DEBATE ON THE ADDRESS

HC Deb 12 March 1974 vol 870 cc48-180

[FIRST DAY]

Mr. Speaker

Before I call the mover and seconder of the Address, I think that it will be for the assistance of the House if I indicate what has been suggested to me as the pattern for the debate.

During the debate tomorrow, the main speeches will relate to industry and energy; on Thursday, to agriculture and prices; on Friday, to social services and education; and on Monday, to the economic situation.

2.45 p.m.

Mr. Ray Carter (Birmingham, Northfield)

I beg to move, 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. To move the Address in response to the Gracious Speech is an honour for both the Member and his constituency. To do so on this occasion is even more so, since we meet for the first time as a newly enlarged Parliament in what can only be described as abnormal circumstances. On behalf of my constituency of Northfield, I acknowledge the honour. By a strange twist of fate, this honour has fallen to my constituency on the fiftieth anniversary of the return to Parliament of the City of Birmingham's first Labour Member of Parliament for none other than the area that I now represent.

You, Mr. Speaker, and Members of the last Parliament will recall many occasions on which, at Question Time, I extended to the then Prime Minister, now Leader of the Opposition, invitations to pay an official visit to Northfield. You will, no doubt, recall also the total predictability of his reply—"I have at present no plans to do so". I confess that not all those invitations were completely genuine, so I was never surprised with the replies. However, I did retain that ray of hope of which only back benchers are capable, and I thought that on one occasion or another he would say "Yes" and then visit one of the country's vital and most hard-working communities.

The constituency of Northfield lies at the south-western tip of Birmingham, astride the main Birmingham to Bristol road. It cannot be described as an area of great scenic beauty or flush with buildings of historic interest and charm, for it is an urban area which, with the exception of the village of Northfield, has come into existence over the past 40 or 50 years. We have no great claim to fame, nor do we seek it. We simply allow, as Birmingham and the Black Country have done for centuries, the products of our labour to speak for themselves.

Northfield is an area of much religious activity, dominated by the Quakers and Methodism until the Second World War. It now embraces at least a dozen varieties of the Christian Church. Rarely a week goes by without my receiving a petition from one or a combination of these churches on social or moral issues. It is reassuring, in an age when we are preoccupied with materialism and the pursuit of affluence, to be asked to address meetings about world poverty in the heart of Britain's major industrial region.

Although it is an industrial community, it is an industrial community with only three factories in it. One of them employs over 25,000 people, and dominates not just Northfield but the whole economic life of the West Midlands. That factory is owned by British Leyland, and it produces both the bane and the bounty of the twentieth century—the motor car. Last year, it produced 170,000 cars to a value of approximately £100 million. One half of that production was exported, earning vital foreign exchange. It is a fact which is well understood, but for those who lead sheltered and uninformed lives it is worth repeating that those who transport themselves in anything but a British Leyland car are missing quite the finest experience known to motorised man.

Many of my constituents are employed at the Cadbury factory, where, the House will not be surprised to hear, the world's finest chocolate is made. It seems that almost everything we turn our hand to in Northfield produces excellent results. But my constituency is dominated by the car industry, and those who know it will for- give me for concentrating upon it, although they will know also that, at the same time, I am speaking for industry generally.

The reference in the Gracious Speech to industrial relations, in particular to the repeal of the Industrial Relations Act, is of great interest to both sides of industry in my constituency. It is to be hoped that the experiences of the past few years will make it more, rather than less, possible to promote good relationships at the places of work.

However, it would be wrong to suppose that there is available a magic cure that will erase disputes from the industrial face of Britain. Indeed, one is entitled to question the proposition that the complete removal of conflict from industrial life will speed us on the road to economic paradise where social harmony is assured.

The industrial workers of my constituency are part of the oldest industrialised community on earth. Neither they, management, nor the factories they work in can be compared with the new and modern industrial communities in Japan, France, or Germany. Our total experience is different. Yet change is essential if we are to maintain our standard of living and full employment.

However, the problems that confront us are not all economic in origin. The industrial workers of my constituency have never had an easy relationship with the machine. Their intuitive response to mechanisation has always been cautious, and in recent years there has arisen throughout our whole community—indeed, the whole Western world—a suspicion that the age of the machine has not entirely lived up to expectations, that for many it has taken away both time and space although greater freedom was promised. The car industry is on the very frontiers of industrial advance and as a consequence is subject to the pressures that inevitably stem from such suspicions.

These were perhaps best summed up by the late and great American trade union leader, Walter Reuther, after he had been shown an entirely new automated engine factory by a Ford executive who said to him, "You will not be able to collect any union dues from all those automated machines", and Mr. Reuther replied, "That is not what is bothering me; what is bothering me is how are you going to sell cars to all those machines."

Such fears may or may not be well founded. What is certain, however, is that they play a major part in the performance of industry. My constituents will therefore be particularly pleased with that part of the Gracious Speech that refers to the intention to bring into existence a new conciliation and arbitration service.

It hardly needs to be said by me—for it is self-evident—that the remainder of the Gracious Speech will receive the overwhelming support of Parliament. Responsible yet radical, with a strong Celtic flavour, there is something in it for everyone. The smallest minority has a right to feel satisfied.

The leader of the Liberal Party said on your day of installation, Mr. Speaker, that we were all minorities now. The truth is, however, that we have always been so. In the past, it has simply been the case that loyalties and common interests have been the binding forces that have produced cohesive major groupings. It should be the objective of this Parliament and this Government once again to make it possible for those loyalties and understandings to flourish, and for that great British quality of compromise to regain its position in every aspect of our national life.

If we are patient and tolerant with one another, there is no reason why that cannot be achieved. Already there is a feeling of hope and an indication that when the country hears of the Government's programme, confidence will return and the past will be left behind. It is because of that and my belief that we have a wise Government sensitive to the needs of the hour that I have felt honoured to move this motion today.

2.54 p.m.

Mr. Neil Kinnock (Bedwellty)

It is a great pleasure to second the remarks of my hon. Friend the Member for Birmingham, Northfield (Mr. Carter), particularly because he is a fellow sponsored Transport and General Workers' Union Member of Parliament and a fellow member of the light cavalry of the Parliamentary Labour Party, the Tribune group.

This is also an honour because, as far as I know, this is the first occasion on which a Member of Parliament for Bedwellty has been called upon to second the motion, not, I am sure, because of any lack of suitability or talent on the part of my predecessors—both Charles Edwards and Harold Finch had distinguished records—but because the right hon. and hon. Gentlemen who have had the task of replying on previous occasions probably have been mortified by the thought of having to pronounce Bedwellty properly. With two Welsh Nationalists in this Parliament and several of my right hon. and hon. Friends having taken the oath in Welsh, clearly the pressure is even greater on this occasion. However, the right hon. Member for Sidcup (Mr. Heath) will not be daunted; we have become well acquainted with his personal courage.

Bedwellty is not Welsh by language, although Welsh by character and by temperament. We have all the essentials of Welsh valley life—clubs and choirs and chapels, and a 22,000 Labour majority. We are also situated in the Bible belt of rugby football. In the 15 towns and villages that make up the constitutency there is also the unique quality of life in South Wales, and that is a competitive self-sufficiency in each of those communities of such a degree as to make Marshal Chauvin seem to be like Florence Nightingale.

In those communities in recent days we have had a mixture of great joy and deep anguish. Among the 3,000 coal miners in my constituency, their wives, disabled comrades and former workmates who have left the industry to seek health and reasonable pay, there has been great rejoicing at the dawn of justice that broke for the miners of Britain as recently as last week.

Until yesterday, in the homes of 2,000 steel workers there had been great impatience because of the lack of response to the trade union intiatives to resolve the lock-out at British Steel Corporation's Spencer Works in Llanwern, and I thought we should have to wait for the proposals of my dear neighbour my right hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) for a conciliation and arbitration service to resolve the dispute. Fortunately, the two parties have come together and, happily, work has restarted.

However, I am bound to reflect that if instead of our fruitless preoccupation in 1971 in this House with the Industrial Relations Act we had been concerned with introducing machinery for conciliation and arbitration, Britain would be several thousands tons of steel better off and my constituents would be several hundred pounds in pocket. But that Act is now to be butchered, and for that and many other reasons it is a unique pleasure for me to second the motion.

In addition, in one week of government the Labour administration have succeeded in keeping more promises and have shown more fidelity to principle and manifesto than practically any Government within living memory. Fidelity will be strange to some hon. Members. That impetus must be maintained, otherwise we shall have the responsiblity of office without having the power of office. That0020would be a most undemocratic and dangerous situation. So I hope we shall maintain the momentum and show that we are not prepared to be persuaded by any tales from Montgomery, Rochdale or Cornwall, North, because this greyhound will stay on course.

Another reason for welcoming the plan that has been presented to us is that it is a blueprint for democratic Socialism. The food subsidies, the housing plans, the urban development proposals and the consumer protection proposals encompass the realities of working-class life. By our practical proposals for the old, the sick and the disabled we show our compassion and our Socialism. We show it, too, in our determination to universalise the best in education and in our determination to apply to the maximum benefit this country's natural resources, to the use, and profit of the community.

But the Queen's Speech is not only Socialist; it is also profoundly democratic. In a democracy, in order to attain the assent of organised labour to the planned and orderly growth of wages, we must advance social and economic justice. When we do that the contract is joined and we can be sure that those workers who see rents frozen, food prices subsidised and better pensions being paid will respond to the initiatives of a democratic Government. The compact is based on the fun- damental of democracy, mutuality and consent, and that is what makes the whole plan democratic.

But more profoundly and instantly we have the undertaking fundamentally to renegotiate the terms of entry to the Common Market and to submit that renegotiation for the judgment of the British people. We thereby give our democracy reality and resilience. We convey to people that when they put a cross on a ballot paper they are influencing their destiny, the destiny of their country and the destiny of their children. That is the fundamental rock on which our democracy must be based.

But there is something for everyone in the Queen's Speech, not least the penultimate paragraph which refers to the consideration of … the provision of financial assistance to enable Opposition parties more effectively to fulfil their Parliamentary functions. This proves, if proof were needed, that the Labour Party is the most fair-minded party in the country. [Laughter.] Hon. Gentlemen opposite may laugh, but when in the town halls the Labour Party is victorious by one seat and we have a Labour mayor, just to show how fair-minded he is, he always votes with the Tories. When the Conservatives have a majority of one, to show how fair he is, the Conservative mayor always votes with the Tories.

It is on that basis of fair-mindedness, though not necessarily with their practical application in the delicate and sensitive matter of votes in this Parliament, that I warmly commend the Government's proposals.

3.3 p.m.

Mr. Edward Heath (Sidcup)

I know that the whole House would like me to offer its warmest congratulations to the hon. Members for Birmingham, Northfield (Mr. Carter) and Bedwellty (Mr. Kinnock) on what I think all former Members will agree have been two of the most attractive and effective speeches that we have heard made for this purpose in recent years.

The hon. Member for Northfield reminded me, although I assure him that I needed no reminder, of his assiduity in looking after the interests of Birmingham and the West Midlands during the time when I was Prime Minister. Although I was unable to accept any of his, apparently, not entirely wholehearted invitations, I hope he will acquit me of any lack of interest by the support which I gave to the Exhibition Centre, because only six weeks ago we committed public money to the railways and communications for that centre. We all hope that the centre will be an enormous asset to Birmingham as well as to the nation.

The hon. Member for Northfield made a very thoughtful speech to which I think the House will wish to give consideration later when we are debating matters of this kind. Meantime, perhaps I can give what I assure him is a wholehearted and sincere invitation to the new Tory-held constituency of Bexley-Sidcup.

The speech of the hon. Member for Bedwellty also delighted us. One endeavours from time to time to find out the characteristics of those who are to move and second the motion for the Address. The one thing that grieves me as a musician is that I understand from my intense researches that in the land of song the hon. Member for Bedwellty is the only Labour representative in Parliament who is unable to sing.

That causes me regret, but he has replaced the omission today with a happy wit—at no time greater than when he was referring to the intention of the Government Front Bench to adhere in every respect to their manifesto at the earliest possible time. Fair minded and far sighted he described his right hon. and hon. Friends—fair minded in their policies, far sighted in making extra provision for those who go into opposition which I have no doubt that he and his right hon. and hon. Friends will appreciate in the near future.

It is customary on these occasions to express the hope on behalf of the House that the two hon. Gentlemen concerned will rapidly receive promotion at the hands of their Front Bench. I do so on this occasion, but if I should do so with any lack of conviction, let me assure both hon. Gentlemen that it is not due to any misunderstanding about how genuinely they deserve to ascend to the Front Bench: it is only from a certitude that the amount of time available will be quite inadequate. However, when one sees the speed with which a Parliamen- tary Secretary to the Civil Service Department can be promoted to a Minister of State in less than a week, with an equivalent promotion in salary, even that may be too pessimistic a forecast. Finally, some of us have known the tendency in a new Parliament for the Government to reproduce at least part of their election speeches and the fact that on this occasion they have been able to resist that temptation earns the Opposition's wholehearted gratitude.

I have already offered to the Prime Minister our congratulations that he should assume the responsibilities of first Minister of State. On behalf of the House, I should also like to add our congratulations to the other hon. Gentlemen who are taking part in the new administration. The Opposition recognise that the Prime Minister and his colleagues face a grave and heavy responsibility and that they will have difficult decisions to take. It is a matter of history, perhaps that they, in our view, failed to face up to the facts of the situation in opposition, but now we realise that they have hard decisions facing them in government. They are a minority Government—quite different from 1950 and 1964 when, although the majority was small, it was an overall majority—and a minority Government is something which no one in the House has hitherto experienced.

The Government have no mandate for the extreme programmes put forward in their manifesto. They have to face the fact that there is no mandate for any particular programme at all. They are not in a position to say that they have the overriding force to carry through a programme which a democratic mandate normally provides in our country.

So every measure put forward has to be debated and argued and agreed on its merits. In this House, where the Government have a lead over the other of the larger parties, each measure has to he argued, and it has to be defended in the country where the Government are in a minority of votes compared with the other large party.

In this situation there are two courses open to the Government. The first is to accept the heavy responsibility of governing in these difficult circumstances; to deal with the grave issues facing the country, and to do so in a way which majority opinion in the House and in the country will accept as fair and right. I can assure the hon. Gentleman and his colleagues that if the Government choose to do that, they need expect no fractious opposition from my right hon. and hon. Friends and myself.

The alternative is to avoid the real and deep-seated issues facing this country today. In the last administration, we tried to tackle them, very often—I must say this to the right hon. Gentleman—with sustained opposition from his own party at the time. Avoiding the real issues means going for short-term popularity in the hope of being able to get support later for issues which may then appear to the present administration to be more important.

It is in the light of those two alternatives, I suggest, that we look at the Queen's Speech. I think that the House will agree that immediately one encounters two difficulties. First, we must consider it without any knowledge of the Government's financial policies, because we have to await the Budget in a fortnight's time before we know the Chancellor's intentions. This, therefore, places an immediate limitation on us. Second, so much of the Queen's Speech on this occasion is drafted, even for a Queen's Speech, in such a convoluted fashion that it requires persistent probing to ascertain what lies behind so much of its wording.

But I welcome wholeheartedly the legislation mentioned in the Queen's Speech which is being taken over from the previous administration, in particular, the consumer protection measures, which we have all regarded as of great importance. I ask, however, about one phrase in the Queen's Speech— a measure … to require goods where appropriate, to be labelled with the price at which they are to be sold". Is that an indirect way of saying that the Government propose to return to resale price maintenance? The consequences of that, I believe, would not be helpful to any prices policy which they are trying to pursue, for the simple reason that it would mean that, in order to help those with smaller businesses, prices would have to be maintained at a level quite unjustifiable for larger businesses, so that consumers would immediately lose the advantages of large-scale marketing from which they have benefited in the past decade.

The Government propose also to take over the measures on unit pricing, health and safety at work, adoption and equal status for women, which were ready for introduction as a result of the last Queen's Speech.

I welcome the continuing of a bipartisan policy on Northern Ireland. We have previously acknowledged the support which we received from the right hon. Gentleman and the then Opposition in pursuing our own policy of reconciliation in Northern Ireland and endeavouring to bring violence to an end. I assure the right hon. Gentleman the new Secretary of State for Northern Ireland of our support for policies with the same objective.

Northern Ireland presented one of the gravest problems which faced the last administration, and, perhaps with modest pride, I can say that we faced it with resolution and steadfastness. The outcome has been a policy of conciliation—conciliation between the two communities expressed in the Northern Ireland Executive, conciliation between North and South and between the Republic and the United Kingdom expressed in the Sunningdale agreement.

Of course, we have always recognised that 400 years of history cannot be brushed aside or forgotten in four months. But the fact that we did reach an understanding at all is, I have always thought, a remarkable achievement. We must recognise that the understanding is fragile, but it is one of which we can be proud, and we on this side have no intention of casting that aside.

I ask Her Majesty's Government to remain resolute in dealing with men of violence and to endeavour to reassure those in Northern Ireland, and perhaps in this House, who have doubts about the policies which we have been pursuing with their support, and which they intend to pursue in the future, and to reassure them that these policies are in the interests of both communities, allowing each to safeguard what it holds dear and at the same time to co-operate over what they have in common. This, I believe, is the key to the policies of conciliation which are essential in Northern Ireland.

For our part, we shall continue to do the same. We shall support the Executive under Mr. Faulkner. We shall abide by the principles of co-operation expressed in the Sunningdale agreement. I therefore hope that it will be possible for the House to maintain a bipartisan policy towards the very difficult problems of Northern Ireland, in an endeavour to secure peace there.

There is one further matter in the Queen's Speech which I wish to welcome now. As early as the second paragraph, reality begins to break through. The second paragraph contains the words. in the face of world-wide inflation. Wonder of wonders, miracle of miracles ! So there is world-wide inflation ! Foodstuffs, raw materials—up 50 per cent., 100 per cent., 200 per cent., 300 per cent., and oil up 400 per cent. At last, the right hon. Gentleman and his colleagues are prepared to recognise it. After all, it is not the responsibility of the last Conservative administration. Why could not the right hon. Gentleman and his hon. Friends have said so in opposition and enabled the trade union movement, employers and the whole nation to make a better judgment on our economic affairs?

The right hon. Gentleman agrees that there is world-wide inflation on an enormous scale, and he agrees, therefore, on the impact that this must have had on the balance of payments last year. He recognises also that, without this worldwide inflation, there would not have been a deficit on the balance of payments last year. Thus, now that he is faced with reality, within the first week we have the dawn of recognition of the real facts of life.

Then we are told of "far-reaching monetary disturbance". So floating the pound was right after all, with the beneficial consequences for our exports and the disadvantages for our imports. These monetary disturbances also are beyond the control of the United Kingdom Government. Why could not the right hon. Gentleman and his hon. Friends have said so when they were in opposition?

The price of oil is now a problem for the whole world—it was not just the fault of the Conservative administration—and the present Government are to co-operate with the producer countries. We welcome this. It is what we ourselves have been doing. I congratulate the right hon. Gentleman the new Foreign Secretary on the new Labour policy for the Middle East. I congratulate him most sincerely, because he has taken over the policy which we ourselves pursued. Of course, he must try to reach agreements in order to safeguard oil supplies, as we did, and his task would be considerably easier were it not for a good many other things said by his leader when he was sitting on the opposition benches. But I assure him that we shall support him in a balanced policy in the Middle East.

I turn now to other aspects of the Gracious Speech. I have said that we must consider the Gracious Speech in the light of whether it deals with the basic problems facing this country, or whether it seeks immediate satisfaction from the voters. It is apparent that many of the "goodies" have been put in the shop window with immediate appeal, regardless of the ultimate consequences. Increased food subsidies—to what extent we do not know. The freezing of rents, regardless of the consequences for those who are less fortunate and who then have to subsidise the better off, and regardless of the impact in increasing the rates. We are told that there are to be increased retirement pensions and greatly increased social service benefits. We have all been working with the CBI and the TUC towards improved pensions and improved social service benefits, and considerable improvements have been made.

At this point, I wish to recall to the new Chancellor of the Exchequer the experience of his right hon. Friend the present Foreign Secretary in 1964, when, abandoning a gradual and progressive improvement in social service benefits and pensions, he took one large step which made an enormous impact on the demand aspect of economic management and proved to have a considerable impact on confidence overseas. However tempting it may be for us to attempt to make an enormous step forward in pensions and social service benefits rather than a steady advance, I ask him to consider that temptation in the light of the impact on the demand management of the economy and the impact overseas.

The other half of the Labour Party's manifesto has been kept carefully under wraps. I do not want to explore it today but it is clear that a mass of nationalisation proposals have been omitted. I suggest to the right hon. Gentleman, particularly so far as North Sea oil—[HON. MEMBERS: "Scottish oil."]—is concerned, where the references are so imprecise as to preclude judgment, that he should introduce certainty at the earliest possible moment. Uncertainty of any kind about industries specified by the Prime Minister and his colleagues will be damaging to investment, and, in connection with North Sea Oil—[HON. MEMBERS: "Scottish oil."]—immensely damaging to the future. The right hon. Gentleman should remove that uncertainty. If he has now recoiled from the nationalisation of North Sea oil, let him say so straight away.

I hope, however, that the Chancellor of the Exchequer will be prepared to go ahead with the proposals announced to Parliament by my right hon. Friend the former Chancellor of the Exchequer concerning the matter of the artificial offsetting of losses against profits by the oil companies, and with ensuring for this country a fair share of the proceeds of the offshore oil industry.

I want now to deal with three specific matters in the Gracious Speech. First, there is a promise to seek a fundamental renegotiation of the terms of entry to the European Economic Community", after which the result will be put to the British people, although there is no commitment in the Gracious Speech on how that will be done. According to the Secretary of State for Trade, this issue towers above all the other matters debated in the election campaign. Many of us might differ from him there, but it is justifiable to ask the Prime Minister to clarify what he intends to do, because so far as this House is concerned he is in a minority on this issue.

The Prime Minister will find it very easy to abandon a good many of the pledges that he made in the election campaign. There was, for example, the pledge to bring in cheap New Zealand food. Having been in office for 10 days, he will now have discovered that there is no cheap New Zealand food to be brought in. There was a pledge to bring in cheap Commonwealth cereals, but they are far more expensive than those in the Community. There is his anxiety about negotiating for 1.4 million tons of sugar to be brought into the Community when, in fact, the problem facing us is how to persuade the Commonwealth to send any sugar here at all. The right hon. Gentleman knows that special arrangements have had to be made to increase the return to the Commonwealth countries in an endeavour to maintain supplies.

Gone, too, are all those splendid promises and easy solutions to our food problems, by using long-term, bulk-buying agreements, all painted in such glowing terms by the right hon. Gentleman during the election campaign. All of that has gone within the first week.

Now we have the question of renegotiating terms of entry into the Community. It is at least better to renegotiate within the Community than from without. Does not the right hon. Gentleman find it anomalous to renegotiate without participating in the institutions of the Community? Do the Government have it in mind now to send Members to the European Parliament at Strasbourg? That would seem to be the least that the Government could do as a token of their genuine concern about renegotiation as opposed to withdrawal from the European Community. Successful or not, however, the Government are committed to putting it through a General Election or through a consultative referendum.

Let us examine this issue before it becomes a most contentious matter. If the issue were to be put at a General Election, the aftermath would be that this House would assemble with a wide variety of views being held among Members, and in that respect it would be no different from when the last vote was taken, when there was a wide variety of views in the House and a majority of 112 for going into Europe. Alternatively, there would be a consultative referendum which would be in no way binding upon the House in any decision it took. [HON. MEMBERS: "Oh."] With great respect, how can a consultative referendum be binding upon the House of Commons?

Therefore, whatever the right hon. Gentleman may say, either in Brussels or in this House, the ultimate decision would again rest with the Members of the House, who could not be tied in the decision which they took. Therefore, this is a bogus argument about the sovereignty of this House. We should find that eventually once again any decision which had to be taken would be taken by Members of this House.

The second matter to which I wish to refer as a theme through the Queen's Speech is the massive programme of Government expenditure which is involved. One has only to look at the list to see the extent to which the Government may be embarking upon this. I have already mentioned pensions and other social security benefits, rent subsidies, food subsidies to an extent unknown, house building, land purchase, regional development, the National Health Service, education, public transport and overseas aid. This, by any test, unless it is meaningless, is an expansion, and a considerable expansion, of Government expenditure. Some of it may be desirable in any circumstances except those which the nation faces today. Others, in our view, would be undesirable in any circumstances. How is this expenditure to be met without damaging investment in industry or damaging exports or through heavy indirect—[Interruption.] I will say a word about that to the hon. Member for Feltham and Heston (Mr. Kerr) in a moment—or direct taxation, putting additional pressure on demands for wages? This is another of the hard facts of life which the right hon. Gentlemen and, in particular, the new Chancellor of the Exchequer have to face.

Mr. Dennis Skinner (Bolsover) rose——

Mr. Heath

The hon. Member for Feltham and Heston said, if I heard him correctly, that it would come from defence. If this is so, we should like to know immediately how much of our defence will be wrecked in order to meet programmes of this kind. If there is to be £1,000 million coming from defence, then, in the course of this debate, the House should be told either by the Prime Minister or some other senior Minister how defence will be affected in order to raise the revenue for this expenditure programme.

Mr. Russell Kerr (Feltham and Heston)

On a point of correction, what I said to the right hon. Gentleman was that we should make a start with £500 million from the surtax concessions given by his right hon. Friend the previous Chancellor.

Mr. Heath

In fact, the action which the hon. Gentleman is saying to his right hon. Friend that he can take—and the figures on which it is based are extremely dubious—will provide the right hon. Gentleman with a major question of demand management, because the expenditure will go out in demand for goods, and what he will take from those with higher incomes will come very largely from savings. This is another of the problems which the right hon. Gentleman will have to face.

The third aspect of the Queen's Speech with which I wish to deal is studiously vague—the Government's proposals on incomes policy. I must ask the Prime Minister: what is the Government's policy on incomes? It is essential not only for this House and Parliament but for everyone in industry to know what is the Government's present policy. An incomes policy is, in our view, vital for dealing with inflation. This is a field over which so much of the General Election was fought and it still remains at the centre of our economic affairs.

The hon. Member for Northfield spoke sincerely and seriously about the need for conciliation and arbitration. I would not differ from him in any respect, except that what he is overlooking is that the means of conciliation and arbitration already exist in many forms. They have not been used—[HON. MEMBERS: "Hear, hear."]—and that has not been the fault either of the Government or of employers. The Chancellor of the Exchequer, who cheers so loudly, might look at the situation which governed the question of the three railway unions for so many months. Arbitration and conciliation are there to be used, but they have not been used by many of the unions for a long time.

The real point to which I would ask the House to give attention is that arbitration which consists only of splitting the difference in a negotiation in which one side moves and the other remains firmly placed is no means of conducting an incomes policy; nor will it contribute anything of good to the right hon. Gentleman's own economic management. This is one of the basic points in relation to an incomes policy.

The miners' settlement was made, apparently, without regard to the relativities report. It is widely reported that the Secretary of State said, "This can be dismissed and thrown out of the window." At the same time every impression was given to the unions that stage 3 no longer existed and that the Pay Board was about to be abolished. Thus, both stage 3 and the relativities report were broken and have gone. This is what the unions now believe.

Can the Prime Minister say exactly what is the position? Is stage 3 still in existence? Is the relativities report, having been thrown out of the window, to be considered of importance or not? Are there to be further references so far as relativities are concerned? If stage 3 is now abolished and does not exist, what is the position of the 6 million workers who settled under it in the belief that others in the community would adhere to it for the next year of negotiations? Are they now entitled to renegotiate or are they to see others successfully grasping for higher awards and find themselves unable to do anything about it?

Will the Prime Minister tell us this: is the Pay Board to be kept, despite all the damaging opposition to it of his own party when in opposition? Is it to be kept, in breach of the promises that he gave to the electorate only ten days ago, or is it to be abolished? If so, is anything to take its place? Is it to be abolished before any other effective policy has been worked out? If it is, in this process it is the lower paid who will suffer; it is the weaker members of the community who will be further damaged and who have no means of redressing their situation, because they do not have the strength of union representation which others have.

I have long believed—and I told the last House on many occasions—that it is essential that we in this country should develop a more rational way of dealing with these matters. Again, I listened attentively to what the hon. Member for Northfield said, that he does not believe, in effect, that this process can be achieved. I do not share his pessimism. I believe that a great deal had already been achieved. I believe that, if the right hon. Gentleman and his hon. Friends had supported what was a genuine attempt to find a more sensible way of dealing with the problems, we could have had even greater success.

But what is important now is for the Prime Minister to clarify the Government's incomes policy and the institutions by which it will operate. What do they believe incomes should be this year? In the Queen's Speech they speak of … methods of securing the orderly growth of incomes on a voluntary basis. We have all wanted a binding voluntary agreement, but is this to be an orderly growth of money incomes alone or an orderly growth of real incomes, and by what means will the right hon. Gentleman ensure an orderly growth of real incomes?

We have seen that the right hon. Gentleman and his hon. Friends will seek to repeal the Industrial Relations Act. That is part of their manifesto and part of their dogma—[An HON. MEMBER: "And CBI policy."] With great respect, it is not the policy of the CBI. On any rational approach, what the Government should consider is an amendment of the Act where it can be shown to be genuinely desirable. But if they mean that there should be no framework of law on industrial relations but merely conciliation and arbitration, then they will in no sense be able to achieve a proper working relationship in industry between unions and employers.

At the last election, I think that the British people showed themselves, quite rightly, resentful of the impact of inflation, whether it came from outside or, as it did at one period, from inside this country, upon their ordinary everyday lives. What they did not show is that they are yet ready to take a firm stand behind the measures which are essential if there is to be a period in which inflation can be dealt with successfully in this country and in which there can be an orderly improvement of real incomes for all the people, but particularly those to whom we wish to give precedence—the lower paid and the pensioners. Until the British people show that they are prepared to take measures which are essential for that, the country will still be confronted with the basic problems of inflation.

In the grave situation which faces us, the Government are embarking on a public expenditure programme of considerable size. They have set out no clear incomes policy in the Queen's Speech. Overseas inflation has at last been recognised as unavoidable because this country cannot insulate itself against it, but the net result of the Government's policy would appear to be to increase the threat of domestic inflation on top of world-wide inflation. We on this side must express grave doubts whether such a programme meets the national interest at this time. If those doubts are to be dispelled, it has to be done by the Prime Minister and his colleagues in this debate.

I understand that the views of the Liberal Members are that, if the Queen's Speech contains more than a tenth of the Labour Party manifesto, they will have the Government out in 24 hours. We were not proposing to approach the Queen's Speech in quite this arithmetical manner, but in any case it appears to me that there is rather more than a tenth of that manifesto in the speech. It may be that, after many years, my knowledge of procedure has become somewhat rusty, but I fail to see how 14 Members can bring the Government down, let alone do so in 24 hours.

Perhaps the Liberal Members are now recognising that it lay in their power to put a Labour Government into office and they did so. It does not lie in their power alone to get rid of that Government. They were offered participation in Government for the first time for 35 years and they declined, and it does not lie alone in their power now to retrieve the situation.

We shall judge this Government by the test of the national interest. We shall subject each item of policy to that test. Where the Government are found wanting by this test of the national interest, either in their general programme or on individual items of policy, we shall not hesitate to oppose them to the full extent of our power.

3.39 p.m.

The Prime Minister (Mr. Harold Wilson)

Although I do not propose to echo the tone of some of the passages in the speech of the right hon. Member for Sidcup (Mr. Heath), nor share what the House may regard as his somewhat backward-looking approach to the problems that the nation faces, I should like to join him in his tribute to my hon. Friends the Members for Birmingham, Northfield (Mr. Carter) and Bedwellty (Mr. Kinnock).

My hon. Friend the Member for Northfield referred to successive invitations to the right hon. Gentleman to visit his constituency. I have been to Northfield many times. In common with other strangers to the area, I have spent some of the best, or worst, hours of my life trying to circumnavigate the re-routed one-way road system in that area. A situation may have arisen in which no one would have tabled a Question asking me to visit Northfield. In 1948, following the activities of the Boundaries Commission in my then constituency, I had a deputation from that area asking me to accept nomination for his constituency. I decided to stay on Merseyside. I am glad that I did. The House is glad, too. Otherwise we should not have had such a good speech moving the Address in reply to the Gracious Speech this afternoon.

My hon. Friend the Member for Bedwellty—I am sorry if I splashed the right hon. Gentleman the former Chancellor of the Exchequer. I have frequently visited the constituency of my hon. Friend the Member for Bedwellty, both during his incumbency and during that of his predecessor, our dear friend Harold Finch, respected on all sides of the House and now, I am sorry to say, mourning the recent loss of his wife. My hon. Friend has repeatedly asked me to his constituency. I have been there in both Government and Opposition. We all rejoice to see the number of factories that he was able to ask me to open, which had been started when Harold Finch was the Member.

After 1970 and up to last November I had the same privilege as the right hon. Gentleman the Leader of the Opposition of being first to compliment movers and seconders—in those days from the Conservative Party. With unerring instinct I forecast the early promotion of the mover in each case to the Treasury Bench. I was right in three cases out of four in 1970. In the fourth case there was, perhaps too little time for the prophesy to fulfil itself. It would be a little unusual if I were to indulge in similar prophesy after the speeches of my two hon. Friends, and certainly today I refrain from adding, as I did about their predecessors, the view that their promotion would strengthen the Treasury Bench and weaken the back benches. It would be difficult for me to say that this early. But both have made their mark in the last Parliament, and I was encouraged to see the obvious impression that they made on the whole House by their thoughtfulness and their underlying social philosophy, a fundamental democratic philosophy.

Before I come to the contents of the Gracious Speech, I should like to mention one or two domestic parliamentary matters. The first is arrangements for Private Members' time on Bills and motions. My right hon. Friend the Leader of the House will propose that there should be 10½ Private Members' days before the Summer Recess, five for Bills and five-and-a-half for motions. Strictly, we need have provided only nine days, in accordance with the usual practice, but we recognise that back benchers may have lost some opportunities because of the General Election, and we have tried to compensate for that.

It will be a matter of regret in all parts of the House that some of the excellent Private Members Bills which were making progress in the concluding weeks of the last Session now have to die. So far as some of them are concerned, if they are not re-presented by hon. Members who may be successful in this Session's ballot, we may find that some will be adopted as Government Bills. One in particular, the Children's Bill which was introduced by my hon. Friend who is now the Member for Plymouth, Devonport (Dr. David Owen)—indeed, he is now a member of the administration—is being taken over by the Government as a basis for a similar Bill, and it is referred to in the Gracious Speech.

With regard to Supply time, I think that discussions are taking place through the usual channels. I think that my right hon. Friend the Chief Whip is probably prepared—he has not decided yet—not to ask the Conservative Party for the return of the two and a half Supply Days which it owed us from last Session.

It is the Government's intention, so far as possible, to give more time than has been normal in the past for debating some of the important measures set out in the Gracious Speech. This will make possible fuller parliamentary consideration of those measures. It may also help to diminish the probability of having a three-line Whip every night, which I judge would not be conducive to the better conduct of parliamentary proceedings.

The right hon. Gentleman the Leader of the Liberal Party last week seized an early opportunity to paraphrase the words of a former distinguished Liberal, Sir William Harcourt, when he said that "we are all minorities now." Sir William Harcourt's original statement 80 years ago was We are all Socialists now. I am not sure whether the proceedings of this Parliament will confirm what Sir William Harcourt said, but certainly the Leader of the Liberal Party was correct in the short term. Her Majesty's Government, as well as every other party here, are not unaware of the consequences in parliamentary terms. The Government intend to treat with suitable respect, but not with exaggerated respect, the results of any snap vote or any snap Division. We all recognise the successes of past Oppositions, and those manoeuvres late at night in Lord North Street—as I happened to uncover in a short monograph which I wrote after I went into Opposition. But I do not think that they should be taken too seriously—they never have been—and, in any case, from Lord North Street I shall be able to keep a close watch on any manoeuvres that may be going on.

In case of a Government defeat, either in such circumstances or in a more clear expression of opinion, the Government will consider their position and make a definitive statement after due consideration. But the Government will not be forced to go to the country except in a situation in which every hon. Member in the House was voting knowing the full consequences of his vote.

I hope that we can make speedy progress also on another proposal in the Gracious Speech, which may be of help to non-Government parties in the House.

Mr. Heath

I suspect that the statement which the Prime Minister has made is of considerable significance, particularly to him. But will he kindly explain how he proposes to ascertain that every hon. Member of the House who was voting was in full possession of his judgment?

The Prime Minister

I understand the right hon. Gentleman's somewhat frivolous mood about these matters. He did not always take very seriously a vote defeating his own Government in the House despite his supposedly adequate majority. What I am trying to say is that a snap Division or even, perhaps in some cases, a more substantial one—such as the right hon. Gentleman suffered on quite major matters—would not necessarily mean, and would not, indeed, immediately mean, any fundamental decision about the future of the Government or about a Dissolution. I am saying that if there were to be anything put to the House which could have those consequences, every hon. Member would have it explained to him in the House by the Government before he voted. We would do this, and I am assuming that every hon. Member, whether in the Conservative Party or in any other, would understand what would be said on that occasion.

Sir Harmar Nicholls (Peterborough)

On a point of order, Mr. Speaker. The right hon. Gentleman the Prime Minister has referred to a procedural matter in this House which affects all of us. It ought to be expanded rather than left, otherwise we could be under a nasty misapprehension as regards our duty.

Mr. Speaker

Order. That is not a point of order.

The Prime Minister

The hon. Gentleman——

Mr. Heath

I am sorry to interrupt the Prime Minister again, but this matter is obviously of great importance. Is he saying that no matter how major a question it is, if the Government themselves do not warn the House of Commons that they will resign afterwards, the Government will then refuse to resign? Is the right hon. Gentleman saying that no matter how major a matter we may consider it in the House, unless the Government gave a warning during the debate that it was a matter on which they would resign they would then not resign however the House voted?

The Prime Minister

The right hon. Gentleman has been a Member of the House for very many years. He knows the difference—[HON. MEMBERS: "Answer."] The right hon. Gentleman knows the difference between a snap Division—he knows the difference between a Division which was not a snap Division but a considered one, as he found a number of times—and a vote of confidence. It is a vote of confidence about which I am speaking. I hope that the right hon. Gentleman will understand that. It is perfectly simple.

Sir Harmar Nicholls

Will the right hon. Gentleman give way? [Interruption.]

Mr. Speaker

Order. If the right hon. Gentleman does not give way, the hon. Member should not keep rising.

The Prime Minister

In other words, we shall provide a recount to help the hon. Member for Peterborough (Sir H. Nicholls) feel at home.

I hope that we shall make speedy progress also on another proposal in the Gracious Speech which should be of help to non-Government parties; namely, the provision of financial assistance to Opposition parties to help them in fulfilling their parliamentary functions. My right hon. Friend the Leader of the House will be prepared to discuss this matter as soon as individual parties have considered it, or, if desired, there could be informal discussions through the usual channels. I hope that we may get these facilities into operation in the very near future. No Government have anything to gain, and certainly the country has nothing to gain, from Opposition parties lacking the necessary facilities, financial and otherwise, for doing their job in the House.

As for the debate on the Address, the official Opposition have indicated their views on the main issues they would like to see debated day by day, and we await the terms of the amendment they may wish to put down. I had hoped that in the choice of subjects for debate there would have been an opportunity for my right hon. Friend the Foreign and Commonwealth Secretary to deal with a subject which has been raised this afternoon by the Leader of the Opposition and which is very much in the minds of hon. Members; namely, Europe as well as other major issues of international affairs. Since the Opposition, well within their rights, have not nominated foreign affairs or Europe as a subject for debate I have suggested discussions through the usual channels—and I hope these have taken place—in the hope that foreign affairs and related matters can be debated at the earliest opportunity, preferably next week.

Pending my right hon. Friend's comprehensive statement, which I had hoped he would be able to make this week, I repeat that the Government's policy will be exactly as we put it to the country. We shall enter into fundamental re-negotiation of the terms of entry into the EEC. When the negotiations are completed, however they have gone and whatever the outcome, the question of Britain's relations with the Community will be put to the British people—[HON. MEMBERS: "How?"]—and their decision will be final. [HON. MEMBERS: "How?"] I answered that question a hundred times during the General Election, and if hon. Members wish I will send them a copy of what I said. [HON. MEMBERS: "How?"] Through the ballot box, as I have said. [HON. MEMBERS: "How?"] I said almost certainly a referendum—[HON. MEMBERS: "Oh !"]—and I could conceive of circumstances in which there would be a General Election.

The economic situation, industry and inflation will be debated—[Interruption.] Hon. Members are very nervous, but they had better listen now and get used to things. As a result of the choice made by the Opposition, the economic situation, industry and inflation will be debated, all of these issues being very much in the minds of all hon. Members. I hope my right hon. Friends the Secretaries of State for Employment and Prices and Consumer Protection will have the opportunity during these debates to outline the Government's position in these areas and answer some of the questions put by the Leader of the Opposition this afternoon.

On Northern Ireland, as the right hon. Gentleman generously said, we in Opposition gave the fullest support to the then Government in all the actions taken from the decision to introduce direct rule onwards. We gave full support to the Northern Ireland Constitution (Amendment) Act which was passed so overwhelmingly in this House with all-party support. The Government support the concept of power sharing, as we did in Opposition. We believe it to be the surest way forward for all the people of Northern Ireland. The Northern Ireland Executive will continue to enjoy the full backing of the United Kingdom Government. The security forces, to which the people of Northern Ireland owe so much—as, indeed, do we all—will continue to combat terrorism and violence wherever it may occur and in whatever form. The ordinary families of Northern Ireland have borne so much, and it is for their sake that the violence must be curbed. It is with their interest at heart that the Government will do everything in their power, we hope with the full support of the whole House, to encourage and support political stability.

I should like to describe the state of the nation as we found it on taking office last week and the steps we intend to propose. I should like to pick up one point by the Leader of the Opposition where he displayed less than his usual fairness in what he said. He will recall that in debate after debate in the concluding months of the old Parliament we repeatedly said that we could not blame the Government for world prices or oil prices. [Interruption.] If hon. Members do not accept that, they are free to refer to HANSARD. The right hon. Gentleman will remember that we repeatedly said it during the General Election. [Interruption.] Indeed, we said it in the famous broadcast.

The position we face today is that after four months under a state of national emergency Britain for 24 hours now is no longer operating under emergency powers. I am sure that this will be welcomed in all parts of the House. The mineworkers' dispute, which in the form of either the overtime ban or the strike, has dominated the industrial scene since the middle of November, was quickly resolved last week. The settlement was very close in financial terms to the Pay Board's recommendations.

As a consequence of the coal industry settlement the legislative provisions forcing the country on to a three-day week, with their corresponding requirements for process industries, have been rescinded, and since midnight last Friday the great fight back to full production has begun. The Leader of the Opposition, in commending the application of his policies, omitted to mention the three-day week. Nevertheless, he is up to date because it is ended.

The co-operation shown by management and the trade unions during the three-day week is the best guarantee we could have of an all-out effort from now on to restore production and make up the grave losses of the last three months. So good is the state of order books in industry that everyone will be going full out to honour them, particularly export orders.

Some export orders have been lost, but the anxiety expressed by industrialists, including the Engineering Industries Association, that we should be losing not only export orders but export markets happily seems not to be the case. But there will be great problems. There will be shortages of certain key materials, particularly certain types of steel, and components where production has been affected during recent weeks. Some of the materials, particularly certain commercial products and packaging, were acutely short before the miners' dispute began and that situation has inevitably been aggravated.

There is also a serious problem of liquidity. Many firms, large and small, have lived from hand to mouth during the three-day week period, though liquidations and bankruptcies have happily been far fewer than some commentators forecast. However, there will be a new liquidity and cash flow problem from now on as firms which have been living on a relatively low level of stocks have to increase their expenditure on materials and components. My right hon. Friend the Chancellor of the Exchequer and the Governor of the Bank of England are paying particular attention to the banking and other financial aspects of this liquidity danger.

The cost of the mineworkers' dispute now has to be faced. The National Coal Board has lost 20 million tons of output. The effect on its finances is that instead of breaking even this year, as the previous Government had hoped, it faces an overall deficit of £150 million. That is more than the whole miners' settlement including the original stage 3 offer. Loss of national production during the strike and the preceding overtime ban is estimated at about £2,000 million and loss of industrial earnings at about £600 million. The consequences in terms of the number of lay-offs and temporarily stopped unemployed signing on at the exchanges have been published month by month during this period.

The House will be debating the terms of the settlement in relation to the nation's battle against inflation and, no doubt, the relation, between the settlement and the Pay Board's report. The task now is to meet the cost of the dispute and the three-day week, and the task, above all, is to get production back to normal and, beyond that, to recover in increased production, as I believe we can, what we have lost.

On the general relevance of the coal settlement to the battle against inflation, my hon. Friend the Secretary of State for Employment, if he catches your eye during the debate on the Address, Mr. Speaker, will give the House all the facts on which hon. Members can judge and will give the House his assessment of the position.

Britain is now freed to devote her energies to the underlying economic problem which already existed last autumn. Even then the economic situation was marked by overheating in some areas, and the shortage of certain essential materials, to which I have referred. It was also marked by a decline in the rate of growth. In fact, before the problem of the coal dispute or the impact of oil, the increase in growth, which had continued for the two previous years, had fallen sharply and growth was nothing like the Government's target during last summer and autumn. I have figures here, but I shall not weary the House with them. In the course of the economic debates perhaps they can be more fully debated.

The two biggest problems which we faced, and still face, are the balance of payments situation and internal inflation at home—twin problems, each interacting on the other. Inflation intensified our balance of payments problem and still does. The balance of payments deficit, with its effect on the value of the pound, aggravated inflation and is still doing so, not least by adding to the increase in world prices a surcharge due to the devaluation of sterling following the float of June 1972.

Both problems—the balance of payments and inflation—have to be tackled —and tackled urgently. It is fair to say in the House that both problems, in varying degree, have eluded the capacity of successive Governments of different parties since the war. It is true that the Labour Government succeeded in converting a record balance of payments deficit in 1964 to the highest-ever surplus in 1970–71, but this was at a very heavy price. It is true that no Government have for long solved the balance of payments problem—still less the balance of payments problem and growth at the same time—without at least a measure of price inflation. Perhaps, therefore, all who have held the responsibility of government over these 30 years will be justified in approaching these problems with a certain degree of humility.

My right hon. Friend the Secretary of State for Employment—I know this will be the desire of the House—will speak at greater length about the Government's approach to the orderly growth of incomes and the control of inflation on the basis of the past discussions, when we were in opposition, with the Trades Union Congress, which we have referred to as a social contract. This will form the subject of one day's debate. The Government, like their predecessors, had clear assurances from the TUC about what would be its attitude following the miners' settlement. We know of no union affiliated to the TUC which has so far quoted the miners' settlement as a reason for a claim. Other unions outside the TUC may have done so, including, I expect, the militants of the Daily Telegraph journalists' chapel—but I do not think that they were covered in the original TUC assurance.

The philosophy underlying the Gracious Speech goes beyond merely what is necessary to get the country right. My right hon. Friends and I believe that the case for a fairer society, in which we believe, becomes not weaker but immeasurably stronger in the difficult economic and social situation which we now face. It might he possible for some to seek to justify an unequal society, above all a society of unequal burden and sacrifices, when the going is easy for the country. But it is when the going is hard, as it will undoubtedly be this year and next, that greater equality and a fairer distribu- tion of burdens and sacrifice becomes essential. But we accept this. The national cake, produced exclusively by those workers by hand and brain, including management and those contributing to essential services, must be divided fairly. We assert that no one, whether by privilege, inheritance or speculative ability, shall be able to take his cut out of the cake before the national distribution begins to those who produced the cake. It is a situation where—changing the metaphor borrowed from the Conservative election broadcast—the biggest burdens have got to be borne by the broadest backs. It is a situation where everyone, regardless of class or title or self-esteem, has to be working for Britain, and the only ones who have a special place are the old, the sick, the handicapped and the very young.

There must be priorities in our programme. We have decided that the priority which we assert in this situation shall be an increase in the pension to £10 for a single person and £16 for a married couple, the value of the pension then to rise proportionately with earnings.

The legislation foreshadowed in the Gracious Speech will give effect to this undertaking in full. It will also provide for increases in short-term benefits. The necessary legislation will be introduced as soon as possible, and full details of this will be given later by my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Social Services, in the context of the Budget.

The situation we face is one where prices have been increasing at record levels, even during the freeze and during stages 2 and 3, where they have been increasing from one stage to another, and where all the estimates available to us—they were also available to the outgoing Government—suggest a still faster rise in the cost of living of the ordinary family for the year. So the period from now, all our estimates suggest, will be still worse than under stages 1, 2 and 3.

It is the main aim of Government policy and of the new Department—that of my right hon. Friend the Secretary of State for Prices and Consumer Protection—to moderate that increase, until we can get it under real and tolerable bounds.

My right hon. Friends, in the debates, will explain the policies which they intend to follow. But if food and the cost of living generally are one of the main and crippling problems for the average family in this country so is another essential—housing. Before the Government had been in office for four days, my right hon. Friend the Secretary of State for the Environment announced a total rents freeze for the remainder of this year.

For owner-occupiers, now an absolute majority in this country, mortgage interest rates are crippling and intolerable. Young families, wanting their own house, are priced out of the market, both by the cost of housing—mainly due to land prices—and by mortgage interest rates. Others who took out a mortgage during the period of record house and land prices have been forced by record interest rates on their mortgages to sell their homes and search for rented accommodation, or go off to live with their families. The mortgage repayments on an average new house are now £94 per month as opposed to £36 in June 1970.

Because of our past debates and exchanges across the Floor of the House on these matters, right hon. and hon. Members know the complexity of this issue and its relation to wider factors, including interest rates, and the organisation of the City of London. particularly under "Competition and Credit Control", a document issued by the former Chancellor of the Exchequer in 1971.

There are no easy solutions, and it will take time to produce answers to the long-term problems. In the meantime, my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for the Environment will be looking urgently at ways of easing some of the immediate problems which we face in this field.

But over and above the financial problems we have the virtual total collapse of the housing programme. Fewer than 300,000 houses were completed last year. It is now nearly a quarter of a century since the Opposition won an election on a pledge to build 300,000 houses every year. Last year they sadly failed. The prospect for 1974, viewed near the end of the first quarter of the year, suggests an even worse record this year than last.

Apart from finance, owner-occupied and rented, there are two basic problems which have to be overcome. One is the structure of the building industry, including the divisive and destructive effects of the "lump" system, which the Labour Government set out to outlaw by legislation four years ago, but which was dropped following the change of Government. The other problem is the provision of adequate areas of land, at prices related not to their speculative value, not to the value conferred on them by the community granting planning permission, but at prices related to the existing use value. That is why the Gracious Speech emphasises our determination to bring the land required for development into public ownership.

My right hon. Friends will deal with the specific social proposals within the Gracious Speech—the health service, education, legislation about children and about discrimination against women, as well as the speedy removal of those museum charges which occupied too much of our parliamentary time in the last Parliament.

But I want to come to the necessary condition of social advance in this country, the maintenance and increase of industrial production, the modernisation of our industry, and the measures necessary to bring industry and financial decision within the responsibility of the elected Government and of this House.

The first essential here is to extract the poison which has been injected into the industrial situation in the area of industrial relations. We shall proceed speedily with proposals for repealing the Industrial Relations Act and for its replacement by constructive measures, embodying some of the proposals legislated by previous Governments, but also providing for a statutorily based system of conciliation and arbitration, operated by the two sides of industry, and by much more rapid action towards a real system of democracy in industry.

The Gracious Speech makes clear that we shall hold urgent consultations followed by legislation to encourage the development and re-equipment of industry, together with measures to stimulate regional development of employment, manpower, and health and safety of those at work.

We propose to introduce a new Industry Bill, which has been much discussed in recent months, building on the formidable armoury of industrial powers which we inherit from our predecessors. Under the Bill we are anxious to establish a system of planning agreements with major companies, on lines already successfully developed in a number of Continental countries which are members of the European Community. The Bill is intended to establish a National Enterprise Board to take over existing publicly-owned assets in industries which belong to the nation.

As to the future development of the board, whose duties we have spelt out, I give the assurance that any extension of public ownership within industry will be submitted to Parliament for decisions through the full parliamentary legislative process.

Leaders of all parties have emphasised that, whatever the gravity of the economic situation we are now facing, a great transformation can result in a few years' time when North Sea oil and gas—[Interruption]—1 was expecting that—and later Celtic Sea oil and gas accrue in full flow. The Gracious Speech sets out the Government's aims in this regard. My right hon. Friend the Secretary of State for Energy, in conjunction with my right hon. Friend the Secretary of State for Scotland, is working on a programme for consultation with all concerns and for approval by the House. It is too early to outline the precise details. In any case, we are firm believers in consultation before a final decision is reached in this matter.

The gas and oil reserves——

Mr. George Lawson (Motherwell and Wishaw) rose——

The Prime Minister

I should like to finish this part of my speech, and then I shall, of course, give way to my hon. Friend.

The gas and oil reserves are already publicly owned. They were nationalised by the right hon. Member for Kinross and West Perthshire (Sir A. Douglas-Home), and no one called him a revolutionary or a militant when he did it. He had the full support of the House.

As to the process of extracting the oil, successive Governments of both parties have been criticised, fairly, about the granting of licences. Hon. Members will have vividly in their minds the report of the Public Accounts Committee for the last Session. We envisage measures which will ensure a much greater public share in the benefits to be derived from this activity. Among other possibilities, we are considering the practice followed in Norway, on the basis of majority public participation.

We shall ensure that British industry, particularly in those areas where work is urgently needed, will have full opportunities to provide the materials and equipment required and will be encouraged to take the greatest advantage of those opportunities. We shall also consider whether the oil, once landed, should be purchased by a public authority, as is already the case for North Sea gas. There are lots of ways this can be done. What we want to do is to consult the views of the people in every area where the oil is landed. There could be a United Kingdom Hydrocarbon Corporation with exclusive buying power like the Gas Board. What attracts me—and there must be consultations about this area by area—would be the idea of a separate buying corporation for each area—one for Scotland, or even separate parts of Scotland; one for the North-East; one for East Anglia; and, when we get oil and gas from the Western Seas, one for Wales. The words I have just used are the words I used in the General Election. It was on those that we fought the election with regard to gas and oil.

It is a further matter for consultation whether the authority buying the oil when it is landed—[Interruption]—I understand the nervousness of hon. Members—should also be the body representing the public interest in the majority participation in the process of getting the oil. We should have to consider to what extent the responsibilities of the purchasing authority of all the oil landed should extend into distribution.

As we have repeatedly suggested, in distributing the oil and fixing selling prices there is a strong case for the authority to have considerable freedom in furthering essential public policies in the area concerned, or more widely. For example, if such an authority felt it desirable on economic and social grounds to provide low-cost or assisted passenger transport services—for example, in remote rural areas—it could adjust its petrol or diesel selling prices for that purpose.

When my right hon. Friends have completed their preparatory work on these questions, we look forward to the fullest possible consultation with those concerned before reporting to the House.

The Gracious Speech says: My Ministers will initiate discussions in Scotland and Wales on the Report of the Royal Commission on the Constitution, and will bring forward proposals for consideration. The House will have seen my announcement yesterday that I have appointed an adviser to the Government on constitutional questions, concentrating particularly on advice to the Ministers concerned in connection with the reference in the Gracious Speech to our intended discussions on the Kilbrandon Reports. In addition, he will advise me and other colleagues on the constitutional aspects of machinery of government questions—

Mrs. Winifred Ewing (Moray and Nairn) rose——

The Prime Minister

I shall give way in a moment, when I have finished this part of my speech. I shall give way to my hon. Friend the Member for Motherwell and Wishaw (Mr. Lawson) and then to the hon. Lady.

I was saying that the adviser would advise the Government also on other aspects of machinery of government questions which fall within the work of the Civil Service Department.

In view of the importance which right hon. and hon. Members in all parts of the House attach to the discussions foreshadowed in the Gracious Speech, I should like to make it clear that the services of the constitutional adviser will be available to the leaders of individual political parties represented in the House, should they so wish.

Mr. Lawson

I thank my right hon. Friend for giving way. Will he bear in mind when considering the question of North Sea oil that a large part of the oil has been found around the coast of Zetland, and that the people of Zetland by no means regard themselves as Scottish? Will he ensure that no action is taken that so enrages the feelings of the people of Zetland, who are much closer to London or Norway than Edinburgh, in terms of affinity, that they might be tempted into declaring a UDI and claiming all the oil as theirs?

The Prime Minister

Without entering too deeply into the troubled waters described by my hon. Friend, I am rather happy that the words I used on the matter during the election campaign involved consultation with each area where the oil might be got and where it might be landed.

Mrs. Ewing

May I ask the Prime Minister why it is—[Interruption]—I will just wait until I get peace and quiet—[Interruption.]

Mr. Speaker

Order. The hon. Lady may have to wait quite a long time before she gets total peace and quiet. Nevertheless, I do ask the House to behave.

Mrs. Ewing

May I ask the Prime Minister why—since his party, in all sincerity, almost from its inception until 1957, and again this year, has supported this—after all the Royal Commissions and discussions, should the Government have to initiate discussions? Could we not now have proposals instead of discussions?

The Prime Minister

We on this side believe in full consultation and discussions. We are not an authoritarian party. Of course we shall publish a White Paper and a Bill. We shall want consultations. When the hon. Lady has considered what I have said about the constitutional adviser I think she will find that to be a real help to all parties in the time before we begin to discuss the serious proposals of Kilbrandon.

The debate which has begun today will express the reaction of the House of Commons to a programme which we believe to be right and relevant. I believe that everyone who speaks in the debate will agree that the country is facing a serious situation. Indeed, that was said by all parties in the General Election. Everyone will agree that all our people are anxious and concerned about the problems which every family has to face, but, above all, about the problem which the nation is facing.

Every party represented here has over the past few weeks and months rightly stressed the serious economic problem facing us. We are all conscious, too, of deep social problems and of what I believe to be a strong desire for reconciliation within the country, for facing our common problems as one people. As a Government we accept the duty and the responsibility for dealing with the nation's problems in that spirit. In that spirit we shall do everything in our power to reconcile and unite all the people of Britain.

4.23 p.m.

Mr. Jeremy Thorpe (Devon, North)

May I join the "Grand Coalition" by congratulating the mover and seconder of the Address. The hon. Member for Birmingham, Northfield (Mr. Carter) comes from a city with a great political history and tradition, forcibly brought home to me when I spoke in the town hall there upon a certain occasion—not, alas, at the hon. Member's invitation, for it was before he was elected. I was told by the caretaker that I was the first Liberal leader to speak there since Mr. Lloyd George had been hurried out by the back door disguised as a policeman. That was done to save his life. Years later he went back to receive the freedom of Birmingham and noted that it was a city which could always be relied upon for the warmth of its welcome. I am sure that in any invitation which the hon. Member gives either to his own side or to the Opposition, warmth would he implicit in any reception accorded to visitors.

The hon. Member for Bedwellty (Mr. Kinnock) must forgive me for my North Wales accent. We listened to his Celtic imagery with great interest. I am delighted that the right hon. Member for Cardiff, West (Mr. George Thomas) has been elected as Chairman of Ways and Means. If this is not an inappropriate moment, I trust that I may express our good wishes and good luck to him. I shall be somewhat sad, on those occasions when I find the Labour Party worthy of my support in the Lobby, not to hear the name, "Thomas, George, Methodist, Cardiff." I hope that the tradition of Celtic ebullience will be carried on by the hon. Member for Bedwellty in his place.

The Prime Minister started with what might be regarded as housekeeping matters. The proposal dealing with the Opposition parties will be generally wel- comed by those who may be involved. It is in a well-known tradition of the right hon. Gentleman who, I think, was the first to raise the status of the Opposition Chief Whip, when he was first Prime Minister.

While we are mentioning this subject and others, I hope that I may raise a matter without embarrassing any individual involved. I believe that this relates to two Conservative holders of the office of Prime Minister and one Labour holder. One of the great advantages of our democracy is the ease with which it is possible to have an election and a change of Government with the process of government continuing. What is quite outrageous—and I do not intend embarrassing any individual, but this must be said—is the way in which we bundle Prime Ministers out of their residence rather as if the bailiff had arrived for non-payment of rent without even a county court hearing.

It has happened to at least three former Prime Ministers, all of whom are within sight of me and all of whom can therefore be equally embarrassed and know what I mean. This is not the way that a person who has held a position of great responsibility should be treated. It should not be beyond the realms of possibility for the Government to own a house which can be used for Government hospitality—for the entertainment of distinguished visiting guests who are not on a State visit—and for this residence to be used by an outgoing Prime Minister.

The Prime Minister

I am grateful to the right hon. Gentleman for what he said. I am only too conscious of this problem. He will be glad to know that I started inquiries and discussions on this subject this morning but have not yet reached the point where it is possible to talk to the leaders of the other parties.

Mr. Thorpe

I am grateful. I will say no more about that but move straight to the Gracious Speech. I would first congratulate the Government upon their omissions, which are significant and welcome. It was once said that the Tories caught the Whigs bathing and stole their clothes. No one can say that the Government have stolen anyone else's clothes. They have merely shed some of their unmentionables—[An HON. MEMBER: "Streakers."] We have not seen them in total nakedness yet but at least they are not so well clad as they might have wished.

If we turn to page 11 of the Labour Party manifesto, we can see now, having read the Gracious Speech, that shipbuilding, ship-repairing, marine engineering, ports, the manufacture of aeroplane and other engines and sections of the pharmaceutical, road haulage, construction and machine tool industries will all have to stagger on under the shackles of free enterprise without being given the elevating and dynamic experience of being taken into public ownership. What these industries have done to have that visited upon them we do not know but no doubt we shall be told.

The right hon. Gentleman said that when the public enterprise board was set up it would be brought before the House for the fullest debate and no doubt an ensuing vote. That is perhaps the reason why it is not in the Gracious Speech. Page 3 of the Labour Party manifesto said that North Sea and Celtic Sea oil and gas resources will be in full public ownership. I confess that the proposals the right hon. Gentleman put forward indicated to me a more recent reading of the Liberal manifesto than of the Labour manifesto. Certainly if he is proposing that private capital should continue to be used for the exploitation of North Sea oil and gas but that there should be some sort of State purchasing corporation, that would be something we would welcome. At the moment it is extremely ambiguous.

There are, then, some omissions from the Gracious Speech which are welcome, Mr. Deputy Speaker. We welcome you there, sitting on what I believe is known in Wales as the sêt fawr, which you grace with distinction.

Coming to industrial relations, we see on page 9 of the manifesto that it is the intention of a Labour Government to take steps to make the management of existing nationalised industries more responsible to the workers in industry and more responsive to their consumers' needs. This is something on which we would like to push the Labour Party a little further along the road. But there is no mention of this in the Gracious Speech. This could have been the first step towards a new industrial democracy far more uniting than is the Industrial Relations Act which the right hon. Gentleman is to repeal. We should have liked to see him move in that direction.

The Gracious Speech refers to the protection of the lower paid. Does that mean that the Labour Party has reversed the position it took at conference last year when it specifically voted down the proposition that there should be guaranteed minimum earnings? Not to introduce guaranteed minimum earnings is a retrogressive step. I hope that that passage in the Gracious Speech means that the Labour Party is moving to a more radical approach. Only by a system of guaranteed minimum earnings can one effectively guarantee the earnings of the lower paid.

According to page 12 of the Labour Party manifesto, prescription charges will be abolished. The Liberal and Labour Parties rightly opposed prescription charges, as they did the imposition of charges for school milk. Those charges are not mentioned in the Gracious Speech. I do not know whether that is because the Chancellor of the Exchequer finds the economic position such that it is not possible to abolish the charges or whether the subject comes under the general ambit of the reference in the Gracious Speech to the Government's progressively improving and extending the National Health Service. It is a disappointment. One expected more radical measures from the Government on prescription charges and school milk.

What is said on Europe is extraordinarily vague. No one is opposed to an improvement of the terms. Indeed, the criticism which some of my hon. Friends and I made of the previous Government was that they were not sufficiently acute in trying to improve the terms. The Leader of the Opposition will, I hope, forgive me for saying that sometimes we remarked that he was the best Gaullist we had. There are many supporters for the view that the terms should be improved. Mr. Helmut Schmidt said that he would like to see a radical reform of the common agricultural policy. If the Government can get better terms, this would be welcome. The noble Lord, Lord Balogh, is reported as having said, The political reasons are even more important than the economic ones and indicate that we should stay in. May we take it that the Labour Party continues to be in favour of membership in principle, subject only to the terms? That would be a great improvement on the position. The new Secretary of State for Employment, the right hon. Member for Ebbw Vale (Mr. Michael Foot), is one of the great converts to the European cause. When the present Prime Minister was previously in office and asked the House of Commons for the right to negotiate to see whether terms could be obtained, the right hon. Member for Ebbw Vale was not prepared to vote for that proposition, but as soon as a Tory Government was in power and he sat on the Opposition benches he was prepared to support the principle of going into the Common Market. That was a great conversion, rather like the blinding flash that appeared to St. Paul on the road to Damascus.

I want to be assured that the official Labour Government view is that which the hon. Member for Ebbw Vale so assiduously canvassed when he was on the Opposition benches. The right hon. Member for Stepney (Mr. Shore) has, of course, always been in favour of our going into Europe and has voted on every occasion for the principle of going in. I should like to know whether the Government mean to embark on a renegotiation of the details or of the basic terms. If the latter, there has been a fundamental change in their view and the Labour Party is no longer the party that agrees on the principle of going in.

Mr. Michael English (Nottingham, West)

The right hon. Gentleman said that no one was against an improvement in the terms. Is he then only against putting the result to the people of the country? Is it not a question for them whether in principle they agree to be in or out of the Common Market on whatever terms are negotiated?

Mr. Thorpe

I am grateful to the hon. Gentleman. I was about to come to that question and would now be in the middle of it were it not for his intervention. The Prime Minister said that this question would be decided almost certainly in the ballot box, but that does not answer the question. He will remember that in 1970 he was opposed to a referendum, as were all three party leaders, for a reason that, strangely enough, has been proved by the General Election.

My interpretation of the General Election is that the outgoing Government intended in effect to make it a referendum on who governs Britain—the Government of the day or the National Union of Mineworkers. Is it to be a phase 3 economy or a free-for-all? The outgoing Government hoped that it would be a single issue election, the nearest thing to a referendum that one can get in a General Election. At the end of the first week we all knew that the General Election was on all the issues—prices, cost of living, the incomes policy and so on.

My criticism of a referendum on a single issue is that it is not necessarily that issue upon which the people pass judgment. They pass judgment on a whole variety of issues and on the Government in particular. That is why I believe that if the Government negotiated different terms they would be entitled to put them to the country at a General Election but not in a referendum.

On this I am being totally consistent. In 1962 I remember congratulating Mr. Macmillan on having decided to apply to join the Common Market. Although I agreed with his decision, I suggested that as the Tory Party had fought the 1959 General Election resolutely opposed to going into the Common Market they had a duty to put the changed position to the electorate. A General Election on this matter is within the discretion of the Prime Minister. But I think that the magazine Punch got it right by prophesying that the Prime Minister would be the man who nearly got us in and nearly got us out. On prices and incomes, the Government are to try to get agreement on a voluntary basis. It took the outgoing administration two-and-a-half years to realise that that was not on, and that a statutory incomes and prices policy was necessary. I only hope that if the Government fail to get a voluntary agreement —and I think they will fail—they will not wait too long before deciding that it is necessary to revert to what they tried to introduce when they were last in power —a statutory prices and incomes policy. On that occasion they were defeated by a coalition of the right hon. Member for Ebbw Vale and the present Leader of the Opposition.

I accept the provisions about social security. One of the better schemes on which the previous Government started was the concept of the credit income tax system. I believe that that was right. My only criticism is that I should wish it to go much further. I should like to see it so used that we could abolish most of the 44 means-tested benefits that we still have.

Therefore, we shall inquire carefully to see whether the Government's proposals about social security still hinge upon means-tested benefits or whether, through the credit income tax system, or in some other way, a guaranteed minimum income will come into every household. If they can do that, they can build on a prices and incomes policy that will be just.

I welcome their statement on Rhodesia.

I confess that although I have a great respect for the noble Lord, Lord Crowther Hunt, his views in the minority report of the Kilbrandon Commission are not likely, since they were held with intellectual fervour, to give total confidence that he will approach this subject with a completely fresh mind. If there is to be a change of heart in the Labour Party, the new Secretary of State for Scotland will need an inverted stomach-pump to keep down everything he will have to swallow.

It is all very well to say there will be discussions and consultations, but the Royal Commission was set up five years ago in the hope at the time that the problem would go away. The exhibition at the Dispatch Box between the present Prime Minister and the present Leader of the Opposition was like that of two ballet dancers. When the Kilbrandon Report came out, they said, "We must not rush it, we must have plenty of time; nothing speedy must be done that we might regret." Surely the Prime Minister has views on the issue; surely the Government are prepared to put out a White Paper very shortly. We should like to know a little more about that.

I hope that the tripartite arrangements for Northern Ireland will continue and that those who might seek to disrupt the Sunningdale agreement will find themselves the most total minority in the House of Commons. The task which the right hon. Member for Penrith and The Border (Mr. Whitelaw) and his successor, the former Tory Chief Whip, and the present right hon. Gentleman have is to take Northern Ireland along the dangerous path of reconciliation. If collectively we can achieve that end, it will be the one achievement of this House of Commons that has eluded every previous administration.

I hope that the Prime Minister, who is knowledgeable and who has feeling about the position of minorities, will recognise that the great case for our present electoral system is that it produces firm government, that it gives decisive results, that it stops a multiplicity of parties, that, by and large, it gives rough justice all round and that everyone roughly comes out with what he ought to have. That is the classic conservative argument.

But we all know, of course, that there are gross injustices under the system. When one suffers from an injustice, that is no reason why one should not mention it. Unless one does so oneself, nobody else will do so. It is an extraordinary situation. The party to which I have the honour to belong has polled well over half the votes which back the whole of the Government side or the whole of the Opposition side and we have 14 Members of Parliament to show for it. The least we must have is a Speaker's Conference on the subject which will report swiftly.

Finally on the Budget, we shall see what is behind the shop window when the Budget is introduced. We shall want to know how the Government will raise the money for the proposals that they have in mind, many of which we support, some of which we think premature. We shall want to see what the cost of the land proposal will be. In my view, it is an extremely extravagant way of trying to produce a desirable objective and there are much better and more radical ways. We shall have to see whether it will create an egalitarian society, which we should welcome, whether it will encourage investment and growth, or whether it will detract from those objectives and whether the economy will be run with fairness.

As an opposition party, it is our duty to give responsible support to all those measures which are in the national interest, and that we shall assuredly do. The Government are bound over formally to be of good behaviour and we shall wait to see whether the old lag breaks out again and gets up to some of his past misdeeds. I hope that he will not.

It is good discipline on the Government to be in a minority. It has a most wonderful effect of concentrating the mind on the Front Benches on what is necessary to the nation, rather than what might be necessary to assuage some of the wild men on the back benches. It is a very healthy thing.

Therefore, it is in that spirit that I am delighted about the omissions from the Queen's Speech. I am sorry that there are not some of the radical proposals I have mentioned; they need not have worried about us, and we would have backed them. There are other measures that I should have liked to see included, but we may have an opportunity to come to them later.

4.44 p.m.

Mr. Kenneth Lomas (Huddersfield, West)

As the first back-bench Member to speak from this side of the House, may I offer my sincere congratulations to you, Mr. Deputy Speaker, on your high appointment. I am sure that you will carry on in the best traditions of that office.

I was very interested in the comments of the Leader of the Liberal Party. There was not much criticism of the fact, which should be understood, that the manifesto is a manifesto for a Parliament, not necessarily for the next six months or the next 12 or 18 months. I would agree with much of what he said about a referendum on the Common Market, but I hope that if we do have a referendum, which is the policy of my party, we shall have a high vote in it. It would be quite meaningless if there were a 50 per cent. vote. I should hope that if it came to that a similar number of people would vote as voted in the General Election.

There are things not in the Queen's Speech that I should have liked to see included. I certainly would have been in favour of a statement that we would abolish prescription charges. But we had to draw up a list of priorities. We had to decide what could be done in the circumstances, and I think we have produced a Queen's Speech that will be acceptable to the country, to the people and to this House. If the Liberal Party wants to go ahead with its idea of profit sharing, of partnership, there is nothing stopping any Liberal employer in the country from putting that into effect now.

Why have we had a Queen's Speech? The reason is that we have had a General Election that was totally unnecessary. The Prime Minister as he then was, now the Leader of the Opposition, decided that he wanted a strong and firm mandate. He already had one—a majority of 17 over all other parties. He then flung it away in an election that he brought upon himself, and he sowed the seeds of his own defeat.

It may be that the Leader of the Opposition was sorry that he called the election at that time. I certainly was, because I was in the Huddersfield Royal Infirmary at the time and I was lying on my back at the moment that the announcement was made that there was to be a General Election. There is a moral in that, because I trebled my majority and my agent says, "Keep the candidate out of the way and you will be the better for it".

What I should like to say with regard to that short stay in hospital is this. We heard much on the radio and on television about the miners' special case. If there is a special case, it is those who work in the hospital service. The dedicated and devoted work of the doctors, nurses and orderlies in the Huddersfield Royal Infirmary in general and in my ward, Ward 1, in particular, convinced me that people doing that kind of work in the public service deserve everything that this House can give them. My operation was for ulcers—I might add, probably brought on by 3½ years of Tory government! Perhaps if we get a long run of Labour government I shall be restored to the best of health. That is why I welcome in the Queen's Speech the decision to "improve and expand" the health service.

In the election the issue that was put by the Leader of the Opposition was, "Who runs the country?". That never was the question. The question was how the country should be run—whether it should be run in the interests of the speculators, the profiteers, and entrepreneurs, or in the interests of ordinary men and women. I believe that the present Government have got their priorities right and intend to run it in the interests of ordinary people.

Certain members of the Liberal Party make me a little sick and tired. In my constituency I defeated a Liberal in 1964. He is now in the House of Lords. He was a kept man by a pact which the Liberals had with the Conservative Party for 13 years. That should be remembered. We in the Huddersfield area do not forget the fact that the Tories backed the Liberals and the Liberals backed the Tories for a very long time. The Liberal utterings that we hear remind me of the quotation from Macbeth: they are: … full of sound and fury, signifying nothing. I think we should bear that in mind.

We are entitled to ask, "Who are the Liberals? Who do they represent?" Of the 6 million Liberal votes, at least one-third were anti-Labour and one-third anti-Tory. Probably one-third of the Liberal vote was the truly radical vote as I know it. But the Liberals do not add up to being a cohesive party. We should recognise that almost 80 per cent. of the people of this country rejected the Liberal Party. So it is no use their saying that they have the support of this, that and the other. That is not the case.

There are many among the radical Liberals who have their rightful place inside the Labour Party. On the other hand, there are some Liberals whose rightful place is within the Conservative Party. They are the bucket, or the bowl, that catches the disgruntled, the fed-up, the discontented people from the Labour Party and the Conservative Party. I feel sorry for the genuine Liberals who are squeezed out in the middle—[Interruption.] I could not beat the hon. Member for Rochdale (Mr. Smith) at that; he is far better than I at that game.

One of the tragic losses to this House —and I am sure that the hon. Member for Colne Valley (Mr. Richard Wainwright) will not mind my saying this—was David Clark, who represented Colne Valley so ably and well. He was a first-class Member, and he might well have been included in the Government team. He was defeated not so much by Liberal votes but by anti-Labour votes. Colne Valley will be a safe seat for the Labour Party at the next election.

We are putting our priorities in order. I welcome the decision to introduce unit pricing, better labelling and packaging. I applaud the standstill in council house rents. I welcome most emphatically and overwhelmingly the desire to implement a crash housing programme. In the borough of Huddersfield not one council house was built in 1973 by the Tory-controlled local authority. It is a borough in which the number of houses without inside toilets and baths is very I hope that the crash programme will get going as soon as possible.

Equally, we must do something for the owner-occupier. It is important to recognise that people who want to buy their own homes are entitled to some kind of Government assistance wherever possible. I hope it will be given. Therefore, I endorse entirely the statement in the Gracious Speech that land required for development will be brought into public possession or ownership—nationalisation, if one likes. This is the only way to stop the speculation and profiteering in the price of land. This is one way in which we can bring about a reduction in the price of houses and help those in need.

Therefore, I take the view that the Queen's Speech is realistic and relevant to the times and that it can capture the support of all sections of the community. It in no way dilutes the philosophy and programme of the Labour Party. I believe that this Queen's Speech is one of many that will come from the present Government. There is no reason why we should not last 15 months, 18 months or more. There is no reason why, when we decide to have a General Election, the country will not say that we have picked up the pieces once again, as we did in 1964, we have got the economy right again, as we did in 1970, and send us back with an even bigger majority to carry out the work we want to do.

4.53 p.m.

Mr. David Mitchell (Basingstoke)

As the first Member to speak from these benches since you assumed the Chair, Mr. Deputy Speaker, may I congratulate you and say how nice it is to see you there, and how much my hon. Friends and I look forward to having you preside over our debates on many occasions.

It is my intention to judge the Queen's Speech solely against the criteria of the national interest, and not on whether it contains popular proposals. The Queen's Speech may appear attractive and offer many "goodies". The real question is whether it will do good to the national interest over the medium and long term, or whether it will make the national situation more difficult.

First, I welcome the proposed legislalation for protecting the health and safety of people at work, the intention to reform the law relating to the adoption, guardianship and fostering of children, and the review to be made of the particular needs of handicapped children. All of us will welcome the Government's decision to find room in their legislative programme for these important matters.

I want now to look, in terms of the national interest, at three major questions: prices, the regulation of wages in the nationalised industries—which, for reasons I shall explain, are different from other industries—and the way in which the Government's proposals will help or hinder our balance of payments.

First, prices. Only four factors enter into a price change. One is the cost of a commodity when it is brought from abroad. One notes here how quick has been the change in the record which the Labour Party has been playing on the causes of price increases. Throughout the election campaign, I was continually bombarded, as were other Conservative spokesmen, with the idea that they were all the fault of the wicked Tory Government. But no sooner do a Labour Government come into office than we have the Secretary of State for Prices and Consumer Protection in her first speech coming back to reality and saying that price increases are caused by world prices over which no Government have any control. I thought to myself, "Good gracious, she is almost quoting from the very speeches I and my colleagues have been making". First, then, there is the effect of commodity prices.

The second item is profit. Profit is inevitably an element which enters into prices. One has to consider whether the profit of British industry generally is too high. The latest information I have is that, taking into account the post-tax yield on investment in British industry, the return is a miserable 6.8 per cent. One can get more with National Savings certificates, or lending money to a local authority with no risk at all. While in the case of some profits, such as those of the banks, there is certainly a different situation, in British industry as a whole the yield is inadequate in relation to the need for modernisation and investment in the future.

The third item is tax, and we shall have to await the Budget to see how big an impact tax will have on prices in the future.

Fourth, there is wage inflation, by which I do not mean increasing wages moderately or in line with increases in production. I mean increasing wages in very large amounts, which simply puts up the cost of each item produced.

Those are the four items which enter into a price change. Comparing the period of 1969–70 with 1973, one finds an interesting difference in the cause of price increases. Whereas, in the 1969–70 period, over two-thirds of all price increases were caused by wage inflation, during the past 12 months, as the right hon. Lady the new Minister responsible for consumer affairs has recognised, the overwhelming cause—over 70 per cent.—of price increases has been world price movements.

The question we have to ask ourselves in examining the Gracious Speech is whether the proposals outlined in it are likely to pile on top of imported inflation —that is, inflation which comes from world prices and cannot be avoided—the avoidable, home-brewed inflation which comes from wage increases unrelated to productivity. One's unfortunate reaction on examining the Queen's Speech is that, in future, the criteria for wage increases will be threefold: that the union concerned is big, bold, and bloody-minded. If it is big enough, bold enough and bloody-minded enough, it will secure large increases for its members, which will have a consequent effect upon the prices of the goods which its members are producing.

That is the first question, the effect on prices, and I am bound to say that I am profoundly uneasy.

Second, there is the question of wages in the nationalised industries. Perhaps it has not been sufficiently recognised that the nationalised industries are different from other industries. In every trade union negotiator in relation to other industries there is a built-in restraint. He has the knowledge that if he pushes his demand too high he will damage the firm and he will damage the security of employment of his members. Those two factors act to impose a degree of limitation and self-restraint.

A nationalised industry is different. It cannot really be made bankrupt. Several have been bankrupt two or three times over already. The question that we must ask ourselves is: how do we find a way in which we can in future regulate and control wages in the nationalised industries, recognising that they are different and that the unions in these industries do not have imposed on them the self-restraint which applies in private industry?

We ought to be moving much more towards recognition of the situation in the Civil Service, where, by pay research units making comparisons with private industry, the equivalent job is slotted in for the equivalent rate of pay. Something along those lines is needed, and whichever Government are in office must take a fresh look at the way in which nationalised industry wages are settled.

Third, I turn to the balance of payments, possibly the most crucial of all the problems which we have to put right. Because of world prices, because of the way in which we shall have to borrow substantially from abroad, it is essential that this country be seen to be attempting to live within its means and certainly not embarking on a spending spree at this time.

There is only so much national cake. If demand is increased by increasing pensions, by subsidising food and by cutting rents, we shall simply increase imports. With the same size of cake, if people are given more money they will spend that money on items which we cannot produce in this country—effectively, we are at peak capacity—and we shall simply suck in additional imports.

We must study the Government's proposals for food subsidies—subsidising those who eat the most—in relation to house rents and the effect those rents will have on the rates, of which I dread to think, and the proposal to increase pensions.

We all like the idea of increasing pensions. There is not one hon. Member who does not view the thought of increased pensions as attractive. When in office, the Conservatives recognised and accepted a duty to ensure that the old-age pensioners, and the weakest in the community, were protected from rising prices, possibly by changing from two-year increases in pensions to one-year increases and then by moving on to six-months increases. By whatever method, that was our suggestion. We were committed and, as a party, we are still committed and in duty bound to see that it is done.

But the new Government are proposing to make considerable additional increases this summer at a time when it is known by old-age pensioners and everyone else that the economy will be under considerable strain. What will be the effect?

First, the cost will be between 68p and 70p per week per employee. The Government may choose to put part of that on the employer's contribution, but that is then part of the cost of production and will show up in higher prices, which helps no one. On the other hand, they may choose to take it from the employee by increasing the employee's insurance contribution. But then they will have to reckon with their friends in the trade union movement and the fact that they have now abandoned control over wages. Increased contributions will inevitably spark off a substantial increase in wage demands.

The effect of both factors together will be to add to prices in the shops. That will not be in the national interest. In any case, one-third of the old-age pensioners we should help are paying tax, so they are not on the poverty line; one-third will benefit from the increase because they do not pay tax and are not on social security benefit; and approximately one-third are receiving social security benefit anyway. We could have helped them more generously and to much greater effect by increasing social security benefit on its own than by having a wide spread of benefit for everyone.

But, whatever be the impact on demand and on imports into this country which is brought about by these proposals of which I have spoken, it pales into insignificance beside the consequence of the Government's approach to settling wages in our major industries. The abandonment of any control, already signalled by the settlement of the miners' dispute, must mean that there are to be substantial increases in wages decided on the basis of who is the strongest on the basis of the law of the jungle, and on the basis of who can do the most damage to the national economy. I believe that, in the present context of the level of demand in this country, to impose that in addition will cause the Chancellor of the Exchequer to introduce a Budget which will be most uncomfortable to live with.

When hon. Members opposite sat on these benches, they consistently supported every inflationary wage demand from any trade union in the country. Having sowed the dragon's teeth, they seem likely now to be about to reap the consequences, disastrous consequences, and I believe that we must examine their proposals carefully in the coming weeks, however long this Government may live.

5.7 p.m.

Sir Arthur Irvine (Liverpool, Edge Hill)

I wish first, Mr. Deputy Speaker, to express the satisfaction that it gives me to see you where you are and to wish you well. You have the warm good wishes of many old friends and associates on both sides of the House at this time.

I have listened carefully, as has the House, to the reflective observations, if I may so describe them, of the hon. Member for Basingstoke (Mr. David Mitchell), who has just addressed us, and I hope that he will forgive me if I do not deal immediately with the points that he raised. I have it in mind to refer to rather broader aspects of the situation that now confronts us. The electors have now declared themselves at a General Election, and it is for us, among our other tasks, to endeavour to interpret their decision aright. Hectored by the media and pushed around by the Press, the people have spoken, and this House resumes its role, because it is an elected body, as the spokesman of the people.

I welcome the reference in the Gracious Speech to a fundamental renegotiation of the terms of entry to the European Community". The word "fundamental" suggests—and I hope means—something that goes beyond the economic aspect of the Community solely. The widespread dissatisfaction felt about the Community is certainly not directed mainly, I think, to its economics. The contemporary pundits of economics have not the clarity to make their themes the basis of any manifestation of the popular will. The dissatisfaction and concern felt in this country about the European Community is founded more on a dislike of something which, relatively and absolutely, is reducing the power of this beloved House of Commons. A sense of the beginning of erosion of that power was unmistakably felt in the course of the last Parliament.

I confess that I have been a trimmer on the European issue. I confess that without qualification or hesitation, because it is true beyond question. I have taxed the patience of hon. and right hon. Friends, such as my right hon. Friend the Home Secretary, who feel a warmth towards the concept of the Community which I find myself increasingly less easy to bring to bear. I wish to pay tribute to the magnanimity which he and other colleagues who share his view have shown towards members of our party who share my opinion. I think that their attitude has contributed importantly to the maintenance of our party unity.

I confess that with the hectic decline of our world position which the Macmillan years revealed, I was led to think and hope that in a united Europe we might recover influence and strength. Recovery of influence and strength for our parliamentary institutions and what they stand for is my aim at this time in public affairs. If in past times I have sometimes had hopes of the European Community, I never contemplated the scale of bulldozer indiscrimination which marked the passage of the Bill, without a Report stage, and I cannot forgive it. The element of consent of the British people simply was not present.

The point of criticism which I make was grasped very clearly by my right hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) and others, and I sincerely hope that they will not allow their new departmental concerns to distract them in future from this basic issue. That the results of the negotiation should be put to the British people is absolutely right. It is a decision of a scale and moment which requires their explicit consent before action is taken.

If the people were acutely aware—as I believe they were—of the erosion of the power of Parliament, they would also soon be quick to see the danger, in the European system, to the authority of our courts and system of law. The thought of the judgment of British judges being turned away from consideration of the common law or the interpretation of statutes of this Parliament to wider issues of constitutionality in the context of a European system of law is not acceptable. When it is recognised what is involved in this respect that, too, will increasingly be felt by the people of Britain.

I welcome the reference in the Gracious Speech to the proposed repeal of the Industrial Relations Act. A good relationship between the courts and the people is a fundamental need of a free society. It is especially desirable if the power of the State is extended, as we on this side of the House believe that it should be for desirable social ends, that the position of the courts should be sustained. A close and understanding, friendly and respectful relationship between the people and the courts, between this House and the judiciary is of immense importance to our common weal.

But the good relationship I am speaking of needs at all times the most careful tending. In earlier days, in opposition to the Restrictive Trade Practices Act, I was concerned that matters not properly justiciable were being referred to the judges, such as questions of economic policy and of the determination of where economic interest lay. My fears proved unfounded in the case of that Act, because as things turned out the court performed its functions without arousing controversy and the risk one had feared did not materialise. Similar fears that I entertained, however, about inherently non-justiciable matters being referred to the Industrial Relations Court, have proved all too well-founded. The history of that matter has been harmful to the good relations between this House and the justiciary, and I welcome what is now proposed.

I want to say a word about the Liberal presence here and the undoubted magnitude of their popular vote. In Liverpool, which has been my political home and base for over 26 years, it was thought that there might be something of a Liberal revival. Every ward in my own division is now represented by a Liberal in the local government authorities, but it all came to nothing at a General Election. The House will not be surprised to hear that I regarded that as the clearest indication of the people's good sense. In a situation where the main party of the Left overlaps the main party of the Right, it has always seemed to me that there was no room in reason for a central party. I hope that so simple a process of ratiocination will not be regarded in any quarter of the House as an oversimplification. It has always seemed to me an unmistakable feature of our party system that it was better suited to two parties than to more. Through the years that I have spent in the Parliamentary Labour Party it is a fact, in my reflection upon it, that I have had colleagues in the Labour Party who were to the right of Left-wing Conservatives in the House. In a state of affairs where that is possible one does not see, in our political system, room for an effective centre party.

The state of affairs which I describe is of course wholly consistent with a situation in which large numbers of people feel that the treatment of some matters by the two main parties, such as prices and incomes policy and inflation, has so far been shown to be deficient. There is no inconsistency there. But the basic fact remains that where this element of overlap exists, as it does in our Parliament, there is no room for a central party. The Liberals in the new situation will do wonderfully well if they can go on for any length of time without splitting down the centre.

The point that control of the commanding heights of the economy is a prerequisite in our time of true liberty for the individual was seized by the Labour Party many years ago and was a foundation of its thinking and philosophy, and explains and justifies the growth of the party and its presence today on the Government benches.

5.22 p.m.

Mr. Michael McNair-Wilson (Newbury)

First, Mr. Deputy Speaker, may I congratulate you on your elevation to your new task in the House of Commons? I should like to say how delighted I am to see you there.

When I left the House before the General Election, I was clothed with the electoral mandate of the people of a constituency in London. I return clothed with the mandate of the people of Newbury, in South Berkshire. The constituency that I now represent is in a beautiful part of England. It has within it two towns, Newbury and Hungerford, steeped in the history of our land. I am therefore conscious of the honour which has been done to me by those people who have returned me to Parliament this time. Indeed, when I looked at one of the phrases in the Gracious Speech, that which referred to better methods of meeting the needs of the disabled I felt that my predecessor, Mr. John Astor, who had spent so much time in the House arguing for just those people, should be remembered by us all, as I know he will be remembered in Newbury for 10 conscientious years of service to the constituents of that area.

I have reservations about the Queen's Speech, perhaps because so many of the statements in it are less than clear about their objectives. It is not my intention to elaborate on the concept of renegotiating our entry into Europe, but I wonder whether the word "renegotiate" implies that the signature on the Treaty of Rome has been expunged as from this moment and that we start all over again, or that we leave our signature on the treaty but somehow try to renegotiate within that treaty. If the latter is the case, I suspect that it will be more difficult to do than anyone has yet cared to admit. No one has refuted the words of Herr Walter Scheel when he said it was not possible to renegotiate, as indeed did one of the most distinguished of the Dutch statesmen.

Be that as it may, let none of us imagine that if we renegotiate and our renegotiation is not accepted by the people of this country, Britain will revert to the position in Europe which she occupied before the Europe of the Nine existed. That will not be the case. We may choose to put the clock back, though I suspect we shall not, but the rest of Europe will not fall into line with our wishes. If we choose to put our heads in the sand, to that extent we have a surprise awaiting us.

I should also add that Southern Ireland was not allowed to join the Common Market unless Britan, too, could obtain membership. Therefore, I wonder what discussions have taken place with the Government of Eire to decide where their future lies in the event of our choosing to leave Europe and to go it alone.

I welcome the suggestion of an increase for old-age pensioners. However, I wonder why there is no reference to the six-monthly review which was in the Conservative manifesto. If it is an oversight, let us hope that it will be put right when legislation is brought forward. If not, I would ask the Government to consider carefully whether this type of rise, given at who knows what intervals, is adequate to meet the need of pensioners to keep in advance of the cost of living. I thought that our annual review and our projected six-monthly review were absolutely right because they met that requirement.

I join the leader of the Opposition in his concern about the lack of detail in references to prices and incomes. It is easy enough to say that, if prices can be controlled, there will not be the desire for wage claims, but I doubt whether it is as simple as that. We all recognise that we cannot insulate ourselves against world prices—neither the present Government nor the last Government can or could do that. But if world prices continue to rise and feed themselves into our economic system, people will find the cost of living rising as well.

As we know, price rises inevitably bring wage claims, which in turn produce wage push. Wage push increases costs, which in turn increase prices. If we are to try to hold prices against wage push, something somewhere will get badly out of step. We can shrink profit margins to a degree, but after a certain point, we no longer have the money for new investment or the profit necessary for companies to operate effectively and make the best use of their facilities.

By the same token, last November, my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) reduced public spending for this year by about £1,200 million. Some of the suggestions in the Queen's Speech imply that that sort of spending will once more find its place in our economy. If it comes out of taxation, presumably it will not be inflationary, but if it does not, then it will. So inflation, far from being curbed, as the Queen's Speech would suggest, will once more spiral upwards.

It is also easy enough to talk about distributing wealth through taxation, but no one has yet been able to prove that taxation, certainly not direct taxation, is an incentive to higher earnings—in fact, exactly the contrary.

One of my regrets is that, in this Gracious Speech, as in so many others, no reference is made to encouraging personal saving. Perhaps that is hardly surprising, when inflation eats into the value of money so quickly. But if there were more domestic purchasing out of savings rather than credit, we should have done something at least to reduce inflation, which in turn would perhaps encourage further savings.

Indeed, all of us who seek social justice should spare a thought to those worthy souls in our community who prefer the concepts of Mr. Samuel Smiles' self-help to that of State help. I like those people who are their own men and who "stand on their own feet". Indeed I am in no way ashamed of that statement, which came from my party in 1970. In any enterprising nation, rather more of that type of approach is needed.

What upsets me is that those who believe in self-help rather than those who are willing to take State help when they hardly need it are so often the same independent people whose income from their not-very-great savings is being taxed to provide that same State help.

The Prime Minister mentioned mortgages. One of the most recurring themes that I met on the doorsteps of my constituency was the high mortgage rates which young married couples are having td pay while the husband's wage is often all but frozen. All of us in the House might reflect that we forgot the dilemma of those people. I believe in a property-owning democracy—never more so than when inflation is on the rampage. Therefore, we must put a lot of flesh on the phrase in the Gracious Speech that urgent measures will be taken "for encouraging home ownership".

All Governments look on the building societies as the agency with which they encourage home ownership. If that is the case, it seems to follow that the building societies should be taken into some form of partnership with the Government. My right hon. Friend the Member for Altrincham and Sale showed that the Government can do something to hold down interest rates when he deliberately used Government intervention to keep the rate blow 10 per cent. I believe there is a lot to be said for a Government equalisation fund which would provide the building societies with adequate money to enable them to hold their interest rates at an acceptable figure—say, for sake of argument, 8 per cent. In the event of the market rate falling below 8 per cent., the building societies could then pay back that subsidy.

Of course, some will say that the building societies would never let the rate fall below 8 per cent. so that they never had to return that money; that is when the ingenuity of this House should come into play. But there is something to be said for that kind of return subsidy, and it should be considered with great care.

There is also something to be said for the concept of tax-exempt bonds being issued by building societies which would be very attractive to those paying higher rates of tax. They would provide a means for those people to get a better return than would otherwise be open to them and, as Mr. Patrick Sergeant said in the Daily Mail on 1st March, they are the people with money to invest and we want that money working in the service of those with the greatest need. Then there is the possibility of getting the banks to play a part in the building societies or of having insurance-linked loans. All these ideas deserve consideration and at this moment, nothing can be overlooked.

I remember many years ago writing to the Daily Herald to ask why the trade unions had never set up a building society or why they invested so little of their funds in building societies. We did not have much of a correspondence, because no union answered my letter; perhaps they never saw it. In 1969, the unions were said to hold shares on the Stock Exchange valued at £750 million. It is extraordinary that those unions should play the market against the capitalist investor they claim to despise without putting such vast sums to work for people in their own organisations who badly need to buy houses.

I am delighted that the Government intend to carry on with the legislation on factory health which, because of the election, the Conservative Government could not carry out. In particular, I hope that they will give special consideration to the amount of noise-induced deafness in industry. This is a subject in which I have taken some interest. I believe that better compensation than has so far been suggested should be paid to those who have lost their hearing or had it damaged.

By the same token, there is a considerable need to encourage those who make machine tools and all forms of equipment for industry to include quietness as a parameter in their design, for there and there alone lies the true solution to getting rid of the appalling noise one hears on the shop floor and, in particular, in such places as drop forges.

Because of my interest in aviation, I was naturally interested to hear that there was to be a reappraisal of certain major redevelopment projects under the heading of the environment. No doubt Maplin as the third London airport is just such a project. On the other hand, I am glad that the Government have not committed themselves to ceasing work at Maplin until such time as the new report from the Civil Aviation Authority, the British Airports Authority and the Department of the Environment has been published and until we have had a chance to study it in the House.

It may well be that with the new cost of fuel, the introduction of wide-bodied aircraft and so on, the case for a third London airport no longer holds good. But until we have seen the new figures for the likely expansion in air traffic we should be very unwise to cancel that project, bearing in mind that to do so, and for those figures to remain the same as they were at the time of Roskill, would mean that Luton, Stansted and Southend would all have to be extended, that we should have to expand London Airport and Gatwick and would have to have a new access road from Heathrow into the West of London at the most enormous cost. I repeat, I am glad that the Government have not committed themselves definitely one way or the other.

Lastly, I must regret that one piece of legislation which so nearly found its way on to the statute book in the last Session is not referred to in the Gracious Speech —namely the Cinematograph and Indecent Displays Bill. It was not a particularly important piece of legislation but it would have done a lot to curb much in pictorial form which is an affront to public decency and which spoils the centres of so many of our great cities and towns. I hope that the Government have something like it up their sleeve. Perhaps the last words of the Gracious Speech, Other measures will be laid before you indicate that such a Bill is even now being drafted. It is my hope that it is.

5.37 p.m.

Mr. Harry Gourlay (Kirkcaldy)

As a former Deputy Speaker and Deputy Chairman, I offer my sincere congratulations to you, Mr. Deputy Speaker, on being elected to that office. I do that with the greatest pleasure.

It has been said that this House is a House of minority parties, but I can well remember that during my term of office we had the legislation dealing with the reform of the House of Lords, when we had minority groups in both major parties in the House. I hope that the difficulties which we experienced then do not devolve upon you, Mr. Deputy Speaker, while you occupy the Chair.

The hon. Member for Newbury (Mr. McNair-Wilson) complained about the lack of detail in the Gracious Speech. Perhaps the language of the Gracious Speech will prove to be much more meaningful than that of some of the Gracious Speeches which the Conservative Government presented to the House in the past 3½ years. Many of them contained promises which proved to be broken long before the Session had been completed.

I welcome the proposals in the Gracious Speech before the House today. I welcome the firm, decisive action which the present Government have taken during their seven days in office. Already three promises in our manifesto have been kept—the settlement of the miners' dispute, getting Britain back to work on a five-day week basis, and the freezing of rent increases. All that is in stark contrast to the broken promises and to the dither and drift of the rudderless Conservative Government before the General Election.

The Gracious Speech mentions many other promises which the Labour Party made during the election, such as the promises to deal with the raising of pensions, to repeal the Industrial Relations Act and the Housing Finance Acts, as well as promises on fair prices for food and on subsidies.

During the General Election we were the only responsible party which undertook to renegotiate the terms of entry to the European Economic Community. It is extremely satisfactory, therefore, to read the reference in the Gracious Speech to that election promise: My Government will seek a fundamental renegotiation of the terms of entry to the European Economic Community. After these negotiations have been completed, the results will be put to the British people. I should have thought that the hon. Member for Newbury would understand the plain English which is so clearly used in the Gracious Speech on that issue. It does not say that we shall come out of Europe after the signature is taken off the Treaty. It says that we shall renegotiate the terms as they are at present and then, having renegotiated the terms, the British people will be given the opportunity, for the first time, to decide whether we should remain within the Common Market or should stay outside it.

Mr. McNair-Wilson

Would not the hon. Gentleman consider it rather strange to sign a contract and then to try to renegotiate its terms? Surely he is trying to have it both ways, and one cannot do that. Therefore, we have either signed the Treaty of Rome, with all that that implies, or we have not signed it. To suggest a renegotiation of the Treaty of Rome is to imply that somehow the treaty is a flexible document.

Mr. Gourlay

The hon. Gentleman must remember that we gave due notice, when the matter was debated in the House, of what would happen if the then Gov- ernment decided to go against the will of the British people, so there is no come-back on that.

Mr. Ian MacArthur (Perth and East Perthshire)

Is the undertaking more clear or less clear than a previous undertaking to renegotiate the Nassau agreement?

Mr. Gourlay

With the renegotiation of the terms of entry to the EEC, it is, certainly. The Nassau agreement does not come into it. The language of the Gracious Speech on this matter is abundantly clear. It is a promise which will be kept, unlike the promise of the Conservative Party, which said that it would not take us into the Common Market without the wholehearted support of the British people.

I come now to the section of the Gracious Speech dealing with housing. It is hardly necessary to quote from the speech because the words are so clear that they need not be spelled out. However, for the record, the Gracious Speech states: My Government … will bring forward comprehensive proposals, which will require the repeal of the Housing Finance Acts, to reform the law relating to rents and housing subsidies in England, Wales and Scotland. Urgent measures will be taken to reverse the fall in house-building. I hope that an early start will be made to arrest the decline in local authority house-building, particularly in Scotland, where the previous Government failed most lamentably in encouraging and providing the means whereby local authorities could build houses and let them at rents which ordinary tenants could afford.

Another aspect on which I want to focus attention is that of improvement grants. Under the present legislation the 75 per cent. grant will terminate on 23rd June this year. Therefore, those authorities—there are many—which will not have their improvement schemes completed before that date will not qualify for the 75 per cent. grant. The tenth report of the Expenditure Committee made several recommendations on this issue. Recommendation 13 stated: Local authorities should have discretion to extend the deadline for the current preferential grant for bona fide cases where the grant has been applied for in plenty of time and the builder has started work, but where the builder fails to complete the work before the deadline. The previous Government refused to accept that unanimous recommendation of the Expenditure Committee, which was made up of members of parties on both sides of the House. Therefore, I appeal to the present Government to take a second look at this issue. Many authorities will be caught by this particular deadline.

One authority in my constituency, Burntisland, has 25 per cent. of its housing stock in a modernisation scheme at present. Those schemes and the tenders for them were negotiated and started before 23rd June 1973, yet because of shortages which have arisen for many reasons, not least because of the three-day week, many of these projects will not be completed by 23rd June 1974. The authority estimates that this delay will cost about £60,000 to £70,000 in grants.

Therefore I sincerely hope that the Government will look favourably at requests from authorities that where building work began before 23rd June last year, all houses completed will qualify for the 75 per cent. grant even though completion may not be until next July, August or September.

I now refer to the section of the Gracious Speech dealing with pensions and wealth. It says: A Bill will be introduced to increase pensions and other social security benefits. Proposals will be put before you for the redistribution of wealth, the protection of the lower paid and the disadvantaged I was appalled to hear the hon. Member for Basingstoke (Mr. David Mitchell) describe the proposed increase in pensions as inflationary. I do not believe that people who are in such dire need of an increase and who have been hit by the rapid rise in inflation of the last three and a half years would, even if they spent all of their pension, cause inflation to the extent suggested by the hon. Member. During and before the election campaign I received complaints from people who were drawing small pensions or annuity payments because they had to pay income tax while others who were drawing the same amount in supplementary benefit were not liable to tax.

When pensions are increased—and I trust that that will be soon—my right hon. Friend the Chancellor should exempt the retirement pension from income tax. An alternative method, of course, is to raise the threshold at which tax becomes payable. I should like to see both of these measures included in the Budget but the exemption of the retirement pension would certainly be a step forward for many people in the lower income brackets.

The Gracious Speech also deals with oil. It says that the Government will ensure that oil and gas from the Continental Shelf are exploited in ways and on terms which will confer maximum benefit on the community, and particularly in Scotland Those of us who were fortunate or unfortunate enough to fight constituencies in Scotland will know that the Nationalists fed the population of Scotland on oil. For three weeks they gave the people oil for breakfast, oil for lunch and oil for their evening meal. But at no time did they explain that what they called Scottish oil had already been taken into public ownership by a Tory Government. It was a Tory Government which nationalised oil on the Continental Shelf, by the Continental Shelf Act 1964. That includes whatever resources may be discovered in the Celtic Sea as well as the North Sea.

The Nationalist Members, in spite of their elation at being elected, are not here now to listen to the debate. It may be that they are away concocting replies to the Gracious Speech, but out of deference to the House they should be here now. They met in Edinburgh last week and each Member was given a shadow portfolio. I would have expected the hon. Member with responsibility for Scottish matters to be here now at least to hear what we have to say. His Absence is indicative of the attitude which the Nationalists have adopted on previous occasions in this House and which they will no doubt be adopting for the rest of this Parliament.

I very much welcome the measures which the Government have proposed in this important area, measures which I believe will prove to be in the best interests of the people of Scotland, a phrase with which many of us have become familiar during the past weeks.

I am disappointed at one omission in the Gracious Speech in connection with events of the last seven days, that is the reduction in the number of Ministers in the Scottish Office. Surely the pressures on that Department will be greater rather than less in the coming months. My right hon. Friend the Prime Minister should have considered this point, and I trust a further appointment will be announced, even though legislation may be required to make it because of the statutory limitation on the number of Ministers that an administration may appoint. With the tremendous pressures which are building up over devolution and other affairs, it is wrong for the number of Scottish Ministers to be cut. Many of us were extremely disappointed that it was almost the last Department for which a full list of Ministers was made public, as Scotland regards itself as a nation, not a region.

Dealing with Scotland the Gracious Speech says: My Ministers will initiate discussions in Scotland and Wales on the Report of the Royal Commission on the Constitution, and will bring forward proposals for consideration". Scotland must get its full share of the increasing wealth which will accrue from the oil industry. There is undoubtedly an increasing interest in the reform of machinery of government in Scotland, but certainly not for separation as advocated by the Nationalists. Kilbrandon emphatically rejected the Nationalists' case. There is obviously a desire that the decisions affecting Scotland should be taken within Scotland wherever possible. It may be that an elected Scottish Assembly with power to contribute to the economic growth of Scotland would meet these desires. I hope the discussions on the constitution which are mentioned in the Gracious Speech will be expedited in order that decisions can be taken at an early date.

In the election the Liberal Party made great play about being the party of moderation. The election result is that Government policies can now be thwarted by the whims of minority groups such as the Ulster so-called Unionists and the Welsh and Scottish Nationalists whose aims are to divide rather than to unite. The people of Britain must face the hard fact that there is no room for third parties unless they are prepared to allow the country to sink into the morass of short-lived Governments which at present dog the Western world. My right hon. and learned Friend the Member for Liverpool, Edge Hill (Sir A. Irvine) spelled out the position of the Liberal Party in this context.

The measures in the Gracious Speech which I have mentioned add up to a programme of moderation which will receive the acclaim of all sections of the community. This Labour Government, even as a minority Government, will be seen to be swift in action and effective and a stronger mandate from the electors will doubtless be its reward.

5.56 p.m.

Dr. Alan Glyn (Windsor and Maidenhead)

I wish to add my congratulations to those already expressed regarding your appointment, Mr. Deputy Speaker. It is a tribute to you that every hon. Member who has spoken so far has welcomed your appointment. We know of the tremendous service which you have rendered to the House in other capacities, and we now welcome you in the Chair.

The Gracious Speech must be considered against the background of the General Election, which confirmed that the electorate was definitely not in favour of all-out Socialism. The General Election also reflected—the right hon. and learned Member for Liverpool, Edge Hill (Sir A. Irvine) put it well—a dislike and a distrust for both of the main parties as well as a general dislike for politicians. As a result many people voted Liberal, clearly as a protest vote. They should realise that we have now been precipitated into a situation in which the Government have not got a full mandate—a situation for which the Liberals are entirely responsible.

I hope that the country will realise that it is not possible—as the hon. Member for Kirkcaldy (Mr. Gourlay) clearly indicated—to have a minority Government in perpetuity to govern the country properly. One of the effects of this situation has been to cut down radically policies contained in the Labour Party manifesto. Considering the Gracious Speech, we see that that strong man, walking forward in the General Election with the red flag has now become a mere embryo of nationalisation. Massive nationalisation was a prominent feature in the Labour Party's manifesto, and we must accept that this is part of a Socialist programme. But because there is a minority Government it is impossible at this juncture for that Government to continue with a policy in which they genuinely and honestly believe. All that is left of the Labour Party's nationalisation proposals is some nationalisation and control of oil in the North Sea. Much more worrying is that the Sword of Damocles is hanging over other industries which are wondering what their future may be.

Perhaps the most dangerous possibility resulting from the election is that the world at large may not believe that we are creditworthy, and thus we might find considerable difficulties in getting the amounts of money which we shall need to borrow in the near future. We all welcome the return to the full working week and the settlement of the miners' dispute. But the country will have to ask itself whether it can afford the price of the settlement. More important, will other unions accept the position, or will there be a clamour for further wage awards? My right hon. Friend the Leader of the Opposition said that 6 million people had accepted settlements under phase 3. I press the Government to say whether phase 3 has now been completely thrown out of the window, or will it be retained? The position regarding phase 3 was not made clear by the Prime Minister this afternoon, and as a result there is a genuine threat of inflation facing the country.

The Government's policies are clear. They are to spend more money. If the Government's programme is carried out it will result in drastic inflation. We have already had inflation, but the Government's policies—at a time when we ought to be cracking down and not increasing public expenditure—could result in a serious dose of inflation which could hit those people whom we do not want it to hit—the pensioners. I shall discuss the pensioners more fully later.

I turn now to Maplin. It would be a great mistake to abandon that project. I say this not because I have a constituency interest, which I am perfectly prepared to admit. My constituency is probably one of the worst affected. But from a national point of view there are some points which must be accepted. Either we have saturation level at existing airports, including Heathrow, and an unacceptable level of noise, or we have an entirely new airport. Admittedly, I have spoken about cutting public expenditure, but with Maplin there is a chance to spend a small sum of money in the immediate future and pay a larger bill later when we get to a better economic climate. In the long term we need another airport, with proper access, as well as a deep-water seaport. I do not want to labour the point, but it would be a great mistake for any Government to set this project aside without careful consideration of the inevitable consequences of abandonment. I am sure no Government would be so foolish to give up what might be a tremendous asset to us as a nation in the future.

The Gracious Speech refers to industrial relations and the scrapping of the Industrial Relations Act. I am the first to say that the Act is not perfect, but we cannot just scrap it and start afresh. I would prefer to see modifications to the Act. I believe that in disputes both sides of industry can be at fault. I have never in the House blamed only one section of industry. I have always said that there are faults on both sides. The object must be to get management and workers to work together in the national interest. However, I cannot see how this can be achieved within the framework of what is proposed in the Gracious Speech.

There can no longer be differentiation between those working with their hands and brains and those working on the shop floor. All should be working together as a team. This must be the aim in industry. I return to my original premise. I do not believe that everything is perfect among management or on the shop floor. We want a modus operandi— a proper working between the two sides of industry.

I am bewildered by references in the Gracious Speech to Europe and renegotiation of Britain's membership of the EEC. Do the Government intend to go through the process of negotiating within the treaty and then come out and present that as a case, or do they intend to break their treaty obligations completely and try to renegotiate? As I see it, the constitutional position is that we have entered into the treaty and are in the Market. Are we to get other members of the Common Market to agree to our terms? Every Government, and the Opposition, want to see some of the terms altered, but are the other members of the Community prepared to accept renegotiated terms?

Mr. Arthur Lewis (Newham, North-West)

The hon. Gentleman regards himself as a great democrat. Does he, therefore, subscribe to the present position in which a number of Tory and Liberal MPs are now allegedly sitting in the European Parliament instead of being here? In fact, some of those in the European Parliament are not even MPs. They cannot be removed for six months —not even by this House—and they can, if they wish, draw up to £150 a day tax-free expenses. Should not that position be renegotiated? Does the hon. Gentleman think that that is right?

Dr. Glyn

Those hon. Members who were present at the end of the last Session will recall the hon. Gentleman's feelings on this matter. We made provision under Act of Parliament for this situation—like other European countries —so that the European Parliament could continue irrespective of the General Election. It is up to the Government to say whether they would like to send their complement of MPs to Europe and renegotiate the treaty from inside. As for the expenses, the hon. Gentleman must remember that all members of the European Parliament receive the same amount. I do not know the details, but I understand that those expenses are for all purposes, for entertaining and many of the things that the delegates do privately.

Mr. Arthur Lewis

What I am trying to get over to the hon. Gentleman is that some of those hon. Members voluntarily resigned, or at least decided not to stand for this Parliament, yet they went to the European Assembly and are there now. They can still draw expenses, and we in this Parliament cannot do anything about it. Does the hon. Gentleman think that that is democracy?

Dr. Glyn

If one belongs to an institution in Europe one must abide by its rules. The European rules are clear. They provide that for a period of six months, not more, delegates can sit without being a member of another House. In some European countries elections take place even more often than they may take place in this country, and it is necessary for the European Parliament to have a form of continuity. All that we have done is to put ourselves in line with the other nations in the European Community.

What worries me about the Gracious Speech is the statement on defence. I understand that reductions of about £1,000 million in expenditure on defence were suggested during the election. Everyone wants to work towards peace, but I do not believe that the time has come when we can afford to disarm. We should be telling our partners in Europe that we are bearing an unacceptable share of the defence burden, and should be trying to get them to help us in our defence problems. We are providing a major part of European defence by virtue of our atomic force. It is expensive, but the answer is not to cut it but to get our European partners to appreciate that we are hard pressed in our present economic circumstances and that they should help us to meet the expenditure. Then NATO could play its proper rôle in the defence of Western Europe.

Everybody welcomes the increase in pensions, but my hon. Friend the Member for Newbury (Mr. McNair-Wilson) touched on an important point. The vital thing about pensions is not so much to set them at a certain level but to gear them to the cost of living as we did in the last Parliament, on a sliding scale reviewed every six months. I am worried that if the Government continue with their programme inflation could erode the substantial benefits they wish to give to the pensioners.

One of the big topics in the election was mortgages. Many young couples have found it almost impossible to continue purchasing their home because of the high rate of mortgage interest. I have always felt that the banks might be able to help. The most important asset anyone can have is his own house. If we want a property-owning democracy, we must find machinery to prevent an excessive load being put on house owners' mortgage payments.

The problem is worrying and difficult. The nationalisation proposals in the Gracious Speech will in no way increase the number of homes or decrease the mortgage interest rate. How do we adjust an international rate, determined by our desire not to have a run on sterling, and the internal rate for mortgages? An answer must be worked out, whether by more tax relief or in some other way. I do not believe that home owners can be expected to meet the present high rate of interest.

We have been presented with a costly document, and I wonder from where the money will come. The lower paid will probably be badly affected by it. It is a watered-down edition of what the Socialists would really like to do. A mild dose of Socialism attempting to give away quite a lot and lure the nation into a false sense of security, so that the Government can go to the country in a short time, having given a lot away and appeared to do something, and ask for a mandate.

I warn the country of the dangers of implementing a full Socialist programme, and of the problems it and the House face as a result of having a Government without a proper mandate. I hope that in future elections people will realise that by casting their vote for a third party—Liberals—they do no service to the nation or the House, and that they make government almost impossible.

The job of the Opposition is responsibility. The most important thing of all is that we look upon any programme put forward by the Government in the light of just one question: is it or is it not in the national interest? At a time of economic crisis it is up to the Opposition to make sure that the nation's needs, and not a party's needs, are put first.

6.12 p.m.

Mr. Alan Lee Williams (Hornchurch)

I first congratulate you, Mr. Deputy Speaker, on being elected Deputy Speaker. I have no doubt that you will conduct your chairmanship in a very fair way, as I know from personal dealings with you.

I do not know what your advice would be, as an old parliamentary hand, on whether it is wiser to speak so early in a Parliament, and make a speech setting out some difficulties which I want to elaborate, or whether to wait until later. My thoughts were somewhat concentrated by what was said outside the House by the hon. Member for Rochdale (Mr. Smith). In a rather unsubtle way he predicted that this Parliament would have a short run.

Mr. Arthur Lewis

Is my hon. Friend aware that during his temporary absence from the House—I am glad to see him back—we were always pointing out that the Liberal bench was not filled when the Liberals had their then limited number of Members? Now, on our first day back we again find that Liberal Members are absent, with the exception of one honourable new Member, whom I am glad to see present. I hope that he will tell his fellow Liberal Members that some of the Opposition benches are supposed to be occupied by them.

Mr. Williams

I welcome my hon. Friend's intervention, but it has rather distracted me from what I wanted to say. I also welcome the arrival of the Liberal Member.

I was saying that the hon. Member for Rochdale argued outside the House that this Parliament might well be short. Therefore, I thought I would be prudent and get my speech in.

Most of us agree that the problems facing the country are extremely serious, both economic and political problems, and also possibly constitutional problems, although we shall have to wait for developments on that score. But, if I take the feeling of the country at large, I do not think that there is any strong desire for a great deal of politicking in its widest sense. That is why I think that this House will be a most interesting one.

A most dangerous situation faces the country, with a minority Government subject to the whims from time to time of a number of additional parties. This raises great problems for the Government.

Before talking about some of the problems that face the nation, I should like to say something about the role of parties within the House, because I think that for a while the House is bound to be introspective, in the nature of the case, because of the balance in the House.

I hope that some of the Nationalist parties will bear in mind the overall national interest. There will be a strong temptation on their part to use language which will damage the overall national interest. I am not talking here of the arguments over devolution but rather about some of the language used during the General Election by Nationalists in Scotland and elsewhere which was so intemperate as to lead to the view that they were in favour of the break-up of the United Kingdom. I trust that this is not the case, because that would be most unfortunate at a time when all the pressures point towards the need for the United Kingdom to remain cohesive and strong.

The Gracious Speech has been skilfully constructed. It will commend itself to the country. However, the Budget will be the important contribution to this Parliament. In many ways the Budget will be more important than the Gracious Speech.

The first point in the Gracious Speech to which I refer deals with the renegotiation of the terms of our entry to the European Community. I am an unrepentant pro-Marketeer and, I do not think that will come as too much of a surprise to my hon. Friends. I recognise that the terms negotiated by the Leader of the Opposition were never by any means totally satisfactory. Therefore, the proposal in our manifesto, reflected in the Gracious Speech, for a renegotiation of certain terms is fully justified.

This raises a number of difficulties. From what I can see of the situation, there are a lot of people inside the Community who will be anxious to reach an accommodation and to compromise with the incoming Labour Government. I do not think that there will be bitter opposition. I am an optimist here and feel that the terms we renegotiate will be acceptable to a Labour Cabinet. I am merely speculating. Whatever method we employ subsequently, whether a referendum or a General Election, it will have to be coupled with a recommendation.

There are certain grounds for cautious optimism that we will be in a position, subject to some tough bargaining, to reach an accommodation which a Labour Cabinet will be able to commend to the country. There has been a certain amount of feeling generated as a result of this General Election, suggesting that Labour's talk of renegotiation was some kind of smoke screen behind which to withdraw from the Community. I do not believe that this is in the spirit of our manifesto. It is not in line with party policy or what is contained in the Gracious Speech.

While I remain reasonably optimistic, the background is not optimistic. We face enormous problems. There is a great rift between Europe and the United States. Europe is in an introspective mood. Because of our situation this country is also in a similar mood. It is highly dangerous. If we read what Dr. Kissinger and other Americans have to say we can appreciate the gravity of the situation. There is the prospect of a most momentous trade war between Europe and the United States. Many of the policies of the Conservative Government fed these tendencies. It was a profound mistake, during our first year in the Community, to play along with the French.

The United States has its own political problems and is suspicious of the Community. There are some on Capital Hill there who would like to see the Community weakened. That is the result of the last Government supporting the French in some of their attitudes within the Community and the result of some of the attitudes of the Community towards the United States. I hope that the Foreign Secretary will alter that and bear in mind the importance of an understanding between Europe and the United States on a whole range of matters, including energy, trade and defence.

In this latter area we are faced with a real opportunity. There is the conference on mutual and balanced force reductions and the conference on European security and co-operation. There are references in the Gracious Speech to this. It says that the Government will: regard the North Atlantic Treaty Organisation as an instrument of détente no less than of defence. All of these matters are involved in these two major conferences.

It would be the height of folly to look at defence expenditure wholly in isolated terms. It is clear, because of the economic situation, that the amount of money spent on defence will decline rather than increase. No one will dispute that. It was the trend under the previous administration. I do not want to argue that point now. There will be opportunities to debate it when we have a clearer idea of what the Government intend to do. It would be foolish to ignore the economic pressures, which mean that any incoming administration is bound to consider drastic cuts in defence.

It would be unwise to ignore the fact that this is an option which will be seriously looked at. The point I make now is that this must not be done in such a way that it feeds the idea that there need not he any multilateral agreement on mutual and balanced force reductions; in other words, the idea that all that is necessary is to make a unilateral cut-back and somehow or other the situation will be just as it was. I do not believe that is so. We have to be careful how we judge this. There will have to be defence cuts, but they must be made in a way commensurate with stability and in a way which will not endanger the Atlantic Alliance.

One point of fundamental importance for the British economy is our attitude towards the Maplin development. There is a constituency interest here for me. I am not convinced, as some hon. Members opposite are, of the wisdom of Maplin. All the independent judgments and all the evidence, on the whole, point against it. On the other hand, there is a strong argument for the seaport at Maplin. The danger is that the whole thing, including the seaport, could be scuppered. That would be wrong when this country's ports are facing immense competition from Rotterdam and other main continental ports. As a warning to my right hon. Friends I say that they will be hearing more from me, and I hope, my hon. Friends, on this question of the Maplin seaport.

In conclusion, the Gracious Speech seems to be a very balanced document considering the parliamentary position in the House. It will not be only the Opposition parties that are watching the Government. I shall be carefully watching their progress. I wish them Godspeed. When they do things that I consider to be right I shall support them, but I shall not hesitate to criticize when I feel that that criticism is justified.

6.25 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

I am sure that the whole House will wish to welcome back the hon. Member for Hornchurch (Mr. Williams) and to thank him for his moderate speech.

I express my appreciation to the Prime Minister for discarding the larger part of his election manifesto. Yet I do not regard the Gracious Speech as a model of moderation. It expresses the hope that the orderly growth of incomes can be secured on a voluntary basis. That may read like a moderate intention, but it is a pious hope and a forlorn one. Already, the inflationary queue has begun, and it will grow longer and more demanding for as long as the Government put aside the obvious need for a firm pay policy. Without that there can be little hope of fulfilling the purpose of measures to restrain price inflation.

I welcome the intention to increase pensions and other social security benefits, as will every hon. Member. In passing, I hope that on this front the Government will improve on their disappointing performance when they were last in office.

I welcome also the intention to protect the lower paid and the disadvantaged and to have better methods of meeting the needs of the disabled. May I say to the hon. Member for Manchester, Wythenshawe (Mr. Morris) what a pleasure it has given to many of us who are interested in the disabled to hear of his appointment. We congratulate him and wish him every success. All these objectives that I have listed are desirable and necessary, but they will not be secured by what we see yet again in the Gracious Speech about the redistribution of wealth, which is no more than a ritual mouthing. The best help for the disadvantaged is the control of inflation, and there is precious little about that in the Gracious Speech.

What we do see in the Gracious Speech are occasional faint cries of true Socialism. Land required for development, we are told, will be nationalised, or, to use the new euphemism, brought into public possession. That is the best way to cut back the supply of land for development. We have trodden that unhappy path before, and it did not lead anywhere in particular.

As one would expect, there is a reference in the Gracious Speech to oil development, and we heard more about that this afternoon from the Prime Minister. We also heard something about it in an interview which the hon. Member for Edinburgh, East (Mr. Strang) recently gave to a daily newspaper. If I understand aright the hon. Member for Edinburgh, East and the Prime Minister, the Government's intention, although it is not disclosed in the Gracious Speech, is to bring 51 per cent. or more of the oil interest into public ownership or, in the new "in" phrase, into public possession. I hope that the Government will spell out their proposals urgently, because we want to know what they are going to do. We do not want any uncertainty to delay the extraction of oil from the sea bed. Every right hon. and hon. Member will agree—and certainly every Scot—that the great benefit from oil must be shared fairly between the people and the oil companies. I hope that the Government will not try to placate their Left-wing supporters by making a ritual sacrifice of oil on the altar of nationalisation. The oil companies, whose massive investment and large skills are essential to the development of oil, will surely not go on pouring millions and millions of pounds into new exploration if the reward for their success is to be their seizure by the State.

We heard a lot about oil during the General Election campaign, particularly in Scotland. I was surprised to hear some Nationalist candidates proposing that the rate of extraction of oil from the sea bed should be slowed down, and that a large part of it should remain quietly undisturbed under the sea bed for the time being. That is a policy of economic madness. Britain desperately needs the oil, and it is, above all, in Scotland's interest that all parts of Britain should get the oil.

The hon. Member for Hornchurch referred in his excellent speech to what he described as the intemperate remarks of Nationalist candidates during the election. His standard of intemperateness was their intention to disrupt the United Kingdom. That, of course, is the intention of the Scottish Nationalists. Their policy is a policy of separatism, and I wish that that had been expressed more clearly during the General Election campaign. It may be arrogant to say this, but I do not believe that more than a handful of those who voted Scottish Nationalist really want separatism. They do not want to see the United Kingdom broken up, yet that is what the Nationalists stand for.

Somehow we all must call wider and wider attention to the single and essential economic fact that, whether Scotland is inside or outside the United Kingdom, Scotland depends above everything else on the strength of the economy of the whole United Kingdom. Scotland cannot flourish economically on her own; no more can England. Scotland depends for her prosperity and her jobs on the strength of demand for Scottish goods and services from the whole United Kingdom economy.

Mr. John Robertson (Paisley)

The hon. Gentleman is uttering nonsense. Whether or not it is desirable that Scotland should be part of the United Kingdom is one thing, but to say that Scotland could not survive is obviously nonsense. Ireland survives, and Norway and Sweden survive.

Mr. MacArthur

I did not say that Scotland would not survive. My intention was to say that Scotland would be seriously damaged if she removed herself from the United Kingdom. If the hon. Gentleman looks around Paisley and Perth and through the whole industrial belt of the lowlands of Scotland, he will recognise one economic fact—that the prosperity of the industrial belt in Scotland depends on British demand for Scottish goods and services. If that is true, as I am convinced it is, it must be in Scotland's interest, above all, that oil should be regarded as British oil, not as Scottish oil, Shetland oil, English or Cornish oil—for oil will be found there too—to speed the wheels of industry throughout Britain. On that Scottish prosperity depends.

One of my most agreeable moments recently was reading in the list of Government appointments that the right hon. Member for Kilmarnock (Mr. Ross) had returned to the Scottish Office. The right hon. Gentleman had great distinction: he got into the Guinness Book of Records as the longest holder of the Scottish Secretaryship. He may get into the Guinness book again as the shortest holder of that office. However, all his friends will be delighted to see him back at the Scottish Office. I am sorry he is not present to hear the nice things I am saying about him, but perhaps someone will tell him.

I realise, on reading the Gracious Speech and Press comments made by the Secretary of State for Scotland, that I have misjudged him all the time I have been in the House of Commons. I always thought that the dour and uncompromising exterior of the right hon. Gentleman concealed a heart of stone. I now find that I was wrong; inside he is a softy. He has become a devolutionist. He has turned himself inside out and become a champion, so it seems, of the cause he rejected until just the other day. My only disappointment is that I always thought that if one could say anything about the right hon. Gentleman it was to echo the old mediaeval cry of chivalry in Scotland: Ye may brak' but canna bend me. The right hon. Gentleman has been tied in knots. He is now proclaiming devolution. I am all for it myself, but I am a little concerned by the way devolution is referred to in the Gracious Speech. It says: My Ministers will initiate discussions in Scotland and Wales on the Report of the Royal Commission on the Constitution, and will bring forward proposals for consideration. I give that a modified welcome for this reason. The Kilbrandon Report is a splendid vade mecum for students of devolution, but it is not a model of what should be done.

I remind the House that after many years the Kilbrandon Commission produced an interesting series of recommendations, all in conflict with each other. There was a majority report, and there was a minority report. There was a minority-majority report, and, if I remember aright, a majority-minority report. Only two conclusions were unanimously reached.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

Three.

Mr. MacArthur

There may have been a third, but I will quote the two which I choose to remember.

First, the Kilbrandon Commission totally and unanimously rejected separatism. It said "No" to the Scottish Nationalists and their policy. It defeats me when I consider the statements made by Scottish Nationalists, who have recently been welcoming the very Kilbrandon Report which threw their policies out of the window, because the commission unanimously recognised that the Nationalist policy of separatism would be damaging to Scotland's interests. That was one unanimous conclusion.

The other was the need for devolution. But what the pattern of devolution should be the commissioners in their wisdom could not agree. That is not surprising, because if any tag could be applied to the devolutionary argument it is the old one of Tot homilies, quot sententiae. There are views upon views, opinions upon opinions, and in the end it will have to be for the Government, of whatever party, to make a clear proposal for Parliament and people to discuss.

I hope that the Prime Minister will not be too blinkered by the Kilbrandon Report, and I hope that he, and, indeed, the whole House, will reject two of the proposals. One was that the office of Secretary of State should end and that the Scottish responsibility in the Cabinet should be carried as a secondary duty by some other Minister. I do not believe that that would be right. The problems of Scotland now and in the future are far too important to be expressed in the Cabinet by a part-time Minister preoccupied with other heavy departmental duties.

The other proposal with which I disagree is that the number of Scottish Members of Parliament should be reduced from 71 to perhaps 57. We cannot afford in Scotland to cut down the strength and voice of Scotland in this Parliament.

I have for years supported the need for further devolution. I suggest that if devolution is to be meaningful it must include some part of the legislative process. I shall not spell out now what I have in mind because this could be done more appropriately at some other time. Simply setting up a talking shop, let alone this superficial idea of having the Scottish Grand Committee meeting in Edinburgh, is not good enough. But I hope that we shall not rush into a facile solution which may have some superficial electoral appeal but could in the end be damaging to the Scottish interest.

I should like to comment on one part of the Gracious Speech which I view with the greatest concern; namely, the proposal to repeal the housing finance Acts and to reform the law relating to rents and housing subsidies". I remember, during the election and long before, right hon. and hon. Gentlemen opposite stomping up and down the country talking about the way in which the wicked Tories had put up rents. Never once did I hear them talk about the wicked Tories putting down rents, because that is the effect of the legislation we introduced. In Scotland today there are 149,000 local authority tenants paying not one penny in rent because of the Tories' housing finance Act and the related supplementary benefit system. In my constituency, in the city of Perth alone—a small town—there are 1,204 local authority tenants paying not one penny in rent, thanks to the Tory Government.

Now we have these self-styled protectors of the under-privileged proposing a measure which will benefit not the underprivileged but those who are better off. If the Scottish Act is repealed, hundreds, probably thousands, of people in Scotland will be denied help which would otherwise be available. If the Government are prepared to spend millions of pounds by way of some new subsidy to compensate local authorities in Scotland for the cost to them of this mad proposal, let them get their priorities right and let them throw aside the idea of giving help to the better off, which is what this means. Let them concentrate the help on those who are worst off.

If the Government are serious in saying that they will help the "disadvantaged", if they want to help the disadvantaged, let them concentrate the help there—and the way to concentrate the help is to retain the Conservative Housing (Financial Provisions) (Scotland) Act, to improve the needs allowance, and to give much more help where it is really needed. Repeal of the Act will have three effects only. First, it will cheer those councillors in Clydebank and Clay Cross who defied the law. Secondly, it will benefit many people who do not need that benefit. Above all, it will deny further help to many thousands of tenants in Scotland who need that help and who are amongst the disadvantaged whom the Government pretend to want to help.

6.45 p.m.

Mr. R. B. Cant (Stoke-on-Trent, Central)

I can see, if not a long Parliament, an exceptionally interesting one. The theme of the last Parliament that divided us all so greatly was the Common Market. No doubt, that will continue, but it looks very much as though this Parliament is to be dominated by Scotland. I must speak with great caution, as I am married to someone from Glasgow, and at any rate in public continue to regard it as something extremely vital to the nation's welfare.

I feel a certain sense of anti-climax because I want to talk about a much humbler theme. Not only is it humbler, but it does not even appear in the Gracious Speech. In the manifesto on which I fought the election, along with others on this side of the House, it was stated that when we came into office we would set up a Royal Commission on the working of the City institutions.

This is a matter of great importance for a large number of reasons. The Labour movement has always had a slightly schizophrenic attitude towards the City. On the one hand, it has been very critical of the City—and quite rightly—because of the enormous power that the institutions of the City exercise, the tremendous influence they have over policy making and, at times, the enormous wealth that accrues to people who produce nothing but who dabble in services handling money and get far more from it than those who produce goods.

On the other hand, the Labour movement, and even the Labour Government in office, have been afraid. It is understandable because the people who wield this enormous power have a great influence over our lives. The work they do is so mysterious, so esoteric that, apart from one Member, we do not know much about how these things work. Even Ministers in high office succumb to the suggestions of the civil servants that if we do something the heavens will fall on us. We were told this about the £ sterling. We could never have floating rates; we could never have sliding parities; we could never have a crawling peg. If we had, we were told, we should be heading straight for disaster. Probably the civil servants were right in that context. Equally, if we interfered with the City, we were told, we would begin to interfere with the enormous invisible earnings for which the City was responsible.

I believe—as, I think, do many people in this country and, in fact, in the City —that we have reached a stage where the behaviour of the people who run these institutions in the City has been such that their activities should be brought under very careful scrutiny. Hence I welcome the statement that there should be a Royal Commission. The "unacceptable face of British capitalism" was a phrase that applied more forcibly to people in the City than anywhere else in British society.

I think that the present Government, despite all their great problems, should start to look at some of the issues to which the operations of the City give rise. I know that one must be careful. When one begins to talk about the banks, especially the very respectable clearing banks, one might be handling political and financial dynamite. But there is not the slightest doubt that the way in which banks have operated in the last two years is not consistent with the way in which we should conduct our financial operations and institutions in this country. They are totally incapable of deciding whether they are rapacious commercial enterprises or whether they have a more responsible rôle in the economy.

We must look at these powerful banks —even though they handle my overdraft and I should speak with caution—and see precisely what is their rôle. We must decide whether it is right, socially just and acceptable that they should from time to time earn these massive profits, which do not arise because the banks suddenly become productive institutions performing new roles, innovating, and so on, but merely because a prodigal Government have increased the money supply and, at the same time, the interest rates have gone up.

We should go back to the Report of the Prices and Incomes Board and say that, on excess profits of this kind, a tax should be paid because these profits are just a kind of endowment element. There are many other ways. Should banks be associated more with industry? Of course, they have had a lot to do with property through the secondary bank trick. They burned their fingers, but that does not matter when £700 million profit has been made in one year. No doubt, they are getting some knowledge of industry because of the liquidity crisis in which many firms find themselves.

I know that one must not mention the word nationalisation, but I think even here it would be justifiable—and I am a Right-winger on these benches—to have a public sector alternative. We have enough Government financial institutions at the moment, but what we do not have are Government financial institutions with an international aspect. In order to give them that, we need to nationalise, perhaps, take into public possession or ownership, one of the big clearing banks and also, perhaps, one of the very profitable, much more profitable, accepting houses.

That is just one of the great institutions that should be looked into. One could go on. There are the insurance companies. Shall we ever resolve the dilemma of the massive amounts of money that accrue to insurance companies and the £10,000 million at the disposal of pension funds in the context of making their investment socially acceptable and at the same time giving a decent return to the people who pay the premiums? Shall we ever resolve the dilemma of the great insurance companies which invest thousands of millions of pounds in companies in this country and then stand back and say that it is none of their business how the companies conduct themselves? Something must be done about that.

Something must be done about the real nigger in the woodpile, the Stock Exchange. How much longer must we go on with the amateurish approach to Stock Exchange supervision through takeover panels and other gentlemen's agreements? Why can we not set up, as the Americans have done in this field, an exchange and securities commission? Why are we frightened? Why should we on this side be frightened to do the job of policing this casino in a professional manner?

We are just beginning to see what is happening in the commodity markets. They have operated in a sort of backwater, and now we suddenly realise that, on some estimates, at least 30 per cent. of the increase of the price of important grains, metals, gold and so forth, is a consequence of speculative operation by people who are getting away with murder. Something could be done about it.

What about the greatest Cinderella of them all, the poor old building societies? Someone should drag them into the 20th century. They are conducting their business today—I have paid off my mortgage —just as they have for 100 years, though they do it now with a computer and from much more lavish offices. They must be made to accept some sort of State interference or control—I do not speak of nationalisation, because I do not think that is the right word in this context—so that the problem could be resolved.

Unless we reach a stage in relation to our great financial institutions where it can be seen that they are accepting such control in a socially responsible manner, we shall have to say—Private enterprise, perhaps, but, if not, the Government must take a closer look at the problem. That is why I believe that the Government should forthwith set up a Royal Commission.

I do not, however, think that that in itself would go far enough, because one must appreciate that the Government operate financially in the market on an enormous scale. Their action has tremendous influence on all sorts of indicators about which we read so often in the Press. I should like to see this Government not only set up a Royal Commission to look into the financial institutions of the City but set up a Select Committee to study the whole question of financial administration and the Government's monetary policies.

That is the one main area which is not subject to scrutiny by a Select Committee. The Treasury, of course, is frightened of it. When the Select Committee on Nationalised Industries under the Labour Government asked whether it could look at that great nationalised industry, the Bank of England, the Chancellor of the day said that it could take a peep but it could not look at this, that or the other and that such matters were felt by his advisers to be too confidential to be exposed to the common view of Members of Parliament. In my view, that scrutiny is essential.

When we talk about finance in this House, we talk about the Budget, but when talking about the Budget what do we discuss? We talk about important practical issues of taxation. We spend hours—often nights—in Committee going through all the minutiae of what tax should be altered and why. Monetary policy has just a brief mention. The whole question of the level of demand in the economy has just a brief mention.

There are many issues relating to Government borrowing at home and abroad. What about all the borrowing that we shall have to do? How much should we borrow? Where should we borrow? Should we go cap in hand to the Eurodollar market or to the International Monetary Fund?—which is cheapest?—and so on.

Should we lower the interest rate now? I believe that we should. But where does one discuss this? The rate of interest cannot be discussed in the House any more than the foreign exchange of sterling can. These are matters only for the Chancellor and his advisers. They should be subject to Select Committee scrutiny.

There are many great issues in the monetary affairs and policies of the nation that we should examine. My hope is that at some time—these are not necessarily matters of legislation—the House will set up a Royal Commission on the working of the City institutions, and a Select Committee on the Government's financial administration.

7.1 p.m.

Mr. Richard Body (Holland with Boston)

I suspect that the hon. Member for Stoke-on-Trent, Central (Mr. Cant) will have his way. Monetary policy will dominate our thoughts in the next few months if the present rate of inflation continues. I regret that he did not push his argument one degree further and say that the malpractices and massive profits of the City institutions always follow a high rate of inflation. I would have thought that he, as an economic historian, would accept that there has never been an occasion in history when a country suffering from the kind of inflation we have now did not have City institutions in which malpractices and profits of the sort of which he spoke did not exist.

The hon. Member said that the last Parliament was dominated by the debate on the Common Market, and it is the passage in the Gracious Speech referring to that issue on which I should like to comment briefly. The passage needs to be tied up with the next paragraph, which concludes … to establish a more liberal pattern of world trade. Those words are enough to gladden the hearts of anyone who, like myself, believes in freer trade. They show that those on the Treasury Bench are not blind to other possibilities of European co-operation.

Everyone here wants to see a greater degree of co-operation with our neighbours on the Continent. That is a banal statement in an ordinary context, but it needs to be said because the Marketeers have for a long time traded on our desire for European co-operation by asserting that there is but one option open to us, namely, to build upon the foundations of the Treaty of Rome. They fail to realise that much of that treaty makes it impossible for the larger part of Europe to ally itself with the smaller part inside the EEC, and as a result there is the danger of erecting a permanent barrier between East and West.

Most of us who are pan-Europeans—that is, those who believe that a Pole or a Swede is just as much a European as an Italian or a Frenchman—argue that the means of uniting Europe lie in a less formal, more functional approach, based upon the principle of a free trade area. The Convention of Stockholm sets out all the necessary rules. They have the merit of being few, and they include the provision that enables membership to be extended to any other country whether within Europe or without. That is the option for Europe that exists now, and, in the hands of Norway and others that have chosen it, it has proved remarkably successful. It has also the advantage of an exit clause, although some of us regret that the United Kingdom has taken advantage of it.

The Labour Party programme requires five matters to be renegotiated and, frankly, I feel driven to supporting them all, as will. I believe, most people once they realise their significance. Moreover, I think that they will gather such support in other parts of the EEC as will enable some fundamental rethinking about future European co-operation. I hope it will lead to the reforming of the European Community into a free trade area, open to any country to join. Above all, that implies that the principle of Community preference should be re-examined. It is not required by the Treaty of Rome—it is the stipulation of France, and of France alone.

M. Pompidou has explained what he means by it; namely, the rejection of an open seas policy and, in its place, the requirement by all the members of the Community to buy all their supplies from within the Community in preference to outside. The preference is enforced upon the consumer. The force or coercion is, as it can only be, by fiscal and penal methods. A willing seller and a willing buyer are made to stand apart from one another for no reason save that the willing seller is not "a European"—the strangest of all forms of racial discrimination.

The power of the State then intervenes and says to one "Thou shalt not buy" and to the other "Thou shalt not sell", and exacts a penalty called a levy if they disobey. It is a denial of free or open trade. It submerges the gains that can be made by the international division of labour beneath the interests of a minority who enjoy the sale of their produce at a price which they would never receive but for the coercion of the majority.

The moral arguments for this coercion have never been stated. The other arguments are often on the lips of the French politicians. In rejecting and denouncing them, as I know he will, I wish the Foreign Secretary every success.

7.9 p.m.

Mr. John Robertson (Paisley)

This is not the Gracious Speech that I should have liked to see but it is one that suits the political facts. The new Labour Government are a minority Government, and they must have regard to that fact. I think, however, that they are to be congratulated on choosing their priorities well and on including them in the Gracious Speech.

I agree with the hon. Member for Holland with Boston (Mr. Body) that one of the most important aspects of the Gracious Speech is the stated determination to renegotiate the terms of entry to the Common Market. I shall not take up his statement, with every part of which I agree, but I say to the Government that when they are renegotiating they must bear in mind the special problems of Scotland and the special difficulties that will be thrown up by continued membership of the EEC. Those matters, as well as Scottish interests, must be given special attention. That can be done only by having a Scottish Minister with that responsibility in the Scottish Office. It is not enough to hope that another Minister somewhere else might not forget sometimes that there is such a place as Scotland, that the laws in Scotland are not the same as those in England, that the situation is not the same and that Scottish interests are not always identical with those of England and Wales.

I am happy that the new Government are to repeal the Industrial Relations Act. From the Gracious Speech it would seem that the Government are determined to introduce new ideas about the orderly growth of incomes on a voluntary basis. The hon. Member for Perth and East Perthshire (Mr. MacArthur) has a strange way of thinking. His speech reflected that, and when he talked about incomes policy he really meant a wages policy. By some strange turn of mind the hon. Member is able to exclude his own income and his own needs from that policy.

Mr. MacArthur

Certainly not.

Mr. Robertson

The hon. Member clearly does that.

I do not wish to pry, but I suggest that he needs to examine his own mind on the subject and his own ways of doing better, of gaining a higher income. Not only Opposition Members have argued in favour of an incomes policy. I have heard hon. Members on the Government side of the House putting that argument, too, but when so doing hon. Members were able by some trick of the mind to exclude themselves from the control that they wished to impose on others.

Mr. MacArthur

I cannot understand why the hon. Gentleman has made those personal remarks. But, as he has done so, I shall reply to him. Such income as I have earned outside this House has been rigorously controlled not only within the terms of phase 1, phrase 2 and phase 3, but at rates considerably less than the maximum allowed in phases 2 and 3. The hon. Gentleman should not make allegations in that loose and irresponsible way without some prior consultation with those whom he wishes to accuse.

Mr. Robertson

I was making no accusations against the hon. Gentleman. I was not even blaming him for doing what he does. He is not alone. A minority of hon. Members have only their parliamentary salary. I do not blame the hon. Gentleman. I am saying that when he talks about an incomes policy he means a wages policy. I have often heard hon. Members talk on this subject, and I know that by this strange alchemy of the mind they exclude themselves——

Mr. MacArthur

Nonsense.

Mr. Robertson

—from such control. It is not nonsense, because they have ways and means of supplementing their income that are not available to men and women who do manual work to earn a living. We know that to be true.

I am therefore pleased that we are to discuss the orderly growth of incomes on a voluntary basis with the Trades Union Congress and the CBI. The past two or three years have shown that no incomes policy is possible without consent. The system must be run on a voluntary basis, or we shall get into the situation in which the previous Government found themselves. They were busy looking for reds under the beds so that they could call for an election. They had nothing else to put before the country. They had intentionally caused inflation. They wanted desperately to try to get another run of government. They could not wait until after the Budget—that was a certainty—and all they could do was drag out "Reds under the beds"

They got their answer, and I am glad that at last we are to tackle the problem in a sane and orderly way. We shall get rid of all the heat and hate induced in industry by the Industrial Relations Act and the rigidly applied prices and incomes policy.

I turn to housing in Scotland. The previous Government's Housing (Financial Provisions) Scotland Act was a tragedy. It has brought house building almost to a halt, and certainly local authority house building in Scotland to a halt.

I am somewhat alarmed by some words in the Gracious Speech about encouraging home ownership, and my right hon. Friends must look at that subject. It is no use talking about encouraging home ownership in Scotland on the same terms as those envisaged for England, for that will not work. The reason we have such a low percentage of privately-owned houses in Scotland is nothing to do with the disposition of Scottish people in respect of local authority or privately-owned houses. It has to do with the relationship between income and housing costs and the ability to obtain a loan to get a new home. Unless we get that right, there is no purpose in talking about encouraging home ownership in Scotland.

One of the great encouragements to workers employed in Scotland, and they are highly-skilled men, is that if they were to take a job in Coventry, the firm giving them a job would give them a loan to buy a house on mortgage, and they would be able to repay it. But the same company would not extend that facility to Scotland, because the relationship between the building costs of a new home and income in Scotland is such that they would not be able to do so. Building societies know of this problem, too. If we are to do something, we must see that the local authorities are encouraged to build more and better houses.

One feature of the Tory Party, especially of its Scottish members, is that it has never understood housing subsidies. Housing subsidies were not created just to build or provide a house. Their purpose was to build a house of a better standard, of an acceptable standard. The emphasis was always on the standard.

Private enterprise has always been able to provide houses for Scottish working people, but we know what kind of houses. We have seen the housing that has been built in the mining villages—single apartment houses with dry WCs; the water, available outside on the pavement. That was the kind of house that Scottish workers could afford. Private enterprise could always build houses, but to build houses of an acceptable standard required a subsidy. This is the point that has been missed by members of the Tory Party. I hope that my right hon. and hon. Friends will do all that they can to build up housing again in Scotland and encourage local authorities, because the house building problem is still serious.

I reiterate what my hon. Friend the Member for Kirkcaldy (Mr. Gourley) said about pensions. I found during the election that this was a major grievance. There were two main grouses. The first was that there was normally a six-month wait for an increase after it had been announced. The second was that when a man had a small occupational pension, or some other small income, income tax bore heavily upon him. He was denied supplementary benefit and had to pay an extortionate amount of income tax. I agree that we should raise the tax threshold.

The Gracious Speech says: My Ministers will initiate discussions in Scotland and Wales on the Report of the Royal Commission on the Constitution and will bring forward proposals for consideration. I hope that the Government mean what they say here. It is possible to put a slightly sinister interpretation on these words, but I believe that any suggestion that initiating discussions in Scotland and Wales alone will meet the position is not true. One of the first things that they could do is initiate discussion in this House. I hope that we shall get a White Paper on this very quickly.

Scottish government for Scottish affairs has a long and respectable history. It was Labour Party policy until some very recent date. What is difficult to find is when it ceased to be Labour Party policy. It was Labour policy right from the day when Keir Hardie formed the Scottish Labour Party, and in 1918 the Labour Party went to the country on the theme "Home rule all round, even for England." That attracts me; I am willing to give the English home rule at any time.

One should not minimise the demand in Scotland for some closer say in their own affairs. An elected legislative Parliament or assembly is the minimum demand. History shows that when legitimate moderate demands have been resisted, people have often sought their objective by other means. The Government and every hon. Member should bear in mind the history of these islands. It has not always been peaceful.

I hope that my right hon. Friends mean what they appear to say, and that in the near future we shall have before us either a White Paper or some other proposal for setting up an elected Scottish assembly to deal with Scottish affairs. There is no question of breaking up the United Kingdom. The Kilbrandon Report makes no such suggestion. Indeed, if this is done correctly, it will strengthen this place and the bonds that tie England, Scotland, Wales and Northern Ireland together. This matter requires the serious consideration of the House, and it should be put into effect as quickly as possible.

7.24 p.m.

Mr. Paul Tyler (Bodmin)

I am grateful and honoured to have been successful in catching your eye, Mr. Speaker.

I hope that the House will not think it excessively precocious of me to leap in so early in a parliamentary career. I have two motives. One is that I suspect that this Parliament may not last all that long, so I want to take advantage of my presence here as quickly as possible. More seriously, there seems to be no opportunity later in the debate on the Gracious Speech to discuss housing, so I was compelled to try to catch your eye today.

My predecessor as Member for Bodmin was a devoted and diligent constituency Member. We admired him for that and were grateful to him for the hard work he put in on behalf of the division. He will be missed, I fear, from the House for an additional reason: I understand that he had the best batting average of any hon. Member. I must confess that cricket is not my game and that even if the House manages to stay together until the cricket season, I shall not be performing in that way.

The constituency that I have the honour and privilege to represent may be known to many right hon. and hon. Members. I hope that it is known to you, Mr. Speaker. I know that it is an old parliamentary game to try to lure the Prime Minister into one's constituency, but I should be much more glad to lure you into mine. The Prime Minister, I understand, frequently travels through my constituency at speed by railway. I would far rather have your presence, Mr. Speaker, so that I could demonstrate to you that it is the most beautiful constituency in the United Kingdom.

More than that—it is at the moment a comparatively prosperous part of Cornwall. I say "comparatively" because the Duchy of Cornwall has not found it easy to keep pace with the rising cost of living in the rest of the country and we have consistently lagged behind in terms of incomes under successive Governments in the last 25 to 30 years. However, for a short time there was a more positive approach to the problems of low income areas and my constituency was fortunate enough to obtain new industry, particularly light engineering. As a result, small market towns have been enabled to expand.

Unfortunately, in the last three-and-a-half to four years, this expansion has slowed up—not just because of a lack of interest among potential industrialists, but because of the housing situation. On this subject, I have considerable sympathy with the hon. Member for Paisley (Mr. Robertson). The housing shortage is now a major social evil again. Perhaps for the first time, it is not just the central urban areas that are feeling the effect of the housing crisis. Certainly a rural area with comparatively small towns, such as South-East Cornwall, feels this now excessively, so much so that it is having a major impact on our whole economy.

Although five or six years ago, young people often had to leave the area because of lack of jobs, the reason now all too often is the complete lack of any suitable accommodation. Any hon. Member representing a large constituency must receive in his postbag details of many sad, unfortunate housing problems. On reaching this place, I certainly found myself engulfed in such a postbag. I know that the previous Member did a great deal of valuable work, but I suspect that my postbag is that much greater as a result of what has happened in comparatively recent months.

The sad fact is that the national and the local housing programmes have collapsed. The former Minister for Housing and Construction announced at the end of January that the figures for completions in the private sector had fallen to 186,100 and in the public sector to 107,500—decreases of 10,200 and 15,400 respectively, giving a total of 293,600 in 1973 compared with 319,100 in 1972. These are alarming figures.

The Natonal House-Building Council has already announced that in the first month of this year there has been a further drop in the private sector of 40 per cent. compared with the previous year. Judging from our own local experience, we in South-East Cornwall are experiencing this situation with the same gravity as that with which we meet all major economic, social and housing problems in the country. When the country gets a cold, we in Cornwall, I fear, seem to catch double pneumonia.

In the West Country in 1973 council housing completions were down by some 75 per cent. on the preceding 12 months. In East Cornwall the council house building programme is almost at a standstill. Very few family houses are being built. Only a handful of old peoples' dwellings are being built. At the same time, the private sector is finding that it has no purchasers for the houses that it completes.

There are two or three immediate steps which the new Government could take. I think that I have my right hon. and hon. Friends with me in suggesting that this is something which the new Government should look at as a matter of urgency. First, it is now possible to give more responsibility to the local housing authority. Some of us had grave misgivings about the passage of the Local Government Act 1972, but its one merit was that in giving additional size and status to the new district councils, the new housing authorities, it should have been possible to trust them a little more. The first way in which I would seek to trust them a little more, to decide what their local needs are and then to meet them, would be to abolish the housing cost yardsticks.

As the House will remember, the housing cost yardsticks were introduced by a previous Labour Government in 1967. They tie down the local housing authority to an immense degree and to minute detail. They have all sorts of unfortunate side effects. Much of the condensation problem in recent council house building has been caused by the fact that the housing cost yardsticks provide for only partial home heating. The result has been that in the long term a great deal of remedial work has had to be undertaken, costing thousands or millions of pounds. The first step would be to abolish the housing cost yardsticks and to lay the responsibility fairly and squarely on the housing authority to undertake the sort of building that it needs for its own purposes.

Secondly, on the mortgages situation the Gracious Speech contains a splendid non sequitur. It states that Urgent measures will be taken to reverse the fall in house-building". and goes on to elaborate other policies which are totally unrelated to that objective. Certainly at present the mortgage situation should be a cause for grave alarm on the Treasury Bench.

The Liberal Party has promoted for some years the idea of low-start mortgages. It is nothing new. Many hon. Members in all parts of the House now support that concept. But why is it that, when we have had an official report making it quite evident that it is possible to run such a scheme, it takes this country two or even three years to put it into operation? The National Economic Development Council produced a report at least two years ago, setting out in detail the financial implications of a low-start mortgage scheme, but it is still not fully operational.

The hon. Member for Stoke-on-Trent, Central (Mr. Cant), who has now left the Chamber, referred to the role of building societies. I believe that building societies are too cautious. The Government should be in a position to encourage them to be much more open-minded and much more liberal with their funds. At the same time, the building societies should be encouraged actually to build. In the Scandinavian countries and in West Germany the building societies build houses. That is a role which would do a great deal for the societies and for the whole question of the finance of housing in Britain.

Thirdly, and very importantly, I believe that there should be immediate action to channel public funds to those most in need when it comes to buying a house. We must now wait for the Budget. It would be fair to say, however, that my right hon. and hon. Friends will be looking to the Chancellor of the Exchequer for some explicit statement or action to try to make sure that the tax allowances for house purchase go to those who are most in need of help.

The time has certainly come when we must regard housing as one of our biggest social problems. From this problem derive so many of our social difficulties. At the same time, we must not forget that it is a question of quality as well as quantity. We must be building to last. We must not be building the slums of tomorrow. The cost yardstick, sadly, has done a great deal to produce substandard homes in the longer term.

But the financial system which ensures that loans are raised for a period of 60 years, and then after that period we forget about the structure of the buildings, has also ensured that we have moved inevitably towards more and more throw-away building in the last 20 to 30 years. That process must now be reversed, because the energy crisis and the material crisis mean that a house or any building today must be built to last if we are to get good value from the public money which we invest in them. Buildings must be built to last at least 100 years, if not 150 years.

We must hope that the new Government will look again at the subject of housing. I fear that the brief reference in the Gracious Speech does not encourage me to think that the Government will approach this subject with a freshness which will enable them to insist that the particular representatives of our community, who are responsible for planning the shelter of our citizens, should look at the subject in the interests of all future generations. It is not good enough to build just for here and now. We must be building for a generation after the next generation. If we are to do that, we certainly cannot continue with the present hand-to-mouth financial restrictions which prevent local housing authorities from doing a good job for their community.

The time has come to trust the people and the representatives of the people. That must mean less Whitehall interference, rather than more.

7.38 p.m.

Mr. James Sillars (South Ayrshire)

It falls to me to offer my congratulations to the hon. Member for Bodmin (Mr. Tyler) on his maiden speech, which was delivered with great eloquence and a great deal of sincerity. All of us join with him in the tribute that he paid to the previous Mem- ber for Bodmin. He was on a different political side from myself, but we all respect him for his personal qualities. However, we are looking forward to hearing from the new Member for Bodmin again.

I wish to refer to two points in the Gracious Speech. The first concerns the Industrial Relations Act and the commitment of the Government to repeal it. The second concerns the reference to Kilbrandon.

Regarding the Industrial Relations Act, there will be no greater benefit to this country, certainly in enhancing the productive potential of British industry, than its repeal. The Act was born of a false belief that workers are sheep, very weak men and women who are extremely easily led by militants of one sort or another, and that workers, so the Tory mythology goes, are also contented people who know their place and are happy to remain there.

That is a myth which has long been believed by successive Conservative Governments and by the Tory Party when out of office. It is a myth that led the Conservative Government to take on the miners in 1972 despite all the warnings from mining areas about the inevitable consequences of such a conflict. It is the same myth that led them once again to the same sort of conflict with the NUM in 1974. and it is the same myth that led them to the General Election campaign in the belief that they could frighten off the country with arguments about Reds under the beds. That was the myth, and I suspect that it is still strongly believed by most of the Conservative Members. With that myth representing the reality of Conservative thinking, the Tories naturally believe that the solution to industrial relations problems is to place the whole thing in the hands of lawyers in the antiseptic atmosphere of a court room, whether it is the National Industrial Relations Court or one of the tribunals.

I can recall our first debate in Committee on the Industrial Relations Bill. Four lawyers from both sides of the Chamber spent a great deal of time arguing the legal definition of the word "responsible". Every trade unionist in the Chamber was in total despair because we knew that if the lawyers could not make up their minds on a simple word like that, a word which any shop steward and any personnel manager would have agreed on within 30 seconds, there was no hope of industrial policy being sensibly pursued in the atmosphere of a court.

I am not arguing against all lawyers in our society. They are necessary to sort out civil suits and for the prosecution of the criminal laws. They engage in these activities in the court room and when they have completed their work sometimes a divorce is made final, perhaps someone who is guilty is properly sent to prison and someone who is innocent is found not guilty. But things are not so simple when lawyers come to grips with industrial relations. The consequences of a wrong or foolish decision by lawyers or a high court judge in an industrial relations court could be enormous in terms of lost production.

I have no doubt that a great deal of intellectual enjoyment is derived by specialist lawyers who argue among themselves the precise meaning of this or that term in the Industrial Relations Act. I have no doubt that a great deal of money has been made by the legal profession out of the Industrial Relations Act. Many a tear will be shed in legal circles tonight when lawyers read the Queen's Speech and see that one of their sources of income is about to be taken away from them.

The lawyers and the courts produced very few solutions to our industrial relations problems, as can be seen from the events of the last three and a half years. In all sections of industry, in the City and elsewhere, it is widely recognised that the Industrial Relations Act must be repealed. When we repeal it we shall put industrial relations back on to a sensible, flexible basis which recognises that we are dealing with people in a human situation.

When a worker goes through a factory gate and clocks on he does not divest himself of his personality. He is the same man inside the factory as outside. Managers are the same. They are ordinary human beings who can lose their temper or enjoy a joke, who can swing the lead for five minutes and who can work harder from 9 a.m. to 10 a.m. than from 10 a.m. to 11 a.m. for a variety of reasons. They can have differences of opinion and they need to let off steam at times. That is the situation which is presented in industrial relations. The problems which it creates cannot be dealt with even by the most brilliant legal minds turning their attention to the difficulties which arise on the shop floor, and trying to resolve them in a court.

No Government, no Act and no situation will totally rid British industry of strikes for ever. We must recognise that fact. We should aim for the realisation that there are areas of friction which need not erupt into strike action and that these situations demand voluntary conciliation and arbitration machinery manned by employers and trade union officials who know what they are talking about and who have access to management and men on the shop floor where the friction occurs. That is the sense of what the Labour Party manifesto said. The Queen's Speech means that we are to get rid of the Act and to get British industry back to good industrial relations.

I come now to the question of the government of Scotland and the reference in the Queen's Speech to the Royal Commission on the Constitution and the initiation of discussions in Scotland and Wales. I recall the day the Kilbrandon Commission Report was published. Many of the so-called national newspapers dismissed it in their leading articles as totally worthless and as something which would soon be pigeon-holed. There were derisive comments in the House about the "Celtic fringe." I do not regard myself as being on the Celtic fringe or any other fringe. Scotland is a pretty big chunk of the United Kingdom land mass, and more than 5 million people live north of the border.

In view of the election results, those leading articles now look even more foolish than when they first appeared. Kilbrandon is back on the agenda whether some people like it or not. The hon. Member for Perth and East Perthshire (Mr. MacArthur) said that the Kilbrandon Report said two things. During the election campaign my right hon. Friend the Secretary of State for Scotland also argued that Kilbrandon said only two things. He said that the report rejected the separatism of the SNP, which was correct. He said it rejected the federal solution put forward by the Liberal Party, and that, too, is correct. He forgot to add the report's unanimous rejection of the status quo. The entire Commission was agreed that the status quo was no longer an acceptable way of running the government, and I refer particularly to the government of Scotland. The argument has to be not whether there is a need for change but how that change will best be effected.

I put on the record at the beginning of this Parliament that like Kilbrandon I am opposed to the separatism of the SNP. I will not go into the reasons tonight because there is no Nationalist representative present. We have to reject separatism because that philosophy argues that after 260 years of common effort we can adjust the relationships between the nations which make up the United Kingdom without coming to the point of break up. I cannot go along with the separatist argument that break up is necessary. However, I say to my right hon. and hon. Friends on the Treasury Bench that there must be recognition of the need for change and I welcome the recent signs of change in the higher policy-making echelons of the Labour Party in Scotland.

Just before I boarded the train last last night at Ayr to travel to London I heard on Radio Scotland's late night news with disappointment and apprehension that Lord Crowther-Hunt had been made constitutional adviser to the Prime Minister. That made me uneasy because he was one of the authors of the minority report of the Kilbrandon Commission. His minority report is based on the assumption that there is essentially no difference between Scotland and Yorkshire. He sees Scotland in the same regional setting as Yorkshire, Lancashire, or Cornwall—although that last area is not the best example to take, because of certain nationalistic problems there. As a Scotsman I entirely reject that assumption, which is unacceptable north of the Border. We cannot under any circumstances accept the assumption that we are exactly the same in regional terms as Yorkshire or Lancashire.

The solution which the Government finally produce must not be based on the minority report. If it is, I for one will not support it. The Kilbrandon Commission said that, in its view, support for an elected assembly in Scotland would grow. I believe that it has grown and that it will continue to grow until an assembly is formed in Edinburgh.

I think that Kilbrandon was right, and I want to see a clear-cut solution. I want an assembly with legislative powers. If we want to stop separatism entering deeper into the politics of the United Kingdom, we must give the Scottish people the right in Scotland to elect other Scottish people who will sit in Scotland and make laws on matters exclusively concerning the Scottish people. Anything less than that will invite further separatist pressures in Scottish society.

Nothing less will be acceptable to the ordinary people in Scotland, and this fact must be understood. At present the Labour movement still have the majority of support of the Scottish working people who have sent us cry after cry in the past 18 months in support of their aspiration for devolution. It is time for the Labour Party to take out the ear plugs and listen to the people. If we do not listen to the people, they will stop listening to us.

7.54 p.m.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

Having sat through four days of debate towards the end of the last Parliament without catching Mr. Speaker's eye, and having sat through most of the speeches today, I was beginning to wonder what was the secret of catching Mr. Speaker's eye. I have now discovered that one has to be the only hon. Member left standing.

I welcome the maiden speech of the hon. Member for Bodmin (Mr. Tyler). I was friendly with his predecessor, for whom I had a high regard outside the House. I enjoyed the hon. Gentleman's speech. As a Member of only three years' standing, I caution the hon. Gentleman that the fact that he was listened to in silence today ought not to be taken as a precedent. I assure him that in days to come his speeches may be met with somewhat rougher opposition than was evident today.

I welcome the Gracious Speech, but in a different way from that of the Leader of the Liberal Party. I was not surprised that the Leader of the Liberal Party welcomed the Speech not because of what was in it but because of what was left out. If the Liberal Party has ensured anything since the election results were announced, it is that the people of this country will never be treated to the scene of the Leader of the Liberal Party seated on his backside leading the country into a promised land of Liberalism.

Since last week the pages of the book have been unfolded showing an attempt to seek a coalition Government, frustrated no doubt by some Members of the Liberal Party, and the threat during the past two days to bring down the Government within 24 hours if the Labour Party dared to include one-tenth of its election manifesto in the Gracious Speech. My goodness, there is more than one-tenth of the manifesto in the Speech. The degree of irresponsibility shown by the Liberals since the election was declared has ensured that at the next General Election the electorate will look closely at what is being said by whom, and at the names of the candidates and the parties they represent.

The Prime Minister recently went on record as saying that he regarded himself as the guardian of the manifesto. We, too, regard ourselves as a guardian of the Labour Party's manifesto. The fact that certain matters which were in the manifesto have been omitted from the speech ought not to be taken as an indication that they are no longer part of our policy. The manifesto was for a five-year Parliament—not for one Gracious Speech. Therefore we, as the Labour Party, remain committed to the ideals, philosophy and policy contained in the manifesto, and the electorate will have the opportunity to decide on that programme.

I welcome principally the proposal in the Gracious Speech to increase pensions. The Speech has done more to restore the credibility of politicians than has any other act for many years. During the election campaign there was great difficulty in convincing the electorate—none more so than the pensioners—that we really meant what we said.

Mr. Skinner

I am surprised that my hon. Friend keeps referring to the Opposition. Where are they? After all the bluster and talk about one-tenth of our manifesto, and threats about the Government being brought to a halt, particularly from the Liberals, where have they gone? Have they gone streaking?

Mr. Ewing

I seriously doubt whether the hon. Member for Rochdale (Mr. Cyril Smith) is out streaking. If he is, I am sure that he will easily be seen. As for the Opposition in the form of the Tory Party, I speculate—with some delight—that they may be away electing a new Leader, which will come out in due course.

There was no group greater than the pensioners during the election campaign, who suspected that members of both the major political parties did not really mean what they said about pensions. Let us be realistic about this. Neither of the two major parties has a good record on pensions. The hon. Member for Windsor and Maidenhead (Dr. Glyn) said that the Tory Government had a policy to review pensions every six months. That was not so. It was a proposal in the Tory Party election manifesto. I am sure that the hon. Gentleman did not mean to mislead the House in that fashion. Pensioners were suspicious, and during the election campaign we had the greatest difficulty in convincing them that if we won the election pensions would be increased to £16 for a married couple and £10 for a single pensioner. Yet this has been announced today in the Gracious Speech. The unqualified guarantee is there. I am sure that pensioners throughout Great Britain will tonight be thankful that my right hon. Friend the Prime Minister accepted the invitation to form a new Labour Government, albeit a minority Government, and that, more than that, he decided that we should pursue the course set out in our election manifesto and would not deviate from it no matter from what source came threats to bring us down.

On the question of other benefits, I greatly welcome the appointment of my hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) as a Minister with special responsibilities for the disabled. I hope that his appointment will lead to the introduction of a national disablement income, a need which has been felt for a long time. I hope that my hon. Friend's appointment means that we as a party and as a Government are giving serious and urgent consideration to alleviating the hardship felt by so many disabled people, by introducing a national disability income. I am sure that many disabled people throughout the country look to our Government to introduce such an income.

I turn to the proposal to repeal the Housing Finance Acts. I am particularly interested in the Housing (Financial Provisions) Scotland Act. I regret that no Scottish Tories are present. That does not deter me from saying that the scandal of housing in Scotland is twofold. One aspect is the reduction in housing completions under the Conservative Government. In the latest period for which figures are available, the year 1973, only 17,000 houses were completed, whereas in 1970, the latest period for which figures of completions under the previous Labour Government are available, we completed 34,000, and we did not consider that to be sufficient.

The evidence is clear that even in our worst year we completed more houses than the Tory Government completed in their best year. It is one of the greatest scandals of housing in Scotland that queues are growing longer by the day. Those of us who hold surgeries have evidence, if evidence is required, that young couples are back to living with their parents when they get married. In my constituency, because of the excessive mortgage interest rates, young couples are seeking to sell their houses and go on to the local authority waiting list because they cannot meet the interest and repayments. This aggravates the problem of the local authority house building programme and waiting list.

There is another scandal which is just as great—the rent arrears situation in Scotland. I believe that they now amount to well over £1 million. Since the introduction of the Housing (Financial Provisions) Scotland Act, the Edinburgh rent arrears figure has doubled. It is logical that if legislation holds down earnings and pushes up rents people are bound to be pushed into that poverty trap which prevents them from paying the rents demanded by the Act. I have hope that by repealing the Act we shall be able to deal not only with the house building programme, the waiting lists and the owner-occupation problem of mortgage interest and repayments, but with the question of rent arrears.

I do not want now to go deeply into what I should like to see as new housing legislation. It is a subject in which I am very interested, and I shall no doubt have my opportunity as time goes on.

I turn to the repeal of the Industrial Relations Act. It would be thought from the speeches of Tory hon. Members that the only people who will welcome the repeal of the Act are trade unionists. That is not so. Industry, as well as trade unions, has been crying out for the past year or 15 months for the removal of the Act from the statute book. It ill becomes the Leader of the Opposition to suggest to my right hon. Friend the Prime Minister that all we are required to do is to amend the Act, when he had opportunity after opportunity to amend it. He abdicated his responsibility to amend it. He turned his back on it, and did not realise that good industrial relations could not be operated in this country within the framework of legal strictures.

One of the things that will be hung around the right hon. Gentleman's neck in years to come is his failure to recognise the way in which we operate our industrial relations in a democracy. The Act is unamendable; it is not possible to amend such an Act, which is so bad. The only way to deal with it is to remove it from the statute book and replace it with new industrial relations legislation. That will be done, because the industrial relations legislation is part of the compact that we have with the Trades Union Congress.

My position on the Common Market is well known both inside and outside my constituency. I have always been opposed to entry. I am not a convert. I was one of the early campaigners against entry. The Labour Government have a responsibility to carry out their pledge to the electorate to seek to renegotiate the terms of entry and, most important of all, to put those renegotiated terms, whether we succeed or fail in our renegotiation attempt, to the people to decide whether we should remain in Europe or come out.

To suggest that we should put the terms to the people with a recommendation is to fail to appreciate the strength of feeling on the Common Market. Those of us who follow opinion on the subject cannot fail to be impressed by the fact that over 80 per cent. of our people, when asked to state whether Great Britain should stay in Europe or withdraw, have made it crystal clear that they want to withdraw. The situation is one that the Government, Opposition and Parliament will have to face up to. Otherwise, we shall betray the trust reposed in the House.

My views on devolution are also well known. They coincide with those expressed by my hon. Friends the Members for South Ayrshire (Mr. Sillars) and Paisley (Mr. Robertson). With my hon. Friend the Member for Midlothian (Mr. Eadie), we have recently written and published a pamphlet on the subject. I welcome the fact that my right hon. Friend the Prime Minister has recognised that there is a desire in Scotland, as in other places, for a greater involvement in decision making.

I have always regarded it as the duty of politicians not to attempt to frustrate the desires of people but to attempt to lead those desires into productive channels. This is what we are saying about devolution. The desire for this must be led in a constructive fashion into productive channels. To put it simply, we have just emerged from an election in which the terms "moderate" and "extremist" were used in the most liberal manner. What I say about devolution is that unless we concede the demands for it, and that is moderation, we shall ultimately be faced with the extreme demand for separation.

It is a choice between moderation in the form of devolution or extremism in the form of separation. I do not believe that the people of Scotland, and I can talk only for them, want separation. I do not believe that the 600,000 votes cast for the Scottish Nationalist Party are 600,000 voices saying that they want Scotland cut off, that they want the world to stop so that Scotland can jump off while the rest of the world gets on with everyday living. I believe that those are voices warning the major political parties, particularly the Labour Party, in Scotland that there is this desire to become involved. It is a positive desire that must be met by positive legislation. Given that legislation and an elected Scottish Assembly with finance from North Sea oil, I am convinced that the people of Scotland will respond to what I consider to be a moderate approach.

I look forward to this Session of Parliament. I do not believe that it will be the short Session that the Liberals and others would have us think. To listen to them, we would be in an election situation next week. I believe that people will be suryrised by the length of this Parliament. I look forward to the constructive work that Parliament can do to rescue the country from the economic and industrial chaos into which it has been plunged by the Tory Government. For all these reasons I welcome the Gracious Speech.

8.12 p.m.

Mr. Bob Cryer (Keighley)

I am pleased to be here and to be able to make this speech representing Keighley in Yorkshire. It is a constituency of 55,000 people, many of whom are engineers who were foremost in the struggle against the Industrial Relations Act. Such people will be pleased by the Gracious Speech, which outlines so many fruitful and positive plans. My constituency also contains rural and semi-rural areas. It includes Haworth, the famous home of the Brontes, the second most important literary shrine in the country. The people of Keighley will be pleased that the Gracious Speech contains such a far-reaching programme of social change.

I pick out in particular the emphasis on comprehensive education. In Keighley we are fortunate, because unlike the majority of local authorities we have a comprehensive system of education in existence. The curtailment of expenditure by the last Government meant that the reorganisation of that comprehensive education, to bring it into line with the plans of the new Bradford Metropolitan District Authority—an authority brought into existence by the last Government—was placed in jeopardy.

I hope that the Labour Government, in formulating their financial plans, will bear in mind the urgent need for further expenditure on education so that areas such as my constituency can once more begin the essentially important task of rebuilding. Two schools in my constituency certainly date from the last century and are greatly overcrowded. One has recently been overshadowed by a large new factory. Children are being educated in circumstances which are far from ideal. This school was due to be replaced first of all in 1973 and then again in 1974. I hope that this rebuilding will be carried out by a Labour Government willing to put into effect plans which the previous administration seemed so reluctant to implement.

Comprehensive education in Keighley, although in existence, is seriously short of money, and we look forward to a lengthy period under a Labour Government when, hopefully, the defects of the last Government will be remedied. We hope that the two schools I have mentioned, Hartington and Swire Smith, will be replaced. The comprehensive education mentioned in the Gracious Speech should be a genuinely comprehensive system, unlike the bipartite system of education which in the majority of local authorities is carried on in separate schools. Many comprehensive schools are comprehensive in name only. Once inside the schools children are streamed rigorously and might just as well be in separate schools. We want a system where streaming is avoided or gradually eroded so that children are given an opportunity of being educated with their peers and not separated as though they were entering separate schools.

Comprehensive education needs to be comprehensive not only for the pupils but for the staff. Hopefully the Government will ensure that there is a degree of democratic participation by staff and pupils inside the schools. We cannot talk about democracy within the education system, we cannot expect teachers to instil an understanding and appreciation of democracy, when they have no democratic right of participation in the administration of what can be large units.

I hope that the Government will ensure that there is an element of democratic participation in education and industry. I often think that, because of a rigid demarcation between management and men, the people of this country are not given sufficient opportunity, within the framework of society, to be able to participate in decision making, and to bring their varied and considerable talents to bear.

In industry and education there is a need to enable people to participate much more in management decisions. We spend far more of our time at work than in any other activity yet so often thousands of millions of people are denied any sense of opportunity or of creative sharing in their work. There are 350,000 people employed in education and it is to be hoped that there will be greater involvement.

The Gracious Speech also mentions the protection of the environment and the need to reappraise major development projects. I hope that this will include much of our motorway programme, because the Gracious Speech also refers to the energy situation which has necessitated the Government taking a critical and sharp look at the energy shortage in the immediate past and future.

It is time that the Government seriously examined all the motorway projects, especially the Aire Valley motorway which, if it is ever constructed, will run through my constituency for 13.2 miles at a cost in excess of £40 million. One wonders whether that sort of expenditure can be justified at a time when the country is in serious economic difficulties.

The prospect of the motorway has already blighted the homes of many people. At least two schools along the route will have to be completely replaced and a third school will be overshadowed by a 40 ft. embankment which will act as a noise barrier against the motorway. In a situation of economic curtailment one wonders whether the expenditure of £40 million is justified, especially when it means the construction of two new schools and the possible curtailment of a third.

How valuable is a motorway programme when at least until the early 1980s we shall have limited energy resources? We know that our energy resources are finite, and we cannot squander energy as we once did. We no longer have an oil glut in the world and we shall have to allocate our total energy resources with great care.

I am glad that one of the first steps of the Labour Government in solving the mining dispute and getting the miners back to work has been undertaken so speedily. First, we have to get the country back to work and, secondly, we have to embark on a programme of solving the energy crisis. The Labour Government are committed to improving the energy position. I suggest that the reappraisal of major projects should include motorway projects which are not proved to be of value to any particular community.

It is with great pleasure that I give my unqualified support to the Gracious Speech and the programme it outlines. A great step forward is the proposal to repeal the Industrial Relations Act. The Act was bitterly opposed by the trade union and Labour movement. We argued at the time that it would produce only industrial strife and that one could not solve delicately balanced industrial relationships by legalistic action. It was a hopeless illusion of the then Government to force the legislation through Parliament and to believe when they did so that it would in any way solve our industrial relations difficulties.

The Act's failure is surely indicated by the figures that show that during the period of the previous Government there were three times as many strikes as there were between 1964 and 1970 when there was a Labour Government. During 1972 alone, as many days were lost in strikes as were lost during the whole of the period between 1964 and 1970. Statistically, the Industrial Relations Act has been a calamity, and it is pleasing that a Labour Government will carry out the promise to repeal it.

There is to be a new conciliation and arbitration service. It has been suggested that a conciliation and arbitration service already exists. If so, it has not been used much. The independence of the new conciliation and arbitration service is important, to show that it is not a Government body and that both sides of industry can appeal to it in the knowledge that it is independent and does not seek as an arm of the Government to impose a solution. That causes suspicion in many industrial disputes. The setting up of this service is an earnest of the Government's serious intention to avoid the confrontation that for the past three-and-a-half years has bedevilled British industry. The only solution to any industrial dispute is by agreement between the two sides round a table, and the conciliation and arbitration service will surely help in this.

It is hoped to introduce an industrial democracy Act. That promise is contained in the manifesto, and I am sure that Opposition Members will support an opportunity for working people to participate to a much greater degree than ever before in the general direction and management of industry. I hope that that will be an item in the future programme.

I am pleased to note that the pledge to renegotiate the Common Market terms is being fulfilled. That is an essential plank of the Labour Government's programme. At last the British people will have the opportunity to make a decision on this vital issue. The Government have made clear their intention to place this matter before the people either through a consultative referendum or in a General Election. The Common Market was foisted on the British people without adequate consultation and in spite of promises that we would never go in without the full-hearted consent of the British people. That consent was never given, and it is pleasing to note that the Labour Government will renegotiate the terms and present the renegotiated terms to the British people.

I have great pleasure in supporting the whole of the Gracious Speech in the knowledge that the Labour Government are honouring the promises made during the election.

8.27 p.m.

Mr. Joseph Dean (Leeds, West)

I will spend a few moments speaking of my predecessor, Mr. Charles Pannell, who represented this constituency for more than 20 years, and who was respected by hon. Members on both sides of the Chamber. He has a tremendous record of public service both in the House and outside. If during my period in the House I measure up in some respects to the wonderful record of Charles Pannell I shall be very pleased. I wish him a long and happy retirement, be it semi-retirement or otherwise. I have known hon. Members to continue in another Chamber.

My constituency is a large one with an electorate of more than 60,000. It has most of the problems of modern urban areas, but it is not a tight city constituency. Four medium-sized units go to make up the 60,000 electorate. My constituency has a great deal of new housing, both council-owned and owner-occupied. It suffers from many of the blights of its industrial history. There are still a great number of back-to-back houses, some of which need demolition. There are also large areas of housing which need improvements in amenities and environment if they are to be saved as homes fit for people to live in.

During the election campaign one of the saddest things I found was the condition of some of the schools in the area. Two schools are almost a hundred years old. They have been removed from the building programme because of the Tory Government's economy measures late last year. They are in a deplorable condition, and I hope that the new Secretary of State for Education and Science will see fit to give them the priority in the building programme that they and schools of similar vintage so richly deserve.

I listened with great interest to the Leader of the Opposition when he spoke in laudatory terms of the Housing Finance Act placed on the statute book while he was Prime Minister. As spokesman for the local authorities on housing, I had the onerous task of trying to fight that Act within the law. The Leader of the Opposition hinted that it put the burden where it could best be carried, because council house rents were increased. No such thing happened. One has to look back only a short time to see what actually happened.

I was a member of the TUC and local authority deputation which met the then Secretary of State for the Environment, the right hon. and learned Member for Hexham (Mr. Rippon). We produced figures showing that in 18 months 60 per cent. of council house tenants had had a 40 per cent. increase in their gross rent inflicted on them by rent and rate increases. That was in a period when the wage earner was in a straitjacket, with no wage rise of any significance coming through. The figures which we produced were not denied. They were accepted in silence, the Act carried on, and we all know the subsequent effects. I am pleased that the Gracious Speech tells us that the Act is to be repealed. Rents have already been frozen, and it is a good job that they have. If the rent levels set by the rent tribunals are any indication, the further operation of the Act would have been disastrous for working-class people living in council houses.

I hope that the repeal of the Act will be approached in a constructive sense, and that something will be put on the statute book which will allow local autho- rities to go in for the massive building programmes which are sadly needed. It has been proved beyond any doubt that, if people are to be adequately housed, the only agency which can do it is the local authority. On that basis, we must make adequate financial and material resources available.

I am glad to see, on a related matter, that there will be the outlawing of the lump. I hope that other measures of a Socialist nature will be introduced, giving local authorities power to deal with the situation. If we are to divert building forces in adequate strength to the municipal building programme and to house building generally, some form of licensing will be necessary. It has been proved beyond doubt that one cannot build houses at the same time as there is overbuilding of blocks of luxury offices and flats. I hope to see some form of licensing which will give local authorities the necessary resources.

I turn now to the energy crisis. I welcome the indication in the Gracious Speech that the Labour Government will be in control of the development of the new-found oilfields, in both the North Sea and the Irish Sea. I thought it was rather odd that, according to a certain election manifesto launched some three or four weeks ago, we were going to place our trust almost in toto in the multinational oil companies. Some of us know what they were up to in this present crisis, keeping millions of tons of oil at sea so that they would make a killing when the price went up. This matter has been raised not only here but in Washington and Rome, and it has not been denied. I am glad to see the end of the miners' strike because, as a Socialist, I would put more faith in a British miner than in a multi-national oil millionaire, and I am glad that this is catered for in the Queen's Speech.

Let us turn now to the question, also raised in the Gracious Speech, of public transport. I welcome the indication that more funds are to be made available for its improvement and that it will be given priority. As one who has spent most of his life in a large city, I have been completely horrified to see the scarring of some of our city centres by these huge monolithic concrete things which are termed roadways. If one looks at Birmingham as it is now, one sees a city almost destroyed by worshipping the god of the motorway. I welcome the indications in the Gracious Speech that more money will be found for public transport and to get this matter under control.

I turn now to the Industrial Relations Act. Of course, one can only look back and say that here again history has repeated itself, because in any democratic country today where Governments have sought to legislate for any period whatsoever on working conditions and wages, it has not lasted very long. Not so long ago there was a similar situation in Australia, when the then Australian Government had to ask the country's trade unionists to rescue them from their own Act. Legislation on working conditions and wages will never work in a democracy. It must be done on a voluntary basis. I am very pleased that it is indicated in the Gracious Speech that this will be one of the priorities.

Last but not least, I should like to deal with the question of pensions. It is about time we tried to make this a non-political issue. So far as I am concerned, £10 and f16 sound very good. It is a tremendous step forward. But I hope that it will merely be the foundation stone for a system of pensions whereby people who have worked all their lives for the benefit of the community will be able to retire in dignity in old age, and will not have to claim this, that and the other fringe benefit. The basic rate should be more than adequate. I am pleased that this will be a top priority in the Government's legislative programme.

I welcome as a whole the progressive measures contained in the Gracious Speech, and I await with interest the implementation of the necessary legislation. I am sure that the programme that has been placed before us has a great deal of social justice in it and will carry the electorate of this country with it when the time comes for a reckoning.

8.38 p.m.

Mr. Michael Latham (Melton)

It is with a sense of great honour and humility that I seek today to address the House for the first time—honour because, despite much fashionable and ill-informed talk which goes on elsewhere about the decline of the importance of the House, I believe that it is the greatest forum for decision in our country as of course it should be, and humility because I feel deeply the weight of responsibility which the people of Melton Mowbray have put upon me and I am conscious of my inadequacies in discharging it.

The hon. Member for Leeds, West (Mr. Dean) has just made his maiden speech. It is not for me as a brand new Member to compliment him on it. Older and wiser Members will do that and do it properly. I just say that I knew Mr. Charles Pannell, his predecessor, slightly when I was engaged in the building industry, and he was much respected and admired for the period when he was Minister of Public Building and Works.

For the past 17 years Melton Mowbray was served by as fine a Member as the people of that constituency could have hoped for, Miss Mervyn Pike. I know that she was much respected and admired throughout the whole constituency and I also know, from talking to senior right hon. and hon. Members, that she was much loved and respected in the House, too. Many hon. Members will know, I think, that she has become Director-General of the Women's Royal Voluntary Service, and I am sure that her passionate interest in the social services will ensure that she brings as much lustre to her new high office as she did to debates here.

The constituency that I now represent is large, with 82,000 electors, having lost 10,000 of them at the redistribution to my hon. Friend the Member for Harborough (Mr. Farr). It is often thought of as being entirely rural, but that is a misconception. Like Gaul, my constituency is divided into three parts. There is the market town of Melton Mowbray, famous for its pork pies and sausages, but also the home of a large and well-known pet food firm. Then there are the great rural expanses of the Vale of Belvoir, parts of the Soar Valley and the areas to the south of Melton Mowbray which are well known to right hon. and hon. Members who ride to hounds. There are the industrial villages of the Soar Valley, where there is plenty of light industry and many people who work in the city of Leicester. The level of commuting and, I am happy to say, the level of employment are very high in my constituency. It is also one of the fastest growing in a county which itself is rapidly expanding in population.

One feature of my constituency is the number of new private housing estates. There is one sizeable village, East Goscote, which consists entirely of new private houses, many of which did not exist at the 1970 General Election. Housing, therefore, is a major issue to my constituents, and I hope that I may use the rest of my few remarks to refer to those parts of the Gracious Speech which deal with housing, particularly the section which says, Urgent measures will be taken to reverse the fall in house-building". Before I do that, I must honour one important tradition of the House by declaring an interest. Up to the end of 1973 I was director of the House-Builders Federation and I was also parliamentary officer for the National Federation of Building Trades Employers. Although I no longer hold any employed position with either of those bodies. I have a small consultancy business and the NFBTE is one of my clients and pays me a fee. I need hardly say, though, that everything I have to say in this House expresses my own views. I am sure that the NFBTE would disagree with many of them. I must also endeavour to honour the wise tradition of this House that maiden speeches should be entirely non-controversial, and I want to restrict myself entirely to practical points.

There is no point in pretending that the housing situation is satisfactory, because manifestly it is not. The level of private housing starts—and it is only of private housing that I speak—is clearly disturbing. A total of 9,335 houses were started in Great Britain in January 1974, and the three-month period November 1973 to January 1974 showed a 19 per cent. decline compared with August to October and—perhaps much more serious—a 36 per cent. decline on November 1972 to January 1973. The Economic Development Committee for Building recently forecast a possible decline in private starts of 45 per cent. in 1974. All my personal contacts in the industry lead me to suggest that without changes of policy that might prove an optimistic assumption.

It is no secret why this situation has arisen. It is because of the high level of interest rates and the shortage of building society finance. When mortgage finance is readily available, housing booms; when it is short, builders cut back on output to avoid having unsold houses on their hands. It is a fact of life. I have yet to be persuaded that any Government can do very much about it.

I fear, therefore, that the Secretary of State for the Environment has as gloomy a task ahead of him in his high office as had my right hon. and learned Friend the Member for Hexham (Mr. Rippon). There is little that either can do on their own. What needs to be done requires the support of the Chancellor of the Exchequer, and in some cases it is beyond the control of the Government altogether.

Clearly a start must be made, because neither side of the House is prepared to tolerate for one minute longer than necessary the present grossly unsatisfactory state of affairs.

It seems to me from the side lines that the scope for immediate action takes two main forms. First, the whole of the Government's diplomatic expertise must be exerted to try to bring down world interest rates. We cannot reduce our interest rates unilaterally, but we can use our good offices to try to induce a more stable level of international financing. As long as the mortgage rate is 11 per cent., the monthly outgoings will have a sharply deterrent effect at the lower end of the housing market.

Secondly, I have always favoured the use of the banks' excess profits to help the building societies with an immediate cash injection. I know that this raises money supply problems, but we shall never get anywhere if the societies are left in their present exposed position. I remember both the Chairman and the Secretary-General of the Building Societies Association saying to me just before Christmas that the societies were simply not geared to cope with an 11 per cent. mortgage rate and a 7½ per cent. investment rate.

At present the banks are making large profits from relending, at 13 or 14 per cent., money which has been deposited with them at the Government-imposed maximum figure of 9½ per cent. At the same time the banks are charging builders 16 or 17 per cent. or more to finance their business and similar sums to house purchasers who are seeking bridging loans.

If my proposition proves unacceptable, then I would urge instead that the banks be induced to make advances on bridging loans for the purchase of the cheaper houses at a specially low rate of interest for the next six months. I know that the industry put this proposition to the bankers just before Christmas. It has merit because it would help to open up the chain of purchase in the second-hand part of the market which at the moment is collapsing.

Therefore, on the demand and finance side of the equation there is no substitute for cash on the table for the building societies as soon as possible. Of course, if nothing is done, the market will adjust to the situation. Prices will continue to fall sharply both for houses and for land, and builders will try to cope with the situation. But the transition will be unpleasant and unwelcome and will result in supply and demand stabilising at a considerably lower level of new construction than any right hon. or hon. Gentleman would consider to be satisfactory. I hope that that thought alone will be a source of strength to the Secretary of State when he is urging the case for more money for housing with his colleagues in the Cabinet.

While talking of tackling the demand on the finance side, I am sure that the Ministers will not wish to neglect consideration of the question of resources. I suppose for the house-building industry as a whole resources must involve materials, labour, plant, equipment and land. On land—which is not currently a constraint—the Gracious Speech says that Ministers will be bringing their proposals before the House. Materials, plant and equipment are obviously largely a matter for industrial decision, save that we need a reasonably stable level of output, which we have not had for over 10 years.

On labour, I would only say that the present recession in the industry, although bad in every other way, will substantially reduce the trend towards self-employment and site bargaining; indeed, it is already doing so. I do not believe that it is necessary for Ministers to legislate on this matter since market forces are doing the job for them. But if, once Ministers have read the report on this matter which is being prepared by the Misselbrook Committee, they still feel they must bring legislation before the House, I hope that they will ensure that the terms of the Bill are capable of being applied on site and that they are drawn up with proper consideration for the practicalities of the industry.

I believe that now is the time for Ministers and the industry as a whole to make a dramatic reform of the apprentice situation. I strongly suggest that policy could be based on four premises. First, apprentices should be trained more quickly and should receive a much more realistic wage from the word go. Indeed, the whole wage structure of the building industry requires substantial reform.

Secondly, I believe that this should be the responsibility of a new manpower board for the industry which would be responsible for all indentured labour and also for proper manpower and output forecasting, which are either nonexistent or inadequate at present.

Thirdly, there must clearly be some system of financial aid based on the levy system for carrying out training, and every significant firm in the industry must do its bit. That may require the manpower board to have power to impose some sort of financial sanction on firms which "pinch" boys who have served their time with another firm. That is an issue that the House may be able to discuss at a later stage.

The fourth premise is that conditions on site must be speedily improved. It is understood that this will have to be paid for.

We all bear a heavy responsibility in considering housing matters. Our constituents are groaning under 11 per cent. mortgage interest rates or are desperately seeking mortgages for their dream homes. Our builder constituents are at their wits' end to know how to continue trading or to build the houses which this House wants to see built.

As a result of circumstances largely out of the control of any Government, the Secretary of State faces one of the gravest crises in housing since the war. If the measures which he brings before the House turn out to be fair, effective and practical, they will, I am sure, receive widespread support.

8.52 p.m.

Mr. Andrew Bennett (Stockport, North)

May I first pay tribute to my predecessor, Mr. Idris Owen, who, although he sat in the House for a fairly short time, worked hard on behalf of his constituents. As the new Member for Stockport, North, I do not want on this occasion to describe all the problems of the whole of my constituency, but rather to concentrate on one, the area's housing problem.

The major housing problem facing the people of Stockport is the size of its housing waiting list. There are now more than 3,000 people on that list. It is not just the size of the list but the time that some of those people have been on it that concerns me.

An issue which arises from that is the appalling housing conditions in which many people now on the list are living. During the past 12 months it has been extremely difficult to get people housed from clearance areas. Some families have remained for months in the odd house in a row when all the others are empty. I saw one house on Saturday where the occupier is the only person left in a courtyard of six. The house has a badly leaking roof, a broken toilet, and all the walls are running with water, yet the housing department sees little prospect of rehousing her for another month or so.

There is also the problem of the elderly, many of whom are housed in Stockport in houses far too large for them. On Saturday, I visited a lady who has thrombosis in the leg. She lives in a six-roomed house and has to negotiate 10 steps each time she wishes to go to the outside toilet. For her there is little prospect of rehousing at present.

During the election campaign I spoke to many young couples who wanted to get out of one-roomed bedsitters hoping that they could soon get a house and be able to start a family. They, too, have little prospect of getting off that housing waiting list. This housing waiting list has steadily grown in Stockport during the period of the Housing Finance Act, which was supposed to help to solve the housing problem. Yet, in Stockport as throughout the country it has done nothing to provide extra homes.

The problem in Stockport is getting building land for the local authority, and I welcome the proposals in the Gracious Speech to bring land for development into public ownership. What is perhaps ironic in Stockport is that as the housing waiting list has continued to grow, so has the number of empty houses on private estates. Within the constituency there are two substantial private estates where the builders are having extreme difficulty finding anyone to purchase houses because, as everyone knows, obtaining a mortgage is nigh impossible for a young couple. I welcome the provision in the Gracious Speech for helping these people to buy houses so that we can end the ridiculous situation of 3,000 people on the housing waiting list and at least 100 houses now empty and waiting for would-be purchasers.

I am also disappointed that there was not more reference in the Gracious Speech to the problem of the continued deterioration of houses. It is sad that the provision for 70 per cent. grants for home improvements will run out on 23rd June. It is unfortunate that when that legislation was brought in it took most local authorities by surprise, certainly in Stockport, where there was a shortage of staff to process applications.

That shortage has now been overcome, but certainly some people who wanted to take advantage of improvement grants encountered such delays. Having overcome those delays, they have recently found it extremely difficult to find builders. Clearly, the building industry was not ready for that level of home improvement grants.

Gradually, the building trade, at least in Stockport, began to cope with the situation. But over the past few months shortage of building materials made doing so extremely difficult, and there is a story—possibly true—of small jobbing builders touring Stockport in search of bags of cement to fulfil promises to carry out home improvements.

Therefore, I am faced with the situation that may people in my constituency are coming to me desperately wanting to take advantage of these grants but saying they cannot find a builder, or that their builder will not be able to meet the June deadline. I hope that it will be possible to extend the deadline for 12 months and that, if that is not feasible it will be possible for all improvement work started by 23rd June to qualify for the grant, rather than only work that will be completed by that date.

Finally, I hope that the legislation promised in the Gracious Speech will mean that within the next two years the housing waiting list in Stockport, as throughout the country, will be drastically reduced.

8.57 p.m.

Mr. Dennis Skinner (Bolsover)

I was in the Tea Room about an hour ago, when in came a worried-looking Government Whip who suggested the need for some livening up of the proceedings in the Chamber. I do not think he was anxious to attract me into the Chamber, but he was concerned because there was not much activity, and I said immediately "What about all that militant opposition?". He replied, "It is not there; it has gone".

I therefore came in and looked at the Liberal benches and wondered, "Could it be that they have gone streaking?" It crossed my mind that the hon. Member for Rochdale (Mr. Smith) was streaking away from the Leader of the Liberal Party as fast as he could. I also wondered whether the hon. Member for Cornwall, North (Mr. Pardoe) was streaking off to another studio—BBC or ITV—to get on the air to exercise what he considers to be Liberal policy. I imagined that the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) was streaking after him with another form of Liberal policy in order to get that across. I thought then of the Liberal leader streaking out of the headquarters of London and County Securities—not today, of course—and I had a mental picture of him trying to streak into any coalition, any place, at any time.

I then looked at the other groupings, and most of them were missing, too. My wife was telling me before I left home that we would have a pretty rough time and that we would have to spend many precious hours here. She understood all that. We have done it before anyway. Then when I looked across at the Opposition I thought, "Well, Mary could be wrong. It might be fairly easy after all." I looked at my three colleagues who have recently been drafted into the Tribune group—the fastest-growing minority in this Parliament—and I said to the lads, "Muck in. There are a few speeches to be made", and along they came. It falls to me to pay a compliment to them.

First, I should like to compliment the hon. Member for Melton (Mr. Latham). I am not sure that we agree on many things. It seems that he now wants to repeal the Housing Finance Act, although I am told, quietly and privately, that he was one of its architects. However, he made a reasonably sensible Tory speech and I have no doubt that he will make many more with many listeners on the other side of the House, and for that matter on this side, too.

We also had a speech from my hon. Friend the new Member for Stockport, North (Mr. Bennett). I think that the House will agree that, as he came into the Chamber an hour ago with me and launched into his maiden speech at such short notice, he made a tremendous job of it. He did all that was required, and he will, I am certain, make a full contribution to the House in future.

We had a maiden speech, too, from my hon. Friend the Member for Leeds, West (Mr. Dean) who has replaced Charles Pannell, and he made a very good job of paying the usual compliments to his predecessor. My hon. Friend is a trade union ex-shop steward with all the credentials. He has been running the Manchester Housing Committee and doing various other little jobs on the side, so he is conversant with the problems of the Labour movement and those of his constituents, and he made it plain that he will make an impact on the House.

The same applies to an hon. Member whom I know better than the other three—that is my hon. Friend the Member for Keighley (Mr. Cryer), who succeeded in a very close battle, despite the malicious intentions of the hon. and learned Member for Lincoln (Mr. Taverne) who, at the last minute before the nominations were put in, got a candidate to stand in order to try to prevent a Labour candidate from winning what was a crucial seat if we were to form a Government. The hon. Member for Keighley survived that. I knew him and I was not surprised that he did. I think that those who heard him tonight will agree that he made a competent speech and that we hope to hear a lot more from him. I am happy to pay my usual compliments to my three hon. Friends and to the hon. Member opposite.

I do not want to spend too much time on the Queen's Speech as most speakers have dealt with it fully. We have had a speech from the Leader of the Opposition. Everyone who heard the new Prime Minister must be confident that we shall plough on with our policy, and if tonight is any evidence, we shall get quite a lot of it through. When we get to the thorny problem of the Common Market renegotiations, I hope that the strategy will be developed along the lines that I have indicated to my right hon. Friend in the several meetings that I have had to have with him. As he is the leader of the largest minority group on this side of the House, I have no doubt that his strategy will be to ensure that we face the country with the issue of the Common Market, and with all the outside assistance that will be forthcoming once again from various quarters, none of which I shall name, we shall sweep the country and get back with an overall parliamentary majority to complete not only the programme in the Queen's Speech but more.

What I did not like about the speech of the Leader of the Opposition was his emphasis once again on wage restraint. I find it somewhat nauseating that, although he did not spell it out as much as he did during the election campaign, he tended to concentrate on what he believes are the greedy people. In a few minutes remaining to me I want to place on record the fact that in some respects the Leader of the Opposition and I agree that there are such people. I believe that instead of talking in abstract terms we should name a few of those greedy people. Instead of talking about collective bodies of trade unionists, let us get down to names.

I refer to the person mentioned during the election campaign, John Davies of the Rank Organisation, whose salary was raised from £55,000 to £65,000 "at a stroke." At the same time the Rank Organisation gave £35,000 to the Tory Party and another £5,000 to the junior partners in "Heathcote Ltd.," the Liberal Party. These are the greedy people. All the Liberals are present—three of them, at least. Rumour had it not a thousand miles from this spot that you had gone off streaking—not you, Mr. Deputy Speaker, but the hon. Member for Rochdale. I know that you, Mr. Deputy Speaker, have to dress up in all kinds of garb, but I am certain that no Deputy Speaker would become involved in anything of that kind—not outside Mr. Speaker's residence, anyway.

The noble Lord, Lord Carrington, has been involved in property speculation for a considerable time. The latest affair concerned the reputed £8½ million profit to be made out of the 140 acres to be sold to Wycombe Borough Council. There was the previous affair in which two houses were bought for £100,000, converted into six flats and sold for £45,000 apiece. It is what is known as "double your money".

Those are some of the greedy people. Therefore, if we are to talk about wage restraint, and if the Opposition and the Liberal Party want to lay down to workers that there must be wage restraint and statutory incomes policies, these greedy people, too, must be brought in. In fact, they should be dealt with first before any question arises about dividing up the national cake. They must be dealt with severely.

There is also the remarkable case of the Duke of Devonshire. He is a fairly wealthy fellow, but he is another of the greedy people. He owns nearly half of Derbyshire, and parts of Yorkshire. I am told that he owns land in County Limerick, and, according to the reports, it looks as if he owns Eastbourne Borough Council as well.

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. The hon. Gentleman understands that the rule about making derogatory comments about those in another place is similar to that concerning comments about Members of this House. I ask the hon. Gentleman to pick his words carefully.

Mr. Skinner

I am picking my words very carefully indeed, for the good reason that I was on a television programme a few months ago, together with one of the noble Lords, and he disagreed with me on the fundamental question of the programme content. He proceeded to the other place and spent about five minutes attacking me. It was not the Duke of Devonshire, but if there are to be attacks on me from the other place, I submit that I am entitled to attack Members of it here. In any case, I am not attacking them. I am saying that they have a right to lecture to miners and other industrial workers about their level of wages—but that if that is their prerogative, it is mine to bring to the attention of miners and other industrial workers what they are up to as they give their lectures and say the things they say in another place.

The Duke of Devonshire has planning permission for a £50 million yachting marina at Eastbourne. We are supposed to be in a period of crisis. There was not supposed to be enough money around to pay the miners the additional £50 million that they have now received. Yet this man, apparently, can put his hand on £50 million to build a yachting marina with 400 berths for top Tory yachtsmen.

If we are to have a relevant Queen's Speech and a meaningful great public debate, with the idea continually thrown at us that the country cannot stand up without the workers pulling in their belts, pulling up their socks and pulling their fingers out, these people, too, must be taken into account. Those on the greener side must be tackled, and tackled fiercely. The Queen's Speech does not fully cover that.

There is an ambiguous phrase which talks about redistribution. It sounds all right. But we must take it further. We must expose what needs to be exposed. If it is right for my constituents and my hon. Friends' constituents, the workers' to be constantly under attack from the Tories, not only at elections but at all times, and again in the House today, as the Leader of the Opposition showed, we must put everyone under the microscope, and we have to name names. If some of them are Members of the other place, taking £8£50 a day for clocking on and clocking off—when miners cannot get a few bob extra for washing and bathing time, which takes even longer—we must make perfectly clear that they, too, are under the microscope. When the Duke of Devonshire finds £50 million to develop a yachting marina at Eastbourne, that is something that my constituents have every right to know. The same applies to many others we can talk about.

We have come to Parliament to talk about the economic crisis. The newspapers are full of it. There is not enough money to go round. Yet at the same time 19 people have trotted off to Strasbourg to a talking shop. To do what? To do nothing. Supposedly, they go to represent our interests-16 Tories, two Liberals and the hon. and learned Member for Lincoln (Mr. Taverne). What do they get for going? They get £120 a time for each return flight and in order to make a few bob they go on a charter flight at £46 a nob, and put the rest in their pockets.

When the Inland Revenue was contacted about this——

Mr. Deputy Speaker

Order. The hon. Gentleman should not make those accusations.

Mr. Skinner

I have made them before.

Mr. Deputy Speaker

I am well aware of that. But the Chair does not think that they are appropriate remarks to make about hon. Members of this House.

Mr. Skinner

I know that they are not appropriate. I know what you mean, Mr. Deputy Speaker. It is not pleasant. I think that that is the point you are making. It is not very pleasant to hear. The Inland Revenue knows all about this, and it has made abundantly plain that one of the reasons why it cannot or will not do much about it is the high cost of living in Europe.

I think that that is where we came in. That is where the hon. Member for Banbury (Mr. Marten) came in. We have been saying, ever since the Common Market negotiations commenced, that the problem is the high living costs in Europe. That is what will happen here to an increasing extent if we allow it to continue much longer. This matter has to be discussed, and it must be brought to everyone's notice.

I shall not continue in that vein, Mr. Deputy Speaker. We have had enough for one day.

I was going to mention all the other greedy people, like the oil companies and the £240 million profit on which they do not pay a penny tax. All this has to be discussed if we are to have a general argument about people having to make sacrifices. One could go on all night discussing these people, whether they are in the Tory Party, whether it is those with the 700-odd directorships or those in the Liberal Party, who have more directorships per head of population than even the Tory Party, or those in the Scottish National Party who have a few on the side——

Mrs. Ewing

Not me.

Mr. Skinner

Perhaps not the hon. Member, but she wants to have a close talk with some of her colleagues; she might find something out that will surprise her.

Mr. Cyril Smith (Rochdale)

Forty-four Labour MPs are company directors.

Mr. Skinner

I have had it calculated by my hon. Friend——

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. If the hon. Member for Bolsover (Mr. Skinner) wishes to defer to the hon. Member for Rochdale (Mr. Smith), well and good, but the hon. Member for Rochdale must not interject from a sitting position.

Mr. Skinner

You are being a bit hard, Mr. Deputy Speaker. I know that that applies to athletic types like me, but let us be fair. It is not all that easy for the hon. Member for Rochdale.

So we are back on the merry-go-round again. I should like hon. Members to refresh their memories about what happened in 1970, when some of us came in and the Leader of the Opposition took on the mantle of Prime Minister. He got in in the long hot summer of 1970 with a £1,000 million surplus that had been provided by the British workers. It is true that the Labour Government had been in office, but the money came out of the sacrifices made by the British workers and their families. He ran away a few weeks ago leaving this sinking ship with a £2,500 million deficit which was growing day by day, a pound which had been devalued by between 18 and 20 per cent. abroad and about 25 per cent. at home, and 11 per cent. mortgages. It is no wonder that he does not talk about dividing the House on Monday.

One of my constituents, after I had mentioned the Duke of Devonshire's yachting marina, said, "You know, Dennis, we ought to run a bus trip". I said, "Where to, darling?" She said, "Eastbourne. We want to go down to that marina, and we want to put the Leader of the Opposition on top of Morning Cloud and give him a little push, just like that, and send him across the English Channel to the Common Market, because that is where his heart is and that is where he should stop."

Debate adjourned.—[Mr. Coleman.]

Debate to be resumed tomorrow.