HC Deb 30 October 1974 vol 880 cc227-371


Order read for resuming adjourned debate on Question [29th October]:

That an humble Address be presented to Her Majesty, as follows:—

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Weitzman.]

Question again proposed.

3.12 p.m.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan)

It will come as no surprise to any hon. Member when I say that the General Election was fought on domestic issues. It usually is. It was fought on how to curb inflation, how to stop prices rising and how to prevent massive unemployment. All those matters played a major part in the campaign. It is hardly necessary for me to remind the House that Britain is not alone in facing these problems and issues. Indeed, it may help us to get our own problems into better perspective if we consider them against a world background.

As an illustration, both yesterday and today I am engaged in discussions with the Japanese Foreign Minister, whom I have had the pleasure of welcoming to our country. He tells me that consumer prices in Japan rose by 24 per cent. on last year and that average monthly earnings have risen by 30.5 per cent. Later this evening, if the House will excuse me, I hope to meet the Dutch Foreign Minister. The Dutch inflation rate and their rate of wage increases are not by any means as large as the Japanese rates but they are very much larger than anything to which they have become accustomed.

It is generally accepted that other countries are facing the same problems as those which we face. It was no accident that the Queen's Speech began, in the second paragraph—it did so deliberately —with a reference to the need for the Government to give full support to an international effort. The paragraph reads: My Government will give their full support to international efforts to solve the world-wide problem of inflation and will play a full part in international discussions to solve the problems created by higher oil prices. That reference gives emphasis to a theme that was hammered home in nearly every speech in the election, and certainly those which I made—namely, the interdependence of the nations of the world, whether for prosperity or for recession.

This House should be basically concerned with discussing our special responsibility as a country to take our own measures to solve our own economic problems. Some of the problems are unprecedented. However, I advance the view that in considering our own problems the solution to them will be easier if nations work together in finding solutions. I go further and say that it may not be possible to solve our own problems unless there is some international agreement.

The third aspect that I wish to emphasise is that it is important in these present unprecedented difficulties that nations should not undertake domestic remedies without considering the consequences that their measures will have on other countries and the harm that they could cause. For example, deflation by one country to reduce pressure on its prices may cause serious unemployment in other parts of the world.

I was greatly encouraged in my recent talk with President Ford in Washington by the fact that he accepts that approach. He recognises that even the mighty United States, with its great weight in world economic affairs, cannot go it alone.

My excuse for intervening in this debate is that what we call "foreign affairs" has in these important aspects come together with the need to solve the domestic problems of our country. To some extent this is so because the root causes are the same. It was the unprecedented rise in commodity and raw material prices during the past two years which set off the inflationary spiral. Of course, the spiral may now be beginning to be fuelled by other circumstances. Through cereals to oil—wherever we care to look—prices have reached unprecedented levels. The price of oil is five times as high as it was a year ago.

The impact of the rise in commodity prices has been felt at the same time as the decoupling of the world's monetary system from the Bretton Woods agreement. The two factors together have brought to an end the economic era which lasted for 25 years and which gave the world, especially the industrialised Western world, a quarter of a century of rapidly expanding prosperity. That happened probably faster than anything we have seen before.

Today the world is trying to steer its way through seas that are literally uncharted. We face problems that are entirely new to this generation. It is in that sense that, as my right hon. Friend the Prime Minister said yesterday, our problems resemble those of the 1930s. The world faces a conjuncture of rapid inflation and prospective unemployment. We are advised to tread warily. History shows us that rapid inflation and massive unemployment, whether they came together or separately, brought in their wake political extremism and violent conflict both within States and between States.

I emphasise the gravity of the problem, but all is not gloom. There are hopeful signs. First, there is recognition among many of the world's leaders that the problems that we face are beyond our experience and beyond our knowledge and that we need new ideas and concepts if they are to be solved. Another hopeful factor is that the détente that had grown up between the USSR and the United States is still in being and is still being actively pursued by both great countries. Détente is not irreversible, but I judge that it is in the interests of neither great Power to go back to the era of the cold war. That atmosphere of détente, in itself, between those two great super-Powers is helping us to handle the world's economic problems rather better than might otherwise have been the case.

It is hopeful also that attempts are being made to grapple with these new problems and that they are taking place in a number of international forums. The supply of both food and energy, which are the very basics of man's life on this planet, are now coming under international scrutiny. Policies are being sought on an international scale for the expansion of production, for conserva- tion and for alternative supplies. Britain is making its contribution in all these matters.

My right hon. Friend the Chancellor of the Exchequer has already put forward certain proposals for consideration in the monetary field in an attempt to channel the unprecedented shift of resources that is now taking place. The Minister of Agriculture, Fisheries and Food, with the Minister of Overseas Development are both taking part in the forthcoming world conference on the supply of food to the world, which will begin in Rome on 5th November. With the European Community and the members of the Energy Co-ordinating Group, which includes both the United States and Japan, my right hon. Friend the Secretary of State for Energy is working on plans for a coordination of the energy policy of the industrialised nations.

President Giscard d'Estaing has recently made an interesting proposal for an international discussion between producers, consumers and the developing countries on the question of oil supplies. We shall certainly wish to consider his proposal constructively although I pointed out that it would be necessary to work out an agenda carefully in advance. We are ready to join in discussions for this purpose.

Of course Britain has a rôle to play in the world. But we require on our part a sense of realism about our capacity to influence world events. We are a medium-sized power and we are not at present among the strongest of them. It was the Labour Party programme in 1973 which warned that a Labour Foreign Secretary could not be expected to ride out like some international Don Quixote to tilt at every windmill.

Having said that, there is a large rôle for Britain to play and many people in all parts of the world are looking to us to play it. The sentiment has been expressed to me time and again. It is not self-regarding to say that statesmen in other countries recognise the great fund of experience and skill in international affairs which resides in Britain. They trust and respect our judgment and our sense of fairness. They appreciate our record of de-colonisation and our respect for human rights.

I must also say that they see these assets being diminished by our failure, so far, to overcome our serious economic problems. The questions that concern me daily as Foreign Secretary are twofold. First, how can Britain best contribute to a common solution of the international problems of inflation, unemployment and world poverty which beset us? Second, how can international co-operation contribute to solving Britain's domestic problems.

Finding the answers to these questions day by day is the rôle of foreign policy. It goes without saying that there are many other preoccupations to which, if I do not unduly weary the House, I shall come later. Looking at the world from our domestic angle, the biggest contribution Britain can make is to have a strong economy at home, in which other nations will have faith and confidence. Britain's rôle in the world depends on how we handle our domestic affairs and overcome our domestic weaknesses. We have a responsibility to others as well as to ourselves to put the matter right.

I have pointed out our weaknesses, but that is not to yield to despair. The Labour Party fought the two General Elections of 1974 on two main themes. First, in February it was argued that we put to the people that the policy of conflict and confrontation pursued by the then Government was not the way to win the support of the British people. Then in October we presented to the country a record of seven months of solid achievement based on the February manifesto, coupled with the policies of the social contract.

We did so—and I repeat what the Prime Minister said yesterday about the myth that is being attempted to be woven around the hallowed figure of the Leader of the Opposition as being the only man to speak the truth during the election —because, to put it in the opening words of our manifesto—and I always thought that, even if it were not read anywhere else, our manifesto was read in Conservative Central Office and carefully scrutinised, sentence by sentence— Britain faces its most dangerous crisis since the war. This crisis can be overcome only by policies which will promote partnership and confidence among our people.

Mr. Victor Goodhew (St. Albans)

Where are they?

Mr. Callaghan

I shall come to that. Hon. Gentleman need have no fear. Perhaps they do fear that I shall come to that. It is our conviction that unity can be achieved only if a Government pursues policies of fairness and social justice and if the broadest backs are seen to be carrying the heaviest burdens.

This is especially true at a time when little or no improvement in real living standards for the majority of our people can be hoped for in the next year or two. This was clearly spelled out time after time in the election. National unity, I say to the Leader of the Opposition, does not come from backstairs deals made by politicians parcelling out offices.

In speaking to the TUC at Brighton in September, both the Prime Minister and I spelled out that the social contract is no soft option. It is a tough policy, which requires co-operation if it is to succeed, rather than coercion. It requires self-discipline and under-standing—

Mr. Peter Rost (Derbyshire, South-East)

Tell them that in Glasgow.

Mr. Callaghan

I am telling them not only in Glasgow but in Britain as a whole.

It is the best hope we have for combating unemployment and inflation. The social contract is erected on two main pillars. First is the regeneration of British industry, involving further public ownership and closer organic links between Government and industry with the beneficial influences that we believe this will have upon encouraging industrial investment, maintaining employment, especially in the development areas, and reducing the balance of payments deficit—the aims that are set out in the Gracious Speech.

The second pillar is the appeal to social justice and a redistribution of wealth. It is against this background and the measures that are contained in the Gracious Speech that a response is required from all the citizens of our country, whether they are wage earners, directors, dividend receivers or whatever. It is against this background that the General Council of the TUC issued its guidelines on wage settlements, and it was against this background that the guidelines were unanimously approved at the Brighton conference at which I was present.

The policy stands as a whole. No one can accept it and pick out the bits he likes and discard the rest. It cannot be said, "We accept the bits on public ownership but will have nothing to do with the limitations on wage settlements." Nor, on the other hand, can people say, "Of course we accept the limitations on wage settlements but will have nothing to do with the extension of public ownership." The policy stands together. It stands as a whole and it was as a whole that it was considered and accepted unanimously.

I ask the Opposition this question in view of their cynicism and jeers about it: do they want the social contract to succeed? Do they accept it or reject it—not parts of it but all of it? From their comments so far their main interest seems to be in how soon they hope it will fail. They keep asking what will we do when it breaks down. I return the question to the Opposition. What will the Opposition do in such circumstances.

Mr. Cyril Smith (Rochdale)

You are the Government.

Mr. Callaghan

Of course we are. And we are the Government precisely because we put forth a policy of this sort.

What different answers from those of last February have the Opposition to offer in a situation in which their combined policies of non-intervention in industry together with statutory limits on wages led to the disaster of last winter.

If the Conservative Party has different answers, let us hear them. We did not hear them during the election and it was for that reason that the Conservative Party lost the election. It was not the fault of the Leader of the Opposition. A Leader of the Opposition can be only as good as his policies, and between February and October the right hon. Gentleman had no opportunity and no chance of thinking out why failure had taken place in February and what he intended to put in place of those policies. That is what the Conservative Party should be addressing itself to, not to the right hon. Gentleman. He is only the man standing in the middle, ready to receive all the slings and arrows of outrageous fortune". I spring to the right hon. Gentleman's defence. I hope he will stay.

It was not so appealing to the country, and they thought about it and returned a verdict, when the right hon. Gentleman asked for a vote on the basis that he would bring into Government unknown men who would follow unspecified policies to remedy undefined evils. Some of them, like the Arabs, have folded their tents and silently stolen away.

Hon. Gentlemen opposite who realise that we are facing a grave national crisis, not just in our perorations but as a matter of reality, have two alternatives if they are real patriots. They have either to tell us what the alternative is to these policies—not a return to last February—or they ought to put their full weight behind the social contract. They have a responsibility for making it work, and that is what I mean by national unity. [Interruption.] If hon. Members have something different to say let us hear it, but it has to be a policy as a whole.

Mr. Rost

Tell us what it means.

Mr. Callaghan

The hon. Gentleman keeps asking me to tell him what it means. I am willing to send him—it costs 3p, but it is cheap at the price—a copy of the social contract for him to read. If he will undertake to read it, I shall also send him "Collective Bargaining and the Social Contract", published by the TUC. There they both are. Why not make it a compulsory reading lesson for the next meeting of the 1922 Committee.

Let us consider the serious and important period that lies ahead for this country during the next year or two. In our relations with the rest of the world, the rôle of foreign policy during this period is three-fold. First, we must encourage at both the political and economic level in international affairs the choice of cooperation rather than conflict as a means to combat inflation and recession. Second, we must ensure that our conduct of foreign affairs inspires confidence in Britain as an ally and a partner. Third, we should promote policies which take account of our wider responsibilities in terms of social justice, racial harmony and human rights.

Probably more than any other nation our survival depends on international trade. This means that it is in our interest to promote peace and stability in the world. It also means, if I may utter a truism that we must trade with the world.

If we require a certificate of social democratic respectability before we buy or sell, we shall find that our market place has become rather small. [HON. MEMBERS: "Hear, hear"]. Trade is not a badge of approval. Britain trades with the world and must always do so, because we must survive. It is for Britain an economic necessity.

But—I hope that I shall have cheers for this, too, from the other side of the House—this does not mean—or does it? —that we should remain silent on issues of human rights and political freedoms. We will speak and act wherever and whenever we feel it to be right. The Foreign and Commonwealth Office is very conscious of the need to back up and, indeed, on some occasions to give the lead, on both aspects of these matters in international forums, as we are trying to do at this moment in the United Nations.

On the subject of trade, I can give the House one statistic to illustrate my point. I have inquired about the work that is being done abroad. In posts abroad a quarter of Diplomatic Service officers are now engaged full time in commercial work, in addition to numerous locally engaged staff. Last year some 100,000 visits were made to foreign firms to gather market information and to identify export opportunities.

Mr. Rost

And Chile?

Mr. Callaghan

Yes, we are trading with Chile, but we are not selling arms to Chile. This falls within the policy that I have enunciated.

Mr. Gwynfor Evans (Carmarthen)

Do the right hon. Gentleman's words mean that the Government will give a lead in getting rid of nuclear explosions?

Mr. Callaghan

I was proposing to come to that, but I may save time by dealing with the issue now, although it is rather taking me out of my thread. Yes, we hope that there will be another con- ference on peaceful nuclear explosions next year, on which we are working at present with the United States and the USSR. We shall attempt to carry the issue of nuclear explosions further than we have done so far to try to limit these. I can promise the hon. Gentleman that we shall be working in that respect, too.

This threefold approach has meant renewed and more vigorous activity in the United Nations and in the Commonwealth. We all know about the inadequacies in the way the United Nations works, but to a great extent those weaknesses reflect a lack of political will rather than structural faults. The United Nations provides an indispensable though not the only framework for the discussions which will have to take place to meet the financial, trading and energy problems which now face us.

On the security side, we have seen the United Nations playing an important part in the dangerous and thankless task of peacekeeping in Cyprus and the Middle East. Britain, too, has played her part in such operations, and I pay a special tribute, which I know the whole House will echo, to the brave young men of the United Nations Cyprus force, including those from this country, who gave their lives in the cause of peace.

Likewise, the Commonwealth has a rôle of increased importance at a time when we need a maximum of international co-operation between North and South and between developed and developing nations. Because of its historical links and understanding, we look to the Commonwealth as a bridge across the barriers of mankind. The Prime Minister looks forward to the Commonwealth Heads of Government Conference —and I hope to accompany him to Jamaica in April. We intend to do our part to demonstrate that the Commonwealth has a continuing rôle in providing a unique example of friendly co-operation between free and independent States.

Some of the world's major economic and political difficulties today stem from the failure to find a just and lasting settlement in the Middle East. The Rabat Summit of Arab leaders and the forthcoming debate in the United Nations on the Arab-Israeli dispute bring the dispute back to the centre of the world stage.

I think that we are about to witness the opening of a new phase in the negotiations for a just and lasting settlement of the dispute, but I cannot be over-optimistic. Dr. Kissinger's tireless efforts deserve success, and I shall certainly want to say nothing that would hinder him, for he needs all the support that we and others can give him in mustering his efforts to consolidate a fragile peace and prevent a breakdown that would have serious economic consequences for us and the rest of the world—[Interruption.] I say to my, hon. Friend the Member for Keighley (Mr. Cryer) that no one is altogether spotless, including even him.

The three fundamental needs which such a settlement must satisfy remain the same. Israel must have satisfaction of her need for recognition by her neighbours of her permanence as a State and of her legitimate security requirements. Israel's Arab neighbours must have satisfaction on the withdrawal of Israeli occupying forces. And provision must be made for satisfaction of the needs of the Palestinians, by which I mean not only the rights of individual Palestinian refugees, as was laid down for so many years by the General Assembly, but also the legitimate political rights of the Palestinian people.

Mr. Andrew Faulds (Warley, East)


Mr. Callaghan

I hope my hon. Friend is not going to spoil a good speech.

Mr. Faulds

No, Sir. If all the speeches from our Front Bench were of the calibre of this speech, a lot of us would be happier. [HON. MEMBERS: "Hear, hear."] Do not give me the kiss of death. If I may finish the point I was about to make—

Mr. Callaghan

I thought my hon. Friend had finished.

Mr. Faulds

Since my right hon. Friend, for whom I have the highest regard, was the one who coined—I am sorry he has to make a face at that—in cahoots with President Sadat, the phrase "the Palestinian personality", would he explain to those of us who are somewhat concerned why we abstained in the United Nations on the PLO vote and, once again, gave an opportunity to our European colleagues to lead where the rest of us should be following?

Mr. Callaghan

Yes, I can explain that quite easily, but perhaps not to my hon. Friend's satisfaction. We abstained because we do not believe that it is right —and it is certainly not in accordance with precedent—that organisations that are not governments should address the General Assembly. They address committees of the United Nations, but they do not address the General Assembly. It was on those grounds that we abstained on the resolution.

We in Britain earnestly hope that negotiations will take place and that they will be successful. I found in my conversations with the Prime Minister of Israel and with Mr. Yigal Allon a strong desire to avoid a further outbreak of hostilities and a willingness to try to reach a settlement. I found the same desire with President Sadat of Egypt and with Mr. Fahmi, the Foreign Secretary. That is at least a start, and I hope that Dr. Kissinger will be able to build on this common purpose.

Some at least of the massive increase in oil revenues which is accruing to many oil-producing States must be wedded to Western technology so as to aid the development of the Arab world and also that of the rest of the developing world. If that does not happen, the shift in the economic balance of power is unimaginable, certainly unimaginable to me, and the volume of the transfer of resources is likely to plunge the world into recession.

As the next-door neighbours of the Arabs, it is right that the countries of Europe should seek to open a dialogue with them about this and other matters of mutual interest, provided that nothing is done which puts at risk the efforts to achieve peace in the Middle East.

The first meeting of the General Commission, consisting of senior officials of European and Arab countries, will soon be taking place, and this dialogue can provide a framework which will assist the economic efforts of this country and other European countries. But I emphasise once more to our friends in Israel that we do not wish to pursue these matters at the expense of the many ties which bind us to that country—a country for which I and many others have a great personal admiration. I am ready to do all that I can to ensure that those ties also, with Israel, are developed and fostered.

One ray of encouragement in the Middle East is that it has not emerged—as it might well have done, and indeed six or seven years ago almost certainly would have done—as a flashpoint for conflict between the Soviet Union and the United States. So far so good.

Neither has there been overt or dangerous conflict between the two super-Powers in another crisis spot close by—the island of Cyprus. Our main aim there throughout has been a disinterested effort to avoid ruin and bloodshed being visited on the people of that island. We failed—I failed—and now we face the task of repairing the aftermath, and aiding the refugees. A number of British subjects are also rightly concerned about their property and their business interests in Cyprus. We shall do what we can. We have made representations to the Turkish administration about these matters, but I must point out that we have very limited control.

The best way in which the sufferings of the people of the island can be relieved and the situation restored is through a political settlement to decide the future pattern of government. That is primarily for the communities themselves to work out and, for this reason, we have welcomed and encouraged, and we support and keep in constant contact with the talks which are going on between the Acting President, Mr. Clerides, and the Vice-President, Mr. Denktash, representing the two communities. But in reality, as I think the House knows, any provisional conclusions that they may reach will also have to be discussed with the Greek and Turkish Governments, both of which are facing elections.

We in Britain remain willing to assist in the achievement of the long-term settlement. The parties know this. In our view, the elements for such a settlement exist. The question is, when will the parties be willing to bring them together? We shall certainly do all we can to assist in that direction.

We have given as a Government high priority to the problems of East-West relations and détente, and we are able to do that from the strength and security of the NATO alliance. The Queen's Speech refers to NATO as an instrument of détente as well as of defence". This is no empty phrase.

The Labour Government have given the strongest possible support to the discussions in a European Security Conference. They have proceeded more slowly than we would have liked, but I still believe that we can reach an agreement of such content and of sufficient value that it will be appropriate to ratify it at the highest level, and that it should be followed up by further discussions at a later date. It is our desire that such a dialogue between East and West should become a permanent feature of the European scene.

The negotiations in Vienna on force reductions have also been resumed. We and our allies are seeking to reach an agreement which would reduce the level of armed forces in Central Europe and at the same time help to create a more stable relationship and one which will leave everyone feeling at least as secure at the end of the exercise as they were at the beginning.

At this stage, perhaps I might interpose and say that our own defence review is not yet complete. It covers a much wider canvas than Europe, and our intention is to match our defence effort to our economic strength. We intend to make substantial savings in our defence expenditure, and this will in due course involve discussion with our allies. The House will be informed as soon as possible.

It is vital that the United States remain committed to the NATO alliance, and Britain will certainly continue to play her full part in NATO. Neither military nor economic isolationism will benefit this country or the United States. None of us can go it alone. The Prime Minister will shortly be visiting the United States, and I hope to accompany him, for talks with President Ford on this and other topics.

In both of the European Conferences on Security and Force Reductions our intentions are the same: we seek a continuing dialogue and we seek agreements which have content and are not meaningless concoctions of words designed to paper over fundamental differences.

This is our approach also in the bilateral relations which Britain is having with all the countries of Eastern Europe. We look forward to talks about realities.

So far as the Soviet Union is concerned, I have already invited the Soviet Foreign Minister, Mr. Gromyko, to visit London for talks and my right hon. Friend the Prime Minister and I hope to visit Moscow before long. It will not be difficult for us to fill our agenda. For our part there is certainly the political will to reach agreements which are of substance and which will contribute to a better understanding between our peoples.

Mr. Antony Buck (Colchester)

Can the right hon. Gentleman give us some indication when we shall be told about the defence review which has been going on for months and months? As there is poised over us what appears to be the possibility of substantial cuts on a unilateral basis, is not the present attitude rather undermining the mutual and balanced force reduction talks which are going on at the moment?

Mr. Callaghan

I quite agree that the review is a lengthy one. We think it is much better to do it this way than to get up in the House of Commons, as Mr. Anthony Barber did, and suddenly announce at 3.30 one afternoon that £178 million was being chopped off the defence budget. We are endeavouring to fit our defence capacity to our economic strength. This requires consideration, which is now being undertaken, and I am sure that the hon. Gentleman will be satisfied when the results are finally known.

Let me now proceed, as there are two other subjects I want to touch on without taking up too much time.

If the dialogue is proceeding between East and West, it has not yet started in Southern Africa. However, even here there seems some hope that the prospect for dialogue is not entirely absent. Hon. Members will have noted and welcomed as I do the recent speech by President Kaunda. Perhaps it is too soon to assess the true significance of Dr. Vorster's speech. If it means that there is a genuine intention to promote peaceful and orderly change in Southern Africa then, as Dr. Kaunda says, there is some hope for the future.

We believe that the white minorities must concede to the legitimate aspirations of the African majority. The apartheid policy of the Government of South Africa is unacceptable to the world and we shall continue to associate ourselves with moves at the United Nations and in other directions designed to put pressure on the South African Government to change their policies, although I must add that I do not believe that this change will be affected by a step that would destroy the universal nature of the United Nations.

The House is aware that the Government are reviewing the naval arrangements arising from the Simonstown Agreement. We intend to weigh the military advantages which might exist against wider British interests throughout the continent of Africa, and I hope that no one on the Opposition benches will take exception to that—unless he is so shortsighted as to believe that these naval arrangements are the only things that really matter. We shall report to the House in due course.

The most immediate and direct British responsibility in Southern Africa remains, of course, Rhodesia, and I shall not discuss it today as the House will have the opportunity to debate it fully when we review the Rhodesia sanctions order.

Mr. Carol Mather (Esher)

On the question of South Africa, during his forthcoming visit to the United States will the right hon. Gentleman discuss specifically with President Ford the value the United States attaches to our arrangements at Simonstown?

Mr. Callaghan

I shall be very happy to discuss it with President Ford, or with anyone else. I have studied these matters very carefully and I am coming to a conclusion about them, and I should certainly want to carry as many people as possible with me in forming that conclusion because it is important that we should all move together. I hope we can agree. If we cannot, so much the worse. But it is our task to judge this matter in overall British interests and in the interests of the people of Africa.

Mr. Neil Kinnock (Bedwellty)

While my right hon. Friend is prepared to try to carry President Ford with him, will he also try to carry me and some of my hon. Friends as well, since in the long run we might conceivably be rather more important to him than President Ford? Bearing that in mind, and the view of the Institute of Strategic Studies that Simonstown is a virtual irrelevancy to our whole relationship in the Western defence alliance and could be an embarrassment to our relationship with the remainder of independent Africa, he should take full cognisance of this fact in weighing the relative virtue of our relationship to Simonstown.

Mr. Callaghan

I have always had a high opinion of the need for my hon. Friend's support since he seconded me in a motion at University College, Cardiff, over 10 years ago in which together we destroyed the Conservative Government. I shall continue to solicit his support on this as on other matters. What he said there has the core of a very good speech, and I hope he will be able to make it. Do not, however, tempt me too far this afternoon. We are in process, with the usual caution with which I always approach these matters, of reaching conclusions which will be communicated in due time, and I hope to carry my hon. Friend with me.

Mr. Stephen Hastings (Mid-Bedfordshire)

Will the right hon. Gentleman say something about the possibility of the establishment of a Soviet naval base in Mozambique or in Portuguese territory? Does that not bear a little on these considerations?

Mr. Callaghan

There are moves among the super-Powers for greater activity in the Indian Ocean. All these things have to be taken into account. There are movements of Soviet ships and there are movements of American and French ships. All these movements are taking place, and they will have to be taken into account. I hope, when taking them into account that we shall also weigh the consequences of what is happening there against the attitudes of other people who live in the great continent of Africa.

A balance must be reached. I have greater hope of carrying my hon. Friend with me than I have of carrying the hon. Gentleman. But I must get on with my speech. We shall be debating Southern Rhodesia very soon.

Yesterday the Opposition asked me a question about the Government's commit- ment to agree to no settlement that does not have the agreement of the African majority. He asked me whether that meant that the Government had moved away from the six principles. No, it does not. The relevant passage in the Gracious Speech meant that the Government recognise, as did his Government when they accepted the Pearce Report, that the fifth principle means, in practice, that there cannot be a settlement without the support of the African people. That is what it was meant to mean. In our view, Mr. Smith will have to move very far and very fast if he is to catch up with the new realities of his situation.

In addition to our continuing global interest, we have to make a key decision during the next 12 months concerning our membership of the European Economic Community. The House will shortly be able to study a White Paper that sets out the first of the half-yearly reports on Community activities and this will, I hope, provide the basis for an informed and detailed debate at a later stage on the progress of our renegotiations.

Let me try to make an interim judgment. In my view, none of us, whatever our views, whether for or against membership of the Common Market, can deny that under the impulse of world events the Community in recent months has become much more flexible in its approach to problems and has taken greater account of the needs of the individual Member countries. The unreal aspirations of the 1972 Paris Summit are melting away.

There is, in my view, now a greater sense of realism in the Community. I believe and hope that Britain's presence has given a nudge in this direction, but, quite apart from that, and the effect of the world crisis, changes in leadership in several important Community countries have taken place. This—together with the new French Government's efforts to get the Community to work more in the interests of all its members—has produced a greater readiness to look at problems with a fresh eye.

I do not think that can be gainsaid, whatever deductions people may thereafter draw from it. But it is a net gain for Europe when the Community recognises that it has been setting itself unrealistic aims and timetables. Two of the important fields in which a fresh look is going on are that of the budget and the common agricultural policy. Following a British request, the Commission has produced the results of a study on the budget. The main thrust of the report is to confirm that, as was always said from these benches when we were in opposition, the British contribution to the budget will be substantially more than our fair share of the cost, based on the size of our GNP.

On this aspect, as on others, the Labour Party's view in opposition has been vindicated—that the terms accepted by the last Government were unjust to this country. I hope to be discussing with other Foreign Ministers in Brussels next month the consequences that are to be drawn from that conclusion, which is not our conclusion alone but the conclusion of the Commission.

The second element on which there is movement is the CAP. We were told time after time from the then Government that it could not be breached. It has been breached time after time and is continually being breached. It was breached shortly after we came into office, it has been breached by the Italians and other countries constantly and continually. Here again, because of the dissatisfaction that was felt not only by us but also by Germany, the Commission has now been charged with the responsibility of undertaking a comprehensive stocktaking and of producing the results of that by next February. Here, too, there is the prospect—I say no more than the prospect—of securing an agricultural policy that will conform to the needs of the British Isles, to our need to provide a steady flow of food at reasonable prices while giving a fair return to the producer.

I do not delude myself on the subject either of the budget or of the CAP. I do not believe that the walls of Jericho are likely to fall down at the first blast of the trumpet, but at any rate we have begun the long march around. I believe it took seven times around before they got there. Maybe we shall succeed; I do not know. Progress has certainly been made by the Minister of Overseas Development on giving the Community's policy towards developing countries a more global approach. But I am less happy about the state of affairs in the matter of regional policy and the control of planning of industry. Even here, however, although I think that this is one of the least satisfactory parts of what we are doing, it seems to me that the blind acceptance of the doctrines of the market economy which has disfigured the Community in recent years is showing signs of giving way to the needs and realities of a sovereign Parliament.

It is our aim to bring the period of renegotiation to an end by next spring so that, in the words of the Gracious Speech Within twelve months the British people will be given the opportunity to decide whether…this country should retain its membership. It is they who should be given the opportunity to make this historic choice—[HON. MEMBERS: "How?"] Next paragraph—[HON. MEMBERS" How?"] I realise that the House is anxious to know the meaning of the phrase "through the ballot box". A statement will be made on this as soon as possible. The necessary preparations for this undertaking are being set in hand by the Government and no doubt we shall return to the matter several times during the current Session.

I conclude by emphasising the significant rôle that Britain ought to play, that we must play, that it is our responsibility to play, in the world. We have valuable assets at our command: our historical links with many parts of the world, the international confidence and respect that is felt for our institutions in the United Kingdom—and I emphasise the words "The United Kingdom" whose integrity it is the responsibility of all of us to preserve. These will be fully effective only if we are successful in our efforts at economic recovery. If we did that it would redouble the international confidence and respect that is vital for our survival.

Our future, our economic prosperity, our capacity to influence the rest of the world, rests in our own hands. It rests, above all, in our capacity to see our own problems clearly. It rests in the ability to look at them with clear eyes, in our capacity for helping ourselves and exerting our own renowned self-discipline. Today we may not be able to save the world by our example, but we can still save ourselves by our exertions.

4.1 p.m.

Mr. James Prior (Lowestoft)

We have had a felicitous speech from the Foreign Secretary. Many of my right hon. and hon. Friends will welcome the last part of his speech, which dealt wiht the European Community. I noticed a few rather wry smiles behind him on the Government benches as it became clear as he proceeded with that part of his speech—I do not wish to embarrass him on this—that he had suffered a good deal of conversion on the road to Brussels over the last few months. He has found out, as so many people have found out before him, that the Community is a far more flexible organisation than he ever anticipated or expected.

When the right hon. Gentleman talked about the changes being made in the common agricultural policy, I hoped that he would give my right hon. Friend the Member for Grantham (Mr. Godber) the credit for demanding and starting the review of the common agricultural policy which he put in hand as long ago as this time last year.

In showing a greater sense of flexibility of the EEC, the right hon. Gentleman should now start to put the positive case for continued British membership. Perhaps he could get the Minister of Agriculture—who also has had a miraculous conversion—to start by saying something more about the price of food. Will the Government give the estimated cost of food if we are a full member of the Community, as opposed to the cost of food if we stay out of the Community? If they do, they will find that it is now cheaper to stay in the Community than to get out. The House and the country have a right to know these facts.

Could we hear tomorrow from the Minister of Agriculture what has happened on sugar? How much will the deal made by the Community save Britain over the next two or three years, and how much will it benefit the Commonwealth by the higher prices that it will get from the Community.

Perhaps also tomorrow we could hear from the Minister on some of the other matters that are worrying agriculture. When the right hon. Gentleman talked about the Government playing their full part in international consultations on food and energy programmes, I thought he would have recognised that the best part we can play is to start doing something about them at home. In the last few months we have done nothing to improve our agricultural position; in fact, we have made it a great deal worse. He, as a beef producer in another capacity, should know exactly what is happening to the whole beef industry in this country.

With regard to energy, whereas a good many nations have now introduced measures designed to save energy and fuel consumption, Britain has shown remarkably little activity in this respect. It is an absolute disgrace that the Government have done nothing, and given no lead whatsoever over the last few months, to bring about a saving in fuel. My party believes strongly that we need a import-saving, import-substitution, policy such as we have never had before.

When the right hon. Gentleman was discussing the difficult world problems that we now face with the rise in commodity prices, and the fact that the price of oil and other items has risen so sharply, I thought he was painting a different picture from that which his party painted and talked about before the February election. If a greater realisation of the then Government's problems had been shown by the then Opposition, we might have been able to avoid some of the subsequent events which we shall pay for this winter and next winter.

Not only that, but the right hon. Gentleman must accept that if we have, as we all admit, these serious problems which are caused by events outside our control it is even more important that we take what action we can when those problems are within our control. That is why the whole aspect of industrial relations is fundamental to the problems that we face as a nation. Unless in a very short period we can find an answer to the problem of excessive wage claims backed by strike action there is no chance of avoiding high rates of inflation and heavy unemployment.

The problem that has dogged every Government since the war has been how to have full employment without having rising prices whilst meeting people's growing expectations of prosperity and still leave enough over for investment. No Government have succeeded in doing so. Our growth rate has been one of the lowest in the Western world. Our investment performance lags far behind that of most other countries. We have one of the worst records of inflation, and our unemployment figures, whilst on their face value they have looked pretty good, conceal a great deal of underemployment.

Governments of both parties have tried to change the law relating to trade unions. Governments of both parties have tried statutory income policies. None has been successful, and yet the problems, far from going away, have become more acute.

Now the whole emphasis is placed on the social contract, the single pillar of the Government's economic strategy. Many of its conditions are totally unacceptable to us, and we look upon the social contract as it is at the moment with a great deal of dismay. It is not so much a social contract as a Socialist contract. It is between the Government and the trade unions, and that is taken straight from the Government's manifesto. Now we are to be faced with heavier taxation, municipalisation, nationalisation, defence cuts—all further threats to our basic freedoms which no Conservative could support. If this part of the contract is carried through—it appears from the Gracious Speech that the writing is on the wall—it will represent a change in the balance of our society between the State and the individual which makes talk of the rights and freedoms of the individual no more than expressions of empty words.

Over the coming months, as the public switch on their radios each morning to hear that the Commons is still sitting or has been sitting to a late hour, I hope that they will not think that this is Members of Parliament playing silly games. We shall be fighting with every means at our disposal to prevent the passage of measures which will reduce the rights of the individual. We shall fight to retain personal freedom, whether it involves more nationalisation or, in the case of trade union legislation, the removal of safeguards for individuals against exclusion or expulsion from a trade union, and we shall support the rights of a smaller union such as the Institute of Journalists in its struggle to remain an independent bargaining agency apart from the National Union of Journalists.

Again, what is the Government's attitude to picketing at a time when more signs of violence at picket lines are already appearing? On these issues, too, we have a right to know the Government's attitude, and I hope that we shall be supported and joined by Members of other Opposition parties.

But if that part of the social contract is unacceptable to us, what do the Government expect from the unions in return? Presumably they seek wage restraint. If they do not seek wage restraint, the contract is completely meaningless. However, let us examine what has happened. Of 39 pay settlements since the end of phase 3, no fewer than 27 broke the contract because they came within a year of the previous settlement. Average rises have been running at about 120 per cent. of the rate of inflation. The biggest rises—up to 55 per cent.—have gone not to the lowest paid but to white-collar workers, and 53,000 Ford workers have been offered average rises of 42 per cent. after only eight months.

That is, so far as we can judge, the social contract. When the right hon. Gentleman asks us to throw our weight behind the social contract, I should like to tell him that, as a matter of dynamics, if he throws his weight behind what is to all intents and purposes a vacuum he will fall flat on his face, and that is exactly what he is going to do. I should like to quote a little snippet from the Sun: In any case, the current Government myth is that we are ALL parties to the contract. It would be more reasonable to say that NONE of us is. Therefore, it is useless for hon. and right hon. Gentlemen opposite to ask us to support something that does not exist and that we all know does not exist. But we are entitled to know—and we are bound to ask—what the level of settlement is for which the Government are aiming. The year-on-year increases for basic hourly wage rates have already risen since March from 15 per cent. to nearly 21 per cent. What figure had the Chancellor in mind when he said that adherence to the social contract would bring inflation down to 10 per cent. next year? Let the Government publish the figures so that the public can judge the results.

I am sorry that the Chancellor of the Exchequer is not here: I did not give him notice beforehand, although I sent a note through the Whips when I saw that he was not on the Government Front Bench. I have always thought that the custom for the opening speeches on the Address was that Ministers would be in their places and that it was not necessary to refer to them in advance.

However, as someone entrusted with the bewildering and difficult task of guiding the nation's economy through the next few years, the Chancellor of the Exchequer in his performance at the election and before it fell well below the standards we expect from the Treasury. His use of the figure of 8.4 per cent. as the current rate of inflation was not only untrue but positively damaging to the battle and task that the Government have of convincing the country of the serious situation. The right hon. Gentleman does not apologise: he brazens it out. I have come to the conclusion that he is one of the few people who do not know the difference between right and wrong or between truth and untruth.

Let the Government tell us their revised estimate for the rate of inflation. This is important, as it is only then that we can judge the effectiveness of wage restraint on the social policy. In the United States wage settlements are running at about the same rate as is inflation. When taxation is taken into account, that means some reduction in the standard of living. Yet here our wage settlements are well ahead of inflation. If the United States has had to accept a reduction in its standard of living, how on earth are we going to avoid it? How do we think that our exports can remain competitive? It is quite clear that we have to tighten our belts. Would it not be better now to admit that that is what we have to do.

When are we going to hear from the Government some condemnation of exorbitant claims such as that which the lorry drivers in Scotland have just achieved? What is that claim? Will Ministers tell us how big they consider that claim to be? When are we going to hear a Minister condemn the tactics of those who cause such hardship as that in Scotland, that has done so much damage to the environment? We have not had a squeak out of any of them.

The only comments of the past few weeks about the social contract and some of the wage increases that have been awarded are the two from the Prime Minister, who accused Ford of being a "rogue" employer, and the right hon. Member for Ebbw Vale (Mr. Foot) who launched an attack against the BBC. If ever there was a specious attack, that was one that we all knew from the start that he would make. The country is being asked, through the social contract, to take so much on trust that it has a right to expect that that should be matched by an exercise in greater frankness. Therefore, let us have the figures and a forecast.

It is clear that the Government's strategy in relying on price control but on no wage control is totally irrelevant to the needs of the nation. The cash flow and liquidity problems of industry caused by a combination of price control, inflation and the March Budget leave companies in a hopeless position. If employers try to resist a wage claim they cannot afford, there is a strike and they go bust. If they pay up, they cannot recoup on prices and suffer a lingering death. So what is happening? Some companies are already bankrupt; others are near to it but dare not admit it. It is already too late to help many companies. Others have cut investment, new products and anything that could improve their cash flow. It is a short-term policy. It is one of eating the seed corn.

It is clear that, after paying taxes, Britain's companies as a whole have been running at a loss.

Mrs. Elaine Kellett-Bowman (Lancaster)

Would my right hon. Friend agree that it is not only the investment position that is causing firms in my constituency to be on a three-day working week with massive redundancies? It is the fact that firms lack the liquidity not merely to invest but to re-stock. They simply cannot afford to place orders with my firms and keep our factories going full time. Therefore, it is the stock problem that is causing the present short-time working and unemployment in my part of the world. Will my right hon. Friend try, too, to persuade hon. Gentlemen opposite not to sacrifice the interests of the intermediate areas to the needs of the Labour-voting development areas?

Mr. Prior

I agree with what my hon. Friend said. I do not believe that hon. Gentlemen opposite have any idea of the seriousness of the situation and the effect that it will have on employment and production over the next few months.

I understand the Government's difficulties in respect of prices. But they must recognise that price controls must be greatly eased and company taxation reduced, and that we must end taxation on paper profits as well. That is one of the points made by my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman). Instead of carrying out, as the Government did in the past, a great campaign to show how great profits were, they will now have to turn round and carry out just as great a campaign to show why profits are needed, why investment is needed and why there must be some easing of price control. For the sake of the country, I only hope that they are as successful in showing those factors as they were in their previous campaign a few months ago.

Mr. Jack Jones pointed out, in what I consider to be a courageous speech, the dangers to employment if bankruptcies occur. That message needs to evoke an immediate response from the Government, too. They have to eat a lot of words over the next few weeks. If they do so, we shall make those words as digestible for them as we possibly can. But the words of last year will have to be eaten. If they are not eaten, industry faces large-scale bankruptcies and all workers face large-scale unemployment. The Government had better get on and start now, and we shall make it as easy for them as we can.

The only way to higher wages is through more investment, greater production and productivity. That means allowing higher profits for industry. Underemployment and low wages are a reflection of our bad investment performance over a number of years. Higher investment, a tight control of Government expenditure and restraint by all sections of society is the only possible way forward for us.

In the debate on the Address it is not unusual, following a General Election, for some of the rhetoric of the hustings to spill over into the Chamber. Yesterday and today have been no exceptions to that. When the Prime Minister referred to the endearing habit of Mr. Harold Macmillan and produced some rather over-elaborate notes from his pocket yesterday, I hoped that what was to follow would enliven and invigorate our debate. To judge by the reaction of the House, it certainly did not. But if the Prime Minister borrows a trick from Mr. Harold Macmillan I hope the House will forgive me if I quote from one of the last great speeches in the House of Aneurin Bevan, the former Member for Ebbw Vale. I do so because it made a great impression on me at the time as a new Member of Parliament, and it is relevant today.

Mr. Bevan was discussing the defeat of his party at the polls and the inevitable speculation, advice and criticism that always followed. He said: I suggest, however, to the House at the beginning of this Parliament that there is another question and one which is even more important. That is, what the Government party does with its victory. It must not be thought that a party victory is necessarily a national victory."—[OFFICIAL REPORT, 3rd November 1959; Vol. 612, c. 861.] How much our country yearns for a national victory. How vital a national victory is going to be if we are to maintain our democratic institutions and the authority of Parliament. The Opposition will judge every action of the Government against the test of its relevance to the nation as a whole. The test will be not whether it satisfies the Tribune group, but whether it is right for all the people—not specifically or specially emotive and ambiguous words such as "useful people" or "working people" but simply all the people.

Many of my hon. and right hon. Friends are in this House entirely due to the votes and support of thousands—in fact, millions—of trade unionists as well as non-trade unionists, people who are as intensely proud of being Conservatives as we are proud to have their support and loyalty. The rhetoric of class division as portrayed in the Labour election manifesto was unworthy of those who now seek to talk about a partnership between the Government and the whole of our national family. I quote from the last page of the manifesto—[Interruption.]—which will certainly win approval from the hon. Gentleman: … our objective is to bring about a fundamental and irreversible shift in the balance of wealth and power in favour of working people and their families. Let me quote the comments of The Times on that particular sentence: The emphasis of that deliberately ambiguous phrase 'working people' is clear enough. It is intended to imply a priority in national life for manual workers as against all other groups; for the 10 million workers who belong to trade unions against the 14 million workers who do not; for a revived working class against all the people who work in middle class jobs in the country. It is not even the rhetoric of working people; it is the rhetoric of irresponsible middle class politicians who believe that they can bamboozle those whom they regard as their inferiors. I hope we shall never hear again from the Government some of the humbug on class distinction that we have had from them over the past few years. There is little in the Government programme which will unite the nation to deal with the immense problems we face. I do not believe that the Government will succeed. For that reason, the policies put forward by my right hon. Friend and our party during the General Election will be vindicated and will be seen to have been the true policies. It is a tragedy for the nation that it has to learn in such a hard and frustrating way.

4.26 p.m.

Sir Geoffrey de Freitas (Kettering)

Like the right hon. Member for Lowestoft (Mr. Prior) and all others in the House, I am much concerned about the problem of inflation and the state of the economy. But I differ from the right hon. Gentleman in that I want us to try the social contract, difficult as it may be to achieve, rather than to try anything that has been put forward from his side of the House.

We have been told that the Conservatives will fight every measure that we produce. That is fair enough; that is their purpose. I would be greatly surprised if they did otherwise. But I look forward during the battles we have been promised to hearing them enunciate some alternative policies. The country is entitled to know.

The right hon. Gentleman said that he would like my right hon. Friend the Minister of Agriculture to answer certain questions tomorrow. He has complained because my right hon. Friend the Chancellor of the Exchequer is not present today. I am sorry that he did not pick up any of the points made by my right hon. Friend the Foreign Secretary this afternoon. I will do so. At the beginning my right hon. Friend referred to the achievement of détente between the USSR and the USA, and he then referred to the need for international consultation. These two points and his reference to the Queen's Speech bring me directly to the theme upon which I wish to dwell—that is, the state of NATO. My right hon. Friend referred to this at the beginning of his speech and then came back to it.

In London next month there will be the twentieth meeting of the North Atlantic Assembly. The success of NATO is shown by the fact that we are able to talk about détente. We have, of course, to maintain that détente, but how are we to do this? How are we to make NATO more effective in order that we can maintain a balance with the Warsaw Pact countries? We are in a period during which we will need even more discussion —"consultation" was my right hon. Friend's word—about NATO and within NATO.

We in the House are in a curious position because, almost alone among the Parliaments of the NATO countries, we have no standing specialist parliamentary defence committee with access to information from Government Departments and the facilities for cross-examining Ministers and senior officials. We need to put our own house in order and would greatly benefit if we did so.

There is another point which we should not overlook. We must debate the problems of NATO with our fellow Members of Parliament from the other NATO countries. For example, I know that more than one hon. Member has had the same experience as I have had of discussions with United States senators and representative's, and found that they have very little idea of the size of Britain's contribution to NATO, which, of course, is larger than that of any other ally of the United States.

I have heard American Congressmen referring to the desirability of pulling American troops out of Europe and arguing—not only from their national point of view of balance of payments and so on—that such a withdrawal would be a spur to greater effort by the European allies. This is not so. They must realise that so prominent has been the rôle of the United States in North Atlantic defence since the war that if they were to pull out large numbers of their forces it would be taken as a signal that the United States had concluded that there was no longer a great danger from Russia.

Because our language is the same and our institutions are similar, we in this House must realise that we have a great opportunity to influence United States Congressmen. Therefore, I ask our Government to work to create an international organisation which will enable us to bring our influence to bear on United States Congressmen. Congressmen understand debate: so do we.

I am asking for an official Consultative Assembly of the North Atlantic to be set up rather along the lines of the Consultative Assembly of the Council of Europe, which is known to many hon. Members. The present unofficial assembly is much less significant than it should be in view of the importance of the people who attend it. Two years ago, the last time the assembly met in Western Europe in Bonn, 20 American senators were present. It was never more important that Europe and North America should have this debate together.

I understand completely why over the years successive British Governments have not regarded the assembly as a serious international body. First its rules of procedure were very sketchy, and that resulted in the assembly adopting a series of declarations addressed to all the world and designed automatically for the world's collective wastepaper basket. The new rules of procedure have already enhanced the reputation of the assembly by ensuring that the committee resolutions coming before it are much more concise and directed to asking a particular body, usually the North Atlantic Council, to follow a certain course of action.

Secondly, the assembly has not yet developed a budgetary system such as has been adopted by other international organisations like the Council of Europe. Here we face a real problem, but I am sure that in a year or two we shall overcome it and have a budgetary system which is acceptable to British Governments.

This is not the occasion on which to go into great detail, but I must mention one unexpected problem. With the separation of powers in the United States, the congressional delegation finances itself and resents the thought that any Government, whether its own or the Government of an ally, should interfere in what it regards as the budget of a parliamentary body.

However, we are dealing with very small sums of money. The annual cost of the assembly is 27 million Belgian francs, compared with 1,600 million Belgian francs for the European Parliament. There is a tiny staff, a secretary-general, who is a first-rate man, and four or five others.

My particular concern is that at the London meeting next month our Treasury will agree the extra cost of a few thousand pounds, so that the British delegation will not be in the embarrassing position of being the only delegation which does not accept the budget. We must not do that again. We have had to do it at previous meetings of the assembly but when the meeting is in London it would be ludicrous to do so, especially as within a year or so the new budgetary system will be adopted and no one will be able to fault it.

I have confidence that the Government will tame the Treasury, because my right hon. Friend the Prime Minister, who many years ago was a delegate, has commended the assembly at a recent meeting of the Heads of Government of the alliance and my right hon. Friend the Foreign and Commonwealth Secretary early this year wrote to me referring to the assembly's transatlantic character, unique to the assembly, which is its special strength. I fear that there is a danger of spoiling the ship for a ha'p'orth of tar.

The organisation is valuable and it will have much greater possibilities in the future. Never was there a time more important than now when we are exchanging views on defence with our American colleagues. I call on the Government to back the assembly all the way.

4.34 p.m.

Mr. Jeremy Thorpe (Devon, North)

The right hon. Member for Kettering (Sir G. de Freitas) will, I hope, forgive me if I do not follow him in the details of NATO, save to say that I am to see a high-powered delegation of American senators shortly and I intend to ask the right hon. Gentleman to give me some advance briefing before they arrive.

I greatly enjoyed the Foreign Secretary's speech. He has had to leave on business and courteously wrote me a note to that effect. He was part Foreign Secretary in some passages, part Chairman of the Labour Party in some parts and a somewhat diffident leader of the European movement in other passages. I found that to be an interesting coalition of ideas, and there was much in his speech which commanded our attention.

The Queen's Speech may most fairly be judged—and this is true of any Gracious Speech—by its ability to attract the confidence and enthusiasm of the nation in tackling the problems which it faces. The nation is less interested—though this would shock many of the political theologians and commentators—in how much of the manifesto is in or out of the Queen's Speech and how many Bills are to be introduced in the course of the Session.

Judged by that criterion, both sides of the House are agreed that the main problem which the country and the Government will have to tackle is inflation. That problem was graphically illustrated in the Financial Times of 28th October in the Lombard column, which indicated that inflation at its present level would cause a contraction in the purchasing power of public holdings in national savings and the building societies at the rate of £5,000 million a year, the equivalent of £2 a week for every member of the population. That is but one example, and I do not think that many more are needed. I think the House accepts that that is the sort of effect which inflation at its present rate will have upon people's savings and upon the real value of their money.

There are many immediate priorities, but I think that the first immediate priority is to increase investment in industry. I think the Government concede that. The only difference is how it is to be done. The Government would do it by their National Enterprise Board, planning agreements and other measures envisaged in the Queen's Speech. Others believe that the most effective way would be by increasing liquidity in industry and by increasing confidence. However it is done, unless there is increased investment the House must agree that there will be less hope of replacing out-of-date machinery. There will, therefore, be less hope of Britain becoming more competitive and less hope of maintaining existing levels of employment, to say nothing of creating new jobs and opportunities.

If the Government are to increase investment, apart from State investment, it will mean a fundamental change of strategy in the Budget which is to be introduced next month, unless it is to be the Government's philosophy that State investment must increasingly replace, and must be positively preferred to, ordinary risk capital which has been the major traditional source of investment. The Budget will be more important as a pointer of the Government's intentions in regard to inflation than is the Gracious Speech.

I heard only this morning from a major firm which employs tens of thousands of people and which is vital to the economy that over the last 12 months stocks and debtors increased by more than £100 million, mostly within the last six months and that in August liquidity was reduced by £24 million, in September by £12 million and in October by £8 million. There are many firms which face the same liquidity problems and are having to cut back on investment or roll forward new projects.

I hope that in his Budget the Chancellor of the Exchequer will look at advance corporation tax. That is the way in which vast sums of money—about £900 million —are advanced to the Treasury six months before the liability is incurred. That is a totally new concept of taxation in this country. It artificially reduces liquidity. Not only is £420 million in additional tax being taken out as a result of the last Budget, but in assessing what industry has to pay the Chancellor has taken into account and treated as profits the enhanced value of stock held without taking account of the actual cost of replacing that stock.

Therefore, very often we are taxing illusory profits, and the lack of inflation accounting is one reason for the lack of liquidity in our industry. That is why new projects are abandoned, whether it be by small engineering firms or by a large concern like Marks and Spencer. They are deliberately cutting back on new investment and rolling forward other projects. That is totally wrong for the vitality of industry and, incidentally, for the prospects of full employment. I ask whether the enthusiasm for a National Enterprise Board has resulted in the Government indulging in an act of infanticide with regard to the so-called Lever investment bank. No doubt we shall hear more about that in the future.

My colleagues and I have always accepted that if the State puts cash into a firm, it is entitled to have a share in the equity. I have never disagreed with that. But that is a very different proposition from saying that it is right to create an economic climate and to create uncertainties through the future of public or private ownership being increasingly in doubt so that the State becomes almost the only major provider of risk capital. That may commend itself to the philosophy of the Secretary of State for Industry, but it is not a healthy basis for a mixed economy. The act of nationalisation itself does not solve the liquidity problem, nor, as is known by the workers at Shotton and East Moors in Cardiff, who are threatened with closure despite the profitability of both works, is it any guarantee of employment. I believe that the Budget will be of critical importance in determining our investment pattern.

Turning to the social contract, one great difficulty in its interpretation is that it means different things, especially during an election, to different Labour Ministers. In his speech at Cardiff on 4th October, the Prime Minister said that the Government would have to take tough measures to deal with rogue employers who made excessive wage awards. The logic of that is that employers will make excessive wage awards if excessive wage claims are made—[Interruption.] I have yet to meet an employer who has gone out of his way to make a greater wage award than that sought.

Mr. William Hamilton (Fife, Central)


Mr. Thorpe

Ford's went beyond the social contract, although whenever anyone does that there is always someone on the Government benches who finds a way of saying that it was within the spirit of it. We almost need an archbishop in permanent residence to interpret the spirit of it.

The Prime Minister's speech saw a position in which wage claims would be made which went beyond the social contract and in which employers would concede those claims. That, for a start, was an indication that the right hon. Gentleman believed that the social contract was inadequate to deal with wage inflation. On the same day, 4th October, we heard the Secretary of State for Industry say in a BBC radio programme that the social contract was not intended to keep down wages. No one suggests that the social contract is to be a repressive measure for keeping down wages. But I am sure the Foreign Secretary agrees that the object of the exercise was to contain wage increases within the cost of living. Therefore, it seems that we have another different interpretation by the Government.

The Chancellor of the Duchy of Lancaster, who is perhaps more cautious, said that the social contract was intended merely to create a good atmosphere in which negotiations could take place. We know that the 12-month rule has been breached already. We know that there have been awards going beyond the norm in the social contract, even taking 20 per cent. and not 8.4 per cent. as the base line. Therefore, we are entitled to ask the Government what are their proposals with regard to the social contract if it is breached, as it has been.

I want now to say a word or two about industrial relations. My colleagues and I voted with the last Government for the repeal of the Industrial Relations Act. We also voted for the successful amendments to the Trade Union and Labour Relations Bill, one of which was moved by a Liberal Member. In our view those amendments contained important conscience clauses. If it is right that the Secretary of State for Employment has received a delegation from the trade union movement and has felt unable to go the whole way with the trade unions in seeking to repeal those amendments, in my view he is taking a highly reputable stand on the issue of individual conscience and individual rights which we shall be prepared to back in this House.

The Prime Minister asked whether the Liberal Party still believed in the slogan that God gave the land to the people. The answer is "Yes". But the slogan was never that God gave the land to the State. Perhaps the Prime Minister, with his expert knowledge of history, will remind himself of the 1909 Budget, which was the great controversy which so distressed the Conservative Party both here and in another place. The object as far as land was concerned was that, in order to return to the community the enhanced value that the community had conferred upon land, either by development alongside it or by granting planning permission, there was to be site value rating. This is the way to return the value to the community and to induce the owner to put to the best possible use the land which he owns. It is a more effective and less inflationary and expensive way of carrying out this proposition than the Government have suggested. I have no doubt that we shall have an opportunity to go into these matters in detail when the Government introduce their measures.

As for housing, I believe that the Conservative policy of 9½ per cent. mortgages was as irresponsible as it was unworkable. The demand for subsidised mortgages would have come at the very time when the building societies had started to repay the £500 million which they had been lent by the Government, so creating another liquidity crisis. I ask the Government to consider whether they cannot reverse the trend in mortgages so that we begin with a low-start mortgage, with higher repayments coming later towards the end of the mortgage. At present a young married couple pay the highest repayments of interest and capital at the beginning of the mortgage, when they are least able to afford it. The building societies, which are very conservative bodies, should be asked to give this matter greater attention than they have so far. If they are not prepared to do so, I hope that the Government will widen the powers of the Housing Corporation so that it may carry out this operation.

The Government having started, on a cautious basis, indexed national savings bonds, I should like to see consideration given to indexed property bonds, which is one way of getting capital into our housing industry.

On rates, I hope that we shall hear something very soon. Here the problem was that the Conservative Government reformed local government without reforming local government finance. Now they have sought to reform local government finance by making it virtually nonexistent. I believe that local authorities must be given the power to raise local taxation, and I revert to my belief that site value rating is a more effective and fairer way of levying rates than the system we have at the moment.

I shall not touch on agriculture today save to say that there is a desperate crisis in the livestock industry. Slaughter figures have been going up consistently, not because farmers are slaughtering to make a profit but because they are trying to do all they can to cut their losses. Many farmers know that hay, which was £35 a ton last year, is now costing anything between £70 and £100 a ton, if it can be bought. Unless we do something, and I suggest that it is perfectly proper, to have a temporary guaranteed price until certainly 1st March, when it should be possible to negotiate a more permanent settlement in Europe—we have always taken this view—not only will farmers be cutting back the national herd but there will be a meat shortage in the country in the very near future.

On Northern Ireland the Government are entitled to the support of the vast majority of the House provided they proceed along the lines indicated in the Gracious Speech. It is not unreasonable to ask whether all hon. Members, and particularly those who represent Ulster constituencies, accept that this Government and this country, who are giving immense military and economic support to Northern Ireland, have the right to expect them to play a responsible part in trying to implement power sharing between the two communities in Northern Ireland. Without that, I believe that there is only a very bleak future for the Province.

The Foreign Secretary touched on the Middle East. As he said, it is too early to conjecture whether the new dimension on the West bank of the PLO being recognised as a quasi-governmental body will make Israeli acceptance of a new position more difficult or whether, though it may make it more difficult, it may make a settlement more meaningful at the end of the day. We shall not know that for several months. I do not believe that the present posture adopted by Syria is very encouraging for the Kissinger initiative, but we must await the outcome of that.

I had hoped that the right hon. Gentleman might say something about the need for arms control between France, Britain, the Soviet Union and the United States, particularly in the Middle East. It is extraordinary that over the years we have expended an immense amount of time and diplomatic energy in maintaining the peace while the four big Powers involved have been responsible for supplying arms, usually to both sides, and have thrown up their hands in horror when our customers have made use of the sales.

I listened with great interest to the right hon. Gentleman on Europe. I have not overcome the opposition which the Prime Minister harboured for a long time on the question of the referendum quite so fully as he has. If the result of the referendum is to be mandatory on Members of this House, it may cause a few hon. Members to go against specific promises and undertakings which they entered into between themselves and their electors at the last election and before. I should hate to have to see a referendum which came down in favour of staying in Europe which would mean that the right hon. Members for Stepney and Poplar (Mr. Shore) and Ebbw Vale (Mr. Foot) would be told that they must accept it and go against promises they made to their electors to pull out of Europe.

If we are to have a referendum and, who knows, another election—and these other matters will become more apparent according to the Foreign Secretary—I believe that there should be a free vote of the House of Commons first. If there is to be a free vote for the British people, I do not sec why the House of Commons should be the only outfit that is shackled on this issue. The outcome of that free vote should be the subject matter of the referendum, namely, that the country should be asked whether it agrees with the decision taken by the House of Commons. If it agrees, that is the end of it. If it does not, there will have to be a Dissolution and a fresh House of Commons more accurately elected to represent the views of the British people.

If we are so anxious to have a forthright system of consultation and democracy in this country, may I hope that the study which the Labour Government carried out between 1965 and 1966 might be published. The Lord President of the Council, who was at that time the Chief Whip, said that the present voting system was unfair to minorities. He said that the Government had taken the view that the time had arrived when they must examine in depth the methods of electing Members of Parliament other than on the present straight majority method. I ask the Prime Minister whether that report can be published, and also when the Crowther-Hunt inquiries to which he referred on 25th July in reply to a question from my hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) might be published too. Therefore, I hope that the Government will at least give us the benefit of their thinking on these matters.

May I say to the Leader of the Opposition that when he makes the point, which is mathematically correct, that 60 per cent. of the electorate did not vote for the Government, that in a sense, I think, reduces his hitherto unquestioned support for the doctrine of the mandate. I do not question the doctrine of the mandate. A government are a government if they have a majority. But if the Leader of the Opposition is worried by this situation, as I am, it would be interesting to know whether in logic he is prepared to consider the system which makes it a possibility and a reality or whether he wishes to blame the system when it does not help him but do nothing about altering it. If so, he would not have logic on his side and many of the Conservative slogans would not ring very true.

If the situation in this country is as bad as politicians say, and I believe that it is, the people of this country expect and will accept leadership from both the Government and the House of Commons. I do not believe that the people are interested in who coined the phrase "national unity" or who first became the prophet of gloom and doom. The Government must realise that any Government of this country which have policies which are fair and far-sighted are entitled to expect and should be able to achieve support beyond the ranks of their own party, not only in the House but outside.

The Government are entitled to put every single measure in the Queen's Speech on the basis of which they won the last election, albeit on a minority vote. But whether they are wise to do so is entirely another matter. All the contentious issues raised in February and October are contained in the Gracious Speech. This country is more in a mood for a recipe to cure inflation and is prepared to accept measures which are tough provided they are fair. My criticism of the Queen's Speech is that it is much more a lecture on the doctrines of Socialism than it is a programme to meet the needs of the nation.

4.57 p.m.

Mr. Dennis Canavan (West Stirlingshire)

I am grateful to have this opportunity of making my maiden speech so soon after being returned as the Member for West Stirlingshire. Those hon. Members who knew my predecessor, William Baxter, will remember him as a man rich in many talents, a man of independent mind and a man who no doubt made many contributions in this House. I am pleased to follow in his footsteps not only as representative for West Stirling-shire but as one who lives in the constituency I represent.

My home is in Bannockburn, but I hope that that does not associate me with that minority Scottish element on the opposite side of the House who seem to take great delight in blaming the English for all our troubles. We Scots get a bit fed up beating the English, not just at Bannockburn but even occasionally at Hampden Park and Wembley. But in twentieth century politics I maintain that it is important that we get maximum co-operation from all the peoples of the United Kingdom irrespective of their nationality.

I also maintain, however, that this maximum co-operation cannot be brought about unless we Scots are given more say in the running of our own affairs. There is a general feeling in Scotland and in my constituency in particular that government has become a bit too bureaucratic, a bit too centralised and remote from ordinary working people. Admittedly something can be done to alleviate this situation by the extension of industrial democracy to give more people more say in the running of their affairs at work. More can also be done in the field of local government. We look to the new community councils to help to bring government closer to the people in Scotland.

Nevertheless, there is an undeniable case for the devolution of more power from this Parliament. That is why I am glad to see in the Gracious Speech that there will be legislation to set up a Scottish legislative assembly. In the past we have seen legislation exclusively affecting the Scottish people going through a Committee called the Scottish Grand Committee. Yet at times this committee was deliberately packed with non-Scottish representatives, whose sole qualification for membership was the possession of a Tory Party ticket. One advantage of the Scottish legislative assembly or parliament, which is what I would prefer to call it, is that there will be an end to that ridiculous farce of democracy.

But I do not think that the Scottish people believe that we can solve all our problems in splendid isolation. We in Scotland face many problems which are similar, if not identical, to problems faced by people elsewhere in the United Kingdom. It would be foolish of us to think that we could solve them by setting up a Scottish separatist State. Therefore, I hope that the legislation for the new Scottish assembly or parliament will not entail any reduction in the number of Scottish representatives in this House. I also hope that it will entail no establishment of a House of Lords in Scotland. We do not want that kind of parliament. We saw enough lords here yesterday. We do not need lords in Scotland.

I also welcome the proposal for an agency that will provide more economic and industrial decision-making apparatus based in Scotland—the Scottish Development Agency. I look to the agency and the National Enterprise Board operating in Scotland to put an end to one of the disadvantages of previous regional policies in Scotland applied by successive Governments. Far too often public money was handed out to private industrialists without a reciprocal transfer of power to the public. That must stop. Private industrialists in Scotland too often took advantage of public hand-outs in the form of regional employment premiums, advance factories and cheap labour. They set themselves up and then after a short time, when things perhaps went slightly against them, they moved elsewhere, without a thought for the trail of human havoc they left behind. I hope that the National Enterprise Board, operating in Scotland probably through the Scottish Development Agency, will see that public enterprise means public responsibility and that people's livelihoods do not depend on the mere whim of private profiteers, as has happened in the past.

I also welcome other proposals for an increase in public ownership. The public ownership of land required for development will ensure an end to land speculation, which has been a great contributory factor to inflation, not only in Scotland but throughout the United Kingdom. Public enterprise will also be required if we are to put into effect the integrated energy policy referred to in the Gracious Speech. I hope that this form of public enterprise will relate to old fuel industries as well as new fuel industries. In my county, for example, there are coal seams at Airth which have remained unexploited for years. I hope to see the National Coal Board engaging in the exploration as well as the exploitation of this great source of fuel for the nation, with the added benefit of additional employment for miners who otherwise face possible redundancy.

I welcome the proposal for a British National Oil Corporation, which will ensure not only a share of the profits for the community but, combined with the public ownership of land required for oil development, the maximum preservation of our environment. I come from a constituency which is very proud of its natural environment, stretching as it does from the bonny banks of Loch Lomond across to the valley of the River Forth. In between we have the Campsie Fells, the Kilsyth Hills and the Fintry Hills. We are very proud of our natural heritage and are very much concerned with protecting it.

It is our duty to see that industrial expansion is accompanied not only by a more equitable share of the material fruits of such expansion but by maximum conservation of our natural heritage. We owe it not only to ourselves and our constituents but to future generations.

5.7 p.m.

Mr. Richard Wood (Bridlington)

I am very grateful to you, Mr. Deputy Speaker, for allowing me to catch your eye. The last Parliament came and went so quickly that I never got around to catching your eye or that of anyone else in the Chair. But, with your permission and tolerance in this Parliament, which looks like lasting a little longer, I hope to be rather more talkative.

During nearly 25 years in the House I have never previously had the pleasure of congratulating an hon. Member who has just addressed the House for the first time. I am delighted on this occasion to follow the hon. Member for West Stirlingshire (Mr. Canavan), because I can express my congratulations with complete sincerity. I admired many things about the hon. Gentleman's speech. I admired his ability to be uncontroversial, or perhaps I should say reasonably uncontroversial. I admired a great deal of his sound common sense and his toleration of those inferior beings among us who live south of the border. I, too, knew the hon. Gentleman's predecessor very well. I am certain that the whole House will realise that the hon. Gentleman will be a worthy successor. We look forward to hearing another speech from him before very long.

As Parliament succeeds Parliament and the problems of our national life become ever more complex, I am growingly conscious of a lack of qualification to address the House on any occasion. I am encouraged only by the example of a number of my parliamentary colleagues during the past two decades or more, who seem to have remained undeterred by lack of qualification from making a speech on any subject.

I heard the Gracious Speech yesterday with more than usual interest, and with two questions particularly in my mind. The first was: how far does it accord with the thousands of words recently spoken by many of us—including, the Prime Minister told us yesterday, the Prime Minister himself—on the need for national unity? The second was: how far does it commit the Government, in the face of our economic problems, to a serious policy of conservation of all our resources.

I heard the Prime Minister's speech yesterday with those same questions in mind. I am bound to say that I found it an extremely depressing experience. During the whole of the last Parliament we rarely escaped—this is probably in the consciousness of other hon. Members —from electioneering preparations for the recent contest of 10th October. That is now over, and we have a Government with a majority which the Prime Minister seems to think sufficient for several years. We do not know, but that is his view. I fervently hope that the present Parliament will not be consistently dominated, as was the last, by the shadow of the next General Election. I am sure that a constant repetition of the kind of speech which we heard yesterday from the Prime Minister is likely to remove the final vestiges of faith outside in our parliamentary system.

It would probably be wiser to suspend judgment on the accord of the Gracious Speech with the present need for unity until we see the precise details of legislation which the Government have in mind. The first indications, to put it mildly, do not fill me with optimism that future Government policy will succeed in bringing us closer together. I must admit that the proposals for further nationalisation—so slight is public enthusiasm for them—may produce a measure of unity which the Government may not wholeheartedly welcome.

I do not suppose that any of us can precisely foretell the nature and magnitude of the problems ahead of us, but it is plain to the least perceptive among us that we approach whatever difficulties there may be in a condition of high vulnerability. It is foolish to argue whether the present divisions in our society are or are not greater than any of us can remember. I only know that they are alarmingly wide. Unless they can be quickly healed by imaginative and greathearted leadership, I believe that Britain will at best be damaged and at worst crippled by the economic storm which the Prime Minister sees clearly ahead.

Our present divisions will be widened and never bridged if the Government try to ride roughshod over all Opposition opinion and continue to claim that none of my right hon. and hon. Friends, narrowly balanced as the House is at present, has any contribution to make towards saving the country from calamity. National unity cannot be achieved by telling everyone who does not agree with you to go to hell. As the House will recognise, those words are not mine but those of the Secretary of State for the Home Department. To use words like that is not to advocate coalition, which the right hon. Gentleman robustly opposes, but to support toleration and to recognise that many hon. Members and the majority of the electors, although not Socialists, have a deep concern for the future of our country and may, at least occasionally, contribute to the correct diagnosis of its ills and the correct prescription for its future health.

I now turn to the seriousness of our present approach to the conservation of all our resources. This is not confined to the conservation of our energy supplies, although obviously that is a matter of great importance and is specifically mentioned in the Queen's Speech. We talk a great deal about the recycling of waste, but I should be happier if effective action always matched our words. There are many people who are obviously forced by economic circumstances to be extremely careful with their resources, but by and large we have become a wasteful nation. We are wasteful with food and countless other materials which daily find their way into British dustbins. For instance, I have often wondered whether the tons of waste paper which year by year emerge from the House have a useful and respectable future. I wonder whether the millions of rejected bottles from here and elsewhere could not possibly provide relief to the anxieties which I recently saw reported in a trade journal. It was said that the supply of bottles this summer had become very much a hand-to-mouth affair.

Next I ask whether a reduction of temperature in our offices, shops, schools and other public places could not achieve a vast economy in our present use of oil, gas and coal. That would not only help to relieve pressure on our balance of payments but give much needed assistance to hundreds of firms by reducing industrial costs. It would, moreover, lighten the burden of rates and taxes, which seem to receive less attention than they deserve when we consider their impact on the cost of living.

I am conscious that any remarks of mine on this subject must be taken with a pinch of salt. My only serious difference of opinion with my late Permanent Secretary centred on the low temperature at which I kept my office. I found that the office had to be warmed up a bit when our meetings together reached a dangerous point, in regard to both brevity and frequency. Today I am asking only for a reduction of temperature of a few degrees. I am told that it is possible in a building that is heated for 24 hours to save as much as one-fith of the cost of heating it if the temperature is reduced from 20° C to 18° C, which, for the benefit of those who would like the figures translated, is about 65° Fahrenheit, which is quite a decent temperature.

If the experience of other hon. Members is like mine they will have suffered during the election campaign on one or two evenings at schools where the temperature has been far above 20°C. A reduction to 18°C or 65°F could make an even more valuable saving. If, added to that reduction of temperature, double-glazing was installed, the experts tell me that it is reasonable to expect a further saving of 13 per cent.

Apart from these substantial savings of up to one-third of our present costs, which admittedly are under favourable conditions, I fancy that the burdens of the hard-pressed National Health Service would not be increased by more reasonable temperatures but might be substantially reduced.

As the Leader of the Liberal Party reminded us, it is not on annual speeches from the throne that Governments can, or should, be judged. This Government will be judged on great issues such as their handling of our economic affairs, their struggle against inflation, their conduct of our defence and foreign relationships, and their actions in Ulster. However, I believe that the sincerity of the Government's desire to unite Britain and their will to put all available resources in the country to the fullest use will be an important basis of judgment of the Government's success or failure in the months immediately ahead.

5.18 p.m.

Dr. Jeremy Bray (Motherwell and Wishaw)

It is with pleasure that I join the right hon. Member for Bridlington (Mr. Wood) in complimenting my hon. Friend the Member for West Stirlingshire (Mr. Canavan) on an admirable maiden speech. I am sure that we all look forward very much to hearing my hon. Friend further in the House.

For myself it is a privilege to return to the House as the Member for Motherwell and Wishaw in succession to my predecessor, Mr. George Lawson, who will be remembered as a man of uncompromising integrity and principle who served the House and his constituents faithfully and well though a long and distinguished parliamentary career.

Motherwell and Wishaw is the heart of industrial Scotland. It is the centre of the Scottish steel industry and my hon. Friends within Scotland will ensure with me that it will remain the centre. It is a burgh with a strong sense of community spirit which shows itself not only in one of the finest housing records in Scotland but in a richness of community activity the like of which I have not seen anywhere else. One would expect such a burgh to show an ambition for further change and a sensitivity to new issues reaching far beyond its boundaries.

As a newcomer to the Scottish Group, it is with some trepidation that I presume to speak upon Scottish affairs. I draw comfort from the fact that, having been for some years a member of the Northern Group and watched with some awe and terror the operations of the Scottish Group and my right hon. Friend the Secretary of State for Scotland, I can now be as frightened of myself as I am of my hon. Friends in Scotland.

There are undoubtedly forces in the economy and politics of Scotland which demand the attention of this House and will be demanding it for the rest of this Parliament. Whether those forces divide, embitter and impoverish the United Kingdom or whether they lead not only to the renewal of Scottish life and institutions but to a revitalisation of the life and institutions of England and Wales and Northern Ireland will depend in large part on the vision and the statesmanship with which this House reacts to the opportunities presented.

The magnitude of the oil revenues in prospect has not yet sunk into public consciousness in Scotland. On the one hand the Scottish National Party, in its frankly separatist policies, has not realised what a crippling blow it would be to the economies of England and Wales to deny them any interest in the oil revenues. It has not registered the grave implications for Scotland directly in the impoverishment of its principal market, and indirectly in the political animosities that would be generated in the rest of Britain, which would divide the United Kingdom.

On the other hand, not only the mass of Labour voters but active Labour Party workers in Scotland have not registered the magnitude of the oil revenues or their importance for the future of the economy of Britain. When I have described this to good, faithful Scottish Labour Party members, their reaction has been "If that is so, then of course we must control the oil revenues. If the rest of Britain needs help, let that be a matter of negotiation between the Scottish Assembly and Westminster." Some hon. Members may feel that that is naive. Yet that is what I believe will come to be the attitude of the great majority of ordinary grass-roots members of the Scottish Labour Party. We are all too much aware of the deprivations that Scotland has suffered over the years and continues to suffer in so many areas of social and economic policy.

To maintain in Scotland the Labour majority which is needed to return a majority Labour Government in the United Kingdom, it will be necessary for the policies of the Labour Party to have moved considerably in this direction by the time of the next election. If the Conservative Party rejects this position, with few seats left in Scotland to defend, it will become merely an English party which in Government would be embattled against mounting public feeling in Scotland, and perhaps Wales, with untold consequences in these disorderly times.

It was not enough for the Labour Party's statement on devolution to dismiss Scottish claims for the oil revenues as manifest avarice and selfishness. Such words would have been more becoming from the Scottish Labour Party than from the National Executive Committee in Westminster. We have to ask whether the oil revenues, if controlled from Westminster, would reduce inequality and poverty in the United Kingdom. If so, why are we in Westminster waiting for the oil revenues? The dependence of England and Wales on those revenues is far greater. Without them the relative decline in the next few years of the British economy would steepen towards the brink of collapse.

Nor is it any answer to point to other resources and industries in other parts of Britain which are equally needed in an industrial economy and to argue that Yorkshire coal, Welsh water or Cornish clay afford equal opportunities for regional control of resources. They do not. Oil is unique as a major commodity in having a market price far above its production cost, thus giving it command over other resources and playing a special rôle in power politics.

There are uncertainties as to how long the market price of oil will remain so far above its production cost. This uncertainty must be a factor in weighing alternatives for Scotland and for Britain.

Before we judge how the differing economic and political interests in Scotland and Britain can be resolved, we must have a clearer picture of what those interests are. For Britain the first claim on resources must be the balance of payments, which is in serious deficit and will remain so for many years. Then there is industrial investment, which is needed to make good the low levels of past and present investment. Only when we get into the 1980s will there be resources from oil available to increase social investment and consumer expenditure. That is the picture for Britain as a whole.

If the oil revenues were retained by Scotland they would be much more thickly spread. Backlogs of social investment in housing, hospitals, schools and roads, improved welfare and social services, new industrial structures and higher levels of consumer spending through reduced taxation would certainly be practicable sooner and would leave room for discretion on the rate of extraction of oil, with the distribution of expenditure influenced by the need to leave Scotland with a well-balanced economy as the oil bonus fades out. Whether the English and Welsh would be prepared quietly to suffer the consequences of the loss of oil revenues would be a different matter.

Even a wholly self-regarding Scotland would be wise in its own interests to give Britain an interest in oil revenues, at least up to the level where the advantage to Scotland of having more buoyant British markets began to be outweighed by the cost to Scotland of losing the oil revenues. For Britain, and in the long run for Scotland, wealth from oil would be worth far less than the value of a regenerated industrial structure.

For the political dimension we must look wider and deeper into the past and into the future. Oil is an accident. There will be other accidents and we shall be left with the consequences of constitutional change for centuries after the decades of dependence on oil. We have to look for constitutional developments and a system of economic management which will be robust enough to cope not only with great differences but also with great changes from time to time in the wealth and resources of the different parts of the United Kingdom.

I have no doubt of the wisdom of the Government's proposals in the Gracious Speech for a Scottish assembly. But I do not believe that a just distribution of resources and the wide acceptance of that distribution required in a stable and peaceful democracy can be attained if all economic power is concentrated at the centre. It is a misconception, perpetuated by the Kilbrandon Commission, to argue that economic management requires central control. It does not. There is a degree of centralism in Britain which it is difficult to match in other countries as advanced and sophisticated as ourselves.

Indeed, the precise opposite is the truth. Any complex management or control system requires a high degree of devolution, where decisions can be taken locally, using locally available resources to meet locally perceived needs with, by all means, the principles agreed centrally. With Scottish oil revenue the greatest sensitivity would be required.

I believe that the only system that stands any chance of acceptance, once the political forces now at work have had time to work themselves out, must start from giving the Scottish assembly an interest in oil revenues. If the question is asked "Should it be 10, 20, 30, 50 per cent. or what?", the only possible answer from within Scotland would be, as hon. Gentlemen on the Opposition side would give it, 100 per cent. Equally this is unacceptable, because no Scot conscious of his own dignity and freedom would wish to subject other Britons to the indignity and subservience of becoming supplicants for aid.

The allocation must start not from the resource end but, as we are Socialists, from the need end. Let there be an inventory of the assets and current expenditure, and of social needs enjoyed or suffered by the several nations, regions and classes within Britain as a whole, and, indeed, of personal wealth and incomes too. Let the objective be set of bringing these up to a common level within a number of years, with the allocation of resources then made on the basis of social need. It is only on this basis that any division of revenues could ever be agreed by the party to which I and other hon. Members on this side of the House belong. On this basis I believe that Scotland, Wales and parts of England would justly enjoy a substantial premium for many years over their present share of the national income.

Mr. Kenneth Lomas (Huddersfield, West)

Would my hon. Friend comment on the fact that it is not Socialist philosophy to build Offa's Dyke or Hadrian's Wall? The object of Socialism is to do away with the barriers that divide nations. We are one nation. Would not my hon. Friend agree that the oil that may accrue to Scotland belongs not only to Scotland but to the whole of Britain? Would he care to comment on that instead of trying to pursue a nationalistic policy —although I congratulate him on returning to the House? I hope he will bear in mind that he represents Great Britain, not just Scotland.

Dr. Bray

I do not think that my hon. Friend has quite followed what I was saying. If he will read HANSARD, he will see that I have just stated that the allocation of resources can be made only according to social need throughout the whole of Britain and, indeed, Northern Ireland. My hon. Friend must also recognise the grave political and constitutional problems that Scotland faces.

Mr. Lomas

And Yorkshire.

Dr. Bray

I accept that—and Wales and all the several parts of the United Kingdom.

The formula, in principle, is familiar to all hon. Members in the block grant system in local government. We are all aware of the painful inadequacies of that system. The wider system on which the devolution of economic policy must be based should differ from the local authority block grant system, not only in being far more comprehensive, embracing considerations of personal income, personal wealth, social capital and social amenity as a whole. It should be decided not centrally by an all-powerful Westminster but by negotiation, bargaining and adjustment, involving the stressing of this social need felt in this area, against that social need in the other area, involving also the national assemblies and the representatives of authorities in England, whether these be county or regional authorities, or whatever may be decided by the House as the appropriate constitutional representation of the people as a whole.

Within Scotland, and, I would guess, within Wales and the regions of England, it is not only the allocation of expenditure but the balance between public and private expenditure that must be subject to a degree of local control. It must be possible for the people of any town or village to say "We will bear higher taxes if we want this or that amenity sooner than we would otherwise have it".

Treasury Ministers will understand what I mean when I say that the present system of economic management is due for major reconstruction. It is essential that this should take full account of the political realities as well as the technical and administrative possibilities.

I can think of no better instrument for exploring the possibilities than a Select Committee of the House. If the several parties are convinced of the excellence of their own prescriptions and proposals, let those proposals be put to the most searching scrutiny with all the evidence that we can command, because the issues are of great moment.

Not all issues are amenable to rational discussion, and no issues can be resolved solely by rational discussion. However, in the devolution of power within the United Kingdom I believe that we have embarked upon a course where we should be wise to think as clearly and as rationally as we can about the emotional and, indeed, explosive issues that we face.

5.35 p.m.

Mr. Gwynfor Evans (Carmarthen)

I have listened with great interest and pleasure and with a great measure of agreement to what the hon. Member for Motherwell and Wishaw (Dr. Bray) has said. I hope he will find that what I have to say is not entirely irrelevant to what he said.

However, I should like to have had the choice—I have not, of course—of addressing the House in the Welsh language. It is the language of my home, the language of my family, the language in which I addressed the great majority of the scores of meetings at the last General Election, the language of the nation of Wales over the whole of its recorded history until now and a language which was for a thousand years and more the language of government in Wales. It was the language of the laws of Wales, which are indeed a classic of the Welsh language, and they may have been unique in the fact that they were written not only in Latin but in Welsh.

However, I find that this language, which has claims to be the language of the oldest living literature in Europe and which is certainly the senior British language, is a foreign language in this House and that I am not allowed to address the House in my own tongue.

Mr. William Hamilton

Quite right, too.

Mr. Evans

In the past I was not even allowed to take the oath in the Welsh language. Yesterday I was allowed to take the oath in the Welsh language, but not before I had already taken it in English. I tried to explain to the Clerk of the House that I was addressing not the House nor him but my Creator, and he said that the only language in which one can address the Creator in the House is English.

This reflects the status of the Welsh nation, which is now, and has been for a long time, a peripheral Province. Indeed, it has been a peripheral Province ever since the Act of incorporation and annexation of 1536—an Act which was also an Act of assimilation. That was its purpose—to assimilate Wales to England and make the Welsh people English. In order to do that, it proscribed the Welsh language. It excluded the Welsh language from the official life of the country, from the legal life of the country, and from the public life of the country, and it has been excluded until this generation—that is, the Welsh people were to become English people. It succeeded, of course, as a policy among the more privileged part of the population.

Mr. Ioan Evans (Aberdare)

Is the hon. Gentleman suggesting to the House that because Welsh people speak English they are not Welsh? Does he agree that the vast majority of people in Wales speak English and that only a small minority speak Welsh?

Mr. Evans

I shall come to that very point in the course of my address. But the policy of the Act of incorporation succeeded at once, or within a century or a century and a half, among the more privileged part of the population who ceased to feel any sense of loyalty to Wales, who certainly ceased to feel that they had an obligation to lead the Welsh people as a nation in any way, and who have ever since made no effort at all to secure for Wales any kind of national future.

In consequence of this situation, Wales has been exploited in such a way that as a nation she has been brought to the brink of destruction as a peripheral Province of Britain. I use the phrase "peripheral Province" because it is the official description of Wales in the EEC. We are a "peripheral Province". The language was not only excluded from the courts and from legal and official life; it was excluded in the last century also from the whole education system. It was excluded completely from the schools of Wales, where the children were punished if they spoke a word of Welsh, with the result that, whereas in the middle of the last century about 90 per cent. of the people of Wales were Welsh-speaking, now, as the hon. Member for Aberdare (Mr. Evans) said, it is a small minority who speak the language, because of the policy of the State. It was the State's policy to destroy Wales and the Welsh language, and the House has upheld that policy. The areas represented by some Labour Members in the valleys of South Wales, which were monoglot Welsh-speaking areas in the middle of the last century, are today almost completely without the Welsh language.

This policy is still being continued. It is being continued, for instance, in the most influential medium of our time—television. We in Wales have been pressing for a long time to have one channel as a national channel. There is a channel. The fourth channel is lying idle. No use is being made of it. But even now we are not allowed to use the fourth channel as a national channel which would give priority to our national tongue and help to sustain it. This surely reflects the attitude of the Government to our life, to our culture, to our civilisation in Wales. Surely where there is a channel of this kind—and in most Welsh-speaking homes by now, if one has television one hears more English from the box than one hears Welsh from the hearth—it is essential that we should have this kind of treatment.

We have been given the excuse that the Crawford Committee is sitting and we must await its report before anything can be done, although it was not set up particularly to consider this matter. I understand that the Crawford Committee's report has been in the Government's hands for at least six weeks. Yet no decision has been made. Nothing has been announced. We should have been glad to see some mention of this in the Queen's Speech, but, of course, there was no mention of it there.

I am glad to see now taking the Chair a great friend of mine who I know is a very keen supporter of everything I have to do and say.

The importance of the Welsh language is this. It is the language of our national way of life. It is the language of the civilisation of Wales. It is the vehicle of that civilisation. If we are concerned for our corner of Europe, for our part of European civilisation, we ought to have a very urgent concern for the language of Wales—which is, after all, a nation. Wales is our nation. Time and again in the House both today and yesterday we have heard the phrase "the nation". I find that phrase offensive, because it means that we do not exist as a nation. There are more nations than one on this island. There is a Scottish nation; there is an English nation; and there is a Welsh nation. There is certainly only one State, and that is the British State. But Britain is not a nation: Britain is a State. Let us face the fact. It is because the Government will not face that fact that Wales is being destroyed.

There is only one British State, of course. We have to distinguish between State and nation; and the State should always be subordinate to the nation. It is the nation, as a community, which should always have primacy. Yet what we have in Wales is a nation dominated by the State, a nation whose State's policy has indeed been to destroy it. The Act of incorporation in which this was set up is still on the statute book, and we say that this Act must go.

Mr. Ioan Evans

Ideas such as these were put to the Welsh nation at the recent General Election. In February your party lost 26 deposits in Wales.

Mr. Deputy Speaker (Mr. George Thomas)

Order. My party did not lose 26 deposits.

Mr. Ioan Evans

I apologise to you, Mr. Deputy Spearker. I know that the hon. Member would feel offended if that interpretation were given to what I said. The party of the hon. Member for Carmarthen (Mr. Evans) in the General Election put these ideas forward. It put them forward in the February General Election and lost 26 deposits in 36 constituencies. Therefore, in this year alone it has lost 52 deposits. So the hon. Gentleman must not tell the House that he is speaking on behalf of the people of Wales in putting these ideas forward.

Mrs. Winifred Ewing (Moray and Nairn)

Does the hon. Member for Carmarthen (Mr. Evans) know how long it took the Labour Party to get one Member of Parliament I admire the Labour Party for its struggle in getting that Member. But does the hon. Member know how long it took, and how that Member, having been elected, lost his seat? The world Press said that that would be the end of the Labour movement, which was absurd. Is the hon. Member for Carmarthen aware of these events and that it takes time for a party to break into the very bad two-party system in the House?

Mr. Deputy Speaker

Before the hon. Member for Carmarthen (Mr. Evans) resumes, may I say that I hope that we shall now hear the hon. Member, who has had a great deal of help, but I think he is not in need of it.

Mr. Gwynfor Evans

I am well aware of what has been said by the hon. Member for Moray and Nairn (Mrs. Ewing). The constituency represented by the hon. Member for Aberdare was the constituency referred to by the hon. Lady. It was the first constituency won by the Labour Party in Wales by Keir Hardie.

An hon. Member

He did not speak Welsh.

Mr. Evans

That was his only shortcoming. The late Keir Hardie was a great Welsh "Home Ruler", as he was a Scottish "Home Ruler". If I may make a prediction, the hon. Gentleman opposite has a very short term to face again in his constituency because we are going to win it before long.

The point I was making was that the status we have in Wales is a colonialist status. We have suffered from this right through the years. Many Members of the House will remember the state of Wales in the 1920s and the 1930s when we had mass unemployment, when we lost 500,000 people from our country. Unemployment has not ceased since the war. We have had a record of double the unemployment in England even since the war. I dare to assert that this would not have been the state of affairs in Wales if we had had a Parliament to look after our own affairs. Even in my own county —my late county, I should say—of Carmarthenshire—the biggest county in Wales, and one of the richest counties in Britain—we have a declining population still and we lost more people between 1961 and 1971 than we lost in 50 years, although we have such riches there in all kinds of minerals. We have a declining population, and this is true of nine of our 13 counties. This would never be the case if we had control of our own country, and this, of course, is what we are standing for in these elections.

The story of Wales, therefore, in this way has been a story of exploitation. One can see it in all our resources. There have been years in the past when we have seen dug from the earth in Wales as much as 60 million tons of coal, which at the time would have been worth more in financial values than the total budgets of countries like Denmark and Norway. How much have we to show for that kind of wealth in our rich little country? Pneumoconiosis and the tips—that is what we have to show, because we have been so badly governed from the centre in London.

That is true of all our resources today. Water is a classic case of exploitation. Water is now one of the necessities of any industrial country, and it is about industrial water that we are talking, not about water to drink. If we in Wales had the right to develop and sell that resource at even 10p per thousand gallons to the municipalities that use it, we would be able to abolish the water rate in Wales.

However, the water rate has risen so much that a farmer told me recently that he is paying more in water rates than in rent. That is what is happening in our country, and that is what will happen in the future with oil. Oil and gas have been discovered in the Celtic Sea already, and we shall see the same kind of exploitation there as has happened in the past with all our great resources.

There is no mention in the Gracious Speech of any reform of the Water Act 1973, described during the General Election as the worst Act on the statute book. What is to be done about it? What are the Government going to do in the near future? That kind of consequence can be seen not only in mineral resources but in the land.

References have been made today to the situation in agriculture. I am sure the Government do not realise how grim the situation is amongst the agricultural community in Wales. It is a grim situation. In my pocket I have a cheque which was given to me a fortnight ago by a farmer in the Carmarthen mart. It is a cheque for 8p which he got for a calf, for which last year he would have got £25. That is a common situation.

What are the Government doing about it? They could do something at once about it. They could inject money at once to help the farmers in Wales who are going to the wall en masse. The Government could lift the ban on the export of livestock, with proper safeguards against cruelty. The O'Brien Report has been in the Government's hands since the beginning of the year, but they have done nothing about it. There has been no debate about it. The Government could do this next week. Instead of getting a few pence for their calves, farmers would be getting tens of pounds. It would be a tremendous help to them at once.

If we had a guaranteed price on beef—farmers should be getting some £22 per hundredweight—it would help. Farmers are in a grim situation. I want to make as strong a plea as possible to the Government to act immediately—not jam tomorrow; not to do something to CAP next year, or the year after, but to do something next week for the farmers of Wales, otherwise there will be great suffering. In the end it will not only be the farming community which will pay; it will be the townspeople who will pay, for we shall be faced with a food shortage before long.

There are many other matters I should like to speak about in detail, but I cannot do that. I believe that the Government do not show the concern that they should about these matters. For us the fight for agriculture is the same as the fight for our culture. It is the economic basis of our Welsh way of life in the more Welsh-speaking parts of Wales. If we are to save that way of life we must save agriculture.

We must also have balanced economic development. Here I want to say how much I welcome the decision announced in the Gracious Speech to have a development agency in Wales. I hope it will be given power and funds, for both are needed. I hope that we shall have a plan for Wales, something that has been promised to us for as long as I can remember, promised when I was last in the House. We have not yet had it. Every English region has some sort of plan and all the local authorities have to work and dovetail their activities inside that plan. Wales has no plan. Wales has not yet had a plan. We must have a plan, and an agency to put that plan into operation.

This we plead for because our conern, our duty, is to the Welsh nation. This is our nation. The Welsh nation is our nation, and our duty is to our own people and we must act in its defence. It should be the concern and the duty of this Parliament, because this is the only Parliament we have. I am glad to hear that, instead of wasting money prodigally, as in the past, on what it calls defence. Parliament is to cut down now. It ought to be spending more money on the true defence of Wales. The farmer is one who stands in the front line of the defence of Wales.

Before we can properly do these things, we must have control of our own life. We have waited long enough for this. A Prime Minister came down from London to Cardiff in 1895—Lord Roseberry—to say that Wales ought to have a Parliament. We are about to celebrate the centenary of the beginning of the movement for the Welsh Parliament, and still we are waiting. We have waited far too long and far too patiently.

Now it is going to come because of the growth of nationalism, and nationalism is the greatest moral power on earth. One cannot play with this. We are here to stay and grow. We are not going to go away. This is something that the Government will have to face.

Hon. Members opposite have been hoping that we will go away. I have seen the growth of this movement over 40 years. I have seen it growing from the tiniest group to a very powerful force, and it is going to grow much greater in future. By now we have in this Parliament more Nationals than we have Liberals. For the first time in British history there are more Nationals than Liberals in this Parliament. Many Nationals have been seen in this Parliament in the past from Ireland, but there were far more Liberals then.

I ask what is going to happen now to the phrase that has been used throughout the last election and is continnally used, "the three major parties." If one has more Nationals than Liberals, which are the three major parties now I wonder? When that question is asked, the fact must be faced that it has the greatest implications not only for matters concerned with the House but for all the media. The Government must face up to this with the greatest urgency, because the development which is going to come about now is the biggest constitutional development in British history. It was rather an affront to us to see it given so low a priority in the Queen's Speech, whether that was deliberate or not.

In conclusion, I believe that our policies for Wales and Scotland are the best thing possible, not only for Wales and for Scotland but for England. I believe that very strongly indeed. Britain is far too big, far too complex, a State to be governable any more. It will have to be decentralised, and here a start can be made in our countries.

England has been suffocated in a sort of miasma of Britishness, and getting rid of Britishness will mean that true Englishness will once again flourish. I want to see England a great nation. I want to see English culture a great cul- ture. I want to see England succeed in every way—we are not in any way anti-English—and this will happen much more quickly if we succeed in Wales and in Scotland in living our own lives as national communities.

Britain today is a State that, as an American said, has lost her purpose. I believe that by getting rid of this huge State, which has no place any more in the world, we can help England to achieve a new sense of purpose and we, too, can achieve our own possibilities.

I believe that Wales, small as she is—only 4.8 per cent. of the population of this island—is a land of tremendous possibilities. Wales has many natural resources and a people of great natural ability, and there is no reason why Wales cannot be a fine laboratory for social experiment that will help the countries round about her.

That is the sort of Wales I look forward to seeing develop, and I believe that we can show how neighbouring nations can live in cordial friendship together. Therefore, I say Cymru am byth—long live England and Scotland.

6.1 p.m.

Mrs. Helene Hayman (Welwyn and Hatfield)

I am grateful to you, Mr. Deputy Speaker, for giving me the opportunity so early in my parliamentary career to speak in this Chamber. My predecessor served this House for almost as many years as I have trodden this earth, and it is only correct that I should pay tribute to the service, both to this House and to the constituency which I now represent, that he gave over those many years. It is a great pleasure to be able to pay that tribute now.

The constituency of Welwyn and Hatfield is a diverse, mixed one. We have people there from every socio-economic grouping, although it is probable the House will be relieved to hear that I have yet to meet any of my constituents who are demanding home rule for the home counties.

Their response to the Queen's Speech will, I am sure, be a varied one. In my constituency there are many one-parent families who will be deeply disappointed that in the Gracious Speech no mention was made of the urgent measures recommended by the Finer Committee's Report to help ease the plight of the most rapidly growing group of families in poverty in our society today. There are families in my constituency with only one child who will not take much encouragement from the goods news that family allowances are to be increased without the news of the introduction of a family allowance for the first and only child in every family.

But there is one issue to which it is only right and proper that I should devote my maiden speech. It is an issue of such importance that I have spent less time than I should have liked in learning my way around the corridors of this august establishment and more time with my constituents. The issue is, of course, the aircraft industry and, in particular, Hawker-Siddeley and the HS146.

I hope that I do not contravene the rules of this House nor enter into the realms of the controversial when I say that had the right hon. Member for Bridlington (Mr. Wood) been in Hatfield this morning at a meeting of 5,000 people with regard to the aircraft industry he might have revised his opinion as to the popularity of nationalisation for that industry.

Without doubt, there is an enormous groundswell of opinion from workers within the aerospace industry, from their families, and from other industries dependent on the factories of BAC and Hawker-Siddeley for their own livelihood for the proposal included in the Gracious Speech to nationalise the aircraft industry.

But we have a crisis in Hatfield, one that calls for immediate action. There has been an announcement by the management of Hawker-Siddeley, which is in partnership with the Government on the development of the HS146—the only new civil aviation project that the British aircraft industry can boast—that it intends unilaterally to cancel the project. I have to choose my words carefully here: it has announced that it has unilaterally cancelled the project.

The workers within the factory, having had encouragement from my right hon. Friend the Secretary of State for Industry, having staked themselves on that aircraft and its selling potential, on its viability and, most of all, on its importance to the industry as a whole, have not taken a unilateral decision to cancel the HS146. They are continuing work on that project, and I hope that they will continue to work on it.

The HS146 is a civil airliner which we know will sell. I do not think that the management at any time—certainly not in my discussions with it—has said that the aircraft will not sell. We have seen in the last 15 months a vast change in the pattern of air travel internationally. We have seen a vast change in markets, but the routes that have fallen off least badly, are the very routes that the HS146 was designed to cover and will cover. The HS146 is a necessary replacement for aircraft that are going out of usable condition at this time. It would be a tragedy if, as we heard reported this week, British Airways, purely and simply because of a unilateral management decision, made perhaps on political grounds or on commercial grounds, had to go abroad to buy a foreign plane which was considered inferior to the HS146. I should not go into that because I should be accused of being controversial, but on that basis we should see our balance of payments position made even worse and the British aircraft industry run down.

What frightens me is that in the intervening period between the announcement of our plans for public ownership of the aircraft industry and the time that we can get legislation through and take that industry into public ownership we shall have seen such a drastic cutback through management decision that there will be very little left to nationalise at the end of the day. That is why I call upon the House for its support and upon Her Majesty's Government for immediate action to ensure that the 20,000 jobs that are involved in this project into the 1980s are safeguarded. We are not talking about 200 redundancies at Hatfield, and we are not talking simply about the Hawker-Siddeley group: there are firms throughout the country which are dependent for their livelihood upon the health of the aircraft industry.

All of us in Great Britain have reason to be proud of this industry's performance in the past. It is an industry which is dependent on the public, on the taxpayer, as its main customer; it is dependent on the public, on the taxpayer, as its main investor in research and development. We cannot allow a decision made out of spite, a decision made out of a very narrow commercial definition of what is viable and what is profitable, to prejudice the future of 20,000 jobs for our people and one of our greatest industries.

The HS146 must continue. That is the message that my constituents would be most happy for me to bring to this House in my maiden speech.

6.10 p.m.

Mr. Nicholas Scott (Chelsea)

Like my right hon. Friend the Member for Bridlington (Mr. Wood), I have never before had the opportunity of complimenting a maiden speaker on his or her contribution. Indeed, it seems only too short a while ago that I was making my own maiden speech in the House.

I suspect that many of my hon. Friends will envy me the task of being able to compliment the hon. Lady the Member for Welwyn and Hatfield (Mrs. Hayman) on her first speech in the House of Commons. It combined many of the qualities for which the House looks. The gracefulness of her tribute to her predecessor was wholly in accordance with the traditions of the House. Her social concern for one-parent families indicates, I suspect, where much of her interest will lie in the months and years that lie ahead, and the vigour with which the hon. Lady put the case for her constituents also fits in with the view which the House always takes of those who fight for their corner. The hon. Lady has got off to a remarkable start, and I think all parts of the House will share my view when I say I hope that we shall not only hear but see more of her in the future.

This is not a maiden speech, and, accordingly, I can look for none of the kindnesses which maiden speakers can expect, but it is the first time that I have addressed the House of Commons since I was summarily removed from it by the electors of Paddington earlier this year. So, in a sense, I am again seeking to break my duck today, but as I take my place at the wicket I face two changes of perspective. One is that I am on the Opposition side of the House now rather than the Government side. If I may say so, I find this side of the House —although not the company—rather uncongenial, and I hope that we can all change places in the not-too-distant future.

The second change of perspective, of course, relates to the fact that I now represent Chelsea rather than Paddington. I apologise if such a small geographical shift causes any confusion in the House. Hon. Members have the same colleague: it is just that different bus routes are relevant for the short journey from here to the constituency.

However, in taking my place as the Member of Parliament for Chelsea I am conscious of the very high standards of service to this House, to Church and to State which were set by my predecessor, Sir Marcus Worsley, who represented Chelsea for eight years and Keighley before that. I am sure the House will have been sorry to see his decision to retire. I certainly shall have no higher aim than to emulate the standards that he set.

Chelsea shares, of course, with my former constituency of Paddington, and, indeed, most other inner London seats, that mix of social problems which, particularly at a time of rampant inflation, threatens the whole quality of urban life in Britain. These problems are immense. We have only to look at the other side of the Atlantic to see how severe are the penalties if a nation fails to protect and develop its cities. If we are to be able to develop balanced communities in our cities, if we are to ensure that it is still possible for a broad spectrum of people to live and bring up their families in inner London, if we are to see that the future of our cities is to be safe, clean, civilised and inspiring, we shall have to take urgent and positive action to make sure that that is so.

There is no social problem closer to my heart than the future of our cities, and yet the harsh fact is that we cannot foresee a viable solution to those problems until we have tackled the twin dangers of inflation and recession that face us as a country. This is the crucial concern of our times, and I want to talk about that this evening. Indeed, I believe that it is the only standard against which we can judge the Gracious Speech, and I believe that against the standard of the need to deal with inflation and recession the Gracious Speech must be seen to be found wanting.

Before I turn to inflation and try to play some modest part in analysing the danger that faces us, it is right to mention the other danger, which is that if we act too vehemently, too ham-handedly, as the Chancellor did in March in relation to company liquidity, we may find ourselves next year with policies that are totally irrelevant to the rising unemployment, lack of business confidence and deepening recession that may well be confronting us then.

I am sure that I do not have to warn the House of the horrendous decisions that many companies are holding over until after the Chancellor of the Exchequer's Budget of 12th November and the impact that those decisions might have on employment levels next year. Therefore, at the same time as we seek to control inflation we must keep in our minds the need to avoid deepening and making worse the recession that threatens as well.

Nevertheless, inflation has to be tackled. If it is to be tackled effectively, its sources have to be understood. It would be a brave man who would claim to understand inflation totally. Like the Foreign Secretary earlier today, I am sure that most of us would agree that inflation is essentially a problem with its roots in the international sphere. Inflation is a world-wide phenomenon. Even in countries such as the United States and Japan which have no large, undisciplined public sector to weigh them down, inflation is rampant.

I maintain that the primary cause is to be found in oil, food and raw material prices and in the uncontrolled growth of the international money supply—by which I mean the Eurodollar market. All those are factors that are outside our narrow national control.

We can do something about this, and I welcome the commitment in the Gracious Speech that Britain will play a major part in seeking to find international solutions to those problems. But if, as I maintain, that is the prime spur to inflation, we in Britain have special social and structural weaknesses that both make the immediate problem worse and will make it more difficult for us to benefit from any international solution that may in time be proposed.

I want now to consider how we may combat the national element of inflation while preserving the best elements of a vigorous market economy, as well as preserving a commitment to those social goals that have had universal support in Britain over the past quarter of a century. There are those who say that that is an impossible task. There are some who say that the market concept is dead, that we must retreat from a harsh competitive world, batten down the hatches and, under a siege Socialist economy, ordered, rationed and poor, survive somehow. The House will not be surprised to hear that I reject that approach.

There are others who say that we cannot cure inflation unless we abandon some of the social goals that we have set ourselves. It is argued that we should let the current squeeze work, that resources will be re-allocated and the problem will be cured. In normal times there are good arguments for allowing a cost-squeeze to operate. It can force the efficient to make better use of their resources. These are not normal times, and the sqeeze that we face today is not a normal squeeze.

What we have today is principally a liquidity squeeze that affects some of our most efficient and productive companies as well as the inefficient ones. If we allow that squeeze to continue unchecked, I do not believe that it will lead to more efficient use of our resources. I believe that it will savage the efficient and inefficient alike. Therefore, that approach, too, I reject.

I believe in a mixed economy. I believe that such an economy can provide us with the vigour of the market approach and the creation of wealth that flows from it, as well as the commitment to social aims about which I have already spoken. I confess to being bewildered by the obsession of the Labour Party with the extention of public ownership. Public influence is one thing. It is widespread in the social and economic spheres and growing rather than diminishing. Why, in those circumstances, the Labour Party retains—unlike virtually any other social democratic party in Europe—its commitment to the extension of public ownership I fail to understand.

I repeat, I believe in a mixed economy. But I think that those of us who do cannot deny that a great deal of the inflationary pressure that we face stems from the fact that we are now a mixed economy.

The economic aims of the market place have rightly been replaced to a considerable degree by social aims dictated by the public sector. That has led to a long-term tendency to inflation, seemingly independent of cyclical influences. We have seen how conventional disinflationary pressures, such as the unemployment of the winter of 1971–72, apparently failed to reduce the rate of wage increases as we might have expected in classical circumstances.

I believe we may have reached a point at which, within any politically relevant timetable, the level of wage claims may be virtually unresponsive to the level of unemployment also within that time scale. This commitment to the mixed economy also means that when recession threatens the policymaker quickly returns to stimulative policies because he sees that in pursuing disinflationary policies with too much vigour and determination the social and political reality is likely to be that inflation, far from getting better, will get worse.

It will get worse for a number of different reasons. Unit costs will rise as the process continues. Organised labour will raise, not moderate, its demands in order to protect its members. The consumer, faced with tax increases, is more likely to press for increased income than to cut back expenditure, and the manufacturer, faced with a cost squeeze, is more likely to cut back investment and press for price increases than to concentrate on improving productivity.

In a word, I do not believe that we face an orthodox problem, or that the former orthodox solutions will necessarily serve our purposes any longer. Some of them will. We are right to give more emphasis to monetary policies. I retain my belief in the fundamental rôle of an incomes policy in a mixed economy. I believe that the Government, by allowing a free market in wages, may well be endangering many of the social aims that they, as a party, are holding to. I do not believe that the social contract has a ghost of a chance of coping with the problems of incomes restraint.

I believe that the solution for which we look must recognise the fact that at least part of the cause of the present inflation stems from our commitment to a mixed economy. Whereas the economic demands of the free market allocate limited resources, there is no restraint of that nature on the social commitments of the public sector. Yet there must be constraint and restraint if the tide is to be controlled.

Mr. John Biffen (Oswestry)

Surely any analysis will show that the disgraceful state into which the financial affairs of our nationalised industries lapsed in recent years was not on account of the social objectives being pursued by those nationalised industries but because their prices mechanism was deliberately politically interfered with.

Mr. Scott

Exactly. It was interfered with politically for social aims.

Mr. Biffen


Mr. Scott

Political and social. My hon. Friend is playing with words. The Conservatives had a commitment. The Conservative Government held down the prices of nationalised industries as part of a policy of incomes restraint. That was a social objective to which that Government were committed, and they held down prices because of it. Other Governments have interfered with those prices for other reasons. To say that is not a social reason just because it is also political is begging the central question.

Mr. Biffen

We must sort this out in our minds. It is one things to lay upon a nationalised industry certain social objectives for dealing with redundancies, keeping railway lines or coal mines operating which might otherwise be closed, if one applies purely price criteria and to have an earmarked and predicated subsidy to cover that additional cost. But the problems that have confronted the nationalised industries have been the result of a deliberate, indiscriminate suppression of price increases in the vain hope that if prices are held down in the nationalised sector somehow or other the private sector would follow by imitation.

Mr. Scott

I am not sure that we shall sort this out, because we are engaged in an argument which is largely semantic.

Mr. Biffen


Mr. Scott

No doubt my hon. Friend and I can return to the argument either in this or some other forum in the future. But the point has been made that the public sector, in an age of universal suffrage, will tend to impose conditions on both the public sector of industry and the market sector which are virtually unlimited and once set are irreversible. It is almost unthinkable that we should go back on them The pursuit of these goals, as my hon. Friend is the first to recognise, is certain to be inflationary.

Mr. Scott

My hon. Friend again differs. I believe it is bound to be inflationary if these social goals are set and one is not prepared to cut the demands of other sectors. If, at a time of full employment, the public sector is increasing its demands and one is not prepared to cut the demands the other sectors are putting on the economy, the result is inevitably inflation.

Secondly, another social goal which is extremely central to the aims of the Labour Party—the redistribution of income, to redistribute income from those with a high propensity to save to those with a high propensity to spend—also fuels the inflationary spiral.

Mr. John Nott (St. Ives)

How can one cut the demands of the public sector by restraining prices? If one restrains prices in the public sector, one increases the demand in the public sector; one does not reduce it.

Mr. Scott

I had moved on from that point of the argument and returned to my main theme. If one sets certain social goals which increase the demands the public sector is making on the economy without cutting back in other areas, inevitably one is fuelling the inflationary spiral.

Inflation encourages people to consume rather than save, and in this way the vicious circle is encouraged and not broken. All the pressures to consume and to increase public spending hit at investment, and, therefore, we come up against capacity ceilings more frequently in the economic cycle. This, again, increases the tendency to inflation. So we tend to fuel all the time the inflation from which we are suffering.

I do not intend to put forward today any simple solution or any personal counter-inflationary package to the House. We shall all wait for the Chancellor's Budget on 12th November when we shall be able to judge the Government's efforts at countering inflation and avoiding the threat of recession.

I want to draw from the analysis of our inflationary situation, controversial though it has been, the single central lesson that we must learn to restrain and control our appetite for social spending. A more restrictive approach to social spending, particularly by local government, not in a dramatic, panic-stricken way, is essential if we are to stand a chance of breaking the inflationary spiral.

We face a situation in which as a country, and in the House in particular, we have too little control over public expenditure, and in which much expenditure by local government is free from any restraint, except the breaking point of the long-suffering ratepayers, many of them with no franchise in the area in which they pay their rates.

Large areas of our national, economic and social life are totally unresponsive to the realities of what is economically possible in a country of this size and wealth. We must manage to get more responsibility and more control into our approach to social spending and recognise that many dreams, however attractive in principle, however much we want to achieve them eventually, must be postponed until we can afford them.

We have, too, to ensure that the limited resources we have available for social spending are directed as precisely as possible to the needs that they have to meet. Blanket subsidies are inevitably wasteful. We should all the time be looking at ways of securing that our limited resources go to the people who most need help—and the tax credit system has a lot to offer in that direction.

If we can begin now to take some of the difficult decisions that face us in the area of social spending, we may just be able to avoid even more painful decisions later. It is worth reminding ourselves that when inflation gets out of control those decisions can be very painful indeed. When Schacht reconstructed the German mark in 1923–24 the central point of his package was the sacking of half a million civil servants overnight. I do not believe that we are coming to that sort of pass in this country, but the juggernaut of our ambition to increase social expenditure must be brought under control. The Gracious Speech gives me precious little confidence that the Government are determined to do so.

6.31 p.m.

Mr. William Hamilton (Fife, Central)

I suppose that if we have to have a Conservative Member for Chelsea I would rather have the hon. Member for Chelsea (Mr. Scott) than almost anybody else, and I hope that he will take that tribute in the spirit in which it is intended.

The hon. Gentleman is well known for his liberal attitudes, but I was a little disturbed when, in congratulating my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman) on her maiden speech, he said that he hoped he would see a lot more of her in the future. I hasten to tell her that she must not take that too literally.

My hon. Friend the Member for Welwyn and Hatfield made an extremely courageous speech. I have been a Member of the House for many years, but I have never dared to make a speech without the first-aid outfit of a few notes.

The hon. Member for Chelsea did not listen with his usual attention to what my hon. Friend said about the aircraft industry. She made clear that the future of that industry depends on the future ownership of it. If the future of the industry remains in the hands of the management which took the unilateral decision on the HS146 without regard to the social consequences—the 20,000 people whose jobs were jeopardised by the decision—that management must be more publicly accountable. It must be accepted that if the workers want public ownership, they have a right to public ownership.

That principle applies also to North Sea gas and oil, about which we shall hear a lot in this Parliament. There must be a large element of public ownership in those resources, if not complete nationalisation. On what is not nationalised we must seek by fiscal means to take from the oil companies 80 per cent., 90 per cent. or even more of the gross profits. The oil companies are agents for the nation and not for their shareholders.

The same principle applies to our proposals for the public ownership of urban land. If we could get away with the confiscation of land anywhere in Britain, it would be in Scotland. There are landlords in Scotland, as there have been for centuries past, who would receive fair compensation if we gave them back what they paid for the land. That would be relevant at a time when land prices are rocketing and are likely to rocket further as a direct consequence of the discovery of North Sea oil and gas—and we are seeing only the tip of the iceberg of those resources around all our shores.

I wish to say a word or two about the contents of the Queen's Speech. I was glad to see in this morning's newspapers condemnation of the two Front Bench speeches we heard yesterday from the Leader of the Opposition, for the time being, and the Prime Minister. For nearly an hour and 20 minutes we had to endure the remorseless drone of these two great men, and it was an insult to the electorate that we had to endure it.

It seems to be the "in" thing nowadays to stage a walk-out. If I could organise a trade union of back benchers I would get them to walk out whenever a Front Bench spokesman spoke for more than half an hour. If a Privy Councillor cannot say what he wants to say in half an hour, he is not worth listening to. I recall the great efforts made by Clem Attlee. However important the debate he could say all he wanted to say in 20 minutes, and anyone who cannot is not worth listening to. I had better watch my time.

I have for some time been interested in equal opportunities and antidiscrimination. The Government deserve great credit for the way they have tackled the problem, for the significant and radical changes that have been made compared with the White Paper produced by the Conservative Government and also in relation to the provisions of the Race Relations Act. Although our proposals are to some extent based on the Race Relations Act, considerable improvements have been made. Initiatives are available to the Equal Opportunites Commission in education, persuasion and so on. There is recourse to the courts for the individual who feels discriminated against. I look forward to early publication of the Bill. It is imperative to get it on to the statute book before the end of 1975 when the Equal Pay Act comes into full effect. Unless we have the other legislation on the statute book by then, the Act will not be as effective as it might be.

Great play has been made of the number of Bills to be presented this Session. The Chief Whip will already be honing his guillotine. If we are to have full discussion of all these highly controversial Bills, we shall need the liberal application of the guillotine. I attack the too regular imposition of the guillotine because it is an evil instrument, but I recognise that if the Government are to get their legislation they are sometimes justified in using it.

The Common Market, which is one of the most important matters which will occupy us this year, is referred to in the Queen's Speech in these terms: Within 12 months the British people will be given the opportunity to decide whether, in the light of the outcome of the negotiations, this country should retain its membership. There is no mention in the Queen's Speech, nor has there been this afternoon, of a referendum.

I have a great regard for my right hon. Friend the Foreign Secretary. He was very much on a tight-rope today. He said that there would be a White Paper, in which it would be spelt out. I am not sure what is to be spelt out. I am not sure whether we are to decide to determine our future membership of the Common Market by a referendum or a General Election. I do not think that anyone wants a General Election in the next 12 months. Certainly no one needs one. I do not think that the Government would be forgiven if they imposed another General Election within that short period. As the Prime Minister said in the course of the election campaign, what the people want more than anything is peace and quiet. Whether they will get that is another matter. But a General Election seems to be ruled out, and therefore we must now look at the possibility of a referendum.

The Government say that a referendum will be binding on the Government. The House and the country have a right to the answers to certain questions posed by that proposition.

When will the necessary legislation be introduced? Is it covered by the penultimate paragraph in the Gracious Speech: Other measures will be laid before you"? Is one of them a referendum measure? If so, will there be a free vote? I agree with the Leader of the Liberal Party that there should be a free vote. It is well known that the Prime Minister in the past has had a distaste for referenda. Whether he has now, I am not sure.

Who will decide when the renegotiations have been completed? The EEC is composed of constantly evolving institutions. When and how do we decide to say to our EEC partners "Stop the world. We want to get off", and have a referendum or a General Election?

What form will the question take? I see my hon. Friend the Member for Bolsover (Mr. Skinner) leaning elegantly at the Bar of the House. He has said that the question should be decided by a party conference—

Mr. Dennis Skinner (Bolsover)

That is right.

Mr. Hamilton

I do not agree that that is the best way of deciding these issues. But it is a matter which had better be made clear by the Government before we take off into this stratosphere.

Who will decide whether there should be one question or a series of questions? Will the Government make recommendations to the people as to how they should vote? If the Government are against staying in, that would not need a referendum as long as they kept their majority in the House of Commons.

How would a campaign on a referendum be conducted? How long would it last? Would it be three weeks, three months, or what? Would there be limits on the cost of it? Would it be carried out on a constituency basis? How would it be done?

Would we as Members of Parliament be free to campaign pro-Market or anti-Market, or would we be expected to take a holiday and to shut up? Would we be told that we must not interfere and that we must keep our mouths shut?

Mr. Skinner

What would my hon. Friend do?

Mr. Hamilton

I do not think that I would shut my mouth. That is not my instinct.

Then I ask those who are anti-Marketeers how they reconcile their condemnation of the EEC on the ground that it weakens the sovereignty of Parliament yet support a referendum which does precisely that.

How would the vote be conducted? Would it be done on a parliamentary constituency basis? Would it be done on a national basis with Scotland, Wales and England being considered separately? Would there be separate votes for countries or counties or the new local authority areas?

Let us suppose that the turn-out is derisory—say, less than 50 per cent. Let us suppose that the result is a narrow one. Will it be binding nevertheless on the Government?

Could we then have referenda on other matters? Let us take the example of complete separatism for Scotland. Only a minority of those who voted SNP want separatism. All the public opinion polls taken show that only a minority voted SNP for complete separatism. This debate to some extent will revolve around devolution. If the SNP or the Welsh National Party comes out separately and unconditionally for separatism, we may be assured that they will get some surprising results. Hardly any Scotsman believes that Scotland could survive for long completely separated from the United Kingdom.

Mr. Norman Buchan (Renfrewshire, West)

My hon. Friend has posed a number of questions in a row, one of which was directed to some of us who have been posing other questions about the Common Market. He asked how some of us can take an attitude to the Common Market in relation to the sovereignty of Parliament and at the same time support a referendum. It is a very important question and it should be answered. I think that the answer is that the sovereignty of Parliament is a matter which has been decided by a contract between us and the voters who have sent us here and that this is the area in which these decisions should be made. But the question of the EEC is outwith that contract because the EEC makes decisions which affect us and therefore goes beyond our contractual agreement with the electorate, who should be the people to decide whether they wish the contract to be extended in that way.

Mr. Hamilton

My hon. Friend makes a special plea in these matters, and I respect him. But he does not know that. He makes a special exception of the Common Market. I put this question to him. Even if the question is put to the electorate in a way which requires to be answered yea or nay, no one can be sure that they will answer the question. If, for example, we have a Labour Government in deep trouble, as they may well be in 12 months, and they put a specific question to the country, a Tory voter will not answer the question. He will ask himself which vote will embarrass that Government most, and he will vote that way irrespective of the merits of the question. We find this in parliamentary elections. People ask themselves not what a candidate is as a person but what he stands for as a party representative.

It would be the same if a Government sought to govern by referenda. We have political partisanship. We are professional politicians and we have a party system. Generally speaking, people will vote on a party ticket. A Tory will vote in a referendum in a way which is likely to embarrass a Labour Government. In the same way, if a Tory Government were trying to conduct a referendum a Labour Party loyalist would cause the maximum embarrassment to the Government irrespective of the question.

I put those questions to show that we are in a mess in relation to the Common Market. I am a pro-Marketeer. I do not take the extreme view of some of my right hon. and hon. Friends, but I hope that we shall be more intelligent about the subject than we have been hitherto. I believe in internationalism rather than in narrow nationalism. Therefore, I disagree with the narrow parochialism of the Scottish and Welsh nationalists.

All the developments in the world, whether they be in the trade union movement or in business or anything else, are towards bigger and bigger units. To take any other step is to try to reverse the course of history. How can multinational companies be controlled other than by multinational political units? We talk about some of the big companies such as ICI, Unilever, Dunlop, Esso, Shell and so on. All are bigger than many national States. If they are to be controlled, we must have multinational political units to control them.

I have run over by time, but no one has walked out so far as I can see.

Mrs. Winifred Ewing


Mr. Hamilton

I will not give way. I give way only to intelligent people.

In the end the Government will be judged by their social contract and their ability to control inflation. We will get inflation whether we like it or not. Whatever the success or failure of the social contract, there will be considerable inflation over the next two years.

Meanwhile it behoves the Government to protect the weak and the defenceless, and I am glad to see that we have that declaration of intent in the Gracious Speech. I shall judge my Government on the way they do that while pursuing the course of trying to get the organised workers of the country, the people who produce its wealth, to see that unless they play their part in the social contract there will be massive unemployment. That was never spelt out in such stark detail in the election by either side.

The consequences of not accepting discipline, whether it be in wages, profits or prices, are colossal and unacceptable unemployment. Therefore, a great responsibility devolves upon the trade unions, the employers and, not least, on this House.

6.52 p.m.

Mr. Graham Page (Crosby)

I am glad to follow the hon. Member for Fife, Central (Mr. Hamilton), not because he is a Scottish Member, because I have never had the courage to venture into a Scottish debate, but because he is what I have always aspired to be—a House of Commnons man. He has shown in what he said tonight that he has at heart the rights of Parliament and the House. The House must be grateful to him for drawing attention to the difficulties of the House in any suggestion of a referendum of a subject to the public.

The House must be grateful to the Foreign Secretary, too, for setting out so clearly the information and policy on foreign affairs. I do not say that I agree with it, but it was of great value. I am glad that we have now moved on from foreign affairs and this is not a foreign affairs debate. I have not attempted to take part in such a debate for 12 years. On the last occasion I attempted to do so I reached the Bar of the House when someone in the Gallery threw leaflets, but the silly clot who threw them forgot to take the string off and the bundle landed on my head, since when I have never attempted to enter into a foreign affairs debate.

Therefore, I pick out just that part of the Foreign Secretary's statement where he was clowning about the social contract. He said that the recent election was fought on home and domestic matters. The first paragraph of the Gracious Speech dealing with home affairs says: At home, My Government, in view of the gravity of the economic situation, will as their most urgent task seek the fulfilment of the social contract". The Foreign Secretary waved a 3p copy of that social contract but he has not thought the House important enough to put that 3p copy in the Library. It is unobtainable in the precincts of the House, and I presume, therefore, that we must pay Transport House 3p for it. It is apparently so unimportant for the House to know its contents that it is not even in the Library. The Government in the Gracious Speech see the social contract an an essential element in its strategy for curbing inflation, reducing the balance of payments deficit, encouraging industrial investment, maintaining employment, particularly in the older industrial areas, and promoting social and economic justice. In short, every aspect of government at home is to be decided by reference to the social contract. My complaint is that the Labour Government have bound themselves to some contractual obligations to one section of the public, and have bound themselves to decide matters of government upon the wishes or even the directions of that section of the public. That sounds to me like the knell of Parliament.

For several years the responsibility of the Government to Parliament and the authority of Parliament over the Government have been slipping away. I am not thinking of arrangements under treaties with foreign Powers, such as the hon. Member for Fife, Central was discussing, because Parliament has survived that for centuries. I have in mind the growth of the additional estates of the realm—the CBI and the TUC.

These new estates of the realm do not meet in the Palace of Westminster to take part in public debates. They meet in No. 10 Downing Street in camera, and those who take the trouble to elect us to represent them in the House can be excused for assuming that the Government, of whatever complexion, no longer regard Parliament as the proper forum in which to consult public opinion and that General Elections have become as much a charade as yesterday's scarlet and ermine in another place.

If it is inevitable that there must be consultation or contractual obligations with the CBI and the TUC before any Government blows their nose let us alter our constitution pretty quickly and convert the House of Peers into a senate with the CBI, the TUC and possibly other bodies like local authority associations, which the Government always consult, as electoral colleges for providing the membership of a reformed second Chamber. I suggest that we do that rather quickly before we proliferate this hypocrisy of parliamentary government by creating replicas of ourselves in Cardiff and Edinburgh, which is, I cannot help feeling, a dangerous step towards the dissolution of the United Kingdom.

As a result of the Government's over-reliance on these new estates of the realm all functions of government are presented as matters of economics, as matters of investment and employment, as matters of sectional interests. Neither Parliament nor the Government are seen by the public to be tackling some of the matters about which the ordinary citizen is most concerned. Never mind about his concern as a member of a trade union or an employer or a manual or skilled worker, or whatever section to which he considers himself to belong.

As well as being in a section we are all ordinary citizens, and one of our main concerns as such is the enforcement of law and order. It was not only on Merseyside, where my constituency is located, that the candidates at the last election were not allowed to talk about anything other than the enforcement of law and order. I find nothing in the Gracious Speech to show that the Government have listened to the voice of the people on this. There is nothing to indicate that they will tackle vigorously all crimes of violence and particularly the national epidemic of vandalism, hooliganism and mugging. In the first three months of this year crime increased by 20 per cent. over the same period last year; that is to say, for every five crimes in 1973 we are running at six in 1974. That means there will be 63,000 more known crimes this year than last year. Offences of criminal damage increased by not just 20 per cent. but 30 per cent. For every three crimes of damage in 1973 there will be four such crimes in 1974.

The people who talked to me in the three weeks of election campaigning were demanding protection quickly against the beating-up of defenceless elderly people, the invasion of the home by housebreakers, the physical scars for life—if life remains—from the studded boot or the vicious knife or the bicycle chain, and the mental scars suffered by the raped girl.

The provision of houses is being delayed by the vandalism of half-built houses. The continual vandalism of schools is interrupting education. Transport is endangered, as appears from a terrifying report by the Liverpool division of British Rail, where in the short period of three weeks there were 16 cases of obstructions being put on the line which might have wrecked passenger trains; 14 cases of things being thrown at passenger trains, as a result of which seven people were injured; and nine cases of signal failures because of theft of wire.

Whenever I complain about such incidents, the answer is that there are not enough police to go around. I believe that we should double the police force and recruit specials. We should amend the Criminal Justice Act so as to toughen the magistrates. We should bring back the birch. The cost of doubling the police force would be insignificant compared with the cost of the damage now being done by such crimes. That is one subject upon which the Gracious Speech ignores the electorate.

Another subject—perhaps the House would expect me to mention this—is rates.

Mr. E. Fernyhough (Jarrow)

It was the right hon. Gentleman's Act.

Mr. Page

The rates problem is nothing to do with the reorganisation of local government. Purely and simply to meet local authorities' wages bill for next year, rates will go up half as much again next March, on average, and in many districts they will double. The ratepaying public will not stand for that. They will not wait for a committee to report in one or two years and then for the Government to take another three years to provide reform. The public are demanding action now about rates.

The only practical action is a rates moratorium—that is, no household rates to be collected for next year, and no increase in the rates on industrial and commercial property. It would cost £1,500 million for the Government to compensate local authorities for that loss. The Government could raise that amount by the much fairer system of income tax, which would amount to 6p in the pound for the year. The machinery for each district to fix a rate for that additional income tax for its own area could be devised for later years, but we cannot wait for that now.

Those are two matters which are uppermost in people's minds and are not dealt with in the Gracious Speech. It seems that the Government are not prepared to let Parliament deal with the subjects which are uppermost in people's minds. Whilst a Government are preoccupied with their contractual obligations to one section of the public, to the exclusion of Parliament, we are draining away the life of constitutional government and leaving a vacuum to be filled by some undemocratic administration. It could happen here.

7.4 p.m.

Mr. Douglas Hoyle (Nelson and Colne)

I am indebted to you, Mr. Deputy Speaker, for giving me this early opportunity to make my maiden speech. I hope that the right hon. Member for Crosby (Mr. Page) will forgive me if I do not follow the line of his argument. I should very much like to do so, particularly in relation to the birch, to the reintroduction of which I am totally opposed.

I wish to thank the electors of Nelson and Colne for giving me the opportunity to speak in the House. I must say a few words about my constituency, which is industrial and peopled by sturdy folk. It is still very dependent on textiles, and is suffering from low-cost imports of textiles, particularly from Turkey and Greece. Unless something is done urgently, short-time working will be followed by widespread unemployment in the textile areas of Lancashire. I hope that the House will take urgent action.

I must also refer to the previous Members for Nelson and Colne, particularly my immediate predecessor Mr. David Waddington. Although he is not of the same political persuasion as I am, he worked tirelessly for the electors. It would be wrong of me not to refer also to my illustrious predecessor, Mr. Sydney Silverman, who represented the constituency for 33 years and gained a name for himself in the House. I am told that he was only once interrupted when making a speech, and it took the death of a monarch to do that.

I know that it is one of the rules of the House that one must not be controversial in a maiden speech. All I can promise in making this speech is that I shall be as uncontroversial as Sydney Silverman was.

I am sorry that my hon. Friend the Member for Fife, Central (Mr. Hamilton) has left the Chamber. He posed a number of questions. I hope to deal with several matters that he raised, particularly in relation to the referendum. I agree with my hon. Friend that it would be unthinkable to have a General Election within the next 12 months. I know that we shall stay here at least four years to enrich the lives and prospects of the people.

The referendum is not the alien thing that my hon. Friend made it out to be. There are plenty of precedents. There was the Northern Ireland referendum, introduced by the last Conservative Government. If it is good enough for one group of our citizens, it is good enough for all. In 1893 Professor Dicey, a great constitutional authority as well as a distinguished Conservative, wrote to Joseph Chamberlain on the question of Irish home rule, saying: To the referendum we shall come at last I am certain. It is the only scheme for giving the constitution any permanence which is at once effective and unmistakably democratic. A referendum on Ireland became Conservative policy, and was duly added in 1911 to the Irish Home Rule Bill. By 1910 the Conservatives had accepted the theory that major constitutional changes should be decided by plebiscite, and they said that tariff reform was a matter for a referendum.

Coming a little more up to date, we find that in 1945 Winston Churchill proposed in a letter to the other political leaders that there should be a referendum on whether the life of the Parliament which had been in office since 1935 should be extended at least until the end of the Japanese war.

I think that the examples I have chosen are in line with the present situation. I agree with my hon. Friend the Member for Fife, Central that it would be unthinkable to have a referendum on every issue. That would be entirely wrong. However, there should be referenda on questions of major importance, and particularly on the transfer of power from this Parliament to Brussels. I believe that I have come to this House at an historical moment. I am being told repeatedly that Parliament is losing some of its power. I want that power to be restored.

How do we begin to organise a referendum? I was pleased to hear from my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs that we shall be getting a White Paper before very long. I hope that it will soon be published and that it will be based upon the precedent of Northern Ireland. That would be a simple and effective way of dealing with the matter. The questions asked should be short but direct. I think that there should be two questions—namely. "Do you want to stay in the Common Market?" and, secondly, "Do you want to come out of the Common Market?". I believe that the electors, faced with that choice, would be able to make the decision.

Having established the framework, we should also establish many other things. For instance, when the referendum is held, as it surely will be, I want to reject once and for all the concept that there should be a free vote. The matter was made clear in my party's manifesto. We are committed to letting the British people decide at the ballot box. That is why I reject the concept of a free vote.

Of course, we know that there will be many interested parties. That will be quite different from the Irish situation.

For instance, there will be parties that are not even in this country that will be interested. Further, many large industrial companies will be very interested in the discussion that will take place on the referendum. We know that they have not been afraid to use their money in other political campaigns. There is also the European Movement which, I believe, has half a million pounds in its coffers. I do not know from where that money came but I know where I do not want it to go. I want limits placed—my hon. Friend the Member for Fife, Central put forward this argument—on the expenditure that can be incurred during the course of the referendum. That already applies to General Elections, so why should it not apply when holding a referendum?

Before the referendum takes place, we know that the Press will be lined up on one side. Because of the lack of balance that will result, I hope we shall ensure that radio and television time is equally divided so that those who are for the Market and those who are against it shall have an equal opportunity to express their views. Why not have a national lobby for those who are in favour and for those who are against, similar to what happened in Norway? Only in that way do I believe that we shall know the will of the people.

I also wish to deal with another odd notion that has been kicking its way about for some time—namely, that the retention of membership will validate all previous decisions and that a vote for withdrawal will mean that the Government can recommence negotiations. I utterly reject that concept. I believe that the negotiations and the vote should be binding. Further I believe that the renegotiation that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs is conducting should be speeded up. It is right and proper, and particularly desirable, that the vote should take place very soon. Certainly it should take place by next spring.

I have made my position clear. I believe that we should withdraw. The trade deficit with the EEC countries in 1973 was £1,167 million. The estimated deficit this year has risen to £1,800 million. That is an increase of 54 per cent. I do not believe that we can any longer afford to be in the Market. If we continue to stay in it, we could face difficulties in carrying out certain matters that we have outlined in the Queen's Speech. I believe that we should be free to organise our resources of oil, gas and coal. As I have said, I believe that we should come out of the Common Market, but I look forward very much to the will of the people being tested in the manner that I have described.

7.15 p.m.

Mr. Airey Neave (Abingdon)

We have had three excellent maiden speeches from the Government benches, and the hon. Member for Nelson and Colne (Mr. Hoyle) made one of them. I congratulate him most sincerely on the forceful way in which he put his arguments. After 21 years in the House I never cease to be amazed at the composure of those who have been elected in the past two or three General Elections when making their maiden speeches so shortly after taking their seats. It took me a long time to find such composure and I congratulate the hon. Member for Nelson and Colne on the lucid way in which he put his case. He will bear in mind, I am sure, the speech of his hon. Friend the Member for Fife, Central (Mr. Hamilton). His hon. Friend made a devastating analysis of the complications of a referendum on the EEC. None the less, the hon. Member for Nelson and Colne put his case very well and the House will congratulate him.

I welcome back my hon. Friend the Member for Chelsea (Mr. Scott) and the hon. Member for Motherwell and Wishaw (Dr. Bray), with whom I was associated on the Select Committee on Science and Technology some time ago. They have now come back to the House and we welcome them.

I intended to make a speech on defence, and I shall do so eventually, but whilst sitting here I received three telegrams to which I shall refer as I shall not be able to take part in the debate on agriculture tomorrow. They are messages for the Minister of Agriculture, Fisheries and Food from my constituency. The Abingdon branch of the National Farmers' Union sent the following message: Abingdon branch NFU most concerned at the rapid deterioration in beef prices. Minimum floor price urgently needed other- wise beef industry will collapse and producers made bankrupt. Urgent action by Minister of Agriculture needed. I have had two other telegrams on the same lines. It is esential to restore the beef market as quickly as possible. Serious hardship will result if we do not do so. I support what the hon. Member for Carmarthen (Mr. Evans) said about these matters. Immediate financial support for beef farmers is urgent.

The Secretary of State for Foreign and Commonwealth Affairs, in an interesting speech, referred to the defence review. I wish to speak about the part of the Gracious Speech where that matter is mentioned, and in particular the use of the North Atlantic Treaty Organisation as an instrument of détente as well as of defence. I do not wish to discuss Simonstown now because I understand that we are to have a statement.

None the less, I hope that we shall shortly have a full-dress debate on defence. Defence matters are arousing anxiety throughout the country. There are sincere differences on defence expenditure, but I do not remember any recent General Election when more concern was expressed by audiences about defence policy. I do not think that anyone has spoken on defence in this debate, but I hope that some of those who follow me will do so. My hon. Friends the Members for St. Albans (Mr. Goodhew) and for Windsor and Maidenhead (Dr. Glyn) made some reference to it yesterday. I hope that others will take up the point.

The Soviet General Staff will read the Gracious Speech with considerable interest. I know that there are sincere differences here. It is not only a question of employment in defence establishments and industries that is causing anxiety. That applies to my constituency and many others. It is that Governments from both sides of the House over the past two years have not fully realised the rapidly changing balance of forces in the world. This is particularly true of the Navy.

I want to talk about the change in the balance of forces between NATO and the Soviet Union. There is genuine concern which will not be allayed by what is said in the Gracious Speech. An early statement is urgently required. In the Gracious Speech the Government are committed to reducing the costs of defence. They use the word "reduce". though I accept that when my right hon. Friends left office they had already ordered defence cuts of £225 million in the year 1974–75.

If further cuts are to be made, there is only one conclusion that there will have to be extremely serious reductions in the strength of the Royal Navy and the other arms. I am aware that there are people in the House who would rejoice at that decision. They apparently think that there should be a smaller Royal Air Force and Army. But it is the naval situation that is most serious. Those who take the view that there should be these further reductions seem to have given little thought to the possible effect on our economy of further reductions in the Navy. That is what I want to talk about. I draw a distinction here between the economic and military consequences of those reductions.

It has been said that the growing Soviet strength at sea is perhaps the most important military-political development of the second half of this century. It will determine many economic and political policies for the Western world, and indeed for the whole world. I ask this question. How can NATO, as the Gracious Speech says, be an instrument of détente—and I am all for détente—if it has no answer to the problem of the immense increase in Soviet sea strength? I did not say "threat". It is a problem. There is a threat but the word needs to be redefined. We have been talking about a threat for 10 years in what I think is already an out-of-date manner.

Today the Russians do not need to invade Western Europe by land if they can achieve what they seek by far less risky methods. That is why they are spending more money on their naval armament programme than on their space programme. In this connection I would like to recall with affection my right hon. Friend Sir Alec Douglas-Home and the warnings he gave over so many years about this very problem. His departure is a great loss to this House. There is a new dimension in foreign policy and defence today as a result of Soviet naval strength.

Here I come to the economic consequences of this, which I think are most serious. It is clear that some of the Arab oil countries will receive the back- ing of the Soviet Navy in exerting pressure on the West. This is one of the biggest problems we face. We should remember with some anxiety the approval expressed by the Soviet Union of the oil boycott last year and what it had to say about that.

It would not be at all difficult, with the large Soviet naval forces, to block the passage of oil to this country and other Western countries. The Soviets are trying to build up a chain of bases along the oil routes emanating from the Persian Gulf. This is not a question of being alarmist. These are well-known facts. We should cease to look at our Navy as an arm of yesterday. This is not the Soviet view of naval strength. Speaking at the NATO conference in Ottawa in July on behalf of the Government, the Foreign Secretary said: Our concern is to maintain and indeed strengthen the defences of the Alliance, not to weaken them. I was glad to hear what he had to say. If we are to have a modern and effective defence system", as the Gracious Speech says, the Government will have to give priority to the Navy, and to the threat to our oil supplies, to protect our economy. If there have to be decisions on priorities, and we understand that that is so, that is the priority which the Government should give.

That is not to say that all danger on land is past. In Northern and Central Europe, as the House knows, the Warsaw Pact has 70 divisions against NATO's 25. It has 20,000 main battle tanks against NATO's 7,000. In the past five years Soviet tank strength has increased by 30 per cent. They are not there for ceremonial purposes. Whatever else they are there for, they are not there for fun. We have all heard of the commandant of the Russian military academy before the war who defined the rôle of the Red Army, which was to stand ready to shake the tree when the rotten fruit was ripe to fall.

As the Economist says this week The Communist opportunity lies in the very fact that the West has inflation and they do not …". This is a point we have to bear very much in mind when considering a reduction in our defence expenditure as the Gracious Speech says. A weak economy such as ours unfortunately is at present cannot support defence spending on the scale we really need to provide security. But this is not to say that we can risk inability to safeguard our own economy and above all our oil supplies, abroad and in the North Sea.

All these dangers were mentioned in the debate on 2nd July in the last Parliament when the Secretary of State, at column 254, referred to the growing strength of Soviet naval forces. He made quite clear that in effect he agreed with what I am saying now. Whatever the Government decide to do, and I hope we shall hear soon, they should give priority to maintaining our naval forces and thereby protecting our economy.

7.27 p.m.

Mr. Norman Buchan (Renfrewshire, West)

It would be proper of me, Sir Myer, to congratulate you upon your appointment as Deputy Speaker. There have been a lot of congratulations in today's debate. It is good to see you sitting in your full capacity as Deputy Speaker.

I am in the curious position of having to congratulate three maidens and three "half maidens". I feel slightly in the latter category myself. There have been three distinguished speakers speaking for the first time in this House and three others whom we know from the past and welcome here once more. At present I feel something of the same traumatic experience as the maiden speakers must have experienced.

The right hon. Member for Crosby (Mr. Page) has now left the Chamber, but he hit one of the characteristic notes of the debate at this time when he began to relive the General Election and the way he had fought the issues. A very drab and dismal affair it sounded, too, on the subject of law and order and the cheapness of birches and goodness knows what else.

I should like to make a point about that, because it is worth studying before it develops. I remember an old lady in the Kelvingrove ward in Glasgow in 1966 when a similar cry went up on the subject of law and order, emanating from the Cathcart Tories. Her comment was that when there was talk about bringing back the birch "It is oor weans they mean, no' theirs. They send theirs to a psychiatrist." By "oor weans" is meant those in socio-economic categories 4 and 5—their own children they send to the psychiatrist. So let us not think of this matter as superseding political affairs either.

I want to deal briefly with my own situation. I am voluntarily resuming a position on the back benches after nine years on the Front Bench both in and out of government. It was not an easy decision to make, but there comes a time, if one feels one is achieving little inside one's own Ministry, when one should come outside and continue the struggle outside. I emphasise the aspect of continuing the struggle. Comments were made during the election about people who would or would not retire from active politics if decisions went the wrong way. I take the reverse point of view. If decisions go the wrong way for me I become more active in politics, not less, in order to change them. I am here not in order to conduct any arguments inside my own party particularly; I am here to continue to fight for Socialism and to combat Toryism. That is what I am in business for, and that is what I intend to do.

My first point is a passing reference to some of the things that have been said over the past day or two. I do not share the curious unanimity of prophecies of doom which has emanated from both sides of the House. I am not a doomwatcher. I think we are in a difficult situation, to a large extent a man-made situation. I believe that men make their own history, and that we can get ourselves out of that situation.

It is not that I have been debarred from doing so, but it has been much less easy for me to participate in that area of political controversy and discussion in which I should have liked to participate over the past few years—namely, in connection with Scotland. I look forward to being able to take part in the public debate that has been raging around me. My wife has not been particularly silent, as the nationalists will know, but I have not been able to take the part I might have wanted in that connection.

I want to pick up the reference in the Queen's Speech to the urgent preparation for directly-elected assemblies in Scotland and Wales", and to follow the speech of a man with whom I have had much contact and discussion in the past, the hon. Member for Carmarthen (Mr. Gwynfor Evans). While he sets out the case for Welsh nationalism, in the process it seems to me that he totally destroys the case for Scottish nationalism. For him Welsh nationalism depends entirely on language. If that were so, it would debar something like 98 per cent. of the Scottish people from expressing their nationhood. I reject that. I, too, am Scottish: The rose of all the world is not for me; For my part, give me the little white rose of Scotland, That smells sharp and sweet and breaks the heart. I reject the hon. Member's desire to reject my nationhood when he bases the case entirely on language. That does not make a political problem for me. It does make a political problem for the rest of the hon. Members on that bench, who try to defend Scottish nationalism.

The problem here is not fundamentally a matter of nationhood and, above all, not a matter of oppressed nationhood. That is a total misreading of the British situation. It is a matter of the uneven development of capitalism. The problems of West Central Scotland are similar to the problems of South Wales, and both are similar to those of the industrial regions of England such as the North-East and Yarrow. This is the question, this is the truth, not the myths. When nationalists attribute all faults to the matter of nationhood it is like the barbarians in the past who put up songs and prayers and dances to ensure that the sun would rise; lo and behold, the sun did rise, so they said that their songs and their dances worked. It is a real misunderstanding of the situation to say that all things are due to this fact of nationhood, and, intellectually, quite unworthy of the hon. Gentleman.

Mr. D. E. Thomas (Merioneth)

While I agree with the hon. Gentleman that the problems of South Wales and West Central Scotland are due to the ravages of uncontrolled capitalism, the question for the future of the nations of these islands is "How does one tackle those problems today?" Surely, the hon. Gentleman would agree that it must be a part of Socialism to decentralise and give real legislative power to Scotland and Wales.

Mr. Buchan

Yes, they are now getting it right. After a three- or four-minute lecture they are beginning to get it right. They are now talking about the real problems. They have learned, these barbarians. They are now talking about real problems. Yes, there is a problem over centralisation. It is a problem of democracy. The problem we are facing in Scotland is not to foster our nationhood we are only too aware of it. I, too, have tears in my eyes when Billy Bremner trots out at Wembley. I, too, know my Scottish language and my songs and my music—better, by the way, than any other member of the Scottish National Party in this House. I say that without any fear of contradiction. As they know, it has been my whole life.

There is no problem there. The problem arises when they then say that this is the real problem we are facing and that all things will be put right by solving it. It is a problem of the economy, of the uneven development of capitalism, as I described it, but there is also the problem of democracy. This is the real task. How do we extend Scottish democracy, Welsh democracy and democracy in Britain? We should not confuse this concept, the mythology of some kind of oppressed nationalism, with nationhood. It is nonsense. Of course it is nonsense.

We have a nationhood which we desire to express. I believe that the right way to do it is through an assembly. I do not think that we have gone the right way about it. My own order of priorities—I have laid it out in the book "Whither Scotland?", which hon. Members will, I hope, have read—is that I think the task is to capture the commanding heights of the economy. That comes first. Then it makes sense to extend constitutional change to control that.

I felt that our assembly policy was the wrong order of events, but the Scottish people have decided otherwise. I accept the rule of the people. I accept the will of the Scottish people, who, quite clearly, wanted their assembly in order to be able to deal with the problems that I thought should have been dealt with in a different order. I accept this. There is no problem there. I believe the nationhood philosophy can be expected to approach it that way. I believe the problems of over-centralisation can be expressed this way too. That will not debar necessary development; we should not have to leave it at that, but will be able to extend democracy.

There is one crucial direction in which we must now extend democracy, the only way in which we can now really extend democracy—I think that the constitutional change does not totally extend democracy—and that is to extend economic power to the ordinary people. There is no democracy if decisions are made for us by the multinational companies to which the Scottish nationalists want to sell out Scotland. This is what they want to sell Scotland out to. "No public ownership of oil", they say.

Scotland's greatest resource, I am told, is North Sea oil. What does the Scottish National Party, which claims to speak for Scotland, say? It says: "No public ownership. Leave it in the hands of the multinational companies." That is not Scottish oil. That is Shell oil, BP oil, Texaco oil. Esso oil, Lord Thomson oil and Sir Hugh Fraser oil.

What is Sir Hugh Fraser's contribution since he joined the Scottish National Party? Within two months of his joining there was a headline in the Glasgow Herald about a £28 million deal that he had done with an American company. So much for the great patriotism of our business leaders, of the Scottish Nationals —a £28 million deal. Did they consult a single Scottish worker about that—any one of their employees? No, they did not.

So there is no democracy there when their fate is being decided over their heads. That is the extension of democracy. We need control over the commanding heights, because democracy is not only a question of constitutional change. It is a question—[Interruption.] Sir Hugh Fraser was the man who said that the idea came to him, I think, in an aeroplane. [An HON. MEMBER: "In a bath."] No, not in a bath, in an aeroplane. He said "I did not fall overboard for it straight away." It was just as well: a young man can hurt himself doing that kind of thing.

There is an astonishing situation in the kind of allies they have chosen. Lord Breadalbane wrote a letter during the election saying that we should all be Scottish nationalists. I looked up the Earl of Breadalbane's credentials to see whether he had more to say than I had. By God, what a list it was. He is Earl of Breadalbane and Holland. God knows how he got Holland. He is the Viscount of Drumnadrochit. He has about 14 different titles, including the Baronetcy of Nova Scotia. Where was this new apostle of nationalism educated? Anybody like to guess? Eton? Right first time. Educated at Eton and the Royal Military College, Sandhurst. The address of this new nationalist is the National Westminster Bank, 15 Whitehall Place, London S.W.1. He not only has vaults in his family mansion; he lives in a vault. This is the new-found nationalist.

So do not let us have any more of this nonsense. I would only say: Cenedl heb iaith, Cenedl heb galon. I agree with the hon. Member for Carmarthen (Mr. Evans) about the importance of language. That, by the way is Welsh, Mr. Deputy Speaker, and I hope that this is permitted. I, too, share in Celtic culture, but do not let us confuse this with the real staff of life that we need to develop.

I want to comment on one or two other things that have been said—the question of legislation and the time. I must say that I think some of my hon. Friends are taking lightly the very real problems involved. I read one speech from this side of the House yesterday which said that we could achieve a major Bill within a year. It has taken us nine years to implement local government, but a major Bill for this matter could be dealt with within a year.

Then there was the little reference in the Gracious Speech to one of the crucial problems, the financial arrangements—the thing that used to be argued about in the 1960s between the Chancellor and the Scottish National Party on the Budget. This is put in as an afterthought. I am told that a system of finance and the relationship between this House and the House in Edinburgh with regard to the financing of the budget could "easily" be set up within a year. It is a bit like the old story—" And with one magnificent hound Jack was free". I do not think that it is so easy. I think it will take a lot of thought.

I should like to put a direct question. We have the leader of the Scottish National Party here—and a nice chap he is, too, so he will answer it straight. He and his colleagues have welcomed an assembly. Do they intend to try to help that assembly to work or do they intend to try to destroy it once it is established? I am waiting for an answer. The leader of the party is here. I ask him outright. I have the right to ask him. Do they intend to try to make the assembly work or do they intend to destroy it? I hope that the Scottish people will notice the failure of the leader of the Scottish National Party to answer that question. Despite the fact that the Glasgow Herald is owned by Sir Hugh Fraser, I hope that it will also take note of the question.

The nature of democracy, therefore, is not only constitutional change. It is also about planning procedures, about economic control by the ordinary people. It is about industrial democracy, which is equally important. Given these things, constitutional change makes sense, but we must have these. Then, given that, I do not object to attempts to remove over-centralisation in Britain. I do not believe in the efficiency of big organisations. I do not agree with my hon. Friend the Member for Fife, West (Mr. Hamilton), who seems to like that. I do not. I think that the Swedish development in motor car manufacturing, for example, the breaking down of the heavy centralised organisation within factories, is proving to be effective. I believe that the same is true of government. I like small organisations.

I do not really like States. I accept that Scotland is a nation. This is the intellectual error that the hon. Member for Carmarthen makes. We have not even reached the stage of discussing their intellectual errors with some of our nationalist friends here, but it is worth discussing it with the hon. Member for Carmarthen. I do not see that it follows that having accepted that one is a nation one should necessarily become a State. In that sense, there is hardly a nation-State in the whole of Western Europe. It is a non sequitur. Not only does it act follow; it has not been established that it is necessarily good. Abraham Lincoln fought to preserve the Union. There were many nations within America.

Mr. Gwynfor Evans

They had one language.

Mr. Buchan

If the hon. Member bases nation upon language, is he discarding the 80 per cent. of the Welsh population who are basically English speakers? Is that his criterion? If it is not and he is basing it on history and tradition and heritage, there were many nations in America. But the war was fought between two groups who had different social attitudes but were basically of the same nation—the leadership of the North and the leadership of the South. So that is an error, too. He has not even demonstrated its desirability.

Mr. Gwynfor Evans

Yes, I have.

Mr. Buchan

The hon. Member did not today, nor has he done so in the past. So, again, that has to be looked at by itself. The final comment that he made, by the way, was virtually to say that some of his best friends were English. I was not particularly happy about that.

We have come out of our recent crisis in Scotland, I am told—the industrial problems that we have been facing for the last few weeks. I must say again on this that I think that the question of playing the ends against the middle was very prominent. It is a curious thing that if there are lay-offs in Scotland because there are strikes in England it is the fault of England. If there are lay-offs in England or Wales, as there have been, because of strikes in Scotland, they do not blame it on Scotland; it is then said to be because of the harsh economic conditions in Scotland. They play this myth of the permanent poverty of Scotland compared with the rest of Britain.

I will give them a sum. What makes the English average what it is? The answer is London and the South-East. The hon. Member for Perth and East Perthshire (Mr. Crawford) laughs. I hope he will dispute my figures if he can. If one removes London and the South-East from the various income figures per person in Britain—there are four main categories; skilled and unskilled, male and female—Scotland is seen to be better off per head in three out of the four categories than England and Wales.

Do not let us perpetuate that myth. It is not true to say, as is continually being said, that we are all worse off than in England—once London is removed. Indeed, my figures—which are only up to 1973—show that skilled male workers were better off to the extent of £1.40. I think that the reason for that is Edinburgh, because there are large elements in that city in professional jobs, including lawyers—the Lord Advocate has just come in—civil servants—I regret saying this—Ministers, too, perhaps. All of these push up the Edinburgh figure. The important thing is that these are socioeconomic factors and not nation factors. So, again, that one should be knocked on the head.

I want to make one final point. When hon. Members talk about nations and the creation of nations within Britain, they should remember that there is another country where this is done also—South Africa. They set up nation-States there, and we know for what reason. So they should be careful about their theory, because the theory that they express is exactly applicable to the South African situation. [An HON. MEMBER: "You do not look like a Bantu."] There is the authentic racial voice of so much of the Scottish National leadership—not the supporters and not the voters, but the leadership. There it is. We got that, too, in the General Election. Our supporters were called "English pigs". We got that, too. It is a dangerous stand, and they had better watch that they are not swept away in the process of what they are creating. I do not want to go through that experience again.

The referendum was discussed tonight. I meant to spend a little more time on other things, but I was back on my favourite subject—Scotland. On the referendum, which was raised by the Foreign Secretary and other speakers, there are two things to be said. The reason why the Labour Party has come to the view that the right thing to do was to renegotiate the terms and have a referendum is that we recognised that the process and the framework of decision making is different in kind—not in quantity but in kind—from the decisions themselves.

Therefore, we say that Parliament is sovereign—we make the decisions. But when we desire to alter the framework and the nature and the constitution whereby these decisions are made we say that something new has occurred. What has occurred is that we have all been elected here to Parliament—the place to make decisions. We have entered into what I call a contractual arrangement with the electorate. But we have gone into the EEC, and I know from experience as a Minister over the past few months the power that Brussels exerts.

We were talking about the problems in the agricultural industry earlier on. We know that the decisions we have had to make there over the past few months are not the decisions we should have made if we had been outwith the EEC. Therefore, the framework of my contract with my people and my constituency is altered because there is another authority to which we are bound by the treaty of accession. This has never been put to the British people despite the need for their "full-hearted approval"; it is this that must be put in the form of a referendum, and there is no going back on that.

I do not particularly care whether the Government recommend or do not recommend acceptance. On the whole I do not think that we should do either. I think that what we should do is to publish what we achieve by renegotiation. In terms of agriculture we have not even started renegotiating yet—we have been trying to take ameliorative steps in a difficult situation. We should submit what has been renegotiated, and an informative process should take place, but I see no reason why the Government—having come to the view that there should be a referendum—need to recommend a decision. It should be left to the British people, individually, actively to propagandise their own points of view. That is the way it should be done.

We are getting bogged down on the question of yea or nay, and of whether the Government should recommend acceptance or not. If a member of the Government is asked how he will vote in the referendum and he does not want us to stay in Europe he has to say "I will vote against it." But if he says that he will vote against it he cannot then recommend acceptance. I have been told that the issue is too complex for the ordinary people of this country. I have been told that even by Scot Nats. The reason why some people say the Common Market issue is too complex for them to decide is that no one has ever asked the ordinary people of this country to make such a decision. But as soon as the ordinary people are asked to make a decision they will make it their business to know what it is all about.

There are lots of things I cannot do. I cannot fly an aeroplane. But if somebody said "In three weeks' time you've got to fly an aeroplane" I would learn. We have so alienated the ordinary people from the basic decision making that they do not find out what that problem is because they do not expect any one to ask them. It is damn well time we asked the British people, and I hope that is the way we shall advance towards achieving a referendum.

7.52 p.m.

Mr. Douglas Crawford (Perth and East Perthshire)

In making my maiden speech I should like to pay tribute to my predecessor, Ian MacArthur. As I said when the result for my constituency was declared, if I can be as good a constituency Member of Parliament as he was I shall have achieved much. I agreed with the hon. Member for Renfrewshire, West (Mr. Buchan) when he condemned the birch. But there agreement ends. If we are anti-English, why do we have as national treasurer in the Scottish National Party a gentleman who hails from Leeds and rejoices in the excellent Scottish name of Murgatroyd?

The hon. Gentleman also alluded to culture and quoted from one of the greatest nationalists of all time. I am sorry that having done so, he should then sell Scotland short.

As a new boy to the House and representing a party whose principal aim is for Scotland to regain her self-respect and self-determination in a fully-sovereign Scottish Parliament, I must admit to having to pinch myself several times during the debate yesterday. It almost seemed as if self-government had been achieved and the sovereign Scottish Parliament was in session. The hon. Members for Edinburgh, Central (Mr. Cook), Dumfries (Mr. Monro), Paisley (Mr. Robertson), North Angus and Mearns (Mr. Buchanan-Smith), West Stirlingshire (Mr. Canavan), Motherwell and Wishaw (Dr. Bray), the Prime Minister and the Leader of the Opposition all said how much they cared for Scotland and how important Scotland was.

We have had protestations of interest in Scottish industry, Scottish agriculture, housing, social affairs, and many promises about them. As the right hon. Member for Ebbw Vale (Mr. Foot) said during the previous Parliament, the road to Damascus is pretty crowded these days. But let there be no mistake: the development of all these sectors costs money, and money itself costs money.

That brings me to the point that members of the Scottish National Party are interested in what the hon. Member for Renfrewshire, West described as the staff of life. Scotland has no balance of payments deficit. Even before oil came upon the scene, the respected and scrupulously non-political Scottish Council for Industry indicated that Scotland had a balance of payments surplus.

Perhaps the hon. Member for Motherwell and Wishaw, who said that it was greedy for the people of Scotland to lay claim to what was theirs, will take that argument to its logical conclusion and say that it is greedy for the United Kingdom Government to lay claim to the oil. Let us say it is Common Market oil. Let us say that it is United Nations oil. I should have thought that oil in Scottish territorial waters was the possession of the people of Scotland.

Scotland, with a balance of payments surplus, will not need to fund a balance of payments deficit. There will be no balace of payments deficit, and, therefore, interest rates would probably be fixed by a Scottish Government at a level considerably lower than those prevailing in the United Kingdom today. The United Kingdom bank rate, or, as it is now called, base rate, is 11½ per cent. Let us compare that with rates in other small countries similar in size and aims and aspirations to Scotland. Norway has a bank rate of 5½ per cent.; Sweden 7 per cent.; Austria 6½ per cent.; and Switzerland 5½ per cent. If we compare these with what could be set in Scotland, we can begin to see what would happen when Scotland resumed self-government.

The cost of money for the development, improvement and enhancement of Scotland's industry, agriculture, housing and social services will come down. It might not even be too facile to suggest that the bank rate in a self-governing Scotland might well be almost half that at present prevailing in the United Kingdom and I am sure that all hon. Members would be glad to see a lower bank rate. It can and will be achieved in a self-governing Scotland.

The Gracious Speech and the protestations of hon. Members of their concern for Scotland took no notice of that. Unless and until they do and unless and until Scotland's healthy balance of payments situation is reflected in considerably lower bank interest rates, the people of Scotland will not be getting a fair reward for their efforts and resources.

I understand that it is customary for a maiden speaker not to be controversial. I shall not take issue with the hon. Member for Renfrewshire, West about many of the points that he made, but I certainly hope to be able to do so in future.

7.57 p.m.

Mr. David Watkins (Consett)

Several hon. Members who have had the pleasure and privilege of following maiden speeches during the course of this debate have made the point that in their years of membership of the House they have never before had such an opportunity. I am maintaining this record because in my eight-and-a-half years in the House this is the first opportunity that I have had to follow a maiden speaker.

It is a great pleasure to follow the hon. Member for Perth and East Perthshire (Mr. Crawford) and to congratulate him upon a very good speech. He said he was not going to be controversial. There are degrees of controversy in maiden and non-maiden speeches, but my own view is that the controversy is always in the ear of the listener and not in that of the person who is making the speech. But whether speeches are controversial or non-controversial, they are always listened to with respect in the House if the hon. Member making them is manifestly speaking from knowledge and experience. The hon. Member for Perth and East Perthshire has certainly measured up to those standards.

Both the hon. Member and I have had a very long wait in the House today to catch the eye of the Chair. It has been worth it to have the opportunity to follow him and to welcome him warmly into the House, to congratulate him on his speech and to say that I know that the House will look forward to hearing from him again.

One of the interesting features about debates on the Queen's Speech is that they tend to be somewhat disjointed and that all sorts of subjects can be and almost invariably are raised. It is one of the interesting juxtapositions of the arrangement for the business in the House today that we appear to be discussing devolution and foreign affairs on the same day.

If I may say so, as one who was born of a Welsh father and an English mother and who represents a constituency that is within sight of Scotland and that has a large Irish and Irish-descendant population, I am jolly glad that I had nothing to do with bringing about that juxtaposition with which we are confronted.

My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs devoted an important section of his speech to the situation in the Middle East, and it is to that that I want to devote my remarks. I particularly welcome the sentence in the Gracious Speech which reads: My Ministers will continue to support the search for a just and lasting peace in the Middle East and to work for a satisfactory solution to the problems of Cyprus. The fact that I shall speak briefly on Cyprus is no detraction from the great tragedy which has come upon that country in recent months.

I was in Cyprus last Easter, and one of the things that struck me was the tremendous progress which had been made in developing the island and in raising the living standards of the people during a period of several years since my last visit. In what nature has bestowed upon Cyprus it is one of the favoured islands of the world, yet today it is a war-torn and unhappy country in which many of its people, both Greeks and Turks, have been turned into refugees in their homeland.

One of the highlights of my visit at Easter was a long talk with Mr. Clerides, who I feel may well prove to be his country's man of destiny in its present time of need. My right hon. Friend the Secretary of State has made Herculean efforts to bring about an end to the fighting and to get talks started on what we hope will lead eventually to a settlement in Cyprus. It is apparent that much more will be needed, that a long and difficult task requiring much patience lies ahead of him, and I take this opportunity to wish him well in his endeavours.

I should like to concentrate my remarks on that other tragic conflict which besets the Middle East—the Arab-Zionist conflict. I stress that a just and lasting peace in that area means justice for the people of Palestine. The injustice which has been inflicted upon those people is the heart and core of the whole conflict which has raged for so many years in that region of the world. The recognition of those people's rights is the key to the so far permanently locked door whose opening alone can lead to a lasting peace.

This is not another refugee problem. It is the problem of a nation that has been dispossessed of its homeland and is clamouring for the justice denied to it during the events that have developed during this century. For a just and lasting peace in that area, which is the overall objective of the endeavours of the Government, that nation must be involved directly in peace negotiations.

I was sorry that Britain abstained in the vote in the United Nations General Assembly on whether the Palestinians should be heard there. Our Ambassador, Mr. Ivor Richard, whom many of us recall as a Member of this House and for whom many have a very high regard, made an able speech which was almost wholly sympathetic to the Palestinians. He made the point that their views ought to be heard by the United Nations. But his speech was not followed by a vote, and Britain weakly abstained—an action that put us out of step with the overwhelming majority of world opinion.

I remind the House that the decision that the Palestinians should be heard at the General Assembly was carried with 105 nations voting for it, with four nations predictably voting against it, and with 20 abstentions, among whom we were numbered. Our abstention may well have been motivated by, amongst other things, considerations of our relations with the Government of Jordan. I recognise that on this issue a delicate situation exists in regard to our relations with that Government. But that situation is no more delicate than the situation that exists among Arab countries in respect of relations between King Hussein and the Palestinians.

Within the last few days at the Arab summit conference in Rabat great progress has been made towards resolving that delicate situation. It is to be hoped that the British Government will similarly take a more positive attitude and make more positive moves towards the participation of the Palestinians in the efforts to find a just and lasting peace.

In a notable speech on 19th March my right hon. Friend the Secretary of State said: We believe that the earliest possible just and lasting solution will come through the full implementation of Security Council Resolution 242. That is a sentiment with which I agree strongly. That famous resolution, unanimously adopted by the Security Council as long ago as November 1967, still provides the only basis for a just and lasting peace. But it is deficient in one important respect: it does not make provision for consultation with the Palestinian people whose plight, as I have already said, is the very heart and core of the conflict and problem which arises in that region.

My right hon. Friend also said: We also believe that there will be no permanent peace unless a settlement provides for a 'personality' for the Palestinian people."— [OFFICIAL REPORT, 19th March 1974; Vol. 870, c. 872.] As he pointed out, he chose the word "personality" very carefully for reasons which are well understood.

I hope that, in pursuance of the undertaking given in the Queen's Speech, the Government will seek an amendment to Resolution 242 to give expression to that Palestinian personality by involving those people in the peace talks, whether they take place at the United Nations headquarters in New York, in Geneva or in any other quarter of the globe.

The Labour Party, on the whole, has a good record on the Middle East in government and a rather less good one in opposition. The fact that the party's record is better in government than in opposition is yet another good reason for keeping the party in government.

I remind the House that it was the Labour Government who sponsored Resolution 242, who devised it and who secured its adoption in the Security Council—a triumph for British diplomacy. It was when the Labour Government were in office that my right hon. Friend expressed the need for a Palestinian personality, and it is in the present Queen's Speech that the Labour Government are undertaking further action for peace and justice. But I am afraid that in opposition our party took a rather less balanced position, especially at the time of the October 1973 war, when the hierarchy of our party took up an unashamedly Zionist position. I want briefly to recall the events of that episode.

The Government, then composed of the largest of the parties represented on the benches opposite, announced the immediate cessation of arms supply to both sides as soon as the war started. By an all-party agreement, a debate was arranged in the House on a motion for the Adjournment of the House so that the situation and its widest implications and the Government action might be debated. It was an eminently sensible arrangement to have the debate on the Adjournment to enable all points of view to be put without there being any necessity for a Division on such a difficult and complex matter.

The day before the debate every member of the Parliamentary Labour Party received a notice from our Chief Whip which indicated that an attempt was likely to line the party up on a Three-line Whip on what could only be described as a Straight Zionist line. More than 80 members of the Parliamentary Labour Party made it plain that they would not accept the imposition of such a Whip, and in the event, although the leadership of the party maintained a Zionist position, there was a free vote in which 15 of us voted in the non-Zionist lobby and about 75 abstained, many of them remaining seated in the Chamber throughout the Division in order to indicate their disapproval of the way in which the matter had been handled.

I recall that episode to illustrate my point that the Labour Party's record in government on the Middle East is, on the whole, rather better than its record in opposition, but, more importantly. I recall and use it to illustrate that never again will attempts to line this party up on a purely Zionist line command the massive support which they commanded in earlier days. In July I was honoured by my colleagues by being appointed Chairman of the Labour Middle East Council, and I speak also from that position.

The events which I have outlined, there having been two General Elections in a year, took place two Parliaments ago, but I would point out that support in our party for a more balanced approach strengthened in the last, short Parliament and it has strengthened further in this one. In the light of that, I take the opportunity to assure my right hon. Friend the Secretary of State that he can count on a growing body of support on this side of the House in his efforts to apply a constructive and balanced policy towards resolving this tragic conflict in the Middle East.

This country is inextricably involved in the Middle East. We cannot escape our involvement, nor can we escape our responsibilities. I leave aside the oil issue, because in the longer term that will change anyway as our own oilfields come into production. But the Middle East is one of the most important of the developing regions of the world and one in which, for historical as well as economic reasons, we are inextricably involved.

If the Arab-Zionist conflict can be ended with peace and justice, the potential for development in that region and the potential for British relationships and British trade with all the countries of the region is almost limitless. This would be to the obvious advantage of our whole national economy, which has been discussed in detail on both sides of the House during the debate. The advantage is almost limitless for all concerned if we can make such a settlement.

One of the dangers is that we could be up-staged by the French, who have taken a much more positive attitude and have taken stronger initiatives in this matter than we have. This is something which, with such a potential in front of us, we must certainly seek to avoid.

In the interests of this country—and the paramount consideration which this Parliament, as the British Parliament, has to consider and which the Government, as the British Government, have to consider, is the interest of this country —it has never been more vital for our Government to act positively and fairly in their policies towards the Midle East.

8.13 p.m.

Mr. Hugh Rossi (Hornsey)

In his opening speech this afternoon the Foreign Secretary made a brief reference to the tragic events which took place in Cyprus this summer. He said, in effect, that his Government had two objectives: first to spare the people in Cyprus as much misery and bloodshed as possible, and secondly to ensure that the future or fate of that island would be determined by the people of Cyprus themselves, though he added the qualification that the solution would have to be accepted by the Governments of Greece and Turkey who were facing general elections, with all that obviously implies.

I wish to detain the House for just a little while in considering the import of what the Foreign Secretary said, and in doing so I must declare my interest to the House. There are at present in my constituency about 4,000 men, women and children who have settled there from Cyprus. They include both Greek and Turkish Cypriots who live in perfect harmony and amity together. Indeed, I can say about my Cypriot constituents that they are industrious, hard-working and law-abiding and that they have integrated well and are making a significant contribution to our local economy in the many small businesses which they run. Also, like most Mediterranean people—if it is permitted for me to say this—they are warm-natured and friendly.

Many of those constituents, however, have shared with me their anxieties and the agony which commenced for them with the events of 15th July. The House can well imagine what they must have gone through as they learned of villages and towns, where their grandparents, parents, brothers and sisters and even their children lived, being engulfed one by one by war, fire and famine. Some have seen their life savings obliterated as retirement homes have been destroyed or have disappeared behind alien enclaves. These are deep human, personal problems which have not been spoken of in this House, nor have they attracted very much attention in the Press. I felt it only right that I should seize the opportunity of speaking up for them on this the first opportunity I have to speak in this new Parliament.

My constituents, both Greek and Turkish Cypriots, have come to me to express their views about the events in Cyprus and to say what they feel should be done. It is as their voice that I now speak to the Foreign Secretary and in order that the House may know what Cypriots themselves are saying about the situation in the island from which they came.

First, there is a feeling of deep disappointment in the rôle that the British Government have so far played, a belief that they have resiled from their responsibilities under the Treaty of Guarantee. The difficulties of the situation are understood, but the fact remains that the British Government sat on their hands while the Greek military junta attempted a coup d'état on 15th July.

If the British Government had spoken up, if there had been a declaration that they were prepared to use the residual powers under Article 4 of the treaty, and if there had been a redeployment of British troops in the island, there would have been no need, no excuse, for the Turkish troops to disembark five days later on 20th July. For five days, however, the Labour Government stood passively by while the Greek generals sought to set up a puppet government under that former terrorist and self-confessed murderer of British troops, Sampson. It was by contrast the reaction of the Turkish Government within three days which not only defeated the coup d'état and deposed Sampson in favour of a moderate and constitutionally appointed leader but led to the collapse of the Greek Government.

Unhappily, however, once the Turkish troops were in, they would not stop. They continued with a full-scale military invasion of the island until they had secured their intended objectives. At that point there was nothing that the British Government could do without embroiling themselves in war with NATO allies, and that is something which the British people would not have accepted.

The tragedy of Cyprus is its strategic importance in the Mediterranean which has excited the cupidity of militarists in both Greece and Turkey. The British Government had no contingency plans to deal with a situation which has been a possibility since the declaration of independence of the island. In the minds of my Cypriot constituents, Greek and Turkish alike, the British Government stand condemned for their inactivity during those vital five days.

However, that relates to the past and we must consider the future. The Foreign Secretary said that that future must be determined by the Cypriot people themselves, and that is a welcome declaration. By itself, however, it is not enough. It can be no more than a pious platitude. Therefore, I must put the following question to the Foreign Secretary and to the Government. Is the right hon. Gentleman prepared to back that declaration, first, by insisting upon the withdrawal of all Turkish troops and any members of the Greek armed forces who may be on the island? Secondly, is he prepared to back the declaration by insisting upon the safe return of all refugees to their homes, the restoration of their property and, possibly, adequate reparation for all that has been destroyed and looted?

Thirdly, will the right hon. Gentleman insist upon the restitution of constitutional order for the whole indivisible, unpartitioned island under a Government elected by the Cypriot people as whole? Fourthly, will he make it plain to the Greek and Turkish Governments that the United Kingdom will, in the terms of Article 4, take action with the sole aim of establishing the independence, sovereignty and territorial integrity of Cyprus?

My constituents are convinced that the people of Cyprus, if left alone without external pressures or influences, can live together in peace and friendship as they have done for centuries. It is for the United Kingdom, as a guarantor of that independence, to ensure that that is achieved by determined and single-minded policies.

Mr. Ronald Brown (Hackney, South and Shoreditch)

The hon. Gentleman has asked my right hon. Friend to take action. I am not sure what he means by that. What action does he want my right hon. Friend to take?

Mr. Rossi

The right hon. Gentleman knows what action is open to him. The political will is required to take that action.

Mr. James Callaghan

The hon. Gentleman has been expressing the views of his constituents, and I understand that they are not necessarily his own views. He is right to do so and to express the views that he so clearly expressed this evening. However, as the United Nations has gone on record on some of the points that he has enumerated—for example, the withdrawal of Turkish troops, which the United Nations has insisted should happen—will the hon. Gentleman please answer my hon. Friend's question and inform the House and his Cypriot constituents, what action he believes the United Kingdom Government should take?

Mr. Rossi

They should show their determination to implement those recommendations to the full.

Mr. Callaghan

Does that mean the hon. Gentleman wants the Government to engage in warlike operations against the Turkish troops? If not, what other action can be taken? Why is not the hon. Gentleman honest about it?

Mr. Rossi

I made it quite plain that I thought the British people would regard warfare in Cyprus as unthinkable. I also said to the right hon. Gentleman that the situation exists because of those lost five days. Now the problems are much greater than they need be.

Mr. Callaghan

I notice that the hon. Gentleman has not replied to my question, and I therefore put another point to him. I hope he will not accept this version of history about the five days, because he is clearly leaving out of account the fact that Archbishop Makarios was rescued within 12 hours of the coup hiking place, and that the Turkish Prime Minister was here on the second or third day after the coup had taken place. The invasion took place on the fifth day, although it was known that the Greeks were due to come to this country on the seventh day.

Mr. Rossi

I recognise that the military bases were used as reception areas for the refugees. That was a great humanitarian gesture, and one gives credit where credit is due.

Mr. Callaghan

What does the hon. Gentleman want done now?

Mr. Rossi

That is a matter for the Government. If the right hon. Gentleman will change places with my right hon. Friends, we shall have a different solution.

Mr. John Lee (Birmingham, Handsworth)

The hon. Gentleman is not answering my right hon. Friend's question. Will he deal with the problem of which of the two NATO allies he wishes to keep in NATO, or whether neither or both? If both, how?

Mr. Rossi

That again is a matter for the Government. It is not beyond the competence of the Government to use their influence in order to see that both of them remain in NATO and also to solve this problem if they assert their authority in a proper manner, which they have failed to do.

I am sorry that I have detained the House longer than I intended, but I thought it only courteous that I should give way on this matter, particularly in view of the attacks I have made on behalf of my constituents on Government policy in this tragic situation.

There is another aspect of the tragedy that affects more the Home Secretary and the Secretary of State for the Environment than the Foreign Secretary. My local authority, the Haringey Council, has become the reception area for the majority of the Cypriot refugees coming to this country. This is natural as Haringey contains the largest concentration of Cypriots in the United Kingdom. I must again, I hope with generosity, pay tribute to the work of the Haringey Council, although it is of a different political view from mine, for the work done by its social services committee and by the Haringey Community Relations Council. Day in and day out it has coped with all the human problems that the Cyprus tragedy has thrown upon this country in tracing missing relatives and in the provision for those arriving here with only the clothes in which they stand.

The burden of all the administration is falling upon the ratepayers of Haringey. By mid-September my local authority had absorbed 232 families in an area of acute housing stress—126 children to be placed in primary schools and 114 in secondary schools, which already have overcrowded classrooms, and bringing with them severe language problems. So far the Government have declined to give any aid.

One must contrast this, curiously enough, with the aid given when the Ugandan refugees came to this country. Reception centres and a resettlement council were set up to help them. The difference is explained as being in the size of the problem, only a few hundred Cypriots instead of thousands. But even these few hundred throw intolerable burdens upon the local community and upon the local authority, which has a very poor rate base and which is faced with a tremendous prospective rate increase next year.

I urge the Government to regard this problem with greater sympathy than they have shown so far. There is no reason why what is essentially an international problem should fall almost completely upon the ratepayers of one single community within the United Kingdom. This is a matter for Government action and Government support, and I hope that the Home Secretary and the Secretary of State for the Environment, who are not present, will read my words and react with a greater generosity than they have shown hitherto.

8.30 p.m.

Mr. loan Evans (Aberdare)

I hope that the hon. Member for Hornsey (Mr. Rossi) will forgive me if I do not deal at length with the situation in Cyprus. He stated the problem admirably but he was unable to put forward a solution. My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) put a good question, and in following up that question the Foreign Secretary showed that it was not easy to put forward solutions to some of the international problems with which we are faced. I believe that the Government acted wisely and well in that troubled island where we can see the results of narrow nationalism.

I welcome the Queen's Speech. It is the second this year. The contents of the Queen's Speech put before Parliament in March were largely fulfilled by the Labour Government in the last Parliament. We have made many other promises in our election manifesto and extended the programme we started in March. In February we told the country that we would do certain things, and we did them, just as we shall bring forward the legislation to implement the Queen's Speech which we are debating today.

Since 1945 there have been 10 General Elections, of which the Labour Party has won six. We are now the party that can be expected to be elected, and we congratulate the Prime Minister as Leader of the party. He has led the party into five elections, four of which he has won. That is a good batting average. We are sympathetic to the Conservative Party which has been led by its Leader into four elections, three of which it has lost. The result of the 1970 election was a fluke. The Conservatives did not deserve or expect to win it. It was simply that the people were conned by the opinion polls into believing that Labour would get back.

Since 1964 the country has returned Labour Governments. When the Labour Party has put forward a radical Socialist policy, it has carried the country with it. When the Labour Party has been uncertain in its party statements, it has tended to lose. My right hon. Friend the Foreign Secretary is present. He is also party chairman. I hope that the party is beginning to prepare its policy for the next election and that it will be a radical Socialist policy.

In this debate we are dealing with subjects such as international affairs and devolution. My right hon. Friend the Foreign Secretary has given a good outline of what the party is doing in government, and we have a record of which we can be proud. But my right hon. Friend will, I am sure, expect Government supporters to refer to matters about which perhaps we are not so happy. He has told us how he intends to deal with East-West affairs and the Middle East and about his preparations to go to the Commonwealth Conference. I agree with much of what the Government have done. I hope, however, that my right hon. Friend will reconsider what the Government are doing with regard to South Africa and that he will study the second motion on the Order Paper calling upon the Labour Government to withdraw from all relationships resulting from the Simonstown Agreement and saying that all military exchange visits and technical arrangements should be terminated.

My right hon. Friend has said that the matter is under review. However, we have just come away from a General Election in which the people of Britain have turned a minority Labour Government into a majority Labour Government. There was a great deal of pleasure among our election workers about the result. However, it was disheartening to find that the way of celebrating it was to have a 21-gun salute to the apartheid régime in Cape Town harbour.

The Nationalist Government in South Africa are leading one of the most evil régimes in the world. At a time when the United Nations is considering in effect whether South Africa can continue as a member, it is wrong that that naval operation should have taken place.

There are many changes taking place in Southern Africa. Recently, 40-odd years of Fascism in Portugal have come to an end. Just as the people of Portugal are getting their freedom from Fascism, so, too, the people of Mozambique, Angola and Guinea—Bissau are making their demands for freedom from colonialism.

Mr. Gordon Wilson (Dundee, East)

What about Scotland?

Mr. Evans

I shall come to that in a moment if the hon. Gentleman will be patient. There are a number of countries in the world where people are fighting for political freedom and to throw off colonial oppression. No one in Britain suffers in that way. I shall deal with Scotland's position in a moment.

In terms of African nationalism, we see the demands of people in the Portuguese territories and we should support those demands.

As for Rhodesia, the Gracious Speech says that the Government will agree to no settlement which is not supported by the African people of that country. I hope that action will be taken by the Government to ensure that, if Rhodesia is to have independence, the illegal régime there is brought to an end and that all people in that territory are given the right to participate in the affairs of their country.

The Labour Party stated clearly in its manifesto what it felt should be done about Namibia. I hope that, before going to the Commonwealth Conference, my right hon. Friend the Foreign Secretary will give us a clear statement that Her Majesty's Government are prepared to support what the United Nations is demanding for Namibia and that we accept the advice of the International Court of Justice that South Africa should not be present in Namibia.

South Africa has no right to be in Namibia. A mandate was given by the old League of Nations to South Africa to administer the territory. South Africa has not observed the terms of that mandate. I look forward to a clear statement from the Government.

For the policy which has been pursued by the Foreign Secretary in his negotiations with the Common Market I have nothing but praise. He has proved that the terms negotiated by the Conservative Party were wrong, as the EEC is now beginning to admit. Clearly we are justified in the action that we have taken.

Government supporters, generally speaking, are happy with what has been done in international affairs. However, on South Africa I hope that we shall have as clear a lead as we have had on other international matters.

Moving from the nationalists in South Africa to the nationalists nearer home, I welcome the part of the Queen's Speech which states: My Government will urgently prepare for the implementation of the decision to set up directly elected assemblies in Scotland and Wales. It should be noted, however, that in both General Elections this year separatism has been clearly rejected by the Welsh people.

I have been provoked to speak in the debate at this time by the speech of the hon. Member for Carmarthen (Mr. Evans). I might have made my remarks on a different subject on a different day but I felt compelled to comment now. Of the 36 constituencies in Wales, 23 returned Labour Members. We do not arrogantly call ourselves the Welsh Party in Wales, although we have the right to make that claim because almost 50 per cent. of the electorate voted Labour. Yet the hon. Member for Carmarthen claims to speak for the Welsh people. In February the nationalists lost 26 deposits and they repeated that performance in October.

Mr. James Callaghan

And they got fewer votes.

Mr. Evans

My right hon. Friend is absolutely correct. They got fewer votes in February than they did in the previous election, and they had fewer votes in October than they had in February.

Mr. D. E. Thomas (Merioneth)

My constituency was graced by a visit from the Foreign Secretary during the election campaign and my majority increased sixfold.

Mr. Evans

The Foreign Secretary came to my constituency too, and my vote also went up. My constituency of Aberdare was one that the nationalists said they would win. My majority in February was 11,000 and in October it was 16,000. My majority is greater than the majorities of all the nationalist Members together, yet my majority is small compared with other Labour majorities in Wales. The nationalists should stop claiming that they represent Wales.

I am disturbed at the way the mass media are dealing with this question. I shall raise on another occasion the way in which the BBC in Wales is dealing with Plaid Cymru. The Western Mail even carried photographs of the hon. Member for Carmarthen at Cardiff Station on his way to the House of Commons. What a news item! I suppose he was shaking hands with the four Plaid Cymru candidates for Cardiff who all lost their deposits. This is the way the nationalists have been built up in Wales. I know what the game is. The Tories cannot beat us in the Principality so they are trying to get a diversionary exercise under way, but they will not win.

Let us set up a directly elected Welsh Assembly, but there is no demand for it in Wales. In the two elections that I have fought in Wales this year, the subject has been raised by a constituent on only one occasion. The trade union movement in Wales does not want separatism. The Welsh nationalists are putting forward the idea of a separate Welsh coal board, but that is the last thing the Welsh miners want. I believe that we should get away from centralisation and change the machinery of government to bring in a more democratic set-up.

We should, however, make quite clear that we are absolutely opposed to separating the countries of this island. We need to break down the boundaries that separate one group of people from another and not create new boundaries. Look at Cyprus, where one group of people are working against another. Look at any area of the world where there is trouble, and we find that nationalism is not far away. We must get away from it.

The influence of Wales in Britain must be safeguarded. There must be no reduction in the number of Welsh Members. We make a real contribution in the House to the solution of the problems of Wales and of Britain. There should continue to be a Welsh Secretary of State in the Cabinet.

The system of election to the assembly should be the same as for parliamentary elections. I hope that we shall not experiment with new methods of democratic election to ensure that certain minorities are represented.

The problems of Wales are the problems of Britain. The problems I encountered in the election were those of jobs, housing and education. Those are the issues that face the working people of Wales, England and Scotland. I hesitate to say that they are the problems of Ireland, because we can see how an argument about boundaries has torn that island to pieces. Let us hope that the tragedy of Northern Ireland is not brought into Scotland and Wales.

No artificial Offa's Dyke can isolate Wales from the economy and the prosperity of this island as a whole. Labour supports the unanimous view of the Kilbrandon Commission in rejecting any talk of an independent Wales.

There is much evidence of resurgence of spirit in the valleys of South Wales. I do not accept the gloomy picture painted by the hon. Member for Carmarthen, who said that Wales was facing disaster. Many jobs have been created, largely as a result of Labour's policies in the 1960s. New employment is coming into the valley areas. Large areas of derelict land have been reclaimed. In the past week or so a £500,000 scheme in my constituency was opened. People had been trying to bring it about for some time, and now they have it. Throughout the industrial areas of South Wales such schemes have been put forward. I believe that a new situation is developing and that the Labour Gov- ernment will work with the local authorities to give further impetus to the task of developing the valleys and improving the quality of life of those living in them.

I should like to say just a word about the language. The hon. Member for Carmarthen said he wished that he could speak in Welsh to this assembly. That would not do a lot of good. Not many of us in the House speak Welsh; not many of us would understand. The purpose of language is to be understood.

I deplore something I read in today's Western Mail. An organisation in Wales started tearing down the English signposts but stopped doing it because it did not want to interfere with the prospects of the nationalist candidates. Now we read: A group calling themselves the Friends of Wales yesterday delivered broken bilingual road signs to the Western Mail offices in protest against priority given to English over Welsh. The signposts are in both languages, but the people concerned are not content with that. Welsh must now be above the English. There are tourists coming to Wales. The Scots and people from other countries are visiting us. They will not know where to go. I am convinced that the nationalists never knew where they were going.

Labour's policy for the Welsh language is directed so as to ensure its survival and to give it practical support and encouragement. But do not let us allow the use of our beautiful language to be so distorted and to be used as a weapon to create hatred and division amongst Welsh-speaking and non-Welsh-speaking Welshmen. That is what I am afraid the nationalists are doing.

I believe that the Government have got off to a good start. I hope that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will make his contribution both at the Commonwealth Conference and at the United Nations. I hope that he will be able to speak for a united Britain that will maintain a democracy which the wider Labour movement has fought to bring about and on which we shall be able to build a Socialist society. We must recognise what was said by the veteran French Socialist Leon Blum: You cannot have a real democracy without Socialism and you cannot have real Socialism without democracy.

8.52 p.m.

Mr. Iain Sproat (Aberdeen, South)

I shall not take up what the hon. Member for Aberdare (Mr. Ioan Evans) said. However, I totally and wholeheartedly agree with his remarks about maintaining the unity of the United Kingdom. Nothing will be more saddening and disagreeable as this Parliament develops than to listen to the absurd and grotesque antics which I fear, we shall get from nationalists of both countries.

The Gracious Speech inevitably made mention of North Sea oil and what the Government intend to do with it. Naturally the Government must primarily consider the matter in the context of the United Kingdom. I hope that it will not be considered too parochial if I ask them to consider it in the context of Scotland in general and the North-East in particular. I am glad to see that the Secretary of State for Scotland is present. The time has come for any Government to direct much more urgent attention to the effect that North Sea oil is having on our established industries in the North-East of Scotland and how it will affect the long-term economic future in that area.

As we all know, there have been many benefits. First, general service industries in the North-East, although not necessarily directly concerned with oil exploration, are undergoing a considerable boom. I am thinking of industries ranging from construction and transport to hotels, plant hire and car hire. But great and gratifying as the success of these industries has been in many cases, their success will last only as long as exploration and production activity continues. They cannot be expected to provide a long-term basis of economic prosperity.

Secondly, there are considerable opportunities for heavy and light engineering industry to adapt their traditional techniques to oil fabrication as well as in engineering products such as pumps and valves. Thirdly, there are those already established North-East companies which have ventured into supply and support services. Again, the success of such ventures, much as they are welcomed, can last only as long as oil exploration and production continue.

Many industries are suffering greatly because of the influx of oil-related activity. Such industries were prevented by their own nature from participating in the new opportunities. They feel badly the effects of a serious labour shortage and a serious shortage of materials and services which is often accompanied by a considerable increase in costs.

I am thinking, for example, of the fishing industry, on which so many people in the North-East still depend, which is now experiencing a labour shortage which, I am afraid, is likely only to get worse. The reason for that situation is that highly-paid jobs are available for fishermen on supply vessels or as roustabouts on rigs and platforms. There is no doubt that the oil-related industries can afford to pay much greater wages than the fishing industry.

There is also the farming industry, the traditional labour force of which is vulnerable, and the people who traditionally provide the mechanics and engineers to carry out the servicing of agricultural equipment.

Shipbuilding, too, in Aberdeen has had to turn away some extremely lucrative contracts because it simply had not got the work force to carry them out. In cases when it had the work force the wage rates, which were being increasingly uplifted, meant that the end price of the product was non-competitive in the national—British—arena. While I underline these problems I must also underline the benefits we are seeing and will increasingly see in an improved infrastructure in the North-East—better roads, houses and schools, improved harbours and airports.

None the less the most serious problem, which is getting worse all the time, is the great shortage of labour, combined with the great increase in wage costs. We have to face the possibility in the North-East that over the next five years or so our most important established industries will be fighting for their lives against oil incomers and oil-related activities which will be drawing away their labour at much higher wages.

There may be those who say that the market should be left to find its own level. To say that would be perilously short-sighted. Not only have the established industries supported our economy for many years, but there is the prospect that while oil will be the single most important factor in our economy in the North-East for the next generation at least, this state of affairs will end. We must plan now for the time when it ends so that we have, now and over the next few years, an industrially balanced economy and something with which to underpin our prosperity in the North-East when oil exploration and production are over.

Our traditional industries will be needed in future and they should not be allowed to wither or die now. How can this be avoided? I have not met anyone who is absolutely confident that he has the full and right answer. I suggest to the Government that they first consider a labour subsidy for traditional industry for a limited time, until a proper house-building programme has achieved the easing of the present appalling labour shortage.

Secondly, I would like the Government to consider special development grants for established traditional industries in the North-East. There are those who suggest that development area status should be ended for the North-East. This would be absolutely disastrous. I would be totally and utterly opposed to it. It shows a complete lack of understanding of the constituent parts of the Scottish and North-East economy.

Withdrawal of grants from the North-East could be a death blow to established industry there trying to compete in the face of rich oil-related industries. I ask the Government to make clear as soon as possible their long-term objectives for traditional industry in the North-East. How do they see the traditionally established industries living with the oil industries? The silence has lasted for too long under both Governments and is now becoming deafening. Until a solution is arrived at, it is absolutely vital that the Government should recognise the problem now and take positive action in the next few months. Otherwise, we shall have the worst of all possible worlds.

8.58 p.m.

Mr. Bruce Grocott (Lichfield and Tamworth)

Thank you for calling me, Mr. Deputy Speaker and enabling me to make my maiden speech as the Member for Lichfield and Tamworth. I will be as brief as possible, since the hour is late, but I will endeavour to make the best use of the time available.

On the only previous occasion on which I visited this House, other than as the Member for Lichfield and Tamworth, I sat in the Strangers' Gallery and listened to a debate. It will give hon. Members a good idea of the timing of that debate if I tell them that the Minister speaking was Mr. Ernest Marples, the then Minister of Transport. I well remember that he was talking about the advanced driving test. He said that there were only 10 Members of the House who had passed the test and he was pleased to say that they were all Conservatives. There was a clearly audible rejoinder "You are the only ones with cars." I am happy to say that times have changed since then and they are not the only ones with cars.

Certainly things have changed in my constituency. I find myself following on as Member from Major-General d'Avigdor-Goldsmid, who was a hardworking constituency Member. Before him, for a long period, there was Julian Snow, who will be well known to many Members of the House, and well known nationally, as well as much respected and admired in the constituency of Lichfield and Tamworth.

The constituency has changed enormously since the first days when a constituency of that name existed, and it has grown enormously. I represent about 90,000 electors. In view of my correspondence at the moment, it strikes me that when we debate the question of the pay of Members of Parliament a plausible argument will be that we should be paid according to the number of electors that we represent. That would mean that I should be paid five times the amount of the Leader of the House. It may not, therefore, be a proposal that would be acceptable.

My constituency is large, and it is one with large and new housing estates. It is for that reason that I want to make three brief references to the Queen's Speech which I think are particularly relevant to my constituency. I said that there are large housing estates. On these large housing estates, municipal and privately-owned estates, there is one single issue which would cause much popularity particularly among the young people living on those estates; namely, the question of nursery education for those with young families.

I see with great pleasure that there is a reference in the Queen's Speech to nursery education and to the determination of the Government to ensure that nursery education is given priority. Although I have been involved in higher education, I think that the whole balance of our expenditure on education should be shifted towards the younger age groups and, in particular, to the nursery groups. Anyone with a four-year-old child, or anyone who has had a four-year-old child, will know well enough that children of that age are ready for school, ready for the contact that school provides, and many of them are bored at home and their mothers are bored at home with them. It is important and desirable to concentrate our education expenditure at that end of the scale.

Secondly, I am in an area of rapidly expanding housing—both municipal housing and private. Yet it is still an area where there are massive housing problems. It is still an area where people are queueing for houses, where most of the letters that I receive are about housing.

There is no way in which we could devote too much of our resources to solving the housing problem. There are the heartbreak cases, which every hon. Member meets in his constituency, of people living with their parents and of young couples with children who have no hope of getting any type of house. I shall look with great interest at the development of the Government's housing programme as outlined in the Queen's Speech.

There is nothing that could do more for people on the mailing lists of Members of Parliament than doing something about the housing problem, and "something" means to build more houses, and particularly more houses for rent. People need the choice. In many cases they have no choice, but development of the rented sector is something that must receive a major priority.

The third and final matter to which I wish to refer is important to my constituency and important as an item in the Queen's Speech, and that is democracy in the National Health Service. There is just a brief reference to this in the Gracious Speech. It talks about consultation in order to develop democracy in the health service. I happen to think that, next to housing, the things that causes more distress, anxiety and stress among the people of this country are matters concerned with health, sickness, disease and the like. I also happen to think that we should be in for a revolution in the relationship between the medical profession and the people whom it serves. This will be achieved only if greater democracy is built into the health service.

We have an odd situation at the moment. If I take my car into a garage to have it mended I am entitled to have, and I shall receive, a full report on the way that the car has been dealt with—the treatment, if one likes, that it has received, and the alternative ways in which it can be repaired, and so on. If, on the other hand, a relative is treated in a hospital and one goes along to the hospital, as I have done recently, as I am sure have many other hon. Members, and asks "What about the treatment that this relative has received? What about the cancer? How did it grow? What about the methods of dealing with it? What about the alternative solutions?", that is regarded as heresy by many members of the medical profession.

I am from the teaching profession, and we have had to learn in that profession that the people whom we serve can take part with us and discuss with us the best ways of dealing with the service. Exactly that kind of development is needed within the medical profession. That will be achieved only by an injection of greater democracy into the medical profession and by making the medical profession and the hospitals properly responsible to the electorate through some form of local council.

I am delighted to see those three items —housing, education and health—in the Queen's Speech. I am sure that, as the representative for Lichfield and Tam-worth, when I go back to my constituents I shall find that they, too, are delighted about that.

9.6 p.m.

Mr. Alick Buchanan-Smith (North Angus and Mearns)

As I rise to wind up for the Opposition on this second day of the debate on the Queen's Speech, my first task is by far the most daunting, in that I think we have had some five maiden speeches today and three, if I may so call them, nearly-maiden speeches of those who have returned to the House. I hope that the Members concerned will forgive me if I find it somewhat difficult, with the galaxy of talent to which we have listened, to refer to each of those speeches individually, but I am sure that I speak for everyone in the House this evening who heard those speeches when I say that all of us were impressed by their fluency, straightforwardness and confidence.

In this I of course include the last speaker, the hon. Member for Lichfield and Tamworth (Mr. Grocott), though I must say that when it comes to charm I think that the hon. Lady the Member for Welwyn and Hatfield (Mrs. Hayman) would have to take the bouquet this afternoon. Certainly from this bench I should like to compliment those who made maiden speeches and say that we look forward to hearing them each speaking again many times.

When one welcomes maiden speeches and compliments those who have made them, at the same time I certainly—and I am sure I speak for many in this House—feel a certain tinge of regret for those who have been replaced by those who have come in, much as we welcome them. Perhaps I may be forgiven for saying that, with the greatest respect to those who have replaced them, the House will be in many ways a poorer place for the lack of the independent contributions we used to have from the former Member for West Stirlingshire, Willie Baxter, and the former Member for Motherwell and Wishaw, George Lawson, who were always likely and could always be relied upon to add colour to our debates. On this side, if I may say so, we shall miss particularly the former Member for Perth and East Perthshire, Ian MacArthur, a very vigorous Member of the House, and the former Member for Welwyn and Hatfield, Lord Balniel, another who contributed so much, not only on the back benches but also on the Front Benches and in government.

My other difficult task—here again I make no apology—relates to the tremendous range of the debate today. We have ranged from Cyprus to Wales, from the north of Scotland to the Far East, from the recycling of waste to the problems of the aircraft industry and one-parent families. In the time available to me it would be quite impossible to deal with such a range of subjects. I hope the House will forgive me if I confine what I have to say to those areas which I believe are of particular importance to Scotland and the things that are happening and will be happening there in the course of this Parliament.

Fundamental to the whole of this debate, and I think it underlined all the speeches yesterday and all the speeches from the Front Bench, is the fact that none of the things that we want to do, none of the things that are in the Queen's Speech and are good measures in one way or another, none of the many good proposals that individual Members have put forward from both sides of the House, will be possible of achievement—whether they are to help one-parent families and find the resources to do so or to help industry, such as the aircraft industry, which is facing difficulties—unless we get the economy of this country on to a firm and longer-lasting basis.

The one thing that must be in the forefront of all our minds as we speak in this debate is the first and fundamental priority of getting the economy right. Unless we do that and unless we really bend all our efforts to doing so, many of the other things we would like to do will simply remain as dreams and visions and will never become the realities which many of us would like them to be.

It is more important than anything else that in approaching this debate we try to find in the Government's proposals the policies which will look after the sections of the community which are in difficulty and which will unite people in order to get support to face the economic difficulties in the future. Anyone who thinks that it will be easy is kidding not only himself but the country. For that reason, many of us are worried by events in Scotland during the first two weeks of the new Government.

I refer to the extent of industrial unrest in Scotland at present. I make no excuse for going through the catalogue of the problems and difficulties facing Scotland. Although much of it has been reported in the national Press, many people outside Scotland do not appreciate the extent of those problems.

At the beginnning of this week, in Scotland more than 24,000 people were on strike. There are 24 different disputes. In the road haulage industry 8,000 people were on strike. In Rolls-Royce's unofficial dispute 6,000 were on strike. At Hoover 4,500 were on strike and have been for the past two months. The road haulage dispute has particularly concerned Members representing constituencies in Scotland. It is a dispute the extent of which is not fully appreciated throughout the rest of the country. I wish that the Government had shown more concern for the problems facing Scotland. The main worry, however, has not been the immediate effect of the dispute on those directly concerned but those in other industries who have had to be laid off, put on short time, or to suffer in other ways because of that dispute. Scotland more than any other part of the United Kingdom depends on transport for its lifeblood. A dispute that affects this industry has repercussions throughout the rest of the economy in all parts of Scotland, not only in the West where it started but in Aberdeen, the Highlands, the east of Scotland and the south-east and southwest of Scotland as well.

On the Department of Employment's own figures given at the beginning of this week, some 230 employers had had to lay off 19,000 workers. From figures that the CBI has produced the situation appears worse still. The CBI believes those those laid off numbered towards 50,000. This situation affects a whole range of industries—foundries, paper-making and food processing, an industry which originally the strikers said they would treat with a certain amount of priority but which in the end came under the stranglehold of the strike. Also affected are the glass, construction and car industries and a whole spectrum of smaller industries.

Therefore, we have seen in this strike in Scotland over the last few weeks—again I emphasise that it is an unofficial strike without the backing of the union—a strike which has struck at the industrial heart of Scotland and has caused untold damage to the future prosperity of Scotland.

It is not only the way in which strikes have affected industry that has concerned us in Scotland in recent weeks but other matters as well. In Glasgow 380 dustmen have been on strike, but I am glad that they have gone back to work this week on the promise of local negotiations if the current national negotiations fail.

Again I ask the House to realise the consequences of that strike and what it has meant to people in Glasgow. There were on the streets of Glasgow at the end of that strike about 30,000 tons of refuse. Now that the men are back at work it will take four weeks to get the streets of Glasgow clear and clean up the mess that the citizens of Glasgow have had to suffer over recent weeks. This, again, affects not so much the economic life of Scotland as the convenience of the people of Glasgow, which can be appreciated to the full only by those who live and work there. Busmen and underground workers in Glasgow are on strike. In terms of people having to walk to work or find other means of transport and in terms of disruption and sheer personal inconvenience, this needs to be experienced before comprehension is possible.

In other areas of Scotland too we have had sporadic disputes in other bus companies. In the Scottish Transport Group the staff have put in a pay claim at this stage and are already starting industrial action, even though their existing wage agreement does not expire until 1st March 1975. That is yet another example of what people in Scotland have been subjected to in recent weeks.

An area in Scotland that has had to suffer, not only in economic terms but in environmental terms as well, is again Glasgow. On Monday of this week 120 sewerage workers in Glasgow voted to continue their strike, which is already three weeks old, against the advice of their union officials. Many hon. Members will have seen on television the results of this strike. It is something that must be seen before the extent of the damage being caused to the environment and to the River Clyde can be understood. Tens of millions of gallons of untreated sewage are being poured into the Clyde every day.

This is serious to the whole programme of river purification in Scotland. The Clyde River Purification Board has estimated that, even if the strike were settled now, it could take one or two years to get the river back to the state of cleanliness reached before this strike took place. At present, oxygen is being pumped into the River Clyde at the rate of two tons per day, at a cost of between £500 to £600 per day, in order to prevent the river from becoming even more of a health hazard than it is already.

I would ask the House to consider several aspects of this strike, not only the unpleasantness for those who live near to the River Clyde. Think of those people who have worked hard over the last three years trying to clean up one of the most difficult rivers in Scotland and who see, as a result of industrial action, years of work disappearing in a matter of weeks.

I turn to a different area, which does not receive the same public attention as sewage pumped into the Clyde or garbage lying in the streets of Glasgow. I refer to the disruption in Scottish schools. This is dependent on discussions which took place today, and I hope that we shall hear from the Secretary of State tonight.

Here again we have a situation where we shall see official strikes tomorrow in Scottish schools sponsored by the Educational Institute of Scotland, the main teachers' union in Scotland. I do not intend to say much about the merits or demerits of that action. It is not only the official action of those in the Educational Institute of Scotland, but in recent weeks we have seen springing up in East and West Scotland action groups of teachers going on strike, or walking out, with children being sent home from school at short notice with the consequent extensive disruption of education.

What worries me most of all is the example that this sets for children. They are brought up in an atmosphere where industrial action appears to be the rule rather than the exception. We in Scotland must seriously contemplate these happenings and heed the dangers. I certainly deprecate the example that the teachers are setting to the young people in their charge, but at the same time I think we must understand the frustration that teachers feel.

If after the February election the Government had maintained the relativities machinery which the Conservative Government set up, that dispute would have been referred immediately to the relativities machinery, as we promised the teachers before the election, and by this time a conclusion would have been reached and the teachers would have had an award. This is one reason why we have to understand the frustration of teachers, because of the changed policy of the Government away from our policy through the dismantling of the relativities machinery. For that degree of building up the frustration of teachers the Labour Government must bear their burden of responsibility.

The second aspect which is important in understanding the frustration of the teachers in relation to their dispute is simply this: how can one expect the teachers, unless they display an extraordinary degree of forbearance and patience, to wait for months, perhaps until next year, before the Houghton Committee reports, when they see others, such as the lorry drivers, through militant, industrial action, obtaining awards of up to 40 per cent.? This is the kind of frustration which the present rash of industrial disputes in Scotland is generating. Although I deprecate the action which the teachers are taking, I think that the House should at least try to understand what is behind the frustration which they feel.

In relation to the industrial situation in Scotland, I wish to ask the Government a number of questions. First—this is the 64,000 dollar question, which is being asked throughout Great Britain, in the House and, more than anywhere else, in Scotland, ever since 10th October—where is the social contract now? I ask the Government to put themselves in the position of the housewife who over the last few weeks, as a result of the lorry drivers' strike, has found the shelves of her local store depleted or empty. I ask the Government to put themselves in the shoes of the foundry worker who, again because of the action of the lorry drivers, has found himself laid off and temporarily without a job. I ask the Government to put themselves in the position of the Glasgow commuter who has either had to walk to work or has had to beg a lift from a neighbour. I ask the Government to put themselves in the shoes of Glasgow householders who have had rubbish piling up in the streets outside their homes, or, again, to think of those who over the last few years have done so much to improve the state of the River Clyde and now see their work going for nought.

I ask the Secretary of State particularly, tonight, where the 40 per cent. award which the lorry drivers have received fits into the Government's economic strategy and what relationship it bears to the social contract of which the Labour Party made so much during the General Election.

The second thing which worries me and which must be of as great concern to the country as a whole is the question of what has happened to the leadership of the trade unions in Scotland in the last few weeks. As regards the lorry drivers' strike, we had a fiasco last week when the leaders negotiated an agreement only to see that agreement rejected by the strikers themselves.

There was a similar situation yesterday when an agreement was negotiated and accepted by mass meetings of the men. Then, having accepted the agreement, they refused to go back to work until certain further conditions were fulfilled. No wonder the headlines in The Scotsman today proclaimed: "Lorry load of chaos." No wonder we hear James Jack, secretary of the Scottish Trades Union Congress, saying "It is a little bewildering".

It certainly is bewildering because, after this rash of unofficial strikes, in which union leadership appears to have gone by the board, one wonders where the leadership or discipline will come from in future wage negotiations. We have seen such a disappearance of union leadership that I cannot help reflecting that if people such as Jack Jones had shown more restraint a year ago—for political reasons I believe that they showed less restraint than they might have done—there might have been more likelihood of their commanding loyalty and respect from their union members today.

My third question to the Secretary of State is about a fundamental issue which must concern the Government benches as much as our own. What is the rôle of the Conciliation and Arbitration Service in these matters? The Secretary of State for Employment knows that a number of questions have been asked in Scotland on the subject since the settlement of the lorry drivers' dispute. Although I believe that the Conciliation and Arbitration Service has done a good job in that it kept the sides talking throughout the dispute—I do not for one moment denigrate the personal efforts of those who tried to get the dispute settled—I ask the right hon. Gentleman to read and listen to what is being said in Scotland.

One of the results of the settlement in Scotland is that it appears one-sided. It is true that the CAS kept the sides talking. At the same time, the result of the settlement is basically a capitulation to the workers as opposed to the unions that might otherwise have been involved in the dispute. If the social contract means anything—[Interruption.] The Secretary of State should not just sit there and tell me I had better not denigrate the work of the CAS; he must look at both sides of industry. He should consider not only those who win their wage claims—with almost a 100 per cent. win, as in the lorry drivers' dispute—but the other side as well.

I ask the right hon. Gentleman to consider the worry of the employers as expressed in Scottish newspapers this morning. Scottish employers have been forced to give in to strong-arm action by militant groups. I respect the value of an independent agency. What concerns me is whether that independent agency takes any account of the national interest. That is where I come to my criticism of the Government. The Conciliation and Arbitration Service may have been working to get a settlement in the dispute, but where in the entire dispute, or in any other dispute, have we once heard a view from the Government of what kind of level of settlement is right in relation to the social contract? At what stage in the dispute have they said what they would do to resolve that issue?

Now we have to face the consequences. There is the problem of getting Scotland moving again and the problem of container ports at Greenock and Grange-mouth being overwhelmed with containers. There are delays and losses to our exports. These are blows to the Scottish economy which we do not want at this time.

Secondly we have the burdens on the firms which have to carry the cost of the dispute. There is the problem of cash to these firms. Already the leaders of the road haulage industry in Scotland have said that the 40 per cent. award will mean an increase of approximately 25 per cent. on road haulage rates in Scotland. Many firms have said they will not be able to pass on this increase and that they may go to the wall. What is the Government's attitude to them? How will the Government treat their applications to the Price Commission for higher freight charges? These are the questions facing industry in Scotland.

The cost to Scotland is tremendous. I ask the Secretary of State to contemplate this. I hope that he saw the statement from the Scottish Grocers' Federation which, referring to this dispute, said that one of the results would be murderous price increases for the Highlands and Islands. The federation forecast that the increase would be as much as 1p per pound on moving foodstuffs and groceries from central Scotland to the north of Scotland and to the Highlands. That is the kind of cost that Scotland will have to face.

The Scottish National Party refers to the high cost of living in Scotland, but here is one thing for which we in Scotland are to blame. Through this strike we have seen a self-inflicted wound in Scotland, and with the settlement of the strike an enormous increase in the cost of living and in freight charges, the effect of which all in Scotland will have to bear.

My worry is that throughout the Government have stood by without getting involved. The Government never even sent a Minister to see what was happening. It is for that more than anything else that the Government stand condemned in Scotland.

So far I have dealt with the question of the industrial situation in Scotland first and foremost because this is the main concern in the minds of the people of Scotland. I hope that I can have an answer tonight from the Secretary of State to some of the points I have raised and in particular as to how he and the Government propose to deal with the consequences of the strike.

Another topic that has caused us great concern regarding the future of Scotland is the reference in the Gracious Speech to the matter of devolution. I should like to congratulate the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) on his appointment to the Scottish Office and wish him well in the tasks that lie before him.

I wish to make two general points. First, although we always talk in terms of the assembly, I hope that we keep in view the objective of devolution, which is better government, diffusion of power, and more effective democracy. These points were made by the hon. Members for West Stirlingshire (Mr. Canavan) and for Motherwell and Wishaw (Dr. Bray).

Mr. Gordon Wilson

Will the hon. Gentleman give way?

Mr. Buchanan-Smith

I cannot give way. On the points made, I would hope that through devolution we shall also see a revitalisation of the institutions of the United Kingdom. I believe that by making devolution effective we can also improve the functions of the United Kingdom Parliament.

My second point is that an assembly is not the only form of devolution for Scotland or Wales. There are other forms, but I mention only three. First, I should like to see greater devolution in industry, with industrial headquarters in Scotland so that more of the decision making of industry would be in Scotland, which would enormously benefit our country.

Secondly, I should like to see a dispersal of the headquarters of United Kingdom statutory bodies, nationalised industries, perhaps of major parts of United Kingdom Departments. This again means devolution to Scotland of United Kingdom Departments. I say to those who sit on the Scottish National Party benches that, of course, the moment one has separation one loses the advantage of having these United Kingdom Departments within Scotland.

The third area in which devolution is worth while and possible is in relation to the financial control exercised by the Secretary of State. We said during the General Election and beforehand that if the Government were prepared, in advance of the establishment of an assembly, to allocate to Scotland its share of the United Kingdom budget, and if the Secretary of State could be seen to be spending in Scotland on the services there, and making up his own priorities for Scotland, this, in advance of the assembly, would be a very big step in devolution and one which, I hope, he will have the courage to take.

I wish to make three requests on devolution. First, will the Secretary of State tell us the timetable? There is uncertainty in the Queen's Speech about his intentions. For how long will there be consultations? Will there be a detailed White Paper of the proposals in advance of legislation, and when can we expect that White Paper? When does the Secretary of State expect the Bill to be introduced and, following the Bill, what will be the time lag between setting up the mechanics of the assembly and its establishment?

Secondly, what are the implications for government in other spheres in Scotland as a result of the establishment of the assembly? For example, what will be the electoral system? Will there be elections for the United Kingdom Parliament, the assembly, regional councils, district councils and community councils? Does the Secretary of State expect to reform local government once again to meet this situation?

Thirdly, how open are the Secretary of State's mind and that of the Government on the functions that the assembly will handle? Obviously it will handle functions presently handled by the Scottish Office, but will it, as is discussed in the White Paper and in Chapter 16 of the Kilbrandon Report, handle functions in Scotland relating to industry and regional development?

I have spoken on two main areas affecting Scotland on which I hope there will be an answer tonight, on devolution and on industrial problems, because, unless we get Scotland moving again now, any hopes for the future will be dashed.

9.38 p.m.

The Secretary of State for Scotland (Mr. William Ross)

My first task is to congratulate you, Mr. Deputy Speaker, on assuming your present position. It is appropriate that in this part of the debate a Scot should be in the Chair, if only to keep us from one another's throats, and you have had a little experience of that in the Scottish Grand Committee.

I congratulate hon. Members who have taken the plunge so quickly and made their maiden speeches: my hon. Friends the Members for West Stirlingshire (Mr. Canavan), Welwyn and Hatfield (Mrs. Hayman), Nelson and Colne (Mr. Hoyle) and Lichfield and Tamworth (Mr. Grocott) and the hon. Member for Perth and East Perthshire (Mr. Crawford). In the 28 years I have been in the House I have had the opportunity of hearing the maiden speeches of almost everyone else present, and I must be one of the few Members to have done so. We tend to judge the quality of a new intake by the crop of maiden speeches. Those we have heard today are well above standard. I cannot but admire the confidence with which the hon. Members spoke. It does credit to their ability to settle down quickly in the House.

There has been a slight relaxation of the controversy rule since I became a Member. I congratulate my hon. Friend the Member for Nelson and Colne on presuming to take on my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) in a controversy about the EEC and a referendum. The speech of my hon. Friend the Member for West Stirlingshire was unmistakably Scots. He is proud of his country and of his county. There are Scots who are proud to be Scots and also proud to be British. There was no doubt where my hon. Friend stood on these issues.

Probably the most outstanding maiden speech I recollect in all the years I have been in the House was that of a young lady who came from Northern Ireland. But the speech of my hon. Friend the Member for Welwyn and Hatfield today certainly impressed the House. It was impressive in its clarity and its confidence, and she conveyed to the House her clear feelings about the state of affairs in her constituency and the effect of a decision of the management of Hawker-Siddeley in relation to the employment of 5,000 people. She said that the message that she was delivering was the one that her people expected of her. No one could have done it better than she did.

I must also make reference to three other speeches which we heard in the course of the debate, though they could hardly be called "maiden" speeches since they came from hon. Members whom we have seen before and who are back with us. I make special reference to my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray). I am glad that he appreciates that he must never refer to himself as the Member for Motherwell. He is the Member for Motherwell and Wishaw. If he appreciates that, he has already learned something from his sojourn in Scotland. However, he ought not to worry about the fact that he is an Englishman representing a Scottish constituency. One of the most loved characters in this House for a long period was the late Emrys Hughes, a Welshman representing the Scottish constituency of South Ayrshire. What is more, we must never forget that Winston Churchill once represented Dundee.

I hope that our friends in the Scottish National Party will remember that the founder of the Labour Party was a Scotsman but that he never sat for a Scottish constituency. He represented a London constituency and later the Welsh constituency of Merthyr Tydfil. The people of those constituencies are proud of that connection.

The Scottish National Party makes a fundamental mistake about the whole devolution controversy. It was put very well by my hon. Friend the Member for Renfrewshire, West. It is that, taking the country as a whole, the main concern is about the solution to the problems and the causes of the problems. Nationality is not a cause of the weaknesses in the Scottish economy. Similar weaknesses are to be found in England. They exist in the South-West, in the North-East and in Wales.

The Scottish National Party wishes to isolate Scotland and say that it is a depressed nation. I cannot accept that, and I have never thought of myself as anything but a Scot, but I have never had to wear the kilt to demonstrate my Scottishness. I had only to open my mouth. But the more that the Scottish National Party attempts to isolate Scotland's problems, the more it is sidetracked.

Mr. Gordon Wilson

Will the right hon. Gentleman give way?

Mr. Ross

No. I have only 25 minutes in which to answer all the matters which have been raised touching on this one question. I am trying to wrap them up, and I hope to deal with devolution in a moment.

We have heard a number of trailers to forthcoming debates. The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) asked a number of questions which he hoped would be answered by my right hon. Friend the Minister of Agriculture tomorrow. The Leader of the Liberal Party gave some advice to my right hon. Friend the Chancellor of the Exchequer about his forthcoming Budget. I am sure that the right hon. Gentleman will not expect my right hon. Friend to anticipate his Budget. Far less is it likely that I shall endeavour to do so.

My right hon. Friend the Foreign Secretary touched upon the subject of a referendum, and a number of hon. Members took up the point. However, my right hon. Friend will never make a speech on foreign affairs which is subject to less criticism. The reason is to be found in the quality of the speech and in the nature of the debate. Right hon. and hon. Members have ranged over a great many subjects to which it is very difficult to give answers, especially when they relate to debates which are to take place later in the week.

I want to make reference to one matter touched upon by the right hon. Member for Lowestoft (Mr. Prior). He spoke about the dangerous days in which we live and the difficult times ahead of us. We would be foolish to underestimate the difficulties or to lead anyone to believe that we shall be living in easy times. No one can dangle before the people glittering promises and prizes, whether they concern mortgage rates at 9½ per cent. or getting rid of rates from the local authority scene. This is one of the difficulties of the Leader of the Opposition in trying to proclaim how dangerous the days are while at the same time trying to buy votes. I do not think that can be done. This even applies to the Scottish National Party. Their answer to most things is oil and an independent Scotland.

Mr. Gordon Wilson

We shall have it.

Mr. Ross

The hon. Member must appreciate that in the next two years, irrespective of what will be the future of Scotland, we are part of the United Kingdom and we stand or fall by the fate of the United Kingdom.

Mr. Douglas Henderson (Aberdeenshire, East)

Is it in order for the right hon. Gentleman to attack us in this way, Mr. Deputy Speaker?

Mr. Deputy Speaker

That is not a point of order.

Mr. Ross

I give way to the hon. Member.

Mr. Gordon Wilson

Does the right hon. Gentleman not accept that the oil wealth off Scotland's shores would belong to Scotland in the event of that country being self-governing, and that, like Norway, we would be able to borrow in advance on the strength of it to meet the initial requirements of the country?

Mr. Ross

The hon. Member simplifies this issue in relation to the whole economy of the country. He should not think that he could isolate the Scottish economy from the rest of the United Kingdom as simply as that.

I come now to the social contract. The hon. Member for North Angus and Mearns listed the number of unofficial strikes in Scotland, but this is not the first time we have had such strikes. He spoke of the serious situation, and I do not underestimate the gravity of it, but it has improved since last week. He is the last to talk about these problems without offering solutions. Under the Government of which he was a member, Britain had a state of emergency from November until after the General Election the following February. There was the three-day working week.

Mr. Teddy Taylor (Glasgow, Cathcart)

Tell us about the social contract.

Mr. Ross

The hon. Member, too, was an occasional member of that Government. I should welcome from any Conservative Member who has spoken so far any indication of his party's alternative policies.

Mr. Teddy Taylor

Will the Secretary of State give way?

Mr. Ross

I am sorry I do not have time.

Mr. Prior

The right hon. Gentleman attacked my hon. Friend.

Mr. Ross

I did not attack the hon. Member. I said he was a member of the Government which brought us to a state of emergency and the three-day working week with people laid off in Scotland.

Mr. Teddy Taylor

Tell us your solutions—you won the election.

Mr. Ross

We are moving from a statutory policy to one which will be based upon the appreciation of everyone in the country of the disciplines that are required of them. Guidelines have been laid down by the TUC and accepted by the leadership of the unions. Do the Conservatives think that this new attitude and state can be built up overnight in view of the difficulties created by the prolongation of the statutory policies, the anomalies and grievances that these caused?

Mr. Cyril Smith (Rochdale)

You will come back to them.

Mr. Ross

That is one of the difficulties. I have heard teachers and other groups of workers saying that they must get everything they can because statutory policies will be reintroduced. That approach does not help in building up the right attitude and mood within the country to accept the need for reasonable restraint based upon social justice and the kind of national unity which is enshrined within the Queen's Speech. We cannot move to it right away.

The hon. Gentleman said that the Government should have intervened to resolve one or more of the industrial disputes in Scotland. The purpose and nature of such intervention has never been made clear. It is the easiest thing in the world for people to send a telegram or write a letter. But we have established a conciliation and arbitration service, which is working day and night to bring the parties together and reach agreement. It would be sheer folly for Ministers to intervene and make the task of the service much more difficult. In the road haulage dispute both the employers and the trade union side said that they did not want intervention. It would be folly for a Government to intervene in such a situation.

The Government are committed to the view that in our democratic society there must be effective and acceptable means of helping to avoid and resolve differences that inevitably arise in the collective bargaining process. We are working towards that end. The hon. Gentleman said that he expects certain things in relation to the social contract and wages. We can exhort people to restrain their wages, but their attitude is determined by a sense of fairness throughout the community. So long as some people are getting away with it, are not shouldering the burdens that they could carry, we shall not have that spirit that will lead to co-operation in sensible policies.

It is not a party that will fall if the social contract fails. The damage will be to the country and its future. My hon. Friend the Member for Fife, Central (Mr. Hamilton) was right when he said that the responsibility rests upon us all. It rests upon us in this House, upon the opinion formers. If we feel that we require a co-operative effort, we should be working towards it and not making speeches asking what the trade union leaders are doing about it. The trade union leaders in Scotland are doing every-things they can to get men back to work, to get men negotiating. We should do everything in our Dower to encourage them along those lines, rather than deprecate them in the way the hon. Gentleman did.

Mr. Teddy Taylor


Mr. Ross

I shall not give way. I have only five minutes left.

The hon. Gentleman asked me about teachers. I had a talk this morning with members of the management side of the negotiating sub-committee of the Scottish Teachers' Salaries Committee. I am represented on the management side, and the local government members of the committee asked to see me so that the management side as a whole would be entirely clear about the response it should give to the claim of the teachers for a 10 per cent. interim increase in pay pending the receipt of the Houghton Report.

This afternoon there was a meeting of the negotiating sub-committee of the salaries committee, both the management and teachers' side being present. The management side indicated that it agreed in principle to an interim payment being made when the Houghton Report was available, the amount to be determined then with retrospection to 24th May.

I understand that the management side indicated that it considered the teachers' claim for an immediate 10 per cent. sympathetically. Inevitably, however, it had to take account of the fact that the Houghton Committee was carrying out a comprehensive review of teachers' pay. If the report of the committee were likely to be long delayed, and if during the period between the appointment of the committee and publication of its report teachers' salaries were likely to be substantially eroded, that would certainly be an argument for making an interim payment now. Frankly, neither of those conditions applies. The Houghton Committee as recently as 10th October informed all interested parties that it "firmly hoped" to report by the end of the year. Since the committee was appointed, teachers have had five payments as a result of the operation of the threshold agreement.

In the circumstances the management side did not feel it right to take any further action. Any interim payment now might cut across the recommendations of the Houghton Committee. But the management side recognised that it was possible on receipt of the committee's report, which will then be sent immediately to the Scottish Teachers' Salaries Committee, that negotiations on points of detail might be required. That was why it indicated that it was agreeable in principle to making an interim payment as soon as the report was available. According to what has been said by the Houghton Committee on 10th October, the report should be available before the end of the year.

I regret as much as anyone else that the EIS has taken a decision in the absence of agreement on an interim payment and that the members of the institute will be on a one-day strike tomorrow. Such action will harm the children for whose education we are all responsible. I do not think that that is a constructive way of dealing with problems of pay. I very much hope that the teachers, following their initial regret that the interim payment has not been made, will realise the importance of the management side's undertaking today about a payment being made as soon as the report is available.

We have already recognised that teachers have fallen behind. I do not agree with the argument that has been put forward on relativities. All that is hypothetical. As I say, we recognised that they have fallen behind, and, with the agreement of everyone concerned, we established the Houghton Committee and made the promise about retrospection. There is no doubt that such payments will be made. To create an upheaval when an interim payment will be made before the end of the year is to be regretted.

I think that the public were glad that the teachers' position was being examined. When we made our decision I believe that we had the support of the public. I urge the teachers to take no action now that might lead the public to be less sympathetic to their case.

There are within the Queen's Speech matters relating to oil, the NEB and the Scottish Development Agency that are relevant to the improved and the improving position of Scotland. Devolution is not the full answer. However, we are moving as quickly as we can. The fact that we have set up the special unit and appointed another Minister to assist me on devolution matters is an indication that we are doing so. We are getting ready to prepare the Bill.

Do not let anyone under-estimate the complexities of the problems. Let them consider what has happened in the past. For example, let them consider the mistakes that were made when the Secretary for Scotland was set up in 1885. Within a year absolute chaos was discovered. Certain matters had been overlooked and yet another Bill had to be introduced. We want to deal with the matter correctly and we wish to make our preparation now. I hope to see the Bill in the next Session and to be able to get it on the statute book long before the next General Election for the future glory of Scotland. There is no reason for this Parliament not lasting for four to four and a half years. The relevance of the Queen's Speech to Scotland is pre-eminent, and I trust that that will be proved as the months go by.

Debate adjourned.—[Miss Boothroyd]

Debate to be resumed tomorrow.

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