HC Deb 03 November 1971 vol 825 cc177-317


Order read for resuming adjourned debate on Question [2nd November]:

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.— [Mr. Nott.]

Question again proposed.

Mr. Speaker

It may be of some help to the House if I indicate what has been suggested to me as the pattern of the debate. The debate today, as yesterday, will be general. On Thursday the main speeches will relate to foreign affairs; on Friday to education ; on Monday to housing, including housing in Wales ; on Tuesday, unemployment.

3.1 p.m.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies)

I listened attentively to the unenthusiastic and gloomy forebodings of the right hon. Gentleman the Leader of the Opposition yesterday. He saw absolutely no light whatever in the development of the economy. My right hon. Friend the Prime Minister was interrupted frequently during the course of what he had to say by members of the Opposition desiring to underline their need to extract the maximum possible effect from their assessment of the unrelieved tendency of the economy to stagnate. I can only say that all that is wholly at variance with indications which are presently available to the Government.

The estimate of the third quarter of this year's consumers' expenditure indicates a rise of about 2½ per cent. compared with the average rate of the first half; this is fully consistent with what the Chancellor's strategy was at the time of the July statement. The third quarter's car registrations are no less than 35 per cent. up on the rate for the first half year. July and August consumer durables are 10 per cent. up on the second

quarter rate. The volume of exports in July and August are 5 per cent. up on the rate for the first half of 1971—a clear improvement in industrial liquidity due largely to tax reduction. [An [fort. MEMBER: "Unemployment."] I will come to that, and I will come to prices, too. Financially industry is well placed to meet investment requirements predominantly from its own resources.

The C.B.I. trends survey for November is by no means euphoric, but there are certain gleams of light, and if on. Members who constantly press the point would read it with some attention they would see that there are gleams of light in the field in which they are interested; namely. in terms of orders.

Retail prices undoubtedly have dramatically slowed in the third quarter, with a rise of only three-quarters of 1 per cent., and that mirrors a considerable and substantial slowing down in the rise of manufacturers' wholesale prices, for which the C.B.I. initiative must have some credit.

Mr. Harold Wilson (Huyton)

The right hon. Gentleman will know that in this marginal improvement it has been mainly fresh fruit and vegetables which are counted in the Index. Could the right hon. Gentleman say in how many years from 1964 to 1970 there was not a marked fall in that element in the index, as shown by the Financial Times shopping index during these months?

Mr. Davies

I am aware of what the right hon. Gentleman says, but the fall goes very much beyond anything of the seasonal kind. What the right hon. Gentleman says has no bearing on manufacturers' wholesale prices, which have shown a substantial cutback, and I do not think that intervention changes what I have been saying.

The rate of increase in hourly wages over the first nine months of 1971 slowed down from 8 per cent. to 6.9 per cent. compared with the previous year. Equivalent earnings figures over the first eight months are down from 9.3 percent. to 6.9 per cent.

All that does not seem to me like a stagnant economy. The prospect is one of continuing growth, with the unsettling elements which are so evident in the economy in the last half of 1970 and the first half of 1971 showing at least a credible degree of moderation. We can [MR. DAVIES.]

look forward to a year of steady and substantial upturn, and it is against that background that the whole programme of government can evolve.

I realise full well that the signs of an improvement in the two most recalcitrant factors have yet to manifest themselves— low industrial investment and, above all, a distressingly high level of unemployment. It is not my intention to play the "It was not me ; it was you" game, but I must emphasise that these two elements are always the most obdurate in answering to the beginning of an upswing, and this is regularly seen. I am confident that they, too, will answer, though I do not doubt that the time lag will prove agonising, as it already is to us all now.

As my right hon. Friend the Prime Minister said yesterday, the unemployment problem is very much accentuated by the undoubted present capacity of firms to sustain a considerably higher level of production with the same manning as they currently have. This adds a particular emphasis to the need to get the other recalcitrant elements of the economy on the move again in the field of industrial investment, and I am confident that the decisions taken last week and the fulfilment of them as they evolve during the course of the next year will materially help.

Undoubtedly, the factor that will dominate the next year is the process of adaptation to the Community. The right hon. Gentleman the Leader of the Opposition saw that adaptation simply in terms of the legislative programme and the number of hurdles he could devise to make that as troublesome as possible. For the Government, the adaptation process means something which is wholly different and a good deal more constructive. The legislative activity is not only a necessity but an essential down-to-earth process.

The real interest centres around the preparation of the country to attain the maximum achievements from the opportunities now available and, no less, the gearing of the country's abilities to make a positive and creative contribution to the evolution of the Community itself. The former question—the extraction of the maximum benefit for ourselves—is primarily a matter for the individual

enterprises and institutions and their representatives throughout the country. But the Government have a major part to play in seeking to ensure the extraction of maximum benefit, as a repository of knowledge of the affairs concerning the Common Market, and making that knowledge available to all who seek it. The active operations which have been set up in my Department and other Departments to meet these needs are in demand to a steadily escalating degree. The flow of inquiries about problems and interests in the Community is gathering momentum. The latter, which is the contribution that we can make to the Community, is clearly one in which the Government have a very big part to play.

There seems little doubt that the decade of the '70s will constitute the industrial policy decade of the European Economic Community. However much some may regret the fact that we are tardy arrivals in the Community, there is no doubt that our appearance now is timely, and undoubtedly the part that we can and shall play in the evolution of industrial policy increases from the very moment at which we join it. This activity of contributing to the evolution of industrial policy in the Community covers an immensely wide area of work, and I can do no more this afternoon than mention a selection of the fields in which we have a real part to play. These are fields in which we shall be happy to play our part, and I know this will be very much welcomed by the Community, as soon as the Treaty of Accession is signed.

In the first place the E.E.C. is on the move to put into effect the purpose expressed in the preamble to the Treaty of Rome about the rectification of regional imbalance. The first measures to move away from a posture of dissociation from national policies have been considered. The intention is not to replace national policies but to supplement them. The reinforcement of national policies to overcome regional problems by Community action is both welcome and likely to evolve considerably in the years to come. We have very much experience on our side in this field, gleaned over many years in seeking to rectify imbalances which have manifested themselves in our own country. We are anxious to put that experience at the service of the Community both in our own self-interest and also in the common interest. I am sure that this contribution will be very welcome to the Community.

Another aspect is the whole field of the facilitation of trading and industrial movements generally and the whole complex of business facilities within the Community. This obviously encompasses such matters as the development of a European-based company law, and many other matters like patent registration and patent licensing, standard specifications, safety requirements and a whole range of relatively down-to-earth and gritty items which have an enormous effect on the facilities for trade in operating effectively within the Community. Here, again, we have a real degree of experience upon which we can draw to put at the service of the Community and which also will be for the benefit of others. I know that, again, this will be welcome.

There is a third matter which is vital. At this point I should like to recall to the right hon. Gentleman the Leader of the Opposition that some years ago, in 1967, he also was a great believer in one particular element and made many speeches and had discussions with many people about it. I refer to the problem facing enterprises which scale the peaks of technological achievement. I have heard very little from the right hon. Gentleman on this subject in recent months, though at one time the technological community was his favourite child.

Mr. Harold Wilson

I would refer the right hon. Gentleman to what I said in the debate July, to my speech at the Labour Party Conference, to another speech I made on 18th October, as well as to my remarks yesterday. I still believe that this is one of the strongest arguments for going into Europe, but I do not think that the technological revolution can be urged on the right hon. Gentleman's side of the House after his record with Rolls-Royce and Upper Clyde.

Mr. Davies

That is the kind of mischievous nonsense that one gets from the right hon. Gentleman. [HON. MEMBERS: "Answer."] I do so with willingness. I had discussions with the right hon. Gentleman back in 1967 and I recall his enthusiasm then and now see his lack of it. [An HON. MEMBER: "What about the I.R.C.? "] The I.R.C. had nothing whatever to do with it. The problem of converting inadequately based national effort into successful Community-based partnerships is a matter of real preoccupation to us all. No one doubts that our involvement in the solution of these problems can and will greatly contribute to the Community's benefit, as it will to our own. These and many other fields of interest constitute the areas of adaptation in which there is really constructive work to do in the coming months to make the most of the Community and to contribute to its activities. This will characterise very much of our work in the coming year.

I now turn to the legislative programme foreshadowed in the Queen's Speech. The Leader of the Opposition in a very interesting passage in his speech yesterday said: They"— that is Her Majesty's Government— are clearly determined to put at risk their whole legislative programme to achieve this, and thereby deny to the House any hope of immediate and relevant action, which they do not propose to take anyway, for dealing with the nation's problems. And, as I have said, where proposals are made, they are wrongly directed, divisive and designed to aggravate the problems, and especially the social inequalities, which are the hallmark of this Government."—[OFFICIAL REPORT, 2nd November, 1971 ; Vol. 825, c. 15.] Those rather exaggerated words refer to the specific legislative programme now proposed by the Government. One has difficulty in reconciling what the right hon. Gentleman said yesterday with the facts. It is surely hard to employ the sort of language he employed yesterday in reference to a programme consisting of the promotion of active competition and fair trading. [Laughter.] Hon. Gentlemen always laugh at this point. I cannot understand it. They hate competition and love monopoly. This is their whole approach. They are devoted adherents to the principles of the cartel and monopoly and cannot bear the introduction of competition.

The second element in our legislative programme is the extension of customers' protection in the sale of goods. The third is the extension of the Shipbuilding Credit Scheme. The fourth is the reorganisation of the structure of the gas industry. The fifth is assistance towards the exploration of our mineral resources. Sixth is the encouragement of British [MR. DAVIES.]

investment overseas to the establishment of an insurance scheme. What on earth is divisive in that? If ever there was a programme combining practicability and the public good. I should have thought this was it, and I totally reject the right hon. Gentleman's condemnation.

Mr. Nigel Spearing (Acton)

Could the right hon. Gentleman enlighten the House as to why last year the Government of which he was a member decided to do away with the Consumer Council? Why is he now seeking to introduce other measures to do the very thing he has destroyed?

Mr. Davies

I am very keen that the measures we take shall be effective. I think that is an adequate answer to the hon. Gentleman's question.

I should like to add a little to what has already been announced about the legislative proposals that I have mentioned. I hope shortly to be elaborating upon the general indication that I gave at The end of last year about the Government's thinking on competition and the measures we propose. Right hon. and hon. Gentlemen on both sides of the House will find these proposals imaginative and valuable as constituting a powerful strengthening of the consumers' and the nation's interests.

As regards customers' protection in the sale of goods, I mean to stop practices whereby the individual purchaser's rights under the Sale of Goods Act can be avoided by sellers imposing contractual conditions of sale circumventing them. I am sure that the mass of public opinion will support me in this.

Our main purpose in the shipbuilding credit legislation is to increase the ceiling of credits to £1,000 million, but I may have certain other provisions to add.

Mr. George Darling (Sheffield, Hillsborough)

Is that the extent of the help which the Government propose to give to consumers?

Mr. Davies

No. I do not know whether the right hon. Gentleman is referring to the Sale of Goods Act, but certainly what I have in mind in regard to competition and fair trading is very germane to the interests of the consumer and is a matter of importance.

The gas industry has undergone some remarkable changes in recent years. Most recently the progressive replacement of local manufacture of gas by an integrated system of supply of natural gas from the North Sea has transformed the industry. Its present structure mirrors the conditions in which it lived in past years and is entirely inappropriate to the requirements of what is now an integrated industry. My purpose is to conserve the local roots of the present structure whilst allowing the new British Gas Corporation to develop the internal management organisation it needs to handle its changed role. This is an act of modernisation and improvement from which great benefits can flow.

Mr. Alan Williams (Swansea, West)

Will the right hon. Gentleman give way?

Mr. Davies

I will give way later. The assistance of the development of our mineral resources constitutes a provision for support of exploration and development to ensure as do other countries, that we make the most of our natural resources.

Finally, the overseas investment insurance scheme was referred to yesterday by my right hon. Friend the Prime Minister. I have no need to add to what he said, but it is clearly a very helpful measure, both to our own investors overseas and certainly to those with investments in this country.

I now deal briefly with certain major matters of policy with which I shall be deeply concerned in the coming year.

All hon. Members on both sides of the House would agree that nothing is more important than the measures necessary to rectify regional imbalance. about which so much has been said, and to try to arrest the decline that has been taking place in certain parts of the country, not just in recent months but in decades. This decline is by no means solely of an industrial nature but there is little doubt that industrial decline has played a very important part in the troubles which certain regions of our country, and of other countries, have had. The rectification of that industrial decline is undoubtedly one of the great remedies which could assist in the resurgence of those areas.

We have built up over the years, in successive Governments, such a complex pattern of incentives and methods of coercion as to make it very hard to assess the effective impact of our total package, as it now stands, upon what are very often wholly dissimilar areas. I do not believe that anything is to be achieved by adding to the weight or number of the present complex provisions. To do so would not materially assist the situation. We should aim, on the one hand, for simplification and, on the other hand, for more direct means of tackling the individual problems of individual areas. It is to this purpose that we are addressing ourselves now most urgently with a view to the possible identification of new lines of action conforming to the broad concept I have mentioned.

No one is in any doubt that the shipbuilding industry has special problems. Those special problems are not by any means confined to this country.

Mr. John Rankin (Glasgow, Govan)

That is an advance, anyway.

Mr. Davies

It is neither an advance nor is it a start. We already give considerable help to the industry, and we shall keep this field of work under review constantly.

I do net propose to dilate once again upon the story of Upper Clyde Shipbuilders, but I sincerely hope that the outcome of the present talks between the unions concerned and Govan Shipbuilders Ltd. will enable that company to present a valid proposition to the Government to justify the support I have promised provided that such a proposition is forthcoming. Whether that is on a two-yard or a three-yard basis depends upon the outcome of the feasibility studies undertaken by the company, and that is supplemented by the work of our consultants. The House would wish to know that, with the support of the Confederation of Shipbuilding and Engineering Unions. I have commissioned a professional study into the resources of the Clydebank Yard with a view to getting advice about the industry or industries for which a purchaser is likely to be found. PA Management Consultants has taken this on and hopes to report early in the new year. This seemed to me the most practical way in which

I could fulfil my pledge to help in discovering a valid purchaser for the yard.

Mr. Rankin

I am concerned about the four-yard or three-yard concept. I appreciate what the Minister has said, but when will there be an outcome of the business? How far away is an outcome? Has the right hon. Gentleman formed any opinion about this, because it is very important?

Mr. Davies

It has been my hope and expectation, and continues to be so, that I should have the results of the Govan Shipbuilders Ltd. feasibility study, together with those of the Governments consultants, about the two-yard or three- yard project for Govan Shipbuilders Ltd the end of the year. As I have said, I hope to have the work I have now commissioned on Clydebank available shortly afterwards, in the early days of next year, and this is about the time scale on which the information will be collected.

Mr. Rankin

In view of what the right hon. Gentleman has said, finance becomes very important. He is assuming that Clydebank will continue until the period he has specified. Who will provide the finance?

Mr. Davies

The hon. Gentleman knows that the Government are currently providing finance to the liquidator and that there is not at the present stage a shortage of work at the Clydebank yard. It will continue into the early days of next year, so the report to which I have referred will be timely on that particular time scale.

Mr. William Ross (Kilmarnock)

The right hon. Gentleman has said that he expects to have this feasibility study by the end of the year. The Government will then take some time to make ur their minds about it. What will be the rundown of manpower in the yards towards then?

Mr. Davies

There is unlikely to be any significant degree of redundancy between now and when I get these reports.

Mr. Ross

What does the right hon. Gentleman mean by "significant"?

Mr. Davies

I cannot quantify it with exact numbers but it will not be significant.


In a further shipbuilding case I have taken what seems to me to be helpful action. As the House knows, the Government are the co-shareholders, with the Laird Group, of Cammell-Laird Shipbuilding and Engineering Ltd. In August the two shareholders, the Laird Group and the Government, decided that a change in the top management was needed, and two very able men were taken on as chairman and managing director respectively. Their first task has been to appraise the future prospects of the company. They have not yet completed this work but consider that greater confidence would be given for it to be carried out thoroughly and deliberately if they had access to a stand-by financial facility of £3 million over the course of the next year or so. I have agreed to give them this facility. Token provision will be made in estimates at the appropriate time to cover this contingent liability.

Mr. Edmund Dell (Birkenhead)

I am glad that the right hon. Gentleman has agreed to make this facility available. However, will he say what effect this will have on further redundancy in shipbuilding yards? He is aware of the redundancy currently occurring and of the current high level of unemployment on Merseyside. Can he give any assurance regarding further redundancy?

Mr. Davies

I can give the assurance that had it not been for making this facility available it would have been very much more difficult for the new management of this company to carry through the work, as it proposes to do, on existing orders, with the consequential rentention of the work force. This was one of the factors borne in mind when making the facility available.

Mr. Eric S. Helfer (Liverpool, Walton)

Would the right hon. Gentleman say what discussions took place with the trade union movement about the change in certain personnel in the management, in view of the agreement reached when the first reorganisation took place under a Labour Government? There is a feeling amongst the trade unions that they were not in any way consulted. Would the right hon. Gentleman indicate what did happen?

Mr. Davies

I understand that there was certain consultation with the trade unions. I do not know whether it was satisfactory to them, but I have certainly not heard any thing which would indicate to me their dissatisfaction with the nominations made to the new company. I should be surprised to hear of that.

I want now to deal with the position of small firms. I remind the House that small firms constitute about one-fifth of our total national product and about one-quarter of our total employment, so they are an exceedingly significant part of our national economy. The Report of the Committee of Inquiry on Small Firms is published today. I would like first to pay a very warm tribute to Mr. John Bolton, Chairman of the Committee, and his colleagues. They have provided the first authoritative study of the place of the small firm in our economy, and it will stand as a landmark for many years to come.

This is a very wide ranging report and there is much in it which will need and receive further careful and sympathetic study. But on a number of its most important recommendations it would be helpful to the House and to those particularly affected if I were to make clear the Government's position now.

First, in order that the place of small firms in the economy should be continuously watched and their interests be taken into account in the formulation of policies, the Committee recommends that in my Department a Minister should be designated as responsible for small firms and that a small firms division should be set up. I accept both these recommendations. I propose to give the ministerial responsibility to my hon. Friend the Under-Secretary of State for Industry, and a division will be set up whose primary function will be to support him in this work.

There will, of course, be no change in the statutory or sponsorship functions for which my Department and others are responsible, and existing lines of communication between small firms and individual Departments will he unaffected. The general task of the division, apart from co-ordinating the consideration of this Report, will be to act as a focal point within Government where the needs of small firms can be seen as a whole.

Secondly, the Committee recommends that there should be a network of local small firms advisory bureaux to provide an information and referral service. It envisages that Government financial support would then be withdrawn from the Industrial Liaison Service. In order to give time for full consideration of this recommendation, I am proposing to extend by one year the provision for supporting the Industrial Liaison Service. Thirdly, the Committee makes several recommendations designed to minimise the burden on small firms of supplying statistics and filling in other Government forms.

Sir Gerald Nabarro (Worcestershire, South)

Bureaucratic muddle.

Mr. Davies

We accept the philosophy underlying these proposals, and they are being examined urgently in detail. Much of what the Committee recommends for statistical surveys is likely to prove acceptable.

Fourthly, the Committee recommends exemption of more small firms from certain of the disclosure provisions of the Companies Act, 1967. I propose to lay an order before the House which will exempt companies with a turnover of below £250,000 from the obligation to disclose it. Although this is lower than the limit proposed by the Committee, it is significantly higher than the present one, which is £50,000.

Likewise, companies will not need to show information about the remuneration of individual directors when the total remuneration of their boards does not exceed £15,000, compared with £7,500 now. These new exemption limits will not apply to holding companies or subsidiaries. The result of these changes will be a large reduction in the number of companies required to disclose all this information.

Fifthly, the Committee recommends that, for small firms at least, the industrial development certificate limit should be raised to 10,000 sq. ft. in all parts of the country. The present limits are 5,000 sq. ft. in the Midlands, the SouthEast and East Anglia, and 10,000 sq. ft. elsewhere. It was raised to these limits as recently as December last. While I will keep this matter under review, I do not think that any further changes are desirable in the present circumstances. Finally, the Committee made two recommendations on the treatment of small businesses by local authorities in exercising their planning functions. It is proposed to send a circular to local authorities encouraging them to take note of this.

Sir G. Nabarro

While congratulating my right hon. Friend very warmly on taking such dramtic action in regard to small firms, may I ask him to bear in mind that there is widespread anxiety amongst small, medium and, indeed, large firms about the scope and incidence of this complex forthcoming value-added tax? Will he therefore undertake to arrange with the Chancellor of the Exchequer that a full statement shall be made about the V.A.T. and that the Bill shall be laid at a very early date?

Mr. Davies

I take note of that. My hon. Friend will have noted that the small firms division of my Department will perhaps serve a useful purpose in listening to and understanding and analysing the views of small firms in this and other matters.

Sir G. Nabarro

Quite so.

Mr. Davies

I am conscious that time is advancing and I do not wish to occupy too much time. There are many things I would have liked to report to the House, including action in hand in relation to the steel and aircraft industries and the whole major question of energy problems, together with the problems and needs of export promotion and certain other matters. These all represent a considerable activity for the future.

I wonder whether my hon. Friend the Member for Flint, West (Sir A. Meyer) is here.

Mr. Charles Loughlin (Gloucestershire, West)

Address the Chair.

Mr. Davies

I will of course address the Chair, and do so regularly. I was looking around to see whether my hon. Friend the Member for Flint, West is here because he had something to say yesterday with which, unusually, I disagreed. He said: I hope that my right hon. Friend the Secretary of State for Trade and Industry, who, if the Queen's Speech is anything to go by, will clearly have a cushy year, will employ this year of leisure to give serious consideration to the objects of regional policy ….—[OFFICIAL RFPORT, 2nd November, 1971 ; Vol. 825, c. 117.] [MR. DAVIES.]

I assure him that that is not my expectation for the year. On the contrary, my judgment is that we are in for a full. active and, I firmly believe, forward looking year. There is an immense amount to do in every facet of our national industrial life. Nothing in the past leaves me to suppose that this is going to be an incident-free year. But we are at the beginning of the upswing and that coincides with European membership and a wide variety of positive and helpful measures upon which we have worked hard. I feel confident that thing; are moving in the country's favour and that before very long that motion will reach into every single part of the nation

3.37 p.m.

Mr. Michael Foot (Ebbw Vale)

The right hon. Gentleman began by discussing the economy as a whole and finished with a few words on the same theme. He referred to the adaptations required, as he believes, to make it possible for legislation and the economy to be accommodated to the requirements of the E.E.C. and he also talked about regional policy. I shall follow him in discussing these different subjects, but in a somewhat dif ferent way and in a slightly different order. I start with what he said about some of the adaptations which are to take place and the influence which they may have on the work and the business conducted by many of our fellow citizens. whether in small firms or large.

The right hon. Gentleman talked about down-to-earth and gritty questions that are involved in making these adaptations and I am sure he will agree, as every right hon. and hon. Member must agree. that it is normal practice that such down- to-earth and gritty questions which may affect the livelihood of our people should be discussed in detail in this House. That has always been our way on Finance Bills. Right hon. and hon. Members on both sides have often insisted during the course of Finance Bills that there should be discussion of these matters. The same thing should apply, of course, to the discussion of the legislative proposals for dealing with entry into the E.E.C., and that is the first matter I should like to get clear in the debate.

I should like the House and the country and all those who are to be faced with down-to-earth and gritty problems in the coming year in connection with this proposed entry to know what are their rights of appeal to Members of Parliament, what are the possibilities of discussion of these matters in the House of Commons, what chance they will have of having these matters represented according to the traditions of the House on the Floor and elsewhere. Every hon. Member, whatever view he may take about entry into the Common Market, must surely agree that as Members of Parliament, we should make these matters clear to the public at the outset.

I should therefore like first to put to the Leader of the House certain propositions upon which I hope he will comment when he replies to the debate. I hope that he will clearly describe to the House and the country—for it is not only the rights of Members of Parliament, but the rights of the public—exactly what will be the rights of Members of Parliament on all the matters which I and many of my hon. Friends will raise in the course of the discussions of this legislation. The right hon. Gentleman is not only the Leader in the House of Commons of his own party, for he has obligations to the whole House. Just as this legislation is said to be unique in the history of the House, so I should have thought that the Leader of the House had a unique responsibility to ensure that the rights of the House were protected. I say that partly because when questions were put yesterday to the Prime Minister by my right hon. Friend the Leader of the Opposition, we received no satisfaction, and we hope that we will receive satisfaction from the Leader of the House.

In articles in the newspapers and in many letters to the newspapers people have asked why it is necessary for the House of Commons to contemplate detailed lengthy discussion of the legislation which is to be presented. They say, "In view of the decision of the House on 28th October, surely it is now not necessary for there to be any detailed examination of this question ; surely we may as well proceed on the basis that everything was decided by that vote last Thursday"

The Government as well as the Opposition have a duty to make it clear that the country is not governed by that method and that Parliament does not work by that process. This Parliament has always worked on the basis that it is the opportunity and the duty of Members of Parliament to examine legislation, not merely on Second Reading, or Third Reading, but in detail in the Committee stages, on the Floor of the House, or wherever it may be. It is also the right of the House. Example after example could be given of legislation which has been transformed and the application of which to individual citizens has been greatly altered by the vigilance of hon. Members.

It is our custom and tradition, and a well-founded tradition protecting the individual rights of citizens, that the wisdom of the House of Commons is to be found not only in the intentions and purposes described by Ministers when they present a Bill for Second Reading but in the outcome of that legislation following the test of examination by the Opposition and Government supporters. It is a right which we have always had in the House of Commons, at any rate for many years, and it is a right which we shall presumably have in future, unless the Leader of the House is proposing a simple one-Clause enabling Bill to abolish Erskine May. I hope that he is not proposing that. Such is my respect for the right hon. Gentleman, that I am sure that if he were, he would have been good enough to give us notification in the Queen's Speech. and, so far as I can see, there is no such proposal. I therefore start with the proposition—I want to get everything clear—that we are to have exactly the same rights in examining this legislation that we have always had in examining other forms of legislation, all the more so because, as we are told, this is a unique event in the history of the country.

I come to some applications of that principle. One has already been mentioned by the right hon. Gentleman and commented on very fully.

Sir G. Nabarro

Quite right.

Mr. Foot

I do not want to entice or seduce the right hon. Member for Worcestershire—

Sir G. Nabarro

South. I am unseducible.

Mr. Foot

I was flattering the right hon. Gentleman; I was about to suggest that he represented the whole county, but I will not do so.

Mr. Harold Wilson:

He was being flattered by being called right honourable.

Mr. Foot

I should like the Leader of the House to tell us whether we are, as I presume we are, to have a separate Bill on value-added tax when we shall be able to examine the whole matter in detail. The Secretary of State has just talked about making forms clearer for small firms. I do not have any objection to what he proposes for assisting certain small business men by making forms clearer, for I detest forms, but I wish that he would show the same sympathy to council house tenants and would make their forms simpler ; they are to be persecuted with fresh forms.

It is remarkable for the Government to claim that they are to take measures to make life simpler for business men and yet in the same White Paper and the same Queen's Speech to propose to introduce value-added tax. I read today in The Times an article describing the system in all its luminous simplicity. If anybody can understand it, I will be gratified to hear the explanation. Everyone knows that it is one of the most complicated forms of tax.

Sir G. Nabarro

It is abstruse.

Mr. Foot

I am agreeing with the hon. Gentleman, not quarrelling with him; I think that he could serve a useful national purpose; the time has come when all patriots have to rally to the State, and I hope that we will get them all on a future occasion.

There was a description in the Daily Telegraphthe other day in an article about value-added tax when certain points which had hitherto been blurred were made a little clearer. This was not an article by an opponent of entry into the Common Market. It was written by Professor Douglas Dosser, who said: Coverage is mainly settled in Europe and the Green Paper on the V.A.T. dutifully follows the plan laid down. In principle, everybody, but everybody, pays V.A.T. on every transaction—your hotel bill, second-hand car, holiday air fare, antique furniture. But certain listed trading activities are exempt—small shops and businesses, banks, non-profit-making non-Institutions, purchase of houses. The major grey area between E.E.C. plans and Green Paper suggestions, the really hot issue on V.A.T., concerns food. In the Community, there is definitely to be a half-rate V.A.T. on food. Here, both parties are adamant that food will not be taxed. This pledge can he held to the end of the transition period (1978) but not beyond. Presumably, all this will be made clear when the Bill is presented.

I ask the Leader of the House to provide facilities to show the operation of the tax in all the countries of the Community and to say that we shall have in the Library translations of their law and practice so that we shall be able to make comparisons between what we have to bear and what they have to bear. The more I look at the value-added tax and how it may operate—and here I know I carry every hon. Member on this side of the House with me—the more I think that when it comes to the legislation, with the best will in the world, we will have quite a job to make a silk purse out of this sow's ear. However, we will have to try.

I now turn to another aspect of the legislation which, unfortunately, is not revealed in the White Paper. I hope that the Leader of the House will take the earliest opportunity to explain—it might even be better for him to publish a White Paper dealing with all these questions— how we are to deal with the adaptations which the Secretary of State mentioned. The right hon. Gentleman did not make any reference to it ; neither does the Queen's Speech mention the adaptations that will be required in the coal and steel industries.

As I understand it, when the Government sign the Treaty of Accession to the European Community, that will include a signature which affects the allegiance of the country to the High Authority of the Coal and Steel Community. If that is not correct, I shall no doubt be put right on it. I also understand that the accession of this country to the Treaty does not deal with the legal questions in this House, nor with the parliamentary responsibility of this House. Clearly, there will have to be at any rate one Bill and possibly two dealing with the rights which this House of Commons can now exercise over the coal and steel industries and which are to be abandoned by the Government's proposals.

This should have been referred to in the Queen's Speech, but no doubt the Leader of the House will put us right on it. When we come to that discussion, I hope that we shall get those answers from the right hon. Gentleman about the steel industry that he has steadfastly refused to give us. Whenever we have asked about the negotiations between the British negotiators and the representatives of the Community about our accession to the High Authority for Coal and Steel we have never had the answers.

We have never been told whether the Government received a firm assurance from the Community that the steel industry would be able to carry through its 40 million tons a year expansion programme. We have never received an answer to the question as to how the Government envisaged the application of the Community's rules about the so-called dominant position of certain products. We have not been told whether, under the Community's rules and practice, as I understand them, there has been intervention by the High Authority to say to certain steel industries or sections of production in the steel industry that, where there is a near-monopoly position in an area, they will forbid or restrain expansion of that part of the industry. This is a matter of prime importance to the British steel industry.

I have put these questions to the right hon. Gentleman before, but I put them again, because we have not had the answers. We want to know whether there is any limitation that can be imposed by the High Authority on the expansion of, for example, the tin-plate industry. At the moment 100 per cent. of the market is taken by the production of our steel industry. I am especially concerned about that industry in my constituency, because we have undertakings from the British Steel Corporation that, as soon as possible, it intends to instal a new tin-plate complex in Ebbw Vale. We must, therefore, have full debates in this House so that all these matters can be dealt with. I am not arguing the principle, but, on the general issue, the way in which the right hon. Gentleman and the Government have dealt with these matters was by saying that we need not worry about them since Lord Melchett, chairman of the British Steel Corporation, was in favour of going in, as was the chairman of the National Coal Board, and we need not be concerned that the interests of these great industries would not be properly protected.

I have the greatest possible respect for the chairmen of both the British Steel Corporation and the National Coal Board, but I think that they, and maybe the heads of some of the other corporations, imagine that they can operate almost as irresponsible persons—I do not mean this as any reflection on them— in that they are responsible to no one. What about Lord Melchett in the House of Lords, when discussing the matter? One of the attractions for him of getting under the High Authority is that he escapes from the right hon. Gentleman and his friends. Lord Melchett and his friends believe, "Better the devils we don't know than this lot." I would say to him that these people will not be here very long, and the consternation of the public arises because some are still there at all. The only reason for that is that, apparently, at the Conservative Party Conference they put out a story saying that they would be dismissed and that held up the desirable process a little. No word will pass my lips which would delay the process of enabling Lord Melchett to make up his mind on the merits with the offending individuals removed.

I am quite serious about these matters. I am deeply concerned about the success of the British steel industry. I want to see it thrive and prosper, naturally, from the nation's point of view and because of the serious employment situation arisng in so many parts of the country involving the steel industry. In Sheffield, in Scotland and in Wales— all round the country—every steel town is still deeply nervous, partly because it has failed so far to get the undertakings from the Government to deal with the question.

I expected to see in the Queen's Speech an announcement about the new borrowing powers for the steel industry. I do not know whether the right hon. Gentleman will incorporate that Bill with the Bill which will be required to deal with the transfer of authority to the High Authority in Europe, but I hope that there will be no such delay. We need decisions in the steel industry much earlier than that.

My remarks are addressed not only to the Government, but also to the Steel Corporation through the Government. One of the reasons why I am against the major proposition is that, in my judgment this House should retain the final authority over such great industries as coal and steel. If anyone asks me for further reasons why I think so, they should look at The Timesof 25th October, 1971. Everyone interested in the steel industry knows that for months now, if not for years, there has been argument whether we should have a great new steel plant built in this country, either on a green field site or on some other new site.

This statement appeared in The Times: The British Steel Corporation is having talks with three continental steel producers which could lead to joint investment in a massive European steel-making complex during the next few years. A senior executive of B.S.C. has described the chances of such a venture as `very, very certain'. The type of joint investment programme the corporation is discussing would be based on a huge coastal steelworks producing up to 10 million tons a year and costing hundreds of millions of pounds. If it be the case that there is a proposal for building a great new steel works in this country, there will be arguments about whether it should be built in Wales, Scotland or elsewhere. But one of the by-products or associated facts of entry into the Community may be that the building of such a big new plant, a major new investment of the Steel Corporation, will take place in Europe instead. This is a matter about which this House would be gravely concerned and my hon. Friends with steel constituencies would also be concerned. Therefore, when we get this Bill, which is not even mentioned in the Queen's Speech, we shall be discussing whether Members of Parliament will have access to those who have responsibility over these great industries, because I know that all my hon. Friends from the steel constituencies have been eager to press me ever since I have had responsibility on these matters to say that questions about the steel industry must be brought to the House of Commons or to the Minister responsible. But if that Bill goes through, we shall not have those same possibilities, and I hope that all my right hon. and hon. Friends will understand exactly what [MR. FOOT.]

is the situation and about what some of us have been fighting.

I come now to a further matter, and it concerns some of the rest of the consequential legislation. My hon. Friend the Member for Acton (Mr. Spearing) has tabled a number of Questions over a period to the Minister who is responsible for the negotiations and to others about the detailed proposals for translating into effect what the right hon. Gentleman him-self spoke about earlier in his speech.

On 29th July, my hon. Friend asked the Chancellor of the Duchy of Lancaster: …if he expects to be in a position to publish, before September, a schedule showing for each article of the Treaty of Rome the Section and name of any Act of Parliament that would require amendment should the United Kingdom decide to accede to that treaty, together with statements describing the significance and effects of any such amendments. The reply was: No. The examination and modification as necessary of Community legislation is continuing and is not expected to be completed before the end of the year "—[OFFICIAL REPORT. 29th July, 1971 ; Vol. 822, c. 163.] I do not know whether that is still the position, but at any rate the right hon. and learned Gentleman was not suggesting that we should be denied the full facilities to discuss all that legislation.

However, when my hon. Friend put the question to the Prime Minister, he got a much more equivocal answer. Some of my hon. Friends may say that that is not surprising. The Prime Minister did not go into details. All that he did was to refer to the matter of sovereignty and to say that this legislation is referred to in general terms in the White Papers.

As I have said before, it is the tradition and duty of this House to examine all these matters in the utmost detail. There was an article in last week's Sunday Timesindicating the range of subjects that we shall have to discuss if we are to discharge the obligations to our constituents which have always been accepted as those which we are entitled to discharge.

The Sunday Timesarticle says: What Parliament is going to be asked to do, starting in February, is to catch up with everything the Six has done since the Rome Treaty took effect on January 1, 1958. What this is going to bring home to people is that the Council of Ministers in Brussels (soon with British Ministers involved) acts, in fact. as a legislature. That is a pretty big change in the history of this country if we are to discuss measures which have already been put in the form of Acts by a legislature, by some other body.

The article goes on: But ironically, because of the catching up process, the British parliament will have to debate measures which never went before the parliments of the Six at all. I understand that, too. But, as I have said before, it is simpler for some of these other countries to adapt themselves to the procedures of the Common Market, because they have different kinds of Parliaments. In France, for example, Parliament is subordinate to the Head of State in the sense that the Head of State can dismiss that Parliament whenever he wishes. France also has a series of differences in the way in which its legislation is conducted.

I am illustrating the arguments and discussions that we must have if we are to discharge our responsibilities to our constituents. The article goes on: On the other hand, because it is a matter of conforming to measures that now apply throughout the community, it will not be possible to change even a comma. So we have legislation by a Council of Ministers. No doubt the Ministers are very able people. But one of the reasons why I believe in Parliament is that I do not think that Ministers by themselves are capable of legislating. Now we have a situation where legislation on a manifold series of matters has been passed by a Council of Ministers which I believe is not qualified to pass legislation. It will be presented to this House. and we shall be told that we cannot change a comma.

The article goes on: Yet here too. it will become clear—as the parliaments of the Six have found out over the years—that all the key points have been tied down in the ministerial negotiations leaving little margin for different implementing legislation. I do not know whether hon. Members or people in the country who have given their minds to discussion of these problems realise how vast is the change in the nature and the powers of this House of Commons which is to flow from our entry. Once we are entered, in a whole series of matters our legislature is to be subordinate to the Council of Ministers. I understand that the Government have said that they want that decision of principle to be made. But, in such a situation as that, where in fact the Leader of the House is trying under his proposals to take away powers that this House has had ever since it was founded—indeed. almost since the Witenagemot—the right hon. Gentleman has a special obligation to ensure that the discussion in this House on the proposals themselves shall not be curtailed by any kind of device.

Some of us thought yesterday that the Prime Minister's answer on this subject was extremely flippant. Surely the right hon. Gentleman must know the answer? If he does, he should have replied to my right hon. Friend on the matter. I do not know what other hon. Members think, but certainly I and many of my right hon. and hon. Friends intend to protect the rights of Parliament. It is not a game. It is not a joke. It is not putting hurdles in the way as the right hon. Gentleman suggested. It is nothing of that sort. Some of us believe, especially in a world where so many nations tremble on the verge of violence. that government by consent is the most sacred cause of all. Some of us believe that Parliament is the best way in which the process of government by consent can be ensured. But if a Government were to say that they were not merely aiming for a situation where these powers were taken from this House but that they intended taking them from this House by a process which was itself a defiance of Parliament, and if the Leader of the House were to be a party to that. he would not have served the cause which he has spoken for so eloquently on many occasions when he has defended the rights of Parliament.

I hope that all this nonsense of one enabling Bill and no second Bill is merely a piece of flippancy on the part of the Prime Minister which is not to be taken seriously. Perhaps the right hon. Gentleman should look up the language of his right hon. Friend the Minister of Agriculture, Fisheries and Food and deal with the matter in that style.

Let us see how we can get a pledge from the right hon. Gentleman. Whatever disputes there may be about the matter, no one can dispute that both the major enabling Bill which is required to carry through the Treaty of Accession and the full harmonisation Bill, however long or short it may be, provided that it covers all the subjects—and there are people in Brussels at the moment working out the number of Clauses which have to be put into the Bill—are major constitutional Measures. It would be a complete breach of the traditions of this House of Commons if any Government contemplated taking either of those Measures anywhere than on the Floor of this House.

Some of the country's great newspapers like The Times might show a little more respect for Parliament. They have discussed whether these Measures can be put through with a guillotine and whether the rights of Members of Parliament are to be taken away permanently by the action of a guillotine. They treat it as if it is a matter of no consequence. Some people in the House are not prepared to treat it in that way. Perhaps I have spoken longer on that subject than I intended, but I hope that I have persuaded the House that I am sincere about it.

The right hon. Gentleman says that the position of the economy will improve and that this is the beginning of the upswing. The other day the Prime Minister said that we were on the threshold of the greatest era of prosperity that we have ever known. We shall see. I do not deny, and I do not think that any sensible person denies, that the measures taken by the Government for expanding the economy are bound to have some effect some time. [An Hors. MEMBER: "Now."] That is what the Chancellor of the Exchequer said six months ago. However, we will hold the right hon. Gentleman to "now ".

That is not the principal part of my argument, because none of us has ever said or argued that it was impossible for the Government to take measures to expand the economy. They have taken measures, although desperately late. I do not think that they have taken the right measures. Certainly they have not taken the right and best measures for the regions. But none of us has said that the economy could not expand if the Chancellor went ahead and dished out the money.


The trouble is this. The Government, saying that they were taking measures which could be effective when we were saying that they would not be effective, have allowed unemployment to rise so much so fast without checking it that it has cut so deep that it is not easy to deal with it now. Two developments could take place. If the Government's measures are effective, unemployment could come down. But the unemployment figures have reached such a high level that it will perhaps be another two or three years before they come down to 600,000. Many of us in the House and many people in the country regard an unemployment figure of 600,000 as far too high and a total we are not prepared to tolerate. [Interruption.] The hon. Gentleman said that he would not play the game of saying, "It is your fault, not mine". I have not played it, because when I was sitting on the benches opposite, with a Labour Government in power, I protested against the unemployment figure of 600,000. But 950,000 is very much worse than 600,000.

My fear is this—and perhaps I am not expressing it in the way in which the economists would formulate it, but I still think it is right. Either it will take two or three years to get back even to the intolerable total of 600,000 unemployed or—and this is just as bad in a sense— there could he a boom, organised by the money being arranged by the dispensations of the Treasury, in conditions in which the unemployment figure does not fall much below 800,000. That would be an intolerable state of affairs, too.

Therefore, either way, the Government have already put themselves in a position in which 100,000, 200,000 or 300,000 people are being subjected quite unnecessarily to all the cruelty, waste and misery of unemployment and are inflicting this injury on the economy. Those of us who come from the regions feel this all the more because we know very well that long-term unemployment spread over the country is a certain way of knocking down the discriminations in favour of the regions. It is much more difficult for any Government—and I do not think that the present Government will fight very hard in the matter—to maintain the discriminations in favour of the regions where the unemployment is heaviest when the unemployment is spread all over the country.

The Prime Minister, when he spoke about the regions, showed what I can only describe as his characteristic insensitivity. He pays glowing tribute and sings a hymn to the working of competition, saying how necessary it is and that it is the only salvation. Then he says, as if these matters have no connection, "For 50 years we have had difficulty with the regions. We have tried this and that, but nothing has been successful. We are now trying to get together other instruments to deal with it "—as if there is no connection between the laws of competition and what has happened in the regions.

The cause of the trouble in the regions —the ruthless operation of market forces —is presented by the Prime Minister as the cure. The trouble was that the operation of competition drove industry out of the regions and there was no central, communal power to intervene and say, "We shall put a stop to this process". It is no good hon. Members talking about the 1920s and 1930s. Even when they were saying that they were accumulating instruments to deal with the problem, the operation of market forces was so fierce that whole communities were wrecked and people in Wales, Scotland and other areas had to pack up and go. The same thing is happening now.

One of the principal reasons why I have been passionately opposed to our entry to the Common Market on any terms which seemed likely to be available is that those market forces will be intensified—and nobody can deny it —in a way which is bound to inflict grave damage to the regions unless the Government are prepared to act about the regions on a far bigger scale. It is very difficult for the present Government to act about the regions. The Labour Government did a great deal, although not enough, in my opinion. But the instruments are not working in the regions. The Government pull the levers but they do not operate. Therefore, we must have new levers and new instruments.

That is why some of us do not believe that the question of public ownership is out of date. People should not go to Wales and Scotland and say that the question of sustaining great industries is out of date. Of course it is not. The way in which we adapt ourselves to industrial changes is almost becoming the central feature of our political controversy. It is easy enough for the Prime Minister to say that competition is the great cure. If competition on the ruthless terms in which he and his colleagues believe is put into operation, people are thrown out of work and so much bitterness is caused that the nation is divided in such a way that the solution of all the other industrial problems becomes almost impossible.

Does not the right hon. Gentleman learn about these things? Does he not know about the feeling on the Clyde, in Rolls-Royce and among people in the steel industry? Does he not understand, when he preaches his sermons about competition, that these problems cannot be dealt with by leaving them to the ruthless play of the market? That is why some of us believe that, so far from Socialism being out of date, it will come back to the very forefront of controversy in this country.

The Prime Minister referred to another matter—and I will not delay the House more than a minute or two—to which I should like to refer in my concluding remarks. He talked about an election, saying there was no need for an election to deal with the Common Market. He apparently had the support of the Leader of the Liberal Party on this subject, I was very surprised to see. I should have thought that a question like this was one of the very things to deal with at a General Election.

Let us just have a look at this. The Leader of the Liberal Party, coming to the rescue of the Government the other day, said that this argument about an election was invalidated because my right hon. and hon. Friends in their election manifesto did not themselves say that there should be an election on this issue of the Market if they managed to secure a proposition for entry. I can understand that argument but I can give him and give to the House two replies on the subject.

I am not myself a supporter of the coalition idea in government. Like Disraeli, I think England does not love coalitions, and I think that both Disraeli and England are right, and, fortunately, since I have had the opportunity to sit on this Front Bench there has never been any suggestion of a coalition, I am glad to say. As long as I sit here I am sure there will not be. So I can understand the argument, even though I may not agree with it, partly because I have spent most of my parliamentary life elsewhere on the benches in this House. Indeed, such is the higgledy-piggledy nature of fortune that I may even return there. Who knows? I may disagree with the policies of my right hon. and hon. Friends. If, in fact, however, there had been agreement between the two Front Benches, or the three Front Benches, if the Leader of the Liberal Party would like to have it that way—if there had been full agreement between the three Front Benches on the terms and conditions of entry into the Market, even though I did not agree with them, I could understand the argument that possibly that might make difficult any question of appeal to the public. I do not agree with that proposition, but I can understand that that argument might prevail.

I have always held the view of Hugh Gaitskell, whom I have quoted to the House previously. I shall not again read the whole of that quotation which I have made before, but I believe the question whether the British people should have a say about this matter is of pre-eminent importance for the future of democracy in this country, and I quote again to the House what Hugh Gaitskell said, and I ask the forgiveness of the House for doing so. The statement made by Hugh Gaitskell when speaking on the subject, in a state of things which exactly applies to our present circumstances when there is a major division between the major parties, was this: I repeat again my demand: If when the final terms are known, this party—the major Opposition party, the alternative government of the country—comes to the conclusion that these terms are not good enough, if it is our conviction that we should not enter the Common Market on these terms, so that there is a clear clash of opinion between the two major political groupings in the country, then the only right and proper and democratic thing is to let the people decide the issue. I do not believe there is any escape from that proposition.

Let us understand that the Prime Minister himself was seeking to reaffirm that principle not so very long ago. I shall not go through the whole quotation from him. The whole country knows what the Prime Minister said on the subject. He certainly led the people of this country to believe that he would not believe it possible for the British Government to take us into the Common Market with all these manifold changes for industry, trade, Parliament, against the wishes of the British people, without the consent of the British people. I still believe that it is necessary for any honourable Government to try to secure the consent of the people to this proposition.

The Leader of the Liberal Party said, "Oh, well, it was all right to say that 10 years ago, but that was a long time ago." He has had every opportunity to present his case to the public and to see whether the country is against our entry into the Market. The Labour Party has come out against it after the most lengthy and detailed discussion. So I say seriously to the Liberals that I believe that if in fact the Government proceed with this proposal to take us into the Market in defiance of the consent of the British people they will do grave injury to democracy in this country where, above all others, it is essential for us to sustain democratic and parliamentary institutions.

I believe that this point is well understood throughout the country, and if anybody, even the Labour Party, says to me,We cannot settle these matters at General Elections ", that will be a very sad day for democracy in this country, if people say that such a question as the future of our country and Parliament cannot be determined at a General Election, through the ballot box. If we cannot settle such conflicts there, where can the be settled?

I understand the passions, the strength of feelings of hon. Members in all parts of the House and in the different parties, on this subject. Anybody who has lived in this House of Commons for the past fortnight and who does not understand that must be a fool. Of course convictions are strong on the different sides. Of course they are passionately held. In my judgment, they have been honestly— and I do not say this in a patronising sense—honestly and sincerely expressed. but when we have these conflicts of opinion, when our opinions and convictions, so passionately held, clash, when there are differences between the parties, between individuals, how do we settle them? I say that the only people proper to settle them are the British people at a General Election.

This is the case which the Government so far have pitiably not answered. It is not an answer to us they have to give. It is an answer they have to give to the British people.

4.27 p.m.

Mr. John Boyd-Carpenter (Kingston-upon-Thames)

It is always a pleasure— and I mean this sincerely—to follow the hon. Member for Ebbw Vale (Mr. Michael Foot). If I may say so, I infinitely prefer to follow him than to be followed by him, for he is undoubtedly the ablest Parliamentarian on that bench and, if I may say so without presumption, the ablest member of his very able family.

Much of his speech was, of course, a pendant to the debate on the E.E.C., on which we spent six days and a good many nights recently and on which we may be spending an hour or two more during the coming Session. I do not propose to say very much on that well-trodden topic but I must follow up one or two of the things that the hon. Gentleman said.

The hon. Gentleman said, no doubt to reassure some people, that since he had been on that Front Bench there had been no question of a coalition. He appeared to overlook the fact that that very Front Bench is itself a coalition and that, indeed, one of the major issues of political speculation today is whether or not it will hang together.

I should like to follow the hon. Gentleman's very serious argument on the rightness or otherwise of a General Election on the E.E.C. issue. He said it was right there should be a General Election, and that is often repeated outside, but that is based on a considerable number of fallacies. In the first place, no one knows better than the hon. Gentleman, who has fought many elections, that elections are not fought on one issue: they are fought on many. Does he pretend that if my right hon. Friend the Prime Minister were to advise Her Majesty to dissolve Parliament in the near future he and his right hon. Friends would not fight the election on prices, unemployment, social security and regional policy?

Does he really believe that the General Election would be fought on the sole clear-cut issue of entry or non-entry into Europe?

What would be the situation in a large number of constituencies? Sixty-nine constituencies are represented in this House by his hon. and right hon. Friends who voted the other night for entry into Europe. How would the electors in those constituencies be called upon to decide? Would it be necessary for my right hon. Friends to put up Conservative candidates who were anti-European, so as to give those electors the chance of making a choice? What about the situation in the 39 constituencies represented by those of my hon. Friends who voted with the hon. Gentleman the other night? How is the issue to be cleared up in what are, after all, 100 constituencies in this country?

The hon. Gentleman, with his parliamentary and political experience, knows perfectly well that the plea for a General Election on this one issue, or on any one issue, is nonsense, and that no clear decision would emerge. At the last General Election the leadership of all three parties declared itself as being generally in favour of entry into the E.E.C.—

Mr. Fred Peart (Workington)

On the right terms.

Mr. Boyd-Carpenter

The right hon. Member for Workington (Mr. Peart) helps me. The issue at the General Election for which his hon. Friend has asked would not be entry or non-entry into Europe ; it would then be the adequacy or inadequacy of the terms. Can the right hon. Gentleman, who has sat in this House for 26 years, think of a more unsuitable subject for decision as a General Election issue than the precise merits or demerits of the complex body of negotiated terms which my right hon. Friend the Chancellor of the Duchy brought back from Brussels? The right hon. Gentleman knows perfectly well that the General Election would not be decided on the adequacy or inadequacy of those terms but, as all our General Elections are, on general agreement and satisfaction or otherwise with the policies and record of the Government of the day.

Mr. John Mendelson (Penistone)

Is not the right hon. Member for Kingston- upon-Thames (Mr. Boyd-Carpenter) moving away from long-established tradition? Although it was clear in 1910 that the whole record of the Liberal Government and their approach to social legislation would be a part of the General Election in that year, no historian denies that the overriding, dominant factor of that General Election was what should be done about the House of Lords. So there would be the normal position of a dominant factor and other factors as well. There is nothing new in this.

Mr. Boyd-Carpenter

I do not think that the hon. Gentleman will get much satisfaction from the example of the 1910 General Elections. He will recall that the result of those General Elections as far as England, Scotland and Wales were concerned was a tie between the Conservative and Liberal Parties. If the hon. Gentleman thinks that a General Election was a satisfactory way of settling that issue he will find that most historians are against him.

I want to follow up one other surprising thing said by the hon. Member for Ebbw Vale, namely, that one of our difficulties in dealing with the Six was that they had systems under which the Head of State could dismiss their Parliaments. The hon. Gentleman suggested that that was a profoundly different system from our own. Of course the reverse is the case. Her Majesty has complete power, exercised for the last several hundred years on the advice of her Prime Minister, to terminate the existence of any Parliament at any time. If the hon. Gentleman is trying to find a distinction between our system and those in Europe I can suggest half a dozen better examples to him ; that was a singularly bad one.

I will not follow the hon. Member for Ebbw Vale in his attempts to foreshadow how legislation to deal with our entry into Europe will be shaped—

Mr. John Mendelson

Why not?

Mr. Boyd-Carpenter

For the good reason that I do not know any more than he does. It is wasting the time of the House to speculate on things that we do not know, whereas, on one or two things that one knows a little about, one might he able to contribute. But I do not believe that a Government formed by my party, which has always stood for the rights of Parliament, would do anything damaging to the proper rights and functions of the House of Commons, and I am absolutely certain that this would not happen when we have a Leader of the House of the quality and the parliamentary feel of the present Lord President of the Council.

When I listened yesterday to the speech of the right hon. Gentleman the Leader of the Opposition, and when, earlier today, we witnessed the characteristic confusion in which the Labour Party found itself on the question of Private Members' time, I could not help reflecting on a passage in the works of that well-known novelist of earlier this century, who wrote under the name of Saki. He wrote of a conversation between two ladies which began, "One should always show respect for Leaders of the Opposition", to which the other lady replied, "I suppose you mean because they may one day lead the Government?", to which the reply was, "No, indeed, it is because they may one day lead the Opposition." I see that the hon. Member for Ebbw Vale recognises the quotation. That quotation from 50 or 60 years ago shows how eternal are the verities of our parliamentary system.

I understand that my right hon. Friend the Secretary of State for Social Services is to wind up the debate. The first question that I have to ask is one which he is particularly fitted to answer. In the middle of page 3 of the Gracious Speech there is an indication that a Measure will be put forward to reform pension schemes in the public service sphere. I hope that my right hon. Friend will tell us a bit more about this. One of the least attractive features of the Crossman national superannuation scheme was the power taken avowedly to cut back public service pension schemes. Many of the bodies affected were deeply concerned about this and I hope that my right hon. Friend will tell me that he does not propose to follow his predecessor's bad example in this respect. I hope that what he has in mind is no more than that power will be taken to enable the public service schemes to be improved sufficiently to measure up to entitlement to contracting out under his own National Insurance proposals, presumably in respect of widowhood, the preservation of rights, and so on. But perhaps he will tell us.

I regret that the Gracious Speech contains no indication of an intention to introduce amendments in the law as to compensation, for which many of my right hon. and hon. Friends—notably the present Minister for Local Government and Development—fought hard when this party was in opposition. The present compensation law is a nonsense, and an unfair nonsense. If a local authority or the Department of the Environment seeks to build an enormous motorway under, or indeed above, one's bedroom windows, and does not actually take one's land in the process, one is not entitled, under the doctrine of injurious affection, to one penny compensation although the whole amenity and value of one's house may have been ruined.

Secondly, when a residential property is taken for a perfectly good public purpose it is not enough just to give the district valuer's idea of the market value, because the person concerned is a person who in the nature of things has not wanted to move or to be moved, and will be involved in considerable expense by way of disturbance. To go back to 1845, the Railway Clauses Consolidation Act of that year provided, when the original railway lines were being constructed, that if the railway companies, as they then were, took land compulsorily they had to pay the full market value plus 10 per cent. for disturbance. This matter is of great importance, particularly in London, where there is great concern about the ringway programme of the G.L.C. That necessary construction of urban motor-ways will not be on or be politically viable unless fair treatment is given to those whose property is affected, and the present law does not give fair treatment.

I hope very much, therefore, that we shall be given some indication that the law of compensation will be amended so as to treat more fairly and generously than they are treated now those who suffer because of public works. I appreciate that this will cost money, but if— as is the case—only a limited amount is available, I would rather see fewer roads and public works carried out within the sum of money available, and fair treatment given to those who are affected, than literally to base an impressive public works programme on injustice and unfairness to individuals.

The main points that I wish to raise relate to the national economy, and here I pick up the remarks of the hon. Member for Ebbw Vale about unemployment. I assure him that many of my hon. Friends care just as much about unemployment as do he and his hon. Friends. We care about the waste of it, the hardship and, more crucially than anything, the humiliation. We feel for the man who feels that there is no place for him—whose wife is busy, whose children are busy at school, but who him-self has nothing to do.

This humiliation bites deep into people's minds. It creates bitterness that lasts for a long time and is a sure recipe for the maintenance of restrictive practices. As the hon. Member for Ebbw Vale said, something must be done, because the unemployment figures are much too high, especially as we are on the verge of winter. Indeed, technically we are in winter.

I urge upon my right hon. Friend the Chancellor of the Exchequer that there is an important further step that the Government could take. The classic instrument for dealing with problems of over-demand for labour, or for inadequate demand, is through the taxation system. I see no reason why we should wait for six months till the April Budget before using this instrument.

An example of the use of the taxation system which I urge on my right hon. Friend is at once to get rid of the remaining half of S.E.T. This is a direct tax on employment. It always has been. It is a handicap to the giving of employment. It is an inflator of costs and prices, if only moderately, and the Government have expressed their intention of getting rid of it.

This is a tax on employment, and in the present situation, its immediate withdrawal could have a considerable economic and, perhaps even more important, psychological effect. As one who takes very seriously this tragedy of unemployment I urge this step on my right hon. Friend.

A more cheerful comment in the economic sphere: I am absolutely delighted that President Nixon's actions earlier this year have given us what I have long wanted to see, namely, a floating £. I have wanted this since the early 'fifties, when I was, as someone once described me, Mr. Butler's under-butler at the Treasury. As Lord Butler of Saffron Walden's memoirs now make clear, on that occasion we nearly floated.

A floating £ is an ideal regulator of the economy. At a time of excessive imports and inadequate exports, with a freely floating £ matters are regulated. Imports become more expensive and are reduced. Exports become cheaper and more competitive and therefore increase. It is an automatic regulator and it spares one all the agonies of borrowing large sums from the I.M.F. to maintain the fiction that one's currency has a value which, on the markets of the world, it does not have. It also saves one the agonising deflation that is sometimes needed to maintain that fiction.

Looking back, I cannot help thinking that since the war the Bretton Woods decision to go for fixed parities was as disastrous as our return to the gold standard at pre-that-war parity in 1925. Then, as now, all the expert opinion and all the financial establishments were in favour of it, naturally, because it makes life a great deal easier for the central bankers.

I recall in this context a conversation that I had with the late Sir Winston Churchill. That great man, who was responsible for the 1925 decision, told me that he had had the gravest doubts about it and that his instincts were against it. He gave way, he said, when the solid body of institutional opinion in the Treasury and Bank of England advised him to take the step when his subtler instincts told him that it was wrong.

I hope that my right hon. Friend the Chancellor of the Exchequer may learn from that example, but I fear that the answer which he gave me last week was not at all satisfactory. He showed some indication of a desire to go back to fixed parities, subject to certain conditions. That would be the greatest mistake. The expansion of our economy, the mopping up of unemployment and the growth of the economy would be infinitely more likely to take place if we were firmly to say that our £ is worth what it is worth on the markets of the world and not a fictitious figure agreed many years ago.

A related question is the cumbrous apparatus of exchange controls which we have used to shore up the artificial value of the pound for a number of years under all Governments. Now that the Treasury are taking measures not to keep sterling in but other currencies out—discouraging them by unprecedented steps in respect of the ban on interest payments on newly-arrived balances—these restrictions look like a row of pre-dreadnought battleships in the nuclear age.

These restrictions do harm in two important respects. The first is the ban on investment in the developed parts of the sterling area. It keeps British investment out of some of the most valuable spheres. The other is the 25 per cent. surrender on realisation of foreign investments, which again has a restrictive effect.

Now that both parties realise the immense value to the economy of the flow of invisible exports, earned in the City of London and elsewhere, cannot my right hon. Friend, with a strong pound and a policy of discouraging the movement here of foreign balances, take a ruthless look at these restrictions? I know how they have grown up, having been supported and operated by people who have genuinely felt that they were vital in the national interest, and have so advised.

Today a radical approach is needed in the new situation that exists, and the combination of a floating pound and the freeing to a great extent of the restrictions on the movement of capital would be of the greatest advantage to the functioning of the British economy.

The Government must take these sorts of steps, in any case. Once we are in Europe there will have to be a considerable freeing of these controls. But why limit our co-operation to Europe, vital though that is, and not extend it so that we can invest in many of those areas where there are enormous possibilities, and particularly in the developed parts of the Commonwealth?

What I have said was not by way of criticism but, I hope, by way of constructive comment ; I share the Secretary of State's optimism as to the outlook. I believe that, given the measures that have been taken and the increasing willingness of our people to face economic realities, there are very real possibilities of growth. expansion and prosperity.

Economic forecasting is rather like meteorological forecasting—one can get the tendency right but the timing almost always defeats one. It is no real criticism of the Government to say that one of their number may have been over-optimistic in believing that an area of high pressure would soon reach this country. I am sure that the tendencies are right and that this Gracious Speech contains a great deal of solid, constructive and—to borrow a word from the Leader of the Opposition—relevant contribution to that end.

I finish by avowing my own faith in words used 124 years ago in Manchester by the famous philosopher Emerson: So… I feel in regard to this aged England… pressed upon by transitions of trade and … competing populations—I see her not dispirited, not weak but well remembering that she has seen dark days before— indeed, with a kind of instinct that she sees a little better in a cloudy day and that, in storm of battle and calamity, she has a secret vigour and a pulse like a cannon.

4.51 p.m.

Mr. Jeremy Thorpe (Devon, North)

It is a pleasure to follow the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). He had a distinguished career as Financial Secretary to the Treasury, and indeed elsewhere, so on fiscal matters he is entitled to be heard with respect. I am in wholehearted agreement with his suggestion about using fiscal means before the Budget to alleviate some of the worst effects of unemployment, and also his suggestion that we should make a free floating pound a permanent feature of our economy.

I believe that we should go still further and look at the whole reserve rÔle of currency, which has been to a large extent a millstone around our neck ever since the Second World War.

The right hon. Member alluded, as I intend to, but briefly, to the kindness of the hon. Member for Ebbw Vale (Mr. Michael Foot), who gave me his reserved and considered reply to the question I put to him last week on the inevitability of a General Election. I am grateful that he has taken the time to give these matters his profound thought so that we can have his quotable views on the record.

As I see it, the hon. Gentleman's view is that if there is a situation in which the main political parties are in disagreement on the issue of the Common Market or in which people appear to disagree with the views of the elected Government or, indeed, a combination of the two, then either that combination or either factor taken singly is itself a sufficient justification in a democracy for submitting the matter to the electorate for decision. I believe that that fairly puts the hon. Member's viewpoint.

All that I was saying to the hon. Member, and would have said to him last week, is that those are perfectly tenable points of view to take on the whole question. All that I was saying was that if they were so held, it seems to me a matter of some constitutional importance and therefore one would have thought it a matter which the Labour Party would have made quite clear to the electorate, either in its election manifesto or in speeches of its leaders or in the election addresses of the Leader of the Opposition or any other leading member of the Labour Front Bench. But such was not the case.

The hon. Member then asked: if a General Election was not the appropriate place to discuss the whole future of parliamentary democracy, what is left of parliamentary democracy? I was merely seeking to make the point, which the right hon. Member for Kingston-upon- Thames made, that in a situation in which parties are genuinely divided, with those on the other side who are Conservatives disagreeing profoundly with their Government and vice versa, under this extraordinary and anachronistic electoral system—which the right hon. Gentleman, if he pursues the logic of his case, must concede—it is impossible to have a meaningful choice if one is a Labour anti-Marketeer in Stechford or a Tory pro-Marketeer in, for instance, Thirsk and Malton. If we had an electoral system which made it possible to choose between varying opinions in one party, there might be some sense in having an election when the parties were in disagreement, but not otherwise.

What the hon. Member did say which I thought was of great significance was that there were those within parties who differed from their leaders on certain issues—[Interruption.]—I hope that the hon. Member for West Ham, North (Mr. Arthur Lewis) will allow me to make my speech—and that they expressed their views with sincerity. I am sure that the so-called rebels on both sides will be pleased to hear that they have the favour of the hon. Member for the determination with which they expressed their convictions in the Lobby. Lt was an important and significant departure from the impressions which have been given to us of the hon. Gentleman's view on this matter in the past few days.

Then the hon. Gentleman says: if we have this position, what do we do? I would say—allow any hon. Member to vote according to his convictions. But what the Leader of the Opposition says in Huddersfield is, "If there is this difference, let us say that it is over and from henceforth everyone must toe the line in Committee and vote as they are told." The hon. Gentleman's cry for a General Election would carry more weight and conviction if a free vote were first accorded to those who happen to disagree with their leaders on this issue.

Indeed, although I oppose a referendum, as did the Leader of the Opposition and the present Prime Minister at the last election, at least a referendum would make it easier for differences of opinion within political parties to be expressed by individual voters than having a General Election under our own electoral system.

When the hon. Member for Ebbw Vale told us of the great threat to the sovereignty of Parliament in the two stages that he mentioned—first, the way in which legislation was to be dealt with, and, second, the merits of the case itself, the sort of Community which we were entering—I asked myself whether he had all along realised this threat to the sovereignty of Parliament. I am sure he has: he has been consistent on this issue and he voted against the Labour application. I just wonder how many of his right hon. Friends who were supporting that application, and who, given the right terms, would have gone in, have had this blinding flash of the obvious on the road to Damascus—whether it was in the last few days and weeks or whether it was after 18th June, 1970.

I believe that the Government may well be judged in this coming year on [MR. THORPE.]

three issues. The first is their ability to bring down the present intolerable level of unemployment. The second is whether they will be able to end uncertainty and pay due regard to the rights of Parliament to give passage to the legislation which will give effect to the majority view of this House that we should join the E.E.C. The third is whether they will be capable of restoring peace to Northern Ireland and achieving with it the good will of all communities within the Province.

On unemployment, the Government must accept that they cannot for ever blame their predecessors for the present unemployment figures. I am delighted that the right hon. Gentleman made that point when he said that he was not going to have the "we and you" type of argument.

Eight years ago the Department of Employment set up a research unit for manpower planning and forecasting. We have had in recent months very little evidence of what has come out of that research unit. It appears to me at least that time and again the Government are overtaken by events, that they should know, but do not know, where demand will be in the next one, two and three years, what in short will be the demand industries.

If the Government can establish those priorities, then this is the moment, when men are out of work, for training and valuable retraining programmes for the growth industries of the next five years. When one considers that only 80,000 people are currently undergoing retraining, out of a total employed population of 25 million, with 1 million unemployed, and when one considers that in Sweden, for example, about 1 per cent. of the employed population are currently undergoing Government training, one realises that we have a long way to go. The O.E.C.D. Report, I believe—although I think that it is restricted—has been very critical indeed of the retraining facilities in this country.

I believe that this is the moment, when people are out of work, that the Government should be conceiving radical retraining programmes for many of the growth industries, such as the science- based industries, which will give us the future prosperity of this country. When men are being retrained, it should be treated as a job and they should be paid accordingly. That is the first thing to which the Government should give far more attention.

I should like to hear more about the sort of studies which the research unit has made at the Department and the sort of forecasts that it is making.

Then, again, there are industries in which the Government have a considerable share in the equity, as is the case with U.C.S., with Government directors on the board, and they are firms where Government finance, because of purchases and long-term defence contracts, has a critical influence over the firm's prosperity or otherwise. There have been examples time and again where the Government have discovered that these firms are undergoing financial difficulties and the announcement is made to the House perhaps only a few days or hours before they become general knowledge. This is a type of Macmillan situation—" Nobody told me ".

I believe that this Government's record of safeguarding public investment in firms where they have directors on the board has fallen far short of the public accountability which they themselves are always protesting they favour.

I also think that the Government must do much more forecasting. I can think of at least two major firms—I will certainly not name them—which are very large employers of labour, where the Government are responsible for considerable contract work, and which I believe will be in considerable difficulties in the next three or four months. This is the moment for the Government to see what re-structuring or reconstruction is needed rather than to allow the bankruptcies to flow and then try to pick up the bits later.

With regard to one area of high unemployment—Scotland—I want to put forward a practical suggestion which my hon. Friends representing Scottish constituencies have put forward and which relates to the discovery of oil in the North Sea. There is no doubt that Scotland does not lack skills. She does not lack men of managerial calibre. She does not lack a good work force. However, she does lack cash for investment.

Hunterston is hanging fire. Oceanspan, despite the efforts of the Scottish Council, is nowhere near realisation. The Highlands and Islands Development Board, which we on this bench enthusiastically supported, is making little impact. The August auctions of the 15 blocks of the areas set out for North Sea oil produced £37 million, and £34 million worth of that was accounted for by oil in the Scottish area. The royalties of 12½ per cent. on landed oil will produce to the Government about £100 million every year.

I suggest that the Government consider setting up a Scottish oil development corporation which could, from a sociological point of view, have oversight of the question of pollution. It will need only one fractured pipe and there will be very great problems of fish conservation. Such a corporation would take over, under Government supervision, future negotiations. It would also have credited to it through the Treasury at least 50 per cent. of the oil revenues, which may be ploughed back in Scottish investment designed to give employment.

I know that there is the argument that the Road Fund is not used to finance the building of roads and that the money got from the tax on tobacco is not given to the Department of Health to finance the attack on cancer. However, I believe that if the substantial royalties to be derived from oil extracted round the shores of Scotland, some of it only two or three miles offshore, are seen to be going to the Treasury here in London whilst little is done to plough investment into Scotland to provide employment there will be very great anger.

On the question of the Common Market legislation, I believe that there are some issues of great constitutional significance which should be taken on the Floor of the House. I also believe that there will be many detailed matters of regulation, such as the butter fat content in a whole variety of products, which by no stretch of the imagination can be said to be wrecking our Constitution and endangering the sovereignty of the House of Commons. Those matters could be very properly taken upstairs in Committee in the same way as minor matters are under the Finance Bill.

I very much hope that, apart from those who are intent on filibustering whatever the procedures are that are adopted, we shall be able to take a civilised apportionment between the matters discussed on the Floor of the House and those that are to go upstairs.

If I may say this without repeating the remarks which I sought to make on Thursday, and if I may have the temerity to give advice, I believe that the reputation of Parliament will be greatly advanced if during those stages Members of the House are accorded the supreme luxury of being able to speak and vote according to their convictions. Finally, I come to the question of Northern Ireland. I was last there on Saturday night. I start at once by paying tribute to the role of the British Army, and indeed of the R.U.C., who are facing almost impossible conditions. One gets a feeling of helplessness that, whatever reforms are introduced and however many more troops go to the Province, the terrorism and the rioting still continue.

I believe that in the long term membership of the European Community will have some beneficial effects in a political sense between all constituent parts of the United Kingdom, in which I include Northern Ireland, and the Republic itself. But that is some way off.

Yesterday the Prime Minister, when referring to a distinguished Roman Catholic who has joined Mr. Faulkner's Administration, said that this had gone some way. That is true. If it had happened five years ago it would have been regarded as a revolution.

What is depressing—I mention this because I think that we can learn some lessons from it—is that time and again it is not until the breakdown of law and order that reforms are introduced, and they appear to be, not voluntary reforms but concessions wrung from a reluctant Government. We were told that there was no need for an ombudsman. Now there are two. We were told that the abuses of gerrymandering, discrimination in housing and in employment, and certain undesirable activities of the "B" Specials, were wilful misrepresentations of the Fenians. The Hunt and Cameron Reports have clearly established that those were the facts and that that was the situation.

Liberals were laughed at for advocating the reintroduction of proportional representation which had been the system [MR. THORPE.]

deliberately and carefully written into the Constitution by the House of Commons in 1920 to ensure fair representation of minorities. We are awaiting the Crowther Report. But the Northern Ireland Labour Party is now giving the impression that it has been in favour of P.R. all along. Mr. Faulkner is now happy to consider it. The Alliance Party has vaguely expressed its conversion. The Prime Minister has said that nothing could be more natural or proper. If this system had been operating for 50 years, I believe that there would have been a premium on moderation in Northern Ireland and that Stormont could have been a credit to the United Kingdom and, indeed, even possibly the pioneer of an eventual federation of the whole of the Irish State.

I accept straight away that there can be no fundamental change in the Constitution without the consent of the people in the Province. But I believe not only that proportional representation is necessary at Stormont and at local government level but that the Government at Stormont—the Cabinet—may well have to be made up on a proportional basis representing all interests in the Province, provided only that they are in favour of working that form of government and are not going in merely to break up the Constitution. It is a system which works in Switzerland and in some other parts of the world. It may not have to be a permanent fixture, but I believe that only by giving the minority authority in shaping events shall we get its co-operation at Stormont.

In the next few weeks we must take major political initiatives in Northern Ireland and not be seen to have them wrung out of us after fresh outbursts of violence. I have always held the view that security should basically be a Westminster responsibility. I do not believe, for example, that the myth can be maintained that security is the responsibility of Stormont and that the Army is only a longstop to maintain law and order, when the Army is also under the control of Westminster.

There is a great confusion of responsibility, which I do not think is in the interests of the Province. Nor do I think that any member of the Catholic community can have great confidence in a Ministry whose Deputy Minister has been advocating the creation of a third force. I believe that when incidents occur it is not merely the incidents themselves which give rise to friction. The point is whether those incidents are likely to be investigated impartially and dispassionately. That is why I believe, and that is why I suggested—the Minister was good enough to say that he would consider it—that there should be some kind of impartial tribunal sitting on a permanent basis to look into the allegations not merely in order that those who are aggrieved might have a forum but so that the Army should have an opportunity to get their names cleared. It may be that some distinguished Commonwealth citizen who has no connection with the problems in Northern Ireland would be the sort of person to share that sort of tribunal.

I believe that internment and the necessity for internment can in the ultimate be judged only by those who have access to all the security reports and documentation. All I can say is that in its partial application to one community alone, with the suggestion that it is only one minority which has ever threatened force or has used force, it has caused a far greater division between the two communities than existed before internment. I believe that if we are to have any derogation from the basic civil liberties which obtain in the rest of the United Kingdom, that decision and the responsibility for that derogation should be made by this House of Commons and not by a subsidiary, subordinate Parliament in Ireland.

I should like to see a joint declaration made by the Republic and this Parliament that we do not rule out the principle of a united Ireland, provided always that it is with the majority support of all people living on both sides of the border. I should like to see a United Nations force patrolling the border between Northern Ireland and the Republic. I say that for this reason. There are those who say that this is an internal matter. It is not an internal matter. The security in the streets of Belfast is an internal matter. The possible confrontation between British and Republican troops on the border is not an internal matter. We in this House wanted to see a patrol on the borders of Egypt and Israel. We have wanted to see United Nations troops separating Greek Cypriots and Turkish Cypriots. If we believe in this case that there is some international significance, how can we in logic say that the border between Ulster and the Republic is quite different and is of no international concern?

I want to damp down the situation between North and South. I believe this is one way in which we can show our good faith in this regard. Then I believe the troops can get on with the internal matters. But that will be of no effect unless we can see a really genuine political initiative taken in Northern Ireland within the next few weeks.

Mr. Robert Adley (Bristol, North-East)

What does the right hon. Gentleman say is the specific task of a United Nations force on the border?

Mr. Thorpe

First of all, this must be a matter for discussion between ourselves and the Government of the Republic. Obviously, the remit of the United Nations must be one which brooks of no misunderstanding and no ambiguities. I hope that it would take over the duty— it is a big one ; there is a 300-mile frontier—of searching for contraband coming across the border, of seeing that there is a cordon sanitaire on both sides of the frontier and that basically it would try to do the job which the British Army is doing at the moment and which the troops of the Republic of Ireland are doing—always running the risk of a flare-up which I am certain neither Government want.

May I touch on two other matters? I hope that one thing that this Government will not do in the coming year is to ship more arms to the Republic of South Africa. I also hope, in the con-text of Africa, that the five principles, which were the principles of the Foreign Secretary when he was Commonwealth Secretary, will not be breached in any settlement simply because it is convenient that a settlement should be brought about. If there were any suggestion of a sell-out on Rhodesia there are some of us who, however dedicated we may be to the European cause, would not find ourselves able to go into any lobby on the European issue to support and sustain a Government which made a sell-out on Rhodesia. I say that plainly and clearly to show the intensity of our feeling on that issue.

Mr. Arthur Lewis (West Ham, North)

Have a free vote.

Mr. Thorpe

I would have a free vote, and that is how I would exercise my free vote on that issue.

In conclusion, I believe that the Government will be greatly concerned with the question of the Common Market and that they would have a lot of filibustering to put up with, but it would not be the first time or the last.

On unemployment, I think the position is one of very great disappointment to this country, and the Government will be judged by the number of unemployed and not by the speeches of the previous Government or by something which could have been done two years ago.

Third and last, I believe that we must have a vigorous political initiative in Northern Ireland, and we have got to have it very soon indeed.

5.16 p.m.

Sir Robert Cary (Manchester, Withington)

It is always a pleasure to listen to the right hon. Member for Devon, North (Mr. Thorpe). He is persuasive, cogent and eloquent on many subjects, and I have listened over the last 10 years to almost all the speeches he has made on the Floor of this House on the Common Market.

Particularly this afternoon I felt deeply about what he had to say about Ulster. After the occupation of the Rhine and the take-over of the Hohenzollern Bridge, I was brought back as a young man with my regiment to be plunged into the troubles in Ireland between 1919 and 1920. It is a most unpleasant and agonising thought. The worst day on the Somme was better than the best day in Ireland in those tragic years.

Everyone in this House, irrespective of party, feels deeply the problem of Northern Ireland where our young soldiers are performing an unenviable duty, many of them merely not being shot down but literally murdered in the process. Fortunately, yesterday the Leader of the Opposition told the Leader of the House that the Opposition had taken special steps to reserve a day next week when the whole problem of Northern Ireland and the Irish situation can be considered in full by this House.

Mr. Bob Brown (Newcastle-upon- Tyne, West)

Not next week.

Sir R. Cary

Well, soon. I have no doubt that the right hon. Gentleman the Leader of the Liberal Party will, as he did this afternoon, refer to those matters about which he and all of us feel so deeply.

I also agree that a General Election just on the issue of the Common Market, just as a subject on which to go to the electors, would be quite impossible. We have gone over this territory so many times in the last 10 years that I doubt whether we could possibly have an election on the single subject of the Common Market without gross misrepresentation of the facts on many occasions. I agree also with the right hon. Gentleman on the question of a referendum. I put a question to the Prime Minister on the feasibility of a referendum and he said that the Government did not want to use it, that it had been used before in other countries and that it had led to the gravest abuse and corruption. Nobody in this country would wish to adopt it. The right hon. Gentleman the Leader of the Opposition agreed with the Prime Minister's answer.

My right hon. Friend the Secretary of State for Trade and Industry, who opened this debate, constituency-wise has the same responsibilities as I have in the area of the Lancashire-Cheshire border. centred upon the hub of Manchester in commanding that great complex which is known to him, to myself and to my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke).

This is a great area which I have known for the last 30 years. I have seen it in its most grievous times in the early 'thirties when I represented the area in this House. I remember the area in the days of mass unemployment when there were 3 million unemployed in this country and 15 million in the United States. But it was world conditions which created that situation; there was a complete and utter collapse of world trade. I do not think we are threatened with that sort of situation at this time.

I certainly agree with the Leader of the Opposition that the unemployment figures are unacceptable, and I am not so sure I do not agree with the hon. Member for Ebbw Vale (Mr. Michael Foot) that even a figure of 600,000 is unacceptable. I would rather go back to the problems of over-full employment rather than that we should now be seeing a situation of 900,000 to 1 million unemployed. The question is whether we can bring about a society in which unemployment is not a permanently agonising factor. I do not wish to distress the House by pointing to some of the minuses in the great industrial complex of the Lancashire/Cheshire border. Everywhere there are misery stories to be told, but a debate such as this is not the occasion on which to unpack that sort of luggage.

The decision we took on Thursday last week was a decision freely arrived at by the House—whether hon. Members were acting under a free vote or a whipped vote. It was a decision taken by each individual Member, and that decision was in favour of the Common Market. We must implement that decision, and there will be a long drawn-out agony in so doing. Let us not underestimate what we have let ourselves in for but, if we can bring it off and can answer the challenge which goes with it, then there are many deep and fundamental matters which we must examine to see whether we are not on the wrong road in anything we may do over the next 12 to 18 months.

Let us see how we get on. One can speculate endlessly and various Members have referred to the shape of things to come. However, we must not get the unemployment situation out of proportion when judged against the background of other days. The present degree of unemployment in that great complex on the Lancashire-Cheshire border centred on Manchester is brought about by the change in business methods and administration much more than by any collapse in trade. The facilities for trade are still enormous, as are the opportunities.

We have a tremendous amount of skilled labour and talents to bring into a great complex like the E.E.C. Many hon. Members will be familiar with one of the greatest trading estates in Europe, Trafford Park, which is on the edge of the Manchester-Chester catchment area for skilled labour. All the assets in that estate still exist. We must re-build and re-use the immense capital resources we have in skills and labour and apply them in the most efficient way.

The great area of Trafford Park has suffered enough, in common with other large industrial areas. We have seen the shut-down of Metro-Vickers and the closing of A.E.I.—great businesses which employed many hundreds of thousands of people. But a change-over is taking place into other complexes. I was delighted to hear my right hon. Friend the Secretary of State for Trade and Industry say today that he was setting up a special division in his Department to take care of small firms and businesses. This is a vast area of skill and employment activity which we must foster. I will remember Oliver Lyttleton, now Lord Chandos, as a senior Minister in the Coalition Government in the early 1940s showing me papers which indicated that in 1941 there were 27,000 engineering businesses in this country, half of which employed no more than 25 to 30 people. This is the sort of small unit which in earlier years thrived in our community and which to some extent still plays an enormous part in the business exchanges of the nation. These small units do not employ great numbers of people, but they are feeling the cold wind as the great business complexes begin to merge. Therefore, I am glad my right hon. Friend is to give them some protection.

The hon. Member for Ebbw Vale paid some attention to the steel industry, a matter about which I feel very strongly, particularly when I see the great complex at Irlam threatened with complete closure. Such a closure will add 5,000 unemployed to the Manchester area and conurbation. The small township of Irlam, with some 25,000 people, will sink through the earth when this happens. I remember some 30 years ago getting some of the young men their jobs in the steel works, and, there- fore, since I know so many of them, I feel a personal moral responsibility about the future of this plant. I am happy to say— and I think my right hon. Friend will confirm this—that the British Steel Corporation has withdrawn its plans to close down completely the Irlam steel works by 1973.

My ambition in these special circumstances is to save the 2,000 younger men who work in the plant. The older men will have to go, but the Corporation has withdrawn its proposals to take away the last surviving steel-making capacity at Irlam which was to have terminated in 1973. That is now to remain. In other words, it has passed until next June when it is hoped a new form of proposal might be examined and accepted to provide a more limited steel-making capacity at Irlam. I very much hope that this will be the case.

The hon. Member for Ebbw Vale attempted to set up some bogymen who were making gigantic decisions in Europe to create a vast steel complex.

Mr. Arthur Lewis

And he did not get an answer from the Minister.

Sir R. Cary

I do not accept that. I know that the biggest sufferer from the point of view of redundancy will be Irlam, and it will involve 5,000 men if the proposals are carried through. However, I have some hope that the proposals will be modified.

Mr. Alan Williams

Would not the hon. Gentleman agree, therefore, that in view of the length of notice given by the Steel Corporation about its future intentions, plenty of time is allowed for the Government to introduce alternative employment?

Sir R. Cary

That is a proposal which could be considered, but I am not sufficiently well informed in terms of matters outside Irlam of what the Government can or cannot do about steel and other properties for which they are responsible throughout the country. They have obligations everywhere, especially the redundancies occurring all over the country, from Glasgow southwards. I cannot comment fully on what may be in the hon. Gentleman's mind.

I turn briefly to the Gracious Speech. I should call it the "All-night-sitting Gracious Speech" because the amount of business put into it is almost fantastic when analysed. It ends in the same delightful way: Other measures will be laid before you. I do not see where there is any room for other measures. I had hoped for one Measure forecast a short time ago concerning road transport, a Bill to make effective the enforcement of the law on the owners of foreign lorries used on United Kingdom roads and to amend the law on the size and weight of other lorries. I do not think we shall get that one in. I see these colossal vehicles [SIR R. CARY.]

thundering through the roads of Kent. They have all got "TIR" on the back. What that stands for I do not know. They have trailers and caravans. I have tried repeatedly to pass them on the road and I find that it is almost impossible because they are far too wide and, with their trailers, far too long.

Mr. Arthur Lewis

The hon. Gentleman will be able to enjoy himself, because when the rules and regulations about our entry into the Common Market are discussed, some 4,000 of them, he will be able to debate all this, but he will not be able to alter or amend any of the regulations. He will find that there will be more of these lorries coming and that this is what he voted for.

Sir R. Cary

Perhaps in the end I shall be in the wrong. It would not be the first time. Yesterday my right hon. Friend the Prime Minister talked about regional policies.

Mr. Ray Carter (Birmingham, North- field)

He did not say much.

Sir R. Cary

I ought to have had notice of that observation. However, I shall not dwell upon that in view of what was said by the right hon. Gentleman the Leader of the Liberal Party about the Common Market and his optimism for it. I hope that his words prove true. On Thursday of last week we took the right decision.

Mr. Arthur Lewis


Sir R. Cary

It is awfully hard to predict the critical moment on the Floor of the House when a decision is taken which affects the whole future of the nation. I have participated only once on such an occasion. I was one of 17 members of the Conservative Party on 20th February, 1938, who supported the Foreign Secretary, Mr. Anthony Eden, as he then was, when he resigned. I have never been in more distinguished company. The 17 contained three future Prime Ministers. That was under the cry of "Stand up to the dictators and stand with Czechoslovakia and others to challenge the German threat ". Lord Butler of Saffron Walden, in "The Art of the Possible", himself in the centre of activities then, almost proves that the. year's delay which Mr. Neville Chamberlain's action represented in that time made the winning of the war possible. It gave us the strength, marginally, in aircraft, and it brought, above all, perhaps the greatest parliamentarian of our time, Sir Winston Churchill, to that Box to mobilise the nation and the whole world to fight the greatest war in history.

Mr. Arthur Lewis

Thanks to a revolt of backbenchers.

Sir R. Cary

In the words of the right hon. Gentleman the Leader of the Liberal Party, let us hope and pray that one of the most sane and wise decisions taken by the House of Commons was that taken on Thursday of last week when we decided to join this great European constellation.

5.35 p.m.

Mr. Maurice Foley (West Bromwich)

I am honoured to follow the hon. Member for Manchester, Withington (Sir R. Cary). He has shown his manifest concern for the employment of his constituents. In listening to him moving on to Common Market issues, I thought he might continue the habit of cross-voting and join us in the Lobby next Tuesday night to condemn his Government for their abject failure in dealing with the employment situation in Britain.

I want to deal particularly with the hon. Gentleman's earlier moving remarks about his experiences in Northern Ireland. The experiences to which he referred were of a time long before I was born. But this is part of the nature of the problem. It has been with us for a long time, and for a long time we have pretended that it did not exist.

I deal exclusively with this question because it is urgent and important. I am not asking for a debate under Standing Order No. 9, but it is urgent. Each day more people are killed. Each day there is an escalation of violence. The matter is important, and important internationally. We have withdrawn many thousands of troops committed to N.A.T.O. to take care of a situation within our responsibility. This has given the responsibility to others. Senator Mansfield's amendment has been proposed in the United States Senate, and the United States may unilaterally withdraw troops as well. There are international repercussions. But it is important, too, for the good name of Britain.

In the Australian Senate and in the United States some speeches have been less helpful than others. In the Press of the world Ulster figures day by day. I have just returned from a trip to West Africa, where it was incredible to see, in both English and French language news- papers, front pages devoted to Britain's problems in Ulster. This is a measure of the way in which the world is looking at us and what we are doing and wondering why it should be so.

I turn to the brief paragraph of the Gracious Speech which refers to this matter: My Ministers are determined that violence in Northern Ireland shall be brought to an end. They are no less determined to continue their efforts to establish political conditions in Northern Ireland which ensure for the communities there an active, permanent and guaranteed rÔle in the life and public affairs of the Province. The Government have firmly stated their case in the two dimensions, the problem of dealing with violence and the problem of establishing the kind of political conditions in which the two communities can live normally in peace and not in fear ; and they both go together.

Day by day we have seen figures of the violence. We are still waiting to see the political initiatives which, if they were taken, would help to diminish and eliminate that violence. In the absence of political initiatives, people will inevitably believe that what is happening is an effort to bring about a military solution, and this is a total misreading of the nature of the problem and of its complexities.

In the absence of a political initiative, internment has produced an escalation of violence on a scale we never dreamt of. Therefore, we must come back to the question of a political initiative. Yesterday the Prime Minister said:

The Prime Minister of Northern Ireland has published a Green Paper. In other words, he has deliberately put the matter forward for discussion. That was what was asked of him by the Home Secretary, so that the Northern Ireland Government could make their contribution to the discussion."—[OFFICIAL REPORT, 2nd November, 1971 ; Vol. 825, c.38.] What does this mean? Here we have a situation in which the British Govern- ment have the ultimate responsibility, and accept the ultimate responsibility, and yet somehow seem unable either to determine what they should do in a political sense, or have not the will to do so, or have not been able to utilise the elements in Northern Ireland to effect their will. We know now what people want. The Northern Ireland Labour Party has put forward proposals for a community Government in which the minority would share in executive power. This has been discussed publicly in Northern Ireland for many months. The Social Democratic and Labour Party has put forward its views—expressed here eloquently by my hon. Friend the Member for Belfast, West (Mr. Fitt)—stating quite clearly and firmly that the minority want to belong and want the right to belong in a real sense. If the words in the Queen's Speech mean anything, they mean that they will be given a place in the country in that real sense.

Yet the Unionist Government have produced a document, "The Future Development of Parliament and Government in Northern Ireland ", in which one sees complacency written on every page. One would never imagine from reading this document that bombs are exploding every night in Belfast, that the economy is grinding to a halt, that innocent people are being maimed and killed, that British troops are under threat the whole of the 24 hours and that there is a total and complete alienation between the two communities.

One would think that this document was a learned exercise as a university lecture. The sum total of the proposals in the document relates, as the right hon. Member for Devon, North (Mr. Thorpe) said, to proportional representation and an expansion of the Senate. It is a discussion document certainly, but it is a discussion document which points away from the participation of the minority, which does not even indicate that the situation in Northern Ireland is unique and demands a unique solution, and which rejects the participation of representatives of the minority in Government. This is what I find quite strange since the ultimate responsibility rests here.

I suppose that I should say, having a name like Foley, that one may expect me to believe ultimately in a united [MR. FOLEY.]

Ireland, and I do. But I do not see this coming about through bombing and violence and intimidation. One cannot threaten the majority in the North and coerce them into belonging. It will come about when the peoples of Ireland freely express themselves in favour—and that will never happen in conditions of shooting, killing and bombing. It will never happen when the minority do not belong and the majority clearly do not want the minority to belong.

I think it quite incredible that the leaders of the opposition parties in Northern Ireland should be rejected by the Unionist Government on the ground that they, too, want to belong ultimately to a united Ireland. My views are known here but I have not been classified as a subversive. I had the honour to serve as a Minister in Her Majesty's Government for nearly six years, yet I was never asked my beliefs, and they certaintly were not regarded as heresy or subversion. If that is the case for Westminster, then it should be the case for Stormont.

This is why I say that in the context of the present situation in the North the document put out by the Northern Ireland Government fails to grasp and deal with the real situation, which is alienation between the two communities, the failure to provide a place for the minority clear and guaranteed, and the failure to offer to the community leaders who are themselves standing up to the violence— the Fitts, the Humes and the Curries— a place in restoring order and unity in the North and bringing about harmony between the two communities.

This is a matter of extreme urgency. It cannot be put off until right hon. and hon. Members have visited the North. There is no need. The issue is known. What is lacking is the political will and intent to decide here at Westminster that the nettle must be grasped, and proposals must be made, and imposed if necessary, in order to bring about an easing of tension, to de-escalate violence and to bring about political normality and harmony between the communities.

The failure to take steps will, in my opinion, lead to an escalation of violence which conceivably could spread from Northern Ireland over to here. It will lead also to the total demise of the responsible leadership in the minority in the North. The present leaders may well find themselves looked upon as being "Uncle Toms" and replaced by unknowns who do not want to talk or to know but whose only language is the bullet and the bomb. It will indeed divide this House further and embitter opposition.

To me, therefore, it is of absolute importance that the Government now declare clearly where they stand. Do they want the minority to belong in the North? If so, by declaring clearly and unequivocally that there is a position in the Northern Ireland Government for the leaders of the minority—and working out the details later—the Government would be taking the first step towards implementing what otherwise will remain a pious hope in the Gracious Speech—peace and harmony and security in the North.

5.48 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

The hon. Member for West Bromwich (Mr. Foley), who spoke so movingly about the situation in Northern Ireland, knows far more about it than I can ever hope to. Indeed, the House is full of people who know the complications and the troubles of that island. I have one of them sitting on my left, in the person of my hon. Friend the Member for Belfast, East (Mr. McMaster). Knowing nothing, it would be foolish and presumptuous of me to follow the hon. Member for West Bromwich in what he has said, except to say that my impression of the Prime Minister's speech yesterday was that he does recognise completely the absolute necessity for identifying the peaceful minority in the Province of Ulster with the Administration there.

In the debate today it has been obligatory to refer extensively to the Common Market, and I shall not disappoint hon. Members before I finish because my theme is the one put forward by my right hon. Friend the Secretary of State for Trade and Industry—the problem of consumer protection and competition policy. There are three Measures in the Gracious Speech which touch upon this subject.

First, in the strict realm of consumer protection, there is the promise that we are to have a Bill which will give the rights of the purchaser under the Sale of Goods Act the full remedy provided by that Act and that they shall not be taken away by bogus guarantees and the other devices which we all know about. We all welcome that, and we have all been urging that for a long time. But it is no good restoring to consumers their rights under the Sale of Goods Act if all that we are doing is to provide them with a remedy in the county court of which they cannot take advantage anyhow for financial reasons.

There are many consumer contracts at present which are already governed by the Sale of Goods Act, where there is no bogus guarantees to take those rights away, and yet the average consumer simply cannot start to exert his rights. He has no countervailing powers, because of the expense of the traditional county court procedure. It is all right for the very poor, because they will get legal aid, and the not so very poor will get increased legal aid, if the Gracious Speech promise is fulfilled. But no amount of increased legal aid ever can, or should, or will, provide the ordinary person, the man on the average wage, with the possibility of fighting a retailer or manufacturer in the county court.

Until county court procedure is radically revised, or unless there is some alternative, such as consumer courts, by which the experts needed on both sides in a dispute are paid for by the court and not by the plaintiff—that is where the chief expense comes—rights under the Sale of Goods Act or any other legislation will be something of a mockery.

Mr. John Smith (Lanarkshire, North)

The hon. and learned Gentleman has put his finger on one of the great difficulties of consumer protection. Would he not agree that the difficulty the individual has in enforcing his rights makes all the more remarkable the decision of the Government last year to abolish the Consumer Council, which spoke collectively on behalf of individual consumers, and would he not regret the absence of proposals in the Gracious Speech to resestablish it?

Mr. Fletcher-Cooke

I do not believe that the Consumer Council could possibly have provided the sort of countervailing power for the individual consumer of which I spoke. I remember writing to Dame Elizabeth Ackroyd on many occasions during the existence of the Consumer Council to call attention to these very abuses. Although she wrote to say that she was very sympathetic and what a dreadful thing it was and how the Council was lobbying hon. Members to have it put right and to say that the Sale of Goods Act should be amended and so on, in fact the individual consumer whose washing machine had broken down found that nobody came to put it right as a result of my letters to Dame Elizabeth Ackroyd. The individual can get effective protection only if the individual consumer has more legal power. That extra power cannot be given merely by increasing legal aid or amending the Sale of Goods Act. It can he done only by a complete revision of the county courts system.

My right hon. and learned Friend the Attorney-General said a year ago that this matter was under review. It has been under review a very long time. As I know from bitter experience, lawyers do not like the idea of a new consumer court. I do not like it very much, because it conflicts with many legal principles. Nevertheless, we have to come to terms with it, and I hope that the House collectively will bring pressure to bear to see that this admirable reform of the Sale of Goods Act is brought into force at the same time as there is a re-consideration of the system of protection given by the county courts to consumers, which is what they were originally designed to provide, because merely amending the Sale of Goods Act will have precious little effect.

We all know that it is the average consumer, or even the above-average consumer, all those ladies who recently wrote to The Times about how frequently their washing machines had broken down, who need protection, so that when these guarantees, whether under the Sale of Goods Act or otherwise, are broken, they have some power to threaten the manufacturer and the retailer, not merely an empty threat, which is what recourse to the county court now is in 75 per cent. of cases. I am sorry to appear ungrateful to my right hon. Friend, who has gone a long way with his proposal to amend the Sale of Goods Act, but not far enough.

Another main Measure which I greatly welcome is the long promised reform of monopolies legislation and the Monopolies [MR. FLETCHER-COOKE.]

Commission. I hope that the Commission will be reformed, not merely to strengthen it but also to maintain its functioning in terms of the preservation of competition. I see the right hon. Member for Birkenhead (Mr. Dell) sitting rather balefully on the other side of the House. He will recollect that some years ago. when we were locked in combat on a Bill which his right hon. Friend and he had introduced, the Commission on Industry and Manpower Bill, there was a danger of confirming what some of us regarded as a bad tendency in the Monopolies Commission to extend its empire not sideways but upwards and downwards when considering and reporting upon matters going beyond the preservation of competition. The right hon. Gentleman will remember that even before that dreadful Bill came along the Commission would discuss whether, for example, proposed mergers were good for the share-holders and good for the employees—all sorts of wide-ranging subjects like that, certainly important but not the function of a Monopolies Commission.

The right hon. Gentleman will remember that his Bill purported to combine the excellent and judicial qualities which the Monopolies Commission had generally shown with the highly political National Board for Prices and Incomes. The right hon. Member for Blackburn (Mrs. Castle) said at that time that the new Commission should have a probing and proselytising rÔle and that it was impossible to separate prices and incomes policy and competition policy. She made various other very frightening statements of that sort. I am glad to say that one of the consequences of the possibly rather premature election of June, 1970—premature from the right hon. Lady's point of view —was that that Bill was killed at an appropriate stage.

Mr. Dell

The hon. and learned Gentleman said that he welcomed the proposed legislation. How does he know that he welcomes it when presumably he has not, as I have not, the faintest idea what will be in it? As we are evidently fundamentally reconstructing the whole of the country's competition law, is it not remarkable that when such matters are being introduced, for the first time since 1948, there has not previously been a report of the Monopolies Commission on which to base attitudes, or a White Paper, or a consultative document of any kind?

Mr. Fletcher-Cooke

It is not so remarkable, because on 17th December last year my right hon. Friend the Secretary of State for Trade and Industry made a long statement in the House—more than two columns of HANSARD—explaining his intentions and going into the matter in great detail. I assume that the Bill will inevitably follow that statement, because as a Government we fulfil the intention given by our leaders.

I welcome the statement—the detailed Bill will presumably follow—and also the opportunity to hope—in view of what the right hon. Genteman has said, I had better not use the word "expect "—that in the Bill full account will be taken of the fact that we are entering what the Prime Minister has called no longer "their" Market but "our" Market. We must therefore be prepared both to harmonise our competition policy with "their" Market and to mould "their" policy according to our ideas.

One or two views of entry into the Common Market are immediately apparent. First, from the point of view of monopoly legislation the position of our own State monopolies will not be quite so serious and oppressive as hither to, in that they will no longer have the complete market dominance—if the market is to be considered Europe, rather than the United Kingdom—that they had in the past. The producing industries that are nationalised, such as coal and steel, will face a competition which is free, fair and without hidden subsidies, like other producers of coal and steel.

The Common Market rules are quite clear on this. Government subventions which distort competition in the Community are against the Rome Treaty, except those given to further social or regional policies. There is a list of things which one cannot do in order to give oneself an unfair advantage by way of hidden subsidies and the like. That is agreed by both opponents and proponents of entry. Some regard it as a merit and others as a demerit. At the same time, there are rules which are not always observed about more important but less obvious questions such as services, the awarding of public contracts, the provision of financial services. In our own domestic legislation, only recently have services been referred to the Monopolies Commission. They have not yet been referred to the Restrictive Practices Court but I hope that they will be under the new legislation.

We must set an example. It is to the advantage of the United Kingdom in the Common Market to see that in terms of free competition, services are subjected to rules as strict as those which apply to the production and distribution of goods, for it is in services that the United Kingdom will seek to make its biggest impression on the Continent of Europe. We have the facilities and the know-how, especially in terms of invisible exports. If we can mould the policy which is inherent in the Treaty of Rome—though not fully expressed or in operation—to ensure that our services are given a fair and free run on the Continent, clearly we shall increase our prosperity. It is in services, both domestically and internationally. that I hope that competition policy will be emphasised.

Mr. Neil McBride (Swansea, East)

I appreciate the hon. and learned Gentleman's courtesy. I have listened with interest to his remarks about the Treaty of Rome. Since, however, we have not secured any amendment of this treaty, and must accept it in its entirety, how will the situation which he envisages materialise?

Mr. Fletcher-Cooke

Nothing in the Treaty of Rome contradicts what I am saying. Indeed, a good deal of what I say is inherent in the treaty. There is a distinct forbidding of preferences in public contracts and of discrimination in the sale and purchase of goods and services. For example, the Commission and the organs of the treaty have already persuaded or compelled offending countries to observe the rules. France, which had been particularly chauvinistic in this matter, was persuaded to allow Community imports of tobacco—something that had never been allowed before since it was previously a State monopoly. That is a small instance, but there are many others, and it is in this direction that I hope we shall use our influence. In 1968, France was somewhat backward in awarding public works con- tracts to other Community countries. The figure was about half of 1 per cent. That is the sort of area where the United Kingdom can bring its influence to bear to ensure that free and fair competition policy is observed.

I suggest that this aspect of competition is one of the most important in persuading those of our constituents who are reluctant and have some misgivings about entry into the European Community. When seeking to explain the advantages of the free, fair and open market of competition, and hon. and right hon. Members will have had experience of people saying that that is all fine and large, but that the rules which are there now and those that are to come will be observed by ourselves but not by the others. People have an instinctive feeling that though we shall leave our market open. somehow, secretly and by fiendishly clever devices, the other members of the Community will prevent the corollary taking place.

It is therefore essential that the Government should do all in their power to assure the public and our future partners in the Community that we shall see to it that these rules are observed, not only in this country but also in the countries of our colleagues.

6.9 p.m.

Mr. Alan Williams (Swansea, West)

I wish to deal with three completely separate items, and I hope that the House will accept that I shall deal briefly with each of them, if not necessarily in a way that meets with unanimous approval.

The first item in the Gracious Speech to which I turn my attention is the reference to mineral policy. I must declare my personal interest in this matter, but equally, as I am sure the Minister of State is conscious, I wish to establish that my political interest far pre-dates any pecuniary one. When my party was in power I carried a certain special responsibility for mineral policy, and it is out of that experience that my remarks arise.

The Gracious Speech refers to assisting the exploration of our mineral resources. The industry will welcome anything that encourages exploration, but why is there no encouragement of exploitation of our mineral resources? Is the Measure referred to in today's Order Paper all that we shall see? If it is, it hardly merits the aggrandisement mentioned in the Gracious Speech.

The nation has a threefold interest in ensuring that our mineral resources are adequately worked, bearing in mind the legitimate environmental considerations.

One must accept that this is an import substitution industry. Without going into the economic rationale, it is a fact that every £1 of import substitution means £4 of expansion without worsening the balance of payments. Taking a hypothetical figure to demonstrate this, if we can achieve an import substitution of £100 million it means we can go for an extra 1 per cent. of growth without the balance of payments factor being considered an inhibition upon our expansion. That is the cardinal economic factor which is often overlooked.

The second is that in any event we need to ensure that our resources are husbanded adequately, and the third is that we have an interest in the information arising from exploration and exploitation. That is of special relevance to the I.G.S. in building up a meaningful geological map of the country.

I wish to concentrate on the possibility of removing real obstacles both to exploration and exploitation at no cost to the Government. I remember that when I sat on the benches opposite anything which offered the possibility of improving our economy without a concomitant increase in cost always held a certain attraction. We did not come across such a possibility very often, so I hope that what I say today will be received generously.

The industry suffers from a legal set of obstacles. First, mineral rights in most parts of the country have become increasingly fragmented. When one company was seeking to do the preparatory work for exploration and exploitation over 23 square miles in the Yorkshire area it had to contact 40 different owners and reach agreement with them. It was very lucky to have so few with whom to deal.

Secondly, not only are the mineral rights fragmented ; they have also become separated from the surface rights. We now have the difficulty of tracing the owners both of the mineral rights and of the parallel but not legally linked surface rights.

Finally, in any case much of the land in which operators are interested is land on which they want ancillary rights such as access. We see a dispersal of ownership of the various rights at a time when the industry, because of operating methods and because of the capital investment required, has to work in wider areas and think in terms of longer periods for its planning and operation.

I will not bore the House with individual details of the problems which arise, but they are distinct and clear in most parts of the country. They are, however, further complicated in some areas which are quite promising in terms of mineral resources, such as the Forest of Dean, Cornwall, Derbyshire, the Isles of Portland and Purbeck, by the fact that superimposed on the problems that I have described, there are many ancient customs and rights in relation to minerals.

The legislation envisaged in today's Order Paper completely overlooks this aspect, yet it could be resolved at no cost to the Exchequer. When I was in Government, with the help of the industry and many other people interested in minerals and with advice from landowners I prepared draft proposals for the reform of mineral rights legislation. Copies of those proposals were put in the Library in 1969, and detailed consultations were undertaken with the industry and with all other interested parties, such as amenity groups, and the Country Landowners' Association. By the time that we left office we had arrived at a considerable concensus that it was an administrative and legislative possibility to produce a Bill which would avoid most of the difficulties that I have described—which are real ones—if only there were a Government willing to do so.

I recognise that it is a detailed matter and that there is great pressure on the time of parliamentary draftsmen. However, it offers a good return to the country in exchange for a relatively small investment, namely, the time of the parliamentary draftsmen.

I turn now to some aspects of regional policy. The fact that, yet again in the Gracious Speech, we have to have an intimation of even further measures to help the regions is evidence of the complete failure of the policy announced by the Government in October of last year.

So much of the trouble today stems from the peculiar conviction of the Conservative Party that the abolition of investment grants was an essential prerequisite to achieving any form of development and growth in the regions. The evidence refutes it. In Wales, for example, unfilled vacancies have fallen yet another 9 per cent. in the last month. My right hon. Friend the Member for Cardiff, West (Mr. George Thomas) could give many tragic examples of the effects of this situation upon small communities in Wales. In addition, the reduction in the number of male jobs in Wales, as shown by the figures for the last 12 months, is running at more than double the rate when we were in office, and it will be remembered that at that time we were attacked bitterly by right hon. and hon. Gentlemen opposite for the then rate of decline.

Mr. Timothy Raison (Aylesbury)

But surely one cannot expect overnight results with investment grants or allowances. What is happening now must be a reflection of the Labour Government's investment policy. It is ridiculous to suggest that what this Government have done in the last year has been capable of destroying jobs in the way that the hon. Gentleman suggests.

Mr. Williams

Certainly the present Government have achieved results overnight. The trouble is that they have been in the wrong direction.

I have said before that in each of the first three years after investment grants were introduced the amount of new industry coming into Wales, measured by I.D.Cs, was treble the amount in the last three years of Conservative Government. In fact, one year under the grant system produced as much new industry for Wales as three years under the old allowance system. We achieved that effect. The effect of the hon. Gentleman's Government has been an overnight one but, as I say, it has been in the wrong direction. If grants are so ineffective, why have they been retained for Conservative Ulster? Why are they good enough for Ulster but not permitted in Wales?

The reduction in male employment has been much more marked in the last year than previously. Redundancies have also doubled this year as compared with a similar period last year, despite the fact that there is no redundancy in coal to contend with this year. All redundancies are confined to the manufacturing sector.

Jobs in the pipeline are down. The hon. Member for Aylesbury (Mr. Raison) seemed to imply that the present situation was the fault of my right hon. and hon. Friends. In fact, there were getting on for 32,000 jobs in the pipeline in Wales when we left office. There are no longer 32,000 in the pipeline. The Tory Government have been living on fat that we created. They have not replaced the jobs in the pipeline which have been taken up in the last 15 months.

We also find that I.D.C.s have fallen nationally. According to a report in last Saturday's Financial Times, for every three square feet of new I.D.C. approval in the third quarter a year ago there are only two in the third quarter of this year. Even more alarming, the figures show that the percentage going to the development and intermediate areas has fallen. What we have now is the combination in the development and intermediate areas of a smaller percentage of a smaller gross amount. That is an achievement of which I suspect the hon. Member for Aylesbury will not want to boast.

Even if the upswing, the Chancellor of the Exchequer's boom—call it what we will—takes place. its initial benefits will not be felt in Wales. There may be some gain for the consumer industries, and there will be a disproportionate gain in the non-development areas. It will be a very long time before Wales, Scotland and the North secure any real benefits.

Mr. John Davies

indicated dissent.

Mr. Williams

The right hon. Gentleman shakes his head. We shall see. He may be right; I hope that he is. But I suspect that he is absolutely wrong on this matter this year as his Government were wrong a year ago.

Only last year the Secretary of State, in the Welsh Grand Committee, was muttering pious platitudes about the future and telling us what would happen as a result of the Government's policy. Since then we have had two Budgets, a [MR. WILLIAMS.]

series of ad hoc measures from the right hon. Gentleman, and a declining employment position. It is small wonder that when the Secretary of State visited Swan-sea on Monday this week in an attempt to gloss over the disastrous situation he has created he virtually ended by laying claim to job creation at factories such as Signode, in my constituency, and Morganite Crucible. The right hon. Gentleman went to open the Signode factory. But, as the executives of these companies will agree, it was the investment grant system which brought those factories to Wales. These are factories and expansion which the Labour Government created. It is no good the Secretary of State trying to mislead the representatives of the local authorities, as he tried on Monday, by spuriously laying claim to job creation.

We have waited decades for local government reform. The Secretary of State for Social Services had to grapple with this problem. No one pretends that the solution is easy. The best thing that one could have done was to come as close to a consensus as possible. Instead, the document presented to us today represents an unbelievable act of political partisanship. I warn the Government that if, as we assume from the Gracious Speech, the Welsh legislation is coupled with the English Bill, the people of Wales, regardless of what the Secretary of State and the Minister of State say, will consider it an insult that an English majority should be drummed up in order to force through decisions on Welsh local government. That might well be an abuse of parliamentary procedure, because I understand that it is clearly established that any matter which relates solely and exclusively to Wales should be dealt with by committees consisting of Members representing Welsh constituencies.

It is no good pretending that the proposals leading to the Bill were made lightly. The Bill to which the Welsh Bill apparently is to be attached was the result of an independent Commission. The proposals which the Government have put forward are based on a set of boundaries drawn up by politicians—not, we suspect, the Secretary of State and his Department but the Secretary of State and the Conservative Central Office. If these two Measures are linked, very few Members representing Welsh constituencies will have the opportunity to participate in the Committee discussions and there will be little chance for them to make detailed scrutiny of provisions affecting localities of which they are thoroughly aware and which have never, in local government terms, been the subject of impartial investigation. It is therefore very important that local Members should have the right of comment and examination.

What seems to be emerging—I hope that this will prove to be wrong—is that the Secretary of State knows that the only way in which he can get his legislation through is by steamrollering it through, using his party's majority. What also emerges is that in the Cabinet the Secretary of State must be either a shadow of a Minister—a Minister without much substance—who has been defeated in the attempt to get a separate Bill for Wales, or a Minister who is afraid of the political repercussions of his proposals, wants to avoid being alone in the firing line in committee, and needs a stronger Minister's shoulder to lean on.

If given the chance, we can demonstrate that this document is gerrymandering in its nature. It envisages a Tory South Glamorgan, which underlines the protest which I and other Members have made that the decision to add the Gower Peninsula to Swansea can be explained only in terms of political motivation and as an attempt to gerrymander a marginal seat. The Secretary of State has completely ignored the representations made by the Swansea City Council, which he proposes to relegate to district council level.

If one looks at the map which has been produced in conjunction with the map of the constituencies one is forced to the conclusion that wherever in Wales two are gathered together in the Tory Party's name a line has been drawn round them to tie them to the nearest marginal constituency. For this reason, the Secretary of State and the Government should be warned that Members representing Welsh constituencies will obstruct this Measure at every level. If we are denied the opportunity of obstructing this one, we will obstruct everything else which may delay it. We reserve the right—and this should be of significance to someone wishing to introduce a lasting local government reform—to redraw the gerrymandered boundaries which have been conjured up by the Tory Central Office for the Secretary of State.

The Secretary of State is in jeopardy in his job as Chairman of the Conservative Party, but if he never produces anything more than this document he can say that he has done his duty by his party.

Mr. Speaker

There are about 160 minutes before I call the right hon. Gentleman on the Front Benches. At least 10 Members wish to speak. The necessary inference can be drawn if one divides 160 by 10.

6.38 p.m.

Mr. Timothy Raison (Aylesbury)

In view of your admonition, Mr. Speaker, I shall not deal at length with what the hon. Member for Swansea, West (Mr. Alan Williams) has said, except to reiterate my point that it is absurd to expect the results of any investment policy to be shown overnight. Investment concerns the long term, not the short term.

I wish to say a few words about the Government's general strategy. For me, the period since the General Election has been dramatic, often worrying, especially concerning Ulster, but exhilarating. The Government know what they want to do, and they intend to do it. Last year's programme seemed to set the style. We had the Industrial Relations Bill, many social service reforms and the Common Market vote on 28th October. The Gracious Speech shows that we are to continue along these lines, with a string of radical and bold measures—housing and local government reform, a criminal justice Bill, further tax reforms and implementation of the decision to join the Common Market.

I welcome these and I welcome the philosophy which seems to me to underlie them. In this philosophy there is, rightly, a stress on giving the individual greater independence. This seems to me to be the key-note of much of what the Government are trying to do, and I am sure we are right to seek to diminish dependence on the State whenever this is possible. Essentially we want free men in this country rather than tied men. We want to get away, for example, from the Socialist notion of using industry as a substitute for the social services.

Mr. Pearl

Is the hon. Member saying that aid to agriculture in the form of direct grants is to tie the farmer?

Mr. Raison

I do not follow the right. hon. Gentleman's point.

The second point, and the corollary to what I have just said about free men and the importance of independence, is the possibility that this will allow us to achieve more effective help for those people who inevitably cannot stand on their own feet. The Government have very clearly shown their concern for groups like the disabled, the old, the young, and others. Together the measures they have taken add up, to my mind, to a realistic overall strategy. We have a strategy, but I think we still need to fill in the details of the strategy. We need to pick out some of the anomalies and inconsistencies which still persist and to develop more clearly and fully the sort of social approach and the sort of economic approach that we ought to apply to our problems in these next few years.

To be a little more specific I think that, first of all, we have some very hard thinking to do in the region of what is commonly called by the pundits income deficiency. We are still, by the standards of Western Europe, indeed of the developed world, a low-wage economy, and we are also, at the lower end of the scale, a high-benefit economy. It was right that we should have got into this situation of concentrating our resources on helping the very poor, and the various Measures, family income supplements and so on, which the Government took in the last year to help the really poor, the really hard-hit people in our society, made very good sense. Nevertheless I think there is some risk that instead of reducing dependence on the State in recent years we may have been increasing it, and we have to face up to this and try to tackle it. Certainly we ought to work as far as possible towards one single, simple principle, that for the normal working family wages rather than benefits should cover the normal contingencies. In other words, I do not think that it is right that people earning average incomes should have to be heavily dependent on benefits to make up their overall incomes. There certainly will be needed some kind of help for some families, some variation of family allowances, because the fact is that large families have special needs which small families and childless families do not have. Nevertheless, I believe we run the risk of spawning too many kinds of benefits and too many kinds of tests at the moment.

I made it clear earlier that I think we were right to meet the needs of those in difficult conditions in a grave situation, and to do this really effectively by directing help where it was most needed, but in the long term I hope we shall do more through increasing family incomes through earnings rather than benefits. That is why I urge, as the long-term objective, a reduction in the amount of income people receive from benefits and an increase in the amount they derive through wages.

I know perfectly well that this is relatively easy to say and a very difficult thing to bring about. Nevertheless, there are certain factors which the Government could exploit. For example, very many of the low-paid are in the employ of the Government or are in the other public services. The earnings of these people should be increased while at the same time we should phase out the proportion of their income derived from benefits. The private sector would have to be following suit, but again, the Government, through the tax system and the national insurance system, could also give some assistance there.

This raises, of course, the old, vexed problem of differentials. It is not easy to solve. If people on lower incomes are allowed to earn more money this may trigger off difficult demands from those on higher income, but we must face this and somehow persuade the trade union movement and industry as a whole to accept some abnormal raising of low incomes in this field.

At the same time it is important to tackle the disincentive effect which has crept in in the last few years, in this area, on people with lower incomes. We know that there have been several pieces of work on this subject by, for example, Professor Prest, Mr. Tony Lynes and Dr. Piachand, who have shown that with round about a £20 a week income there is a disincentive effect; there is a high rate in effect of marginal taxation so that it really is not worth while for some people to earn more money through increased wages because they begin to lose benefits in the process and simply are not better off. This cannot be right under any philosophy, and I hope that the Government will find it possible to face this during the next few months and try to restore the sort of situation where if one earns more money, if one has a higher wage, one really does begin to feel the benefits of it. Again, we ought to try to encourage people to derive income from what they are paid through earnings rather than from benefits.

Secondly, I want to say a word or two about unemployment. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and my hon. Friend the Member for Manchester, Withington (Sir R. Cary) on this matter said things which were very true and important. I am sure that we on this side feel very deeply that unemployment is both a social scourge and an economic scourge and must be treated with the highest possible priority in order to get rid of it. We have to face the fact that there is an unemployment situation now which is unacceptable whatever one's political philosophy may be, and that it is a more difficult one than we have known in recent years.

A few years back it was, by and large, safe to say that the sort of cure for unemployment was to turn the tap—to have more money about, decreasing credit restrictions, and so on. In other words, the Government, provided the balance of payments situation would allow it, could reduce unemployment very much. Unquestionably what is happening today is that although we have an increase in production and something beginning to look like a consumer boom it has not had a comparable effect on the unemployment rate. In other words, what is happening is that industry is saying that because of the costs of labour, and because of other costs, it must look much more severely at the way it employs manpower, and much more closely than it has in recent years.

This is a very difficult problem. For a long time we have talked about the effect which increased leisure would have, and have had the expectation of increased leisure. But if we look at the facts we see that the amount of time actually worked, as opposed to basic working hours, has changed very little during the years. As I say, we may be getting into a situation where unemployment is much more endemic than it has been in the past. Business, by and large, has become rather better at managing and organising labour than it used to be, and this poses a very great problem.

What do we do about it? First of all, I share the view expressed by another hon. Member earlier in the debate: I doubt whether Whitehall really knows as much about the facts as it should. I have on occasions made inquiries of the Government as to what really is the nature of unemployment today—how much of the unemployment we have is due to diminished production, to people being laid off because orders were not coming in, and so on, and how much is due to a shift in the nature of employment. I have the impression that the Whitehall machine is not really equipped to give us answers at the moment. I do not have the impression that the people there are analysing the unemployment statistics in the kind of detail which seems to me to be necessary. I only hope that the Government can give an assurance that I am wrong in my impression, but I am much concerned about this.

It is not enough to have the facts that we need. We must also accept that there are theoretical problems to be faced about the nature of the right to work. I believe that the notion of a full-employment society is a correct one. Since the war-time years Governments have tried to follow this notion but we are running into difficulties. In his Report in 1944 on "Full Employment in a Free Society "Lord Beveridge said first that there should be a job for everybody. He considered it was the duty of society to provide jobs, and he wanted a surplus of jobs over people. That may be fine; but he went on to say that it was the duty of people to be prepared to move anywhere to find work. In other words, he did not think that there was an assumption that everybody had the right to a particular type of work in a particular place. We must ask ourselves what is our basic principle in this matter today. Do we think everyone has the right to the job of his choice in the place of his choice? It is obviously a difficult position to put forward in present circumstances.

I believe that we should accept the right of people to stay put. For many social reasons we do not want to encourage an unduly mobile society in terms of people switching from area to area. Migration, movement about and rootlessness have contributed to many social problems. I hope that we can uphold the principle which has been the policy of Governments on both sides since the war, that people should not normally have to move in order to find work. Of course, some people will want to, ambitious people often will, but as a general principle they should not normally have to. On the other hand, we must be prepared to be a bit tougher about the nature of employment. It seems foolish that people should be able to keep on drawing benefits because no job is available in the trade, craft or occupation to which they are used.

I do not want to argue heartlessly about this, but the nature of occupations and activities in our society is changing all the time, and it is not possible to go on on the old assumption that sooner or later the right job will turn up. Let us stick to the principle of not trying to shift people, but let us be a bit tougher about the way in which we expect people to be able to turn down particular jobs—

Mr. Alan Williams

Does not the hon. Gentleman agree that, by the nature of technological development, we are moving to the stage where it is essential to have the co-operation of workers and unions in job mobility? The proposals the hon. Gentleman is putting forward would ensure that we would not have that necessary co-operation in getting efficient development in technology.

Mr. Raison

I think the hon. Gentleman is appealing to the small Luddite element in the trade union movement rather than the more sensible element. We all know there are different ways of talking to trade unionists, as there are different ways of talking to anyone else. By approaching the unions and pointing out, as I am trying to do in a non-partisan way, the nature of the problem I hope that we should get a good response from them.

It is a basic Tory faith that, on the question of what kind of jobs we create to replace those that are undoubtedly going as dying industries fade away, private enterprise has an absolutely vital [MR. RAISON.]

part to play. I was delighted to hear what my right hon Friend the Secretary of State for Trade and Industry said this afternoon about small businesses. What he is proposing is geared to meet a very real need. In modern society it is not true that great organisations can provide jobs out of hats. We often hear hon. Members on the Opposition Benches asking why the Government do not produce a whole string of jobs. This is not feasible. Even great companies cannot produce strings of jobs. In a society where industry is inevitably more and more concerned with consumer products we need people with an eye for an opening, who can see that there is something which people want to buy and who can set up the business which will get this under way.

I want to say a word, perhaps a little provocatively, to some of the hon. Gentlemen opposite who represent Scottish constituencies. I have been struck by the profound defeatism they show in approaching economic problems. Some of them are able people with the interests of their electorates at heart, but I am depressed by the way in which they will not face the realities of modern industry. They will not accept that what is needed now is leadership to make sure that industry comes where nothing exists at the moment. Their approach is entirely backward-looking and defensive. They would do much more service to their electorate if they went back to their own communities and tried to get a more invigorating atmosphere.

Private enterprise has a great rÔle in this, but the Government also have a rÔle. As we enter the Common Market the Government role which will matter most from the point of view of industry is providing effective transport. If we are to have a large-scale European market, it will be vital to get goods to other parts of the market with speed and efficiency. Of all the infrastructure activities we talk about here, the provision of good transport is unquestionably the most important.

I note your admonition, Mr. Speaker, and I will conclude by saying that the provision of effective employment is crucial to the notion of free and independent men which I am sure the Government uphold. The Gracious Speech sets us on the right path, and I only ask my right hon. Friends to give further thought to the points I have raised.

6.46 p.m.

Mr. Bob Brown (Newcastle-upon-Tyne, West)

I am sure the hon. Member for Aylesbury (Mr. Raison) will not expect me to pursue lame ducks, whether they are Aylesbury or any other ducks.

I wish to refer to the sentence in the Gracious Speech which reads: My Government acknowledge and share public concern at the growth of violent crime. Don't we all! I remember with some nausea the pre-election campaign on law and order ably led in a sanctimonious and hypocritical way by one who has now left for another place. The purpose of the campaign was to persuade the people that the Labour Government were dealing with thugs like a bunch of softies. This is part of the bogus prospectus on which the Government were elected.

The present Government, this bunch of toughies, were elected on 18th June, 1970. What has happened? Violent crime has increased. The Home Secretary recently announced that violent crime was running at an all-time high and the rate was about 30 per cent. higher than it was during the sanctimonious, humbuging law and order campaign which fooled some of the people some of the time.

I do not get any joy from talking about the increase in violent crime, but we must face the situation realistically. The thugs in our society must be dealt with, and we must aim at reducing the number of potential thugs. The only way in which this can be done is by bringing the police forces up to strength and giving them the sort of mechanisms that will make the job of detection a lot easier.

Mr. Norman Fowler (Nottingham, South)

But was not one of the points that the Conservative Party was making before the General Election that the police forces should be brought up to strength and that, therefore, the 1968 and 1969 restrictions on police recruiting should be lifted?

Mr. Brown

I do not dispute that for a moment, but I contend that 16 months after their being elected it is no good the Government continually praying in aid the weaknesses of their predecessors. They have had 16 months in which to do all those things in relation to law and order, but the police forces are still under strength and thuggery is still on the increase.

It is no use their suggesting that in this respect they have done better than any other Government. I believe that they have done a great deal less. There is no doubt that in recent months the police forces got a sizeable increase in pay, but that was only after the heart had been knocked out of them, and after many thousands of men had left because of the attitude of the present Home Secretary. It is no use expecting men to hang around in the hope of a decent increase: instead of doing that they are liable to push off in search of something better before the increase is given to them.

Another part of the Gracious Speech states: At home my Government's first care will be to increase employment by strengthening the economy …". If I am in order in doing so, I draw attention to a passage from the Gracious Speech of 2nd July, 1970, which states: My Ministers attach the greatest importance to promoting full employment and an effective regional development policy. Again, more than 12 months have elapsed since Ministers then expressed concern about the high level of unemployment, particularly in the development areas. How are we to believe the words in the present Gracious Speech when what was said in last year's Gracious Speech about regional policies and unemployment has not been redeemed in the slightest degree?

I made no apology for reminding the House of the Prime Minister's now infamous announcement of 16th June, 1970—two days before polling day— when he pledged his Government, if elected, to cut at a stroke prices and unemployment. Since then we have had an increase of 50 per cent. or 60 per cent. in unemployment and of 12 per cent. in prices. How can we rely on the words in this Gracious Speech?

The right hon. Gentleman the Member for Lowestoft (Mr. Prior), now Minister of Agriculture, got a little irritated by constant references to this "at a stroke " speech. He attempted to put things right in a radio broadcast in the summer, when he said, in effect: "We all know that the housewives never really believed my right hon. Friend the Prime Minister when he said he would cut prices and unemployment at a stroke." Was the right hon. Gentleman then suggesting that the Prime Minister is a cheat and a liar, or that the women folk are a set of idiots? I do not for one moment believe that the housewives are a set of idiots.

Speaking in my constituency during the General Election last year I said more than once: If the Tories win the North-East will become an economic disaster area. I know that candidates in elections, and not necessarily in parliamentary elections, have been known to romanticise, but I was not romanticising then. I firmly believed that my forecast would come true within the lifetime of this Parliament, but never in the wildest moments of electioneering passion did I dream that the North-East would be devastated in the course of a few months.

Yet that is what has happened. In the first six months of the tenure of this present Government, unemployment in the urban district of Newburn in my constituency had increased by over 10 per cent., and in the city of Newcastle itself, which is at the other end of my constituency, by over 15 per cent. That was the measure of the truth of the words in the Gracious Speech of Thursday, 2nd July, 1970.

That is why I ask: what right have I to expect my constituents to believe anything said in this Gracious Speech by this Government, except the indication that the Government will deal with housing finance, which means that they will punish everyone who lives in rented property, whether private or public? On that point I can tell my constituents, "They will carry that out, brothers— don't disbelieve that."

Then we had the three magic letters used by the Chancellor of the Exchequer when things became really desperate, when there was every indication that the Tories would be getting hammering after hammering in subsequent by-elections. In the debate on a Motion of censure tabled by us earlier this year the Chancellor of [MR. BROWN.]

the Exchequer spoke of S.D.A. status for Tyneside and for Wearside. Those three magic initials—denoting special development areas—will not solve anything at all for the Tyne or for the Wear, nor will they restore in the Northern Region the confidence which has been destroyed by the Government's policies.

On the day after the Chancellor of the Exchequer used those magic letters, the Regional Affairs Correspondent of The Guardian wrote: A Government decision to give additional development aid to large areas of the North-east, Scotland, and South Wales, brought a sharp report last night from development organisations which described it as a panic measure which would not alter the economic stagnation underlying rising unemployment. His article quoted the following view: 'Benevolence is not substitute for policy. It's nice for industry to come with more money in its pocket, but the important thing is to make it come. Nothing is going to happen until John Davies spells out what his policy is in respect of the development areas.' The article also stated: In the face of a dearth of investment inquiries, development organisations have been convinced for some time that no special new measures in the development areas themselves can be any help in the present economic circumstances. Whose view was The Guardian quoting in that earlier paragraph? It was not that of a prominent Labour politician but that of Alderman Arthur Grey, Chairman of the North-East Economic Development Council and leader of the Tory-controlled Newcastle City Council —a man for whom I have a lot more respect than I have for anyone on that Treasury Bench, though I am not giving him too much credit in saying that.

Confidence has been lost not only in the North-East and, indeed, in every development area, but nationally. In industry generally the country has been beggared from the investment point of view by 16 months of sterility under Tory rule.

I get tired of hearing the argument from the Government Front Bench that everything is due to wage-cost inflation. This has been thrown down our throats for too long. I want tonight to demolish once and for all the codswallop of this argument. At a time when the Prime Minister, not to mention the Minister for Trade and Industry, proudly proclaims that wage increases are being steadily reduced, unemployment is rising at a faster rate than ever before. This in itself should destroy the wage-cost inflation argument.

Nor does the argument hold water, and it never did, because it is generally agreed that new Government policies take about four months to work their way through the economy. Last September we had the "Demon Barber's" mini- Budget with the promise of a boom. Then we had his Budget proper in April, with the underlying message "To those that have shall be given some more." We also had the promise of a further boom. We then had the right hon. Gentleman's mini-Budget in July, when we were told that the boom of all booms was just around the corner. The Chancellor might as well be known as the "Sonic Barber" because the only boom we are likely to get as a result of the measures being pursued by the Tories is a sonic one.

It is fair to say that throughout 1971 as a direct result of the policies pursued by this Government—I fear that this can be said for 1972 and possibly for part of 1973—we shall have, at any rate in the North, the misery of higher and higher unemployment.

Speaking from the Government Front Bench not long ago the Secretary of State for the Environment, when winding up one of our debates on the economy of the North-East—because we have an active Northern Group in the House we have had a number of debates on this part of the country in the last year or so —said, in reply to some comments that I had made, that unemployment in February, 1971, in the North-East was exactly the same as it was in 1970 and 1969, and he prayed that in aid as a triumph.

However, the right hon. Gentleman overlooked the fact that between 1965 and 1970 we in the North-East lost 120,000 jobs in coal mining alone. The Tories have been singularly fortunate in being spared the misery, which the Labour Government had to bear, of these pit closures and the consequent loss of 120,000 jobs. It was reasonable to assume that, having got over the hump of pit closures, we should be seeing an improvement.

At the latest available date, which is 11th October, we in the Northern Region had no fewer than 81,396 registered males unemployed, or an unemployment rate of 8 per cent. This compares with 6 per cent. 12 months ago. I referred earlier to the depreciation in the situation in the first six months of office of the Conservative Government. We have now had a decline in employment for males in the North-East of no less than 25 per cent. in 12 months. Added to what happened previously, we see that the true situation is disastrous.

Any fair-minded hon. Gentleman opposite will agree that since July the situation should have improved, for since that date there should have been a period of increasing employment. However, since July we have lost 5,000 male jobs —this at a time of the year when unemployment should have been falling, and there can be no alibi about it having been a period of bad building weather and so on.

If I had my way I would impose a penance on every member of the Government. I hold in my hand a graph which sets out the unemployment percentages, showing the downward curve of vacancies, in this part of the country. I would make every member of the Government wallpaper every room in his house with graphs similar to this.

Since the creation of the Department of the Environment in place of the old Housing and Transport Ministries, the word "infrastructure" has become greatly overworked. A certain right hon. Gentleman opposite uses it frequently in his weekend speeches. Indeed, it is fair to say that the Secretary of State for the Environment spends more time talking about the environment and infrastructure than about unemployment, despite the fact that when we, the members of the Northern Group of M.P.s met him some time ago he said, "It is my job to speak for the North in the House." We have been listening patiently.

Mr. Wilfred Proudfoot (Brighouse and Spenborough)

I am sure the hon. Gentle- man will recall that that was introduced as a result of the Hailsham Report. He cannot, therefore, lay the infrastructure concept for the North-East at the door of the present Minister.

Mr. Brown

I recall the noble lord arriving in the North-East in 1963 complete with cloth cap. I was mayor of the City of Newcastle at the time, and the noble lord was given a questionable welcome. He was also given lunch. I am not prepared to have all the ills of the North-East ascribed to that noble gentleman, not even the infrastructure concept.

A lot of lip service has been paid to the infrastructure argument. We in the North-East have done more than our share to improve the infrastructure. With the aid of the 85 per cent. grant which was introduced by the Labour Government, we have done extremely well in clearing derelict areas. There is more to infrastructure than pits and chemical heaps. We need clean rivers and so on.

Years ago when I was chairman of a committee of Newcastle City Council we decided to have a massive sewerage scheme for Tyneside. We went through the agony of getting the riparian authorities together in an effort to reach agreement. We got a joint committee set up and finally all the technical officers' reports were accumulated. Before the 1970 General Election the necessary reports were sent to what is now the Department of the Environment. The scheme was initially estimated to cost— this was six or seven years ago; heaven knows what it would cost now—about £30 million.

Our proposals were sat on, and eventually the Secretary of State argued that perhaps we should go in for a second best scheme. That involved partially treating the sewage and throwing it back into the river, simply because that would have been a cheaper method of dealing with it. The scheme was held up for 12 months until finally he realised that public opinion in the area, even through Tory controlled councils, including Newcastle, would not be fobbed off with a cheaper scheme. We would not be satisfied with second best, and finally the right hon. Gentleman had to come down in favour of the major scheme. Nevertheless, 12 months have been lost as a direct result of the Secretary of State's action. Denton Dene in my constituency badly needs some money spent on it to improve the environment. Again, the Tory-controlled Newcastle City Council, to give it full marks, decided to do a major scheme. But loan sanction has been refused by the Department of the Environment.

Newcastle, like every other council, is suffering from major cut-backs in loan sanctions for major schemes, which of course leads to deferment of badly-needed projects. We, as a northern Group of Labour M.P.s, then pressured the Secretary of State for another meeting and another debate. It is often said that backbenchers do not have much influence on the Executive, but that is not strictly true. If a group of backbenchers lean heavily enough on any Secretary of State, his back begins to weaken and he wilts— and this one wilted. On the eve of the meeting with this deputation of Northern M.P.s, he announced this new hand-out for local authorities of £130 million.

This was very good for the development areas, since it meant that the local authorities would immediately be able to get on with major schemes. But the Tory Leader of Newcastle City Council said to me, "Peter Walker has conned you lads, because all he is doing is giving local authorities a licence to go deeper and deeper into debt with the ratepayers' money". There is no £130 million at all. All that the Secretary of State is saying is, "You can get on with schemes," knowing full well that the major portion of the schemes which could possibly be done in the next few months are the type of scheme where there is either no Government grant or only 5, 10, 15 or 25 per cent. Government grant. So, as the Leader of the Newcastle City Council, a good Tory, told me, the right hon. Gentleman is only giving local authorities a licence to go deeper into debt.

I do not propose to say more on the subject of the E.E.C., except that our entry will in the long term be for the good not only of this country but of the North-East as well. But there is no question of entry being a short-term panacea. I am very much afraid that there are right hon. and hon. Gentlemen on the Treasury Bench who firmly believe that this is the thing which they must cling to —that entry of the E.E.C. will solve all our regional and national problems. It will not. In a generation we shall be able to look back on this period and say, "Thank God the House of Commons took that decision that night," but in the short term at all. What matters is to have North-Eastern Member of Parliament about the short term—there is nothing in it for the North-East.

I need no lecture from anyone, either here or in the North-East, about how I as a Member should look after the best interests of the constituents whom I represent. I believe that whether we go into Europe or not does not matter in the short term at all. What matters is to have a Government with some belief in the need for adopting a vigorous regional policy.

In a leading article entitled" Take Off the Brakes", the Newcastle Evening Chronicle said: …the North-East waits impatiently for the word of exactly what the Government has in mind for the more positive half of its regional policy. We already know that investment grants are out and depreciation allowances are in—in itself an exchange of doubtful value, since it gives no incentive to firms not already making a profit in Britain. That is not from last week or the week before. It is from 26th January this year, and we are still waiting for the second half of this Government's policy for the regions.

On development area policy, the Government have the morals of a bunch of alley cats, because all that they said before the General Election has not meant a thing. The sooner that we can have a General Election and return a Government with the will to look after the regions, the better.

7.16 p.m.

Dr. Alan Glyn (Windsor)

I hope that the hon. Member for Newcastle-under-Lyric, West will forgive me if I do not follow his speech in its entirety, although I will refer to the last part, about the Common Market—

Mr. Bob Brown

I have made the point before that Newcastle-under-Lyme is a relatively small village in the Midlands; I represent part of Newcastle-upon-Tyne.

Dr. Glyn

I apologise to the hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown).

I am very cognisant of the other hon. Members who want to speak and I promise to keep my speech as short as possible. I welcome the Gracious Speech, particularly because the first three paragraphs state quite clearly the most important issues with which this country is faced—a decision on the Market and on our foreign relations. Without peace and security, and an assured future, we cannot possibly hope for anything. That shows the perspective in which the Loyal Address is framed.

The rest of the Gracious Speech proposals may not be much affected by entry or non-entry to the Common Market, but in future the whole of our economics will have to be geared to entry. What struck me about our debates on the Market, and has struck me in my constituency, is that there has never been any attempt by either side in this House, or by any constituent at any meeting, to suggest an alternative viable course which this country could possibly adopt. That seems a good reason for realising the importance of our joining the Market.

I do not want to go into the politics of the matter. The right hon. Member for Fulham (Mr. Michael Stewart) and the Leader of the Liberal Party made it perfectly clear that the mandates in both election manifestos were quite clear, and that we had the right to enter into negotiations subject to the approval of this House.

Mr. Michael Foot

indicated dissent.

Dr. Glyn

The hon. Member shakes his head, but I have the election manifestos, and the vote the other day clearly showed that this is the wish of Parliament. I went even further and put it in my election address, so my electors can never say to me, "You did not consult the electorate."

It should also be borne in mind that many of us would have liked to join Europe earlier. We know the reasons why we did not. We know that our Commonwealth obligations were even stronger in those days. Also, not only was our application vetoed by France but, at the same time, we were worried about our friends in E.F.T.A. and our Common- wealth partners.

I am satisfied that in the long term entry will be beneficial, not only to us but to our Commonwealth partners, though I agree with the hon. Member for Newcastle-upon-Tyne, West that in the intermediate period there may be difficulties which it would be foolish to minimise.

It should not be thought that failure to get into Europe would have any immediate effects. There would be a slow rundown; we should find it very difficult to capture new markets and to expand, but that would not happen overnight. Let us hope that that predicament does not arise.

Entry into Europe is not a panacea, nor can it be an excuse for any unfortunate things now happening—for instance, the rise in unemployment. I am not impressed by the league table of what the Community has done in the last decade; it started from a very low threshold and escalated. I am far more interested in whether entry will benefit Britain in the long term.

I believe that one of the main reasons why French policy has changed is that there is a growing realisation in France that her force de frappe has not worked, and that the only credible nuclear deterrent in the West is in Britain's hands. Polaris is supplied by America. America is gradually withdrawing from the Far East, and we have no guarantee that she will not withdraw from Europe. When that happens, who will pay for the alternative which will almost certainly be necessary when the present-day Polaris is out of date? I said in the House 10 years ago that Europe did not have the right to deny us the commercial advantages of entry and at the same time expect us to hold the nuclear umbrella over her and thereby supply the major part of the defence. This is one of the most compelling reasons why we should join Europe.

Whatever arrangements we come to, we must be very careful who has his finger on the button, and how authority and responsibility are shared for control and use of the nuclear weapon. China is developing its nuclear power. We are faced by the great Power blocs of the United States, China, and Russia. In this context the best thing for us is to join Europe. There is the possibility that Russia will take over in Sinkiang. There is an obligation on the part of the British Government to provide Britain with adequate defence and to ensure that Europe is secured against attack.

We all want to see the Community expand to at least 10 members. Many hon. Members want it to expand even [DR. GLYN.]

further. In time some of the satellites may wish to join. There will be short-term disadvantages and the transitional period may be difficult, but the Government have obtained reasonable terms. My right hon. and hon. Friends have promised categorically that those on the lower income level will have their pensions supplemented. Those about whom I am worried are not those on the threshold but those just above it—those who have saved their money and invested it wisely, and who are now living on pensions or investment incomes. We should try to help them by tax concessions and by moving over to a form of indirect taxation, helping them to combat what must be a rise in the cost of living.

I have had many letters on the question of sovereignty, for a not very surprising reason—Windsor Castle is in my constituency. Members of the Royal Family take a tremendous interest in everything that happens in the division, and take part in many activities there. I have made it clear that there are two other monarchs in the Common Market countries. Our monarch is received with tremendous enthusiasm everywhere, and I am sure that the visits foreshadowed in the first paragraph of the Gracious Speech will be a great success. Our monarchy is safe, supreme and respected.

However, sovereignty does not consist only of a monarch. It consists also of a Parliament. I share the anxieties of many hon. Members about the powers of the Commission. However, the Community has existed for only a decade, whereas we have been going for 1,000 years. It is possible that some of the lessons which we have learned in that time will be adopted by the Community.

It will be a difficult operation for us to provide the 36 Members of Parliament but, as I read the Treaty, there is no legal reason why Members of the Upper House should not help out in this respect.

I will not follow what the hon. Member for Newcastle-upon-Tyne, West said about unemployment, except to sympathise with him and to say that I do not believe that our joining the Common Market will affect the unemployment position in the short term. It is the opportunities for growth that are important. I agree with my hon. Friend the Member for Aylesbury (Mr. Raison) that people must be more flexible; they can- not throughout their lives demand the same type of job in a changing situation. Unemployed people must be flexible in the type of job they are prepared to accept. Hitherto the grading at the exchanges has been too stiff, and people have been reluctant to accept jobs of a somewhat different type from those to which they have been accustomed.

As the hon. Member for Newcastle-upon-Tyne, West said, the only way to stop crime is by having a larger police force. It is necessary to have not only a strong deterrent but a much more effective method of reparation by the criminal. I am old-fashioned; I have no sympathy for the criminal but great sympathy for the victim. Why should not a criminal be made to work and pay money into an account? Would this not make him feel that he is in some small measure making recompense for the horror and the misery for which he was responsible?

In conclusion, although our accession to the Treaty will present short-term difficulties, I believe that it offers great prospects for the future, but those prospects will be achieved only if we put our own house in order first. Whether or not we put our own house in order we must compete. Whether or not we join the Common Market, people must work. Management and men must make a joint effort to produce the goods which others want to buy at the right price. I believe that if we can get into the European Economic Community our standard of living will be improved and that we shall be able to give more aid to the developing countries. Not only will Britain's voice in Europe be more effective; we shall be strong. I also believe that our presence will ensure a lasting opportunity for a united Europe and the preservation of world peace.

7.30 p.m.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

I trust that the hon. Member for Windsor (Dr. Glyn) will forgive me if I do not follow him into the area of our possible entry into the European Economic Community. I want to deal with a particularly narrow point in the Gracious Speech which relates specifically to other Measures which will provide for extending the Shipbuilding Credit Scheme … I am glad that the Secretary of State for Trade and Industry has now come into the Chamber. The impression that was given in the right hon. Gentleman's remarks this afternoon—I did not hear them in great detail—was that we would receive in this House a Measure to raise credits from £700 million to £1,000 million. I understand the need for this because in the past few months I have paid several visits to major shipbuilding centres in the United Kingdom and I have found in those shipbuilding centres various degrees of concern and strain.

I want to emphasise that, although the Upper Clyde is in difficulty, considerable progress is being made in the Lower Clyde, and that there are two different sets of circumstances in the shipbuilding capacity of those consortia. In the case of the Upper Clyde there is a difficulty which is wholly of this Government's making because the sparking-off point goes back to 14th October last year when the company ran into difficulties connected with the granting of credits.

The whole cost of this operation will be very difficult to quantify, and I would not want to put a figure on it, but I have today received an interim report on the inquiry from the Scottish T.U.C., and I should like to refer briefly to it. I would not like to suggest a figure, but this report gives some idea of the cost to the country arising from the action of the present Government. There is no point in blaming previous Governments. The report says: Taking all these items together the total loss to central and local governments consequent upon U.C.S. redundancies cannot be less than £10 million… We have not taken into account the recent increase in social security rates, we have under-estimated at various points and made relatively optimistic estimates about the up-turn in employment. The true figure could therefore well exceed £15 million. This takes no special account of the further effect on business confidence in the region and its repercussions upon regional employment policies. The Secretary of State knows very well my views on this matter. What he is trying to achieve on the Upper Clyde is a restructuring of the industry, and I put it to him that this could have been achieved within the ambit of the U.C.S. It could have been achieved with much less hardship and less damage to the ship- building industry, in particular on Clyde- side, and to the economy of Scotland as a whole.

I put this charge specifically to the right hon. Gentleman, because it goes back to the way in which these credits were handled on 14th October last year. In raising the credits the approach previously used was to have consultation between the Shipbuilding Industry Board and the Ship Mortgage Finance Corporation. Guarantees were given. The under- writing of the credits was brought about by the Secretary of State under Section 7 of the Industrial Expansion Act. At the end of the year we shall have no Shipbuilding Industry Board. There will be nothing upon which objectively to found an opinion as to whether credit should be granted or not, except the right hon. Gentleman's Department; and we can have no confidence in the people in his Department, particularly the Under- Secretary of State, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), if he has anything to do with these credits, because he has undermined the veracity of the Government Departments working with the industry.

I am concerned as to what the administrative and accountability procedures will be. Dealing with the viability of the companies, one person in particular has had his career prospects severely damaged by some of the words and the attitude of the Secretary of State. I refer to Mr. Crawford, the Financial Director of U.C.S. He was a member of the body which looked into accountancy procedures for the Shipbuilding Industry Board. He was a very able person. He was thrown into a very difficult situation in the Upper Clyde, and he did his best. Some of the views expressed by the Secretary of State are unworthy of him because they cast aspersions on that gentleman's method of approach. I hope the right hon. Gentleman will take an early opportunity to redress the balance because I feel that Mr. Crawford has been unfairly treated.

Looking at shipbuilding generally, we are promised more than just an up-grading of the credits, important though they be. We have an indication that perhaps at long last the Government will try to provide a philosophy for the industry. There is no use standing back and saying, "Let the industry get on with the job and sort itself out" in the face of Japanese competition and a declining market for its products. We must get a philosophy for this industry which involves both the shipping and the ship-building companies.

Looking at the nature of investment which is at risk, in the case of the Lower Clyde there is £5 million to £6 million of investment, and those concerned are doing a great job in trying to make it pay. Even then, optimistic though they may be, they cannot see themselves making money before 1973. Take Harland and Wolff, Belfast; £16 million of investment has to be made to pay. It cannot be made to pay merely by operating at arm's length; the right hon. Gentleman knows only too well—far better than I do—that the orders which have gone there have not gone there on a "by your leave" basis. There are problems involved in making such investment pay. For example, the great complex of Tyne- side contains many highly-skilled people who have learned those skills over a long period of time. Such skills should not be allowed to be eroded; workers' talents must not be left to decline and remain unused.

The Secretary of State this afternoon mentioned Cammell Laird on Merseyside. I did not understand the method used to subvent this yard, but I suspect that one of the reasons was that, because the Shipbuilding Industry Board was involved, the Board's funds could not be used to subvent the yard. If there are investment plans no doubt these will be put before the Minister since investment is needed there. Certainly that yard cannot be continued without a great deal of capital investment. I am not capable of quantifying the investment required, but it obviously needs a great deal. May we be told what funds are now likely to be made available now that the S.I.B. has ended its activities in this particular concern?

I wish to refer to the speech of the hon. Member for Aylesbury (Mr. Raison), who is not present in the Chamber at the moment. He has only to go to Scotland at the present time to see skills there which are completely unused. As somebody who has been retrained three times in his lifetime, I resent it that some- body in this House should try to lecture a Scot, and Scots in general, about the need to be mobile and outward-looking in terms of jobs.

There has been a very high rate of net migration under previous Tory Governments, and I suspect we shall discover that the rate is still very high when the Secretary of State for Scotland has the guts to come to the House and give us the figure. We have a massive rate of unemployment involving highly-skilled workers who are now seeking jobs. If there is one thing above all that this Government could do to restore confidence in industry in Scotland, it would be to reverse the system of tax-based allowances and return to the provision of investment grants.

7.43 p.m.

Mr. R. A. McCrindle (Billericay):

One of the fascinations about the debate on the Queen's Speech is the wide range of subjects that it evokes and which it is quite in order to raise. Today's speeches have ranged from the splendid Celtic eloquence of the hon. Member for Ebbw Vale (Mr. Michael Foot), who sketched a broad canvas of national affairs, to some sincere constituency-orientated speeches, including that which we have just heard from the hon. Member for East Stirlingshire (Mr. Douglas), who showed real knowledge on a particular aspect of the Queen's Speech.

One of the more agreeable aspects of addressing the House on such an occasion as this is that perhaps not all Members who speak on this side of the House are necessarily expected to support every detail of what is said in the Gracious Speech. I shall probably not disappoint hon. Members opposite if that is the way they are expecting me to approach certain matters in the Gracious Speech.

I welcome the Gracious Speech as a whole, but there are one or two topics on which I want particularly to comment. I do not entirely agree with some of the sentiments expressed in it, and I shall be saying something on the subject of the social services, about which comparatively little is said in the Gracious Speech.

I refer first to the subject of education. I have never concealed my personal opposition to the raising of the school-leaving age. I realise that in saying that I shall be marked down as a reactionary on education. However, I will set out some of my reasons for opposing the raising of the school-leaving age, and hope that hon. Members will judge me less partially when I tell them why I take this line.

I believe that it is unfortunate that we shall be increasing the school-leaving age when the movement towards voluntarily staying on at school has gained such momentum over the past few years. I am convinced that over a relatively short period—with, dare I say it?, some education of the parents in the process—the percentage of children staying on voluntarily at school will be very high. I question the wisdom of bringing in this Measure at a time when the indications are that our objective will soon be achieved voluntarily.

The second reason why I have such severe doubts about raising the school-leaving age is that a substantial additional number of teachers will be required. They will be facing an uphill task in teaching children who do not wish to be taught. We have heard far too little about any change in the curriculum proposed for this last year. Unless and until that curriculum is changed and a major degree of interest is introduced to keep the young people in order, teachers will have a difficult task on their hands, and the children will not necessarily benefit to any great degree.

My last reason for opposing the move outlined in the Gracious Speech is, I hope, the most positive of all. Believing as I do in educational priorities, I am firmly convinced that the resources required to increase the school-leaving age could be much better spent on improving facilities in nursery school education and on classes for the under-fives. I believe that the truly formative years in a child's life are between the ages of 4 and 7, and I hope that the Government, in pressing on with their intention to increase the school-leaving age, will not ignore the need for more and better provision for the under-fives.

One other facet of education that disturbs me is the problem of the number of poor readers at the age of 11. I ask the Government to consider the allocation of additional resources to the recruit- ment of further remedial teachers. In some areas the average number of children of a poor reading standard is unconscionably high.

I turn to the social services in general and pensions in particular. The subject of old-age pensions is an emotional one —not always justifiably so. Even after the recent increases, and having done more for the social services in a year than many of their predecessors have done during their time in office, the Conservative Government are still seen as a hard and stony-faced Government in the matter of social services. [HON. MEMBERS: "Hear, hear."] Before hon. Gentlemen get too carried away in agreeing with what I am saying, I should add that there is little that is less justified in the image of the Government as seen by the public. The fact is that there is real and genuine concern among the old at the possibility of two years of inflation, great or small, stretching before them.

It will come as no surprise to my right hon. and hon. Friends on the Front Bench to say that I should like to put three proposals to them on old-age pensions.

First, as to the possibility of our entry into Europe—my only reference tonight to Europe—I ask the Government seriously to reconsider their refusal hitherto, to link pensions and other benefits more openly with the cost of living. It may be that a special index has to be created for this purpose. It may mean that in the long run the recipients of these benefits gain only about the same as they would gain under the present circumstances, or perhaps even less. But the fact of knowing that future pension benefits would be tied to the cost of living would give comfort to some of those who fear two years of inflation lying ahead.

Second, I ask the Government again to consider annual reviews of pensions and benefits. It is undeniable that wage claims are submitted on an annual basis and that a two-year wait for a review of pension is a long time in the life of an old person.

Third, I ask the Government again to make sure that they are correct when they say they cannot improve the machinery so that a shorter period elapses between the announcement of an increase and its payment. I have it on good authority that several European countries find it [MR. McCRINDLE.]

possible to pay increases much more quickly than has so far been possible in Britain.

Reference is made in the Gracious Speech to the fact that Powers will be sought to facilitate the reform of pensions schemes in the public services. If I understand it correctly, the Government's intention is to shorten the period between announcement and payment in the public sector. If that is possible in that sector I ask my right hon. and hon. Friends to redouble their efforts to shorten the period generally for old-age pensions and similar benefits.

These three reforms would reassure our old people and would project a fair and proper image of the Government to the people.

On education and pensions, I venture to persuade my right hon. Friends to move further to goals that I know they share.

7.53 p.m.

Mr. Ray Carter (Birmingham, Northfield)

I agree with much that the hon. Member for Billericay (Mr. McCrindle) said—particularly his reference to the public image of the Tory Party, which is that of being wicked and stony-faced. He suggests that that is not so, and that his party is not wicked or stony-faced. I refer him to a piece of propaganda put out by his party about three years ago, which took the form of a car sticker which said, "Bring Back the Wicked Tories", the point being that the Conservative Party believes itself to be wicked and the country believes that the Government's activities over the past 15 months have done much to live up to that image.

I make no apology for returning to a well-trodden theme in the debate so far—the concern of all hon. Members about the present high level of unemployment. To set the scene for that theme I return to the Gracious Speech of last year. I was a new Member, having been elected in June, and I was fortunate enough to make my maiden speech after that Gracious Speech. I spoke after having listened to the Prime Minister. At that time I was still comparatively innocent and naive, and I took much of what he said at face value. In particular, I was impressed by the Prime Minister's concept of one nation. He said: We cannot hope to influence the outside world in peaceful directions if we see conflict within ourselves here in this country. He concluded: I firmly believe, however, that the great task which lies before us humbly as an Administration, but lies before us also as a House of Commons and as a Parliament, is to work to create unity in our country, to create one nation. This is the greatest challenge which faces us still today, but it also sums up the broad purpose of this Administration: to create within freedom in Britain one nation."—[OFFICIAL REPORT, 2nd July, 1970; Vol. 803, c. 95, 96.] Those were imposing words—words which any Government would strive to live up to. Certainly that is what the former Labour Government did. Having heard the Prime Minister's words last July I naively believed that that was precisely what this Government would like to do. They have not succeeded in the least. On the contrary, we have had one of the most divisive periods of Government in modern history. I cite a few examples.

No single act of any Government or group of employers has ever caused as much hatred and bitterness as would the passing into law of the Industrial Relations Bill. We have had a succession of nasty and mean welfare cuts, best symbolised by the rather nasty piece of legislation which snatched milk from the lips of millions of young children. We have seen taxation handouts giving more to those who have and taking away from those who have nothing. We have seen cuts in public expenditure in areas where we need to spend more than we do, such as housing, hospitals, and local government. We have seen a policy of bankruptcy come into commerce to which previous Governments had not resorted. As others have mentioned, we have seen the complete breakdown of regional policy.

All those things are bad enough, but by far the worst product of this Government is the pitiful sight of a million of their fellow citizens standing in dole queues throughout the country. This has affected almost everyone. It has affected school leavers. Thousands of young people trained to take their part in the world are now standing in dole queues. Middle-aged people who have been sacked prematurely at the age of 55 or 60 stand no hope of ever being employed again. Graduates who have had thousands of pounds of public money spent on their education are also standing in the dole queue. People who have fallen sick for one reason or another and have lost their jobs have been unable to return to work. More particularly, unemployment has affected areas of the country which previously—at least since the war —have not known what the problems of unemployment were.

I should like to mention the change that has taken place between June, 1970, and September, 1971 in the employment situation. In June, 1970, there were 55,746 people unemployed. In September 1971, the figure was 128,772— an increase of 2.4 per cent. in 1970 and 5.6 per cent. now. Male unemployment increased from 3.2 per cent. to 7.8 per cent. In June, 1970, only 2,593 school-leavers were unemployed; in 1971, the figure was 34,733. In Birmingham, in June, 1970, there were 17.502 unemployed; in 1971, the figure rose to 40,321-an increase of 3.2 per cent.

That is a pitiful picture of a once-prosperous area, offering a wide range of employment opportunities but now unfortunately afflicted with the most pernicious sickness of industrial society. It is a sickness which can be cured only by the action of the Government. It does things to a man which no other form of sickness can do at one and the same time. It is a most soul-destroying experience for him; it takes from him the right to earn a decent living for his family and to take his proper place in society.

The Government may well deny that they are to blame. They may put the blame upon such things as improved technology, the rising use of science and the methods that flow from it in industry, to restructuring at a much faster pace than before, the reduction of over manning, and international trade's effect on our manufacturing position in certain areas. But these things have always been with us. Technology has been changing and moving into industry for a long time—never more so than in the nineteenth century. The rate of mechanisation of industry was far greater then than it has been at any time in the twentieth century. One can paint a similar picture for the process of restructuring.

But the real cause of unemployment in Britain— or at least the massive increase since June, 1970— has been the Government's exaltation of the principle of competition. They have used strong language. They have posed a completely alternative policy, exemplified by the remarks of the Secretary of State for Trade and Industry to the Tory Party Conference last year. He referred to "lame ducks", and the need to stop propping them up. He referred to "subsidised incompetence". All this is very strong language.

It amuses me to hear the Government use that language— knowing that they believe in it strongly and deeply— while not having the guts to face the results of their policy. Politicians are always being accused of saying one thing and doing another, but we were told by the Government from the outset that we were to have the smack of firm and honest government. I would like to hear some admission from some Member of the Government that their policies are having effect. After all, they told us that the bright future held out to us would come about only as a result of the imposition of their policies. Surely they will have the courage now to admit that the level and extent of unemployment is a direct result of their policies.

The Government are attempting, and will continue to attempt, to usher back a freer, more unbridled form of laissez faire than we have had for the last 40 or 50 years. The success of the Government's policies and new philosophy can be best gauged by the way in which they have been received in board rooms throughout the country—the way in which management now accepts that it must be far more ruthless and tougher than it has been in the past.

The accountants now run industry. If they are ever in doubt, their reaction is, "Lay men off ". After all—and this is the most critical thing—they know that the Government will always back them up. That has been proved time and again in this House, from the latest incident the case of B.S.A. in Birmingham, where 3,000 men have been laid off—right back to Rolls-Royce and, more recently, U.C.S. That is the Government's philosophy. It [MR. CARTER.]

has percolated through to every level of industry where individuals are responsible for the running of industry and commerce. The Government should not try to run away from the sad situation they have created.

I have some knowledge of unemployment. Just prior to my National Service I found, having left school, that no one was prepared to employ me for a year. I suppose that at the age of 17 one is able to bear more easily the trouble and distress of unemployment. But I have every sympathy with those who come to my surgery at the weekend to tell me that they have three or four children, that they are 55 years old, and that no one will give them a job. In fact, there is no job to be offered them.

Possibly the saddest aspect of the whole unemployment problem is the great reduction in the number of vacancies. We are dealing not just with a short-term problem of people out of work but also a long-term problem such as we have not had in the last 30 or 40 years in Birmingham and the West Midlands, where those who are unemployed have no immediate prospects of getting back into full-time work.

It particularly distresses me—and I feel extremely bitter about it—that my class is principally affected. Working-class people in Britain, together with all other classes, fought two World Wars in defence of what their leaders called "freedom and liberty". They fought the good fight and they won. Now, in 1971–26 years after we fought some of the most evil doctrines that the world has ever seen—we in Britain have one million of our citizens in the dole queue. In this society of ours, even if the Government will not take the responsibility, after we have fought for freedom and retained it, not only for our own citizens but for the whole continent of Europe, which we are now to join, one million people have had their basic freedom—the right to work— withdrawn from them. That is a scandalous indictment of any community and more particularly so of ours, because we make such a big play—indeed, it is more profound than that—of the belief we all have in freedom.

When I hear hon. Members opposite talk about freedom I am reminded of what people far older and more ex- perienced than I always said about the Tory Party—that the only real freedom it ever believed in was the freedom to exploit. That may sound rather harsh to hon. Members opposite, but the fact remains that the Queen's Speech contains no mention of unemployment, and only a cursory reference to employment, so that one is led to believe, as the million unemployed believe, that the Government are not particularly concerned with their plight. My hon. Friends and I will continue to harass the Government until they have again established as a first principle of economic policy the maintenance of full employment.

I conclude by referring again to the Prime Minister's speech in the debate on the Gracious Speech of last year, when he spoke of the concept of one nation. At some stage in the life of this Parliament the Prime Minister and his Government must strive to implement some policies which will lead us to believe that they truly believe in the concept of one nation. I earnestly urge the Prime Minister to re-read that speech. If he ever meant what he said, the Government may some day get around to solving the problems of one million people who now feel that they are a part of another nation.

8.11 p.m.

Mr. Norman Fowler (Nottingham, South)

I know that the hon. Member for Birmingham, Northfield (Mr. Carter) will forgive me if I do not comment on what he was saying beyond remarking that I would not accept what he has said about the divisive theory of Government and that the concern which he expressed about the dreadful toll of unemployment is shared on these Benches.

I should like to mention only one part of the Gracious Speech, that referring to measures to tackle crime in Britain. Perhaps I may make a non-partisan comment. As politicians we are sometimes in danger of ignoring the public's concern about this subject, and concern there undoubtedly is. I get more letters from my Nottingham constituency about crime than about any other subject. In Nottingham there is great concern, particularly among older people, who feel themselves especially vulnerable. Nottingham is not alone in this. There is widespread public concern and public alarm. What is more, it is public alarm which in no sense is bogus. It is based on the rapid upward trend in crime which is taking place and which has taken place over the last 15 years. The general upward trend is well recognised, but the woefully inadequate statistics with which we are provided sometimes disguise two of the more important features of crime.

First, it is sometimes assumed that crime is somehow confined to London, yet a study of the ratios of population to numbers of crimes committed will give a different picture. The rate of crime, which, after all, is the significant figure, is often higher in the cities and towns outside London than in the capital itself. For example, the Midlands faces as serious a crime problem as does London. Crime is a problem which is truly nationwide. Secondly, it is sometimes assumed that the increase in crime is somehow only in trivial or petty crime. The facts show completely the opposite. It is the most serious crime which has increased at the fastest rate. It has increased not by less than but by more than the average.

The outstanding example is robbery. In London alone in 1950 there were 250 robberies; in 1960, 750; in 1970, 2,400. In other words, since 1950 the number of robberies in London alone increased by almost 10 times. Robbery is a good example which epitomises the picture of serious crime.

In London the value of cash and property stolen was about £2,800,000, of which a mere £250,000 was recovered. The number of robbers detected was about one third and in 338 cases—and this clearly concerns the police—firearms were carried by the robbers on their raids.

Those who say that there is no crime problem in Britain deceive themselves. There is, and it is about time that the political parties started to recognise it and to take the problem seriously as a political subject. I see no reason why the parties should not have policies for tackling crime as they have policies to tackle other major social problems. It is policies we want, and not just slogans.

For this reason, I am glad to see the concentration in the Queen's Speech on the issue of violent crime. I am also glad to see concentration on the need for sentences as an alternative to imprisonment. This is a recognition of the fact that the British prison system faces an undoubted crisis. It recognises the almost overwhelming pressure that 40,000 prisoners put on British prisons, an increase from 15,000 at the end of the war. The policy of an alternative to prison recognises, too, that the conditions inside prisons are sometimes desperately bad. It recognises that there are 14,000 prisoners living two or three to a cell in ancient Victorian prisons and the fact that there are simply not enough work facilities to give many of them a full working week.

Above all, the kind of policy set out in the Queen's Speech recognises that there is a clear distinction to be made between criminals and prisoners, a distinction between those now held in prison. On the one side, there are the undoubted criminals, the robbers and the young professionals, and there is no way of dealing with them other than in prison. The first essential in these cases must be the security of the public. On the other hand, there are those now held in prison who could be dealt with in other ways. Prison must necessarily be a place of last resort, and it should not be used as a kind of social dustbin. For instance, it should not be used, as it now is, for alcoholics, who clog up the works at Pentonville Prison, for instance.

I hope that the kind of policy which the Government have put forward will be a step to distinguishing much more clearly between those who need to he in prison and those who do not. I look forward to seeing the details of the alternative sentences.

Whatever alternative sentences are developed, the one thing which will be essential to make them work will be a strong Probation Service. Unless we have a strong Probation Service we shall have no one able to carry out the supervision of those offenders who do not go to prison. I would urge the Government, although they have increased the target for the Probation Service, to look at the service again and to consider whether those targets are sufficient. In particular, the Government must give to the service a degree of priority which it has not received before. The inquiry now to be set up to look at the service must be of the character of the Royal Commissions on the Police in 1960 and 1962. In other words, it must mark a new [MR. FOWLER.]

development in the Probation Service and stand as a landmark for that service.

Mr. Alfred Morris (Manchester, Wythenshawe)

The hon. Gentleman takes a close and continuing interest in Home Office affairs and particularly in police matters. Has he looked at the current figures for police establishments, particularly in terms of wastage and recruitment? Bearing in mind the importance of continuing security for the public, does he not agree that these are extremely disturbing figures?

Mr. Fowler

Yes, I agree with the hon. Member that wastage is a serious matter, but I point out to the hon. Gentleman, who also takes a close interest in police affairs, that it is not altogether fair to blame this Government for all the omissions there may have been. That comes ill from a representative of a party which insisted on the first restrictions on police recruitment. The present bad position is in part due to that two-year restriction on police recruitment upon which the previous Government insisted.

Having said that, I agree that the situation at the moment gives cause for concern, and is one that must be kept under continual review. But it was to the prisons that I was addressing myself, as it was on the alternatives to imprisonment that the Queen's Speech on this subject concentrated. I welcome this concentration, but I would urge the Government to recognise that this can only be the start, rather than the end, of their policies for tackling crime.

8.23 p.m.

Mr. Mark Hughes (Durham)

I welcome wholeheartedly the Government's proposal in the Queen's Speech to give additional assistance to conservation areas and ancient monuments. This will be welcomed on both sides of the House.

There are, however, three disasters contained in the Queen's Speech to which we ought to turn our attention. The first—regional policy—has already been mentioned at length by hon. Members on this side of the House. In the space of 15 months regional policy has collapsed totally. Despite the programme of pit closures that took place in the North, we had hoped that there might be a glimmer of light at the end of the tunnel. There had appeared to be some prospect of getting away from the level of unemployment of the mid and late-1960s, but that hope has dwindled to virtually nothing. The prospects of alternative employment in Durham for young men as well as pitmen are negligible. New factories are not being built, and new employment is scarcely to be seen in the hundred-odd miles between Tees and Tweed. In the space of 15 months we have seen the whole area slip back 20 years, and it will take a great deal more than the empty promises of this Government to restore the, faith of the people there in their views and prophecies.

The next disaster is that of the common agricultural policy to which this Government have said that we shall ally ourselves. But what does the E.E.C. find when it produces a 12 per cent. increase in grain production, as has been achieved in this harvest year? It finds that it cannot foot the bill which it has said it must foot. Neither can it pay the subsidies and grants which it undertook to pay. What do we get? We are accepting a policy which, the moment it moves from scarcity to sufficiency, produces more problems than it knows how to solve. Since 15th August any belief that the common agricultural policy had commonalty or was a policy has become pure moonshine. It no longer exists, and where it tries to exist it emerges as the most baneful product of the Brussels bureaucracy yet produced.

Bad though the C.A.P. is, it is as nothing compared with the achievements of this Government on agricultural policy. Very few hon. Members on either side of the House could have believed that the 1947 Act would remain unchanged and unmodified in its details into the 1970s. There were already major problems on the horizon. What have we had put in its place? What do we get in the Gracious Speech? We read the following: My Ministers will continue to encourage the efficient expansion of agriculture and will introduce legislation to simplify administrative procedures and improve agricultural services. Last week, or the week before. talking to the Country Landowners' Association, the Prime Minister said: We have clearly set out the price support policies which we shall follow in the years ahead. I am confident that they will give the industry a sound basis on which to build. The Minister of Agriculture, in an interview with The Farmers Weekly said: I can assure you that the levy system is working well to protect the home market. I have yet to meet a grain farmer who believes that the levy system is working well to protect the home market.

It is intriguing to note that the Minister of Agriculture for New Zealand tells us that the levy on lamb is being paid by New Zealand producers. It is not raising the price for British lamb producers; it is lowering the price for New Zealand producers. To my mind, that kind of activity carries no benefit to this country.

The minimum import price scheme, as it is currently constituted with its variable levies and so forth, is totally powerless to prevent a depression in grain prices when one is in a position of near-surplus or sufficiently. Having very nearly got to a position of sufficiency this harvest year with barley, partly by using wheat for animal feed to supplement barley, it is at this point that this misbegotten governmental scheme insists upon putting up the price of bread to every man, woman and child in the country in the pretence of aiding the farming community.

In addition, we have from the producers of compound feeding stuffs the guarantee that their prices will go up. Although world prices of maize may decline, this Government make sure that no compound feed producer benefits from that decline by putting up the levy to keep prices at the artificial levels which prevailed last season. Thus the higher levy and higher duties on feeding stuff for livestock result in higher meat and milk prices.

Of all the forms of raising revenue open to any Government, a tax on bread and a tax on meat are the most divisive and regressive that can be devised. Yet the Government say that they are doing this in order to help our farmers—the 3.8 or 4 per cent. of the community who gain their livelihood from farming.

In this week's editorial, The Farmers Weekly, which in the past has not been notorious for its support of right hon. and hon. Members on this side of the House, had this to say under the heading "Corn policy failure": It should now be clear that the Government's 'new farm price policy, at least as far as its effect on cereal prices is concerned, is a failure. Despite the highest import levies we have ever had, market prices are at rock bottom. That is said to be helping the farming community and to be saving the Exchequer money. But let us see what is happening.

On the one hand, we are imposing levies which put up prices to the consumer. At the same time, the consumer will have to make deficiency payments to farmers. We are paying our increased bread costs twice over, with the expectation that about £70 million may be required in subsidies to the farming community this year. In addition, we shall be collecting vast sums of money on the imports of the bread grain that we need to fed our population. If that is a coherent agricultural policy, I shudder to think what would happen if the Government tried to change it into anything less coherent.

I come, then, to the bacon curing stabilisation scheme, which, given the natural tendency in the cycle of pig production. has a most important duty to perform. Last week, faced with the possibility that it would cost the Exchequer £20 million, the Minister of Agriculture made it clear that he intended to scrap it.

What we have is a Government which, over 15 months, have seen the prices of agricultural products at the farm gate rise more than they did in the whole six years during which the Labour Party was in office. That is true of every product bar potatoes. That is the evidence that has been produced month by month in the Bulletin of Statistics. The Government have achieved the marvellous situation where, under the stimulus of high prices and a good season, once our farmers produce near sufficiency their prices fall so low that there is no profit for them.

The Government's levy system has collapsed round their ears and is a total disaster to the farming community. At the same time. it has raised the prices of meat, bread, milk and every other item of human consumption quite unnecessarily.

Dr. Tom Stuttaford (Norwich, South)

Does not the hon. Gentleman agree that over the last year farmers have done very much better than in the last years of the previous Administration? They [DR. STUTTAFORD.]

are better off financially today than they were a year ago, and they are very much happier.

Mr. Hughes

I am reluctant to take that view—

Dr. Stuttaford

Ask any bank manager.

Mr. Hughes

If the hon. Gentleman is suggesting that overdrafts are easier to come by and that interest levels are lower, one cannot disagree. Once over-drafts are easier to come by, members of the farming community usually wear broader smiles. If the hon. Gentleman is saying that the marginal return to the farming community on capital invested has increased this year, I should have thought that the evidence was distinctly that it has not. If the hon. Gentleman is saying that the yield this harvest has been better, that is undoubtedly true. But the Government cannot take credit for a good harvest, although they will try to do so.

Food is unnecessarily expensive, and the agricultural community is faced in the short term with considerable difficulties and in the long term with a major readjustment consequential upon our possible entry to the Common Market, which can do nothing but harm to existing investment and husbandry practices in the country. A more devastating 15 months for British agriculture has not occurred since the abandonment of the agricultural policies of the First World War after 1921. Not since then has British agriculture suffered so massive a disaster.

8.36 p.m.

Sir Brandon Rhys Williams (Kensington, South)

I feel somewhat depressed by the sepulchral speech of the hon. Member for Durham (Mr. Mark Hughes), but as I have no farms in my constituency I trust that he will forgive me if I do not take up his interesting points.

Having put before us a Gracious Speech containing so much I hope that Her Majesty will not think that I am being carping or over-critical if I voice some disappointment. I may have been hoping for too much, and certainly this menu is not just a one-course meal, although one of the courses is likely to take us a considerable time.

Arising from the Government's European initiative, I believe that much needs to be done by way of preparation—not only of the public, but of our institutions, of Westminster and perhaps most of all of Whitehall—for the great event which right hon. and hon. Members on both sides of the House confidently expect will take place on 1st January, 1973, however militant their attitudes may be at the moment. I should like to see preparations made during 1972 for radical change in our public administration. We have heard much about the appointment of the Central Capability Unit. Possibly that is a cloud the size of a man's hand from which ultimately will flow the waters of the river of life. However, I have a sense of restiveness —I do not think that I am alone in this because we have not been given clearer indications about where the unit is concentrating its efforts and what changes we can expect from it.

The Gracious Speech offers large-scale local government reorganisation. This is first class, but I think it is not wrong to say that it will be only a peripheral reform. We also hope for reforms in the system of public service pensions. That could be one of the most important things in the Gracious Speech if it means that civil servants who are stuck in mid-career will be free to express their opinions on their Department's management by voting with their feet.

What are the Government doing to initiate radical reform of our institutions? Let me first take possibly our greatest economic asset—the City of London. What are we doing to make sure that London emerges as the main European capital market and the financial centre of the Community? At the International Monetary Fund meeting my right hon. Friend the Chancellor of the Exchequer made initiatives which have been welcomed all over the world, particularly, I am glad to say, in the developing countries. But we cannot hope for too much from the I.M.F. It is not a central bank. It does not at present even have the makings of one. It is a club.

I am rather anxious about the dependence which the Treasury is putting for the future upon the Special Drawing Rights. It would be useful if S.D.R.s came into vogue as the numeraire for world currencies so that we could express the value of currencies in terms of S.D.R.s instead of dollars, pounds or gold as the case may be; but I am nervous about S.D.R.s if the printing presses are put to work, and I am not satisfied at present with the relationship that has been established between the need for an increase in world liquidity and the particular role of S.D.R.s in providing it.

I should like to see Europe's cluster of currencies brought together under centralised institutional leadership I would hope that Britain would be the first in making moves to establish a European fund for economic co-operation. That was one of the good things that were unfortunately lost with the other initiatives based on the Werner Report. They were lost when the agreement collapsed earlier this year. Much that was in the Werner Report was unrealistic; but this was one of the good recommendations in it. We should not lose sight of it, but should take the lead in reviving it.

Let us consider what the Government are doing about companies. I do not think anyone is really satisfied at the present state of the joint stock company. There is a feeling that there ought to be a move on the part of the Government to provide more effective super- vision. I do not think that we should go, at a stroke, as far as setting up the supervisory board, but there is room for a measure of reform in our company law. Unfortunately, it does not seem to appear in the Gracious Speech.

Of course, an enormous measure of company reform is in preparation—we have heard of it for a number of years. Some of the things which are in the pipeline are not of immediate urgency, but I should like to see something done at once to increase the power of shareholders— at any rate, to increase the supervisory forces which act to create efficiency in the board room.

In the last Session I had the privilege of introducing a small Bill which would have required all large companies to have a certain number of non-executive directors, and in order to ensure that those non-executive directors performed a useful function I suggested in my Bill that they should be made to produce to the shareholders an independent report, which should be attached to the annual balance sheet. I believe that this idea is still worth following up, and if I have the leave of the House I shall seek to re-introduce that Bill in the coming year.

Let us also see what the Government are doing to help individuals in this period of preparation for our entry into the Economic Communities. Some right hon. and hon. Members may have heard me speak about the importance of protecting the pension rights of people who change their employment before they reach the normal age of retirement. I am rather distressed that nothing is being done on that important issue, which effects millions of people. The initiative may rest with a Department other than that which has just produced an important White Paper on the subject. My view is that way is clear, and that the amendment of the rules should be enforced by the Inland Revenue, through a change in the practice in regard to mixed benefits.

My views on this subject are, I think, well known, and the fact that I normally discuss this subject in front of an almost empty House does not make it less important or less immediate. Hon. Members in all parts of the House will probably agree that it is not good enough for this matter to be left till 1975. Something should be done at once—and where there is a will there is a way.

I have often spoken about the cash relationship between the individual and the State. This is becoming an increasingly disastrous muddle, with 4 million or 5 million people now dependent on means-tested benefits. I cannot reconcile myself to the means test. Although in these days it is administered with the greatest possible humanity and insight, I consider that the benefits drawn from the community should be based on citizen- ship, or on the record of contributions. Need should be the criterion only in the minimum number of cases, and not for millions of people, as it is now.

This matter is vital for incentives, for savings and for the self-respect of our people. I should like to see signs that the Government, who acknowledge the present problems, are coming forward with radical solutions to this vexed question of the cash relationship between the individual and the State. In Britain there is deep resentment not only over taxation but over benefits, and the Welfare State. That state of affairs should not be allowed to continue. It is deeply divisive in our society, at a time when we should be working towards unity and greater mutual understanding.

Apart from the psychological and political aspects of the reform of taxation and the Welfare State, we must see in the present situation an urgent problem of business efficiency. We are fortunate in having on our Front Bench men of the highest administrative capacity. I should like their minds to be directed to the solution of this problem in the coming year. The public is longing for radical change. We do not have to be too cautious or too conservative in our approach.

I know that people may use against me the saying that All rowed fast but none so fast as stroke and that if the Government try to move too fast for public opinion we shall make no progress at all. But, in the areas which I have mentioned briefly tonight, if the Government will seize the initiative I am confident that they will find that the British public, especially the young, are willing to follow.

8.46 p.m.

Mr. John Smith (Lanarkshire, North)

l do not wish to follow the hon. Member for Kensington, South (Sir B. Rhys Williams) in his interesting speech. He mentioned one or two divisive aspects of the current situation, but I will concentrate on what I consider to be an even stronger divisive factor, which is the difference in the level of prosperity between what are loosely called the development areas and the more prosperous areas.

Anyone who represents a constituency like mine with a much higher than average level of unemployment, indeed one of the highest levels in Scotland which itself is above the national average, would scan the Gracious Speech closely to see what there was in the legislative programme proposed by the Government which would be of advantage to his disadvantaged constituents.

One thing which has most impressed me during the short time in which I have been a Member of Parliament is meeting a number of people who had been made redundant in a small village in my constituency. The experience of meeting these people face to face, seeing the anxiety in their eyes and understanding the genuine fears they felt for the future, made me realise how direct the effects of unemployment are upon the lives and aspirations of ordinary people. Only by direct personal, and even emotional, contact with the problems of our unemployed citizens is one able to realise the disaster which unemployment brings to their personal lives.

Faced as we are with the present level of unemployment, distributed in the way it is, one of the top priorities of the Government must be to devise a policy not only for full employment but for full employment spread properly throughout the country. I therefore read the Gracious Speech with considerable care to see what hope for my constituents there was in the Government's programme. It says of the the Government: In developing their regional policies they will pay close attention to the economic needs of particular areas. One certainly could not accuse the Government there of laying down too specific a policy. That sort of political bromide was offered a year ago, and nothing much flowed from it. It would be naive to assume that what the Government propose is contained in the cryptic tones of the Gracious Speech. So I read what the Prime Minister said yesterday in order to see what further elucidation there was of the regional policies the Government might introduce. The right hon. Gentleman then said, in a massive piece of understatement: The regional measures that we are using today are not a complete answer …". With that capacity for understatement which the right hon. Gentleman has developed in the course of Government which is equalled only by his capacity for overstatement in the weeks preceding the General Election, the Prime Minister went on to promise action and, again in tones of understatement which are becoming familiar, said:

…we are now studying the alternative options which may be open to us. We know that quite dramatic changes in regional policy were made soon after this Government came to power. We know that the investment grant system was virtually disestablished, and an announcement made that regional employment premiums would be discontinued by 1974. The crucial underpins of the last Labour Government's regional development policy were removed very quickly after the Conservative Government came into office. We are often told that during its period in opposition the Conservative Party spent much time thinking out closely and in detail the policies a Conservative Government would follow. Was the removal of investment grants and the decision to abolish the regional employment benefit the fruit of that close and detailed study? One wonders, because in effect all that happened was a return to the policies followed by the Conservative Government prior to 1964.

The Prime Minister said yesterday that the problem of regional imbalance had been a deep-seated problem which had beset the country for many years, and that is certainly true. He also said that no Government within the memory of present Members had solved the problems of the regions. That also is certainly true. He went on to say: … right hon. Gentlemen opposite will also have to acknowledge that during their period in office the level of unemployment in the regions was, alas, higher than the national average." —[OFFICIAL REPORT, 2nd November, 1971 Vol. 825, c. 45.] That, of course, is true, but there is an important qualification to be made, and Scotland provides a useful example. In 1963 Scotland had an unemployment level of over 130,000. We then had a Labour Government from 1964 to 1970, and in no one month of any year did unemployment reach that level. We only reach it again when we come to the present time. When the Labour Government left office, unemployment in Scotland was 90,000-a level rather highly objected to at the time not only by Labour Members but also by Conservative Members in vociferous tones.

The Scottish unemployment figure now is 136,000, an increase of over 50 percent. in the period of office of the present Government. So if it is to be said that no Government of any party have solved the regional problems of Britain, it must also be recorded that some have made a better attempt than others. The last Labour Government, whatever their other faults may have been, pursued their policies of regional development with enthusiasm, vigour and great intelligence, and achieved a great deal of success. The tragedy is that the impetus vanished on 18th June last year; indeed, it was put into reverse. Now we find in the Gracious Speech, and in speeches made by the Prime Minister and other members of the Government that the Government are having second thoughts on regional development policy.

Hon. Members who represent constituencies which are deeply affected by the regional policies of the Government read these signs of Government change of mind rather in the way that an observer of Chinese affairs watches developments in that country, and it is as difficult to discover what the Conservative Government intend to do about regional policy as it is to find out the intentions of the Chinese Politburo.

I listened with care and attention to the comments of the Secretary of State for Trade and Industry in the hope that he would at least give a clue as to the intentions of the Government. Unfortunately, the very part of his speech in which I was particularly interested, in which he dealt with this problem, he hurried through so quickly that it was with great difficulty that I caught only some of his remarks.

The right hon. Gentleman said that nothing was to be achieved by increasing the weight and number of existing provisions for regional development aid, and I gathered that he proposes no new initiatives. He went on to say that the Government were considering direct means of helping "individual problems in individual areas ", but I could not work out what he meant by that.

I suspect that some sort of change of thought has occurred because of the problems that have been revealed in Scotland. For example, the Government announced that the West Central area of Scotland would be a special development area with additional incentives. That was done in response, no doubt, to the clamour in the West of Scotland, and not least because of the shock that was expressed over the high unemployment figures in the Glasgow area.

The Government then found that, having made the West of Scotland a special development area, Dundee was put in an even more difficult employment situation. It was clear, therefore, that the special development area policy was not apt to deal with the problems that were thrown up in that part of the country. I do not know what the Government are currently proposing.

I must give the Government a little credit, though I am not inclined to overdo it. I believe that they are reconsidering the initial philosophy which prompted their earlier policies. Gone are the lame duck days when Ministers could stand at the Government Dispatch Box saying in ringing tones that industry could not be subsidised and had to stand on its own feet. The facts have caught up with hon. Gentlemen opposite. We have no more sermons from them because they know that their words fall on deal ears, particularly in the disadvantaged areas of the country.

It will suggest to the Government some steps that they might take. They might, for example, reconsider the whole question of investment grants. I understand that a committee was set up by the previous Government to look into the situation and compare investment grants with other policies, including that based on depreciation. However, before that committee concluded its work the Government changed their policy.

I hope that the investment grants policy will be reconsidered because I have found that the present system of direct assistance from the Government is not working satisfactorily. Most industrialists speak highly of the previous system of investment grants. If hon. Gentlemen opposite will not listen to the voice of industry, I do not know to what they will listen.

We hear a great deal from industrialists in the development areas about the difficulties that are put in their way by the special development area provisions. It is in this context that we must consider the Government's decision to phase out the regional employment premium in 1974. Existing firms say that they are not given the benefits that incoming firms receive. An industry which has tried to keep its labour force intact is bound to feel resentful if a newcomer, perhaps a competitor, is given advantages and benefits which the existing firm cannot get.

The regional employment premium can help both existing and incoming firms because both benefit from the premium. At a time when we are trying to en- courage the use of labour in the development areas, it seems the height of folly to phase out the very part of the regional development programme which is directly related to the employment of labour. If the Government are serious about holding the jobs we have in the development areas—and let us start by holding the jobs we have, let alone talking about creating new ones—they should take this step. We desperately need other jobs, but we shall avoid an even greater disaster if we just hold on to the ones we have.

One way in which the Government can act directly and tomorrow would be by doubling the regional employment premium. That would be a direct incentive to firms which are in difficulties. The Government would get the complete support of the House. They might have to change the policies which they announced 15 months ago, but that would not be too much to swallow, bearing in mind the good it would do. So why do not the Government, even if they will not examine their doctrinaire objections to investment grants, at least reconsider the use of the regional employment premium in two ways?

The first is by announcing that it will not be phased out. We are now getting so near 1974 that employers are discounting its value anyway. The second would be by the Government giving evidence of their faith that employment will rise in the regions by increasing the premium now, with the guarantee that it will be effective for the next three, four or five years, so that employers will be able to take on and keep on their labour force in the midst of the present economic difficulties. If the Government are serious about the alleged coming boom, the reason for this premium will disappear in the near future. It will help bail out industry in the meantime and it will mean a good deal to those under the shadow of redundancy.

The real solution to the problems of stimulating industry in the development areas is a much more radical look at the problem than this Government are capable of taking. I say more radical because one of the disturbing features of the Conservative Government is their doctrinaire aversion to anything involving the use of public expenditure, particularly as regards industry.

It was that aversion which led to the destruction of the Industrial Reorganisation Corporation and which led the Government to the abolition of the investment grants system. When Conservatives see public funds getting mixed up with private funds in the development of industry, their ideological hackles rise. That doctrinaire aversion means that we cannot expect from a Conservative Government any radical idea about the mixing of public and private funds to stimulate industry in the regions.

I am particularly interested in two possible sources of help for our development areas. One is the concept of using public enterprise and public funds directly to stimulate industrial enterprises. Many hon. Members who have studied the European scene will know that this goes on to some extent in Italy, and there is a good deal that this country can learn from the policies of the Italian Government—not only in using public enterprise directly to stimulate industrial development in areas which require it, but also by observing the techniques which the Italians use; for example, by insisting that public investment takes place in development areas. The Italian Government at the moment insist that in some cases 100 per cent. of public investment must be made in the Mezzo Giorno.

That is the sort of regional development policy which radical government in this country must follow. The situation will be such that when this party, as I hope it will, again becomes the Government in the near future, the situation in the development areas will be such that we cannot just rely on the policies followed in the past.

There are two things that we must follow. One is the notion of allowing public enterprise, through a State holding agency or something of that sort, to help to set up enterprises. The other is the concept of some form of development authority. The T.U.C. has put forward proposals about this which we are told are being studied by the Government. There is much to be said for thinking this one through. We would not expect the Government to give an immediate response. because this idea has implications which must be considered. For example. if the west of Scotland could have a development authority backed by public funds which could intervene direct and sponsor industries where a skilled labour force was available but where there was no private investment to further it, that would be a useful way in which the Government could help to ease the employment situation and could also help to re-structure the economy of the west of Scotland.

It is no good the Government saying, "Let us leave the future of the West of Scotland to private enterprise. Let us leave it to the forecs of competition and hope that something will turn up which will give all these chaps a job". That is what the Government are saying. They set up the special development area, but that has not produced very much yet. The Government seem to be hoping that the economy will move into an upturn, that there will be some fall-out into the West Central area, and that somehow things will get going again. I am not so sure that they will. That is not much of a policy for a Government that have the responsibility of trying to bring a decent standard of living to the people living in that area. If the Government are to have a full employment policy they will have to think out the ways in which it is to be achieved.

In the short time available to me I have tried to spell out some of the ways in which that can be done—the re-institution of investment grants; a decision not to abolish the regional employment premium; a decision to double or significantly to increase the regional employment premium to help existing as well as incoming industry; an examination of the idea of using public enterprise and public investment to start new enterprises to utilise the skill which Scotland has.

The tragedy of the West of Scotland is that all the skilled men that are out of work spent a lifetime acquiring and using their skill. The hon. Member for Aylesbury (Mr. Raison) referred to what he regarded as the defeatist attitude of many Scottish Members of Parliament. The hon. Gentleman did not specify what he meant by that. Perhaps he meant that we should stop complaining about the situation that exists in our country. That would be defeatism. However, we are going a stage further and are suggesting ways in which the Government could help us to get out of the present situation. If we do not complain to the Government and if we do not get the Government to do something about the problems in West Central Scotland nobody will do anything about them.

Mr. Raison

What about the Scots?

Mr. Smith

They are by and large the people who work in the factories. They cannot by some endeavour of their own just wish factories and industrial enterprises into coming and depositing themselves on their doorstep. It is all very well viewing these problems from Aylesbury, where the problems of Scottish unemployment look quite different from the reality. There is not one Scottish Tory Member of Parliament present.

Mr. Raison

One of the problems is that many of the capable entrepreneurs which Scotland has for a long time produced have found their way to Aylesbury rather than stayed in Scotland. I suspect the reason is that the hon. Member and his friends produce such a depressing and defeatist atmosphere in Scotland that the Scottish entrepreneurs will not stay there.

Mr. Smith

I do not know many Aylesbury Scots.

I apologise to the Secretary of State for Foreign and Commonwealth Affairs. I am afraid that, due to his international responsibilities, we sometimes forget that he is a Scottish Member. I am sure that he would disagree with the point made by the hon. Member for Aylesbury (Mr. Raison).

I do not know what the hon. Member for Aylesbury expects Scottish Members of Parliament to do. I suppose he thinks we should just come here and say, "We are sorry about this unemployment. Let us get together and do something about it. Let us start a factory here and start one there." The hon. Gentleman knows full well that that will not do. We are sent by the Scottish workers to represent them in the House. We know that the way in which we can help the workers who send us here is to get the Government to move from their backsides and put public money into enterprises in Scotland. It has been done before. It can be done again. If the Government would put public money into and give public support to enterprises in Scotland, we could achieve something. I end by talking about one way in which the Government could restore confidence in the West of Scotland. It is a method which will be achieved by public pressure and agitation. We are concerned about what is going to happen at Hunterston. This is very disturbing for the future. A great deal of the steel industry in Scotland is obsolete. The obsolete parts will be run down, and there will be serious redundancy unless there is something to replace it. This is why the siting of a major steel complex at Hunterston is of great importance. I suppose the hon. Member for Aylesbury would say that we ought to set about setting up such a steel complex ourselves. Since the investment is likely to be about £1,500 million, I think most people would agree that it would be beyond our present capacity. Therefore, it is something which the Government must do.

The Secretary of State for Scotland appears to have placed his political reputation at stake in saying that he is going to make sure that the Hunterston project comes alive. I would have preferred a surer prop on which to base our hopes. It is sometimes said that a jacket hangs on a slack nail, and as far as Hunterston and the Secretary of State for Scotland are concerned that is just about the position. If we were to get development at Hunterston it would be a demonstration that the Government mean business in the matter of regional development policy. It would help to restore our confidence. Confidence can be restored only if the Government show that they are prepared to have confidence in the future of Scotland. It is because we have nothing on which to base any confidence that we express disappointment.

9.11 p.m.

Mr. Fred Peart (Workington)

The right hon. Gentleman the Secretary of State for Social Services and I have agreed to make shorter speeches than usual, and I therefore hope that more hon. Members have managed to participate in today's debate. I will try quickly to deploy my argument and mention specific items in the Gracious Speech.

I am glad that my hon. Friends who represent regional areas where there are great unemployment problems have been able to make their points. They have done so very effectively. I have in mind in particular my hon. Friends the Members for Swansea, West (Mr. Alan Williams) and Newcastle-upon-Tyne, West (Mr. Bob Brown), who also speaks for my own Northern Region—for I represent West Cumberland, which is in the Northern Region, and we have serious problems, which my hon. Friend has high-lighted, in the North-East.

I think also of my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) who dwelt on problems which are now emerging for the first time in the Birmingham area, and my hon. Friends the Members for Lanarkshire, North (Mr. John Smith) and East Stirlingshire (Mr. Douglas) who have reiterated a point of view which no doubt will be debated at great length and with passion when we deal specifically with the Amendment relating to this important matter of employment.

Inevitably in the Gracious Speech there is a theme, and I therefore make no apology for returning occasionally to the issue of the European Economic Community and the effects that our entry into it would have on this country.

Mr. Patrick Cormack (Cannock)

Hon. Members opposite have lost that one.

Mr. Peart

It is true that the House of Commons had a majority, but the majority of the British people disagree with the House of Commons. I only wish that we had an opportunity to test this. There are some who argue sincerely that entry into Europe would solve our unemployment problem, although even the Minister is on record as saying that there is as yet no Community regional policy. Certainly the more that I examine what is happening in Europe the more I am inclined to agree with the Secretary of State. There are various national policies but there is no regional policy as we know it in other fields of Community activity.

From time to time the E.E.C. tries to interfere. The E.E.C. Commission has told Italy that it must scrap the regional aid which it gives to a part of Northern Italy. Accordingly to The Times business page, In a letter to the Italian Government the Commission claims that the aid which is given to this province is a distinguished subsidy to industry there.

Mr. Cormack

A disguised subsidy. surely.

Mr. Peart

I agree, it must be "disguised", but who is to quarrel with The Times? It goes on to say … which risks falsified competition within the Six and is therefore banned by Article 92 of the Rome Treaty. Many of my hon. Friends believe that entry into the Community could bring benefits to areas like the Northern Region. I have my doubts. I shall not deploy that argument today, since it has already been gone into in detail. I believe that in a competitive society— as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) stressed today, the fringe areas in this country will face growing problems such as we have all seen in our Regional areas.

It is a matter of great pride to me that various Labour Governments have put forward interventionist measures. The first Labour Government—the Attlee Administration—and the Administration which I had the honour to serve, adopted interventionist policies in the economy. We sought interventionist means to attract and direct industry into those areas where it was essential they should go to give employment to men and women in those areas. I recognise that this is not an easy problem, and never has been. But if we have a nakedly competitive society, without the sort of intervention Labour has sought to create, then inevitably industrial investment and resources will be attracted away from those areas and there will be the pull of the Market—and especially in regard to the E.E.C. there will be the pull of the Market in the Rhine and Rhone axis.

I once had the honour, as a member of the Council of Europe, to chair a commission of inquiry into employment problems in the Mezzo Giorno in Southern Italy. I understand that despite State intervention there, and despite the building of the steel works at Taranto, there is still the pull of the market away to the North of Italy—that many Southern Italian workers remain unemployed and therefore go north. I believe that that is a real issue. which will inevitably have its effect if we go into the E.E.C.

The Secretary of State in his speech today stressed the importance of the small business firm. We all agree that many small business firms in various branches of commerce, industry and agriculture, play an important part in our economy, and must continue to do so. But I am sure that the right hon. Gentleman will remember what has been stated in the Bolton Report on Small Firms, which has only just been published. It deals with the way in which our entry into the E.E.C. will affect small business firms I am sure that the right hon. Gentleman will have studied the report and will have seen, on page 106, in regard to entry into the E.E.C.: So far as we are aware, there has been no official study of the likely consequences for small firms of United Kingdom entry into the Common Market. This is of course a very difficult question…We think that study of this question should be one of the early tasks of the Division if it were set up in response to our recommendation. We ourselves have been unable to devote to this the time and resources needed to form a clear view on so complex an issue: but it is evident that entry into the E.E.C. will accentuate some of the processes which have contributed to the decline of the small firm in the United Kingdom, as well as providing new opportunities for the most enterprising. A little later, on page 106, the report says: … large firms throughout the Community will seize the new opportunities to expand, and their expansion will be to some extent at the expense of small businesses…many manufacturers are bound to feel the extra weight of competition. The report goes on to examine what has happened in the Netherlands, and says that … the formation of the E.E.C. was followed by a tendency to larger scale production and an increase in the number of mergers and takeovers… Finally: We think it vital that the Department of Trade and Industry should begin to prepare the small business community for the changes which must be expected upon our accession to the Treaty of Rome.

Mr. John Davies

It is part of the Bolton recommendations that this matter should be studied, but the right hon. Gentleman will be aware that the Smaller Firms Council of the C.B.I. have voted overwhelmingly in favour of membership of the European Communities.

Mr. Peart

But this is the report of the Chairman and Managing Director of Growth Capital Ltd., a distinguished businessman, a former Chairman of the Council of the British Institute of Management. It is a very important committee, including Mr. Robbins, the Vice-Chairman of the Industrial Training Foundation, Professor Tew, and Mr. Tindale, the Director and General Manager of the Industrial and Commercial Finance Corporation. They took the evidence, and the report is in the Minister's Department. I hope that he will study it carefully. I agree that he probably has not yet had the time, but I hope that he will take note of what has been said. I am merely suggesting that when he eulogises small business, as rightly he did today, he should remember that entry into the European Communities will inevitably create the problems that have been highlighted.

I have argued this for another industry. and I am glad that my hon. Friend the Member for Durham (Mr. Mark Hughes) mentioned it. He devoted his informative address to the problems of agriculture. and in the Gracious Speech there is a reference to agriculture: My Ministers will continue to encourage the efficient expansion of agriculture and will introduce legislation to simplify administrative procedures and improve agricultural services. We had a previous debate about agricultural services and my right hon. Friend the Secretary of State for Scotland—[Hors. MEMBERS: "Former"]—my right hon. Friend the future Secretary of State for Scotland will remember it vividly. I shall not go into the details because the time is not available, but a whole series of Measures have been put forward already by the Department in which there has been a cutting down of the advisory services and many of the basic services which have contributed to the building up of increased efficiency within the industry and, furthermore, services which have been an example to every other agricultural industry in the world.

In many ways, in the sphere of agricultural technology and the professional skills peculiar to the men who work in this industry, not only have we been admired but our techniques have been used by other countries. Many people now in the advisory services—because of actions already taken by the Government and highlighted in the Gracious Speech—are worried that the Government, in the name of false economy, will damage something which has provided a service to the farming community and to the nation. I should like to spell this out much more, and I hope that later my hon. Friends will be able to press the Minister of Agriculture about this matter.

I argue, too, with the Secretary of State for Trade and Industry, as I have argued over the small businessmen, that all will not be well for the farming community's entry into the E.E.C. The present Administration have already prepared the way for entry. They have sought to cut down the services that I have mentioned and to cut down important measures affecting regional development in the agricultural services. The Northern Pennines Rural Development Board is an example of their attitude to something that we shall need if we enter the Community. It is strange that many of my European friends will defend what is happening in the Community and, at the same time, fail to realise that the Government have already sought to frustrate regional development in a very important industry. The Northern Pennines Rural Development Board, which I had the privilege to create—in the sense that I provided the legislation—was supported by the National Farmers Union, the Country Landowners' Association, the Agricultural Workers, and all political factions in that part of the country.

I still cannot understand the doctrinaire attitude of the Government on this this matter. [interruption.] Inevitably there will be dangers for this major British industry. My hon. Friend the Member for Durham mentioned grain and cereal prices, and that problem has been highlighted in an interesting editorial in Farmers Weekly. [Interruption.] I have argued so often—

Mr. Speaker

Order. I hope that hon. Members will not forget what I said the other day. It is not the manner of the House to whisper or talk secretly when a right hon. or hon. Gentleman is speaking. The right hon. Member for Workington (Mr. Peart) is in possession of the Floor.

Mr. Peart

I was not aware that my hon. Friends were arguing with each other, Mr. Speaker—not tonight, anyway.

I would recommend everyone who knows the agricultural industry to read the replies of Dr. Mansholt, one of the leading members of the Commission and a man known to many Members of this House. The Farmers Weekly published an interview with him on 27th October and it led the magazine, which has always been sympathetic to British entry, to publish an editorial headed, "Who's fooling whom?". In other words, the Farmers Weekly admits, from what Dr. Mansholt has said, that the Government have not given the farming community all the information which is essential if farmers are to make up their minds. The editorial quotes in detail what Dr. Mansholt said.

I would like the Minister of Agriculture at a later stage to give some replies to the frank statements made by Dr. Mansholt and also to the criticisms which have now emerged—for example, problems that could affect such institution as the Statutory Milk Board. Will these problems still exist in the E.E.C.? Will the pricing system be able to provide the essential long-term security which is so important to the farmers?

This is a matter not just for agriculture but for a number of our great industries. In the Common Market debate I recently crossed swords with the Minister about the problems of the fishing industry and the fishing limits. According to The Guardian today, the Chancellor of the Duchy of Lancaster is meeting his European counterparts about this subject, and it seems that an impression is now being given by him and by the previous attitude of the Prime Minister and the Minister of Agriculture that the Government will not sign the Rome Treaty if they do not solve the fisheries problem first. They gave that impression on a previous occasion. It is stated again in The Guardian today, in a report from Bonn.

The House wants to know this. Many of my hon. Friends, like some hon. Members opposite. represent fishing ports. If the E.E.C.'s fisheries policy is adopted as is stands it will be disastrous for large sections of our fishing industry, so we have a right to know. But nothing has yet been forthcoming from the Government about it.

I could argue at great length about the effect of entry on British agriculture. I have argued about the problems of the common agricultural policy—how what we see emerging in Europe is neither common nor a policy; how, even now. in Germany, France and other members of the E.E.C., there are different pricing systems. There is no Community pricing policy. The Community itself is well aware that this will remain the case until it can get genuine agreement in interational monetary matters. At present, therefore, there is no genuine Community policy in this matter, and it may well be that at some later stage the E.E.C. will have to adopt the British deficiency payments system which the Government are now destroying. That is the view of Dr. Mansholt and of many other Continental political leaders.

The common agricultural policy will provide no security for our farmers. There is no adequate review procedure such as we have enshrined in our legislation. All our legislation will go and the uncertainty which is now felt by farmers in the Community will be felt by our own farmers.

Other hon. Members have referred to other institutions, but I will switch very quickly to a point of view expressed by my right hon. Friend the Member for Kettering (Sir G. de Freitas), who talked about a European Parliament. He asked for guarantees. I think that he had a valid argument. He is a sincere European and I have already respected his views. He believes that we should have a proper parliamentary check on the European Commission—that it must not be like the Assembly at Strasbourg, which he and I used to attend. But the Commission is the main body in Europe, even though there is a Council of Ministers. In a European Parliament we should be able to have 36 members, and my right hon. Friend is concerned because inevitably we should have constituencies as large as 1,500,000 people. He therefore asked for certain assurances. He may have faith in this sort of system, but I have not. All I can see in Europe at the moment is a vast European bureaucracy.

Sir Geoffrey de Freitas (Kettering)

The whole point of my argument was that if the Labour Party co-operated with the Socialist group in the European Parliament we should be able to see to it that there was a system such as that in German domestic politics, in which there would be Government-financed elections. so that we should not hand over to the European Kennedys and the European Rockefellers because of the enormous expenditure which they are capable of making at elections.

Mr. Peart

I admire my hon. Friend's optimism. All I can say is that only one policy is emerging. I have criticised it, but it is the only policy, and there is a vast bureaucracy. Even one of the Commissioners—the German Commissioner, Professor Dahrendorf—has attacked the bureaucracy in the Community. There is no effective parliamentary check.

That is why I agree so much with my hon. Friend the Member for Ebbw Vale. There is no check on taxation policies; there is no check on matters such as the value-added tax, which inevitably we shall have to accept. Italy is now fighting a rearguard action, and the Italian Government has asked for a six-months' delay in the application of V.A.T., The Government have announced their intention of introducing V.A.T., but inevitably matters of that kind are decided by the Community—which means by the Cornmission—without any effective check as we know it, and that is completely againct the traditions of the parliamentary system which we have built up.

The Leader of the House is to reply to the debate. He and I were responsible for setting up Select Committees on many matters in order to increase the influence of back benchers who were in contact with their constituencies, and to enable them to check Ministers—the Executive. This system will inevitably he frustrated if we enter the Community. One example was the Select Committee on Agriculture.

Mr. Kenneth Baker (St. Marylebone)

The right hon. Gentleman destroyed it.

Mr. Peart

I did not destroy it. I was the first Minister to appear before it, and I co-operated with hon. Members and gave evidence to it. It was an experimental Committee which so continued, and we had many others. My successor, the present Leader of the House, continued the policy, which has been approved on all sides.

Entry into the European Economic Community, with the establishment of the bureaucracy that we now see and the concept of creating a European Parliament in the absence of a federal system, which is what it really means, will weaken and frustrate our own democratic procedures and will not solve the fundamental problems that I have mentioned— such as employment—and those affecting the great industry for which I once had the honour to have responsibility.

It is for those reasons that we criticise the Gracious Speech. We shall continue to do so.

9.35 p.m.

The Secretary of State for Social Services (Sir Keith Joseph)

In his opening speech, the hon. Member for Ebbw Vale (Mr. Michael Foot) really moved on from last week's European debate and vote. Much of what he said was concerned with the consequentials of that vote, and shall return to his speech later in my remarks.

However, the right hon. Member for Workington (Mr. Peart) merely repeated his speech of last week, or very nearly. He tried to give the impression from the Front Bench opposite of a firm party point of view. But I must tell the House that of the seven Labour back benchers who have spoken today, all of them vigorously against Government policies, three voted for Europe last week, three voted against, and the seventh abstained, but he declared today that he was in favour of Europe in due course. I think that the right hon. Gentleman gave a false impression when he repeated his European speech.

Today has been a vigorous day of speeches. Necessarily, a number of them were addressed to others of my right hon. Friends. The right hon. Member for Devon, North (Mr. Thorpe) and the hon. Member for West Bromwich (Mr. Foley) made speeches on Ulster which I know that my right hon. Friend the Home Secretary will read before coming to the Ulster debate. My hon. Friend the Member for Manchester, Withington (Sir R. Cary) made a moving speech covering a number of subjects, and I am sure that it will be read by several of my right hon. Friends. Other hon. Members spoke about regional policies and unemployment, and, of course, a day has been set aside for a debate on the economy.

My hon. Friend the Member for Nottingham, South (Mr. Fowler) made a number of points, which have been reported to me, about the increase in crime. But there was one subject that he raised on the treatment of alcoholics which is of great interest to me as well as to my right hon. Friend the Home Secretary.

My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) and my hon. Friend the Member for Aylesbury (Mr. Raison) both welcomed the announcements made by my right hon. Friend the Secretary of State for Trade and Industry about the Committee on Small Businesses. Perhaps I might add one personal note. It was in Opposition some four years ago that my hon. Friend the Member for Croydon, North-East (Mr. Weatherill) chose, by way of a private Member's Motion that he was lucky enough to win in the Ballot, to debate small businesses. That was in February, 1967. His subsequent speeches and pamphlets persuaded the last Government to set up the John Bolton Committee on Small Businesses, which evidently has now produced a good Report. I pay tribute to the zeal and energy of my hon. Friend the Member for Croydon, North-East.

My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) raised a number of questions about public service pensions, most of which are for my noble Friend the Lord Privy Seal and for my hon. Friend the Parliamentary Secretary to the Civil Service Department. However, there is no question, as there would have been under the previous Government's pension scheme, of any cutback in public service pension schemes. In their present state, most of them will satisfy the conditions for exemption from the reserve scheme.

During the time covered by the Gracious Speech, a number of developments will be occurring on the social service front of which I ought to inform the House. I shall cover them fairly rapidly before coming to some of the comments of the hon. Member for Ebbw Vale.

The Government have produced a consultative document on the National Health Service, and we are now consulting all the interests concerned before, in due course, producing a White Paper in preparation for legislation. We have produced a White Paper entitled "Strategy for Pensions" and are now engaged in consulting the occupational pensions interests on some of the detailed technicalities involved. I note the familiar and understandable impatience of my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) about the preservation issue. I shall return later to some of the things he said.

There is an enormous amount to be done on the social service front. We are trying to do a number of things simultaneously. We are trying to do justice to the cash needs of widows, war pensioners, the sick, the chronically sick, the unemployed, low wage earners with children and the rapidly rising number of the elderly. We are trying to do justice to the cash claims of an expanding and improving National Health Service and, at the same time, to make good decades of relative neglect in the services for the elderly, the disabled, the mentally disordered and the mentally handicapped. Extra money is now available on all these fronts and for all these needs, but the backlog cannot possibly be made up overnight.

Last year the Chancellor of the Exchequer provided, over and above the normal increases for all these services, £110 million for improved services in the hospitals, and in the community for the elderly, mentally disordered and mentally handicapped. The hospitals and local authorities have made a good start in the use of this money. During the year the regional hospital boards and local authorities will be discussing and planning together on the basis of the targets set them in the White Paper on the mentally handicapped which the Government produced a few months ago.

Much more needs to be done on these fronts, especially in connection with the services for the elderly and the mentally disordered. On the local authority personal social service front, there has been the reorganisation of committees to conform with the new Seebohm structure. The local authorities are beginning to tackle an immensely wide range of duties and functions with the newly reorganised staff. The House is interested in a whole range of their obligations, and it is particularly interested in the Chronically Sick and Disabled Persons Act. I am now considering how best to keep myself informed of the progress made in each local authority area in connection with the Act.

The Government put particular emphasis on the contribution which the voluntary services can make across this front. I am glad to remind the House that the Government are trebling the financial help given to the voluntary services. The number of paid organisers of voluntary services in local authorities and hospitals is increasing fast, and I am in the midst of systematic discussions with a number of national voluntary bodies. The period covered by the Gracious Speech will see 250,000 chronically sick households benefit for the first time from the extra allowances to be provided starting in September. During this period we expect to carry further forward the awards made during the Family Income Supplement Scheme, as a result of which about 85,000 households with children in which the wage-earner is on very low earnings are now receiving awards.

My hon. Friend the Member for Aylesbury rightly returned to his concern about incentives. The Government acknowledge that they need to know more about the operation of incentives at this level of earnings. He rightly emphasised that a number of very low wage-earners are in public service and, therefore, should be accessible to some initiative by the Government qua employer to improve both their output and, therefore, their earnings. I know that some of them are in the National Health Service where we are trying to expand as quickly as practicable the scope of incentive schemes by which to achieve both these objects.

My hon. Friend the Member for Aylesbury was wrong about one thing. It is not only a large family which can make a household very poor. In many cases, it is the first child, even when he is an only child, who, because the mother is generally removed from earning capacity, leaves the household in relative poverty.

Mr. Bob Brown

On the question of the first child, surely the answer is that the Government should have redeemed their pre-election pledge and increased family allowances and introduced family allowances for the first child. The second point I wish to raise concerns the question referred by the hon. Member for Kensington, South (Sir B. Rhys Williams) about the increase in the number of people who should be means-tested. Does the Secretary of State agree that if the present tendency continues only surtax payers will be exempted?

Sir K. Joseph

I am coming to that. I am not going to go over the whole family allowances argument, but the point is that we could not possibly have brought in first children anything like as quickly as we brought in family income supplement. There are many speeches on record explaining that, and it would not have produced as much for the very poorest as family income supplement already has.

I come on next to the conditions of the severely disabled. In five weeks' time we shall be putting in payment for the first time in this country attendance allowance, tax free and generally disregarded, for the very severely disabled. Already we have made awards to some 31,000 households concerned, and we expect by the end of the year to be up in the neighbourhood of 50,000 awards. This is only the beginning of the vast task of providing decent services and support for the very large numbers of civil disabled in our country; but it is a start.

I noted the concern of my hon. Friend the Member for Billericay (Mr. McCrindle) about the worries of the pensioners in connection with the cost of living. I also noted his view that there should be annual uprating of pensions, but I really would ask him not to expect the rate of increase in the cost of living to continue in future as it has in this past year.

My hon. Friend the Member for Windsor (Dr. Glyn) was concerned about protection for those on fixed incomes when we enter Europe. He accepts the pledge for pensioners. Ministers will certainly bear in mind his argument.

My hon. Friend the Member for Kensington, South has, understandably I would say, entirely rational and very persuasive ambitions. They are very difficult to fulfil. The Government share the ambition of making sense of the benefit structure and of doing no damage to incentives. The only thing I would say to my hon. Friend is that it is not always the case that where there's a will there's a way. There are real difficulties, and the Government are studying them.

I say again that there is so very much to be done in the social services field. Improvements in this field can come from better organisation, better management, and reorganisation at the local authority level of the National Health Service. The proposed reorganisation will, I think, with local government reform, improve the services to some extent. That is why those changes are being carried out. Improvements can come also through more voluntary service, and that we are seeking to procure. Improvements can come from redeployment of the existing resources and towards higher priorities, and, with some resistance from hon. Members opposite, we have done some of that. We have redeployed some existing resources—

Mr. Stanley Orme (Salford, West)

The Government have thrown benefits away.

Sir K. Joseph

—towards higher priorities. But, above all, improvements come from growth. Growth is the key to better social services. My hon. Friend the Member for Aylesbury was absolutely right: we are becoming a people with low real earnings. Many householders, many people, many families are hard pressed. The way to relieve them is through growth. Growth is the background to and the purpose of the Gracious Speech. Growth is an unfashionable concept with some of the better off. They fear spoliation, and, indeed, if growth were uncontrolled it could destroy more than it created; but we now know that, given the right laws and the right safeguards, we can have growth while improving our economy and our quality of life.

There has never been a more vigorous upholder of that philosophy than my right hon. Friend the Secretary of State for the Environment. Growth is the main source of the better standards and better provision that we all want to see, but it cannot occur without competition and adaptation.

The hon. Member for Ebbw Vale made a powerful speech. My right hon. Friend the Lord President was in his place to hear him, so I will not comment on what

he said about Europe. However, I will comment on what he said about competition.

The hon. Gentleman is a formidable and witty orator. Lesser speakers than he dare not trust to the orderliness of their minds to restrain the flow of their passion. Listening to him I was reminded of a postcript by Pascale: Please forgive the length of this letter. I have not had the time to make it shorter. The hon. Member for Ebbw Vale objects to our reference to competition. To work humanely and yet effectively, competition requires two conditions, and we intend to provide both. The two are a steady growth in demand, as widely spread geographically as possible, and a humane apparatus to ease movements between jobs.

It is any Government's duty—and I should have thought that the hon. Member for Ebbw Vale would have accepted this—to keep a balance between the interests of the citizens as producers, as workers, on the one hand, and the interests of the citizens, the same people, as consumers, on the other. Without competition the citizen suffers. Without growth within a civilised framework of job changes for the producer, the worker suffers.

We could not safely inject more growth early in the life of this Parliament because the riot of inflation left by Labour — [Interruption.]—had to be damped down. Large numbers of people last year literally wage-claimed themselves out of jobs. [HON. MEMBERS: "Rubbish!"] Hon. Gentlemen opposite do not serve the interests of their constituents—

Mr. Heller

The right hon. Gentleman is talking rubbish.

Mr. Orme

The right hon. Gentleman just spoke about the large number of people with low earnings. That fact completely contradicts the higher earnings accusation he has just made.

Sir K. Joseph

The hon. Gentleman surely knows better than that. There is every reason to welcome higher earnings when they go with commensurably higher output, but the trouble with the last 18 months or two years has been that wage increases have gone far be- yond the capacity of higher output— [Interruption.]—and this has forced up prices and forced down jobs. Unless hon. Members opposite grasp this, they will do their constituents no service whatever.

My right hon. Friend the Prime Minister predicted yesterday a rapid growth, by our standards, in the economy. We can now see ahead the first essential for the adaptation which is necessary if we are to have a higher standard of living. The Gracious Speech refers to improved training, and that is another essential if we are to have humane changes from job to job. But the growth and prosperity that we need will not come without adaptation.

Which approach will best serve the elderly, the hard-pressed and the mass of the public better? Is it the siege economy of the hon. Member for Ebbw Vale, freezing the pattern—[Interruption.]—whether or not people adapt and compete; and if a firm makes a loss it must be propped up regardless of whether the people in it. management and workers, adapt?

Mr. John Mendelson

My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) did not say anything of the kind.

Sir K. Joseph

The Labour Party is on the record as seeking the nationalisation of a whole range of industry.

Mr. Heifer

The right hon. Gentleman is talking absolute tripe.

Sir K. Joseph

Or is it a better alternative for improving the social services and the condition of the people to have the combination of growth and adaptation which is what we intend to secure?

This debate has very much been on the basis of a country populated almost entirely by people who work in manufacturing industry. Manufacturing industry is still the country's most important single source of jobs, but it is rapidly losing ground as a source both of wealth and of employment to the service industries. We are becoming a service economy, and there are many services, commercial and non-commercial, which offer a prospect for improving the standards of the workers and the living conditions of the citizens if manufacturing industry can produce competitively in world markets. We have, therefore, if we have the growth that my right hon. Friends expect, a prospect of improving simultaneously the earnings and the standard of living of those who are in manufacturing industry and those who are not in manufacturing industry. But there is one quintessential condition, and it is that management and workers shall adapt to the forces of competition.

It is because the hon. Member for Ebbw Vale lent his great oratory to what would virtually be a frozen pattern of employment that I think he does such harm to the improved conditions of the people of the country. Keeping everyone, even if they are not adapting, in their existing jobs may seem noble in the mouth of the hon. Gentleman, but it is a prescription for the present relatively low, compared with many of our neighbours, standard of living of large numbers—

Mr. Michael Foot

The right hon. Gentleman must not be allowed to make such a misrepresentation. I said that the way in which industrial change is made is the great question in our society. To say that I am opposed to industrial change is an absurdity, and the Secretary of State should know better than to say it.

Sir K. Joseph

But the hon. Member must accept that given the growth the Government now accepts, and given a civilised apparatus for change of jobs, we now face prospects of greatly improved conditions both of employment and of standard of living. That is the intention of the Government, that is the purpose of the Gracious Speech, and that will be the result of the Government's proposals and actions.

Debate adjourned.—[Mr. Eyre.]

Debate to be resumed tomorrow.

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