Orders of the Day — The Economy

– in the House of Commons at 3:31 pm on 13th May 1992.

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Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons 3:31 pm, 13th May 1992

We are heavily subscribed for the debate. Speeches between 7 pm and 9 pm will be limited to 10 minutes, and I ask for voluntary restraint by hon. Members who speak outside that period. I have selected for debate the amendment in the name of the Leader of the Opposition. 1 have selected for Division only the amendment in the name of the Leader of the Liberal Democrat party.

Photo of Mr John Smith Mr John Smith , Monklands East 3:37 pm, 13th May 1992

I beg to move, at the end of the Question, to add: but humbly regret that the Gracious Speech does not recognise the existence of rising unemployment, which menaces the security and wellbeing of so many citizens and families in all parts of the nation, and the dangers for the United Kingdom's future economic development caused by the continuing fall in investment in the productive economy and the continuing neglect of education and training; and call upon Your Majesty's Government to adopt economic policies which promote sustained industrial and commercial investment, improve and expand education and training, encourage science and technology, stimulate economic advance in all the regions and nations of the United Kingdom, and create the opportunity for a successful response to the new challenge of the Single Market. I add my congratulations to those of my colleagues and express great pleasure at seeing you in the Chair, Madam Speaker.

Consideration of proposals in the Queen's Speech and of the justification offered for them by Ministers in the debate so far drives one, I fear, to the sad conclusion that the Government have started on a new period of office cocooned in complacency about the real state of our economy and the many problems in our society. As we listened to the Prime Minister's bland pronouncements at the beginning of the debate on the Gracious Speech, it was hard to believe that the country was still suffering the acute pains of the longest economic recession since the second world war.

Unemployment has risen for 23 consecutive months and is still rising, 21 unemployed people chase every registered vacancy, and in the first three months of this year nearly 15,000 businesses went bust—an increase of 55 per cent. on last year, which was itself a record year for business failures. Despite a deep recession, our overseas trade remains seriously in deficit and is forecast by the Government to get even worse. Overall investment in 1991 fell by 10 per cent. and investment in manufacturing fell by 15 per cent. That means that this is the only country in the European Community in which investment in manufacturing is lower than it was in 1979 when the Conservatives took office.

Photo of Mr John Townend Mr John Townend , Bridlington

If the situation is as dire as the right hon. and learned Gentleman has suggested, can he explain why it is that, since the general election, the pound has strengthened, the stock market has risen to new heights and interest rates have gone down?

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Gentleman is too easily satisfied. He should be paying attention to when unemployment might start to fall and investment start to rise. All too often, all that Conservative Members are interested in is the level of their shares on the stock exchange. They are not concerned about the jobs that our constituents want.

Where in the Queen's Speech, or in any speech by any Minister in this debate, is there the faintest glimmer of recognition of these economic realities? Where is there any appreciation of the damage caused by the steep fall in investment and the neglect of training when we are only months away from the competition of the single market? Where is there any concern for the waste, frustration and misery of unemployment on the scale from which we suffer?

Unemployment is, in terms of public finances, an extremely expensive option. The cost in terms of lost tax revenue and benefit payments is £8,000 a year for every unemployed person. That, I fear, is seriously to underestimate the economic and human cost of high and rising unemployment. We have consistently condemned the deliberate and cynical manipulation of the measurement of unemployment by a Government determined to conceal the extent of their failures, but, even on the basis of their own underestimation, unemployment is now at 2.65 million, or 9.4 per cent. of the work force. Were unemployment to be measured today on the same basis as it was in 1979 rather than on the manipulated basis, it would, according to the independent Unemployment Unit, be at 3.7 million, or 12.9 per cent. of the work force. [Interruption.] It is a bit odd that there should be some complaint from those on the Government Benches when we remind them of the consequences of their manipulation.

What is worse is that the unemployment figures, even when they are honestly measured, understate the impact of the recession on the work force and jobs in Britain. In a study produced this month by Salomon Brothers, who compared unemployment in this recession with that in he recession at the beginning of the 1980s, it was revealed that last year, 1991, the drop in employment—that is, in the number of jobs in the economy—was 996,000. That was the largest fall in employment for 30 years and significantly worse than the fall in employment in 1980–81. This is not adequately reflected in the unemployment figures, as the authors of this report demonstrate, because large numbers of what they call discouraged workers are married women working part time who, when they lose their jobs, cannot claim benefit and are therefore not reflected in the statistics.

In the boom years of the late 1980s, the Conservatives were quick to claim success in creating jobs on the basis of any increase in part-time employment, but we have heard not a word as these jobs disappear from sight. According to the latest OECD figures, the United Kingdom has the worst record for job creation among the 24 countries of the OECD. That was not only true for last year but is forecast to be true of this year of 1992.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

The right hon. and learned Gentleman may have got his figures wrong. Is it not a matter of fact that, before the recession started, there were 4.5 million women working part time and, as recently as the early part of this year, there were still 4.5 million women working part time? Is it not also true that countries such as France and Germany have many more people unemployed than we have?

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Lady is incorrect. I refer her to the study from which I quoted, which gives the figure of a fall of 996,000 in one year, the largest fall for 30 years.

How astonishing and how revealing it is that the words "recession" and "unemployment" are absent from the Queen's Speech. There is no mention of either the fact of the recession or the fact of unemployment. The Government apparently believe that if they avoid mentioning such unfortunate topics they will not be of concern to us or to those whom we represent here. A certain collective amnesia appears to be the only response that the Government can make to the tragedy and waste of unemployment.

A striking example of the Government's paralysis of action is their failure to permit the phased release of local authority capital receipts to boost the construction industry, as has been urged upon them repeatedly not just by the Labour party, but by the Treasury and Civil Service Select Committee, the Institute of Housing, local government of all political persuasions and the whole of the construction industry.

The Institute of Housing has calculated that the impact of the recession in the construction industry cost the Government £1 billion in lost corporation tax, £1.5 billion in the cost of the extra unemployed and £400 million in lost stamp duty—a total of almost £3 billion. A policy of meeting the current need of those who are without homes by utilising the unused resources of a beleaguered industry is not just plain common sense; it is sound public finance. As the Institute of Housing said: Mortgage repossessions, homelessness, and lengthening council house waiting lists are symptomatic of unmet demand for affordable housing which the Chancellor could start to tackle with the measures we advocate.

Photo of Ian Taylor Ian Taylor , Esher

As the right hon. and learned Gentleman cited the views of the construction industry, will he also cite its views on the loss of disposable income for those who would have been affected by his tax plans if his party had won the election? It would have been a disaster for the construction industry, which is why the right hon. and learned Gentleman and his party were rejected by the public.

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Gentleman is remarkably ill informed. The vast majority of people who would have benefited from our tax proposals were first-time buyers. Eight out of 10 families would have benefited from our proposals. Those members of the construction industry who are not paid-up supporters of the Conservative party told us that during the general election campaign.

Unemployment is, perhaps, the worst manifestation of the weakness of the economy, but it is not, unfortunately, our only problem. The average rate of growth from 1979 to the present time was 1.7 per cent. per annum, the worst record of any Government since the war. If we do not do better in the years ahead, we will lose out to more efficient competitors and we will imperil our national standard of living.

At the heart of the difference between the Opposition and the Government is the fact that we recognise that the British economy suffers from serious structural weaknesses that must be overcome. There is insufficient investment, both overall and especially in the crucial manufacturing sector. Our facilities for training and education are woefully inadequate, as every international comparison reveals. It is simply unacceptable to continue to waste our most precious resource, which is the extraordinary potential of ordinary people.

Britain's commitment to technological innovation and scientific discovery is, at the very best, fragile. As the registration of patents reveals, we are losing ground to more successful competitors in a world where ceaseless innovation is the engine of economic success. Our economy seems fixed in an obsession with short-term returns and quick profits, indulging Conservative Members, such as the hon. Member for Esher (Mr. Taylor), with temporary movements in the stock exchange at the expense of the long-term investment that is the only secure route to sustained economic growth, as our successful competitors know only too well.

The structural weakness is dramatically revealed by our continuing balance of trade deficit which, even in the depths of recession, is forecast to reach £6.5 billion this year and to worsen to £9 billion in 1993.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

Could the right hon. and learned Gentleman explain why, having spent many years advocating increased taxation on some income from savings, that proposal was dropped four weeks before the general election?

Photo of Mr John Smith Mr John Smith , Monklands East

I do not think that the hon. Gentleman's question is relevant, but I shall answer it. Unlike the Conservative party, whose addiction to the poll tax drove it to waste £19 billion of taxpayers' money, we are prepared to listen to representations and criticisms of our policies and we are willing to react. It is a pity that the Conservative party did not realise that it was wrong about the poll tax. Think of all that could have been done with the £19 billion that was wasted on the poll tax.

As for the balance of payments deficit, from which I was diverted by that irrelevant interruption, the fact is that even after the longest recession and a severe depression in domestic demand—one of the most severe depressions that we have experienced—we still draw in imports every week of every month of the year, most of which are products that at one time we manufactured.

When the Prime Minister was Chief Secretary, he sought constantly to explain that deficit as the consequence of increased investment in imported equipment which would generate export growth which would then help to correct the deficit by increased exports. But we observe, do we not, that, although investment has collapsed, the deficit is still with us and getting worse. So much for that bogus theory which the Prime Minister once adopted.

There was once a voice on the Conservative side of the House that was not much convinced by the then Chief Secretary's argument. The right hon. Member for Henley (Mr. Heseltine), the present President of the Board of Trade, told the Tory Reform group at the party's conference in 1989: Britain is not paying its way. We have a serious balance of payments problem …beg our Party not to argue that a deficit on overseas trade is of incidental importance, self-correcting, easily financed. I don't believe a word of it. How perceptive of the right hon. Gentleman then. I recognise, of course, that his perspective then was a little different. He was heavily engaged on the Tory ladies luncheon circuit and much in demand at constituency chicken dinners throughout the land. The Board of Trade was not, I think, his planned destination as a result of those activities, but during that phase he had some insights which I hope he has not obliterated from his consciousness. His programme was so interventionist that it was mordantly described by the right hon. Member for Shropshire, North (Mr. Biffen) as the Henley school of socialism.

What he then perceived, at least in part, and what is true is that the Government of this country cannot abandon their responsibility for our successful economic progress. They have a duty to stimulate and maintain investment; they have a duty to foster manufacturing as our crucial wealth creator; they have a duty to set a longer-term persepective than unfettered markets, left to themselves, can produce; they have a duty to create a positive partnership between Government and industry that maximises our national opportunities in a world of intense competition; they have a duty to create opportunities for education, training and personal development that not only match but surpass those available in other countries. None of these things is even in the mind of the Government, of which the right hon. Member for Henley is now a member. None of them features in the Queen's Speech which we are debating today.

Photo of Mr Michael Grylls Mr Michael Grylls , Surrey North West

The right hon. and learned Gentleman has a reputation, both inside and outside the House, for being a fair man. Does he recognise that any strictures on British industry, particularly on innovation, do not take into account the fact that the top four best selling pharmaceutical drugs in the world have been produced by British firms? That is not a bad record for a small country, and it certainly does not suggest that manufacturing industry is not doing well. It is doing very well.

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Gentleman selects one area of our economic activity where we are doing pretty well—the pharmaceutical industry. I wish that that were true to the whole spread of our industrial effort. If I may return the hon. Gentleman's compliment, he is regarded by some as a fair person. I think that he recognises, therefore, that that is not true of other areas of industry and that the pharmaceutical industry stands out as the exception to the general rule. I am criticising not British industry but the Government, who do not support industry's efforts in the competitive markets of the world.

Photo of Simon Burns Simon Burns , Chelmsford

I have been listening to the right hon. and learned Gentleman's speech for a quarter of an hour. Does he realise that he seems to be stuck in some time warp that has not progressed since 9 April? Does not he realise that between January and 9 April he gave the House the same speech, ad nauseam, as he is giving now? The Labour party lost the election and decisively lost last week's local elections. If he does not want to be considered as yesterday's man in the next five years, he will have to come up with new ideas rather than harking back to old criticisms that the British people have rejected.

Photo of Mr John Smith Mr John Smith , Monklands East

I know that it would be convenient for the Conservative party if, immediately after an election, we stopped all political argument and discussion. That is riot why we were sent here. I shall not stop telling the truth about the British economy or change my appreciation of the facts just because of an election result. I wish that investment was not falling and unemployment was not rising and that industry was being supported by Government, but since that is not the position it is our duty to say it clearly and unambiguously.

Photo of Mr Michael Colvin Mr Michael Colvin , Romsey and Waterside

Will the right hon. and learned Gentleman give way?

Photo of Mr John Smith Mr John Smith , Monklands East

No. I have given way a lot.

The pity is that none of those things is perceived or even understood by the Government. I refer again to the President of the Board of Trade. He now finds himself in charge not of a powerhouse Department to rival the Treasury, as he once dreamed, but of a mini-Ministry whose expenditure in real terms is a third of what it was in 1986–87 and whose budget will be reduced in each of the next three years to a grand total of about £800 million in 1994–95. In case he is tempted to back his interventionist inclinations, or even to utter the dreaded words "industrial strategy", he is policed at his Department by a posse of card-carrying no-turning-back Tories.

I warn the right hon. Gentleman that he has no hope of boosting his budget in the context of the public expenditure cuts, for which the knives are now being sharpened in the Treasury. The reason is the parlous state of our public finances. In his Budget, the Chancellor told us that the PSBR was forecast for this year to be £28 billion, deteriorating to £32 billion next year but then improving steadily until it reached £6 billion in 1996–97. There is now, to put it extremely mildly, widespread scepticism about those figures. Rumours persist that internal Treasury forecasts have revised the figure to above £30 billion for this year alone, and some City analysts are convinced that the figures are even worse. For example, recent calculations by Shearson Lehman Brothers, under the heading "UK Public Spending: No More Mr. Nice Guy", predict that the PSBR will overshoot dramatically for the whole period ahead. It estimates that the deficit this year will be £32 billion, rising to £37 billion next year and declining not to £6 billion but to £21 billion in 1996–97.

Last week, one positive feature of the Prime Minister's speech was this: We will sweep away many of the cobwebs of secrecy which needlessly veil too much of Government business."—[Official Report, 6 May 1992; Vol. 207, c. 64.] Today, the Chancellor, in this spirit of cobweb destruction and veil dismantling, should tell the truth about our public finances. Let him wipe away the cobwebs of secrecy and tell us the true state of the PSBR according to the latest forecasts that he has been given by his Treasury civil servants. We know that he has been given them and he should give them to the House. Are his Budget forecasts consistent with the latest estimates? As this is right at the heart of what I predict will be an intense debate on public expenditure, the House has a right to know and the Chancellor has a highly convenient opportunity to tell us in this debate.

What we fear is a repeat of the Tories' standard performance—they promise public expenditure increases before an election and deliver cuts after it. In the 1986 autumn statement—just before the 1987 election—there were plans to increase spending but they were abandoned in the years following the election. In fact, in the three years after the 1987 election, expenditure was £21 billion less than was promised in the statements before the election. The same familiar con trick is likely to reappear.

Throughout the recent election we were constantly referred to the public expenditure plans set out in the autumn statement and in the Red Book all the way through to 1996–97. They were the Government's predicted and guaranteed spending plans, but what is their status now, given the increasing doubts about the state of our public finances? Why do we have to wait for the autumn statement to hear the bad news that we know is coming anyway? What our constituents want to know is which of our public services will bear the brunt of the coming Tory cuts. Will it be our health service? Will it be our schools? Will it be our colleges and universities? Will it be community care? Will it be expenditure on law and order and the fight against crime? Will it be training, once again?

In Washington recently the Chancellor predicted a harsh outcome to the public spending round. He has an opportunity today to tell us—the House of Commons—what his intentions are. It is to us here, after all, that he is responsible. What price will our public services have to pay for the election of a Conservative Government? Will the Government now abandon the Tory three-card trick—the pretence that public expenditure programmes can be maintained, taxes cut and the budget balanced all in the next few years? I fear that when that pretence finally has to be abandoned it will be seen that the victim of the process is public investment. That means that further harm will he caused to our economy and to our society.

The Government do not seem even to comprehend that in the modern world sustained public investment in, for example, education and training is a vital precondition of economic success as well as of social progress. In a successful nation in the world of today—and this will be even more true in the world of tomorrow—there is a crucial interconnection between economic strength and social justice. In modern industry, driven as it is by ceaseless innovation and by the new technologies of information, the success of the enterprise depends on utilising the skills and initiative of every employee, and not only those of a small managerial elite. That is why our neglect of skills is such a national tragedy.

We have no future as a low-cost, low-wage, bargain-basement economy. We must instead aim high for a combination of high technology and high skills based on continual investment in innovation and in the skills of our people. How are we to compete against the fast-growing, newly industrialising countries or in the new single European market unless we grasp that fundamental truth and act decisively on it? We shall certainly not succeed by seeking to be the low-wage, low-skill adjunct to the European Community. Instead of competing with those who offer the lowest wages, we should be competing with those who possess the highest skills.

The opt-out from the social chapter of the Maastricht treaty shows all too clearly how far we are adrift from the consensus among our more successful competitors that a strong economy and a fair society go together. We deplore the indifference that the Queen's Speech exhibits towards the manifest weaknesses in our economy and the complacency and inaction that result from that flawed perception of the reality of our situation. Instead of facing our real and well known economic problems—low investment, low skills, low growth, high unemployment and poor public provision—the Government walk away from their responsibility to tackle them. Instead of aiming for social progress at least in line with our Community partners, the Government opt out from any responsibility to do so.

This is an opt-out Government—but it is not simply a question of opt-out schools and hospitals; it is a case of opting out of the basic responsibilities of Government in a modern community. The Opposition assert with confidence and conviction that it is the inescapable responsibility of Government to build the strong economy and to create the fair society.

We deplore the fact that in the first Queen's Speech of a new Parliament the Government so carelessly abandon such a responsibility. Sadly, their complacency and inaction, and their lack of ambition for our country, will mean yet more missed opportunities for our people. That is why we will vote against the proposals in the Queen's Speech.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames 4:05 pm, 13th May 1992

It gives me particular pleasure to speak opposite the right hon. and learned Member for Monklands, East (Mr. Smith) once more. Alas, I fear that our fruitful partnership is now drawing to a close—[HON. MEMBERS: "Are you getting the sack?"' The right hon. and learned Gentleman treated us to his usual speech. I, too, intend to make a familiar speech, but at least I have one justification which the right hon. and learned Gentleman lacks—the British people have given a ringing endorsement of the Government's economic policies, and decisively rejected the tired shop-worn policies of the right hon. and learned Gentleman and his colleagues.

For the right hon. and learned Gentleman, today's debate is a bit of a comedown. Only two months ago he was delivering what he called his shadow Budget. It was a grand occasion. There he stood, flanked by his shadow Treasury team, posing for photographs, on the very doorstep of the Treasury—only a few yards from the corridors of power. It was a happy picture but, alas, an ephemeral one.

Then the right hon. and learned Gentleman and his colleagues processed majestically across the road to the august wood-panelled halls of the Institution of Civil Engineers. There, surrounded by Red Books, tax tables and applauding acolytes, he delivered what he called the next Budget. His confidence was running high. On 16 March he assured us that the benefits of his Budget would be crystal clear to the people of this country", who would therefore, he added confidently, be inclined to vote Labour". As with some popular brand of cat food, eight out of 10 voters apparently preferred Smiths. As Oscar Wilde said, one would have needed a heart of stone not to laugh.

It was in that mood of self-congratulation that the right hon. and learned Gentleman progressed to Sheffield to be anointed there before an ecstatic crowd, in a sort of mixture of Gotterdammerung and the Eurovision song contest. It was one short step from Budget Monday to Sheffield Wednesday—and one more step towards Labour's calamity Thursday.

Any normal man might have been shaken by the events of 9 April—but not the right hon. and learned Gentleman, who is nothing if not resourceful and resilient. Having failed to get the one job that he had always wanted, he picked himself up from the floor and applied for another.

Perhaps that is why his speech today seemed directed not so much at the Government or at the country, but more at his right hon. and hon. Friends. It was the late Anthony Crosland who, with the merest hint of irony, once described the Labour party as the most sophisticated electorate in the world". But I am afraid that by electing the right hon. and learned Gentleman as leader, the parliamentary Labour party will demonstrate beyond doubt that it is less sophisticated than the constituency of Basildon. Although the right hon. and learned Gentleman's shadow Budget may have fooled the Labour party, it did not fool Basildon.

In fact, the shadow Budget did not fool anyone; the people of this country quickly saw through the right hon. and learned Gentleman's so-called shadow Budget. The only people whom members of the Labour party were fooling were themselves. That was not for want of trying by the right hon. and learned Gentleman. Those of us who know him well and who have listened to him often know that he has one quality above all: he is extremely skilled at saying nothing. For months and years, he came to this House and made speeches—brilliant speeches—to great acclaim, but in all that time he never made the mistake of spoiling a good speech with a policy.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Will the right hon. Gentleman give way?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Then the election came and the right hon. and learned Gentleman made one fatal error. Inexplicably, he lost his nerve and he actually set out a policy. Admittedly, he did not go overboard; he set out only one, but that one policy was enough to lose Labour the election. It was to increase taxes—to be precise, to increase taxes by £7 billion. It is not merely the Tory press, about which Opposition Members are so obsessed, which has doubted the wisdom of the right hon. and learned Gentleman's proposals. His hon. Friend the Member for Dagenham (Mr. Gould) now discloses that all along he too had doubts. With characteristic understatement, he said on 15 April: I think it is fair to say that our tax proposals showed perhaps less than total sensitivity to some of the interests of the voters in the South of England". Well, of course, the hon. Member for Dagenham may—I do not wish to attribute any motives to him—have a vested interest in doing down his right hon. and learned Friend. His hon. Friend the Member for Brent, East (Mr. Livingstone), as befits a columnist for The Sun, put it rather more bluntly on 26 April: the increase at £21,000 cost us the election".

Photo of Paul Flynn Paul Flynn , Newport West

Will the right hon. Gentleman give way?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Labour's expert on presentation—the hon. Member for Hartlepool (Mr. Mandelson)—commented on 11 May: At the heart of Labour's problems was a deep-seated fear about the party's credibility …Tory claims were more believable than Labour assurances that it would only spend what the country could afford".

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Will the right hon. Gentleman give way?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The right hon. and learned Gentleman's failure was summed up most damningly by the Labour party's chief press and broadcasting officer, Mr. Colin Byrne, who in a letter to The Guardian on 13 April had this to say about the right hon. and learned Gentleman: John Smith may be a very nice man. His smile may not frighten the voters, [but] his insistence on playing Labour's tax changes his way during the campaign …cost the Party dear.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Will the right hon. Gentleman give way?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Quite so. As someone once said, the right hon. and learned Gentleman has a brilliant mind—until he has made it up. Once his mind is made up, he does not like to change it.

Photo of Peter Hain Peter Hain , Neath

On a point of order, Madam Speaker. When will the Chancellor start talking about the economy and unemployment?

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

That is not a point of order for me.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

We all heard the right hon. and learned Member for Monklands, East say that he was always prepared to listen and to learn. Yet only last week, when the right hon. and learned Gentleman was interviewed by Brian Walden, he said that he thought that his tax plans "were sound and fair". He then said: they got a fair amount of assent from the electorate. I repeat: a fair amount of assent from the electorate. The right hon. and learned Gentleman appears to have learnt nothing about the election and the attitudes of the public towards taxation.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Now that that is over, let us talk about the future. In the weeks running up to the general election, the Chancellor handed out £6 billion in bribes. According to a good many people, in this autumn's Budget there is likely to be a hauling back of many of those bribes. We want to know how much those cuts will be. We also want to know whether the public sector borrowing requirement is likely to be £35 billion. Most of all, the Chancellor must answer the following question. He has said many times, before the election and after it, that the Government will balance the books in the medium term. When will that happen? Many of us believe that that medium term will expire long before the next general election. It is time that the Chancellor came clean.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I thought that the right hon. and learned Member for Monklands, East was of the future and that I was talking about the future. Of course, I shall discuss exactly what the hon. Gentleman raised. I shall comment on it substantially. But we stand by our public expenditure plans. Of course, as I have emphasised, public expenditure will have to be controlled in the future. But our plans stand. We intend, as we have demonstrated in the Red Book, to balance the Budget over the medium term.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I will give way later.

The last time that I debated with the right hon. and learned Member for Monklands, East he drew attention, with what I thought was slightly uncharacteristic immodesty, to his personal poll ratings.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

In a minute. Perhaps the lesson of the election is that the right hon. and learned Gentleman should have thought a little less about polls and concentrated a little more on policy. For it was at the very height of his popularity in those polls that he planted a bomb under Labour's election chances.

But the right hon. and learned Gentleman has not done too badly. If he becomes leader, as all the portents suggest, what now appears to have been a blunder on a massive scale will, to coin a phrase, have been a price well worth paying.

Photo of Mr John Smith Mr John Smith , Monklands East

The right hon. Gentleman repeated the commitment to balance the budget in the medium term. Will he tell us by which year that will be achieved?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The right hon. and learned Gentleman can look in the Red Book. He will see the path that is there. That is what we have defined as our policy. That is what we stand by.

Photo of Mr John Smith Mr John Smith , Monklands East

The question is clear and simple. Which year?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The answer is crystal clear. The process of moving towards balancing the Budget is set out and set out clearly in the Red Book. The right hon. and learned Gentleman will see—[AN HON. MEMBER: "The right hon. Gentleman does not know what the table says."] I do know what table 3.8 of the Red Book says. The last year of the projection in that table is close to balance.

Photo of Mr John Smith Mr John Smith , Monklands East

We have all read the Red Book but the Chancellor must answer the question. In which year will balance be achieved?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I have already answered the question. The table shows the PSBR coming down year by year. That is consistent with total debt being constant.

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of HM Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

First, further to refresh the Chancellor's memory slightly, the figure at the beginning is the current estimate of the PSBR. There are many stories, many of which we have good reason to believe, which say that the figure will not turn out to be £28 billion this year. So perhaps we have to recalculate what that reduction in PSBR will be over the period specified in the Red Book.

Secondly, the Chancellor says that the Budget will be close to balance at the end of the period set out in the Red Book. That is not quite the same as balance. Will he answer my right hon. and learned Friend's question? Over the four-year period specified in the Red Book, the last figure that appears for the PSBR is £6 billion. Is the right hon. Gentleman defining the medium term as four years, in which case it is not in balance, or is the medium term suddenly taking on an elastic quality?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

To take the initial point, we stand by our forecast for the PSBR. We are not altering it in any way. The right hon. Gentleman can follow the PSBR month by month. On the second point, I have already said to the right hon. and learned Member for Monklands, East that our policy is as defined in the table in the Red Book. We have said repeatedly that that is consistent with our policy. I am more than a little astonished at the right hon. and learned Member for Monklands, East going on and on about the state of public finances and the PSBR. I have never heard anyone on the Opposition Front Bench express the remotest interest in reducing the PSBR. The reason the Labour party lost the election was that its whole programme made pledge after pledge that Labour would make the finances of Britain utterly impossible.

In the years to come, while the right hon. and learned Gentleman is busy repackaging his policies we will continue with the same policies that brought us a fourth successive election victory. We will continue to pursue sound fiscal and monetary policies. We will keep firm control over public spending. We will continue to make progress towards our objective of a 20p basic rate for everyone and we will continue to reform the supply side and improve the underlying performance of the British economy.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. Gentleman give way?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Later on. I should like to make a little progress.

Those are the policies set out in the Gracious Speech. They are the policies by which we stand, and the policies which will bring us steady and sustained growth.

In the real Budget on 9 March, I cut income tax for everybody. From next week those tax cuts will start to appear in pay packets. All 25 million income taxpayers gain from the introduction of the 20p rate, but the gains are proportionately greater for the low paid. Four million people on low incomes will see their income tax bill cut by a fifth, boosting their take-home pay and improving their work incentives.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I have given way many times and I shall give way again but I wish to make progress.

One would have thought that such a policy—giving the most help to those with the greatest need—would have commanded the Opposition's support. And one would have been right. Just one month before the Budget, the Labour party published what it called a guide to policy —a pocket guide. It was quite clear. Under the heading "Fair Taxes" it said: Labour plans to move towards a starting income tax rate of 20 per cent. Labour's policy then was "Tax cuts No; 20p band Yes." During the Budget speech we saw the astonishing spectacle of the Leader of the Opposition and the right hon. and learned Member for Monklands, East debating how to react. Of course, they could not be seen to support our tax-cutting proposals, but they also knew that they could not go into an election promising to put up income tax for every taxpayer. So suddenly their policy was turned on its head—"Tax cuts Yes; 20p band No."

You will not see a better somersault than that in this year's Olympics, Madam Speaker. No wonder it left the right hon. and learned Gentleman's credibility with the public in tatters. Small wonder that, despite the soft sell, the British people voted again for the only party that really believes in tax cuts.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Bringing the Chancellor back to the question of the PSBR, which many of us believe is critically important, is it true that Treasury officials and advisers have said that there will be an overshoot of as much as £4 billion in the PSBR in the current year, which would take it up to £32 billion or more? Is it true that they are also saying that there will be an overshoot of at least £4 billion, and perhaps £6 billion next year?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The forecast that we have published is our forecast and we stand by it. We have also published our assumption—not a forecast—for the following year.

Touching on some of the problems mentioned by the right hon. and learned Member for Monklands, East, I do not underestimate the problems of recession and unemployment. However, with the election behind us, with confidence coming back and with interest rates lower, Britain's economic future is certainly brighter.

Only a few weeks ago, with his usual immaculate sense of timing, the right hon. and learned Member for Monklands, East was holding Germany up in this House as a model for Britain to emulate. But now in Germany we have seen labour unrest of the kind that here, thanks to our trade union reforms—incidentally, those reforms were strongly opposed by the right hon. and learned Gentleman—is now a thing of the past.

Of course, we cannot insulate ourselves from economic conditions throughout the industrialised world. In the early part of this year, that was compounded by the uncertainty that prevailed in the run-up to the election.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I shall give way in a minute.

What business would invest with the threat of a return to trade union militancy and bureaucratic interventionism of the kind put forward by the Opposition? Who would buy a car, knowing that an extra tax demand might drop through the letter box? Who would take out a mortgage with the prospect of a sharp rise in interest rates, which surely would have happened if Labour had won the election? It was not surprising that companies held back on investment and orders and that consumer demand remained subdued, as long as there was a chance that the Opposition might return to power.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

The Chancellor slipped away very quickly from the issue of poverty. Does he remember, during the election campaign, being pressed about the widening gap between rich and poor? He said then that he did not believe that the gap had widened. Does he now accept that, during the period in which he has been in government, it has widened? How does he now propose to address it?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Living standards have risen at all levels of income. Differentials have widened. Opposition Members are obsessed with differentials, but what matters to the poor is securing an increase in living standards. They would not have secured that under the Labour party, and they did not secure it when Labour was in office.

The message from forward-looking surveys of business and consumer confidence is clear. In April, consumer confidence rose to its highest level for more than three years. The CBI's industrial trends survey showed business optimism to be higher than at any time since 1988, and other business surveys in a number of regions and different sectors give the same message.

I am sure that my hon. Friends noticed the way in which the right hon. and learned Member for Monklands, East pooh-poohed the stock market. Yet, in every speech that he makes, he quotes the opinions of whoever he can find in the stock market who might remotely support his position. Already, the stock market and the foreign exchange markets have signalled their renewed confidence —their belief in the soundness of our policies. Last week, that confidence allowed me to cut interest rates by half a percentage point; it was the ninth cut since sterling entered the exchange rate mechanism.

Interest rates have now fallen by a full 5 per cent. from their peak, to a level below the average that obtained in the 1980s. The fall translates directly into increased disposable income for ordinary families with mortgages. Much of that increased disposable income has been saved, but I expect some of it to feed through into higher consumer spending in the months ahead. As the full effects of lower interest rates, lower inflation and rising confidence continue to come through, growth will become firmly established during 1992.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

No.

In the last 18 months, the differential between British and German interest rates has been reduced from about 7 per cent. to just a quarter of 1 per cent. That is lower than it has been at any time in the past decade—inside or outside the exchange rate mechanism, I should add for the benefit of the hon. Member for Dagenham. That is a remarkable achievement, and it is a testimony to the credibility of our anti-inflationary resolve.

That resolve is demonstrated by the timing of last week's cut in interest rates. Some people pressed me, for political reasons, to cut interest rates before the election, but that would have been quite wrong. We cut interest rates not when it was politically convenient to do so, but when it was right and prudent.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

No.

All that is pure Greek to the right hon. and learned Member for Monklands, East. Throughout last year, he called time after time for interest rate cuts, and every time we cut them he said that it was too little, too late. Only once did he change his line; and that—remarkably, astonishingly, mysteriously—was on the immediate run-up to the election. At that point, the right hon. and learned Gentleman said that any cuts in interest rates would be imprudent, and would simply be an election bribe.

Now, however, normal service has been resumed. According to the right hon. and learned Gentleman, interest rate cuts before the election were bribes; after the election, they are too late. No one, of course, has ever accused the right hon. and learned Gentleman of consistency. Although he has regularly called for interest rate cuts, regardless of our current position in the exchange rate mechanism, and although he has always claimed that he would never contemplate devaluation, the markets—unfortunately for him—have never believed him. Had Labour won the election, interest rates would be heading up, not down.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

No, I will not.

If the markets do not believe the right hon. and learned Gentleman, what on earth will they make of the hon. Member for Dagenham? We know that he takes a very different view from that of his right hon. and learned Friend: he thinks that the pound is overvalued, and that we should devalue it. If he becomes deputy leader, with the right hon. and learned Member for Monklands, East as leader, all the options will be covered. The Labour party will have a leader committed to maintaining the value of the pound, along with a deputy who thinks that its value is far too high and that it should be devalued.

I am reminded of Lord Marsh, who once addressed a meeting that I attended and someone in the audience shouted, "The Labour party's got no defence policy". He responded, "Rubbish. We've got two of them."

But I can suggest a simple way for the hon. Gentlemen to sort out their differences. The last time I spoke in the House, the right hon. and learned Member for Monklands, East never stopped challenging me to debates. We had several debates in the election campaign which I greatly enjoyed, and I thought they were very fruitful and enlightening. I hope that the right hon. and learned Member for Monklands, East will challenge his hon. Friend the hon. Member for Dagenham to a debate. And why stop at two? I think fairness would require that the distinguished columnist of The Sun, the hon. Member for Brent, East, should also be invited to participate. Perhaps I could chair the discussion and then we could all see that there was a free, fair and frank exchange of views between the participants.

We have to sympathise with the hon. Member for Dagenham. In order to make his leadership bid credible, he must explain why the right hon. and learned Member for Monklands, East got it all wrong and is not suitable to be leader of his party. But if he wants to be deputy leader, he has to profess his undying support for the right hon. and learned Gentleman, and proclaim that he will serve him loyally as his deputy. A dilemma that calls for a brave face; or possibly even two.

Photo of Austin Mitchell Austin Mitchell , Great Grimsby

I hesitate to bring the right hon. Gentleman back to the subject of the economy. Will he tell us how much real interest rates have gone up in the past two years and whether real interest rates have ever been higher?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The hon. Gentleman knows that real interest rates throughout many parts of the world have been higher in the 1980s than they were in the 1970s. Our real interest rates are lower then those of several of our European competitors, including Germany. The hon. Gentleman should ask himself why real interest rates are high and what that says about the demand for capital and the supply of savings in the world. That is where the answer to his questions may be found. The hon. Gentleman should also remember that our interest rates are close to the average of the past decade and, furthermore, are close to those of our major competitors.

It was not merely the Opposition and the right hon. and learned Gentleman who urged on me the quick fix or the easy option. For somewhat different reasons, many in the media followed the same line. But we stuck to the policies that we knew were right for the long-term health of the country.

Some said that it was impossible to pursue sound policies and win the election. But the British people preferred to trust a Government who were prepared to show that they could take difficult decisions and would continue to bear down on inflation, rather than a party which, throughout the election, tried to pretend that there were bogus, fraudulent and easy solutions to recession.

Low inflation is the foundation upon which renewed growth must be built. Only with low inflation can businesses plan and invest. Only with low inflation can savers be confident that their investments will hold their value, and borrowers will not face interest payments spiralling out of control.

Thanks to our refusal to bow to short-term pressures, our inflation performance has improved out of all recognition. Underlying producer-output price inflation is lower than at any time since the early 1970s. I expect it to fall below 2 per cent. in 1983, and I am confident that we will see further falls in underlying retail price inflation.

The progress that we have made has been highly encouraging. Inflation is at German levels, and below the European average. But that does not mean that we can afford to relax. There are countries in the European Community whose inflation performance is better than ours. So, as far as I am concerned, inflation is still too high. Over the months and years to come, I intend to bring it down further. We have a once-in-a-generation chance to push towards price stability and, as the Prime Minister made clear, that is our policy.

Prudent management of the economy will also mean firm control over public spending. As my right hon. Friend the Chief Secretary said last week, current plans already in the base-line provide for generous real increases in priority areas like health and education. While the ratio of Government expenditure to the gross domestic product may be expected to rise in a recession, there can be no justification for allowing the public sector to take an ever-growing share of the country's resources at a time of strong economic growth.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I shall give way in a minute.

On the contrary, as the economy picks up, I would expect to see public expenditure, as a proportion of GDP, resume its downward trend. Controlling public expenditure in Britain will also require restraining the growth of the European Community budget. That is a top priority.

Photo of Mr John Garrett Mr John Garrett , Norwich South

Can the Chancellor of the Exchequer explain how he can devote some of his speech, at least, to the economy without ever mentioning unemployment?

Does he agree that most independent forecasters think that unemployment will continue to rise and that it will probably reach, on the present bogus figures, at least 3.25 million next year? What is his forecast for unemployment and the colossal waste of resources and talent that it represents?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The hon. Gentleman, who pays close attention to those matters, knows that in the Budget speech, during the election campaign and in every broadcast I said that we recognised the high level of unemployment and the fact that it was likely to rise for some time. We shall not take lectures from the Opposition who were putting forward proposals for a minimum wage that would have destroyed jobs in many sectors. It was admitted by the shadow transport spokesman, despite the disbelief of the right hon. and learned Member for Monklands, East. Many academic experts put the cost at hundreds of thousands of jobs, so we shall not take lectures from the Opposition.

As well as controlling public spending, we need to control that of the European Community.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Is not Mr. Delors right in saying that all those who supported the Maastricht agreement are in a thoroughly illogical position if they now complain about his demand for more funds? If we are to move toward more converged economies, is it not inevitable that we shall have to prop up—bribe, support or however else it may be described —all the weaker economies of Europe, which will lead to much more expenditure on European projects in this country and all those countries that are net contributors?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I do not agree with my hon. Friend. Nothing in the Maastricht agreement, at this stage when we have not moved toward a single currency, could remotely justify the position that my hon. Friend outlines. I am amazed that, as my hon. Friend is meant to believe in market economies, the thought does not appear to have crossed his mind that countries should adjust their economies, costs and labour markets rather than get funds from the centre. That is not the way that we should proceed.

Photo of Paul Flynn Paul Flynn , Newport West

What does the Chancellor say to the managing director of Inmos in my constituency, who told me on Friday that the reason why the British-invented transputer would in future be manufactured in France and Italy is that the French and Italian Governments are prepared to invest in a partnership deal with Inmos? Those jobs will now be stolen from Britain, as the product will be manufactured in France and Italy. Why can the French and Italian Governments invest in a British invention when the British Government cannot?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

If the hon. Gentleman is suggesting that it is the Government's role to invest directly in inventions and industry, I do not for one minute agree with him.

There must be greater priorities for the Community than further expansion of the Community budget. Community membership is, in principle, open to any democratic European state. That should be a higher priority. In years to come, the benefits of membership must be extended across Europe. That will certainly be at the top of our agenda for the presidency later this year.

Another international issue that will have a big impact on the economy and politics in the years ahead is the future of the former Soviet Union. Indeed, it already has—not many people have noticed the impact that the collapse of the former Soviet Union has had on trade between the former Comecon countries and on world trade generally. But a successful transition to a market economy in the former Soviet Union would benefit us all. It would boost trade, open up huge markets for western business and increase worldwide political stability. In contrast, a return to a closed society and a closed economy would be gravely damaging for all.

We in Britain have been ahead in pressing the case for financial support to underpin reform in the former Soviet Union. If the Russians are prepared to implement a comprehensive reform programme agreed with the IMF, the international community must stand ready to assist it. If it perseveres in its difficult but necessary course, we will continue to give it our support and assistance. I urge British business to take full advantage of the new opportunities now available, both in eastern Europe and in the former Soviet Union.

With low inflation and a prudent fiscal policy, British industry and business has the stable, low-tax environment it needs to plan and invest for the future. But strong growth will also depend on continued progress in strengthening the supply side of our economy. That does not mean the failed nostrums of bureaucratic red tape and Government intervention in industry, which the electorate has decisively rejected. The Labour party tries to recycle the failed policies of the 1960s under the more modern sounding name of "supply side socialism". There is no such thing.

The way to improve the productive capacity of our economy is not to try to increase the role of Government, but to curtail it; not to add to regulation and bureaucracy, but to reduce it wherever possible; not to restore trade union power, but to continue with the process of reform; not to renationalise or regulate, but to privatise; not to restrict or remove the rights of workers and employers to decide for themselves the terms and conditions of their employment, but to extend them. We will continue to do all those things.

As Europe approaches the single market, Britain is well placed to compete. As some of our partners falter, we have stable government, and a stable economic framework within which business can prosper. We are the most popular location for inward investment in Europe. We have the lowest rate of corporation tax anywhere in either the European Community or the G7 countries. Despite the slurs cast by the Labour party, we have a well-educated and highly trained work force.

Earlier in the year, the prospect of a Labour Government threatened all the achievements of the 1980s. That threat is behind us, and confidence in the British economy can grow. Soon, the only question will be how anyone ever thought that there was even a possibility of the election of a party pledged to reverse all the changes of the 1980s. As confidence returns and there is evidence of a strong and steady recovery, the wisdom of the choice of the British people will become clearer and clearer. That is why I urge my right hon. and hon. Friends to reject the amendment and to vote in support of the Government in tonight's Division.

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney 4:45 pm, 13th May 1992

We have heard a curious opening speech from the Chancellor of the Exchequer. He covered many matters that did not seem to many of us to be relevant to the state of the economy and Government policy, but he omitted to say anything about two crucial sentences in the Queen's Speech which define his policy. I refer to the passage: My Government will pursue, within the framework of the exchange rate mechanism, firm financial policies designed to achieve price stability and maintain the conditions necessary for sustained growth. That is the first sentence of that paragraph, and it is perhaps the first time that a Chancellor of the Exchequer has said to a British Parliament that the central discipline or guideline of his policies will be a framework of interest rates and exchange rates set, not by himself with the co-operation of the Governor of the Bank of England, but by the Bundesbank and the rate of inflation in Germany. The Queen's Speech contained the phrase "within the framework", which means that the Chancellor cannot cut interest rates beyond a whisker or a margin every six months, but will have to maintain real interest rates that are higher than ever before, as my hon. Friend the Member for Great Grimsby (Mr. Mitchell) rightly said.

Whether or not such a policy will be conducive to the conditions necessary for sustained growth is questionable. Certainly most European countries in the European monetary fund do not enjoy sustained growth or a sustained reduction in unemployment.

The Queen's Speech also states that the purpose of the policies, not just of this Session but of the Parliament, in the medium term, will be to ensure that the United Kingdom meets the convergence criteria set out in the Maastricht treaty". The fact that the Chancellor of the Exchequer made no reference to that passage in the Queen's Speech is truly amazing. I am somewhat surprised that my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the shadow Chancellor, did not see fit to draw attention to that section.

What are the convergence criteria which we are pledged to meet in the medium term? I understand what is meant by medium term—about the year 1995–96. That seems to be the crucial year, as that is when the Commission is due to report on whether countries that wish to join the third stage of EMU are eligible to do so.

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney

I shall give way later, but this is a complicated issue which I wish to explain.

There are four criteria. The first is that the rate of inflation in the United Kingdom has to be not more than 1.5 per cent. above that in the three best-performing European Community countries. Secondly, we must not have an excessive deficit—that is defined in the treaty and the protocol as being 3 per cent. of gross domestic product. Thirdly, we must bring the pound, already within the exchange rate mechanism, out of the present 6 per cent. band and into the 2.5 per cent. band. Fourthly, the yield on our gilts has to be no more than 2 per cent. above the yield on similar Government stock in the three best-performing Community countries.

The targets to which the Chancellor has committed himself are formidable. My right hon. and learned Friend the Member for Monklands, East will understand why those targets do not refer to unemployment. The criteria cannot necessarily co-exist with a reasonable prospect of a fall in unemployment in this country. They take precedence over purely British interests. It may well be in the interests of the United Kingdom and other European countries to have lower interest rates and to pursue policies that will increase employment. But as long as we and those other European countries are committed—under the Maastricht treaty and the provisions relating to economic and monetary union—to convergence by 1996 at the latest, unless we achieve that aim we will fail to meet our obligations under the Maastricht treaty.

The Chancellor could say, "But we Conservatives have an opt-out clause." I see great advantages in an opt-out clause if we use it. But it is no good the Chancellor saying that he has an opt-out clause when his policy for the next four years is to put this country in the same position as those that do not have opt-out clauses. It is no good if he is prepared, if necessary, to squeeze the life out of this country's economy—as will have to happen in other countries—in order to meet our treaty obligations.

It is time that we had a real debate on this subject in the House. We heard speeches from the two Front-Bench spokesmen that did not touch on the major issue dominating this Parliament. It is extraordinary that we have not yet had a serious discussion on it.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Is it not true that we have agreed not only that our economy should converge but that other economies should converge? That means that we have agreed to assist weaker economies so that they may converge. That is essentially an artificial activity, which runs against all market forces. Will the right hon. Gentleman explain how the convergence of the weaker economies can be achieved within the terms of the Maastricht agreement except by a massive increase in public expenditure? Does that not mean that Mr. Delors is right in saying that everyone who supported the Maastricht treaty must have known that to do so would mean a massive increase in regional and social funds, which would inevitably have to be paid for by the contributing countries of Europe—notably by Germany and Britain?

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney

There would be great increases under the Delors plan. The budgets that he produced over some years increased those funds. In relation to the problems faced by the poorer southern European countries, those funds will make virtually no impact under the criteria set down. They will have to deflate and create unemployment, as will the other countries which are trying to subscribe to the conditions that will enable them to be considered as eligible for joining the third stage of the EMU.

What must we do to increase demand in Britain in order to lift output and reduce unemployment? Unemployment is not 2.6 million. It is much closer, as the Chancellor will agree, to 3 million, perhaps more, and still rising. The Government do not have a policy for that. They simply say that, if they can keep inflation down, expansion in the rest of the world will be sufficient, they hope, to lift the British economy. That is their principal hope.

We have advanced what people describe as supply-side socialism, which makes good sense over a long time, but we have not yet formulated a policy to lift demand. How are we to increase demand for the goods and services that our firms can currently produce, let alone encourage them to invest more so that they can produce more in future? Where will the demand come from? If we cut taxes and increase public expenditure, there will be a negative effect on the current account balance. In the past four or five years, the balance of trade has been appalling and the deficit is due to rise still further in the current year.

There is only one way to get a benign increase in demand and it is to have demand from outside, an increase in exports, while carrying on with import replacement. That can be done only by cutting severely our competitive prices against those in other currencies. That means changing the exchange rate mechanism, Britain's position within it and the present value of the pound. I defy anyone to say where else the demand can come from.

To illustrate the point, I shall look at the other major economies. As everyone knows, Japan is in worse shape than it has ever been and it will not contribute to the increase in world output and trade, certainly not over the next two or three years. Recovery is taking place in the United States, but it is weak. At least the United States is free to cut its interest rate, which is at about 3 per cent., and that helps enormously. However, recovery in the United States cannot be predicated as the engine of growth for the rest of the world economy.

The economies in the other states of the European Community are not a promising sight. According to the Commission paper discussed in Lisbon, output this year is due to rise by 2–5 per cent. at best and next year it is due to rise by 1–7 per cent., which is well below the productive potential and growth in productivity of the Community. That means that there will be a further rise in unemployment in Europe as well. Therefore, Europe will not contribute to the revival of world trade and output that we all want.

I remind those who are over-enthusiastic about the benefits of the ERM and the EMU about unemployment in the European Community. France has had the "great benefit" of 10 years of membership of the ERM. Some might say that that is wonderful, but the unemployment level there is 10–2 per cent. Italy has also had the "enormous benefit" of membership and the un-employment level there was 10–7 per cent. at the beginning of the year. Our unemployment rate, at 10–4 per cent., is not much better, but it is not worse. As those who know anything about the matter can confirm, during most of the 1980s unemployment in the United Kingdom was lower than on the continent. That was because we had a free-floating exchange rate. As the Chancellor sometimes reminds us, at that time much investment by America and Japan was attracted to Britain.

I have one or two common-sense suggestions. First, no one who has looked seriously at the European, British and world economies can doubt that there is an overwhelming case for a realignment of currencies within the ERM. France and Italy and all countries with high and rising unemployment and far too moderate growth of output need and want that. Germany resists it, but surely pressure could be put upon that country or, failing that, the other countries could readjust their exchange rates in relation to the mark. That would be of enormous benefit, and only German economic egotism stands in the way of a necessary and helpful readjustment.

Secondly, we should give up the nonsensical notion of creating a single currency in Europe, with all that it would mean for deflation in our country and elsewhere. It would be better to give up that goal and settle for a regional IMF in terms of the exchange rate mechanism of which we are a member. I am suggesting fixed but changeable exchange rates, under which, in the IMF, we lived with considerable benefit for more than a quarter of a century after the end of the war. Surely that makes sense.

Thirdly, instead of going ahead with the effort to create a single currency, the ecu, would it not make sense in current world conditions to look upon it as a possible reserve currency that other currencies could use, one would hope, for international trade?

Those are perfectly practical proposals and they would have considerable support if the Government were prepared to take them up. If they do not, they will preside over another period of failure in terms of growth of output in the British economy and over a prolonged and desperately unhappy period of high unemployment.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex 4:57 pm, 13th May 1992

I do not intend to follow the extremely interesting points made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) because there will be other occasions on which I can do so, not least next week in the debate on the Maastricht treaty.

After eight years as a Minister and, before that, two or three years as a Parliamentary Private Secretary, I confess to some pleasure and even a feeling of freedom at being able to speak from the Back Benches. Nor do I have to find that narrow ground between subservience and rebellion about which my right hon. Friend the Member for Mole Valley (Mr. Baker) spoke so feelingly in moving the Loyal Address last week. In saying that, I hope that I am not causing too much trepidation to any of my old friends from the Whips' Office who are seated in front of me.

I warmly congratulate my right hon. Friend the Chancellor on the steadiness and determination with which he has brought down interest rates in the past few months. He has not listened to siren cries, not least those of the right hon. and learned Member for Monklands, East (Mr. Smith), that he should do more and do it more quickly or that he should devalue within the ERN. Consequently, there is every sign of a strong recovery and greater economic prosperity, and we probably have a better chance of consistent low inflation than for many years.

It is often said that the best spring is the one that comes late when the blossom can no longer be ruined by frost. I am sure that this will be true of the economic spring that we are starting to enjoy.

I am pleased also at the new promise made by my right hon. Friend the President of the Board of Trade, who is supported by an extremely strong ministerial team, that he has every intention of listening sympathetically to the needs of industrialists. I confess that I do not know from where any great increase in his budget is likely to come, but it is extremely important that there should be strong recovery in manufacturing industry. That is badly needed, because recovery should not be won just in the service industries.

These are my bouquets and, before the experience of the too-violent economic swing of 1988–92 is put to bed and has become part of economic history, I should now like to risk, in the words just used by my right hon. Friend the Chancellor of the Exchequer, ruining a good speech with the suggestion of a few policies.

The first of the lessons of the past few years that must be learnt concerns how to deal with credit control. In saying that, I do not mean statutory control of lending. I remember well when that was tried in the 1960s. It did not work then, and when it was changed to a policy of competition and credit control by my right hon. Friend the Member for Old Bexley and Sidcup (Sir Edward Heath), it released such a volume of new lending that it did not work then either. Therefore, we cannot follow the statutory route, but that means that there is a greater case for wisdom, prudence and good sense in lending by all the financial institutions.

A figure has often been bandied about. It is that, in 1988, the tax cuts introduced in his Budget by my good friend Mr. Nigel Lawson amounted to £4 billion, but they were followed by a £40 billion increase in credit—a ratio of 10:1. That was simply far too much. In my part of the world, the south of England, it led to a ridiculous excess in house prices in 1989, an excess also fuelled by the availability of 100 per cent. mortgages for houses or flats that were often bought at excessive prices. Those mortgages were on high fixed interest rates to start with or, if they began as variable loans, became fixed at a higher rate if the customer defaulted for even a month or two.

Many of us who represent constituencies in London or the south-east must have been horrified in recent months by the details of repossession cases brought to us by our constituents. We were horrified because they were lent far too much in the first place for houses that were excessively priced, and they had only to get into a small amount of trouble—one of the family or partners losing his or her job, for example—to become fixed on the course of repossession.

Against that background, there is a strong case for banks, building societies and all the respectable financial institutions jointly to look at the issue and collectively to publish guidelines, which should set sensible restrictions on mortgage lending. These should be made available to those who leave schools, universities and polytechnics, and to all first-time buyers. They could, for example, say that no mortgage should ever be more than 75 per cent. of the initial purchase value, that monthly repayments of capital plus interest should never be more, at the start, than 25 per cent. of the total salaries in the household. If a buyer cannot afford to buy 100 per cent. of the property that he wishes on those terms, then partial purchase, in which equity is shared with a housing association, is a far better solution.

Quite simply, we must, in the years ahead, avoid having another housing boom followed by a collapse such as that which we have had in the past four years. It was bad—desperately bad for some—not only for house owners but for the building industry. Hand-in-hand with that goes the fact that we cannot afford such violent fluctuations in interest rates. I appreciate that these are now less likely than they were. Unlike some hon. Members, I welcome our membership of the exchange rate mechanism. I wrote a letter to The Times in 1979 or 1980 suggesting that we should join the ERM at the same time as the Republic of Ireland. I hope that we shall move quickly to the narrow band within it.

One result of the ERM is that it depoliticises the movement in interest rates. They become much more mechanistic. Against that background, I urge my right hon. Friends on the Treasury Bench to consider the denationalisation of the Bank of England, which was nationalised in 1945. This move was considered between 1970 and 1974 by the Government of my right hon. Friend the Member for Old Bexley and Sidcup. It should be on the agenda again now.

We all know that the Bank of England, as with all central banks, has to be denationalised before the decision to set up and join in a European central bank becomes effective. Denationalisation would clearly mean greater independence for the Bank of England. I am not saying that this should happen because I believe that all its decisions and views are necessarily and invariably wise. That was clearly not so in the case of the Bank of Credit and Commerce International. However, it is good sense to have some years of experience of an independent domestic central bank before taking the final decision on the European central bank. This would not be a bad learning curve for us politicians, nor for our bankers.

I shall now move from the macro-economy to the micro-economy. As Minister for the Arts, I was delighted by the decision, taken before the election, to set up a national lottery. I had campaigned for it for all the 17 or 18 happy, exciting and fruitful months that I held the job of Arts Minister. I had quickly come to the conclusion that, while every Minister in that position might argue with the Treasury each year and get a few million more for the Arts Council or the museums and galleries, serious signs of more money could come only from a national lottery. I was delighted when my right hon. Friend the Member for Mole Valley, then Home Secretary, put his weight behind the argument, convinced our colleagues and ensured the publication, before the general election, of a White Paper supporting a lottery.

Obviously, Treasury Ministers were harder to convince. They have had their doubts about a national lottery for 40 years. The Treasury does not like hypothecation of money. That means that it does not like to see relatively large sums of money, over which it does not have direct control and in defence of which the spending Minister does not have to come each year to argue his case, going annually to specific causes and projects.

The then Chief Secretary to the Treasury now enters the stage as the new Secretary of State for National Heritage, and I am delighted that he has had such a Pauline conversion that the Bill to enact a lottery is now to be his. It will be organised, drafted and produced by his Department rather than by the Home Secretary. No Minister changes his colours with his job so becomingly as an ex-Treasury Minister. To use an operatic phrase, "cosi fan tutte".

The national lottery has the potential to be an enormous success. I studied its workings with relevant Ministers in both Ireland and Greece, and it is very successful in those countries. The proceeds should be concentrated on capital projects in the arts, sport and the heritage.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

Would the success of a national lottery depend on its enjoying monopolistic powers or privileges that other forms of gambling did not have?

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

I will not be drawn down that route this afternoon as I must not speak for too long. However, i would love to debate that matter with the hon. Gentleman on another occasion.

As foreshadowed in our election manifesto, I hope that there will be a millennium fund into which some of the proceeds from the national lottery will go every year, so that in different parts of the country we can build new theatres, new concert halls and new sports stadia of which future generations can be very proud.

Within the funds of that national lottery, I would plead for an endowment fund of, perhaps, £30 million a year to be set aside especially to keep in this country those pictures that are so important to our national heritage. Although the idea of a list of objects that can never be exported has been examined in recent months, it is, in my view, neither a practical nor a fair solution. However, we cannot rely on Andrew Lloyd Webber to keep all of those beautiful objects in this country. I had always hoped that, when a national lottery was established, some money from it would be dedicated specifically to the purpose of keeping in this country those great works of art that are so important to our heritage. It is also important that they stay here for the enjoyment and education of future generations.

The key to the success of the national lottery must be that there will be new money. It must come from those who are participating in a lottery, perhaps for the first time, and who are quite happy in the knowledge that if they do not win a prize the balance of the fund will go to a good cause such as the arts, heritage or, perhaps, even one of the smaller charities that they support.

It follows from that statement that the lottery proceeds cannot just be a substitute for existing Treasury funds, nor can they bear an excessive tax rate. If Treasury Ministers will refrain from regarding the lottery as a successful milch cow, the national lottery will enter our scheme of things as it has in virtually every other European country, where it has enjoyed enormous success. It will give a tremendous boost to the arts, to heritage, to sport and, through them, to tourism. All those are great earners for our economy and they are all vital to our enjoyment of life.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury) 5:12 pm, 13th May 1992

I welcome you, Madam Deputy Speaker, to the Chair. We look forward to you presiding over our debates. I also welcome the right hon. Member for Mid-Sussex (Mr. Renton) to the Back Benches. As a Minister, he was always so genial and courteous that even the most unpleasant things that he said were sugared with a pleasant coating.

I found myself in unusual agreement with much of the earlier part of the right hon. Gentleman's speech when he referred to the independence of the central bank, the narrow bands of the exchange rate mechanism and the benefits of the ERM. I have reservations about the latter part of his speech on the national lottery, partly because I am convinced that it cannot be made to work unless it is, in effect, a nationalised lottery—that is, a nationally-sponsored lottery that enjoys privileges denied to other raisers of charitable funds by means of lotteries. That would be in direct contravention of what is supposed to be the Government's policy—that one organisation with national sponsorship and approval should not be given privileges and rights over the entire private sector. What could be more private sector than voluntary fund raising of that sort? However, that is an argument for another day.

There are always phrases that catch one's attention in the Gracious Speech, in the economic and in other spheres. I was struck by the inclusion, for the first time in a Gracious Speech, of an explicit commitment to price stability. That commitment was reiterated by the Prime Minister in what my right hon. Friend the Member for Yeovil (Mr. Ashdown) called "rich man's Sheffield". I am, of course, referring to the Prime Minister's speech to the Institute of Directors when he said, "Price stability, yes price stability"—words that have not featured overmuch in the Government's vocabulary of late. However, I welcome that commitment, even though I think that the Government will have to do some of the things to which the right hon. Member for Mid-Sussex referred if they are to meet it. Central bank independence is one of those things.

There are other interesting changes of phrase. The balancing of the budget is no longer to be over the cycle, but over the medium term. There have been some discussions today about what that medium term is. When it was over the cycle, it reminded me of the trick cycles that we used to see in circuses, where the front end became detached from the back end and the cycle could therefore be stretched to an infinite length—or at least the total length of the rider of that rather dangerous machine. The cycle certainly stretched to infinite length when it came to balancing the budget.

It is not even clear that balancing the budget is the most appropriate guide to Government policy. It may be more appropriate to have public sector borrowing in some circumstances and public sector debt repayment in others. Some of the Government's critics, especially in the Labour party, have focused heavily on the lack of certainty that the Government will achieve that balanced budget, but the Government should question whether a balanced budget is actually the right objective.

There is also an interesting phrase about the share of national income taken by the public sector, which is to be reduced. I take that to be a rephrasing of the previous commitment to reduce public expenditure as a share of gross domestic product. The logical conclusion is that eventually there will be no public expenditure. The Government have never clarified the purpose of perpetually reducing public expenditure as a share of GDP, unless they believe that at any given time it is too high. We believe that the extent of public expenditure should be determined by a balance of the needs for which the public sector provides and what the economy will stand—that is, whatever will enable the economy to function effectively—rather than being determined by some commitment constantly to decrease it or, for that matter, constantly to increase it.

There is also a phrase about promoting market mechanisms. That is mealy mouthed. The Government should be saying that they will vigorously promote competition and attack monopoly, but perhaps the language is too strong for a Government who privatised industries by turning public monopolies into private monopolies, instead of breaking them up as would have been appropriate in a number of cases.

On the Government's privatisation plans, the Gracious Speech says: Legislation will be introduced to return British Coal to the private sector. It may have escaped the Government's notice, but British Coal was never in the private sector. There used to be a series of coal companies in the private sector, some of which had a bad record on the treatment and safety of their employees.

If the Government were to put British Coal into the private sector without at the same time developing an energy policy, they would unleash the coal industry into a very much rigged and monopolistic market, in which the generating companies, which have excessive control of the energy market, could continue their short-term policy of introducing gas generation. The nuclear sector would continue to be heavily featherbedded by public subsidy and guarantee. British Coal would not be in anything even resembling a fair market, still less a market where proper account is taken of the fact that, once a pit is closed, it cannot be reopened.

There is certainly scope for private investment and private activity in the coal industry. Over many years my hon. Friend the Member for Gordon (Mr. Bruce) has made a powerful case for taking away from British Coal the mineral rights on which its mining is based and placing them under proper Government control. The winner of the coal would not then be the giver-out of the rights. We need a better balance than currently exists. Simply to put British Coal into the private sector without a proper energy policy could, in the long term, prove to be a disaster.

The Government's words on the rail service are much more cautious. The Gracious Speech states: Legislation will be introduced to enable the private sector to operate rail services. We do not disagree with that proposal. We have been arguing for some time that there is scope for a privately run rail service on the rail system—that is, provided that there is a decent rail system, properly invested in, on which it can run. If there are proceeds to be gained from that process, they must be used to improve the network. Other resources will also be needed to bring the network up to the standard at which the existing services can run properly, let alone additional private sector services. We welcome the Government's move towards our position from one of apparent wholesale privatisation of British Rail, which any railway expert—including the hon. Member for Christchurch (Mr. Adley)—knows is simply not a practical proposition.

All that the Gracious Speech says about agriculture is that Legislation will be introduced to promote improvements in agricultural marketing. That is all well and good, but what is really needed is a clear indication of the Government's approach to the future of the industry. Do the Government intend to continue to argue that Mr. MacSharry's proposals are totally misguided and that nothing of the kind is necessary, or do they recognise that there will be some reforms and that they ought to influence those reforms so that British agriculture remains viable and is able to meet environmental objectives? We need a much clearer policy statement from the Government.

What has changed since the general election? Has anything changed so much as to justify the degree of complacency that characterised most of the Chancellor's remarks? During a general election campaign one cannot be surprised if the Chancellor of the Exchequer puts the best possible construction on the state of the economy. General elections are like that. The best possible sales line has to be put forward. But the election is over now. We do not need a re-run.

Photo of George Mudie George Mudie , Leeds East

Some of us would like one.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

Other elections are going on elsewhere in the House. Some of the speeches during the last few days will have a considerable bearing on the outcome of those elections, but the general election is out of the way for the Chancellor of the Exchequer. He can therefore make a more objective assessment.

The election has removed one of the elements of uncertainty. Firms that delayed investment can now invest without having to wait to see what kind of Government they get. That may help to bring us a little more quickly out of the dreadful recession that we are experiencing. If, however, the Government say how much better off we are after the election, why did they not call it a great deal earlier and end the uncertainty? The election could have taken place many months, even a year, ago.

The interest rate cut of 0.5 per cent. is also welcome, but its impact will be limited. It is a sign that the Chancellor is being deservedly cautious until it can be made clear to the markets that there is no prospect of a devaluation of sterling and that Britain's interest rate policy will not be based on short-term political considerations. Again, now that the election is out of the way, there is no need for short-term political considerations. The fight against inflation must continue. We are a stage nearer in the cycle to recovery, but it is a painfully slow process.

What else has changed? There has been a change in the German economy and in German politics. The tendency for Ministers to crow about that is misguided, for two reasons. They underestimate the resilience of the German economy and the determination of the German people to make reunification work. Moreover, Ministers are misguided if they believe that it is to Britain's advantage for the deutschmark no longer to be a bulwark against inflation in Europe. If it ceased to be so, we should soon have to find another one. Sterling is not yet in that position. It would be rather nice if it were, but it is not. It would not be to our advantage if we suddenly found that that underpinning of the system was no longer there.

Those are the positive points that the Chancellor can justifiably quote, but what about the other side of the coin? Certain things have not changed. Unemployment is still high, is certain to remain so and to go higher. Bankruptcies continue, and our infrastructure continues to decline. One has only to consider the horrific backlog of repairs to schools. We could all quote examples from our constituencies. Our education and training system remains woefully inadequate for the needs of the country. Housing receipts remain frozen and local authorities are therefore unable to meet dire housing needs.

For these reasons, the case for additional investment of the kind that was argued for during the election campaign by both my party and the Labour party must be considered by the Government. If recovery is coming more quickly than we believe, the opportunity to invest when it is cheaper and not inflationary to do so will slip by. If the Government are right and recovery is just around the corner and the green shoots are really coming through, it is all the more important to ease the unemployment problem and to secure some of that public investment while the circumstances are most favourable. If we are right and they are wrong, it would help to bring about recovery if we invested in those areas that could create jobs now while at the same time providing us with assets for the future.

There are other long-term issues to be addressed that the Chancellor failed to address today. There is the long-term anti-inflation policy. I do not believe that we shall have a satisfactory long-term anti-inflation policy unless there is a combination of an independent central bank and the narrow bands of the exchange rate mechanism. That is the way to ensure that in the longer term we have lower interest rates. That is the only way to remove the premium that the market expects if it is to hedge itself against the belief that the currency might be devalued. [Interruption.] There are voices on both sides of the Chamber, including that of the hon. Member for Great Grimsby (Mr. Mitchell), who argue for precisely that. So long as the hon. Member for Great Grimsby is around — so vocal and so active— the markets may be right to believe that one day the currency may be devalued.

Photo of Austin Mitchell Austin Mitchell , Great Grimsby

May I remind the hon. Gentleman that in 1925 Lord Keynes reminded Winston Churchill that the pound was grossly overvalued? Does the hon. Gentleman agree that the pound is overvalued? If it is overvalued, we need high interest rates to keep it that way. To go into the narrow band would simply mean that interest rates would have to go even higher to keep them in the narrow band.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

Interest rates have to remain high over a longer period because of the belief that the currency may be devalued. Until it is believed that the United Kingdom currency is secure and that there is an anti-inflation culture in this country, there will continue to be a premium on interest rates. When the hon. Gentleman sought constantly to intervene during the Chancellor's speech I was reminded of the exchange that took place on the "Jimmy Young Show" when I appeared with the Chancellor of the Exchequer. At one point Jimmy Young said, "Don't ask Norman another question, otherwise i won't be able to get in before there's a break for the music." The hon. Gentleman has got his break and he continues with his familiar cry, which is echoed by voices on the Conservative Benches. I do not say that they should not announce their beliefs: they hold them most sincerely. However, they are a sufficient reason for people to believe that we might well seek to devalue our currency. That is a sure way to high interest rates, long term.

The Government must also address the competition policy issue, in which they still show insufficient interest. Sir Leon Brittan has become much more interested in competition policy since he became a commissioner and he is doing an energetic job in that connection. However, that has not yet led to greater interest in the issue among his friends back home.

Furthermore, the Government have not addressed the immobility issue, which is the result of housing problems. There are two kinds of immobility, one of which was referred to earlier by the right hon. Member for Mid-Sussex. I refer to those who bought their homes when the market was artificially high, as a consequence of a combination of misguided Government policies. They cannot move because they cannot sell their homes. If they did so, it would be at a price that would not enable them anywhere near to repay their mortgages. Other people cannot move because they cannot rent a house; houses are not being built and the waiting lists are therefore enormous. For most people, the national mobility scheme just does not work because they are unable to find accommodation elsewhere in the country.

I referred in an intervention to another issue that the Government still fail to address. The Government continue to duck the poverty issue and all the problems that it involves. For example, the withdrawal of benefits from young people continues. The social fund is inadequate. Health charges, the impact of the poll tax and the likely impact of the council tax on a large number of people create great problems, yet the Government do not appear to believe that there are problems. I am amazed by the Chancellor's lack of understanding. It is true that the gap between rich and poor has widened. All the evidence is there to demonstrate that that is so. In January 1992, "Economic Trends" showed that in 1979 the poorest fifth of the country had about 10 per cent. of post-tax income, while the richest fifth had 37 per cent. Ten years later, the poorest fifth had only 7 per cent. and the richest fifth 43 per cent. The gap widens and widens. It is indicative that the Chancellor did not realise how that gap had widened when he was questioned on radio about it by a member of the public. We have to keep on reminding him.

During the election my party found that there was some willingness to accept that there has to be a redistribution of tax to deal with this problem. We also found great fear of what Labour would do with the tax system if it was given the chance. Many people did not think that Liberal Democrats would be in a powerful enough position to block Labour's tendency to go over the top or to kill the goose that laid the golden egg. That fear emerged as a powerful reality in the last few days of the election campaign. It certainly cost my party seats, and without it a number of Conservative Members would not be sitting on the Government Benches.

I still believe that the British electorate are willing to support measures of redistribution if they are kept within bounds that they feel they can manage. British politics has not given them the opportunity to support such policies. The Government made a political point of arguing in the opposite direction, and survived by doing so. The party in the strongest position, potentially, to do something about it frightened large sections of the electorate away from itself and from us. The majority of people voted not for this Government but for other parties. It is vital, therefore, that over the next few years the Government consider the needs and problems that so many of those people face. If the Government are to persist in their view that the electoral system can allow a minority to become the majority in the House—a view with which we profoundly disagree—they had better try to vindicate it by showing that they are prepared to govern for the whole of the country, including the majority who voted against them, and that they are prepared to address the needs, problems and personal tragedies that so many of those people have had to face without the complacency that has been evident in Government contributions to this debate.

Our amendment expresses some of those concerns and shows how they could be dealt with. The Government now have the opportunity to address them, and if they legitimately believe that they are the Government of the whole country they should do so.

Photo of Mr Matthew Carrington Mr Matthew Carrington , Fulham 5:31 pm, 13th May 1992

The most important part of the Queen's Speech is the commitment to bring other countries into the European Community. Many of us have been concerned about the Commission's tendency to centralise decision making, concentrating power on itself and removing some of the rights and privileges of the House.

That worrying trend will be altered only by expanding the Community. The best way of doing so is to bring in those European Free Trade Association countries that wish to join the Community and they are the countries that will find it easiest to make the adjustment. The most important challenge will be to bring in the fledgling democracies of eastern Europe, which are so fragile and economically backward. The assistance that they will need from the European Community will make the unification of Germany seem extremely easy.

We should not be the least surprised that bringing in those countries will be difficult, because their economies are in a poor state. East Germany was by far and away the most developed of the east European countries, yet the unification of Germany has cost four or five times more than even the most pessimistic estimates. That massive change will not be brought about quickly, but it must be done as rapidly as possible.

An expanded EC has two ways of proceeding. First, the decision-making power of the Community may override the wishes of national Governments because the Community will become too large to be able to take decisions on the basis of negotiation and co-operation, as they are taken at the moment. The alternative is to define more precisely what decisions—and only what decisions —can be taken by the European Community centrally, and then to ensure that the decisions that are not taken centrally are reserved to the component countries.

The second way of unifying the Community is the only method that will be practical once the European Community is larger than the Twelve and consists of 20 or 24 members. Subsidiarity will have to apply to monetary policy and monetary union. There is no way of avoiding that. The only way forward is to set up, as the Maastricht agreement proposes, a central bank to deal with monetary policy on a Europe-wide basis. Monetary union will be important to the development of the Community, but it must be clearly defined. It will be of much benefit to business. Getting away from floating exchange rates or exchange rates that vary will remove uncertainty for business and trade across Europe, and that will be vital in enabling the European Community to develop.

One of the benefits of German unification is that it will ensure that the German dominance of monetary policy will begin to diminish. In the past few years, the Bundesbank has dictated monetary policy across European economies. Without unification, European monetary union would increasingly have been dictated by the Germans and we would have had to accept their interest rate decisions and other decisions that would have affected our economy. With the weakness of the German economy, however temporary, the Germans may start to recognise that they will have to transfer a lot of the effective decision-taking power of the Bundesbank to the European central bank. The Germans will not have the same control as they would otherwise have had.

It is important that the decision on the location of the European central bank rules in London. London must remain the major centre for the financial markets of Europe. If the central bank were located in one of the European financial centres—either Frankfurt or Paris—London would experience serious difficulty in retaining its dominance as the time zone financial centre for our part of the hemisphere, which is so important.

The central bank must be located in London, but if it is not possible to persuade the French or the Germans to agree to that, it must be located somewhere other than Frankfurt or Paris—it does not matter where—and somewhere which is not likely to be the nucleus of a financial centre.

Photo of Mr Matthew Carrington Mr Matthew Carrington , Fulham

Leeds would be good. We need to fight extremely hard to ensure that the central bank comes to London.

One of the consequences of monetary union will be that the barriers of entry into the Community will be very hard to overcome for the countries of eastern Europe. The problems of joining a hard currency area will add to their enormous difficulties of modernising and strengthening their economies, and they will have even worse problems if they have to join the Community too rapidly. They will need to maintain exchange rate flexibility and to do so as their trade increases with the Community. We must ensure that they have access to our markets on an increasingly open basis so that they can develop their industries even, to some extent, at the cost of our own.

The alternative to giving those countries access and to allowing them exchange rate flexibility will be something for which there is already pressure from inside the European Community itself—massive transfers of payment from the richer to the poorer countries. One way of overcoming the deflationary effects of joining a strong currency area is for the countries that can sustain the strength of the currency to make payments to the poorer countries. I do not believe that that will be politically acceptable. I represent a London constituency that has many problems of urban deprivation and it would be hard for me to explain to my constituents that they must pay substantial sums to support other economies. It would be unpopular, to say the least.

The traditional alternative to massive transfers of resources has been major population shifts, which is how America solves the problem. The American population is and always has been highly mobile. The Americans have avoided one state having to make payments to another in order to support it by moving the population as the economy alters. That alternative is not acceptable. The only realistic option is to maintain exchange rate flexibility, which can at least soften the problem of transition from a weak to a strong economy.

It is becoming clear that, except for perhaps a few EFTA countries, the expansion of the Community will be a long-term business. It may be possible to achieve that expansion by the year 2000, but the east German experience suggests that it will take considerably longer. At this stage, we are incapable of predicting the necessary time frame. That means that many countries with fledgling democracies and with economies going through difficult times will be sitting on the outside during a time of rapid development within the Community. We must find a way of bringing them into the decision-making process ahead of their joining the Community on a proper and complete basis. We must do so to a greater extent than is afforded by the associate status for countries planning to join. We must bring them in so that the shape of the Community is the shape that it will have to have when they are members.

Monetary union is important, but there is a danger that it will be followed—as night follows day—by fiscal union. Fiscal union is far less acceptable and is a considerable danger. There is no doubt that some people who advocate monetary union inside Europe also look forward to fiscal union when, effectively, tax and monetary policy will be dictated from the centre. I do not believe that one needs to follow the other, but we must be aware of the danger. It must be specifically guarded against in the treaties, by the way in which monetary policy is organised and controlled and in the details of the establishment of the European central bank. The danger must be borne in mind so that we can ensure that it does not materialise.

The principal goal during our presidency of the European Community is to start the process of the expansion of the Community. It is perhaps the most historic stage through which the Community has passed for some years. It is a difficult one and it could be very expensive, but it will be extremely important and worth while.

Photo of Mr Robert Sheldon Mr Robert Sheldon Chair, Public Accounts Committee, Chair, Public Accounts Committee 5:44 pm, 13th May 1992

It is a pleasure to have an equal number of females in the Chair and it is my privilege to congratulate you, Madam Deputy Speaker, on your appointment.

In his interesting speech the hon. Member for Fulham (Mr. Carrington) spoke about economic and monetary union. I agree with only a little of what he said, but it was worth listening to and I shall respond to it later. I deal first with the unspoken theme of the Queen's Speech—unemployment—to which my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) referred.

The Government came to power in 1979 and we experienced the deepest recession of the post-war years. They ended their period in office, up to the recent election, with the longest recession. It became clear that the level of unemployment that we suffered as a consequence was here to stay. In view of the present mass unemployment which has lasted longer than it did in the 1930s, few people will deny that the scars which took a generation or more to heal—and many still remain—will be with us again as a result of this long recession and long period of high unemployment. The Queen's Speech did not even refer to the subject, so we must assume that the Government have nothing in mind other than to wait for outside sources to bring about an improvement.

The promotion of manufacturing industry which the Labour party has—rightly—advocated for so long is crucial to create output. We shall increase output if we start thinking in terms of capital allowances and training but they will not mop up unemployment. Productivity grows about as fast as production, so as production increases, productivity also grows rapidly. Years ago, we used to speak in terms of automation and talk about the factory that could operate without people. That vision was too far ahead of its time, but one element of that vision was that in the future we would need relatively few people to produce the extra goods required.

There is a case for capital allowances to produce extra output, skills and production. They would also produce an employment gain, but the main effect would be on our balance of payments and our balance of trade. We must look to areas of the economy other than manufacturing industry to deal with unemployment. Manufacturing industry is the central problem facing us today but it is not central to the reduction of unemployment—for that we must think in terms of the construction industry and, like Beveridge, of roads and house building, and of the personal services that can come about only as a result of the wealth created by the manufacturing industries.

We must think about how much unemployment costs us, quite apart from the misery and wretchedness with which we are familiar from our weekly visits to our constituencies. The £20 billion that we spend on mass unemployment is probably the best example of failure to get value for money. What do we get for the £20 billion that we wantonly distribute? We get two societies—a society of those who have and one of those who have not. We get child poverty and disaffection, and the riots in Los Angeles have shown the potential for violence in a society in which people—especially the young—feel that they have no part to play.

Our expenditure results in the dependency culture which is so frequently condemned by the Government but about which they seem to do very little. Who is fostering this dependency culture? The Government say that it is a short-term problem and that if we get inflation down all will be well. However, we have had mass unemployment for 13 years and—my goodness—13 years is long enough to test any theory.

One difficulty in the dependency culture is that benefits must compete with low-paid jobs. The Government's solution is to cut benefits to produce competition so that people are forced into low-paid jobs. I am sure that we all agree that the earning of a living and the proper employment of the individual must benefit society as a whole.

One difficulty is that today a substantial cost is associated with the very fact of earning a living. Once, people could walk down the road to the mill or factory; they carried a snack and wore old clothes to work. But today is different. Transport costs many pounds a week, and constitutes a substantial proportion of the cost of earning a living. The cost of meals and of normal clothes also represent a large element. All that added together means that a lot of money is deducted from the low pay which is all that is normally available to many people, so that it is hardly worth their while to get a job.

None of that expenditure is allowed to be offset against income tax. We know why not: apart from the cost to the Exchequer, the Inland Revenue would fear being inundated with claims. However, it is time that we examined the possibility afresh, if we are serious about reducing the factors which make people worse off at work than on benefit. What would be the cost of allowing some such expenditure to be offset against tax? We give a tool allowance to engineers, and there are clothing allowances in special cases. We should consider the whole subject again, and find ways of bringing people into work.

Photo of Mr James Couchman Mr James Couchman , Gillingham

The right hon. Gentleman has just made an interesting suggestion. For those who are given company cars, home-to-work journeys are described as private mileage. Does he wish to make the same sort of allowances for them as for people travelling by public transport? A substantial reduction in the tax gathered from people with company cars seems to lie down that road.

Photo of Mr Robert Sheldon Mr Robert Sheldon Chair, Public Accounts Committee, Chair, Public Accounts Committee

I simply put up an idea for further examination. Something like the tool allowance would be one way of handling the matter. Whichever way one looks at it, however much might be spent on such allowances, it would be small in comparison with the £20 billion that we squander on creating the kind of misery that we see around us.

From the beginning of this Government—and, in fairness, I must say, before that too—the "housing ladder" has been a dangerous concept. Buying a house is fine; so is moving to a larger house as the family grows; but the idea of house purchase as a suitable investment is wrong.

Housing is a form of consumption. It is necessary, but it has to be balanced by other forms of consumption. Whereas price inflation without increases in pay settlements reduces consumption, house inflation increases consumption—and it does not even appear in the retail prices index. House price inflation makes house owners feel that they have a large amount of extra money, and they are pressed on all sides to capitalise on that and to take out big loans to buy the things that they want. They feel that they are in a strong position.

There are great advantages in house purchase. Tax relief on mortgages costs £5 billion to £7 billion a year —and then there is schedule A, under which it is more profitable to spend money on doing up one's house than to invest it elsewhere. There is capital transfer tax relief between spouses, and capital gains tax relief on one's main residence. Those are massive advantages. Why are we giving them, when housing is a form of consumption? We should realise that, although certain aspects of housing are essential, other aspects of it are less so—and are, in fact, a form of consumption. We should look at housing afresh, and say that we should not give those reliefs.

Too many people have looked upon house purchase as a form of wealth creation, and that was what fuelled so much spending in 1988–89. In the aftermath of the stock exchange slump, Nigel Lawson prepared a relaxation—but the stock exchange is not the best indicator of how the economy is faring. It affects well-to-do people, and also pension entitlements. Because of rises on the stock exchange, the value of pension funds increases, and therefore so do people's pension entitlements. But for most people there is no close connection between the FT index and their pensions. For most people, their pension is a long way off and does not affect their expenditure patterns. People do not make spending decisions based on the growing value of their pension entitlement. For one thing, they do not know about it; for another, it is not a matter of immediate concern.

For most people, the value of their house—which may have risen by many thousands of pounds—was far more important. The stock market fell, but house owners were sitting on over-appreciated assets, which made them feel wealthy. Banks and financial institutions begged them to use that extra value to improve the quality of their lives. Nigel Lawson, with his eyes constantly on the City of London, did not realise that what was happening elsewhere was more important.

Any Government would have to reconsider mortgage interest tax relief. Clearly, one could not remove the reasonable expectations of people already engaged in the process, but a long-term phasing out could begin.

Both the hon. Member for Fulham and my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) referred to European monetary union. In theory, EMU is acceptable—if we could achieve convergence on economic matters. Financial matters are easy, but economic matters are different. Once we had achieved convergence on economic aims and ends, we could achieve the growth, prosperity and economic development. My right hon. and learned Friend the Member for Monklands, East was right to use that as a criterion early in the debate. If there were convergence among the economies of Europe there could be a single trading area, with similar taxes, comparable welfare treatment, compatible living standards, employment opportunities and so on. But that is a long way off.

In past years this country has given billions of pounds in transfer payments to the regions. Even when the sum was much larger than it is today—not much goes that way now—there was never enough money to even out the great disparities in our country. Scotland and the regions received large payments—unfortunately, with limited effects.

Within the United Kingdom there have at least always been two safety valves. They are not very good, but they have helped to limit the damage of real and perceived regional differences. One safety valve has been our people's willingness to allow part of what would be their living standards to be used to help other areas of the country. That has been most valuable. The other safety valve has been that some people have been able to move to more prosperous parts of the country. "Getting on one's bike" can seriously damage the areas that export their best talents, but, in the absense of proper resources, it provides some opportunities which help at least to keep the country together.

As the hon. Member for Fulham said, such opportunities are far more limited across national frontiers within the Community. Germans cannot be expected to subsidise the Italian south, nor Belgians to transfer resources to the north-east of England, to anything like the extent that national Governments are willing to make such transfers within one country. Furthermore, people cannot cross language frontiers and expect to be treated much better than as guest workers, with few rights and expectations—certainly fewer than those of the people of the host country.

Economic disparities within the Community will not be reduced by anything like the amount required by the inability to alter the exchange rate or to undertake national policies to enable such damaged communities to recover. People do not have much sympathy with the economic problems of other countries. We always think that our neighbours' economies are easy to run—if only they would act sensibly.

The hon. Member for Fulham talked about the problem of Germany. The theory that all one needs to do is to transfer money is now on test—between west and east Germany. An economic merger such as that required by European monetary union is now being undertaken by that country.

Germany had the best possible hopes for success. East and west Germany have the same language, similar cultures, a cornucopia of good will, a massive balance of payments surplus, a disciplined industry and a booming manufacturing sector. Yet Germany has great problems which people say will take many years to resolve. The Germans had great hopes when they equalised the east German and west German deutschmarks, but there has been a massive transfer of funds from west to east Germany, which currently proceeds at £50 billion to £60 billion a year.

That sum is enormous. It is about the same as our expenditure in the Department of Social Security. All the dozens of welfare payments and all the retirement pensions come to roughly the amount that the Germans are spending every year in the transfer of resources from west to east Germany in the attempt to equalise the relationship between the two halves. Such a transfer would be inconceivable in any other European situation. Despite the almost unbelievable flow of funds, the results have been disappointing and no one can give a time for ultimate success. In such circumstances, economic convergence seems a long way off. Anyone who pins his hopes on that convergence should consider the lessons of west and east Germany. People should not come to conclusions that the west and east German position does not justify.

I should like there to be fixed exchange rates which were at least variable from time to time. The Bretton Woods system was right. No fixed exchange rates will last for ever, but they can last for a few years. If there is a minor cataclysm at the end of that time in which exchange rates are readjusted, that is far cheaper than the regular purchases of foreign currency which keep all the foreign exchanges throughout the City of London busy handling money and trying to make money on the turn all the time. That is an extremely expensive way in which to operate foreign payments.

The very fine rates that we used to have under the old Bretton Woods system were far better. They did not last for ever, but in this world, nothing does. Such a system provides stability for a reasonable period. If a merger does not succeed within one country—Germany—what is the outlook for countries such as Portugal and Greece if they join a central bank?

When Britain has the presidency, we have a chance to seek a realignment, which is the sensible attitude to take. I fear that the realignment may not be as great as one might wish, but it offers us the opportunity to bring sense to the situation. We cannot continue to have Germany, through having to pay vast sums to east Germany, controlling the whole level of the financial and monetary systems that operate throughout the Community.

Photo of Mr Matthew Carrington Mr Matthew Carrington , Fulham

The difficulty with a Bretton Woods arrangement is that if it is known that there will be a currency realignment at intervals, whether specified or unspecified, the speculation against that realignment would be massive and would force that realignment either to happen prematurely or to happen to an extent greater than would otherwise be the case. That was why Bretton Woods broke down. That will always be the criticism of such a pegged arrangement.

Photo of Mr Robert Sheldon Mr Robert Sheldon Chair, Public Accounts Committee, Chair, Public Accounts Committee

That is why the currency alignment, when it takes place, must take account of people's expectations for a long period ahead. That happened in 1949 when there was a 30 per cent. devaluation of the pound, so the currency realignment must meet people's expectations for a long period ahead. Stability for two or three years is then at least possible. There is then a massive saving on the billions of pounds which go across the exchanges every day. We must start to examine that possibility.

The Germans used to say that other countries needed more discipline on wages while they themselves threatened to disrupt the world's trade arrangements by entrenching within their highly prosperous economy their grossly indulged farmers. We like to discipline others in accordance with our prejudices and the countries with the strongest economies are foremost in their disciplinary zeal.

We now see a failure of discipline in a number of areas. We must ensure that we do not over-extend ourselves by introducing fresh disciplines that might limit our opportunities to control our own destiny. Other countries will come to similar conclusions. I want to continue the battle within the Community because we are right. Other countries, especially Spain, Italy, Portugal and Greece—and even France—will come to similar conclusions. On that basis, I look forward to seeing changes coming about.

Sir Thomas Hazel (Arnold Grove):

I congratulate you, Madam Deputy Speaker, on your appointment to the Chair.

It is a pleasure to follow the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). We are near neighbours and I share his concern about rising unemployment. I should have been happier with the tone of his speech if he had allowed some recognition of the fact that living standards in the north-west have risen in recent years to colour his remarks. If he looked objectively at circumstances in and around Greater Manchester, he would probably agree that, compared with where we were some years ago, the standard of living of most of our constituents has risen.

I accept, of course, that there are problems generated by the recession. We have just fought a general election in which the recession and unemployment played an important part. However, as a result of their spectacular election victory, the Government have considerably more room for manoeuvre than the right hon. Member for Bethnal Green and Stepney (Mr. Shore) led us to believe from his remarks. Having won an election so decisively, the Government now have a full term of office in which to justify their confident statements in the Queen's Speech.

The right hon. Member for Bethnal Green and Stepney sought to make some mischief of the Government's twin objectives. He contrasted our objectives of reducing the Government's share of national income, balancing the budget over the medium term and reducing taxes with the statement in the Queen's Speech about the need to set policy in the medium term by the criterion of convergence within the exchange rate mechanism of the European monetary system.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) said that he could not understand why the Conservative party wanted to reduce the share of national income taken by Government spending. The reason is simple. It is that we believe that that is the route to lower taxes, and we fought the general election campaign on that theme. The experience of being in office from 1979 has encouraged us in the belief that in a lightly taxed economy it is possible to obtain non-inflationary growth, to reward initiative and enterprise, and to encourage a real expansion in economic activity and enterprise. With that it is possible, however paradoxical it may appear at first sight, to generate increased revenues. During the 1980s, there were periods when that happened.

I am concerned about some of the problems that my right hon. Friend the Chief Secretary to the Treasury faces. He will enjoy my support in some of the decisions that he will have to take. The Chancellor repeated this afternoon that health and education are the priority in public spending, and I support that observation. However, I hope that the Chief Secretary will stick to his declared aim, which he outlined in his speech in the debate on public spending last week, to reduce public spending as a share of national income.

Whatever the present difficulties of my right hon. Friend the Chief Secretary, the long-term trends favour us —on one condition, to which I shall come in a moment —because in 1980 the Conservative Government took the courageous and at the time controversial decision to link benefits and pensions to prices rather than earnings. In that sense, we shall find in the years ahead that Government spending as a share of gross domestic product falls compared with that of many of our partners in the European Community.

There are also demographic reasons why we can look forward to a period in which, compared with other countries—in particular, France and Germany—our Government spending represents a smaller share of GDP. That will help the British economy considerably in the latter part of the 1990s. Astonishing though it may sound, Madam Deputy Speaker, provided that the Government stick to their intention to continue down the path of cutting taxes when it is prudent to do so, in the late 1990s we may well have tax rates half those of our continental neighbours and competitors. That will have important—beneficial, I believe—effects on inward investment. It will also make Britain a desirable place for highly professional people to work in and operate from within the wider European framework that we have debated this afternoon.

Whatever the Chief Secretary's current preoccupations and immediate difficulties—he outlined some of them in his speech—the long-term trends are favourable, provided that the Government keep their nerve. It is surely important at the start of a Parliament—what better time? —to have a strategy for public spending, stick to it and not allow public spending decisions to become the subject of immediate political pressures, of which we are all very much aware in the House, simply through the perspective of the annual public spending round. So I hope that the Government will stick to their strategy and not allow themselves to be deflected. I support my right hon. Friend the Chief Secretary in his objective.

In saying that I support my right hon. Friend the Chief Secretary, I am aware of the strictures which the right hon. Member for Bethnal Green and Stepney levelled at him. As I understood his argument, the right hon. Gentleman said that if the Government sought to reduce Government spending as a share of national income, to balance the budget over the medium term and to reduce taxes, it would be impossible, certainly difficult, to meet the Maastricht treaty convergence criteria also set out in the Queen's Speech. I should like to make my position clear. I believe that the former should take precedence over the latter.

If the Government had to choose between pursuing the policy of reducing Government spending as a proportion of national income—as well as the other wholly desirable features associated with that policy—and sticking rigidly by the criteria of convergence that the right hon. Gentleman accurately spelt out, they should be prepared to take a political decision and allow some relaxation. Some people may say, "Ah, but Maastricht is a treaty. It is solemn and binding. The British Government cannot act unilaterally." But surely that is to mistake the way in which the Common Market has developed over the years.

Given the circumstances that we witnessed recently in Germany, to which reference has been made several times this afternoon, it is likely that pressures will arise which will produce change. Perhaps there will be a realignment later this year. Indeed, such flexibility is to be welcomed.

We should not make too much of the apparent contradiction in the Queen's Speech to which the right hon. Member for Bethnal Green and Stepney referred in his eloquent remarks. There is more room for manoeuvre and the Government have greater opportunities than perhaps the right hon. Gentleman is prepared to recognise at first sight.

Photo of Mr Tom Arnold Mr Tom Arnold , Hazel Grove

The right hon. Gentleman says that he hopes so. We shall see as the months go by.

The Government come to a new term of office full of hope, with all sorts of opportunities before them. That being the case, I hope that my right hon. Friends in the Treasury will stick by their declared policy and will not deviate from the path which they have set out. It will not be easy. It will be difficult. I want to do everything that I possibly can to support them in their objectives because I believe that that is the way in which we can fulfil the commitments that we gave to the electorate at the general election.

Photo of Alan Simpson Alan Simpson , Nottingham South 6:14 pm, 13th May 1992

Thank you, Madam Deputy Speaker, for calling me as the first person to make a maiden speech in this afternoon's debate on the Queen's Speech.

Let me begin by paying several tributes. First, I pay tribute to my immediate predecessor in Nottingham, South. One would be hard pressed to find two people further apart politically, but Members will undoubtedly remember my predecessor as a loyal and faithful servant of the House. What Members may not know is that he was a distinguished rowing referee; often to be seen strutting the banks of the River Trent during competitive events. Those qualities probably made him much better qualified than me to understand a Government who were often perceived by the general public as going backwards, at great speed, and with their eyes closed.

My second tribute is to my city of Nottingham. It has been my home for some 25 years since I first arrived there as a bright-eyed student. It is a great and kind city. It has a long-held reputation, which is well deserved, as the Queen of the Midlands. Last year it was also voted the place in which the most people around Britain would like to live. This year the people of Nottingham confirmed the good judgment of the rest of the country when they voted to give the city a facelift. In a fit of great electoral enthusiasm and sound common sense, Labour swept the board in Nottingham in the general election. We are now in the proud position that at every level of government, be it district council, county council, Parliament or the European Parliament, Nottingham is well and truly a Labour city. We were only somewhat perplexed to know what was happening in the rest of the country on 9 April.

But Nottingham has its own problems, and it is these problems which force me to speak in opposition to the Queen's Speech. When I examine the measures set out in the Government's programme, I find that they are at best irrelevant and at worst cruelly indifferent to the challenges facing my city and this society. I have served as a county councillor in Nottinghamshire since 1985. I know how deeply, long-term and rising unemployment scars the life of entire communities in my city. Yet there was no mention of unemployment in the Government's programme.

This year, the county council has had to revise the graph that it uses to chart the growth of unemployment because the figures have spilled over the top of the original axis. How tragic and ironic it is that that has coincided with the issue appearing to drop off the bottom of the Government's agenda.

Nottingham has also been riven by the Government's policies on homelessness and bankruptcies. We now have record levels of both in our city. I have to tell this House that not a single family in Nottingham has been saved from eviction by the Government's much-vaunted mortgage rescue scheme. Not a single property has the city council been allowed to buy or buy-back to avert a repossession. The city council has been forced by the Government's dogma to sit on capital receipts of more than £50 million, unable to buy properties or buy back properties to avert repossessions, whilst the repossessed and dispossessed have had to sit out on their belongings.

Unfortunately, the Government's package of proposals offers as little to the homeless in Nottingham as it offers to the jobless. The city has also suffered as much as anywhere from the Government's gimmicks and games-show approach to education funding and reform.

I am a governor of an inner city comprehensive school —a school which I am proud that my children attend—but I have had to watch in sadness as the Government have lavished about £10 million on the white elephant of a city technology college that it will not even allow Her Majesty's inspectorate to issue reports on. Consider what that money could have been used for. Had we been able to share out the money, we would have been able to put it towards huge increases in the quality of education for more than 16,000 secondary pupils in the city of Nottingham rather than the 250 pupils at the city technology college. Had we used the money in a different way, we could have provided a nursery place for every child of three or four years of age in Nottinghamshire. That is the opportunity lost through the games-show approach that the Government have adopted towards education—one special school gets £10 million to spend, and the other 543 schools in the county are allocated £5 million between them.

The question is whether the Government's policies offer a future for all the children in Nottinghamshire or whether they are simply about privileges for a select few.

Although it may be a strange thing to say at this time in the life of a Parliament, I must tell the Government that time is not on their side. Another agenda is being shaped outside this House. It is an agenda that, sooner rather than later, the Government will have to face. Young people I know and with whom I spoke on the streets of Nottingham in the lead-up to the election have a different set of priorities which they wish us to face. They want answers from the House about tackling the worst famine in the history of Africa. They want to know our response to the huge increase in civil and regional conflicts, which are spreading around the globe, where the dictionary definition of a ceasefire has already been rewritten merely as the time it takes to reload or the time it takes to sell replacement arms.

I have to tell those young people, and young people in the Chamber today, that they will find no answers to those questions in the bunker mentality of the Government's approach to aid or arms control, or in the pernicious return of the Asylum Bill. There will be no future for my children or for anyone else's in a society riven by the extremes of wealth and poverty. In the Government's programme they will find only the policies of an Administration that closes its doors and turns its back on those increasingly trapped in fear, famine and civil war.

Those young people also ask how we may halt the destruction of the planet—so that they may inherit a future rather than a funeral. They will find no reference whatsoever to this in the Government's programme. That enormous challenge is being ducked.

People of all ages are asking what plans we have to reclaim the links with that generation of Thatcher's children who have become lost—those who were told to fend for themselves and that they were not worth decent training. As in the past, the Government's response is one of lamentable silence.

If there are lessons to be learnt from the tragic events of the Los Angeles riots, surely one lesson must be this: that the self-indulgence and complacency of the rich in Beverly Hills was as much a part of the riots as the looting and shooting amongst the poor. I see no future for this country if we ignore the lessons of those riots. I see no future for our children if we consign them to a society riven by the shabby prejudices of race, gender, age or religion.

When I rise in the House to tackle such questions, I shall seek to continue to press the Government on the issues that are already being shaped by a generation outside who will lose patience with the House if we do not address their priorities. I shall seek to do so with a degree of humour, and with courtesy, but reinforced by the words of advice from the late President Truman, who said: Never give them hell—just tell them the truth and they think it's hell. The lives and livelihoods of my constituents in Nottingham, South are of such importance that anything less than that commitment would be quite remiss of me. I pledge that commitment to the House now and to my constituents throughout my period in this House.

Photo of Mr James Couchman Mr James Couchman , Gillingham 6:25 pm, 13th May 1992

I join my hon. Friend the Member for Hazel Grove (Sir T. Arnold) in congratulating you, Madam Deputy Speaker, on your arrival in the Chair to oversee our proceedings. I add my congratulations to the new Member for Nottingham, South (Mr. Simpson) who has just spoken elegantly and with a great passion about his constituents and about affairs beyond these shores. His predecessor was a contemporary of mine and a good friend and I shall miss him, as will many of us on these Benches. We hope that the hon. Member for Nottingham, South will enjoy fighting him at the next election and we shall hope to welcome him back here then.

We shall listen to the words of the hon. Member for Nottingham, South in a slightly less restrained manner, I suspect, on the next occasion that he rises to speak, for there are conventions about how contentious one should be in one's maiden speech. Although I recognise that he gave us the obligatory Cook's tour of Nottingham, he also gave us a good deal of politics of a contentious nature and we shall certainly taken him to task next time.

We have heard a number of interesting contributions to the first important debate on the economy in this new Parliament. I shall not follow the lines of argument, which were more ably pursued by others, about European monetary union, the exchange rate mechanism and everything that will affect us during the coming years, through the Maastricht agreement and subsequent agreements within Europe.

As evidence of economic recovery gathers pace, it might be helpful to offer a perspective from someone who is still running a small family business in London, in a sector which was late into recession and which will probably be late into recovery. I declare my interest and my involvement in business to comply with our conventions and to establish credentials which are by no means common among Members of Parliament.

This week, we have received news of a Confederation of British Industry survey which suggests that the outlook for small firms is the most encouraging for two years, in terms both of the economy in general and of their own performance. After four months at the beginning of the year still firmly stuck in recession, with output and demand falling, the general election has proved to be something of a watershed, and the outlook is now a sharp increase in output and a sharp fall in unemployment.

That good news reflects a growth in confidence, the key ingredient which was lacking in the run-up to the general election. Although the successive half-point cuts in interest rates helped to ease the overhead costs of business during the past 12 months, without a return of confidence there could be no hope of increasing business turnover, thereby easing the rise in unemployment. It was a vicious circle because the fear of unemployment was itself a serious brake on the recovery of consumer activity.

According to figures published yesterday, during the first quarter of this year, and especially in March—when the fear of a possible Labour Government was greatest —consumers paid off £118 million of debts. People were so worried by the possibility of a predatory Labour Government that the debt total fell. I, for one, would not scoff at their worry. They had plenty of cause for concern, especially those people in the lower to medium income brackets.

The increase in optimism among small firms that was reflected in the CBI survey is good news, although it should not be overestimated: life out there for someone running a small company, as I am, is still very tough indeed. The banks—which are trying to recover from the results of their monumental misjudgments in relation to mega-borrowers such as Maxwell, Polly Peck, Brent Walker, Olympia and York and other major property developers—are very twitchy.

It is ironic that someone seeking to borrow a few thousand pounds will be trussed up like a Christmas turkey with mortgage charges, debentures, personal guarantees and anything else on which the banks can lay their hands, whereas if someone like their great socialist tycoon Maxwell wants a few hundred million, the banks will pay with almost no evidence of security. I believe that small and medium-sized businesses are paying the price for the misjudgments of the banks in relation to loans to the outfits that I have named.

At this point, let me make the first of my pleas to Ministers. If recovery is to come, it is essential that the banks play their part. While cash flow is still weak, orders and demand will need to be financed, probably by further loans. Ministers at the Treasury and the Department of Trade and Industry must use their influence to encourage the banks not to pull the plug on potentially sound and mature businesses that are fighting to survive the effects of the past two disastrous years. Such companies are the backbone of British business, and their demise would leave gaps that could not easily be filled. That can only make recovery more difficult.

My second plea is for Ministers to work without ceasing to take bureaucracy off the back of business. When I was in Australia last year on a Commonwealth Parliamentary Association visit, I was told about a brave entrepreneur who decided to set up a small business operating a flying-boat service from Melbourne through Sydney to Brisbane. His mistake, or misfortune, lay in the fact that his proposed business involved land, sea and air in three states, with three state administrations—not to mention the federal authorities.

It transpired that, to operate what had seemed to be quite a simple service, that entrepreneur would need 189 separate licences—each involving a more or less difficult application form to be approved by at least one capricious official, and each involving a fee. There can be no better turn-off for the enterprising aspirant business man than that sort of burgeoning bureaucracy. As a result, sadly, there is now no small flying-boat service up the east coast of Australia.

It is easy to suggest that the experience of grossly over-governed Australia could not be repeated here, but we ignore that lesson at our peril. As we sit in the House of Commons—few of us with coalface experience of business—passing shelfyard after shelfyard of legislation with the very best of intent, we have hardly an inkling of the way in which officialdom, with its routines and procedures, will interpret our laws and implement our policies. Recent examples of well-meaning laws that we have passed, which will have massive effects on many businesses, include the Food Safety Act 1990 and the Environmental Protection Act 1989, both of which satisfy the wildest dreams of the ambitious bureaucrat.

The Sunday Times has lately highlighted the recent tendency of Customs and Excise and the Inland Revenue audit group to become very aggressive, even in the most routine monitoring of payments by business. It seems that those two organisations are going on fishing trips. The Sunday Times is right to bring to light some of the very questionable practices of inspectors: its evidence accords with my recent experience of such audits. Fighting off outrageous and unsubstantiated claims from the Revenue can take enormous amounts of executive time, and it can cost a substantial sum in fees paid to a company's accountants to bring about a withdrawal of the Revenue's claims.

What is more, the Revenue has unlimited funds with which to take any case that it wishes to dispute to the highest courts in the land. That will break or cripple almost every small or medium-sized business that becomes involved.

It seems to me that the two great tax-gathering agencies of Government have it within their powers to destroy business, or to help and guide confused business men through the maze of shifting rules and regulations that emanate from our Finance Acts. In the interests of economic recovery, my right hon. and hon. Friends in the Treasury should use their considerable influence to persuade the Inland Revenue and Customs and Excise to use their formidable powers positively, rather than to destroy the companies that will make recovery possible. They need to cherish small and medium-sized companies, which offer the best chance of creating new jobs and reducing unemployment—as they did throughout the 1980s.

Many of the principals of those small companies have applied their craft skills, and either a redundancy payment or borrowed money, to building new businesses. They are terrified of the multitude of regulations that flow from the Palace of Westminster, the Departments in Whitehall, county hall and the municipal buildings. They have to spend far too much of their time satisfying the whims of officialdom, to the detriment of their businesses' prosperity.

At this point, I shall indulge myself in a short anecdote about the business statistics office—just one of a myriad officialdoms that afflict small business. I fill in forms about capital spending for the office each quarter, but recently it has sent me forms about revenue spending. While I was away fighting the general election campaign, the co-director of my small business was telephoned by the business statistics office, which wanted to know where the latest return had got to. "Ah," said my co-director. "the person who usually fills those in is away fighting the general election campaign", and he explained the circumstances.

The chap on the other end of the telephone line said, "Well, fill in what you think you may have taken. The figures do not really matter anyway." If that was indeed the Government's official business statistics office speaking, it is a piece of officialdom that can be taken off our backs straight away. I beg my right hon. and hon. Friends in the Government to be especially mindful, at the outset of the new Parliament, of the burden that will fall on business as a result of their legislation, and to seek to minimise that burden. Through such action, they will make a real contribution to the recovery in which small and medium-sized companies seek to play their part.

I was encouraged by the commitment made by my right hon. Friend the Chancellor this afternoon to reducing the bureaucratic burden. I shall keep him up to it.

Photo of Mr James Molyneaux Mr James Molyneaux , Lagan Valley 6:37 pm, 13th May 1992

I am sometimes absent from the House because of what used to be known as the group talks, now known as the Stormont talks. I have to attend three days a week, and I therefore hope that you will forgive me, Mr. Deputy Speaker, for not congratulating you earlier on your elevation. You and I have been near neighbours geographically for a long time, separated only by a narrow strip of Gangway. I think that I can promise you—perhaps rashly—that my colleagues and I will try not to give you too much trouble.

I congratulate the hon. Member for Nottingham, South (Mr. Simpson) on a forceful and sincere speech. At Question Time today, he occupied my seat at the end of the Bench. I made no attempt to dislodge him, because I have high hopes of converting him and enlisting him in my party—and, even after hearing the speech that he made this evening, I have not given up hope entirely. I know that the Chief Whip may not approve, but perhaps we can fight a duel when it comes to the point.

The hon. Member for Gillingham (Mr. Couchman) made a special plea to the Government in defence of the business community, and small businesses in particular. I am sure that the Financial Secretary to the Treasury will convey his views forcefully and accurately to the Chief Secretary, who may hold the key to many of the answers. We shall depend on the Treasury, which is at the receiving end of all the advice that we are giving today, to do what it can to ease the burden of bureaucracy endured by businesses great and small. That is one handicap that they can do without in these times.

The number of Ministers on the Treasury Bench has thinned since the beginning of the debate. Nevertheless, there are a couple of matters that I wish to raise with the Financial Secretary. I hope that he will not resent any words of advice that I give him and that he will be able, in a reciprocal gesture, to answer my brief questions. I hope that my opening words will offer a grain of comfort to him and his colleagues, because in drafting our party manifesto for the election we took a calculated risk when we included the following: We believe that our advocacy of a general policy of prudent and useful expenditure tailored to meet the special needs of each region of the United Kingdom is the right course of action for a government which desires to keep the Union intact. Our election result vindicated that consistent stance on sound money, and the voters of Northern Ireland proved that election bribes are not a decisive factor in winning elections.

The intelligence of voters should not be underestimated. They have the ability to spot dishonesty from far off. A prudent Government, particularly one which has been elected for the fourth time, should ensure that the nation's problems are put squarely before the public. The Government have everything to gain from trusting the public and the judgment of the people. For example, in the mid-1980s, when it became clear that something would have to be done about the rating system, the Government should have put the basic choices clearly before the public. Once convinced that drastic measures were required, it is true that there may not have been agreement on any one option, but there would have been a far greater acceptance of the resulting legislation.

In 1980–81, the Thatcher Government, as it has been called in the debate, made a virtue out of reducing expenditure to such an extent that they were blamed for making savage cuts—an accusation which became a millstone round the Government's neck for the entire decade. I never quite understood why the then Ministers refused to explain that they were merely restraining increases in the rate of expenditure. In that way, they would have avoided antagonising nearly every sectional interest and every profession.

I do not think that my words are jarring greatly on the Financial Secretary because, in those days, he probably shared my views, and he still may. The Queen's Speech made a modest and even timid reference to good housekeeping when it stated that the Government would maintain firm control of public spending with the aim of keeping its share of the national income on a downward trend over time. If the Government are determined to do just that, they need to explain, and to continue to explain, just why it is necessary to adhere resolutely to that course.

Explanations will be made even more necessary by unpredicable events in Europe and alterations in the European Community's structures. Many of those foreshadowed changes will outdate whole slabs of the Maastricht treaty, and in next week's debate on that treaty the House would be wise to study its implications for Britain by the end of the century. Certainly it would be impossible to comply with the delusions and whims of Jacques Delors and find ourselves deprived of freedom of action in regard to Treasury matters—perhaps the most important—and many other internal policies.

Those on the Treasury Bench would be wise to heed the wise words of the right hon. Member for Bethnal Green and Stepney (Mr. Shore), who said that the nation had been denied the opportunity to express a view on Europe. During the election campaign, I was haunted by the suspicion that there was a three-party conspiracy of silence which prevented that matter from being debated seriously. Consequently, given those circumstances, the British electorate had no clear method to express a view on a matter that has important implications for their future.

The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) warned us about the knock-on effects of German reunification, which are just beginning to make an impact. I hope that Her Majesty's Government would not be so foolish as to ignore the probability that the situation in Germany will deteriorate still further with consequent effects on us. Treasury calculations could be seriously upset, and I am sure that the Financial Secretary will have taken careful note of what the right hon. Gentleman said.

I hope that in the very near future the Treasury will resolve what appears to be a contradiction over the estimated costs of devolution. Some Ministers have been warning the Scots that they would have to bear what amounted to double taxation for the privilege of enjoying some control over their own affairs. The component parts of the United Kingdom need to know—and urgently—exactly what that cost will be. Scotland, Wales and Northern Ireland are all candidates for decentralised powers. Their taxpayers need to know, within weeks, just how great the additional financial burden will be because discussions on the process of decentralisation are already under way in the component parts of the United Kingdom, and, since the general election, in little discussion circles in the Palace of Westminster. That is something that we cannot ignore.

The financial contradiction may be a reflection of the constitutional contradiction, which certainly existed in the minds of several Ministers, who were in the habit of declaring that they would not contemplate devolution for Scotland and Wales. However, at the same time, they were making haste to impose devolution on Northern Ireland. That contradiction existed, at least, until the final week of the election campaign, when the Prime Minister—I think quite rightly—opened up the debate on the integrity of the United Kingdom. He declared: I will entertain no constitutional changes that will weaken the United Kingdom". Two days later, he added: there is no issue more crucial at this election than the defence of the unity of our United Kingdom. It was natural that in the debate on the Loyal Address the Prime Minister should refer to the four corners of the United Kingdom and recognise that, while the individuality of all parts of the United Kingdom should be respected, the Union itself is not negotiable".—[Official Report, 6 May 1992; Vol. 207, c. 67.] The Prime Minister's thinking is in line with my own humble contribution to our party manifesto, which predicted that in the new Parliament there would be delivered a pattern of governance common to every part of the kingdom.

The House will know that the three Northern Ireland parties represented in the House are currently engaged in discussions about a practical level of devolution for our part of the kingdom. We trust that there will be an assurance from the Treasury that, if we are lucky, we will not be surcharged for that privilege. At the beginning of those talks, we bound ourselves to the maintenance of confidentiality. However, I think that the other two parties' representatives would allow me to say that we have in the ranks of those delegations, which total about 40, around the Stormont table the talent and ability to achieve my long-held personal aim of designing a structure which will draw together the various strands in Northern Ireland, and gradually integrate them into one Ulster community at peace with itself, and working as an equal partner with the other three countries in the United Kingdom which the Prime Minister is determined to maintain. I am sure that the Treasury Bench and the Prime Minister will have our full support in that high endeavour and that we shall register that support in the Lobby tonight.

Photo of Mr John Marshall Mr John Marshall , Hendon South 6:50 pm, 13th May 1992

May I join my hon. Friends who have congratulated you, Mr. Deputy Speaker, on your election. It is a tribute to you and your fellow occupants of the Speaker's Chair that your election has given pleasure to hon. Members on both sides of the House.

I also join my hon. Friends in congratulating the hon. Member for Nottingham, South (Mr. Simpson) on his maiden speech which, like all too many maiden speeches so far in this Parliament, was conspicuously controversial. I join the hon. Gentleman in the tribute that he paid to Martin Brandon-Bravo, who was well liked throughout the House and regarded as a concerned, conscientious, loyal and hard-working Member.

The right hon. Member for Lagan Valley (Mr. Molyneaux) asked that the costs of devolution should be quickly defined. However, it is not the Government but the Opposition who are proposing a tax-raising assembly for the Scottish people. Surely is it up to the Labour party to say what additional taxes that would impose on the people of Scotland.

I wish to refer to various paragraphs in the Gracious Speech, the most important of which relates to a subject that was discussed in great detail yesterday—education. If the Government get the education system right, fewer other problems will face our country. I commend the paragraph that begins: My Government will ‖ raise standards at all levels of education". I am privileged to represent the London borough of Barnet, which has the best education results of any local authority in the country. One of the reasons for that is the great diversity and choice of schools. In my constituency, the electorate can choose to send their children to two voluntary-aided high schools, a voluntary-aided grammar school or two comprehensive schools. That wide variety of choice is one reason why the London borough of Barnet has achieved such good results.

Photo of Mr Roy Beggs Mr Roy Beggs , East Antrim

Does the hon. Gentleman agree that all children get off to a good start in their education if they attend nursery school? What nursery provision exists in his constituency? We in Northern Ireland have had excellent results at O and A-level, but many young people do less well partly because we have the lowest level of nursery provision in the United Kingdom.

Photo of Mr John Marshall Mr John Marshall , Hendon South

I am glad that the hon. Gentleman has given me an opportunity to point out that, under this Government, nursery school provision has increased in the London borough of Barnet. Only recently we saw the opening of the new St. Agnes Catholic school with nursery provision for 48 children. I hope that, despite the denominational nature of that education, the hon. Gentleman will welcome it.

I cannot for the life of me understand the opposition of some hon. Members to grant-maintained schools. I am fortunate that one of the first grant-maintained schools in the country is Hendon school in my constituency. I have visited the school on many occasions and the high morale within the school is conspicuous. One of the first times that I visited that school was in the company of the current Secretary of State for Transport when he was Secretary of State for Education and Science. During that visit one of the teachers approached him and said, "Mr. MacGregor, I have a confession to make: I am a member of the Labour party." I wondered what would be said next. He then said, "I think that I should tell you that the best thing that has happened to this school is its becoming a grant-maintained school."

More recently, the former Prime Minister, Mrs. Thatcher, visited the school during the general election campaign. In that visit one of the teachers approached her and said, "Thank you very much, Mrs. Thatcher, for giving us the opportunity to show that we can run this school and provide a better school than we had before."

The proof of that comes from the attitude of the parents in Barnet to Hendon school. When it was run by the local authority, some 110 pupils applied to go there. This year, the number of applicants was 386. The school has been able to spend much more money on books and teaching aids and provides much better school lunches than when it was part of the local authority system.

If we look at our education system, we find that those schools that have become grant maintained are popular and successful. The grant-maintained experiment will do a great service for education. I hope that we shall never believe that higher expenditure on education automatically leads to better results. Those of us who represent London constituencies remember the record of the unlamented Inner London Education Authority, which regularly spent much more money than the London borough of Barnet and regularly had some of the worst results in the country.

We should congratulate the Government not only on changing the school system but on their policies in respect of further and higher education. Recently in my constituency we have seen many new signs relating to the new university of Middlesex, which is of the highest calibre. More students from other EC countries go there than to any other university in the United Kingdom. Far more go there than to the universities of Cambridge and Oxford.

I welcome the fact that the Gracious Speech states that the Government are committed to pursuing vigorously their programme of privatisation". I welcome particularly the privatisation of British Coal. Some hon. Members—we have heard them in this debate —say that privatisation is flogging off the family silver. If that is the case with British Coal, it is pretty tarnished family silver. I know of your interest, Mr. Deputy Speaker, in the industry, but I must point out that British Coal has put a massive burden on the taxpayer, costing many billions of pounds that could have been spent more productively. It has been a burden not only on the taxpayer but on the consumer, because the electricity industry has been encouraged to buy its coal from British Coal rather than on the world market. Who has paid for that? Those who have paid for higher electricity prices have been the pensioners, the consumers of coal and the energy-intensive industries. The denationalisation of British Coal will lead to a good deal for the consumer and those who work in energy-intensive industries. They can look forward to an improvement in their job opportunities as a result of its denationalisation. The hon. Member for Berwick-upon-Tweed (Mr. Beith) said that British Coal was a monopoly. Is he not aware that it will face competition from imports, the gas industry and oil?

Some hon. Members doubt the wisdom of privatisation. There may even be one or two Opposition Members who have still not learned the facts of economic life. When we look at the record of the privatised industries, the first thing we notice is that there has been a huge increase in the productivity of the employees.

Photo of Mr John Marshall Mr John Marshall , Hendon South

The hon. Gentleman should be better informed. He knows that prices charged by the privatised industries have risen by much less than the rate of inflation. As a Labour Front-Bench spokesman, the hon. Gentleman should know that the Office of Gas Supply has been more effective in controlling British Gas than any Cabinet Minister. The hon. Gentleman should realise that the Office of Telecommunications has succeeded in keeping the prices charged by British Telecom lower than they would have been if the industry had stayed in the state sector. The hon. Member for Kirkcaldy (Dr. Moonie) should know that the Office of Electricity Regulation would be more successful in controlling electricity prices than any Cabinet Minister. The regulator of the water industry will be equally successful in controlling water prices. The hon. Member for Kirkcaldy should also know that one of the characteristics of privatised industries has been a massive increase in investment in those industries because they are tapping the private market rather than the taxpayer.

Do hon. Members think that Cable and Wireless, if it had stayed in the public sector, would have been encouraged to compete with British Telecom? Would it have been given taxpayers' money to invest in a competitive telephone system? Of course not. Would British Telecom be spending what it is spending today on new investment if it was still in the public sector? Of course it would not. The hon. Member for Kirkcaldy should know that the reason for the massive increase in investment by the privatised industries is that they are now in the private sector, no longer subject to the constraints of the Treasury and the public sector.

I welcome the paragraph in the Gracious Speech which reads: My Government will encourage Community agreements with central and eastern Europe". I have had the privilege of visiting Romania, Czechoslovakia and Poland. In all those countries one is struck by the fact that, under communism, industry was vastly overmanned—a characteristic of which the Labour party probably approves—underinvested and overdependent on fellow countries of the Council of Mutual Economic Assistance for their markets. Industries were oversubsidised and there was environmental pollution.

The result of the overthrow of communism has led to huge price increases, massive reductions in output and large increases in unemployment. That economic instability will lead to political instability unless we in the west take action to help those countries. In Romania, many Securitate officials are still in post, and there has already been an outbreak of anti-Semitism.

I welcome the comments in the Gracious Speech that relate to the Maastricht settlement. I will not be allowed to speak next week as I am speaking this week, so I hope that you, Mr. Deputy Speaker, will not object if I say one or two words about that agreement.

Photo of Mr Brian Wilson Mr Brian Wilson , Cunninghame North

Perhaps the Government will have to work to make up the numbers next week as well.

Photo of Mr John Marshall Mr John Marshall , Hendon South

I suspect that there will be plenty of volunteers to speak next week. No doubt there will be some from the Carlton club.

Any community either has to develop and expand or it decays. There can be no such thing as a static European Community. I know that some hon. Members wish that we had never joined, but they should recognise the reality. We have been a member of the Community for more than 19 years, and the referendum in 1975 gave a massive endorsement of our membership of the Community. The principle of our membership has been long accepted. Even the Labour party has accepted it in the past five or six years.

Photo of Mr John Marshall Mr John Marshall , Hendon South

As my hon. Friend says, on and off.

There are some mean-minded and petty hon. Members and members of the general public who do not want Britain to make a success of its membership of the Community, but that is folly. Maastricht was a great success for this country as the exemption of Britain from the social chapter will be beneficial to inward investment and job creation. I do not understand how some hon. Members can say that they want to impose the social chapter on Britain when it will lead to the unemployment of their constituents. It might salve their social conscience, but I do not want to salve my social conscience at the expense of the unemployment of my constituents.

The Gracious Speech also stated: Other measures will be laid before you. I hope that one such measure will relate to Sunday trading. The anomalies of the Sunday trading law are spoken of all too frequently. It is possible to go to a football match, a tennis match at Wimbledon or a cricket match, but it is illegal to rent out a sporting video on a Sunday. It is possible to sell the News of the World, but not a book. It is possible to sell gin legally, but not teabags. Such nonsense is defended by those who support the Sunday trading laws. A law that is frequently broken and rarely enforced is absolute nonsense. The law is frequently broken by supermarkets, corner shops and even, dare I say it, cathedral shops. It has brought the rule of law into disrepute.

Who opposes changes in the law? The first opponent is the Union of Shop, Distributive and Allied Workers, one of the least representative trade unions in the country. One shop worker in 10 is a member of USDAW. Another group of opponents is the "Keep Sunday Special" brigade.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster

It is possible to amend some of the anomalies to which my hon. Friend refers without ripping Sunday apart. It is possible to keep Sunday special and, at the same time, get rid of some of that nonsense.

Photo of Mr John Marshall Mr John Marshall , Hendon South

I quite agree that we can reform the law and not rip Sunday apart. I advise my hon. Friend the Member for Lancaster (Dame Elaine Kellett-Bowman) to go to Scotland. That country has maintained a special Sunday and deregulated Sunday trading. In Scotland, shops can open at any time. Many of them choose not to do so, and more people go to church in Scotland than do so in England. My hon. Friend is right: a similar policy could be adopted in England, where we could have a special Sunday and deregulated trading. More people go to supermarkets on a Sunday than to the Church of England—an important point that the Treasury should consider.

The Gracious Speech provides for the prosperity of our country, the foundation of the success of our country in the 1990s, and the success of the Government in the election in 1996. I commend it to the House.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

May I remind the House that Madam Speaker put a time limit on speeches made between 7 and 9 pm. I hope that it will not be necessary for me to intervene before hon. Members conclude their speeches.

Photo of Michael Connarty Michael Connarty , Falkirk East 7:08 pm, 13th May 1992

I am grateful to be called in this, the first major debate of the new Parliament, and congratulate you, Mr. Deputy Speaker, on your appointment.

I rise to speak with some trepidation, first, as I am aware that my speaking style may not transcribe well into the record of the House, and, secondly, as I am not likely to be oily enough to match the hon. Member for Gedling (Mr. Mitchell) who seconded the motion on the Loyal Address last week. I am more known to my Scots colleagues for my spiky style. Having seen the old photograph shown by the Serjeant at Arms, I think it may take some time to live down that spiky reputation.

My most important concern as the new hon. Member for Falkirk, East is to follow in the footsteps of the well-liked and respected Harry Ewing. Harry was liked and loved by his former constituents, and respected in the House for his timely and telling interventions. He left me with an additional burden as, in a debate on Sunday trading during the last Session, he offered to do the Speaker's shopping in Scotland on Sundays. I wonder whether Madam Speaker will expect me to include her shopping in my weekend duties. It would be in keeping with the spirit of the age and would help her to prepare for her weekday duties, but I hope that I may resile the contract if I pledge to attempt to be as pleasant in nature and as telling in my interventions as my predecessor.

Harry Ewing was also known for his competence in Scottish ministerial posts and for his dedication to working people, in addition to his pleasant nature. I shall be honoured to try to do as well as he in all things. In his maiden speech as the Member for the then Stirling and Falkirk Burghs in October 1971, Harry Ewing expressed concern that Scotland would become a peripheral region of Europe. Given the Government's approach to the social chapter of the Maastricht treaty, it appears that Scotland is about to become a semi-detached peripheral region of Europe.

Before reorganisation, parts of Falkirk, East were in the constituencies of Clackmannan, East Stirlingshire and West Lothian. My hon. Friends the Members for Clackmannan (Mr. O'Neill) and for Linlithgow (Mr. Dalyell) are held in high regard by their former constituents, which is evidence of the excellent way in which they served them in the past.

The town of Grangemouth is at the centre of Falkirk, East and has been noted for some time as a petrochemical town, boasting substantial production facilities for BP Oil, BP Chemicals, ICI, General-Electric Plastics, and Rhom and Haas (Scotland). My constituents are pleased at the commitment to investment by those companies, notably the £600 million investment by BP Chemicals in an ethylene cracker plant, the process technology labs of ICI and the Rhom and Haas plant upgrade. However, all is not what it once was. Harry Ewing noted the vast expansion of Grangemouth in 1971, but in 1971, when speaking about new employment, he said that the position was rapidly changing. I say without criticism of local management in Grangemouth that, in 1991–92, more than 1,000 job losses were announced in the town. Some 300 jobs have gone at the BP refinery, 250 have gone at ICI and 200 more redundancies are being sought. In addition, there were major job losses in the timber yards, which were made much of in 1971 by my predecessor.

Let us look particularly at ICI. ICI was threatened by Hanson in a way that no other European country would allow. The Government's policies afford no protection to British companies from the smash-and-grab merchants, or should I call them grab-and-smash merchants, of international finance. ICI is now forced to break with its past policy of sharing its prosperity with all those who helped the company grow over decades. That has dire consequences for those who lose their jobs and for job prospects in my constituency. It has all been done for the sake of the share price, so that Hanson can sell them off and, hopefully, take "clear-off" money. I am told that the City has an unparliamentary phrase for that sort of thing, but I shall not use it.

Another departure at ICI that concerns the people of Falkirk, East is the closure of the anthraquinone production plant at Grangemouth. The chemical is the base green product for many dyes. There were concerns about the need to upgrade the plant to reduce airborne emissions, but the decision to build a production plant in India and ship the anthraquinone to the United Kingdom to raise it to the required European standard has left a sour taste in the mouths of local people. It also raises for the Government the question of what they will do to assist the reduction and acceptable disposal of chemical industry effluents. Will they guarantee for local government strong powers to enforce standards for all effluent disposal as a token of their commitment to the environment?

Grangemouth is also known as a port handling more than 40,000 containers per annum, plus dry cargo. The port is also known for the way it was privatised with undue haste just before the general election. The Government's credibility over that escapade is in tatters. I am informed that the Forth ports authority, a trust set up to look after a public asset, fixed up a deal with the Government that resulted in those same trustees getting a majority of the shares in the privatised Forth Ports company. The Government get a kick-back of a substantial percentage of any future asset sales to add to the original sale money.

Some matters continue to cause concern—for instance, that the dock land covered by the recently-granted simplified planning zone will not be developed for commerce but sold for housing and quick profit. There are also concerns at the connection between the pricing policy of the Forth Ports company, which appears to be driving dry cargo to other ports, and the disgusting but not surprising demand for redundancies of dockers, despite what I understand was a £9 million profit declared by Forth Ports on assets of £30 million.

The constituency also boasts the former mining villages of east Stirlingshire, which combine with the vastly expanded commuter village of Polmont and the community of Laurieston on the edge of Falkirk to form the area called the Braes. I detail the geography of this community of 20,000 plus to underline the Government's failure to provide the resources for even one secondary school. Children are forced to travel by weird and wonderful routes from all irts and pirts to the nearby town of Falkirk in the constituency of my hon. Friend the Member for Falkirk, West (Mr. Canavan).

Viewed together with the need for increased nursery and primary school capacity, that is a major deficiency in encouraging the building of a community identity and in assisting in a rebirth of pride and endeavour in those once proud communities, many of which have been ship-wrecked by the tides of economic change. I urge the Government not to continue with the discouraging line set by the previous Minister with responsibility for Scottish education but to release the necessary resources to Central regional council and guarantee that they will not centralise the control of education at the Scottish Office.

I link the most easterly and the most northerly communities in the constituency in a plea for the needs of the health service. Borrowstouness, better known as Bo'ness, in the east is a former whaling port and is still an iron foundry town. Until the 1980s, it had a proud mining tradition. The pride of Bo'ness Kinneil's colliers lives on, but Bo'ness has become mainly a commuter town of 15,000 people. It has a heritage centre and the Scottish Steam Railway Preservation Society. But modern Bo'ness does not have a single NHS bed for the long-term care of elderly male patients. I stress the word patients. There are only 24 female beds in Bo'ness hospital. In the spring 1990 issue of the "Forth Valley Health Board News", the hon. Member for Stirling (Mr. Forsyth), as part of a clear propaganda exercise, wrote: To underline our commitment to the elderly and disabled we will spend £5·6 million on 150 new beds at Lochgreen hospital in the constituency of my hon. Friend the Member for Falkirk, West and Bo'ness hospital. I have a letter from the health board secretary, saying that work would start in 1992–93 but nothing has happened. I have now been told by the health board secretary that work is in the programme for 1994–95.

I have a well-documented consequence of this lack of facilities. A constituent who is in her seventies must travel daily to Falkirk to the male ward of the Falkirk infirmary in the constituency of my hon. Friend the Member for Falkirk, West. She undertakes an arduous bus journey of five miles and a long walk to visit her husband who suffered a stroke while undergoing an operation two years ago. If the health board and the former Scottish health Minister had kept their promise, that woman would be looking forward to her husband returning to his home town within a year. The health board has suggested that the family might try to get a place at a Bo'ness nursing home. I have it on the authority of local consultants that that solution is most favoured by the Conservative chairman of the local health board.

The family checked with local nursing homes and found that they can have a place at £320 a week, of which £260 will be provided by social security and the gentleman's pensions. Therefore, the family must find £60 a week. The wife has said, "No. Why should I pay for care that I and my husband have already paid taxes for all our lives?" She says that the Government will never convince her that they are not privatising health care.

Why is Forth Valley health board not willing to pay for a nursing home place? The woman's husband is still a patient—a word which I stressed earlier—and it is the Government's failure and the Minister's broken promise that are causing the difficulty. I hope that the Government will confirm that they will not allow Forth Valley health board to withdraw from its commitment to provide additional beds at Bo'ness hospital. I urge the Government to consider arrangements to ensure that some of the care and boarding costs are covered by the health board contributions when patients are transferred from hospitals to private nursing homes.

I should like to say much more to the Government—a Government who caused so much harm in the 1980s. They must be reminded that they shaved in at the election and that only 1,700 votes in 11 constituencies made the Conservatives the largest party. In view of that, I hope that the Government will moderate their ideology. In future speeches, I shall return unstintingly to the task of representing the needs and interests of all the people of Falkirk, East throughout this Parliament.

Photo of Mr Anthony Coombs Mr Anthony Coombs , Wyre Forest 7:18 pm, 13th May 1992

I congratulate the hon. Members for Falkirk, East (Mr. Connarty) and for Nottingham, South (Mr. Simpson) on their excellent maiden speeches. I also congratulate in advance the large number of hon. Members who will later make their maiden speeches. I am sure that they will all grace the House over the next four of five years.

Many of the issues raised in the debate were adequately aired in the general election debate. The decisive vote in favour of the Conservative party was due to three basic factors, but especially to our economic policies. The first was that the British people did not feel that a party that was still committed, through clause IV, to the ownership of the common means of production and exchange was the kind of party that could be adequately left in charge of a mixed enterprise economy. Secondly, a party that saw taxation primarily in terms of the redistribution of wealth was unlikely to improve incentives. Thirdly, a party that saw the rich as people earning more than £21,000 a year was unlikely to push forward a large increase in the prosperity of the individual.

As to financial rectitude, here was the Labour party with £38,000 million worth of policies and only £4,000 million worth of revenue to fund them. Its difficulty in convincing the country on its attitude to inflation was demonstrated by the following two quotes. The first is from the Leader of the Opposition in 1990, when he said to the Welsh Labour party conference: Inflation must be brought down by a combination of restrictions on credit, financial discipline and—yes—interest rates too. The second comes from the right hon and learned Member for Monklands, East (Mr. Smith), who said in 1991, less than a year later: We will not be using interest rates for ‖ controlling demand. Two of the most senior members of the Labour party were unable to decide on the role that interest rates should play in the control of inflation.

More positively, the British people showed that, despite the world recession, which was generally recognised, the British economy had, over the 1980s, been transformed in terms of manufacturing productivity, growth, exports and the ability of management to manage. It is small wonder that the director general of the CBI welcomed the election result by saying that it was the best possible result for British business of all the possible outcomes of the general election. In the short time since the election, that judgment by the British people has been vindicated. The stock market has risen by 10 per cent., and Dun and Bradstreet has shown that industrial confidence among business men has gone up from a positive 7 per cent. to a positive 25 per cent. The CBI and the chambers of commerce tell the same tale about industrial confidence. Even the housing market is starting to show some signs of improvement. I am told that in my constituency, the transport of rolled steel has moved up significantly over the past month, and that is a harbinger of the potential general growth of the economy. The pound has strengthened considerably against the deutschmark and, to a certain extent, against the dollar, despite the reduction in interest rates. In my constituency, unemployment has started to fall slightly.

The Government's economic policy has brought about all these improvements. First of all, the political climate is much more favourable to investors than it is in France, Italy or Germany. Secondly, international investors are convinced that we shall ensure that the battle against inflation will be won, and it is significant that yesterday's announcement showed that the factory gate prices to April rose by only 3·8 per cent., which is the best figure for four years. The money supply growth, in both the narrow and broad range, is well within target. Thirdly, the Government have reinforced their commitment to the ERM within the present parities, and that is a significant reason why the credibility of the pound has been maintained.

It is interesting that, despite the fact that the relative differential of interest rates between the pound and the deutschmark has dropped from 5 to 0·5 per cent., the pound has strengthened against the deutschmark. Domestic investors are convinced that the Government will continue their low-taxation, high-incentive policies, which have given the country the lowest corporate tax rate in Europe.

The right hon. Member for Bethnal Green and Stepney (Mr. Shore) said that we would be shackled to the deutschmark in terms of our interest rate policy. In fact, we now have the opportunity to break free from it. For the first time in more than 20 years, we have lower interest rates than Germany. There are two reasons for that. The first is financial stability. Retail prices have increased by 2·1 per cent. in the United Kingdom over the past three months whereas in Germany they have increased by 4·7 per cent. Our money supply, on a broad level, is much more under control than that in Germany—we had a 5·6 per cent. increase over last year, compared with 7 per cent. there. Although we realise, as my right hon. Friend the Chief Secretary has said, that we have demands on our public expenditure budget, they pale into insignificance against the 70 billion deutschmarks that the Germans have to pump into the east of Germany every year. Our political situation is more stable, particularly given the instability of the coalition Government.

All that gives us the opportunity to lower real interest rates and therefore nominal ones in the way that the Germans cannot. However, we cannot afford—this is crucial—any relaxation in monetary or fiscal policy.

Secondly, irrespective of what the right hon. Member for Bethnal Green and Stepney may think, we cannot afford any talk or hint of a realignment of the currencies of the ERM. That would undo precisely the confidence that has seen the pound rise and the disappearance of the interest premium that previously international investors demanded to hold sterling. It is crucial that the Government hold to their present view of ensuring that we have a strong exchange rate, and one that is not accompanied by any talk of realignment in the exchange rate mechanism.

Provided that we hold fast to those policies, I expect that interest rates will continue to fall, that the pound will continue to strengthen and that that will reintroduce growth in our economy, which will mean that, in the long term, we have more potential for tax cuts with the amount of money available for public expenditure still going up.

There is another matter to which the Government should be giving their attention, irrespective of one's view of stage 3 of European and economic monetary union or the desirability of a single currency. I think that we shall not achieve a single currency, irrespective of its political desirability or otherwise, simply because, in the foreseeable future, the cost of ensuring that 12 European currencies and economies converge in the way that is required is unrealistic.

Nevertheless, it looks as though a European central bank will emerge as part of stage 2 and will have a significant role even within a Europe without a single currency. We should ignore Chancellor Kohl's reported threat that the Germans will not ratify the Maastricht agreement unless the European central bank comes to Frankfurt. The bank should come to London because that is its natural home. Not only is London the world's largest foreign exchange centre, but it has 27 per cent. of the deposits of the ecu, the new European currency, while Frankfurt's deposits are too small to quantify. Furthermore, no fewer than 520 foreign banks have offices in London, and that is more than in any other city in the world, and the City of London accounts for more than 95 per cent. of all reported European cross-border equity business. All that underlines London's position as a world financial centre. I urge the Government, in their discussions with their European partners, to ensure that the European central bank comes to the natural financial capital, London.

Photo of Brian H Donohoe Brian H Donohoe , Cunninghame South 7:28 pm, 13th May 1992

I congratulate you, Mr. Deputy Speaker, on your appointment to your elevated position. I am grateful to you for the chance to make my first speech so early in the new Parliament, particularly in a debate on the economy.

I begin by paying tribute to my predecessor, David Lambie. I know that, had he been here, he would have wished to contribute to the debate in his normal pleasant style. He was known to both sides of the House as "wee Davy" and his many friends will be glad to know that, having served his constituents well for 20 years, first in Central Ayrshire and latterly in Cunninghame, South, he is now enjoying life with his wife Netta and his family at home in Saltcoats.

David served Scotland well. He was Chairman of the Scottish Select Committee, and it is to be hoped that that Committee will be resurrected with my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) in the Chair. In his maiden speech, David referred to his predecessor, Archie Manuel, who was Member of Parliament for Central Ayrshire from 1950. David reminded the House that Archie's name appeared in Hansard more frequently than that of any other Member because of his interruptions and points of order. David promised that he would not give the then Speaker too much trouble, and I am sure that that was the case.

Cunninghame, South is a relatively new constituency, having been made up from the rump of Central Ayrshire.

The population is concentrated in three principal towns —Stevenston, Kilwinning and Irvine. There are also several villages, but too many to name without missing out some and offending them. The constituency can be split in two. The great majority of the population is based in the new town of Irvine, which includes Kilwinning, with the remainder in Stevenston.

I noted from the maiden speeches of my hon. Friends the Members for East Kilbride (Mr. Ingram) and Cumbernauld and Kilsyth (Mr. Hogg)—by sheer coincidence, ex-colleagues as NALGO district officers—who represent two of the five new towns in Scotland—NALGO officials appear to want to take over Scotland's new towns—that each of my hon. Friends was of the opinion that his new town was number one in Scotland. Indeed, my hon. Friend the Member for East Kilbride claimed his new town to be the best in Britain. What neither of them can claim to represent is the only new town by the sea. That is the distinction that I can claim, and to that end I suggest that Irvine is the most attractive new town in Britain. It has tremendous facilities, such as the Magnum leisure centre and many golf courses.

The new towns face common problems, not least because of the Government's intention to wind up the development corporations and dispose of their assets. The rhetoric of the 1989 White Paper that suggested the setting up of private sector local development companies to maintain the economic momentum has now gone. Instead we are faced with the prospect of the Government removing assets from areas of great need.

To suggest stripping the development corporations of their assets at this time, with the closure of Ravenscraig in Motherwell and the rundown of ICI in Stevenston, is irresponsible. I remember as a boy going to the station in Ardrossan to meet my uncle from his work at ICI. That was one train load among dozens of buses and trains that every day transported thousands and thousands of workers to ICI. I worked in ICI from 1977 to 1981 and I remember dozens of buses queueing to take the workers home. There was also a car park full of cars. All that has gone and Stevenston has nothing left. There is nothing to replace a factory that employed thousands of people, and the local economy has been devastated.

We need an injection of resources. We already have the expertise in the form of the development corporation in Irvine. What we need from the Government is commitments.

When David Lambie entered Parliament in 1970, there was a thriving local economy, with the SKF ballbearing company, Monsanto Nylon, Essey International, Bonny-Forge and many more. On our doorstep in neighbouring constituencies there were Saxone shoes, BMK carpets, Glenfield and Kennedy and Massey Ferguson, with Ailsa Shipbuilding in Troon employing 700, myself included. All those companies have closed, with the result that unemployment in what is supposed to be a development area has been, at times, the highest in Britain. I have been unemployed on three separate occasions. That is the state of the economy in the part of Scotland that I represent.

It is only because of the activities of the development corporations that there has been inward investment, with Caledonian Paper at the forefront of their achievements. My hon. Friend the Member for East Kilbride said in 1987: A simple, straightforward commitment to a regenerated industrial manufacturing base by the Government could transform East Kilbride's and Scotland's fortunes overnight." —[Official Report, 20 July 1987; Vol. 120, c. 147.] Unless there is some commitment from the Government—sadly missing from the Gracious Speech—to inward investment and to extending the boundaries of the development corporations' remit to Stevenston, the pockets of deprivation and the no-go areas in my constituency will increase and there will be a threat to the whole population. That is the reality of life in Cunninghame, South, and it must not be understated by Conservative Members.

I do not want the structure of the local government reforms proposed in 1991 to be broken up into small units. For 10 years I have battled for a decent road link to East Kilbride and Cumbernauld. The fact that the best road out of Ayrshire to the rest of Scotland is a B road is disgraceful. That is the reality of the problems of infrastructure in our part of the country. I would not want the reforming of local government to mean that it does not have clout. There have been enough delays, and the killer road, the A77, should be upgraded immediately. The Government have made three separate announcements about the upgrading of that road, but work is yet to begin on the first stretch of road. We need that road upgraded now.

As a trade union full-time official involved in local government, and having travelled Scotland extensively, including the isles, I do not believe that one-tier authorities should be the Government's automatic choice. I have clear examples of both cost and resources efficiency, and I would not want that to be lost with the imposition of one-tier authorities. I hope that at a later date I will be allowed to expand my arguments on that matter.

I remind the House of David Lambie's pledge in his maiden speech, which was to behave. I will also give you that commitment, Mr. Deputy Speaker, but I will not give the same commitment to the Government unless they listen to my plea and those of my hon. Friends who have made their maiden speeches this week. The Government must listen. We hope that, in this case, the Government have listened and that they will act.

Photo of Ms Jean Corston Ms Jean Corston , Bristol East 7:38 pm, 13th May 1992

In making my maiden speech to the House I am conscious of the honour bestowed on me by the people of Bristol, East in electing me as their Member of Parliament. I am proud to join my hon. Friend the Member for Bristol, South (Ms. Primarolo) as the second woman Member of Parliament in the city of Bristol, which now serves as a shining example of equal parliamentary representation as between men and women.

Since 1983, Bristol, East was represented by Mr. Jonathan Sayeed. It is fair to say that there was little on which he and I agreed, but I know that he developed a great affection for the city during his nine-year tenure and that he worked hard to represent his constituents.

Prior to the 1983 boundary redistribution, Bristol, East was primarily contained within two former seats. One was Bristol, North-East, which was represented by Arthur Palmer. He was first elected to the House in 1949 and is now in well-earned retirement. The other seat, Bristol, South-East was represented by my right hon. Friend the Member for Chesterfield (Mr. Benn) who was a Bristol Member for 33 years and is remembered by many constituents as an exemplary constituency Member.

The economy of Bristol, East is a microcosm of what has happened to the British economy under this Government. Fifteen to 20 years ago there were major employers in the constituency: St. Anne's Board Mills, Bristol Commercial Vehicles, Marden, Son and Hall, and Strachan and Henshaw. They have all gone. Now we have a number of trading estates, many with empty sites. We also have neighbourhood shopping centres that are characterised by vacant shops.

Many of my constituents are employed in defence-related industries. We are all aware of what is happening to them as a result of the peace dividend. However, their future is even more bleak under a Government whose diversification policy is confined to the diversification of capital, as in British Aerospace's purchase of Rover, rather than diversification of the precious skills of those defence workers. We have rapidly increasing unemployment, therefore, and the constant and insidious fear of unemployment.

The Government's solution has exacerbated the problem, in the shape of the Bristol Development Corporation whose area of responsibility is almost wholly contained within Bristol, East. It has managed to arouse the hostility of residents, business people and virtually every community group. It has not created a single job. It proposes, without holding a public inquiry, to build a dual carriageway on stilts through my constituency which will carry 42,000 vehicles a day, while at the same time the European Community is talking of traffic-free city centres.

The Gracious Speech contains a commitment to modernise the social security system, with sustained emphasis on those groups in the greatest need. Many hundreds of people in my constituency are in that category only because of the Government's failure to provide affordable child care. I refer to women on income support, with dependent children, who want to work but who find that the money that they earn is barely enough to cover child care costs. They are forced into the dependency culture against their will, and cannot exercise the freedom of choice to which the Prime Minister makes frequent reference.

Furthermore, when the House comes to debate the Maastricht treaty, many of my women constituents will want to know why they, unlike most women in the European Community, will not be given the opportunity and protection offered by the social chapter. They will want to know why they are at the bottom of the European league in maternity pay and maternity rights. They will want to know why they have such inadequate employment protection.

Many part-time workers, most of whom are women, now have to work for an employer for five years before they are covered by the redundancy and unfair dismissal legislation. They will want to know why, after 20 years of equal pay legislation, there is no real commitment to equal pay for work of equal value, and why women's pay is still only 68 per cent. of men's pay. They will also want to know why they are not going to be protected from exploitation at work, in the form of long hours, and why no provision has been made for their health and safety. What are we saying about women, as mothers, if they can be compelled to work for more than 48 hours a week and if they can be compelled to work on Sundays if they do not want to do so?

The Prime Minister is to be congratulated on rectifying a grievous oversight—because that is all that it can possibly have been—by appointing two women to his Cabinet. I congratulate the Secretary of State for Employment and the Secretary of State for Health on their appointments. However, the Queen's Speech provided the Government with the opportunity to show the women of this country that they are committed to improving their life chances as women and as employees. I noticed that there was a great deal of talk about that by the Prime Minister before the election, and at times during the election, but the Queen's Speech is amazingly silent about the Government's intentions regarding 52 per cent. of our population. That opportunity has been missed and thrown away. Women will have noticed it. The advancement of the careers of two women, however well deserved, is a very poor substitute. Much, much more is needed.

Photo of Mr Richard Page Mr Richard Page , South West Hertfordshire 7:44 pm, 13th May 1992

It is my pleasure and privilege to follow the hon. Member for Bristol, East (Ms. Corston) and to congratulate her on her maiden speech. I very much appreciated her reference to her predecessor, Jonathan Sayeed.

All of us remember our maiden speeches. They are indelibly printed on our minds. I well remember my own shaking and nervous initial contribution, which contrasted with the smooth and, dare I say it, professional performance of the hon. Member for Bristol, East. The House will look forward to her future contributions. The House is becoming the place where the rights of women are championed. I am sure that the hon. Lady will take her place in the lists and make sure that the women of this country are adequately represented and their causes fought for by those like her, with her hard and forceful words. I congratulate her.

The contents of the Gracious Speech are inevitably coloured by the result of the general election. I regard political parties as a little bit like a religion. I believe that a political party should have a creed, a philosophy to follow. The Conservative party has a very simple creed: it believes in choice, in the rights and responsibilities of the individual and in the family. That is the cornerstone of our society, upon which everything else rests and from which everything else can grow.

The traditional basis of our political system—the Labour party and the Conservative party—is undergoing change. I believe that the Conservative party has found its way. It has returned to its traditional beliefs. However, the Labour party is in desperate trouble. The two-party system has been in operation for about 70 years. The Labour party grew and flourished because it believed in its own particular creed, the creed of clause IV, of centralisation, of state control, of the individual being subsumed by the state. Now, however, the Labour party has been forced by the election to realise that the country has moved on and requires different political creeds. Conservative philosophies are being adopted throughout the world, with the return of many state activities to the private sector. They are thereby becoming more efficient and profitable and are providing better standards of service.

A few days ago the BBC referred to trouble at British Gas—trouble over whether gas charges would remain static or come down. If that is the sort of trouble that we are getting from our privatisation programme, I hope that we shall get a lot more of it. With the regulatory process in place, I believe that there will be greater and greater returns to the economy from previously state-owned industries.

The Labour party will have to sit down and decide how it is going to present a credible alternative to the British people. I regret the proposed hasty resignation of its leader. The Labour party ought to have spent some time considering the way forward before rushing into that election. The House requires a two-party system, with arguments going back and forth across the Chamber. We should like the Labour party to give us a bit more of a run for our money, instead of making such a hopeless hash of things, just as it did after the two previous elections. In the 1983 election, the Labour party asked the electorate to vote for unilateral disarmament, more public ownership and more taxation, but now it says, "We are sorry, we got that completely wrong. These are our new policies." Thank heaven Conservative policies are in place to make the economy grow and become much stronger.

The Government aim to reduce the standard rate of taxation to 20p. I hope that my hon. Friend the Member for Chichester (Mr. Nelson), who was recently promoted to the Treasury as Economic Secretary, will carry on the battle to ensure that the basic rate is the norm for the whole country. Perhaps with a little bit of pushing and courage we could improve it beyond that. I believe that people know how to spend their own money better than the state because they can choose how to regulate their own lives. That is the way forward.

Britain has a problem of manufacturing culture. Business, with notable exceptions such as British Aerospace, ICI or one or two other major leaders, does not invest enough in manufacturing industry as a percentage of economic activity. We do not invest enough in research and development and training. The Government have taken an immense leap forward by investing in training, but businesses must follow the example of competitors such as those in Germany and Japan by investing in growth for the future. I welcome inward investment, about which the Opposition have had to do another volte face, as it provides jobs and growth, but we must invest in indigenous industries to provide jobs, to balance our trade and to reduce our public sector borrowing requirement. Our new Secretary of State for Trade and Industry and the new atmosphere and approach to industry at the Department of Trade and Industry, which is no longer trying to phase itself out of business, will ensure that manufacturing industry grows.

For the past 10 years I have continually pushed for greater emphasis to be placed on small businesses and to ensure that they are started after proper evaluation of cash flows. As small businesses grow, they will contribute more to the economy, offer more employment and eventually grow into bigger companies. A recent survey showed that the British profile of companies was still heavily biased towards larger companies. Conservative policies have improved the status of small business, but we must do more to ensure that they grow and develop further.

I urge that we continue the Treasury's policy of encouraging smaller businesses by removing barriers. I refer to the substantial move forward in the last Budget but one of increasing the VAT band up to £36,600. That tremendous improvement took many new businesses out of the VAT trap and saved them the enormous task of keeping VAT records until they had grown.

I hope that the Queen's Speech, which points the way for further implementation of Conservative party policies, will be supported by the House and I wish to give it every encouragement.

Photo of Mike O'Brien Mike O'Brien , North Warwickshire 7:54 pm, 13th May 1992

May I take the opportunity in my maiden speech to congratulate you, Mr. Deputy Speaker, on your new office?

I wish to honour the traditions of the House. My electors of Warwickshire, North sent me here to speak out for them on issues that concern them. Some of my remarks, therefore, will be controversial, but I hope not in a partisan way. There is a fair measure of agreement among Warwickshire Members about some of the issues that I will deal with today.

Let me first pay tribute to some of those who have represented the north Warwickshire area in the past. Warwickshire, North was formed in 1983 by the amalgamation of part of the constituencies of Nuneaton and Meriden. The Bedworth part of Nuneaton was joined to North Warwickshire borough to form the new seat. The Meriden name still exists and is represented in the House by an hon. Member who is recalled in North Warwickshire borough as a hard-working and able representative.

In the late 1970s, both parts of north Warwickshire were represented by Labour Members—John Tomlinson for the Meriden seat and Les Huckfield for Nuneaton. Both are remembered with affection as good constituency Members who were able to combine a high profile on the national scene with a ready availability to deal with the individual problems of constituents. Proof that they were good Members is that when they passed from this place to a higher reward they went to that heaven for parliamentarians, where there are large offices, plenty of facilities, short hours, long holidays and very high pay —the European Parliament.

Let me pay tribute to my immediate predecessor for Warwickshire, North, Francis Maude. I fought him in two elections—1987 and 1992. He won one and I won one. Although he and I had sharp differences in philosophy, I was always impressed by the utter conviction with which he expressed his views. He argued the case for the politics that he believed in forcefully and impressively. He lost while standing firm for the principles that he believed in, and there is a certain honour in that. His career as a public representative has been temporarily halted. I do not doubt that he will return to the House, although I tell him that he will not be representing Warwickshire, North because I intend to represent the seat for a long time.

The issues that I wish to raise are central to my constituency. Some of them may have been better raised in the environment debate yesterday, but because of the pressure of time I was not called. I ask for the indulgence of the House if I deal with economic matters and then deal with matters that I should have raised yesterday.

Warwickshire, North is an area between Coventry, Birmingham and Tamworth of light industry and coal mines. Many workers commute to the car factories and businesses of the west midlands. The failures of Government policy have hit the area hard. Car workers have lost their jobs; others have been laid off, and the financial impact of that on families has been quite heavy. Small businesses are struggling. Only this morning I was talking in my constituency to some small business men who are experiencing difficulty. Coventry pit was recently closed, with the loss of 1,300 jobs. My constituents are looking to the House for plans to create jobs and to rebuild industry. They will gain no solace from the Gracious Speech or the economic policy—or lack of it—that was outlined by the Chancellor of the Exchequer today.

My constituents voted for improved training, for investment in education and for policies to put Britain back to work. The Chancellor of the Exchequer offers none of that. He plans merely to hold down costs and to wait for the economic cycle to get him out of the mess. That is not good enough. Such an abdication of responsibility does not deal with the central problems facing Britain, nor does it recognise the fact that, although the Government are back in office, they lost 40 seats. General elections do not merely elect Governments but convey to Governments a democratic message—and that democratic message was the loss of 40 seats. Therefore, the Government's policies must be changed. There was nothing in the complacent view presented today by the Chancellor of the Exchequer which will give any solace to my constituents.

In north Warwickshire people voted Labour not only because of economic issues but because of other issues that worry them greatly. Large areas of north Warwickshire are threatened by opencast coal mining. In the run-up to privatisation, opencast mining is seen as a source of cheap coal and quick profits for British Coal but it will devastate the lives of thousands of people in my constituency. The village of Baddesley Ensor is awaiting the outcome of a public inquiry to see whether residents will have an opencast pit up to 600 ft deep and the size of 500 football pitches within 50 yards of their back gardens.

Some hon. Members with constituencies in the south of England may not understand what opencast mining can do to an area. If one can imagine a beautiful area of English agricultural countryside, then imagine a hole of the size that I have described despoiling it, and then imagine daily blasting, hundreds of large lorries on all the roads, dumper trucks, excavators, noise, dirt and air pollution, then one will begin to get an idea of the prospect facing some of the people in Baddesley Ensor. Beyond that, the villages of Dordon, Polesworth, Shuttington and Newton Regis are also threatened. About 20,000 people will be affected if the plans are accepted. Their environment will be polluted, the value of their houses will fall and a blight which could last for 50 years will be put on the area.

This is not a party political issue because Francis Maude—to his credit—also spoke out against opencast. During the general election campaign he brought the right hon. Member for Henley (Mr. Heseltine), the then Secretary of State for the Environment, to the village of Shuttington and secured from him a commitment to review the planning guidance on opencast mining. That guidance and the review of it is, with the re-election of a Conservative Government, the best chance that the residents of Baddesley Ensor and the adjoining areas have not to be facing the prospect of opencast mining in their back gardens. The review must be thorough, with full consultation among all the interested parties. The Government must deliver on their commitment.

At present the opencast guidelines contain a presumption in favour of British Coal getting permission to introduce opencast mining and that presumption must be reversed. If protection of the environment means anything to the Government, it must surely mean that the environment should not be despoiled unless those damaging it can prove that it is necessary. I want the guidelines to state that no opencast mining should take place except on derelict land which needs to be reclaimed and only where local people want that opencast mining in order to reclaim that derelict land.

That is the basis of the charter on opencast mining drawn up by the Coalfield Communities Campaign, a charter signed by members of all parties, including some Conservatives. That charter should be the basis of the Government's review of opencast guidelines. The British Coal opencast executive is pursuing a short-term policy of quick profits while ignoring the impact on the environment. Even for those who are committed to privatisation, the present expansion of opencast mining must surely be too high a price to pay in damage to the environment and to people's lives.

As if the threat of opencast mining were not enough, I am sorry to say that there are other threats to Warwickshire, North. Briefly, one of the threats is of a toll road running through the western part of the constituency. That toll road willl turn the environment of a number of villages into something akin to traffic islands. That is utterly unacceptable, and I—as the Member of Parliament for the area—shall do all that I can to oppose it.

I must raise today an issue which I believe is to be raised tomorrow. I understand that a statement—or at least an announcement—may be made to the effect that Warwickshire will be among the authorities that will possibly be poll tax capped. This issue concerns all hon. Members who represent Warwickshire. The hon. Members for Rugby and Kenilworth (Mr. Pawsey) and for Warwick and Leamington (Sir D. Smith) and my hon. Friend the new Member for Nuneaton (Mr. Olner) have all spoken forthrightly against poll tax capping of Warwickshire should the announcement be made tomorrow. For local people it is a constant source of—

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. May I ask the hon. Gentleman to resume his seat? I must draw to his attention the fact that he has had his 10 minutes, and I am sorry to have to ask him to resume his seat.

Photo of Mr Colin Pickthall Mr Colin Pickthall , West Lancashire 8:05 pm, 13th May 1992

In the past month or so, I have been evolving a theory—based on my own experience—that no human being ever gets fed up with being congratulated. You, Mr. Deputy Speaker, and your colleagues must be testing that theory to the point of destruction at the moment. Nevertheless, may I add my congratulations to the others.

Clearly, I wish to keep to the conventions of the maiden speech, although, like my hon. Friend the Member for Warwickshire, North (Mr. O'Brien), I shall find it difficult. I have listened with admiration to my hon. Friends' maiden speeches and, in particular, to that of my hon. Friend the Member for Barrow and Furness (Mr. Hutton) who represents the area from which I originate and of which I am patriotically fond. He spoke up well for the area and also analysed its problems well. I can tell him—through the written word—that my extensive family and friends in the area admired him as a candidate and will admire him even more as a Member of Parliament.

For parliamentary purposes, my constituency is called Lancashire, West. I wish that it were called "West Lancashire", which is the name of a place, not merely a convenience for carving up a city or a shire. My constituency occupies a large area between Wigan and Merseyside to the south and east and between Southport to the west and Preston to the north. It is based on the towns of Skelmersdale and Ormskirk, the smaller communities of Burscough and UpHolland, many villages and a vast rural hinterland. The rural area contains some of the richest agricultural land in the country. If one were to eat cabbage—which, as a good northerner, I believe that one should—the odds are that from time to time one would have eaten a part of west Lancashire. I wish to outline briefly the problems of the area and, having located it geographically for the edification of the House, I should perhaps also locate it in its immediate history.

I have lived and worked in and by the town of Ormskirk for 22 years and I represented it as a county councillor and now as a Member of Parliament. Since the war, the town has been represented by Sir Harold—now Lord—Wilson, by Sir Douglas Glover, by Mr. Harold Soref, by Mr. Robert Kilroy-Silk and, until recently, by Mr. Kenneth Hind. I make no comment on the totality of that legacy, other than to say that it is unlikely that I shall ever write a column for the Daily Express, and I shall certainly never appear in a colour supplement's feature "A Room of One's Own", up to here in warm water in my swimming pool and surrounded by exotic plants. Even if I had a scintilla of ambition to be Prime Minister, I should never be daft enough to say so in front of a camera a few weeks after being elected.

My immediate predecessor, Mr. Kenneth Hind, was a very energetic man. He often appeared to be the only energetic Conservative in the constituency and, judging by the amount of business that he had begun and that has now come my way, he must have had an extensive acquaintance with the difficulties of the area. I wish him and his family well, as he returns—I presume—to his career as a barrister. Personally, I compliment him on the two hard, but clean, fights that I have had with him in the constituency, in 1987 and last month.

The largest centre of population in west Lancashire is Skelmersdale—a new town which was designed to have a population of 80,000 and an infrastructure for that number of people, but whose growth was artificially stunted by Government at just over half that number. It has no hospital, no town hall and no magistrates' courts and it lacks many other facilities that one would expect to find in a town of that size. It has scores of empty factories—and, alongside them, 17 per cent. unemployment. Throughout its existence, the town has had a distinguished and excellent industrial relations record, with an enterprising, lively population, which has been woefully disregarded by Governments—not only Conservative Governments.

The Queen's Speech includes a Government commitment to an urban regeneration agency. I shall press as hard as I can for that agency to focus on Skelmersdale and other such towns. I do not criticise the attention which has rightly been paid to inner-city problems, but that has had the unfortunate effect of diverting attention from smaller towns with severe urban problems. "Skem" has no urban programme, although its problems can be measured as more severe than those of neighbouring towns in the north-west which receive such help. In Government calculations, Skelmersdale is lumped in with its rather more prosperous hinterland.

The new towns are deemed to be finished. Some may be finished, but Skelmersdale is not. Those new towns were about homes and jobs. Skelmersdale got the homes—although now, sadly, they have run out—but it has never had the jobs. Over the past two years the picture has been demoralising, if not disgraceful. For example, in order, it was said, to maximise shareholders' profits, Procter and Gamble closed a highly profitable factory in the town—or rather, it was not entirely closed; there is a little rump left, but 350 jobs were lost. The company is moving the production elsewhere in the country—with the help of Government grants. That is patently absurd. Only this week I heard that another well-respected and highly profitable factory in the town is about to do the same—to turn off workers so as to maximise shareholders' returns. Such examples lead me to agree entirely with the speech made by the Archbishop of Canterbury a few days ago —he got it spot on.

I could list a long series of disasters—beginning with Thorn and Courtaulds in the late 1970s, and Dunlop. Yet, despite all that, the people of Skelmersdale do not give in. They strive hard to rescue themselves and to find jobs. They have the advantage of a superb further education college, which—under the aegis of Lancashire county council—has done a great deal to help. The people do a great deal to make their town attractive to live in.

The Queen's Speech offers no hope to the more than 2,000 people in my constituency who are seeking homes for rent. That argument has been knocked around the Chamber over the past two days. As with many other hon. Members, most of my correspondence and case work is about housing problems. One homelessness presentation is made every working day to my local housing authority; the demand simply cannot be met. Furthermore, the authority does not have the funds to refurbish the 40, 50 and 60-year-old houses which need modern heating systems, new roofs, damp courses and window frames, better drains and so forth.

West Lancashire has built no new general needs houses since the early 1970s—it has been under Conservative control all that time—although I must admit that it has built reasonable sheltered accommodation. Yet £14 million sits in the council's capital receipts—this is a microcosm of the bigger debate earlier. A fraction of that £14 million could do an enormous amount to solve the housing problems in my area.

If we as a nation can get housing right, we would go a long way towards solving many other problems, such as family break-up, bad health, delinquency, vandalism and demoralisation. Even transport, and some of the crucial economic problems, can be seen as dependent on the provision of proper and suitable housing.

Skelmersdale development corporation was wound up five years ago. Since then the Commission for the New Towns has systematically asset-stripped the town of £36 million. We approached the then Secretary of State for the Environment, now the President of the Board of Trade, but we got the brush off. We asked for a small proportion of that money to be left in the town to prime the pump for industrial recovery. But that was not to be. We were told that the Government—although it was not a Tory Government then—had spent money on developing the town in the 1960s, and now they wanted their money back.

The resources to solve the housing problems in west Lancashire, and many of the economic problems, already exist. No increase in taxation would be required. The Government's refusal to allow proper use of those resources is an act of peculiar perversity, which creates a potential social calamity—especially for the people of Skelmersdale.

I know that I am in danger of speaking for too long, but I shall try to raise two more topics quickly. First, I notice in the Queen's Speech measures designed to improve agricultural marketing. As an outsider to agriculture in west Lancashire, I have always thought that it was crackers to encourage set-aside while we import half our food.

Finally, I shall mention the tomato industry The supermarkets have announced that they intend virtually to close that industry by moving the time when they start buying British tomatoes to later in the year.

Photo of Gordon Prentice Gordon Prentice , Pendle 8:16 pm, 13th May 1992

Thank you, Mr. Deputy Speaker, for calling me for this, my first speech in the Chamber. It is an honour and a privilege to represent the people of Pendle, which is in north-east Lancashire. The constituency has been represented by good democratic socialists. It takes in the former seat of Nelson and Colne, which was held by Sydney Silverman for 23 years. He is still fondly remembered in the constituency for his many achievements, notably his campaign to abolish the death penalty.

In the 1970s the seat alternated between the major parties. My hon. Friend the Member for Warrington, North (Mr. Hoyle) held it between 1974 and 1979. My immediate predecessor, John Lee, was here for 13 years —which was no mean achievement. He had a genial approach to politics, and was always courteous and pleasant to me. He developed an interest in tourism and the hospitality industry, and returned to the Back Benches almost three years ago to enable him to spend more time on his many business interests. I wish him well in pursuing those interests.

John Lee is the chairman of Country Holidays, a firm based in Earby, in my constituency. Since February last year that company has laid off 131 people, blaming the state of the economy. The company, which is in the service sector, is one of many in Pendle which are reeling from the effects of the worst recession in 60 years.

The north-west has suffered badly from Government policies. There are closures, redundancies and incredibly low wages. According to Government figures, people there are worse off than those in the south-east, where average personal disposable income is 16 per cent. higher than the United Kingdom average. In the north-west that is 8.2 per cent. below the average. There are many people who are struggling on extremely low incomes. Yet the Government are implacably opposed to a minimum wage on the ground that it would cost jobs. That is from a party that has presided over spiralling unemployment and the worst record in the European Community.

The whole debate on the minimum wage is coloured by the hypocrisy of so many of the participants. I have met no one earning less than £7,000 a year who thinks that the minimum wage is a bad idea. Some of the most vocal critics of the minimum wage are hon. Members who are also members of Lloyd's of London. Until they fell on hard times recently, the average unearned profit per year for a syndicate member in Lloyd's of London was £26,613. Yet the same hon. Members chided the rest of us by saying that a minimum hourly rate of £3·40 would smash the economy.

How can the Prime Minister talk about wealth "cascading down the generations" when inheritance tax begins to bite at £140,000 and in the north of England, in my constituency, the average inheritance is £13,000? The major source of inherited wealth is property, but real wealth does not come from property; it comes from making things—from manufacturing.

Some 55 per cent. of my constituents are employed in manufacturing industry, which is the highest percentage of the work force engaged in manufacturing of any constituency. However, the constituency has suffered crushing blows. The textile industry, the mainstay of the area, is visibly contracting. Under the Tories, it has lost thousands of jobs.

The last occasion on which my predecessor spoke in the House on the textile industry was on 12 January 1990. He listed four local firms which, he said, battle away in intensely competitive markets."—[0fficial Report, 12 January 1990; Vol. 164, c. 1233.] He mentioned Smith and Nephew where 170 people lost their jobs this Easter. He mentioned Dawes and Co where 25 people were made redundant recently. He mentioned CV Woven Fabrics at Barrowford where 206 people were made redundant last year. He mentioned Thomas Mason in Colne which closed down at Christmas after 200 years. What Napoleon could not do to Thomas Mason of Colne, the Tory Government have done: they have closed it down.

In every other country with a textile industry of any consequence, the Government are in there helping, promoting, advising and investing. Here in Britain a hands-off policy towards industrial investment is killing our industries. My constituents do not want preferential treatment; they want a level playing field on which we compete on equal terms with our competitors. Instead, the Government sell Britain's manufacturing industries short.

In engineering and in aerospace, there is a big Rolls-Royce plant. There are great uncertainties. Unemployment, although mercifully below the national average, has more than doubled since 1979.

It was not just the crushing of Pendle's manufacturing base which lost the Tories the seat on 9 April. It was the poll tax, a £19 billion bungle which has a crippling effect on the traditionally low-rated areas of north-east Lancashire. Many constituents saw their household bills leap from £160 to £1,200—in a low-wage area. The Pendle factor entered the poll tax lexicon.

My predecessor first spoke out publicly against the poll tax on 5 December 1990, after the Thatcher factor had been removed by the Conservative parliamentary party. He told the House that the Conservative parliamentary party had been "clubbed and conned" into supporting what he called a "wretched tax". Indeed, Conservative Members were clubbed and conned.

It was, therefore, surprising that we had a visit to Pendle earlier this year by the present Secretary of State for the Environment who was primarily responsible for putting the poll tax on the statute book. Irony follows irony. He is now the man with the primary responsibility for introducing the council tax. On 16 November 1987, he told the Financial Times:A property tax is not a fair tax … so we must abolish the local property tax. The Secretary of State for the Environment will introduce a property tax, the council tax, which will not be fair to Pendle. Those living in the largest and most expensive properties will never pay more than three times more than those living in the meanest, smallest and most modest accommodation will pay.

As my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said yesterday, the council tax will have surprises for us yet. It was rushed through the House in three weeks when the Tories voted to guillotine debate. The price for that haste has still to be paid. The Conservatives, even after 13 years, constantly make mistakes.

I will say a word or two about democracy and the lack of democracy in contemporary Britain. We debated local government yesterday. Every local government reorganisation since the war has been carried out by the Conservatives, and each has been deeply flawed. The Conservatives set up the Greater London council and they abolished the GLC. They set up the Inner London Education Authority and they abolished ILEA. They set up the six metropolitan counties and they abolished the metropolitan counties. In 1974, they set up the two-tier district and county structure which they now propose to change yet again.

This Chamber is supposed to be at the heart of our democracy, yet our system of government is a perversion of democracy. Half this building is given over to Members of Parliament who are not elected but who are here by birth or patronage. That is absolutely indefensible. We meet in a capital city with no democratically elected city-wide government, yet we tolerate the continued existence of the City of London Corporation which is a cross between Gilbert and Sullivan and a music hall joke. The Lime Street ward, which is one of 25, has 18 electors. Eight of them belong to the Obertelli family who run a sandwich bar.

Much of Britain's system of government is not just Victorian but feudal. It needs massively updating to make it relevant to the 21st century. Overhauling our constitution is not a task in which the Tory party should engage—it will not. We will strive to ensure that overhauling the constitution and rebuilding our manufacturing base are the projects of the next Labour Government.

Photo of George Mudie George Mudie , Leeds East 8:26 pm, 13th May 1992

I offer my congratulations to my hon. Friend the Member for Pendle (Mr. Prentice). I have worked with him in local government for a number of years and I have admired his abilities. I am privileged to have the opportunity to work with him in the House in his new career in Parliament. It is difficult for me to follow such a spirited speech, although it is also quite a relief. I was afraid that my speech might be too controversial, but it will now look rather tame in comparison.

I congratulate you, Mr. Deputy Speaker, on attaining your high position. I also welcome the opportunity to pay tribute to my predecessor in Leeds, East. Over the past few days I have heard many hon. Members speak of more than one predecessor. In my case, that would give me great difficulty because Denis Healey represented Leeds, East for exactly 40 years. Having researched his maiden speech, I have decided that my Chief Whip will have to explain to me why Denis Healey got 24 minutes for his maiden speech whereas I have only 10 minutes.

Photo of Mr Anthony Nelson Mr Anthony Nelson , Chichester

He is bigger than you.

Photo of George Mudie George Mudie , Leeds East

He is bigger than me. It will be of interest to the House to hear that his maiden speech was given to the House on 14 May—which is tomorrow—in 1952, which is 40 years ago. I intend to keep up the Leeds, East tradition of changing Member of Parliament at only 40-year intervals.

Denis was and is widely admired and respected in Leeds, East. If it were not in Yorkshire, I would have said "widely loved" but love is too strong a sentiment for anyone in Yorkshire to express in public. He was admired and respected. He brought to his constituency the same ability, humour, intelligence and exuberance which hon. Members will recall that he demonstrated in his years in the House. As for exuberance, he certainly had self-confidence. I notice that in the first paragraph of his maiden speech he used the word parthenogenesis. One has to be pretty confident to use that word in the first paragraph of one's maiden speech. It is with considerable pleasure that I thank both Denis and Edna, on behalf of their many friends in Leeds, East.

I noticed that in one of the parliamentary guides my constituency is described as "inner city residential". That is a description with which I cannot disagree but which signals two factors. One is a lack of commercial and industrial properties on a desirable scale, and the other is a level of unemployment well above the national average and hidden unemployment in horrifying proportions in the various communities. The official figures show an increasing number of unemployed in my area. Most alarmingly, literally thousands of individuals have been unemployed for more than one year. Many have been unemployed for very lengthy periods indeed.

I listened yesterday to the Secretary of State for the Environment declare: There can be no forgotten few—nor can there be any exclusion zone in our inner cities or on any of our housing estates; no no-go areas where the writ of opportunity does not run."—[Official Report, 12 May 1992; Vol. 207, c. 507.] What did that writ of opportunity offer? The Secretary of State went on to say that my long-term unemployed would have the choice of school for their children. I think that he has been using a ministerial car for too long. How do people use the choice of school? By car? They do not have cars. By bus? Does the Secretary of State know the bus fares that are currently in force as a result of Government policy?

The Secretary of State went on to say that the writ of opportunity would include the opportunity for people to purchase their own council housing. Does not that, even to Conservative Members, sound slightly insensitive? He went on to offer an urban development agency. The latter policy item is the only investment item which could be seen as relevant to the unemployed in the inner city and my area. I suggest that, even if such an agency succeeded, it would do little to affect the sustained and disturbing level of long-term unemployment.

The proposal for an urban development agency comes in the same week that the World Bank changed its 40-year-old development strategy and stated that the trickle-down policy of dealing with poverty simply does not work. I appeal to the Government to think again. I appeal to them to think about the money that they are to spend on that policy and to consider spending it on two separate matters of policy which would have profound economic and human consequences in my and other inner-city wards.

The first matter is training. People who are long-term unemployed need skills that will allow them to compete in the job market. I watched during the last boom how economic prosperity never reached certain communities in my constituency. People without job experience, qualifications or skills were stranded too far up the beach for the economic tide ever to reach them.

We live in an economy in which each boom leads to recession, largely because our industries and our economy overheat. Skill shortages in our industries are a key part of that problem. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) raised the spectre of public expenditure cuts in the training budget. There were stories this week in the Financial Times that employment training was being critically reviewed. If the Government are looking at ET, I hope that they will increase the benefit paid and extend the length of time for which unemployed people can be on the scheme. The 12-month period is too short to skill a person who has been unemployed for years.

The other matter on which the money for the urban development agency should be spent is child care. The issue was spelt out this evening in a first-class speech by my hon. Friend the Member for Bristol, East (Ms. Corston). Even when training opportunities are available, women are deprived of their chance to escape poverty because their children stop them from taking up the places. Women cannot easily take up places. Their approach is underpinned by the feeling that, even if they obtained skills training, they would have similar difficulties in keeping a job.

Our inner cities are filled with people who need every help that we can give them. They do not want charity. They do not enjoy welfare. They want to join the general relative level of prosperity—in short, they want to work. I hope that they will get their wish. I shall work as their Member of Parliament to ensure that their voice is heard and their wishes are fulfilled.

Photo of Mr Jimmy Boyce Mr Jimmy Boyce , Rotherham 8:35 pm, 13th May 1992

Thank you, Mr. Deputy Speaker. I offer my congratulations, first to my hon. Friend the Member for Leeds, East (Mr. Mudie) on his maiden speech. I also join the lengthening list who have congratulated you, Mr. Deputy Speaker, on your elevation to office. I also congratulate the Speaker of the House. It was a privilege to take part in the historic event of electing a woman to the Chair of the House. I hope that that signifies a new era of equal opportunities in the House.

May I now pay my respects to my predecessor, Stan Crowther, who was a much admired and respected Member of Parliament, both in the House and in his constituency, which he served for the best part of 16 years. Stan Crowther was a man of many parts. Not many people know that he was the only person to hold the position of mayor of Rotherham on two separate occasions. That is unique. I hope that I have not ruined too many pub quizzes by revealing that fact to the House.

Stan Crowther's work with the Select Committee on Trade and Industry also earned him the respect of the House. During the time that he served on the Committee, it became a labour of love to Stan. He is also much respected by the steelworkers, for whom he did a great deal of work in the Rotherham area. I am sure that the House would wish to join me in wishing Stan and his wife Margaret a long and happy retirement.

I should now like to mention Stan's predecessor, Brian O'Malley. Some long-serving Members of Parliament may remember Brian. Again, he was much loved in the Rotherham constituency. I did not know Brian personally, but many Members will remember him with great affection. In his maiden speech to the House in May 1963, he brought to the attention of the House the desperate shortage of decent, affordable housing. In his maiden speech in July 1976, Stan Crowther pointed to the growing unemployment in the region that he represented, especially among school leavers of that particular year. After 29 years and almost 16 years respectively since those maiden speeches were made, it is my sad duty to report to the House that those two blights on society and indictments of successive Governments have not yet been removed from our land.

I wish to pose a few questions to the House. How, in an age of unprecedented unemployment in the building industry, can there be an unprecedented shortage of housing? In Rotherham constituency, where unemployment stands at 16·6 per cent., why does the number of people on the housing list for accommodation or a transfer to more suitable accommodation stand at 22,163? When the local authority has money in the bank from the proceeds of council house sales, why is it prohibited by legislation from building council houses to take away the blight that I mentioned?

Where has the revenue from North sea oil gone? Chancellors have had billions of pounds to give away in recent years. Where has it gone? Where is the product of selling off the family silver? Gas, water and everything that we hold dear to our hearts have been sold off. Those were rhetorical questions because the House knows the answers. They went in tax handouts to the richest members of our population.

I believe that the House would agree with the old maxim, "Where there's a will, there's a way." It is difficult for a new Member of Parliament to conclude that the Government have the will to remove those blights from society.

I came here, rather naively, at the end of the nightmare of Thatcherism with the view that the Prime Minister, on his own mandate, could present the House with progressive legislation in the Queen's Speech which would take away the blight and scourge of homelessness and unemployment from this land. I was willing to forgive the Prime Minister for the 12 or 15 months that he had to live in the shadow of Mrs. Thatcher. I was willing to forgive him because I am a reasonable man.

I am not prepared to forgive the Prime Minister now for coming along with more of the same. He had the opportunity—the missed opportunity. The people of Rotherham are long suffering, but they have suffered long enough.

I am a reasonable man, and I will give Conservative Members the benefit of the doubt, but I shall return to this subject at every opportunity, and every time that they fail to make life better for the people of Rotherham, I will accuse them and they will stand indicted.

Photo of Malcolm Wicks Malcolm Wicks , Croydon North West 8:42 pm, 13th May 1992

In the absence of those best qualified, I congratulate hon. Friends who have made their maiden speeches as I rise to make mine.

The constituency of Croydon, North-West is interesting for its recent political history. It may not be unique hut, within little more than a decade, it has been represented in Parliament by members of the three major political parties. Mr. Bill Pitt represented the constituency very ably for the Liberal party, which was then part of the Alliance, and more recently Mr. Humfrey Malins represented it on behalf of the Conservative party. I hope that the constituents of Croydon, North-West have now arrived at the end of their political journey and that the seat will not be represented by the Scottish nationalists in a few years' time; but that will be for the electors to decide.

As is traditional, I pay sincere tribute to my predecessor, Humfrey Malins. He is well known to Members of the House and he was highly regarded. In an interesting, multicultural constituency he was certainly highly respected, and he made friends and, helped many people from the different groups making up that energetic community.

Humfrey had one claim to fame which left me somewhat anxious. Recently, I believe that he was captain of the House of Commons rugby team. [HON. MEMBERS: "Yes, he was."] My hon. Friends confirm that. In my early days here, I was not sure whether, as a Member for Croydon, North-West, I had to take on certain responsibilities. Having only played the football game with the more sensibly shaped ball, that is one responsibility that I could not carry out on behalf of my friend Humfrey Malins.

Croydon, North-West constituency contains people with energy and ambition—people with positive aspirations for themselves, for their families, their children and their communities. However, it is not without major problems. It has the dubious distinction of heading the Lord Chancellor's league table for county courts in areas with high mortgage repossessions. Those people who think of Croydon as an affluent town will be surprised to learn that it has high unemployment rates and that as many as one in seven men are out of work. Therefore, it is a town with much pain and poverty.

May I share a first impression with my right hon. and hon. Friends? Of course, as a new Member, I was impressed by the pomp and pageantry of the House at the state opening of Parliament and on the exciting day when the first woman Speaker was elected. We can draw on the strengths of history; there is much to be said for that. But I shall share a story with hon. Members. On 9 April, at 10 o'clock—the hour when the polls closed—I was hurrying from a committee room in Thornton Heath. The first person I saw after 10 o'clock, in the early days of a new political era, was a dishevelled gentleman who was going through a litter bin in the London road in Thornton Heath. Judging from his behaviour, he was mentally ill. I asked myself what Parliament and democracy had to offer him. He was probably not on the electoral register.

As I came to Parliament down Victoria street on my second day, I was stopped by another gentleman of 70, asking for the price of a cup of tea. I obliged with a few coins and asked him what explained his situation and where he lived—[Laughter.] This is serious. He told me that he had been in a mental institution for 35 years, and that he was now—these are my words and not his—in the care of the community. Again, he is probably not on the electoral register and is not represented here by any hon. Member. What does our democracy and what can this Parliament offer him?

As a new Member of Parliament, I am left to face this challenge: whether we can bridge the gap between the pomp and circumstance of Parliament and the poverty and pain in many of our communities.

Unemployment is one of the obvious causes of pain in our society and in a sensible debate it would be central to our concerns about macro-economic policy. The year 1992 will be remembered for many things—for the election, of course, and for the beginnings of a new Europe. However, I hope that later this year we will recall that it is 50 years since the publication of one of our great state papers, the Beveridge report on social insurance and social security. When talking about the five giant evils which needed to be confronted in the post-war period, Sir William Beveridge described them as want, disease, ignorance, squalor and idleness.

The 50th anniversary of that report is a cause for some concern about social policy and cause for a new Beveridge debate. Sir William Beveridge said of idleness, by which he meant unemployment, that it was the largest and the fiercest of the giant evils and the most important to attack. He said that, unless we tackled idleness and unemployment, all the other gains of post-war reconstruction would be out of reach.

I am struck by the fact that, because of the memories of mass unemployment in the inter-war period and the solidarity that wartime brought, Governments of both left and right, under Harold Macmillan as well as Harold Wilson, viewed the attack on unemployment as central to economic and public policy. When unemployment reached 600,000, hon. Members on both sides of the Chamber—this is no mere party political point—were horrified and wanted to do something about it. There was concern and compassion for the unemployed on the Tory Benches as well as on other Benches. Where is the concern and compassion today?

Far from macro-economic policy saying that the attack on unemployment is central to our objectives, sadly, in the 1980s, we have witnessed the use of unemployment as a tool for depressing demand. Unemployment has been driven up as a tool of economic policy, rather than an attack on unemployment being a key objective of policy.

Although the Government have the advantage of a fourth term, I hope that there will be no smug triumphalism. In a sense, politically, they can ignore the arguments, and the pleas of the unemployed, but it would be a foolish Government who chose to do that. Unless we can articulate in the Chamber the needs of the unemployed, and unless we can secure a decent response from the Government—I have an open mind about that —although it may serve a short-term political purpose, it will prove unwise for our country.

We cannot survive as a community—united, strong and offering equal opportunities—if we have high unemployment rates. I ask the Leader of the House to set out the Government's views on full employment. Is it now an objective; if so, how do the Government seek to achieve that objective? If they have decent policies, I shall be the first to support them.

Photo of Keith Vaz Keith Vaz , Leicester East 8:50 pm, 13th May 1992

Let me join hon. Members on both sides of the House in congratulating you on your elevation, Mr. Deputy Speaker. Your work in the House is well known. Let me mention particularly the way in which you have developed links with the high commission of Sri Lanka, and the excellent work that you have done with Governments in south Asia.

Let me also say how pleased I was to be present for three excellent maiden speeches by Labour Members. My hon. Friend the Member for Croydon, North-West (Mr. Wicks) told us of his deep concern about his constituency, and I am sure that we shall hear many more contributions from him about the need to defend the people of Croydon, North-West. He spoke eloquently about unemployment in his constituency. I know that no other Member of Parliament will work as hard as he will to defend his constituents.

The speech made by my hon. Friend the Member for Pendle (Mr. Prentice) reminded me of my own maiden speech. He and I share a deep interest in the textile industry. Many of my hon. Friend's constituents work in the industry, and we look forward to hearing more of his sterling contributions.

My hon. Friend the Member for Leeds, East (Mr. Mudie) does not know this, but I was in his constituency on Saturday night and early on Sunday morning. I hope that we can do something about the signposts in Leeds: I went around the one-way system many times, perhaps because Leeds United supporters, their team having won the league title, had turned all the signs around. The people of Leeds have elected a Member of Parliament who will serve their interests extremely well, and I welcome him to the House.

I thank the electors of Leicester, East for returning me to serve a second term. A decent swing to Labour took place in the constituency, and I believe that we now have a mandate to defend the national health service in Leicester—protecting it from further privatization—and to speak on behalf of the workers, especially those in the footwear and textile industries that form such a vital part of the local economy.

Hon. Members may think that I go on too much about the plight of victims of the collapse of the Bank of Credit and Commerce International, but I have to do it, and I make no apology for doing so. Matters have now reached a crucial stage. I am delighted that the new Economic Secretary to the Treasury is present, as BCCI comes within his responsibility—not the bank itself, of course, but the aftermath of what happened. We had many meetings with his predecessor, who showed a great deal of sympathy; on one occasion, indeed, he offered us tea, but he offered little else. We hope that we shall receive a more positive response from his successor when we meet him.

Nine months ago, on 5 July 1991, BCCI was closed by order of the Governor of the Bank of England. Since then, the depositors and creditors have received no compensation, either from the Government of Abu Dhabi—in terms of the proposals presented in November—or from the British Government, under the deposit protection scheme. In a letter dated 9 April this year, the Governor told me that the Bank of England hoped that statutory payments would be made as quickly as possible. Three days ago, a hearing took place in the High Court. The Vice-Chancellor adjourned the proceedings concerning BCCI for a further 28 days, the purpose being that the Abu Dhabi Government should provide clarification of the amount of compensation to be paid.

I pay tribute to the Vice-Chancellor and to his predecessor. They are models of British justice, and they have provided the victims of BCCI, in an ever-changing world, with a great deal of hope. They have acted in accordance with the original views of the depositors, in that their judgments and decisions have allowed us to continue with the campaign to seek justice and compensation for the victims.

Those 28 days—ending on 8 June 1992—are crucial. The settlement agreement proposed by the sheikh of Abu Dhabi in November last year, which was arrived at with a great fanfare and spoken of with great enthusiasm by Mr. Brian Smouha, the liquidator of BCCI, does not appear to be in tatters; it appears to be the subject of careful examination. Clearly, if the settlement were to be accepted and acceptable, the court would have ordered it to be accepted on Monday, subject to the agreement of the proper percentage of depositors. It was the interim creditors' committee that decided to commission a report by the City solicitors' firm Norton Rose on whether the deal should be accepted.

In my post this morning, I received a copy of the confidential Norton Rose report. It is very detailed and thorough, but it causes me a great deal of concern. A number of aspects are commercially sensitive, and I do not want to quote anything that would prevent depositors from receiving a decent amount of compensation. I am concerned, however. Throughout the report, mention is made of the knowledge of certain officials in the Abu Dhabi Government about some of the loans that were taken out. There are frequent references to Mr. Al Mazrui. Mr. Mazrui is the head of the sheikh of Abu Dhabi's private office, and was one of the directors of BCCI. He is a person of great importance in Abu Dhabi, and has led the negotiations with the liquidators. Comments about him in the report are therefore important.

Under the paragraph heading "Knowledge of the Ruling Family" on page 25, the following appears: Mr. Al Mazrui, according to Price Waterhouse, admitted that he had benefitted from 'no risk' transactions in which he purchased BCCI Group shares. Such transactions, including the manipulation of the BCCI Group share price, were clearly fraudulent. Mr. Al Mazrui apparently informed other Government officials of his involvement in April 1990.Mr. Al Mazrui, according to Price Waterhouse, confirmed a fictitious loan in the name of Shaikh Khalifa. However, we note that Shaikh Khalifa has denied knowledge of this loan.There appears to be evidence that ADIA was involved in a proposed 'no risk' share transaction in 1981 and in an 'out of book' loan in 1988 to finance the buy-back of shares from Shaikh Khalid Bin Mahfouz. The report makes further statements about the knowledge of Mr. Al Mazrui.

I should make it clear that there is no suggestion in the report that the ruler of Abu Dhabi, Sheikh Zayed, had any knowledge of what happened. In previous debates, I have been full of praise for the sheikh, and for what the Government of Abu Dhabi have done following the closure of the bank. They have done a great deal more than our Government. I remain convinced that the ruler of Abu Dhabi knew nothing about it. Paragraph 31 of the Norton Rose report says: Turning however to the Majority Shareholders, unlike section 214 which we mention next, there is no provision relevant to fraudulent trading applying to 'shadow directors'. We do not consider that common law notions of vicarious liability can have any application to fraudulent trading under the Insolvency Act and so we see no means by which Mr. Al Mazrui's knowledge (if any) can be imputed to the Majority Shareholders if they did not have actual knowledge within section 213. It is clear from the Norton Rose report that there is no question of the involvement or knowledge of the ruler of Abu Dhabi. However, depositors and creditors will be concerned about the mention of Mr. Al Mazrui. His name appeared before in the section 41 report prepared by Price Waterhouse.

It is of the utmost importance that we have a statement from Mr. Al Mazrui either to deny knowledge of what the report refers to or to give an explanation of his involvement. That is important because negotiations are now at a critical stage.

It is also important to consider the agreement prepared by the liquidators in consultation with the ruler of Abu Dhabi. This agreement, which involves the injection of $1·7 billion in compensation, means that if the depositors and creditors accept it, they will have to waive their right to sue and the right to promissory notes that total several billion dollars. It has been said that they are worth about $3 billion. Therefore, it is right for people to question why on earth they must give up the claim to promissory notes when they have been offered something substantially less.

Although I have not criticised the agreement until now, it is important to pause to consider the levels of compensation that have been offered. Although I do not wish to disagree with Mr. Smouha, the liquidator, the feeling among creditors and depositors who have written to me is that they will not receive the 30 or 40 per cent. that was on offer. They want to know why they will have to wait for an instalment scheme for that money when we are dealing with a country and a Government that have substantial funds.

The Norton Rose report is of such importance that, yet again, the issue has become an intergovernmental matter. We have had meetings with the Foreign Secretary, and I had a brief meeting with the Chancellor of the Exchequer. I also had many meetings with the former Economic Secretary to the Treasury. It is of the utmost importance, in view of the 28-day period, that the Foreign Secretary, in consultation with the Chancellor of the Exchequer, takes on the responsibility of negotiating a better deal for the people who have lost so much money. We are dealing with British citizens—1,200 employees and 40,000 depositors —who face the loss of considerable amounts. I am sorry that the Chancellor is not here because the biggest single depositor—as an individual or a company—in BCCI, who had £20 million in the bank, is one of his constituents from Kingston, Surrey. Despite the fact that the Chancellor has a constituency interest, he appears to show no interest.

I want the Foreign Secretary to visit Abu Dhabi at the first opportunity in order to thank the sheikh of Abu Dhabi for the money that has become available, and to ask for more. We need more money if the depositors are to be satisfied.

There is a saying that every cloud has a silver lining, but for the liquidators of BCCI, Touche Ross, that cloud has not a silver lining but a gold one. It is claiming fees of £1 million a week since the bank went into liquidation. Creditors and depositers want to know why Lovell White and Durrant, their solicitors, who are also claiming substantial fees, and the liquidators did not produce a report of the quality of the Norton Rose report. It is important that we have an explanation from the liquidators about what has happened.

I also want the liquidators to hand over to Norton Rose all the documents contained in appendices A, B and C in the report. Norton Rose says that it has still not seen many documents. It refers to a building in Abu Dhabi called Kew and says: We have not received a response to our letter of 24 April 1992 to LWD requesting access to the documents at Kew. Our understanding is that Kew contains a vast number of documents which could be relevant to the matters raised in the Report. Norton Rose then says that there are documents at 100 Leadenhall street in London to which it does not have access.

It is important to get the full facts and to find out who is hiding what from whom. I hope that the Economic Secretary to the Treasury will agree to meet a delegation of Members who have a constituency interest and review the current situation concerning BCCI before the 28 days elapse.

The Bigham report is about to be published. We seek an assurance from the Chancellor—perhaps the Leader of the House could give it to us—that when the Bigham report is handed to the Chancellor, who was a witness to the Bigham inquiry, the Chancellor will publish that report. It is important that it is not kept hidden. Newspaper reports say that it will be kept hidden until the Governor of the Bank of England has retired. That is not good enough—[Interruption.] The Economic Secretary is making a face. One way to disprove those rumours it to give an unequivocal undertaking that the Bigham report will be published.

Will the Leader of the House pass on to the Secretary of State for Trade and Industry our deep concern about the way in which the liquidator is demanding the full payment of BCCI loans from former customers of BCCI? On Monday I had a meeting with one customer who had a loan with BCCI of some £1·7 million. His assets are worth considerably more than that. He told me that they were worth £3 million. Because he could not realise that loan immediately, the liquidators put him into receivership. As a result, he has had to close his firm and make people unemployed. That will continue if the liquidator continues to demand the full payment of loans. It is totally unacceptable, at a time of recession, that it does not accept instalment payments.

I hope that when the Leader of the House replies he will assure us that the Secretary of State for Trade and Industry will meet us. The former Secretary of State for Trade and Industry—the present Secretary of State for Social Security—with whom I have had few dealings, his Department and the insolvency service acted perfectly properly in dealing with BCCI. They took on board representations and went to court to argue for a creditors' meeting. It is still the only liquidation in history in which creditors have not met to appoint a creditors' committee. That is why we must accept an interim committee. The Secretary of State for Social Security acted perfectly properly and we thank him for what he did, but we expect the same treatment from the present Secretary of State for Trade and Industry.

The future direction of the whole issue rests with the Government. If the British Government were to support the view of the depositors and creditors of BCCI that more money should be made available, the Abu Dhabi Government would act positively. The Abu Dhabi Government have shown themselves to be extremely generous. We seek justice for the victims of BCCI. The Norton Rose report will add to the moral responsibility of the Abu Dhabi Government, who are of the highest quality and wish to protect not only their reputation but the reputation of the Arab world. Many Arab banks such as the Islamic bank and individuals are concerned that they will lose so much money. The Government should come out, for the first time, with a clear statement that they think that there should be more compensation. The Foreign Secretary, or even a junior Minister, should go to Abu Dhabi to argue for more money. If that were to happen, this extraordinary story—which started in tragedy, has moved on to farce and has had catastrophic consequences for a section of the British community—could be brought to a just end.

Photo of Bruce George Bruce George , Walsall South 9:10 pm, 13th May 1992

I apologise to hon. Members for my absence during almost all of the debate on the Queen's Speech. I have been away for pressing personal reasons. I have been camped out at the hospital in Merthyr Tydfil for so long during the past two weeks that my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) may think that I am engineering a coup. That is not the case, and I shall apologise to him when I see him.

I think that all Labour Members have now got over their disappointment that the Queen's Speech has not been a Labour Queen's Speech—at least I have. But we must once again play an important, constructive role in Opposition. We look forward to a Queen's Speech delivered by the Queen on behalf of a different Administration. Democracy, as well as the interests of our constituents, will be advanced when that long-awaited day finally dawns.

I wish to speak on matters of particular interest to me: defence, law and order, and terrorism. The early part of the Queen's Speech related to defence and the future of the North Atlantic Treaty Organisation. Since 1949, we have managed to sustain the Alliance despite external and internal threats. The external threat has now largely disappeared, and the threat to the future of the Alliance derives more from internal pressures. In particular, the French are ambivalent towards NATO. Having left the integrated military structure a quarter of a century ago, they have never fully reconciled themselves to the fact that NATO has survived and become stronger without their direct military presence and co-operation.

The Alliance that has served us so well in the past has much life left in it and should be used until alternative arrangements can be found superior to those that have been to our general advantage since 1949. I do not remotely consider the Western European Union as ready to assume that role. In the immediate, medium or long-term future, I do not believe that the European Community will provide a substitute for NATO in providing adequate defence and security. I do not consider that the embryonic and, I hope, reformed and improved Council on Co-operation and Security in Europe will provide collective security or collective defence.

The legacy and memory of the League of Nations is still strong. Over the next decade we will be served by a multitude of institutions related to security, foreign policy and defence, and the primary one must be a reformed NATO. That organisation has gone through the process of adapting itself to the new circumstances and now, to use a well worn expression, holds out the hand of friendship to former adversaries through the North Atlantic Council, and provides enormous assistance, just short of a security guarantee.

NATO has proved that it is relevant to the future. I will give every support to the Foreign Secretary, the Secretary of State for Defence and the Prime Minister in their work with Alliance members to ensure that the organisation has a continuing relevance. We must fight the battle in our own country, in Europe and, particularly, in the United States to convince our American allies that, although they have profound economic and social problems at home which must be addressed, they will not solve their problems by extricating their forces from the continent of Europe. If the United States removes all or a substantial portion of its forces from the continent, it will become marginalised in Europe. Canada will find that to its cost as it removes its limited forces.

If isolationism reasserts itself during the presidential election and pressure is placed on the President after the election to reform American security policy it could lead to the eventual dissolution of NATO. That would be catastrophic. Even the French must appreciate that the security of Europe has not depended upon French armed forces or French nuclear weapons. I do not devalue those forces when I say that the security of Europe has largely been due to the continuation of an alliance. That alliance has great future potential for security, not simply for existing members but for the whole continent and even beyond.

Next week's debate on the Maastricht treaty must encompass whether we believe that the time has come, or will ever come, for the European Community to be directly or indirectly capable through the Western European Union of picking up the mantle of the Alliance. I am not saying that Europe cannot do more or that the European pillar of NATO should not be strengthened, but we must not convey to our American allies the feeling that the Europeans are ganging up in some sort of caucus and presenting a collective European view to the United States. Such a move would be a recipe for the progressive collapse of the Alliance and would be to our disadvantage.

Following "Options for Change" the Ministry of Defence was led by the nose by the Treasury. History has shown that the Treasury gets more wrong than the economy because it has not proved to be competent as an alternative defence ministry. The Treasury has created its own perception of the threat and has imposed upon the Ministry of Defence a policy of restructuring Britain's forces. My history books show that in that regard in the 1930s the Treasury did not do too well. It should keep its nose out of future policy making.

I do not say that we should not reduce defence expenditure and I agree that there must be restructuring. However, it is wrong to reduce our Navy to about 35 frigates and destroyers and to reduce the Army to 160,000 men in a world which is still fraught with difficulty and danger for this country. I hope that the new Secretary of State for Defence will look again at the "Options for Change" programme and will conclude, as many hon. Members have concluded, that an army of 160,000 men and women and 38 infantry battalions is dangerously low.

In the last part of my speech I shall deal with terrorism and law and order. It is embarrassing for me to say that in one area of policy I support the Government. I do not say that often, but if we are compelled to implement the elimination of frontiers in 1992 we shall create not just an open market for goods and services but an open border for terrorists and drug smugglers. Those who wish to come to the Community will find it easy to pierce the weak external wall and would soon find places where entry was simple. Consequently, the hands of the police and the Government in dealing with crimes such as drug smuggling and terrorism would be weakened. We must resist that because if we eliminate internal borders we shall have to introduce continental practices such as identity checks and the depositing of passports in hotels. Would the British public be prepared to accept that?

Photo of Dr Jack Cunningham Dr Jack Cunningham , Copeland 9:19 pm, 13th May 1992

I begin by adding my congratulations to you, Mr. Deputy Speaker, on your elevation to the Chair and by wishing you well on behalf of my right hon. and hon. Friends.

It is my formidable task to review six days of debate. In truth, I can make only brief references to some of the highlights and some of the more important issues discussed. The speeches of the mover and seconder of the motion on the Loyal Address were, as they often are, entertaining and amusing. Even on his way out, the right hon. Member for Mole Valley (Mr. Baker) characteristically made his exit from centre stage. No shrinking violet he —even though he was going, he quit from the spotlight. In a typical moment, without even a blush, he castigated the Liberal Democrats for their support for proportional representation, although he once argued for it to prevent what he called domination by a "minority of a majority."

Even the most right hon. Gentleman's most stern critics have a sneaking admiration for his flair fading into brass neck. His Panglossian ability to portray failure as success, defeat as victory, served him very well during his less-than-successful sojourn at Tory central office. The right hon. Gentleman has had a distinguished career at the top of British politics—no mean feat. His humanity was obvious in his generous remarks about my right hon. Friend the Leader of the Opposition and I personally wish the right hon. Gentleman well.

The hon. Member for Gedling (Mr. Mitchell) also made an excellent speech, in which he charmed the House with his fluent wit and humour. One of the hon. Gentleman's student contemporaries disclosed his apparently early commitment to keeping expenditure down when he remarked: Whenever we went for a drink Andrew seemed to have left his wallet behind. I am sure that the hon. Gentleman has changed and many hon. Members will support his call for further reforms of the procedures of the House, even if we cannot promise to share his political views.

I congratulate the Leader of the House on his new position. He has a difficult path to pursue. It will help him if he remembers throughout his period of office, as I am sure that he will, that he is not simply a senior and important member of the Government but holds a special position in relation to the House of Commons. He must uphold its traditions and ensure that the Government's majority is not used oppressively—as it so often was in the last Parliament—and that the rights of the Opposition, the minority parties and Back Benchers are respected. He will have my whole-hearted support for his efforts to reform the House, its procedures, services and facilities and my implacable opposition to any attempt by the Government to abuse those procedures for political advantage.

It is a great pleasure to have so many new Labour Members in the House, although I shall miss those excellent by-election victors John P. Smith, Sylvia Heal, Huw Edwards and Ashok Kumar. They all brought ability and commitment to our debates and I hope that we shall see them all back here again before too long. I have a special word of commiseration for the unlucky defeat of Frank Doran in Aberdeen, South. I hope that he, too, will soon rejoin us.

In all, I calculate that 53 maiden speeches, 41 of which were by Labour Members, have been made in this debate. That is the kind of proportion that I like and I hope that we can look forward to a similar share of the debate on many future occasions.

There have been 10 maiden speeches today, all from Labour Members. My hon. Friends the Members for Bristol, East (Ms. Corston), for Rotherham (Mr. Boyce), for Leeds, East (Mr. Mudie), for Croydon, North-West (Mr. Wicks), for Pendle (Mr. Prentice), for Nottingham, South (Mr. Simpson), for Cunninghame, South (Mr. Donohoe), for Falkirk, East (Mr. Connarty), for Lancashire, West (Mr. Pickthall) and for Warwickshire, North (Mr. O'Brien) all made excellent contributions to the debate. Indeed, it was an awesome performance from the Labour Back Benches and we look forward to many more such contributions.

I could not possibly refer to many of those speeches, so I decided to be partisan about the whole matter and to refer, in a little more detail, to the speech of my constituency neighbour, my hon. Friend the Member for Barrow and Furness (Mr. Hutton). He had an outstanding victory in that important Cumbrian constituency. I share with him many constituency problems. Some of my constituents from Millom work at the VSEL plant in my hon. Friend's constituency, and some of his constituents work at the British Nuclear Fuels plant in my constituency.

West and south Cumbria suffer from poor road and rail links, inadequate transport services, rising unemployment and huge forecast job losses. Our case, as my hon. Friend made emphatically clear, demands urgent Government action. I look forward to working closely with my hon. Friend in the common interests of the communities that we represent.

I have no doubt that many new colleagues bring welcome fresh minds, fresh views and fresh ideas to the House. I urge them to set aside their initial shock at the inadequate genteel antiquity of the Palace and to mobilise, on both sides of the House, to change things here in the interests of our constituents, our staff and the visitors and, not least, in the interests of more rigorous and effective scrutiny of the Government.

This is a very different House of Commons from its predecessor. I refer not just to the change in personnel but to the change in the numerical balance between the parties, which has so many important implications. For example, I do not believe that a Bill to introduce the poll tax would get through a House of Commons of this nature and balance. I refer also to the implications of those changes for the membership of Select and Standing Committees. I hope that we can establish Select Committees without undue delay. In that context, I say to the Leader of the House that, without vacillation or delay, we must have agreement on the establishment of a Scottish Select Committee. We will press for Select Committees to cover all Departments of State and we shall strongly support—as I do personally—the proposal to recreate the Select Committee on Science and Technology. I served on the former Committee of that name for six of my early years in the House.

I hope that the Leader of the House will ensure early publication of the report on allowances for the salaries of Members' secretaries and research assistants and for the purchase of office equipment, on which the House as a whole must reach a decision as soon as possible.

There are some things to welcome, but much to regret, about the Queen's Speech. In general terms, it completely lacks the freshness, the thrust and the new vision that the British people were led to expect from a Prime Minister with his own mandate. Indeed, with references to reducing the burden of taxation, to restricting the public sector, to trade union legislation, to state control over our schools and to more privatisation, the tone and content of the Queen's Speech have an uncanny resemblance to the one introduced by the Prime Minister's predecessor, Margaret Thatcher, in 1979.

On succeeding days Ministers addressed the House as though the manifest failures of the past 13 years had never occurred. Unfortunately, it is all too clear already that the answer to the obvious and fair question, "What will the Government do differently to repair the nation's economy and our industrial base, to reduce unemployment, to house people decently and to avoid the repetition of obvious past mistakes?" is, "Nothing". The Government intend to change nothing. There is nothing new, nothing fresh. They will just muddle on as before.

At the end of a particularly vacuous and evasive performance on Thursday, the Chief Secretary to the Treasury at last confirmed our judgment of the Government's intentions when he concluded his speech by saying: the policies that succeeded in the 1980s will succeed again in the 1990s."—[Official Report, 7 May 1992; Vol. 207, c. 169.] There was a similar, irrelevant and pettily abusive speech today from the Chancellor. There we have it. Voltaire's Dr. Pangloss rides again. Failure is success. Industrial decline is ignored. Unemployment goes unremarked: it was mentioned once in the Tory party manifesto but not at all in the Queen's Speech. The Queen's Speech was almost silent on the economy. After reading it, most people would be surprised to learn that Britain is suffering its longest recession since the war—as my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) pointed out earlier today—that unemployment is now more than 2·6 million, and rising, and that major forecasts do not see unemployment coming down at all this year.

We were told that the prime aim of Tory economic policy is to reduce inflation. Most rational people, though, would measure success in terms of growth and employment, as well as the control of inflation. Keeping inflation low and stable may be a key element in producing sustainable growth, but that is not in itself a sufficient policy to produce a strong economy and lasting prosperity. Nevertheless, there was no recognition of the need for a new agenda—no apparent understanding that a firm, sustainable recovery must be based upon investment, not just upon consumption, and that mere talk and deregulation get us nowhere beyond the short term.

The Prime Minister's decision, on the other hand, to acknowledge the existence of the secret intelligence service is welcome, if long overdue. What we all knew about for years and read of regularly in the newspapers has finally been confirmed. The Prime Minister deserves credit for that. At least as important were his decisions to announce the full list of Cabinet committees, with their terms of reference and membership, and to make available to the House the guidance on procedure and the conduct of business that has long been sought, according to the Prime Minister's own words, by many hon. Members. However, this rather coy lifting of the veil of secrecy has much further to go. It is regrettable that the Prime Minister's commitment to more open government does not extend to making the security services directly accountable to a committee of Privy Councillors of the House, or to a freedom of information Act.

I well recall, as a young Member of the House, having a meeting with the then Prime Minister, Harold Wilson, together with a few colleagues. I have to confess that it was a rather unruly meeting. As it concerned Members' salaries and allowances, the temperature rose. I well recall Lord Wilson, as he now is, saying to us, somewhat pompously, "I intend to break with all precedent and tell you that this matter is on the agenda for the Cabinet on Thursday", to which one of my colleagues, who had better be nameless, replied, "Hell, Harold, we read that in The Guardian yesterday." That sums up the long-standing attitude to Government secrecy.

I say to the Leader of the House and his right hon. and hon. Friends that progress is welcome but it is simply not enough. The Government will be urged again and again to break out of this unnecessary, antiquated stranglehold of secrecy, which is a disadvantage to better government, better debate and better informed discussion of the issues.

In addition, the Prime Minister's reform of government does not extend to Scotland. In his opening speech, he referred once again to "taking stock" of the position north of the border. The people of Scotland do not need to take stock any more. They have taken stock of the Conservative party and, for that matter, of the minority parties.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster

We won two seats in Scotland.

Photo of Dr Jack Cunningham Dr Jack Cunningham , Copeland

Two seats; heavens above! The Labour party in Scotland is hardly trembling at that outcome, even though we regret the loss of Frank Doran.

The reality is that again and again, in election after election, the people of Scotland have made it abundantly clear what they want. The Prime Minister's remarks smack of someone who intends to maintain the inadequate status quo, which the Scottish people again rejected on 9 April. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) pointed out on Monday, the change that Scotland wants is the creation of a directly elected body reflecting Scottish opinion and with the power that matters in a democracy—the power to make law."—[Official Report, 11 May 1992; Vol. 207, c. 458.] Another glaring omission, Madam Speaker—I am delighted to add my personal congratulations on your appointment and to see you in the Chair—is the lack of a Bill to establish an environmental protection agency with comprehensive powers to monitor, control and improve the environment. The Prime Minister was ready to filch Labour party policy and to set up such an agency before the election, but apparently he is backtracking on his commitment to protect the environment.

In his speech last Wednesday, the Prime Minister again spoke of more choice in education and of opening up opportunity for children. The Tory concept of choice in education has at its heart the extension of opted-out schools. The new Secretary of State for Education has already said that he wants most of the 4,000 secondary schools in England and Wales to be grant maintained within a few years. As is so graphically shown by the decision that Wandsworth council took a few days ago to reintroduce selection, increased opting out will mean a back-door return to the testing and sorting of children at the age of 11 and of first and second-class provision for children in our schools.

As we warned during the election campaign, a two-tier education system, with well-funded opted-out schools at the top, and a second tier of poorer local education authority schools for the rest, will be a bad deal for our children, for their parents and, most important, for Britain.

The hidden Tory agenda on the future of the national health service has re-emerged. Almost as soon as the election was over, fresh speculation about the closure of two famous London teaching hospitals began. Yesterday, despite Government attempts to massage the figures, big increases in the number of people waiting for up to a year for hospital treatment were revealed. The simple fact is that long waiting lists are the recruiting serjeants for private sector health care. People who can afford to pay —and even some who cannot—are being forced into private treatment to avoid prolonged pain and suffering. Far from developing a nation at ease with itself, the Government's policies are creating a nation where people have to pay fees for their health.

As for cutting waiting lists, as someone called out from a sedentary position, I refer that right hon. or hon. Member to The Guardian of 13 May and the article entitled "Big rise in queues for hospital treatment". That is the reality of what is happening in the national health service in spite of the apparent belief of Tory Members of Parliament in their own propaganda. The reality is regrettably clear—a Tory party, which in many quarters is surprised to have won the election, has a new mandate—

Photo of Dr Jack Cunningham Dr Jack Cunningham , Copeland

Even the hon. Gentleman cannot say that with a straight face. The reality is that we have a Tory Government with a new mandate but no new agenda, a Government with a long record of economic incompetence, unfairness and neglect who begin a new Parliament without any regrets or clear vision for the future. Indeed, for two hours of this evening's debate they could not muster a single speaker to support the Government's economic policies—not one Tory Member of Parliament was here to speak in defence of the Chancellor's speech today.

The Chancellor of all people must realise that today's bombast and bluster will not help as his day of reckoning approaches with the autumn and the expenditure cuts that we all know are coming. I fear once again that the British people and their services will pay a heavy price for a Tory Government who are already limping along, weighed down by the huge burden of a public sector borrowing requirement that they cannot sustain, a balance of payments deficit that they cannot correct and an industrial base that they cannot regenerate.

The Labour party, with its new Members of Parliament, is determined to do everything in its power to protect Britain and its people from the failures already so evident in defective policies and in the inadequate programme in the Queen's Speech. That is why we shall vote for our amendment.

Photo of Mr Tony Newton Mr Tony Newton , Braintree 9:41 pm, 13th May 1992

Madam Speaker, whatever else may be said of our week of debates on the Queen's Speech, there has been one element of absolute unanimity in the warmth of the welcome given to you. I shall say simply, "Please count me in."

It is also appropriate to welcome my hon. Friend the Member for Northampton, South (Mr. Morris), the hon. Member for Pontefract and Castleford (Mr. Lofthouse) and my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) to the offices of Chairman and Deputy Chairmen of Ways and Means which they have already begun to perform with distinction. I am sure that the whole House will join me in paying tribute to the dedication shown in those offices in the previous Parliament by the former Chairman of Ways and Means, the right hon. Member for Doncaster, Central (Mr. Walker), and his deputy, Sir Paul Dean, who is no longer in the House.

There has been one other unifying feature of our debates which is the quantity—to which the hon. Member for Copeland (Dr. Cunningham) referred—and the quality of the maiden speeches. Today has certainly been no exception, including valid contributions—and this is slightly at variance with some of the remarks made by the hon. Member for Copeland at the end of his speech—from my hon. Friend the Member for Gillingham (Mr. Couchman), my right hon. Friend the Member for Mid-Sussex (Mr. Renton), my hon. Friends the Members for Hendon, South (Mr. Marshall), for Wyre Forest (Mr. Coombs), for Hertfordshire, South-West (Mr. Page), for Fulham (Mr. Carrington) and for Hazel Grove (Sir T. Arnold). There were also significant contributions from other parties on a number of issues, including a contribution from the hon. Member for Leicester, East (Mr. Vaz) whom I cannot see now. He made a number of points which he asked me to pass on to my right hon. and hon. Friends, which I shall certainly do.

We heard a speech from the hon. Member for Walsall, South (Mr. George) which might almost have counted as a speech in support of the Government, compared with what the hon. Member for Copeland said. We also heard from the hon. Member for Berwick-upon-Tweed (Mr. Beith) and from the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). We also heard an important speech from the leader of the Ulster Unionists, and a vigorous speech from the right hon. Member for Bethnal Green and Stepney (Mr. Shore) which had the air of being directed at least as much to members of his own Front Bench as to members of the Conservative Front Bench, and I suspect that we may hear more about it in coming debates.

The hon. Member for Copeland mentioned one maiden speech in particular. I enjoyed the maiden speeches of the Labour Members—I believe that the hon. Gentleman said that there were 10 of them—who spoke in the debate, although—I believe that my opinion would be echoed by some of my hon. Friends—one or two of them considerably stretched the conventions of the House, and the patience of my hon. Friends.

The hon. Member for Nottingham, South (Mr. Simpson) made a pleasing tribute to his predecessor, Mr. Martin Brandon-Bravo, although at one stage I thought that he was trying to compete in hype with the hon. Member for Oldham, West (Mr. Meacher). The hon. Member for Falkirk, East (Mr. Connarty) referred to his own "spiky style"—a definition with which I would not wish to quarrel. The hon. Gentleman left not a hamlet in his constituency unmentioned.

The hon. Member for Cunninghame, South (Mr. Donohoe) paid a proper tribute to his predecessor, David Lambie, for whom we had a great deal of respect. He also made remarks which I know will be carefully noted by my right hon. Friend the Secretary of State for Scotland. He gave what I believe he described as a "qualified commitment to behave". It remains to be seen what that means.

The hon. Member for Bristol, East (Ms. Corston) made a pleasing claim about equal opportunities in Bristol, following her election. Her kind words about her predecessor, Jonathan Sayeed, will have been appreciated by my hon. Friends. The hon. Member for Warwickshire, North (Mr. O'Brien) paid a remarkable and well deserved tribute expressing respect for his predecessor, Francis Maude. He, too, managed to mention a remarkable number of the communities in his constituency.

The hon. Member for Lancashire, West (Mr. Pickthall) made what has been relatively rare today—a traditional maiden speech, staying away from controversy. He, too, paid a pleasing tribute, expressed with great flair, to his predecessor, Ken Hind, which was appreciated by my hon. Friends. The hon. Member for Pendle (Mr. Prentice) returned to what I could call the aggressive mode, and paid tribute to his predecessor principally by quoting his speeches. I hope that the hon. Gentleman's remarks about another place will not be read there, or they could cause some stir.

The hon. Member for Leeds, East (Mr. Mudie) described his own ensuing speech as tame in comparison —which was right. He pleased us all both with his tribute to Denis Healey, and his hope that his constituency's tradition of keeping its Members of Parliament for 40 years at a time would continue with himself. That remains to be seen. The hon. Member for Rotherham (Mr. Boyce) made a vigorous speech, and paid tribute to his predecessor, Stan Crowther, who was much respected by my right hon. and hon. Friends.

Finally—on my list, at least—the hon. Member for Croydon, North-West (Mr. Wicks) paid a proper tribute to his predecessor, Humfrey Malins, and did so with style and elegance. Something that he said gave me something else in common with him—we have had various contacts over the years because of his interest in social security through the Family Policy Studies Centre. I now understand that he shares with me an addiction to the round football rather than the oval football. I am glad to have that, too, in common with the hon. Gentleman.

I am filled with admiration not only for the performance of hon. Members who have made maiden speeches but for their courage and self-confidence in performing so soon. If my memory serves me, when I was first elected, in February 1974, it took me far longer to take the plunge. I was finally driven to do so, in what was sure to be a short Parliament, by my anxiety that it could end without my having opened my mouth at all. Finally, I addressed the House on the subject of pigs—not a matter on which I have seen the need to trouble the House further in the intervening 18 years.

In its own way, my speech tonight is a maiden, as the hon. Member for Copeland acknowledged. It is my first as Leader of the House. I want to pick up his remarks straightaway by taking this opportunity to acknowledge clearly the special nature of the post in which responsibility as a member of the Government is combined with responsibility to the House as a whole, to all groups within it and to the interests of individuals as Members regardless of their party label. I will keep all that much in mind.

My comment leads me naturally to say something about certain issues currently on the House's agenda which, although not covered in the Loyal Address, have been raised in a number of speeches in the debate, in the opening speech of my right hon. Friend the Prime Minister and in the speech by the hon. Member for Cunninghame, South.

My right hon. Friend the Member for Norfolk, South (Mr. MacGregor), the previous Leader of the House, will be remembered for a number of achievements including the establishment of the European Standing Committees and other improvements in procedure. He may be especially remembered for the way in which he took forward my right hon. Friend the Prime Minister's clear commitment to the reform of our hours and working practices. The setting up of the Select Committee chaired by my right hon. Friend the Member for Westmorland arid Lonsdale (Mr. Jopling) and that Committee's very valuable report have done the House a great service.

To my hon. Friend the Member for Gedling (Mr. Mitchell) who, in his elegant speech seconding the motion, urged us to make progress on reform I can say that I too, although it is getting a bit in the distant past, have been a Member with young children and I know the pressures to which he referred.

Last week, my right hon. Friend the Prime Minister reinforced his personal view, first expressed when he became Prime Minister 17 months ago, that it is time that some of our procedures were reformed. I share that view and I also agree with him that these are matters for the whole House. I can tell the House tonight that I will certainly consult widely on how best to take forward the Jopling report.

I noted the intervention by my right hon. Friend the Member for Westmorland and Lonsdale in the Prime Minister's speech and his hope that changes could be implemented from this autumn. He will not expect me to pre-empt the process of consultation by responding to that tonight. However, I can tell the House that I hope to find time for a debate on the report in the not-too-distant future. It is important in this new Parliament with many new Members that everyone has a chance to reflect on the changes proposed which would represent the most radical shake-up of our working practices for many decades.

In the light of the remarks made by the hon. Member for Copeland, I should say a word about the Select Committees. In this debate, a number of right hon. and hon. Members have asked me when the various Select Committees will be set up. My right hon. Friend the Member for Worthing (Mr. Higgins) and my hon. Friend the Member for Honiton (Sir P. Emery), drawing on their previous experience as Chairmen of the Liaison and Procedure Committees, have put to me strongly the case for speedy action, as did my right hon. Friend the Member for Guildford (Mr. Howell) in his trenchant contribution to the debate last Friday. To him and to all who have raised the matter, I must make it clear that I share their desire, which I sense is widely felt among hon. Members of all parties and which I am grateful to the hon. Member for Copeland for expressing in his speech, that we should do everything possible to avoid any undue delay.

The House will realise that it is necessary to consult through the usual channels on such matters as the allocation of chairmanships and members between the parties, and any changes necessary to take account of the departmental reorganisation announced by my right hon. Friend the Prime Minister after the election. I cannot tell the House how long that may take, but I can make it clear that the process has already begun.

I can also say that I hope that we may be able in the next week or two to appoint the "domestic" Committees which are so important under the new structure for the management of this place which is being implemented following the Ibbs report.

Photo of John Home Robertson John Home Robertson , East Lothian

Will the right hon. Gentleman make it clear to the House that it is the Government's intention that, unlike in the previous Parliament, there should be a Scottish Select Committee?

Photo of Mr Tony Newton Mr Tony Newton , Braintree

I have noted what the hon. Gentleman has just said and what was said by his hon. Friend the Member for Copeland. My remarks about the spirit in which the Government and I, as Leader of the House, will approach these matters were intended to embrace all issues of concern which relate to Select Committees. It would not be appropriate for me tonight to discuss individual Committees, however important that may be to individual Members.

In turning to the other half of my dual role in the debate tonight, I naturally sought inspiration by turning to the record of what transpired in the previous such debate barely six months ago on 7 November 1991. Listening to the remarks of the hon. Member for Copeland on a more general front tonight added to the interest with which I read his words on that occasion just six months ago. He was then, as now—although I doubt that he expected still to be—shadow Leader of the House. I hope that he never joins the team of weather forecasters because he said of the Prime Minister: He is a caretaker who will not last. Having delivered himself of that, he proceeded to have a bit of fun, as he saw it, at the Prime Minister's expense. I have to say that it was reasonably funny. He said: He says that he wants women in his Cabinet—but not yet. He says that he wants Britain at the heart of Europe—but not yet. He says that he wants to abolish poll tax—but not yet.[Interruption.] It was not bad at the time.

He says that he wants to reform the DTI and put the right hon. Member for Henley (Mr. Heseltine) in charge—but not yet. He says that he wants a mandate of his own"— [HON. MEMBERS: "But not yet."] Six months later, it has rather more of the air of a tribute to my right hon. Friend's capacity to deliver. Every one of those commitments has already been ticked off. The Queen's Speech which underlies the debate will put dozens more on the way to achievement.

The hon. Member for Copeland then gave us another treat. He went swiftly on to conclude his remarks with another ringing forecast. He said: We look forward to the next Gracious Speech, because we shall write it."—[Official Report, 7 November 1991; Vol. 198, c. 662.] Well, in the hon. Gentleman's immortal words, "But not yet". Not this year, not next year, or the year after, or the year after that. If I were him, especially in view of the track record of the right hon. and learned Member for Monklands, East on getting things wrong, I would not put my shirt on writing it in five years' time either.

As we conclude the debate, I shudder to think what would be the background to our discussions today and what the Queen's Speech would have contained if the hon. Member for Copeland had achieved his ambition of moving from that side of the House to this. Instead of seeing interest rates coming down, we should have seen them going up. We should have seen millions of ordinary taxpayers bracing themselves for tax increases that would have killed off any hope of economic recovery. We would have seen a programme carried through which would have killed the prospects of recovery stone dead. We would be debating a Queen's Speech that would restrict people's opportunity and diminish their standard and quality of life.

One has only to recite the list of what was on offer from the other side of the House to know why the British people decided to take their custom elsewhere and to vote for a different programme, of which this Queen's Speech is the first instalment. It will continue the expansion of ownership and the widening of opportunity and choice in education, pensions and housing. It will continue to extend the benefits of privatisation and the improvements in the quality of life in our inner cities and throughout the country that we have set in hand. It will carry forward the key theme of improving the quality of service throughout the public sector in health, education, social security and social services. It is a programme which was clearly endorsed by the whole country a month ago. It will be clearly endorsed by the House of Commons tonight.

Question put, That the amendment be made:—

The House divided: Ayes 283, Noes 335.

Division No. 3][10 pm
AYES
Abbott, Ms DianeDavies, Bryan (Oldham C'tral)
Adams, Mrs IreneDavies, Rt Hon Denzil (Llanelli)
Ainger, NicholasDavies, Ron (Caerphilly)
Ainsworth, Robert (Cov'try NE)Davis, Terry (B'ham, H'dge H'I)
Allen, GrahamDenham, John
Alton, DavidDewar, Donald
Anderson, Donald (Swansea E)Dixon, Don
Anderson, Ms JanetDobson, Frank
Armstrong, HilaryDonohoe, Brian
Ashdown, Rt Hon PaddyDowd, Jim
Ashton, JoeDunnachie, Jimmy
Austin-Walker, JohnDunwoody, Mrs Gwyneth
Banks, Tony (Newham NW)Eagle, Ms Angela
Barnes, HarryEastham, Ken
Barron, KevinEnright, Derek
Battle, JohnEtherington, William
Bayley, HughEvans, Jonathan (Brecon)
Beckett, MargaretFatchett, Derek
Beith, A. J.Faulds, Andrew
Bell, StuartField, Frank (Birkenhead)
Benn, Rt Hon TonyFisher, Mark
Bennett, Andrew F.Flynn, Paul
Benton, JoeFoster, Derek (B'p Auckland)
Bermingham, GeraldFoster, Donald (Bath)
Berry, RogerFoulkes, George
Betts, CliveFraser, John
Blair, TonyFyfe, Maria
Blunkett, DavidGalbraith, Sam
Boateng, PaulGalloway, George
Boyce, JimmyGapes, Michael
Boyes, RolandGarrett, John
Bradley, KeithGeorge, Bruce
Bray, Dr JeremyGerrard, Neil
Brown, Gordon (Dunfermline E)Gilbert, Rt Hon Dr John
Brown, N. (N'c'tle upon Tyne E)Godman, Dr Norman A.
Bruce, Malcolm (Gordon)Godsiff, Roger
Burden, RichardGolding, Mrs Llin
Byers, StephenGordon, Mildred
Caborn, RichardGould, Bryan
Callaghan, JimGraham, Thomas
Campbell, Ms Anne (C'bridge)Grant, Bernie (Tottenham)
Campbell, Menzies (Fife NE)Griffiths, Nigel (Edinburgh S)
Campbell, Ronald (Blyth V)Griffiths, Win (Bridgend)
Cambell-Savours, D. N.Grocott, Bruce
Canavan, DennisGunnell, John
Cann, JamesHain, Peter
Carlile, Alexander (Montgomry)Hall, Mike
Chisholm, MalcolmHanson, David
Clapham, MichaelHardy, Peter
Clark, Dr David (South Shields)Harman, Ms Harriet
Clarke, Eric (Midlothian)Harvey, Nick
Clarke, Tom (Monklands W)Hattersley, Rt Hon Roy
Clwyd, Mrs AnnHenderson, Doug
Coffey, Ms AnnHendron, Dr Joe
Cohen, HarryHeppell, John
Connarty, MichaelHill, Keith (Streatham)
Cook, Robin (Livingston)Hinchliffe, David
Corbett, RobinHoey, Kate (Vauxhall)
Corbyn, JeremyHogg, Norman (Cumbernauld)
Corston, Ms JeanHome Robertson, John
Cousins, JimHood, Jimmy
Cox, TomHoon, Geoff
Cryer, BobHowarth, George (Knowsley N)
Cummings, JohnHowells, Dr. Kim (Pontypridd)
Cunliffe, LawrenceHoyle, Doug
Cunningham, Jim (Covy SE)Hughes, Kevin (Doncaster N)
Cunningham, Dr John (C'p'l'nd)Hughes, Robert (Aberdeen N)
Dafis, CynogHughes, Roy (Newport E)
Dalyell, TamHughes, Simon (Southwark)
Darling, AlistairHutton, John
Davidson, IanIllsley, Eric
Ingram, AdamPatchett, Terry
Jackson, Ms Glenda (H'stead)Pendry, Tom
Jackson, Ms Helen (Shef'ld, H)Pickthall, Colin
Jamieson, DavidPike, Peter L.
Janner, GrevillePope, Greg
Johnston, Sir RussellPowell, Ray (Ogmore)
Jones, Barry (Alyn and D'side)Prentice, Ms Bridget (Lew' E)
Jones, leuan (Ynys Môn)Prentice, Gordon (Pendle)
Jones, Jon Owen (Cardiff C)Primarolo, Dawn
Jones, Ms Lynne (B'ham S O)Purchase, Ken
Jones, Nigel (Cheltenham)Quin, Ms Joyce
Jowell, Ms TessaRadice, Giles
Kaufman, Rt Hon GeraldRandall, Stuart
Keen, AlanRaynsford, Nick
Kennedy, Charles (Ross, C & S)Redmond, Martin
Kennedy, Ms Jane (L'p'l Br'g'n)Reid, Dr John
Khabra, PiaraRichardson, Jo
Kilfoyle, PeterRobinson, Geoffrey (Co'try NW)
Kinnock, Rt Hon Neil (Islwyn)Roche, Ms Barbara
Kirkwood, ArchyRogers, Allan
Leighton, RonRooker, Jeff
Lestor, Joan (Eccles)Rooney, Terry
Lewis, TerryRoss, Ernie (Dundee W)
Litherland, RobertRowlands, Ted
Livingstone, KenRuddock, Joan
Lloyd, Tony (Stretford)Salmond, Alex
Llwyd, ElfynSedgemore, Brian
Loyden, EddieSheerman, Barry
Lynne, Ms LizSheldon, Rt Hon Robert
McAllion, JohnShore, Rt Hon Peter
McCartney, IanShort, Clare
MacDonald, CalumSimpson, Alan
McFall, JohnSkinner, Dennis
McKelvey, WilliamSmith, Andrew (Oxford E)
Mackinlay, AndrewSmith, C. (Isl'ton S & F'sbury)
McLeish, HenrySmith, Rt Hon John (M'kl'ds E)
Maclennan, RobertSmith, Llewellyn (Blaenau G'nt)
McMaster, GordonSoley, Clive
McNamara, KevinSpearing, Nigel
McWilliam, JohnSpellar, John
Madden, MaxSquire, Ms Rachel (D'mline W)
Mahon, AliceSteel, Rt Hon Sir David
Mandelson, PeterSteinberg, Gerry
Marek, Dr JohnStevenson, George
Marshall, David (Shettleston)Stott, Roger
Marshall, Jim (Leicester, S)Strang, Gavin
Martin, Michael J. (Springburn)Straw, Jack
Martlew, EricTaylor, Mrs Ann (Dewsbury)
Maxton, JohnTaylor, Matthew (Truro)
Meacher, MichaelThompson, Jack (Wansbeck)
Meale, AlanTipping, Paddy
Michael, AlunTyler, Paul
Michie, Bill (Sheffield Heeley)Vaz, Keith
Michie, Mrs Ray (Argyle Bute)Walker, Rt Hon Harold
Milburn, AlanWallace, James
Miller, AndrewWardell, Gareth (Gower)
Mitchell, Austin (Gt Grimsby)Wareing, Robert N
Moonie, Dr LewisWatson, Mike (Glasgow C)
Morgan, RhodriWicks, Malcolm H
Morley, ElliotWilliams, Rt Hon Alan (Sw'n W)
Morris, Rt Hon A. (Wy'nshawe)Williams, Alan (Carmarthen)
Morris, Estelle (B'ham Yardley)Wilson, Brian
Morris, Rt Hon J. (Aberavon)Winnick, David
Mowlam, MarjorieWise, Mrs Audrey
Mudie, GeorgeWorthington, Tony
Mullin, ChrisWray, Jimmy
Murphy, PaulWright, Anthony
O'Brien, Michael (N W'kshire)Young, David (Bolton SE)
O'Brien, William (Normanton)
Olner, WilliamTellers for the Ayes:
O'Neill, MartinMr. Martyn Jones and
Orme, Rt Hon StanleyMr. Thomas McAvoy.
Parry, Robert
NOES
Adley, RobertAllason, Rupert (Torbay)
Ainsworth, Peter (East Surrey)Amess, David
Aitken, JonathanAncram, Michael
Alexander, RichardArbuthnot, James
Alison, Rt Hon Michael (Selby)Arnold, Jacques (Gravesham)
Arnold, Sir Thomas (Hazel Grv)Eggar, Tim
Ashby, DavidElletson, Harold
Aspinwall, JackEmery, Sir Peter
Atkins, RobertEvans, David (Welwyn Hatfield)
Atkinson, David (Bour'mouth E)Evans, Jonathan (Brecon)
Atkinson, Peter (Hexham)Evans, Nigel (Ribble Valley)
Baker, Rt Hon K. (Mole Valley)Evans, Roger (Monmouth)
Baker, Nicholas (Dorset North)Evennett, David
Baldry, TonyFaber, David
Banks, Matthew (Southport)Fabricant, Michael
Banks, Robert (Harrogate)Fairbairn, Sir Nicholas
Bates, MichaelFenner, Dame Peggy
Batiste, SpencerField, Barry (Isle of Wight)
Beggs, RoyFishburn, John Dudley
Bellingham, HenryForman, Nigel
Bendall, VivianForsyth, Michael (Stirling)
Beresford, Sir PaulForsythe, Clifford (Antrim S)
Biffen, Rt Hon JohnForth, Eric
Blackburn, Dr John G.Fowler, Rt Hon Sir Norman
Body, Sir RichardFox, Dr Liam
Bonsor, Sir NicholasFox, Sir Marcus
Booth, HartleyFreeman, Roger
Boswell, TimFrench, Douglas
Bottomley, PeterFry, Peter
Bottomley, Rt Hon VirginiaGale, Roger
Bowden, AndrewGallie, Philip
Bowis, JohnGardiner, Sir George
Boyson, Rt Hon Sir RhodesGarel-Jones, Rt Hon Tristan
Brandreth, GylesGarnier, Edward
Brazier, JulianGill, Christopher
Bright, GrahamGillan, Ms Cheryl
Brooke, Rt Hon PeterGoodlad, Rt Hon Alastair
Brown, M. (Brigg & Cl'thorpes)Goodson-Wickes, Dr Charles
Browning, Mrs. AngelaGorman, Mrs Teresa
Bruce, Ian (S Dorset)Gorst, John
Budgen, NicholasGrant. Sir Anthony (Cambs SW)
Burns, SimonGreenway, Harry (Ealing N)
Burt, AlistairGreenway, John (Ryedale)
Butcher, JohnGriffiths, Peter (Portsmouth, N)
Butler, PeterGrylls, Sir Michael
Butterfill, JohnGummer, Rt Hon John Selwyn
Carlisle, John (Luton North)Hague, William
Carlisle, Kenneth (Lincoln)Hamilton, Rt Hon Archie
Carrington, MatthewHamilton, Neil (Tatton)
Carttiss, MichaelHampson, Dr Keith
Cash, WilliamHanley, Jeremy
Channon, Rt Hon PaulHannam, Sir John
Chaplin, Mrs JudithHargreaves, Andrew
Churchill, MrHarris, David
Clappison, JamesHaselhurst, Alan
Clark, Dr Michael (Rochford)Hawkins, Nicholas
Clarke, Rt Hon Kenneth (Ruclif)Hawksley, Warren
Clifton-Brown, GeoffreyHayes, Jerry
Coe, SebastianHeald, Oliver
Colvin, MichaelHeath, Rt Hon Sir Edward
Congdon, DavidHeathcoat-Amory, David
Conway, DerekHendry, Charles
Coombs, Anthony (Wyre For'st)Heseltine, Rt Hon Michael
Coombs, Simon (Swindon)Hicks, Robert
Cope, Rt Hon Sir JohnHiggins, Rt Hon Terence L.
Cormack, PatrickHill, James (Southampton Test)
Couchman, JamesHogg, Rt Hon Douglas (G'tham)
Cran, JamesHoram, John
Critchley, JulianHordern, Sir Peter
Currie, Mrs Edwina (S D'by'ire)Howard, Rt Hon Michael
Curry, David (Skipton & Ripon)Howarth, Alan (Strat'rd-on-A)
Davies, Quentin (Stamford)Howell, Rt Hon David (G'dford)
Davis, David (Boothferry)Howell, Ralph (North Norfolk)
Day, StephenHughes Robert G. (Harrow W)
Deva, NiranjanHunt, Rt Hon David (Wirral W)
Devlin, TimHunt, Sir John (Ravensbourne)
Dickens, GeoffreyHunter, Andrew
Dicks, TerryHurd, Rt Hon Douglas
Dorrell, StephenJack, Michael
Douglas-Hamilton, Lord JamesJackson, Robert (Wantage)
Dover, DenJenkin, Bernard
Duncan, AlanJessel, Toby
Duncan-Smith, IainJones, Gwilym (Cardiff N)
Dunn, BobJones, Robert B. (W H'f'rdshire)
Dykes, HughJopling, Rt Hon Michael
Kellett-Bowman, Dame ElaineRiddick, Graham
Kilfedder, JamesRifkind, Rt Hon. Malcolm
King, Rt Hon TomRobathan, Andrew
Kirkhope, TimothyRoberts, Rt Hon Sir Wyn
Knapman, RogerRobertson, Raymond (Ab'd'n S)
Knight, Mrs Angela (Erewash)Robinson, Mark (Somerton)
Knight, Greg (Derby N)Roe, Mrs Marion (Broxbourne)
Knight, Dame Jill (Bir'm E'st'n)Ross, William (E Londonderry)
Knox, DavidRowe, Andrew (Mid Kent)
Kynoch, George (Kincardine)Rumbold, Rt Hon Dame Angela
Lait, Ms JacquiRyder, Rt Hon Richard
Lamont, Rt Hon NormanSackville, Tom
Lang, Rt Hon IanSainsbury, Rt Hon Tim
Lawrence, IvanScott, Rt Hon Nicholas
Legg, BarryShaw, Sir Giles (Pudsey)
Leigh, EdwardShephard, Rt Hon Gillian
Lennox-Boyd, Hon MarkShepherd, Richard (Aldridge)
Lester, Jim (Broxtowe)Shersby, Michael
Lidington, DavidSims, Roger
Lilley, Rt Hon PeterSkeet, Sir Trevor
Lloyd, Peter (Fareham)Smith, Sir Dudley (Warwick)
Lord, MichaelSmith, Tim (Beaconsfield)
Luff, PeterSmyth, Rev Martin (Belfast S)
Lyell, Rt Hon Sir NicholasSoames, Nicholas
McCrea, Rev WilliamSpeed, Keith
MacGregor, Rt Hon JohnSpencer, Sir Derek
MacKay, AndrewSpicer, Sir James (W Dorset)
Maclean, DavidSpicer, Michael (S Worcs)
McLoughlin, PatrickSpink, Dr Robert
McNair-Wilson, Sir PatrickSpring, Richard
Madel, DavidSproat, Iain
Maginnis, KenSquire, Robin (Hornchurch)
Maitland, Lady OlgaStanley, Rt Hon Sir John
Major, Rt Hon JohnSteen, Anthony
Malone, GeraldStephen, Michael
Mans, KeithStern, Michael
Marland, PaulStewart, John
Marlow, TonyStreeter, Gary
Marshall, John (Hendon S)Sumberg, David
Marshall, Sir Michael (Arundel)Sweeney, Walter
Martin, David (Portsmouth S)Sykes, John
Mawhinney, Dr BrianTapsell, Sir Peter
Mayhew, Rt Hon Sir PatrickTaylor, Ian (Esher)
Mellor, Rt Hon DavidTaylor, John M. (Solihull)
Merchant, PiersTaylor, Sir Teddy (Southend, E)
Milligan, StephenTemple-Morris, Peter
Mills, IainThomason, Roy
Mitchell, Andrew (Gedling)Thompson, Sir Donald (C'er V)
Mitchell, Sir David (Hants NW)Thompson, Patrick (Norwich N)
Moate, RogerThornton, Malcolm
Molyneaux, Rt Hon JamesThurnham, Peter
Monro, Sir HectorTownend, John (Bridlington)
Montgomery, Sir FergusTownsend, Cyril D. (B'xl'yh'ath)
Moss, MalcolmTracey, Richard
Nelson, AnthonyTredinnick, David
Neubert, Sir MichaelTrend, Michael
Newton, Rt Hon TonyTrimble, David
Nicholls, PatrickTrotter, Neville
Nicholson, David (Taunton)Twinn, Dr Ian
Nicholson, Emma (Devon West)Vaughan, Sir Gerard
Norris, SteveViggers, Peter
Onslow, Rt Hon CranleyWaldegrave, Rt Hon William
Oppenheim, PhillipWalden, George
Ottaway, RichardWalker, A. Cecil (Belfast N)
Page, RichardWalker, Bill (N Tayside)
Paice, JamesWaller, Gary
Patnick, IrvineWard, John
Patten, Rt Hon JohnWardle, Charles (Bexhill)
Pattie, Rt Hon Sir GeoffreyWaterson, Nigel
Pawsey, JamesWatts, John
Peacock, Mrs ElizabethWheeler, Sir John
Pickles, EricWhitney, Ray
Porter, Barry (Wirral S)Whittingdale, John
Porter, David (Waveney)Widdecombe, Ann
Portillo, Rt Hon MichaelWilkinson, John
Powell, William (Corby)Willetts, David
Rathbone, TimWilshire, David
Redwood, JohnWinterton, Mrs Ann (Congleton)
Renton, Rt Hon TimWinterton, Nicholas (Macc'f'Id)
Richards, RodWolfson, Mark
Wood, TimothyTellers for the Noes:
Yeo, TimMr. David Lightbown and
Young, Sri George (Acton)Mr. Sydney Chapman.

Question accordingly negatived.

Amendment proposed, at the end of the Question, to add:but humbly regret that the Gracious Speech fails to provide for the essential investment in education and training which is vital to the country's economic recovery, lacks the basis for a sustained policy of low inflation and stable interest rates, and specifically lacks a commitment to joining the narrow band of the ERM and establishing the operational independence of the Bank of England, fails to address the fundamental problems of the economy, by increasing investment, competition and the establishment of a flexible labour market in which employees increasingly share in the success of' their companies, and does not contain legislation to deal with the problems of environmental pollution; and finally regret the absence of any legislation to provide for electoral reform for local, Westminster and European elections or to provide for Parliaments for Scotland and Wales."—[Mr. Ashdown.]

Question put forthwith, pursuant to Standing Order No. 32 (Calling of amendments at end of debate), That the amendment be made:—

The House divided: Ayes 18, Noes, 332.

Division No. 4][10.18 pm
AYES
Alton, DavidLynne, Ms Liz
Ashdown, Rt Hon PaddyMaclennan, Robert
Beith, A. J.Michie, Mrs Ray (Argyle Bute)
Bruce, Malcolm (Gordon)Steel, Rt Hon Sir David
Campbell, Menzies (Fife NE)Taylor, Matthew (Truro)
Carlile, Alexander (Montgomry)Tyler, Paul
Foster, Donald (Bath)Wallace, James
Harvey, Nick
Johnston, Sir RussellTellers for the Ayes:
Jones, Nigel (Cheltenham)Mr. Archy Kirkwood and
Kennedy, Charles (Ross, C & S)Mr. Simon Hughes.
NOES
Adley, RobertBoyson, Rt Hon Sir Rhodes
Ainsworth, Peter (East Surrey)Brandreth, Gyles
Aitken, JonathanBrazier, Julian
Alexander, RichardBright, Graham
Alison, Rt Hon Michael (Selby)Brooke, Rt Hon Peter
Allason, Rupert (Torbay)Brown, M. (Brigg & Cl'thorpes)
Amess, DavidBrowning, Mrs. Angela
Ancram, MichaelBruce, Ian (S Dorset)
Arbuthnot, JamesBudgen, Nicholas
Arnold, Jacques (Gravesham)Burns, Simon
Arnold, Sir Thomas (Hazel Grv)Burt, Alistair
Ashby, DavidButcher, John
Aspinwall, JackButler, Peter
Atkins, RobertButterfill, John
Atkinson, David (Bour'mouth E)Carlisle, John (Luton North)
Atkinson, Peter (Hexham)Carlisle, Kenneth (Lincoln)
Baker, Rt Hon K. (Mole Valley)Carrington, Matthew
Baker, Nicholas (Dorset North)Carttiss, Michael
Baldry, TonyCash, William
Banks, Matthew (Southport)Channon, Rt Hon Paul
Banks, Robert (Harrogate)Chaplin, Mrs Judith
Bates, MichaelChurchill, Mr
Batiste, SpencerClappison, James
Beggs, RoyClark, Dr Michael (Rochford)
Bellingham, HenryClarke, Rt Hon Kenneth (Ruclif)
Bendall, VivianClifton-Brown, Geoffrey
Beresford, Sir PaulCoe, Sebastian
Biffen, Rt Hon JohnColvin, Michael
Blackburn, Dr John G.Congdon, David
Body, Sir RichardConway, Derek
Bonsor, Sir NicholasCoombs, Anthony (Wyre For'st)
Booth, HartleyCoombs, Simon (Swindon)
Boswell, TimCope, Rt Hon Sir John
Bottomley, PeterCormack, Patrick
Bottomley, Rt Hon VirginiaCouchman, James
Bowden, AndrewCran, James
Bowis, JohnCritchley, Julian
Currie, Mrs Edwina (S D'by'ire)Howarth, Alan (Strat'rd-on-A)
Curry, David (Skipton & Ripon)Howell, Rt Hon David (G'dford)
Davies, Quentin (Stamford)Howell, Ralph (North Norfolk)
Davis, David (Boothferry)Hughes Robert G. (Harrow W)
Day, StephenHunt, Rt Hon David (Wirral W)
Deva, NiranjanHunt, Sir John (Ravensbourne)
Devlin, TimHunter, Andrew
Dickens, GeoffreyHurd, Rt Hon Douglas
Dicks, TerryJack, Michael
Dorrell, StephenJackson, Robert (Wantage)
Douglas-Hamilton, Lord JamesJenkin, Bernard
Dover, DenJessel, Toby
Duncan, AlanJones, Gwilym (Cardiff N)
Duncan-Smith, IainJones, Robert B. (W H'f'rdshire)
Dunn, BobJopling, Rt Hon Michael
Dykes, HughKellett-Bowman, Dame Elaine
Eggar, TimKilfedder, James
Elletson, HaroldKing, Rt Hon Tom
Emery, Sir PeterKirkhope, Timothy
Evans, David (Welwyn Hatfield)Knapman, Roger
Evans, Jonathan (Brecon)Knight, Mrs Angela (Erewash)
Evans, Nigel (Ribble Valley)Knight, Greg (Derby N)
Evans, Roger (Monmouth)Knight, Dame Jill (Bir'm E'st'n)
Evennett, DavidKnox, David
Faber, DavidKynoch, George (Kincardine)
Fabricant, MichaelLait, Ms Jacqui
Fairbairn, Sir NicholasLamont, Rt Hon Norman
Fenner, Dame PeggyLang, Rt Hon Ian
Field, Barry (Isle of Wight)Lawrence, Ivan
Fishburn, John DudleyLegg, Barry
Forman, NigelLeigh, Edward
Forsyth, Michael (Stirling)Lennox-Boyd, Hon Mark
Forsythe, Clifford (Antrim S)Lester, Jim (Broxtowe)
Forth, EricLidington, David
Fowler, Rt Hon Sir NormanLilley, Rt Hon Peter
Fox, Dr LiamLloyd, Peter (Fareham)
Fox, Sir MarcusLord, Michael
Freeman, RogerLuff, Peter
French, DouglasLyell, Rt Hon Sir Nicholas
Fry, PeterMcCrea, Rev William
Gale, RogerMacGregor, Rt Hon John
Gallie, PhilipMacKay, Andrew
Gardiner, Sir GeorgeMaclean, David
Garel-Jones, Rt Hon TristanMcLoughlin, Patrick
Garnier, EdwardMcNair-Wilson, Sir Patrick
Gill, ChristopherMadel, David
Gillan, Ms CherylMaginnis, Ken
Goodlad, Rt Hon AlastairMaitland, Lady Olga
Goodson-Wickes, Dr CharlesMajor, Rt Hon John
Gorman, Mrs TeresaMalone, Gerald
Gorst, JohnMans, Keith
Grant, Sir Anthony (Cambs SW)Marland, Paul
Greenway, Harry (Ealing N)Marlow, Tony
Greenway, John (Ryedale)Marshall, John (Hendon S)
Griffiths, Peter (Portsmouth, N)Marshall, Sir Michael (Arundel)
Grylls, Sir MichaelMartin, David (Portsmouth S)
Gummer, Rt Hon John SelwynMawhinney, Dr Brian
Hague, WilliamMayhew, Rt Hon Sir Patrick
Hamilton, Rt Hon ArchieMellor, Rt Hon David
Hamilton, Neil (Tatton)Merchant, Piers
Hampson, Dr KeithMilligan, Stephen
Hanley, JeremyMills, Iain
Hannam, Sir JohnMitchell, Andrew (Gedling)
Hargreaves, AndrewMitchell, Sir David (Hants NW)
Harris, DavidMoate, Roger
Haselhurst, AlanMolyneaux, Rt Hon James
Hawkins, NicholasMonro, Sir Hector
Hawksley, WarrenMontgomery, Sir Fergus
Hayes, JerryMoss, Malcolm
Heald, OliverNelson, Anthony
Heath, Rt Hon Sir EdwardNeubert, Sir Michael
Heathcoat-Amory, DavidNewton, Rt Hon Tony
Hendry, CharlesNicholls, Patrick
Heseltine, Rt Hon MichaelNicholson, David (Taunton)
Hicks, RobertNicholson, Emma (Devon West)
Higgins, Rt Hon Terence L.Norris, Steve
Hogg, Rt Hon Douglas (G'tham)Onslow, Rt Hon Cranley
Horam, JohnOppenheim, Phillip
Hordern, Sir PeterOttaway, Richard
Howard, Rt Hon MichaelPaice, James
Patnick, IrvineStern, Michael
Patten, Rt Hon JohnStewart, Allan
Pattie, Rt Hon Sir GeoffreyStreeter, Gary
Pawsey, JamesSumberg, David
Peacock, Mrs ElizabethSweeney, Walter
Pickles, EricSykes, John
Porter, Barry (Wirral S)Tapsell, Sir Peter
Porter, David (Waveney)Taylor, Ian (Esher)
Portillo, Rt Hon MichaelTaylor, John M. (Solihull)
Powell, William (Corby)Temple-Morris, Peter
Rathbone, TimThomason, Roy
Redwood, JohnThompson, Sir Donald (C'er V)
Renton, Rt Hon TimThompson, Patrick (Norwich N)
Richards, RodThornton, Malcolm
Riddick, GrahamThurnham, Peter
Rifkind, Rt Hon. MalcolmTownend, John (Bridlington)
Robathan, AndrewTownsend, Cyril D. (B'xl'yh'ath)
Roberts, Rt Hon Sir WynTracey, Richard
Robertson, Raymond (Ab'd'n S)Tredinnick, David
Robinson, Mark (Somerton)Trend, Michael
Roe, Mrs Marion (Broxbourne)Trimble, David
Ross, William (E Londonderry)Trotter, Neville
Rowe, Andrew (Mid Kent)Twinn, Dr Ian
Rumbold, Rt Hon Dame AngelaVaughan, Sir Gerard
Ryder, Rt Hon RichardViggers, Peter
Sackville, TomWaldegrave, Rt Hon William
Sainsbury, Rt Hon TimWalden, George
Scott, Rt Hon NicholasWalker, A. Cecil (Belfast N)
Shaw, David (Dover)Walker, Bill (N Tayside)
Shaw, Sir Giles (Pudsey)Waller, Gary
Shephard, Rt Hon GillianWard, John
Shepherd, Richard (Aldridge)Wardle, Charles (Bexhill)
Shersby, MichaelWaterson, Nigel
Sims, RogerWatts, John
Skeet, Sir TrevorWheeler, Sir John
Skinner, DennisWhitney, Ray
Smith, Sir Dudley (Warwick)Whittingdale, John
Smith, Tim (Beaconsfield)Widdecombe, Ann
Smyth, Rev Martin (Belfast S)Wilkinson, John
Soames, NicholasWilletts, David
Speed, KeithWilshire, David
Spencer, Sir DerekWinterton, Mrs Ann (Congleton)
Spicer, Sir James (W Dorset)Winterton, Nicholas (Macc'f'ld)
Spicer, Michael (S Worcs)Wolfson, Mark
Spink, Dr RobertWood, Timothy
Spring, RichardYeo, Tim
Sproat, IainYoung, Sir George (Acton)
Squire, Robin (Hornchurch)
Stanley, Rt Hon Sir JohnTellers for the Noes:
Steen, AnthonyMr. David Lightbown and
Stephen, MichaelMr. Sydney Chapman.

Question accordingly negatived.

Main Question put and agreed to.

Resolved,That an humble Address be presented to Her Majesty, as follows:Most Gracious Sovereign,We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.