HC Deb 24 November 1976 vol 921 cc9-152


2.50 p.m.

Mr. J. P. W. Mallalieu (Huddersfield, East)

I beg to move, That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament. The first time I heard a fellow Member move the Address was 31 years ago. It is a sobering thought that my hon. Friend the Member for Gloucestershire, West (Mr. Watkinson), who is to second the motion this afternoon, was 4½ years old at the time and that some hon. Members were not even born. I can tell them that they missed an occasion.

The European war was just over. There was a feeling of relief and of hope, and it was mid-summer. I can remember how the sun shafted down in another place on to the brilliantly polished buttons of the recently demobbed soldier who was moving the Address. It also shone on the items in the King's Speech, because so many of the proposals in that speech were proposals for which many of us had been fighting and arguing, and which we had advocated for nearly half a century. At long last we had a Government in power, with an overwhelming majority, who were about to carry them through.

I remember, too, my own special pleasure that at last I was to be the representative, in this great House, of the county borough of Huddersfield. I say "at last", because by 1945 I had been the prospective candidate there for nine years without a fight, and I had known this House and Huddersfield virtually all my life.

Huddersfield was, and indeed is, a most remarkable place. It was remarkable in one respect-that virtually throughout the whole of its life as a county borough it had been governed by the Liberal Party. The views of those Liberal politicians were somewhat to the right of Louis XIV. But as business men they knew a good thing when they saw it, and when the chance came they took into public ownership almost all the land on which Huddersfield stood—hence Huddersfield, the town that bought itself.

It is not really so much a town as a collection of villages, each on a spur of the Pennines, looking down into a commercial and industrial centre along the valley of the Colne. In that centre we had such a wide spread of industry that even in the bad days of the 1920s and 1930s we escaped the worst ravages of unemployment. Even today, bad though our unemployment figures are, they are well below the national average.

We produce some of the finest worsted cloth the world has ever known. We produce a wide range of engineering products. We produce a lot of dyes and chemicals. Up to the 1950s, we produced the most expensive smog that it has been my misfortune to smell. I am delighted to say that that has now been more or less abolished, so that it is possible to stand in any street in the centre and actually see the green fields and the purple moorlands stretching away on either side.

Having got reasonably clear air, our problem now is to get reasonably clean water, and to get it without putting half our industry out of action. We shall need some help on that matter in due course.

There are two other features that I feel I must mention about Huddersfield. One is our Choral Society, which is really famous throughout the whole world. The other is our sport. I remember that one of the particuar pleasures I felt in 1945, as a representative of Huddersfield in this House, was that among my constituents I could number Percy Holmes, Wilfred Rhodes, and that first gentleman of cricket, George Herbert Hirst. It is no secret that in those days the prowess of our football team was such that Wembley Stadium was better known as Little Huddersfield. Unhappily, that great trio of characters is dead, Huddersfield Town is in the Fourth Division, and I am not feeling too good myself.

I feel the same "then and now" contrast between the King's Speech of 1945 and the Queen's Speech which we are beginning to consider this afternoon. Two of the central issues in the present Speech concern direct elections to the European Parliament and devolution. I do not feel that these matters will excite great exuberance on any side of this many-sided House. I cannot see much marching into the Lobbies to the strains of "There'll always be an England", "Land of my Fathers" or "Glasgow belongs to them". But I am delighted—although I am very sorry indeed for the occasion which has necessitated it—that we are to have the Aircraft and Shipbuilding Industries Bill back in its entirety. My one worry about the Bill arises from the question how much of those industries will be in reasonable shape when we have finished playing around and finally have the Bill on the statute book.

For the rest, I think that the Bills proposed in the Queen's Speech are all sensible, and, thank goodness, there are not too many of them—unless the penultimate sentence in the Queen's Speech is more sinister than I suspect it to be. I hope that this comparative freedom from legislation will allow Government Departments to get on with a bit of administration.

In particular, I want the Department of Trade to get cracking about some of the imports of cheap textiles. When a well-made suit of good quality cloth arrives from abroad and retails in our shops at £5, it genuinely does not take a Sherlock Holmes to deduce that there is some evidence of dumping. Yet for the past 12 months the Department has been faffing around on this subject and has produced no action and no solution. I hope that we shall be able to correct it in the course of the next few months.

I do not believe that you, Mr. Speaker, think that we in this House serve the best interests of the country when we behave like illiterate and ill-mannered schoolchildren, as we did so often in the last Session, when we try to rake muck over our political opponents, and when we spend time attacking that section of our fellow citizens which is least able to defend itself.

What we need to do now, and what I believe we want to do, is to concentrate on the very grave problems facing the country—the problems of inflation, unemployment, our changed trade position, our debts and those persistent menaces to our financial stability, the sterling balances. In tackling these problems, which are serious ones, I hope that we shall remember that, as a result of the discovery of oil and gas under the seas and of coal in the new seams at Selby, we are acquiring better sources of power than any other country in Western Europe. I hope that those sources of power will be used not just for the benefit of Yorkshire and not just for the benefit of Scotland, but for the benefit for all the people of these islands.

Allied to those sources of power we still have, thank God, our inventiveness, which has always been outstanding. If we can make sure by really intelligent investment that our capacity to develop and to produce matches our inventiveness, for one, will have more of the hopes of 1945 than I have of the fears of 1976 for the future welfare of our country. In this gigantic job, the Government by their action and we in Parliament by our guidance have a major role to play. I hope that we shall get on with it.

3.2 p.m.

Mr. John Watkinson (Gloucestershire, West)

It is a great pleasure for me to be called after my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) to second the motion which he moved so ably. This must be one of those occasions when I do not fear any reference to the age gap which he mentioned. Just as I was feeling the hoary hand of middle age on my shoulder, it was delightful to be reminded how young one actually is.

I should like to take the House away from industrial Yorkshire down to the rolling acres of Gloucestershire, to that area between the Wye and the Severn where my constituency is situated. The people of that area are a canny and intelligent people. Over the years, consistently they have returned a Labour Member to this House. But I go further and say that the people of the Forest are brave, courageous and perhaps a little reckless. How else can I account for the fact that one of our prettiest girls chose to marry my right hon. Friend the Chancellor of the Exchequer?

Steeped in history, the Forest has some strange places with which to beguile the visitor. I can think of two. One of them is known as Soloman's Tump. The other is a dark and gloomy place known as the Wilderness. I spend most of my time advising and dispensing wisdom in and around Soloman's Tump. I am glad to say that my Tory opponent finds his natural habitat in the Wilderness, and long may he remain there.

We have nurtured a fair number of characters amongst our Members of Parliament. One in particular whom I call to mind is Sir Charles Dilke. Sir Charles sat for Chelsea before coming down to the Forest. As hon. Members will know, he rose in the political world of the late nineteenth century like a meteor, only to find his career stultified by allegations of amazing amorous adventures. I take comfort from the fact that what swinging Chelsea and the Kings Road would not put up with, the warm-hearted people of the Forest were prepared to forgive and forget.

Another of my predecessors was Philips Price. He was a regular visitor to Russia and to Eastern Europe, a friend of the supporters of Rosa Luxembourg and certainly a gentleman who would have found a high place on some of the hysterical lists which we see produced before us these days. Yet that self-same gentleman managed to combine his political beliefs with owning a country estate, riding to hounds and glorifying in the title "SquirePrice"—a combination of such abilities so complex that I think the only person who could have explained it to me would have been the late Richard Crossman.

Historically, the Forest of Dean constituency is based on timber and on coal. A Royal forest, it has been presided over for centuries by the Court of Verderers, which still exists minus some of its more punitive powers which in days gone by enabled it to nail the skins of offenders to the trees of the Forest. Those trees, we are told, provided the oak for the fleet which sailed against the Armada, and our coal helped to fuel the Industrial Revolution.

But now there are no longer any pits in the Forest, although there are still men living there who suffer from pneumoconiosis and who bear the scars on their bodies and in their lungs. When I meet these men, I am reminded of what George Orwell wrote in his essay "Going Down the Mine": In the metabolism of the Western world the coalminer is second in importance only to the man who ploughs the soil. I am glad that this House has felt itself able to give some relief to those families who suffer daily on the rack of pneumoconiosis. But I note, too, the importance which Orwell attached to agriculture and, representing an agricultural seat, as I do, I endorse that.

But I represent a forest seat as well. We have 26,000 acres of forest in West Gloucestershire. It was the dream of Keir Hardie that we should have 10 million acres in this country with forestry on them. We are still a long way from that goal. But I support that cause enthusiastically, though perhaps not quite as enthusiastically as Lord Rothschild, who made the bizarre suggestion that every Englishman should have at least one acre of rough woodland at the bottom of his garden.

We preserve our ancient traditions in the Forest, including the right for the free miners to dig their coal and to run their sheep. But we have moved forward as well into the technological age. We have in my constituency the most important copying machine industry in Europe. We have important industries connected with the aircraft industry and with textiles. In common with the situation of many hon. Members, the spectre of unemployment hangs over my constituency, although I take comfort from the fact that the figures fell marginally over the past month.

I also have one firm in my constituency which must represent the only opposition to the simply staggering achievement of my right hon. Friend the Minister of State for Sport and Recreation in his other rôle as drought Minister. The firm in question had the most marvellous year in its history supplying soft drinks to the nation. It could not meet the huge demand made upon it this summer.

I welcome many aspects of this Gracious Speech. I welcome especially the Government's determination to deal with the laws of conspiracy. As a practising barrister, I know the temptation that there was for prosecutions to throw in a conspiracy charge at the end of an indictment in the hope of exacting a possible plea. As we know from the notorious Shrewsbury trial, the penalties for conspiracy are at large. I hope that the Government and the Bill that they bring forward will make the penalty for conspiracy consistent with that for the substantive offence.

I welcome the proposals on devolution. I think we can say that the wheel of Empire has turned full circle and now we are in the position of actually debating the decolonisation of our own islands. I hope that my right hon. Friend the Leader of the House, whom I know to be a reasonable man, will cast his mind back to the heady days of the EEC referendum and consider applying that precedent in present circumstances.

I note the determination of the Government to reintroduce the Aircraft and Shipbuilding Industries Bill. I acknowledge and accept the resolution which the Government have shown, and I hope that they will show the same resolution in dealing with the House of Lords, which must be considered by all as a most unrepresentative and anachronistic Chamber.

These are times when the rôle of Cassandra is an attractive proposition. Prophecies of doom and gloom are everywhere. But was it ever otherwise? In 1832 Gladstone wrote to his father saying that, although he regarded the collapse of the social order as imminent and inevitable, nevertheless he was entering politics. The social order did not collapse in 1832 and it will not do so in 1976. We must distinguish between difficulty and disaster. It was Disraeli who made a distinction between misfortune and calamity when he said that it would be a misfortune if Mr. Gladstone fell into the Thames but that it would be a calamity indeed if anyone were to try to pull him out.

This is a year when we shall test our democratic institutions and our democratic will, both constitutionally and industrially. It is a year when we must resolve to do effective battle with the economic problems which beset us. But come this time next year, I believe that there will be two Labour Members proposing the motion moved today by my hon. Friend the Member for Huddersfield, East.

3.12 p.m.

Mrs. Margaret Thatcher (Finchley)

By long-standing custom it is the privilege of the Leader of the Opposition to be the first to congratulate the mover and the seconder of the motion on their admirable speeches. I carry out this custom today with very great pleasure. I have heard many speeches of movers and seconders of this motion, and each year they have lived up to the traditions and standards of those of previous years. This year was no exception. The hon. Member for Huddersfield, East (Mr. Mallalieu) took us back to the time when he first came into this House, which was, with respect, long before I came here.

When I first came here in 1959 I had an annual family duty to perform—to be present at the Oxford-Cambridge Varsity match, which was usually held on the second Tuesday in December. I asked how this could be arranged, and I was advised that the best thing was to try to pair with the hon. Member for Huddersfield, East. That pair was duly effected on several occasions, but in those days the Leader of the Opposition was very co-operative in the numbers of pairs allowed.

I wonder whether the hon. Gentleman was chosen specially to move the Address on this occasion because of his connection with the University of Chicago. I thought that the Chancellor of the Exchequer might need its support in some of the difficulties that we are encountering, particularly as this year's particularly distinguished Nobel Prize winner is a member of that university and specialises in the subject of money supply. However, the hon. Member for Huddersfield, East was also a member of the University of Oxford, as was the seconder, and I was, too. However, I think it is politic in days like these to wear the colours of Cambridge University.

The seconder of the motion referred to things that Chelsea would not tolerate. I should inform him that I live just off the King's Road, and I am very glad that swinging Chelsea would not put up with what he took over in Gloucestershire, West. It is better that way. The mover and seconder could both be said to have seats which are marginal. One has a majority of only 400; the other a mere 8,000. I note that both of them somehow voted in favour of a Bill introduced last Session to abolish the House of Lords. Happily, this House refused permission for that Bill to be introduced.

It is the custom for the Leader of the Opposition to start off the debate with a very brief speech, leaving the main speech to the Prime Minister. Naturally I studied the anniversaries which fell this week and I found two rather interesting ones. There is a lesson for us, because on 26th November 1964 the then Chancellor, who is now Prime Minister, announced that Britain had borrowed $3 billion to save the pound. He also pointed out that he had applied to the IMF and was using part of that loan to repay other borrowings. The second anniversary which falls this week is 28th November 1919, when Lady Astor was elected the first woman MP. Clearly she started something which has not yet finished.

I disagree very firmly with one thing that was stated by the mover of the Address. He did not think that there was very much legislation in the Gracious Speech. I think that there is a great deal, particularly when one considers the amount of time which some of it will take. It is easy to put in a short paragraph on devolution, but we all know that it will take a great deal of time in this House. I understand that the Bill will be presented very shortly and that at least three or four days will be devoted to the debate on Second Reading. It is better that most of my comments should be made then when we know the Government's full proposals.

I wish to confine my comments to three points. The coming year will be dominated by economic circumstances and in particular by the deficit we now face. I notice that the longest paragraph in the Gracious Speech is devoted to the economic future of this country, and that investment has the highest priority. Whichever way we look at it, it is not legislation which dominates people's lives but the success with which we manage to cope with the deficit, with public expenditure and taxation. I believe that the Chancellor is learning the lesson that he who goes a-borrowing will soon go a-sorrowing". One of the conditions on which he applied for the standby credit is that if we are not able to repay the loan on the due date, he will be prepared to go to the IMF to secure money to do so. In other words, we have to draft a Letter of Intent unless we are able to repay the loan by other moneys. The Chancellor said at the Labour Party Conference that he was going to negotiate with the IMF on the basis of his existing policies and that there would be no changes. But he has had to change his financial policies before, and it looks as if he will have to change them again if he is to secure that loan.

He also pointed out in the House that the British people would prefer to maintain the highest possible standard of living at the expense of borrowing at a very low rate over a reasonable period rather than to incur a sudden and dramatic fall in living standards which would be involved if we did not succeed in arranging the loan."—[Official Report, 11th November 1976; Vol. 919, c. 639.] When he said that, a number of us were rather shocked, because we felt that his only policy was perpetual borrowing and not one of attempting so to order our financial affairs that the Government could easily live within their means. It seemed to me that he was taking up, if I may explain it thus without causing offence, an "Irish" position. He seemed to be saying "Let us all be happy and live within our means, even if we have to borrow the money to do it". That was the Irishism he seemed to be expressing.

That policy will not do if the country is ever to be successful in the world again. I do not mean being successful only at home. The first foundation of a successful foreign policy is a successful home policy. It is a great sorrow to many of us that whenever our great statesmen go abroad now the main news when they come back seems to be the question whether other nations will support us in our application for a loan.

It will not be easy with the IMF this time. Far too many people want to borrow from the limited coffers of the IMF. Even the IMF does not have unlimited resources, and many nations wish to draw upon them. We believe at the moment that Britain has lost credibility and that the sooner we regain it by sound financial policies the better. During the time that the Chancellor has held that portfolio he has continued to talk big, but his actions have made Britain look very small. The Chancellor has always taken the view, as have many Labour Members, that public expenditure and higher public expenditure is, per se, a good thing. I think they probably never ask the right question, which is, how is that public expenditure to be financed?

As I walked around the streets of Walsall and Workington during the by-elections the main thing which people said to me was that they did not want to go on paying their present level of tax, let alone pay even more tax to finance the level of public expenditure which the Government have assumed. Ask them which they would prefer—a bigger social wage, which they will have to pay for, or more take-home pay. There will be no doubt about the answer. They will go for greater take-home pay.

Mr. Dennis Skinner (Bolsover)

Will the right hon. Lady admit that some of the borrowing and some of the financing that took place in the past two and a half years has been also to assist in the finaning of the private sector? Does she also agree that about £300 million was used to bail out Burmah Oil, a private company with which her husband had more than a passing interest? The right hon. Lady, in considering public expenditure and the borrowing requirement, should consider all these factors, not just whether the social wage is large enough for working-class people.

Mrs. Thatcher

The hon. Member must know that one of the reasons why money is not available for the private sector is that the Government are prepared to pay so highly for it, and that the private sector simply cannot compete with them and pay 14¾ or 15 per cent. in order to finance its operations. If the Government were not borrowing so much, the interest rates would be a lot lower. If interest rates were a lot lower it would be a good thing for British industry. It would be better for the wealth-creating sector of the economy and for the many people who want to realise the ambition of purchasing their own houses.

I shall now leave the question of investment, because we shall be debating the economy later. The Prime Minister and some of his Ministers and Back-Benchers pay lip service to the mixed economy, but the Government constantly produce programmes which make it less and less mixed. The balance leans far too much towards the public sector and far too little towards the wealth-creating private sector. This Gracious Speech is no exception. We still suffer from too few producers and too many people who are dependent upon those producers.

I notice that the Aircraft and Shipbuilding Industries Bill is to be reintroduced. No doubt that measure will give my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) a wealth of intellectual exercise when once it comes in. I note that one noble Lord who served for many years in this House—Lord Shinwell—made a brilliant speech about the Bill before it was finally despatched in the other place. That speech is one that we would all do well to read. With this Gracious Speech the mixed economy becomes less mixed, by virtue of the nationalisation of aircraft and shipbuilding.

My right hon. and hon. Friends and I will also vote against any further measures to increase the powers of direct labour forces. There are already many of them which are extravagant. They cause the ratepayer to pay increased rates and cause increased public expenditure by local authorities. While many ratepayers are already suffering an unacceptable shock through the size of their rate bills it seems absurd to introduce such a measure. Another measure is that concerned with water authorities. We are not certain whether the Government intend to nationalise the water companies.

The final aspect of the mixed economy that I want to mention involves the Bill which shows that although the Government pay lip service to a healthy private sector they do not hesitate to take £1,000 million out of it by way of the payroll levy to which the Gracious Speech refers.

If we are to continue with a politically pluralistic society we must continue to have an economically pluralistic society. We cannot say that we believe in having two or more political parties in the democratic system yet not accept that there must be two or more economic policies. So long as the other party persists with its present policies, some of which are irreversible, it is showing a rejection of its alleged belief in a pluralistic society.

Mr. Eric S. Heffer (Liverpool, Walton)

The right hon. Lady argues that one must have a free enterprise capitalist system in order to have democracy. Why is it that there is no democracy in Chile, and that there was no democracy for 50 years in Spain or for 70 or so years in Portugal? Is it logical to suggest that in those countries, which are free enterprise countries, there could not be a dictatorship?

Mrs. Thatcher

A free enterprise system is a necessary but not a sufficient condition. There is only one economic system in the world, and that is capitalism. The difference lies in whether the capital is in the hands of the State or whether the greater part of it is in the hands of people outside of State control. Where there is State capitalism there will never be political freedom. Where there is private capitalism there may not be political freedom, but there cannot be political freedom without it. I am grateful to the hon. Member for allowing me to make that clear.

Mr. Heffer

That is absolute nonsense.

Mrs. Thatcher

The third point that I wish to make is that many people are worried that the individual no longer seems to count. He seems to count only if he is a member of a large group. If he is not, it seems to me that his voice is not heard or considered. I sometimes wonder whether we are moving to a situation in which only those who belong to large groups have rights. I suggest that the Government should ponder upon that very carefully indeed. The more money that is taken away from the citizen to finance decisions taken on his behalf to produce things that he does not necessarily like, the less he and his decisions count.

At the end of the Gracious Speech there is a small phrase which refers to promoting both justice and equality for all the people of the United Kingdom. The word "equality" is often used, but. wisely, rarely defined. The moment one tries to define it, one gets into great difficulty. For example, it cannot mean equality of incomes or earnings; otherwise, we would not need more than one union. Indeed, we would not need one union. If we are to have opportunity, we cannot have equality, because the two are opposite. We may have equality of opportunity, but if the only opportunity is to be equal, it is not opportunity.

It is interesting that the Socialists have proceeded by not defining this term. They did not define equality, or the social contract. Therefore, people must judge by performance.

What the Government have left out of that phrase at the end of the Gracious Speech is any reference to liberty. That is the important thing.

I was interested in an article written by Daniel Moynihan in Commentary of March 1975. It was a very long article, about world society and the effect of British Socialism on it. In that article Mr. Moynihan studied countries which had put equality before liberty as an objective. At the end he came to this conclusion: And equality, what of it? …what is the record? The record was stated most succinctly by an Israeli socialist … that those nations which have put liberty ahead of equality have ended up doing better by equality than those with the reverse priority". The Prime Minister has chosen to put equality first. We suggest that he should choose to put liberty first. Then he will end up with liberty and fewer inequalities than if he puts equality first and wholly neglects liberty.

The view that we shall take on the Gracious Speech will be that our purpose in Opposition will be, first, to further those policies which lead to confidence in our economic and industrial future; secondly, to revitalise the wealth-creating sections of the mixed economy; thirdly, to ensure that the individual counts in society; and, fourthly, to try to see that constitutional changes are carried out in accordance with the traditions and achievements of the United Kingdom as a whole.

For these things we have fought, and for these things we shall fight on.

3.33 p.m.

The Prime Minister (Mr. James Callaghan)

I begin by endorsing what the Leader of the Opposition said in tribute to the mover and seconder of the Address on the Gracious Speech.

I regret that I am the first speaker who, alas, did not study at Oxford University, but, by way of compensation in late life, I was made a Doctor of Laws of the University of Wales.

I should like particularly to congratulate my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu), who is one of the select handful on the two sides of the House—we regard ourselves as a select handful—who entered the House in 1945 and who have represented the same constituencies ever since. Indeed, as he said, both he and my hon. Friend the Member for Gloucestershire, West (Mr. Watkinson) between them span 30 years since their entry.

My hon. Friend the Member for Huddersfield, East gave us yet another reminder of what those of us who have known him for so long recognise—namely, his lightness of touch, his sense of humour and the delicacy with which he can skirt round a controversial topic, which he combines and always has combined with a great firmness of principle and a passion which has not mellowed with the years.

My hon. Friend can be rough. I recall, if the House will permit a personal reminiscence, when he was rejoicing in all the glory of one ring and, as an ordinary seaman, I forgot to put the sugar in his tea. That night—the House will believe it or not—when I was standing in line to go ashore on the liberty boat, he had the impertinence to stop me from going ashore because, he claimed, my oilskins were not properly marked—and they were. My hon. Friend has held office as a member of the Board of Admiralty—I notice that he is wearing his Board of Admiralty tie today—and in other Ministries.

My hon. Friend has that rarity of being a muscular intellectual. I believe that he is the only person who has combined being President of the Oxford Union with getting a blue at rugby. My hon. Friend has represented Huddersfield, East with distinction and faithfulness. I positively refuse to draw comparisons between the merits, on the one hand, of George Hirst and, on the other hand, of Walter Hammond.

My hon. Friend the Member for Gloucestershire, West also has a distinctive sporting prowess. I was impressed—as I am sure the whole House will be until it hears the end of the story—when I heard that he was the only former world champion at his sport who was a Member of this House. I am sure that the House will be impressed until it hears that the game that he played was the esoteric game of rugby fives, which, in any case, is played only in England. However, he was all-England champion for a number of years. I congratulate him on that and on his thoughtful speech.

My hon. Friend has played an active part in the Council of Europe and as a member of the Public Accounts Committee since he entered the House. Like the right hon. Lady, I was not sure how to take his reference to the fact that he took comfort in that the amorous pecadilloes of Charles Dilke were, at any rate, tolerated in Gloucestershire, West. I am sure that no personal reference was intended.

I should like to take the opportunity of thanking my hon. Friends the Members for Huddersfield, East and Gloucestershire, West for the manner in which they moved the reply to the Gracious Speech.

I should also like to take the opportunity of saying something about the textile industry. My hon. Friend the Member for Huddersfield, East reminded us that his constituency lies in the centre of one of the largest wool textile industries in the world and one of the most renowned, with a history of excellent labour relations.

Last year that industry met 90 per cent. of home demand and exported one-third of its output to more than 150 overseas markets. It has been adversely affected by the world-wide depression in textiles, with mill closures, but the industry has made full use of the Industry Act scheme. Altogether, nearly £80 million has been spent on investment in new plant, machinery and buildings fertilised by the Industry Act scheme.

I invite the House to note that that was public expenditure. The industry is now substantially rationalised and re-equipped and is well placed to exploit home trade revival and exports. We hope shortly to announce further measures of Industry Act assistance.

Our policy is for a viable, profitable and internationally competitive textile and clothing industry because it employs 840,000 people. Clearly it is one of the largest employers of labour in this country. It is therefore vital to preserve the health of that industry.

I have taken note of what was said by my hon. Friend the Member for Huddersfield, East about the textile industry. We recognise the difficulties through which it is going. But its export performance remains encouraging. There has been a steady improvement during the first 10 months of this year. Cheap imports remain a problem, although I remind my hon. Friend and others in the textile industry that it has the most comprehensive programme of restraints ever.

There are unsatisfactory features, which the Government are examining, of the operation of the Multi-Fibre Arrangement which is made under GATT and which expires at the end of 1977. During the next 12 months we shall be consulting the industry and unions about modifications which we believe are necessary in any new arrangement.

We have come to the preliminary conclusion that changes are needed in the Multi-Fibre Arrangement. We shall have to convince others, because this will be a matter for negotiation. However, we intend to maintain substantial contact with the industry during those negotiations. I want my hon. Friend and textile Members generally to take back to their constituencies the fact that we recognise these unsatisfactory features. We shall do what we can in the meantime, before the ending of the Multi-Fibre Arrangement and the new agreement, which I trust will take its place, to make their position more tolerable.

Mr. Dan Jones (Burnley)

When deliberating on the textile industry will the Prime Minister send the issue to an appropriate Select Committee so that in turn the Government may have the advice of the Select Committee with that of the administration officials?

The Prime Minister

As far as the Government are concerned, I can say now that if the House wished to make its own investigations into this matter, it would be a matter for the House and an appropriate Committee, and the Government would be glad to consider what advice might be proffered.

We have begun a detailed study of the matter, which has gone quite a long way. I hope that we shall be able to begin discussions with the Community, which will be very important in this mat- ter, very shortly. However, this is a matter for the House, and certainly the Government—subject to what my right hon. Friend the Leader of the House says—will not resist any proposal of that sort. I hope that my right hon. Friend will not rebuke me when we leave the Chamber.

The Gracious Speech begins very properly with a reference to the 25th anniversary of Her Majesty's accession to the Throne, which is to be celebrated next year. This will give the nation the opportunity to express its thanks for a quarter of a century of devotion and public duty—[HON. MEMBERS: "Hear, hear."] —known best, perhaps, to those who have had the opportunity of serving Her Majesty closest.

Our people will wish to join in the celebrations. Many events are being prepared in all parts of the country. Her Majesty will also travel to various parts of the Commonwealth, where preparations are also being made. It is intended that both Houses of Parliament should present Addresses to Her Majesty in Westminster Hall. For the convenience of the House, perhaps I may announce now that these presentations will be made on 4th May next.

I should like now to comment on our domestic arrangements in Parliament. Because of the later start, the parliamentary year will be fully occupied with legislation and essential business. There are 29 Supply Days, which will be provided, as usual, by the Standing Orders of the House and be allocated to the Opposition. It will be for the official Opposition to decide whether to allocate any days to the other parties and which days. In addition, 20 Fridays will be allocated to private Members for Bills and motions, and four half-days for motions in addition. The Leader of the House will shortly be bringing forward motions to deal with these matters.

There have been a number of improvements to the service of Members in recent years in the provision of information. The Government have decided to make a modest change—I claim no more than that—further to assist hon. Members in the House.

The practice of publishing Green Papers will continue, for appropriate subjects, but in addition the question has been raised about what other information can be made available. When the Government make major policy studies, it will be our policy in future to publish as much as possible of the factual and analytical material which is used as the background to these studies. This will include material used in the programme analysis reviews, unless—and I must make the condition—there is some good reason, of which I fear we must be the judge, to the contrary.

I am trying to help. I assure the House that we shall not endeavour to pull back the information. We shall look at every case to see whether we can make it available. The cost to public funds is a factor here, and we should like to keep that cost to a minimum. Therefore, arrangements will not be of a luxurious nature, but we shall make available what information we can to provide a basis for better informed public debate and analysis of ministerial policy conclusions.

The right hon. Lady the Leader of the Opposition referred to the Aircraft and Shipbuilding Industries Bill. Before I come to new legislation mentioned in the Gracious Speech, I must refer to this piece of business, which was left in an unacceptable state in the Session that we have just ended. Let me announce straight away that the Aircraft and Shipbuilding Industries Bill will this week be reintroduced into the House of Commons.

I note what the right hon. Lady says about providing the hon. Member for Tiverton (Mr. Maxwell-Hyslop) with a great deal of intellectual exercise. This is not the way in which it is seen on the Tyne or the Wear, or on Clydeside. It is not an intellectual exercise there. It is a question of how the futures of these industries and jobs are to be preserved and whether they are, indeed, to have a viable future at all. I hope that when the right hon. Lady is speaking to her hon. Friend she will convey to him the fact that this is not the Oxford University Debating Society but a House of Commons which should reach conclusions in order that these industries should know where their future lies.

It is true that the House of Commons reached conclusions. Throughout the debates on the Bill, many hours of discussion, on no single occasion were the Government defeated in this House. It is an unelected, inbuilt anti-Labour majority in another place which has arrogated to itself the right to refuse to accept the repeated decision of this House. We now invite Parliament to put the matter right again.

Mr. Peter Tapsell (Horncastle)

Will the Prime Minister give way?

The Prime Minister

Before giving way, I should like to congratulate the hon. Gentleman on his new-found accession to the Opposition Front Bench. I wonder why he is sitting where he is.

Mr. Tapsell

I thank the Prime Minister for his graceful remark. Our Front Bench spokesmen are so assiduous in their duties that there is no room for me on it. However, I now come to the point on which I rose. The House of Lords has been operating under an Act that was passed by a Labour Government. It is absolutely and constitutionally within its rights to seek to preserve rights, which have been given to it under the constitution, intended to give this House, as the elected representatives of the people, a chance for second thoughts on these highly important and controversial matters.

The Prime Minister

I am aware of that, and that is what we now intend to invite the House to put right in the manner of voting once again for the Bill—as I believe it will.

I wish to move on to other measures of importance. I come first to the Fishing Limits Bill. Its main purpose is to extend fishing limits from 12 miles to 200 miles. The Bill will provide for the regulation of fishing by vessels of all nationalities and by British vessels where-ever they may be. The Bill will contain powers to conserve fishing stocks, whether by Community measures or measures introduced unilaterally by the United Kingdom.

We should like the House to help us to be in a position to extend fishing limits by 1st January 1977 in concert with other members of the European Community. The Bill will provide for substantial penalties for serious offences such as unauthorised fishing or fishing in a closed area. This will meet increasing criticism about inadequate penalties.

I should like to refer to a further Bill on water charges.

Mrs. Winifred Ewing (Moray and Nairn) rose—

The Prime Minister

I wanted to mention these Bills in passing. There will be other opportunities to discuss them in greater detail. In the course of debate, no doubt the hon. Lady will be able to make observations about the Fishing Limits Bill which can be answered.

There are, as is known, wide variations in average water bills according to the parts of the country in which people live. That has been a cause of great dissatisfaction to domestic users. We shall, therefore, ask the House to pass a measure which would mean more fairness in water charges by narrowing the gap—not closing it—between the highest and lowest charges which at present vary very considerably. I am glad to say that this measure will be especially welcomed in Wales where charges rose sharply after reorganisation.

In due course we shall also submit to the House a Bill on direct elections to the European Parliament. The Select Committee on Direct Elections has produced its second report. This legislation will be introduced during the current Session with a view to holding elections in 1978.

We shall also introduce a Patents Bill. That may sound a dry subject to those not involved, but, having given a little study to the matter. I believe that it will be a most important Bill, although perhaps not particularly party controversial. The present patent system has served the country well, but its origins lie in Victorian times. I believe that the changes we propose will be welcomed by industry.

The Bill will provide three major changes. One change will provide for early publication of patents specifications so that industry may become aware of new technology at an early date. Secondly, the Bill will enable procedures to be streamlined and simplified. Thirdly, it will ratify the European Patent Convention. That will enable British industry to obtain by means of one application, in accordance with one law and one procedure, the possibility of coverage throughout most of Europe. That, in connection with our industrial strategy, will provide a most valuable ancillary weapon.

My hon. Friend the Member for Gloucestershire, West referred to the Criminal Law Conspiracy Bill. The Government intend to introduce legislation to amend this law, and conspiracy will be restricted to agreements to commit criminal offences. As regards trade disputes, the penalty for conspiracy will be limited to three months. I am informed that that is what Parliament originally intended with the Conspiracy and Protection of Property Act, which was passed as long ago as 1875. However, there was a technical defect in that Act.

Probably all hon. Members attend constituency surgeries, and I am sure that they will all be glad to hear that the Bill will simplify the rules that govern the delegation of cases to Crown courts and magistrates' courts. It is expected to result in the transfer of about 10,000 cases from Crown courts to magistrates' courts. It will reduce delays, therefore, in the time spent awaiting trial, a matter which most hon. Members have probably found to be the subject of many complaints in their surgeries. The magistrates' courts will need additional resources to cope with the work, but I am glad to say that an overall saving in public expenditure is expected.

Levels of crime are a cause for serious concern, especially offences committed by young people and the increase in violence that is taking place in our cities. There is a disturbing increase in vandalism, especially among teenagers. There is real and justifiable concern about group violence, including so-called football fans who frighten peaceful citizens inside and outside the football grounds.

The Government must do all that they can to help in matters such as police strength and the maintenance and improvement of police communications and other aids that give considerable assistance. I have asked about the figures and I am told that during the past two years the total police strength in Great Britain has increased by 7,500 to a total of over 121,000—the largest police force we have ever had in these islands. Perhaps in some ways that is regrettable, but it is necessary to try to handle some of the problems of vandalism, violence and crime.

The Criminal Law Conspiracy Bill will increase many maximum summary fines, including those for offences committed by football hooligans. The House will have to decide but the Government will propose a maximum fine of £1,000 for an adult and £200 for a juvenile.

Of course, we shall listen to what the House has to say, but it is our belief that it is necessary and important that there should be real deterrents to the growth of hooliganism and vandalism on the scale at which it is now running. I was told the other day that British Rail is suffering damage to the extent of £1 million a year as a result of that behaviour. That cannot continue.

The Bill will also contain proposals to increase amounts payable as compensation by convicted offenders to their victims. The police and many other organisations are putting in a great deal of work to counter motiveless and mindless behaviour. But the rôle of the parent and the influence of the family are vital. Parents must reassume the responsibilities for the care of their children that some of them seem to have given up.

My right hon. Friend the Secretary of State for the Home Department intends to call a special conference to be held in January, at which the appropriate organisations and others can discuss these matters. The Government will do all that they can, but what we can do in these matters is, I think, limited. The major key lies with society itself and with its organisation.

There are other Bills that we should like to introduce depending on the time that is available. The House knows of the limitations under which we are working this year. There is a Bill on homelessness to which the Government are committed. We welcome the fact that local authorities already take prime responsibility for coping with homelessness, but they need better legislative cover than is now provided. Until that can be provided, I ask them to continue to take the prime responsibility that they have already undertaken on our behalf.

We should also like to introduce a Bill on occupational pensions but more consultations will be needed. Again, much will depend on the time that is available. We intend in 1977–78—that is, not this Session—to legislate—[Interruption.] Yes, we shall be here then: there is no need to worry about that. We intend in that Session to legislate on smoking and health, there being a particular need to divorce to some extent the provisions on smoking from the financial machinery that Chancellors of the Exchequer have used in the past and to transfer them to the Medicines Act.

The debate on education for which I asked and which got under way before I was allowed to make my speech is now proceeding. My right hon. Friend the Secretary of State for Education and Science will bring forward a consultative document that I trust will focus on methods, curriculum, and the relevance of the present system. She is now embarking on consultations herself.

I inform the House that there may be a contingent need for legislation on Rhodesia. That will depend on the results of the conference. The chairman, Mr. Ivor Richard, has set 20th December as the target date for the conference to complete its work. The surest guarantee of early independence, to which the House, the Government and the Labour Party are committed, is rapid agreement on the establishment of an interim administration. The words "an interim administration by agreement" are important, because that is what is necessary.

There is also a need to achieve agreement on a date for independence, although I believe that that will be less difficult because the area of difference is so small that it can be bridged. Britain will do everything possible to achieve a successful conclusion to the conference.

We have recognised our constitutional position by being willing to provide a chairman. There is no limitation to our political willingness—I emphasise political willingness—to help to reach agreement, but there are limitations to our capacity to do so. These limitations will be determined by the prospects of the Europeans and the Africans working together to make a success of independence based on majority rule.

Our future rôle between now and independence—that is the period in which those concerned have worked up to the establishment of an interim Government and the period between that establishment and final independence—must be influenced by the prospects of agreement between the Europeans and the Africans. The greater the willingness to agree, the more hopeful and the larger the rôle we can play. If there is no basic willingness to agree, our rôle is limited. Our purpose will be to seek to provide a secure future for the people of Rhodesia.

I turn to the major item in our programme in terms of length and in some ways importance—namely, devolution and the proposals to establish Scottish and Welsh Assemblies. A Bill will be presented in a few days' time and my right hon. Friend the Leader of the House hopes to arrange its Second Reading before Christmas so that we may begin the Committee stage when we return after the Christmas Recess. Before the Second Reading date we hope to publish a consultative document on England.

The devolution Bill—and the Government have considered this matter carefully —is a necessary means of bringing government closer to the people. It will give them an opportunity to take more part in the way our affairs are run and it will enable them to feel closer to the centres at which decisions are reached. I realise that this may not be the universal view, but I believe that there is real feeling about these matters.

Public bodies which are currently run by nominated and selective bodies will be more readily accountable to the electorate. Transfer of increased democratic responsibility for their own affairs to the people of Scotland and Wales lies at the heart of the devolution proposals. But these changes, as the Gracious Speech emphasises, must be made within the secure framework of the continuing unity of the United Kingdom.

That is what the vast majority of people want. We live in a State where individual national identities and national cultures flourish within the context of democratic unity. We wish to see that situation continue.

The proposals which will be embodied in the Bill are the outcome of a lengthy period of consultation, investigation and reflection—and, indeed, of second thoughts and, on some occasions, third thoughts. It is probably the most widespread, thorough-going and open examination of constitutional change ever made, certainly in modern times, in these islands —and so it should be.

I shall not recount all the stages of discussion and study through which the proposals have gone. There will be many opportunities to debate these matters in the months that lie ahead, but there have been extensive consultations with the widest possible range of organisations. These have all helped to determine the shape of the Bill which will shortly be published and which, we believe, rests on a broad basis of understanding and participation.

Mr. Gordon Wilson (Dundee, East)

Does not the Prime Minister realise that, following all the considerable consultations in the past two years, if not in the past eight years, majority opinion in Scotland is that the conditions and powers indicated by the Government in the new Bill are insufficient because they do not take account of industrial and economic powers and access to Scottish oil revenues?

The Prime Minister

No, Sir, I do not accept that. Judging by what I know of the views of Scottish industrialists and of the Scottish TUC—and I have had occasion to meet them both—I believe that they do riot take the hon. Gentleman's view. However, there will be plenty of time to debate these matters in the weeks that lie ahead.

Mr. Kevin McNamara (Kingston upon Hull, Central)

Many Labour Members, including English Members, will welcome my right hon. Friend's statement about devolution, but will he say whether within the devolution powers in the Bill there will be an elemental power of taxation to the local Assemblies?

The Prime Minister

No, Sir. We have discussed this matter on many occasions, and no doubt we shall do so again in the course of debating the Bill. The Bill when presented will contain no powers for taxation of that sort. Although I am sure that the House will want to debate the matter and although some hon. Members may find it desirable as a concept, they will find it very much more difficult to decide the nature of such powers. I repeat that the Bill will not contain such powers.

I accept that many hon. Members hold strong views on this subject and the Bill will undoubtedly be given careful and full consideration. Indeed, the Government accept that major constitutional proposals of this kind, which make fundamental changes in the system of government, demand proper time for discussion and conclusion.

The Government will set aside a considerable proportion of legislative time at the Government's disposal in the coming year for this purpose. We shall be ready to listen closely to the discussions and to make adjustments if good reasons are substantiated. There is a need for a full and constructive debate, marked by a genuine desire to improve the institutions through which we govern ourselves.

The Government ask Parliament to place this Bill on the statute book by the end of the Session we are now beginning. We believe that the people of Scotland and Wales are entitled to a decision by Parliament on these matters during this Session. The Government's view is that this decision should not be deferred beyond the present Session.

Discussion of our constitutional arrangements naturally leads me to the subject of Northern Ireland, where the problems are radically different from those on the mainland. It remains our first task to establish peace and political stability. We continue to stand by the aim of effective devolved government in Northern Ireland.

But no system will be stable or effective unless both parts of the community accept and support it. There are slight but encouraging signs that progress can be made, and I hope that these signs will continue to grow. However, in the meantime direct rule must continue. All necessary support will be given to the police and Army in defeating terrorism and maintaining the rule of law.

The Royal Ulster Constabulary is increasingly effective in detection and the arrest of terrorists. I wish to express my thanks to the RUC, the Ulster Defence Regiment, and the Regular Army for their courage and perseverance in facing a most thankless task.

The economic situation in Northern Ireland is of particular concern, as it is throughout the rest of the United Kingdom. I wish therefore to embrace that subject in what I wish to say generally

The right hon. Lady the Leader of the Opposition said that the Session would be dominated by the economy. That is probably true, but I hope that there will not be undue concentration on that topic to the exclusion of other matters of social and cultural concern on which the House must spend time. I sometimes reflect that we spend so much time in taking our temperature on the economic front that we allow a number of other matters which are of equal concern to the health of the nation to go undiscussed.

There is no doubt that the world economic climate has changed in the past few months since the summer. Until then there was pretty general concern that recovery in the world might be too fast and inflation too high. But the reality now is that world economic growth has slackened since the first quarter of the year and in most countries, including our own, inflation remains too high, although there are some important exceptions.

Some countries, such as France and Italy, have introduced tough measures of restraint. We have acted in a similar fashion in the last year. The continuing strength of upturn in world trade is still open to question, and the prospects on this score depend almost exclusively on the United States of America, Germany and Japan.

We already see moves on this aspect being pursued by the new United States Administration. Our estimate is that there is more prospect in present policies of a downside risk for growth in the world than there is for too fast an expansion. The prospect—I must put this fairly and squarely to the House—is for employment to continue to rise in this country as in many others. This is a matter of serious concern.

Against this sombre world background we must consider how we determine our economic affairs and policies. The doctrine of interdependence of world trade is being spread more widely, is becoming more generally accepted, and is being proved more conclusively every day.

Domestically against that background we have achieved noteworthy successes in certain respects. [HON. MEMBERS: "Where?"] One has only to instance industrial relations. The present Government came to office against a disastrous failure of regulating industrial relations in the courts as though they were criminal matters. Does anybody claim that there has not been noteworthy success in that area of activity? We have relied on voluntary consent and co-operation.

Nowhere has voluntary co-operation been more crucial or effective than in the attack on inflation. There has been real success in that respect. [HON. MEMBERS: "Oh!"] Opposition Members are either singularly dense or stupid if they do not think that there has been improvement in the rate of improvement in the past 12 months. With the co-operation of the trade union movement, we broke the wage-price spiral, which 18 months ago threatened to destroy this country. Does anyone deny that?

Mr. Peter Rost (Derbyshire, South-East)

You started it.

The Prime Minister

That is where it was started—on the Tory Front Bench.

Mr. Ronald Bell (Beaconsfield)

The right hon. Gentleman invited an intervention. Does he seriously suggest that the rate of inflation has now dropped below 8.4 per cent.?

The Prime Minister

No, Sir. What I am saying—I repeat my words—is that we have broken the wage-price spiral which 18 months ago threatened to destroy this country. That is what I said and that is what I stand by. That is a singular success, which even Conservative Members should be ready to welcome in the interests of their own country.

The voluntary pay guidelines for which the TUC made itself responsible were achieved through the social contract. It is a living agreement based on a social strategy, yes, and an economic strategy. [Interruption.] I hear the Opposition scoff, but they failed entirely in this field. Even now, they cannot decide whether they are in favour of a policy on incomes —even now, at this stage. The right hon. Member for Leeds, North-East (Sir K. Joseph), who has now left us, is against; the right hon. Member for Sidcup (Mr. Heath) is for; the right hon. Lady the Leader of the Opposition is both for and against at the same time.

Mr. Russell Kerr (Feltham and Heston)

That is very shrewd.

The Prime Minister

It may be shrewd, but it will not lead this country out of its political and economic problems. We need a clear indication from the Opposition of where they stand on this matter. We need it not only from the Leader of the Opposition, but from the shadow Leader of the Opposition. Let them get together and tell us what the reality of their policy is.

Although inflation has been substantially reduced, as is well known, it is still far too high. I must inform the House that on present prospects I do not see the rate of inflation declining during the next few months. This is bad from every point of view—from the point of view of employment, exports and investments, from the angle of the consumers and especially for large families and poor families.

We must ask the country to adhere to existing policies, hard though that may appear to families who see the necessities of life costing more each month. In our view, these will include—it will be interesting to hear some time from the Opposition what their attitude is—the need for a further voluntary agreement on income levels for 1977–78. I wonder whether we shall have the support of the Opposition for that.

On prices, there have been steep increases for gas, coal, electricity and travel. All of these have borne very hardly on families, but these industries cannot live for ever on borrowed money. [Interruption.] The Conservatives should know this: they tried it themselves in 1972 and 1973.

The deficits of these industries —the Opposition Front Bench knows this even if Opposition Back Benchers care to forget it—were financed by substantial increases in public sector borrowing. That is the way they did it. They allowed public sector expenditure to rise by borrowing and they increased the supply of money to do it.

We were the heirs of that profligacy. We have now brought public expenditure under control. [HON. MEMBERS: "No."] Public expenditure in this country is under control and it does no good to anybody —certainly not to our own country—for hon. Members opposite to deny that. They know very well that it is. Indeed, one of the reasons why 40,000 people demonstrated outside the House only a week ago was that they felt the effects of that.

Public expenditure is under control and cash limits have been applied in as rigorous a way as they have ever been before—indeed, more rigorously than previous Governments applied them over many years. But the result—I do not deny it—has been sharp price increases, much sharper than they would have been if our predecessors had acted with greater prudence. We should not have gone through some of the things we have gone through with coal, gas and electricity if we had not had to increase prices to make up for their failure to keep pace with them.

We shall take every step to reduce the effects of price increases, ensuring, so far as we can, that no company, corporation, industry or individual makes a killing at the expense of the community. Present prices powers last until July and we intend to pay special attention to goods and services, such as basic foodstuffs and including the things people wear as well as what they eat. The Price Commission will be asked to examine a number of cases.

We have already had success in holding back increases in a number of areas. Last week, my right hon. Friend the Secretary of State for Prices and Consumer Protection announced the holding back of an increase in the maximum retail price of bread pending new arrangements. Also, a short while ago TV rentals were held back, and there are other issues which the Price Commission will be asked to investigate.

The Price Commission will also maintain its strict enforcement of the Price Code. During the last 12 months up to August it obtained price reductions worth over £80 million from firms and over 1,000 notifications of price increases were either modified, rejected or withdrawn. We are now considering—and we shall consult industry, the CBI and others—what should replace the present powers when they expire next July.

The Government's strategy for a successful United Kingdom economy is based on a sustained and substantial improvement in our industrial and economic performance. Nothing else will give lasting full employment and rising standards. That is why we put so much emphasis on the industrial strategy, giving highest priority to industry and calling for a joint effort by both side of industry to improve performance.

It is true that many years ago when I was Chancellor of the Exchequer industry seemed to regard changes made by the Government as being the one necessity which could cause it either to boom or to go into a recession. I do not think that people in industry feel that any more. They know that they must do more themselves. This change is taking place throughout industry.

Industry understands, too, that long-term changes in the world economy, such as we have seen, for example, in relation to textiles, have not made its task any easier, but the first step was taken to try to make the task a little easier when we broke out of the wage-price spiral. The second step has been the dramatic improvement in our strike record. The number of days lost in industrial disputes is only one-fifth of the level of two years ago.

These factors among others—they are not the only ones—have helped to make exports more profitable and have encouraged industry to increase new investment, despite high interest rates. I am glad to say that interest rates have declined slightly, just by a touch, recently—[Laughter.] I know that the hon. Member for Blaby (Mr. Lawson) would much prefer us to fail than to succeed, but as we continue he may find that they will come down even further. [An HON. MEMBER: "Of course we would not"] If they would not prefer us to fail, why do Opposition Members scoff and jeer whenever there is a mention of good news?

Mr. Russell Kerr

Because they are little-minded ponces.

The Prime Minister

No, it is because they are party politicians.

However, it is still expected that industrial investment will increase sharply. [Interruption.] Now that the hon. Member for Blaby has reached the distinguished position of being an Opposition Whip, he should know that Whips do not speak.

Although it is still expected that industrial investment will increase, the gross national product will grow slightly during the next 12 months and we want to encourage faster growth. It is important and vital therefore that the broad industrial strategy which has been agreed among the TUC, the CBI and the Government should succeed.

Since I am often asked what we have done for industry, perhaps the House will allow me to list some of the things which have been done and which I believe reflect that improvement. There have been generous allowances against tax for capital investment and for the appreciation of stock values. This is known to every Opposition Member and there are many experts among them who deal with company affairs. The result of these concessions in a year of recession such as we have gone through, and in which we are still, is that many companies will pay little or no mainstream corporation tax. That is what we have done to help companies in that area.

There has been a relaxation in the Price Code designed to help investment. Industry's financial situation in terms of liquidity and profitability has markedly improved during the past 18 months. Of course, there are adverse factors, some of which I have mentioned. But there are favourable prospects, too. I ask the Opposition to consider this matter fairly and not only to pick on unfavourable factors but to encourage industry to know what the factors are so that we can try to escape from the current recession.

There is one other factor—the social contract. However much it is sneered at, it has offered a crucial assurance to employers over two years that there will be no wages explosion. That, too, is important. There are opportunities here which must be taken to achieve a sharp increase in export volumes, to create new jobs and to make more profit. The national and economic environment and our policies are important. But action is also needed in each industry and in each firm at factory level.

The Government have asked both sides of industry through NEDC, and both have agreed that their task now is for individual companies and firms, working in conjunction with the trade unions in those firms, to set targets which can be accomplished. The National Enterprise Board will be able to be of assistance to the industrial strategy, as can the Development Agencies for Wales, Scotland and Northern Ireland.

We need to set aside more funds for the NEB and also to achieve planning agreements. We have failed here and I very much regret that we have had no further success wth industry. When I discuss the matter with leaders of industry, I find that in principle they are not against such agreements, but they feel that a lot of trouble is involved and that consultation will be required.

I believe that the advanced industrial complex in which we live is now at a stage when we have to take that trouble. We may be a few years ahead of other countries but I believe that we must take this trouble. Planning agreements are one way to go about it. Linked with this is the Government's ambitious plan, never exceeded in terms of size, for adult retraining and better training in industry. This underlines the point that opportunities for expansion must not be frustrated, as we have seen time and again, by bottlenecks caused by skilled labour shortages or shortage of capacity, particularly in engineering.

All industries, including the Engineering Industry Training Board, have done a lot in this area. This year the Board aims to achieve a target of training 28,000 craft apprentices, including 5,000 supported by public funds. That is more public expenditure. Training under the Training Opportunities Scheme this also involves public expenditure—has increased from 62,000 to 87,000 this year. Some 15,000 to 20,000 people are being trained in engineering skills. A further increase is expected next year.

Over the past 18 months we have allocated £140 million of public expenditure to boost training. That is public expenditure well spent. These are the ways in which to create sustainable full employment. In the meantime, the Government have introduced a variety of manpower measures designed to alleviate the worst effects of unemployment, particularly among the young.

Over £500 million of public expenditure has been made available since the 1975 Budget to create or to keep open 500,000 jobs or training places. This is important, especially during the present period of unemployment. I intend, and I know that my colleagues intend, to discuss the problem of unemployment at the Hague when the Community Governments meet at the end of the month. It also needs discussion on a wider canvas with the United States. I note what President-elect Carter has been saying about this matter.

Britain is losing her reputation as a strike-ridden country. I hope that we can keep this up. It is our reputation abroad —or perhaps I should say our bad reputation—more than the reality of the situation which dogs us overseas when discusing these matters. The number of stoppages has been the best for a quarter of a century thanks to the reform of industrial relations. The Advisory, Conciliation and Arbitration Service was set up in the autumn of 1974. It has had over 3,000 requests for conciliation in a period of 16 months and the success rate has been about 80 per cent. This is one reason why we look forward with some hope to the future.

I turn now to financial matters. The Leader of the Opposition referred to November 1964. Yes, I recall it well. I well remember the first evening I went into No. 11 Downing Street. The indefatigable Treasury knights, who were busy during the election, produced a thick folder. It began with these words: We greet the Chancellor of the Exchequer. We wish to inform him that there will be a deficit on the balance of payments of nearly £800 million during the current year. I remember very well that that was why —because the right hon. Lady's Government, even in those days, did not have the courage to take the necessary action —I had to go to the IMF within a month of taking office. [Interruption.] I remember this only too well. The Conservative Government failed to take even the minimum action they could have taken on such matters because of the election. They put off taking decisions for month after month. I remember 1964 very well. I shall never forget it.

I remember the contrast in 1970, when the right hon. Lady's Government inherited not a deficit but a surplus. They did not have to go to the IMF because they could live on the surplus accumulated by the previous Labour Government.

Mrs. Thatcher

Will the right hon. Gentleman say how much debt the Socialist Government left us with in 1970?

The Prime Minister

As I was not aware that the right hon. Lady would misuse history in this way I have not come prepared. [Interruption.] What I can say is the Conservatives came back to power in 1970 in a period when there was calm in the exchanges and a balance of payments surplus. They had no worries on the international monetary front at all. After 13 years of Tory rule they handed over to us a situation which required action.

Everyone knew in 1964, including the Conservative Government Front Bench—although I do not think that the right hon. Lady was a member of that Cabinet —that action was needed. But they waited until after the General Election. Perhaps they hoped they would win and take action or perhaps they were leaving it to us. The Tory Government's record is nothing to be proud of. [Interruption.] I thought that the right hon. Lady would want to change her arguments when she heard the answers. She was simply repeating a piece of misquoted history. I lived through it and I know what happened.

There are two problems concerning financial matters which the country has to face at the moment. They are the problems of internal and external financing. On internal financing, the needs of the Government and the needs of industry must be reconciled and they must be matched against the flow of available savings.

On external financing, the problem is to bridge the period of deficit that we have and to improve the competitiveness of our goods and services so that, together with the flow of North Sea oil, we can eliminate our current deficit. These are separate problems but linked by the issue of confidence. We also need to achieve an orderly move towards a stable capital account position.

Some of these problems are now being discussed with the IMF. The House will not expect me to give an account of those discussions until they are completed. I shall report our conclusions to the House in due course. Others, particularly the problem of the future of sterling balances, need to be discussed on an intergovernmental level. I intend to pursue that. I indeed, it is already being followed up.

There are only two ways in which to bridge the present gap. One is by borrowing and the other is by accepting a temporary fall in our own standards. We have done both. All the suggestions that are made to the Government boil down to varying the mixture between those two.

In tackling the problem, our first consideration must be—and we intend to adhere to it—not to block the longer-term industrial improvement which the country needs so much and on which our hopes of a better future rest. In the medium term the aim must be faster growth fed not by inflation—that is easy —but by sustained improvement in productivity and exports.

Let me repeat the Government's attitude on import controls. It is based not on ideology but on a continuing assessment—which will continue—of where the balance of national advantage lies and of our trading relations with other countries. Where possible, as I said in the case of the textile industry, which I used only as an example, the Government will protect individual industries which need temporary assistance by the use of selective import controls.

For example, the Government were able to agree with most of the proposals we recently received from the TUC and the CBI in a joint communication on dumping, on GATT and on the Multi-Fibre Arrangement. Perhaps some of the dumping procedures need speeding up. That is under review and we shall see whether it is possible to do that.

I have also agreed with President Giscard d'Estaing on the need for a special examination of a number of sensitive industries—motor cars, electronics, textiles, steel and shipbuilding.

I have not hesitated to outline our successes and our failures. The House must face them frankly. In the current discussions with the IMF we are certainly doing that. I try to give at certain intervals a sober, realistic and objective account of our difficulties and of the prospects for a regenerated industrial system. I believe those prospects exist and that it is our task to try to take maximum advantage of them.

Before concluding, I should like to say a word about industrial democracy. Here, again, we wish to progress through co- operation rather than confrontation. That is essential at all levels. I want the House clearly to understand the Government's policy. We want to see participation by workers in decision-making in their own companies which will directly affect their jobs and their lives, have social consequences in helping to bring down the "them" and "us" barriers, and help to lessen the class divisions which have bedevilled British industry and much else in recent years. I believe that decisions jointly arrived at will be more acceptable to all.

The present law is based on out-dated nineteenth century ideas about the rôle and responsibilities of companies in society. There is a need for social and industrial reform. I know that some—perhaps many—in industry on the managerial side have grave doubts about this, but I ask them please to note that participation of this kind has been successful in other countries, including those to which they are most ready to point when they want to show the other directions in which they believe British industry should move.

We shall not anticipate the report of the Bullock Committee, because we hope to have it by the end of this year, in just over a month's time. We shall not take firm decisions before the necessary consultations with both sides of industry have been undertaken, but the Government believe that substantial changes are necessary, and we shall work towards that end.

I have spoken of the need for creating the conditions in which industry can thrive and in which I believe that it will, but let us not overlook our social programme. I do not apologise because the Labour Government and Labour Members of Parliament seem always to be specially concerned about the protection of the poor and the disadvantaged. Why should we be ashamed of that? We shall continue to the best of our ability to protect those in need.

The purchasing power of the old-age pension is higher than it was when we took office—involving more public expenditure. We are looking forward to a new pension scheme which will start in April 1978. It will enable present-day workers to build up pension rights comparable with those available in good occupational schemes, and both men and women will be included in the scheme. Millions of people at work will benefit from that. Should not we aim to do these things over a period? Of course we should. We have begun to take poverty out of old age.

I am proud of the considerable help we have given to the disabled and those who care for them. I am proud that we have given invalid care allowances and mobility allowances, that we have tempered the heavy electricity bill and are phasing in the child benefit scheme. We have also given aid to one-parent families.

I wonder whether it is true, as the right hon. Lady said, that it is only the voice of those who are in large groups that is heard. One-parent families and those in need of invalid care allowances are not in large groups. As long as there is a Labour Government and a Labour Party, their voices will be heard.

Mr. Patrick Cormack (Staffordshire, South-West) rose—

The Prime Minister

In our view, by giving aid to one-parent families and invalids who need care, we are adding liberty to equality and justice. That is part of our case that the Conservative Party never seems to have understood.

I am asking the local authorities to protect as far as they are able the standard of services given to the elderly, the mentally ill and the handicapped. Local authorities are under special stress in respect of expenditure because of the great pressure there is on public expenditure—

Mr. Cormack


The Prime Minister

I will give way when I have finished my point.

I am asking the local authorities to maintain the services they provide. That is the principal task. There may be some criticism among local authorities when I say this, but I think that it is nevertheless true. Local government exists to provide services for the people, not to create jobs that would not otherwise be necessary. That is the basis on which local authorities should proceed.

Mr. Cormack

Will the right hon. Gentleman stop pretending that he and his party have a monoply of compassion and tell us how many more people are paying tax after his party's two years in office? Will he also tell us about the lot of the widows?

The Prime Minister

I do not deny that there are many social injustices still to be put right, but the hon. Gentleman when he constantly presses me at Question Time to reduce public expenditure is not helping towards that end.

This will undoubtedly be an eventful year. The Government intend to see it through as long as we can rely on a majority in the House of Commons. There are no short-term gimmicks. We must stick to the essential policies that we have laid down, and we shall stick to them despite electoral unpopularity in mid-term. There will be many events during the next 12 months that will no doubt try our patience, but I take heart from the fact that there is growing agreement on national objectives and what needs to be done.

Since we assumed office in 1974, the Government have radically changed the previous Government's course. We must not let up now. In industry there are encouraging changes in attitude. In Parliament the Government intend to pursue the changes that are necessary in our institutions—political, economic and social—to bring about the shift in relationships that is necessary if we are to transform the country.

We must remain steadfast, for only so can we set the country on the course of national recovery to which we have pledged ourselves. Whatever setbacks, whatever disappointments, whatever cynicism we may have to face, let us see it through.

4.39 p.m.

Mr. J. Grimond (Orkney and Shetland)

I join in congratulating the mover and seconder of the motion. I have no doubt that the right hon. Lady the Leader of the Opposition was reassured by the exchange between the Prime Minister and the hon. Member for Huddersfield, East (Mr. Mallalieu). The right hon. Lady will be glad to know that equality has not taken over, that discipline still exists in the Labour Party and that standards are kept up, even for the Prime Minister. I was very glad also to hear reference made to Mr. Philips Price. He was an extraordinarily nice man, with a very varied career, and until the days of Reggie Paget he was the only member of the Labour Party who was a Master of Hounds.

I want to refer to three matters. The first of these—fisheries—was also referred to by the Prime Minister. I want to put on record once more what the fishermen of Scotland are worried about, and this also applies to fishermen from other parts of the coast of Scotland, England and Ireland. They are concerned not so much about agreement on the 200-mile limit as about what is going to happen to national limits within 200 miles. A belief has sprung up that any country in the Common Market has a right to fish up to the shores of any other Community State. That is quite untrue. There is no such right under the Treaty of Rome, and we trust that the British Government will insist on a 50-mile national limit. We also hope that the limit will be adequately policed, because there is great difficulty in policing limits and quotas. I was very glad to hear the Secretary of State for Foreign Affairs tell us, at Question Time recently, that this was much in the minds of the Government. So it ought to be, because it is absolutely vital to conservation policy.

The second matter that I want to raise is the main legislation proposal for the coming year, that is, devolution for Scotland and Wales. I do not want to go into the merits of the matter now, because there will be time for that when the Bill is produced. I want to ask for adequate time to be given between publication of the Bill and Second Reading. The Prime Minister was quite right to say that there has been a great deal of discussion on the proposals, but many people are waiting to see the Bill before making up their minds. I was glad to hear the Prime Minister say that the Government would be open to suggestions for making alterations to the Bill. There are many people in my constituency, including the local authoriites, who are worried about certain aspects of what they understand the Bill will do.

I have the greatest reservations about the powers of the Scottish Assembly. It will have to be given power to tax. As to the method of election, there is a widespread demand from all parties in Scotland for electoral reform, at least for the Assembly. It is a mistake to deal with Scotland and Wales in a single Bill. I also feel that there will be great difficulty over the control and the loyalties of Scottish civil servants.

There are many important matters to be debated and resolved, and I hope that the Government will provide adequate time for us to debate the Bill besides giving us sufficient time to study the Bill before it is introduced.

The third matter to which I want to refer is the key question before the country. It is so described in the paragraph of the Gracious Speech which reads My Ministers are convinced that the key to a better economic future for the British people lies in improved levels of industrial output and productivity, a higher level of industrial investment, and being more competitive thus securing a greater share of world markets. There is no mystery about our situation. It is no new development in this country. For years, we have been sliding downhill for the simple reason that all sorts of organisations in this country have been demanding more resources and expenditure than our output has been able to sustain. Our output is not rising, and meanwhile the Government are faced by demands from every sort of authority, public and private.

In this very important section of the Gracious Speech I should have liked to see an emphasis on the importance of control and reduction of unproductive and unnecessary public expenditure. The Prime Minister said that he had public expenditure under control. I doubt it. If one reads the newspapers, one can still see local authorities of all sorts advertising for staff at salaries that private business could not pay. Within the last four years the staffs of local authorities, and their salaries, have quadrupled. There are now many more administrators than doctors in the National Health Service, and the demands on public resources are increasing from all sorts of public bodies.

The Prime Minister

I did not say that we had local authority expenditure under control, because we do not control it. The right hon. Gentleman knows that as well as I do. Unless he wishes the Government to take control of local government expenditure, that is something which only the ratepayers and local authorities themselves can deal with.

Mr. Grimond

If the Prime Minister is saying that he has now no complete control over local government expenditure, I agree with him. But the Government should now alter the whole system of financing local authorities. The grant system encourages extravagance, and this has been borne out by statements made by the Secretary of State for the Environment. The Government could have far more control over specific items of local expenditure, particularly capital expenditure, such as roads and office building, than they appear to be willing to exercise.

I often protest to my local authority about items of unnecessary and unproductive expenditure, but I am told that these things are a good bargain, because the Government will pay 75 per cent. of the cost. So the responsibility is batted backwards and forwards. This should be altered. It has been pointed out before that we cannot say that the public sector is under adequate control when we need an interest rate of 15 per cent. to finance it. This means that private industry—productive industry—is either deprived of resources or has to spend an immense amount on the interest charges.

There is little incentive under the new regulations imposed by the Government—of which I wholly approve—for the monetary limiting of public expenditure. There is no attempt to reward local authorities which have kept within those limits, or to penalise those which have not. I do not accept that unnecessary public expenditure is under control. I should have liked to see the importance of that added to this paragraph in the Gracious Speech.

Another feature that is absent from the Gracious Speech is the control of money supply. The Prime Minister referred to this and is well aware of its importance.

Lastly, I do not think we have really impressed upon the British public, or upon organisations in Britain, that this is fundamentally not an economic matter but a political one. No economy, whether Socialist, Liberal, Conservative or Communist, can run while excessive demands are made upon production that is not rising. The first essential for this country is to increase efficient production. It is alarming that even with the pound at its low level, exports are not doing better, and it is even more alarming when one sees the restrictive practices that are rife on all sides in British industry and the toleration with which this situation is accepted.

I do not believe that the Prime Minister's speech, fair and honest though it was in many regards, will make the slightest impact on the country. No one is going to get up tomorrow thinking that there is something desperately wrong with Britain. There is something desperately wrong. This is not something that cannot be cured. It is not new, nor is it the fault of this Government. There has been a decline since the war, which has been brought about by excessive demands upon our capacity to produce. No one who has had power has changed this to make sure that those who produce efficiently are rewarded while those who spend on unnecessary and unproductive projects are penalised. I emphasise "unnecessary and unproductive", because I wholly agree with the Prime Minister that it is necessary to keep up an adequate standard of living for the poor, and also to maintain adequate social services. Of course, a great deal of public expenditure is productive, but there is an immense weight of unproductive demand on this country's resources. It is to this, and to restrictive practices, above all, that we should be directing our attention in the coming year.

4.50 p.m.

Mr. Peter Hardy (Rother Valley)

I think that the right hon. Member for Orkney and Shetland (Mr. Grimond) will forgive me if I do not follow up his remarks, except to say that it is a pity that his party was not a little more vigorous in its criticism of local government reorganisation in 1973. It is hardly suitable for him to be condemning arrangements which his party was a little lethargic about at that time.

As the Member for a Yorkshire constituency, I must offer my congratulations to my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) on his delightful speech in opening the debate. I cannot be quite as complimentary to the Leader of the Opposition. Her speech rightly reminded my right hon. Friend the Prime Minister of a university debating society on a bad day.

The right hon. Lady seemed to be saying that no liberty was possible unless her party was in power and that liberty disappeared as soon as another party took office. This was hardly a mature or helpful approach to politics, and her suggestion that those who do not agree with her are, in effect, totalitarianists does not seem appropriate.

There was a great deal that the right hon. Lady could have said in commendation of the Gracious Speech, not least on the legislative content, which, although not as small as many hon. Members may have wished, is certainly smaller than in recent years. If the Conservative Party conducts itself responsibly, the House will not have the same legislative burden about which it has rightly been complaining for some time.

I welcome the modest volume of the Queen's Speech, but I must express anxiety about certain aspects of it. On devolution I accept the need to ensure the sustenance of nationhood, and the development of a suitable political structure seems worth while. However, unless wisdom prevails, the Assembly in Edinburgh could degenerate, as I warned in a debate a year ago, into a sounding board for the pettiest nationalism. The proposed legislation will be no substitute for the endeavour and argument which is always needed to bolster good sense and to avoid some of the foolishness that we occasionally hear from the Opposition Benches.

I expect to support the Government on devolution if I can be satisfied that it will offer no economic disadvantage and confer no over-competitive economic attraction upon Scotland or Wales, since my area should not enjoy less support while it faces equal or greater need. That is the case at present. At the same time, I hope that the House will ensure that the changes which will be produced through devolution will not bring the same extravagance and fecklessness as accompanied the Conservative Government's reorganisation of our local affairs in England and Wales.

I also hope that the House will not seek the spectacle of repetitious and over-protracted debate on this matter. Devolution seems likely to be rather less attractive at 4 o'clock in the morning than at 4 o'clock in the afternoon.

The other major item in the Gracious Speech is direct elections to the European Assembly. I took the view before 1975 that one of the weaknesses of the Community was the absence of a political assembly capable of challenging or exert- ing significant control over the bureaucracy. A vigorous organisation must emerge. There have been very important improvements lately, but I do not feel that any hon. Member could for very long serve both the Commons and the European Assembly and care adequately for his constituency and his family. This point will have to be borne in mind by hon. Members who are not enthusiastic about direct elections.

Even apart from direct elections and devolution there will still be a great deal for the House to do, and it seems worth experimenting with a limitation of time on many Bills which will not be controversial unless the Opposition are particularly awkward. We could limit the time spent on some modest and uncontroversial Bills in order to debate matters of considerable importance.

We ought to be concerning ourselves more with the realities of our present problems and less with the intricacies of technical, complex legislation which may serve no great purpose except to establish the necessary trivia of history. We could consider some of the current problems such as the decline in the birth rate, which seems to have been ignored by this House. We could look at the implications of that decline and the possibilities it offers for greatly increasing the proportion of food we grow for ourselves and for the Government and local authorities to give greater protection to the green belt, since the population pressure which was expected 20 years ago is now not likely to arise.

We could also give far more attention to education and law and order, which my right hon. Friend the Prime Minister rightly referred to in his speech and to which he significantly and usefully drew attention at Oxford recently.

These are matters which the House should be debating. We ought not to be insisting that we spend our time on less relevant matters. For example, Ministers and Opposition spokesmen should be spending their time usefully promoting the levels of industrial production and commercial success rather than tramping through the Lobbies in support of matters which are not terribly important.

If this House is to serve the nation properly during the coming year, we should spend more time on these matters and less on legislation and party political games. We could spend a great deal more time on regional affairs. We were to have a debate on this subject on Monday, but for some reason it did not take place. I should have liked to participate in such a debate, if only to offer one illustration which the House might find interesting.

A few weeks ago there were increases in the fees for firearms licences. I have been considering this matter carefully. The Home Office justified the increases, not entirely unreasonably, by saying that the new fees represented the cost to the police of collection and administration. However, I put down a Question on this subject recently and learned that the only police force in which the administrative cost was at the same level as the licence fee was the Metropolitan Constabulary. But the Metropolitan Police apparently bear costs which are five or 10 times greater than those in other parts of the country. The automatic response surely should have been to question the Metropolitan Police's procedures rather than to impose very much larger fees on licence holders in other parts of the country.

I am not suggesting that the Metropolitan Police are inefficient, but, if it costs them five or 10 times as much to deal with gun licences as it costs police forces in other parts of the country, there is even greater cause for astonishment that we have not seen more dispersal of administration and commerce from London. If that is the level of costs in the capital, it enhances our economic position in the regions where we need the benefits of dispersal.

As I have said in the House before, hon. Members on both sides have a good deal of experience of the hardship which is developing as a result of the Daymond judgment and of the inefficiencies of the water legislation of 1973. Several hundred people in my constituency live in properties which are not connected to the main sewers, and they face alarming costs. That situation does not merely apply in South Yorkshire; it is fairly general.

I was pleased to see in the Gracious Speech a reference to the water industry. This is to be welcomed. However, I am a little anxious that there is no specific reference to the need to sort out the muddle of sewerage charges, on which I have addressed the House previously. I hope that my right hon. Friend the Secretary of State for the Environment will not persist in the view that people shall pay only for what they receive, because that goes against the traditions of British local government.

I shall be pleased to give support to the Government, but I hope that they will take the point that, at this difficult period, we need ample time to debate ideas and motions rather than try to fit our speeches within the rules to have to make serious points in connection with an amendment to a rather technical clause in a not very relevant Bill perhaps at some god-forsaken hour in the morning. I hope that we shall have serious debates but that we shall not be taking part in many of them in the early hours in the morning.

5.2 p.m.

Mr. Michael Clark Hutchison (Edinburgh, South)

I wish to address myself to a narrow but important subject. I ask the House to consider the future of the Falkland Islands. I was sorry that there was no mention of them in the Gracious Speech.

The Falkland Islands were discovered by a British sailor and they have been occupied by British people since 1833. However, the Argentine has from time to time laid claim to the islands but it has never pushed its claim. It has never agreed to go before the International Court at The Hague or any other tribunal, because its claim is so weak both in law and in fact. I should not object if there were a plebiscite in the Falklands, because the 2,000 people there are all of British origin and they have already made clear their wish to remain British and to retain their ties with the United Kingdom.

Two difficulties face the islanders. First, they rely practically entirely on the wool crop, which is brought to Britain and sold, and it brings us considerable revenue—about £2 million a year in hard currency. But the islanders wish to diversify, and I think that everyone can see the wisdom of that.

The second difficulty concerns communications. There is little British shipping to the southern part of Latin America or to the islands. Air travel is practically the only means of getting to them, but it involves going via Argentina and relying on Argentine services; indeed, there is complete control by the Argentine. This causes considerable concern to the people in the Falklands and to people like myself, and, I am sure, to every hon. Member who has their welfare at heart.

A permanent airfield is being built near Stanley, but it is too small. It cannot accommodate aircraft going to North America or to Africa. Therefore, Argentinian control will continue. The airfield needs to be extended by 1,000 yards, and that would ensure complete independence. There is space for that, and it would not be costly because the construction company, with its engineers and equipment, is already there.

I urge the Government to act in this matter. It is a key matter and an early decision is necessary. I am glad to be able to praise the report of Lord Shackleton and his able team who recently made a survey of the islands. It is a very imaginative document and it makes practical suggestions. It stresses the need for extension of the airfield.

I have no doubt that there is enormous potential, financial and otherwise, in the region. The Western world is running out of seaweed, but there is plenty in the Falklands. Alginate Industries, a British company, already has a pilot scheme there, but it is unwilling to invest further substantial sums until the political uncertainties are removed and communications are secure.

There are enormous resources of fish in those areas, particularly blue whiting, hake, and Falkland herring. The Russians and Japanese are already fishing in the waters of those territories. Why should we not do so? Surely here is an opportunity for us, bearing in mind the difficulties about fishing that we shall have nearer home.

There seems little doubt that there is oil in the area. Many companies are anxious to explore and to pay handsomely for concessions.

All those developments could produce revenues for the local people and for us at home, but they all hang on the extension of the airfield to international standards. I ask the Government to go ahead with the extension. Money could be found for it by rearranging the Vote on overseas aid or by loan, or perhaps by devising a tax haven system. That one act more than any other would show the islanders that we care for them and intend to support their future. I ask the Government to explain the case of the Falkland Islands to other Commonwealth countries and to our allies. That has not really been done.

We might do well to remember that the Falkland Islands played a part in the First World War when Admiral Sturdee defeated the German raiders and in the Second World War at the time of the battle of the River Plate. Who knows what they hold for the future?

5.9 p.m.

Mr. Dan Jones (Burnley)

I shall relate my speech to my constituency. I say that quite challengingly, and I am not prepared to apologise to a living soul for saying that, because I think I can prove that since the war no constituency in the United Kingdom has suffered so much industrially as the constituency of Burnley, in the centre of North-East Lancashire. The textile industry has suffered terrific blows. The coal mining industry has been almost totally decimated. Yet it is possible to find areas in the United Kingdom that have benefited from central Government financial subvention to a remarkable degree.

I shall not survey the whole scene, as other hon. Members wish to speak. I will make only two brief points. The first relates to the textile industry, about which I put a question to my right hon. Friend the Prime Minister when he spoke today. He said that the industry was to be subjected to a further central Government inquiry. With all due respect to my right hon. Friend, for whom I have not only regard but affection, I must say that that is really a little late in the day.

One of the reasons why I am still plugging away for the textile industry is the human tragedy associated with it. Quite a large number of men, and women, too, to a marked degree, were forced to leave the industry after devoting a lifetime to it. Some of them were in the age range 55 to 60, and once they became unemployed there was little or no chance for them to be reabsorbed in alternative industries because of their age.

In August 1975, I suggested to my right hon. Friend the Member for Huyton (Sir H. Wilson) that the matter of the textile industry should be taken over by the Select Committee on Trade and Industry. I made this suggestion because I understood that the Government had an instant reaction against harsh measures of import controls because of the fear of the repercussions which these might have and which would be counter-productive. I thought that my suggestion was intelligent and I think that it is even more intelligent today.

If any right hon. or hon. Member chooses to examine the work of that Select Committee over the years, he will find that it has done some remarkably productive work for industry. Two examples are the shipyards and British Leyland. Both have received hundreds of millions of pounds. But I am not really seeking Government money. I recognise the justification of the argument that during the period that Labour has been in office money has been in desperately short supply and, therefore, must be used with a major degree of discrimination.

But I do ask that the Select Committee should analyse the textile industry, particularly with regard to imports in order to find out whether they are bona fide and how much dumping is going on and, equally important, to find out how mans of the commercial interests in the country are choosing totally to disregard our own textile-producing areas. The Committee would also find that subvention could be given to the textile industry without contravening any international agreement.

We have a right to expect our people to buy British where possible when quality, design and costs are comparable, and I am convinced that such would be found to be the case. Indeed, I can go further. I have met some of the big textile buyers in this country, and I must say, quite deliberately, that I do not think they give a damn about Yorkshire, Lancashire or some of the areas in the Midlands pro- ducing textiles. Indeed, some have inferred to me "You see, it is always much more pleasurable for the buyers to have a jaunt to the Continent in order to purchase there".

I will not pursue the point to making the names available, although I am under privilege and I could do so. But that would not be playing the game. However. I emphasise that the situation should be analysed. Having worked at the Board of Trade, I have nothing disparaging to say about our administrative officials, but they suffer the disability of time. The Select Committee, however, would have the time and the terms of reference to analyse the situation deeply, including seeing the people concerned and asking "Why do you spend so much money on buying textiles abroad? Have you examined whether some of these products could not be bought here?" Those are fair questions. No harm could be done, but only very much good.

My second point concerns an area in my constituency that grieves me sadly. Many good people live there and have spent their lives there. But the area has been shamelessly vandalised by successive Governments, Labour as well as Conservative. This is because of the failure to build the motorway through Burnley in North-East Lancashire.

We have been waiting a very long time —indeed, the matter dates back to when the late Sydney Silverman was here, and that dear man has been in his grave for about 10 years. He was a stout fighter for that area, and I was very much his assistant at the time because he was a very experienced parliamentarian and J took a lead from him. As long ago as that, we were definitely promised that this motorway would go through Burnley. We had realised—the industrialists, the local authorities and all the political parties in the area—that it was a vital element in the economic development and buoyancy of North-East Lancashire. But we have been frustrated, and it is incumbent upon those who have served as Ministers in both Governments to tell us why.

Areas less industrially developed than North-East Lancashire has been getting motorways. Money spent in this way in North-East Lancashire would not be expenditure so much as investment because of the highly industrialised nature of the place. Industry came to the area at the turn of the century. It was something of a novelty then, but the people there took it in their stride and there is among them a remarkable industrial ability.

I was never able to understand why, having been promised this motorway, we were not able to get it. The Conservatives were returned to office in 1970, and in 1972 the right hon. Member for Crosby (Mr. Page) came to Burnley and told the local authorities to get on with their preparations. The important point is that he came to Burnley as a Minister of the then Conservative Government. He carried with him not only his name but the authority of that Government. He told the local authority in Burnley—we also brought other local authorities in with us—to get on with the preparations for that road. I believe that the right hon. Gentleman was quite sincere when he instructed us to get on with the preparations. It is perfectly true that the local authority in question did precisely that.

Let us look at the time factor and try to realise just what has taken place. That was in 1972, and the local authorities worked hard to clear the area. Now, in 1976, four years later, the road has not been constructed. But the area which has been cleared is a residential morass. The people who have lived there for the whole of their lives have become thoroughly and totally dejected.

There is one paragraph in the Queen's Speech which I hope will provide the means whereby, at long last, we can have some hope that the roadway in question will have priority. It refers to special attention being given to the inner city roadways. This is notwithstanding the fact that at the present time our economy is dreadfully low. But if the inner city roadways can also be attended to, surely the areas that I have mentioned can also be attended to. Areas to the north have had a beginning. Areas at the other end of Burnley should be attended to by the Government.

I have had private words with Ministers. They took the view that at any rate my appeal is justified. I give the House notice that if these areas are not attended to in the very near future I shall make it my business not only to see the responsible Ministers but also to send a report to the Prime Minister.

The people who have made such a handsome contribution not only to the economic well-being of Burnley but also to the economic well-being of the nation should be given the opportunity to live as civilised human beings and not like some form of animal life. It is most unfair, it is most intolerable and it is certainly anti-Christian.

I hope that as a result of this very limited contribution—which I intend to send to the Minister—the reform to which we are entitled will be forthcoming.

5.24 p.m.

Mr. Wm. Ross (Londonderry)

Yesterday evening at about this time a man whom I knew well, Mr. Joseph Glover, answered a knock at the door of his business in Londonderry. As a result, I shall be attending his funeral on Friday. He was a man whom I knew well in business and in politics, and for whom I had the greatest respect. His was, so far as I am aware, the most recent death in Ulster's bloody civil war.

It is because of this that I was so pleased to read in the Gracious Speech today that Her Majesty's Government are determined to combat terrorism and to maintain the rule of law. I believe that there is no place in Northern Ireland at the present time where this determination to maintain the rule of law and to combat terrorism is more necessary than in the city and county of Londonderry.

I should like to deal briefly with the situation that prevails in the country area of County Londonderry, in my own constituency, and the constituency of my hon. Friend the Member for Mid-Ulster (Mr. Dunlop), for we share a common frontier of terror.

In the eastern part of County London-deny over the past few months and weeks there has been a campaign of murder against members of the security forces—specifically against the UDR and the members of the Police Reserve. A number of very good men have died, a number of others have been wounded, and there have been other unsuccessful attempts on the lives of further members.

This is not random killing, nor is it murder simply for the sake of murder. It is a carefully planned campaign to dismay, to terrify and to drive out of their homes and places of work men and women who have lived there all their lives and, indeed, whose families have been living in the area for many generations.

The attack is directed specifically against those who are foremost in the fight against terrorism. It is directed against those who are most likely to resist terrorism. It is directed against those who have local knowledge, who know their enemies, and who are prepared to pursue them wherever they may go.

The failure of the Government and of the security forces to match the terrorists in their determination, and the failure of the Government to deal with the problem that is arising in this area of Northern Ireland, will surely have the most dire consequences. It will, I believe, lead eventually to the emergence of illegal para-military strike-back forces, if it is not stopped by the legitimate forces of law and order.

I shall return to that aspect in a moment, but I should like now to paint for the House a picture of the situation in Londonderry. It is a city which many hon. Members of this House have visited. They know that it is bisected north and south by the River Foyle. They know that the east bank is mainly Protestant and the west bank mainly Roman Catholic, and that they are connected by a double-deck bridge—one of the few, I believe, on the face of this earth—which is constantly monitored by the Army. A constant check is made on movements. I believe that this has had an inhibiting effect upon terrorist activities backwards and forwards across that river.

I will now detail the deaths which have taken place in the past few weeks. In October a Mr. Hamilton, an officer in the prison service, was shot dead. A Mr. McKay was blown up in the country area. A Mr. Mulhern, a Roman Catholic, was shot dead in the city.

Captain Bond of the UDR was shot on 28th October and died on 6th November. Corporal Speer of the UDR was shot in the constituency of my hon. Friend the Member for Mid-Ulster on 9th November. Corporal McCaughey was killed in my constituency on 14th November. Mr. Loughrey was shot by assassins and very seriously injured on 14th November. Corporal Kydd of the UDR was shot dead in Londonderry on 18th November. Mr. Stockman, a prison officer, was seriously injured in an attack on 20th November, again in Mid-Ulster. Mr. Toland was shot dead on 22nd November just outside Londonderry. Mr. Glover, as I have already told the House, was shot dead on 23rd November.

This is a catalogue of terror which is, I believe, practically without parallel even in Ulster. The killings of Bond, Kydd and Glover, and the retaliatory murders of Mulhern and Toland, are part of the continuing attempt by the IRA to dominate the city of Londonderry. Indeed, they already control certain parts of it. They have controlled now for a good many years the Bogside, the Creggan and the Shan-tallow areas, and only those who have no knowledge of the city—or those who are attempting to justify security policies which have failed in the city—will attempt to deny that simple fact of life.

These areas are not policed and cannot be policed. Only the Army can venture into them. They are, therefore, without the writ of law in any reasonable sense, and this House does not rule there. It is a matter which is the responsibility of this House, and it is a matter which must be changed.

The IRA has its evil roots set deep in this area and its foliage covers the entire city with a dark shadow. Murder is rife, and terror is the normal way of life for all those whom I represent.

Against this, what has been the response of the Government? There has been an attempt to erect a security cage, which has been completed recently in new security moves, around the commercial and retail life of the town. I believe that this in itself is an act which admits of failure. We shall not beat the terrorists by hedgehogging. There have been very few successful hedgehogging operations in the past. Although at the moment we may be replacing the moats of past centuries by a wire fence, it will be no more successful today than it was at Stalingrad or at any castle besieged by marauding armies in years gone by.

The only way to defeat the terrorist is to go after him and to bury him. I have said that at home, and I have no fear of saying it in this House. These are men who are committed to what they believe in, and they are prepared to kill and to be killed for their cause. If we fight a war, people get hurt. At present, too many innocent men and women have been killed and too many are blinded, crippled and dead. Too many weeping widows have come to me. On every occasion that I have been home in past months, I have been to such homes and to such funerals. How many other Members of this House have been in such a position or talked to widows or weeping children? I could weep. I often have.

Against these terrorists, what happens? We have a useless cage erected which encloses elements of terror and the machinery of terror. We have periodical incursions, on the advice of intelligence services, which are not nearly strong enough into the strongholds. There are arrests, and there are imprisonments of terrorists. There are victories. But there is an endless downward drift because sufficient is not being done to stop it.

What is the response of the Protestant population in the city of which I speak? They saw what happened in South Armagh. They saw the endless murders. Eventually, whenever the Protestant population there failed to respond they saw a deluge of troops which simply transferred terrorist activity to their doorsteps. So what do the Protestant paramilitaries in Londonderry do? They strike back. This is the inevitable result of Government failure. If the legitimate forces do not do it, other forces arise. Other men will risk their lives and liberty. Other men will commit murder, arson and acts of intimidation. It is plain to those who look and who listen.

The strike-back capability exists in Londonderry. If I am asked how I know, my reply is that there are funerals this weekend which are not of Protestants, which are not of members of the UDR, but which are of members of the minority population who have suffered as a result of reaction terror against the efforts of the IRA.

In this situation, what is to be done? I believe that the answer is plain, as it has been for eight long years, but again plain only to those who are prepared to look and to listen—those who can see and who refuse to be blind to what is happening before them.

The IRA is the well from which the evil spills. It is the source and the stronghold of terror. It is the IRA which must be destroyed, and any remnants of reaction against it which remain can be taken care of easily when it is destroyed, when peace and quietness, when honesty and decent living, have returned to Ulster.

The first thing to do in the destruction of the IRA is to destroy its hope of a political victory. One of my right hon. Friends made that point many years ago and, if anything, it is truer today than when he first made it. Therefore, the political future of the people of Northern Ireland must be assured, and not only in this House, because it must be an assurance in the hearts of those who support the Union in Ulster and it must also be an assurance in the hearts of those who would try to destroy that Union. It is in the hearts and minds of men and women that this battle must be fought and won. It is only by assurance, by the definite destruction of the IRA's hope of victory and by the resurgence of the hope of those who support the Union that a true foundation for victory can be laid.

In that connection, I have in mind some of the foolish articles which in recent weeks have appeared in a number of newspapers and magazines dealing with such topics as the continued presence of the Army in Ulster and meetings in Ulster to discuss independence—meetings, incidentally, which were attended by those who did not make it to this House and who cannot speak for the people of Ulster.

I refer, for example, to an article which appeared some weeks ago in The Sunday Times which said that the British Army should pull out and which went on to describe what would happen. It suggested that in the parts of Northern Ireland that the Protestants controlled there would be a Protestant police force—a police force acceptable to them—and that in the parts of Northern Ireland which were controlled by Roman Catholics there would be a Roman Catholic police force responsible to that section of the community, and then all would be peace. Has the writer never heard of Cyprus and considered where that policy led there? That is not the way. That is not a path which will lead to peace in Ulster.

The Gracious Speech speaks of the need to combat terrorism and to restore the rule of law. Therefore, not only must there be the destruction of the IRA's hope of a political victory. There must also be the military defeat of the IRA. The plain truth is that at present the attack on the IRA is not really succeeding. The reason is that it is being fought by the wrong methods and on the wrong grounds. To succeed, the circumstances in which the attack against the IRA is carried out must be changed; the balance must be tilted in such a way that the security forces can win.

There are several things which can be done, not the least of which is to increase greatly the intelligence-gathering functions of the security forces. This is specifically a police matter.

There is the problem of protection by the part-time members of the security forces of the community in which they live. They fulfil a very valuable function. But whereas a soldier can go back to his barracks when his time of duty is over in the knowledge that he is safe until he steps on to the streets again, the UDR man goes home to his farm to milk his cows or to drive his tractor or he goes to his place of business, usually unarmed, utterly vulnerable and, when the IRA chooses, he is dead.

So not only do we have the problem of protecting the public; we have the problem of improving the protection of the part-time forces by their own actions, by the weaponry and by the communication that this House makes available to them.

Then we have the continual problem of border security. Some people say that the border is tightly secured but I believe, and I am sure Ministers are well aware of this, that there is not a sufficiently secure border. Gunmen who travel do not travel only in Ulster. They travel from south to north. They pick up their contacts in Ulster, commit murders and flee south. Because of this cross-border traffic my hon. Friends and I have so often raised in this House the case for improving border security. If we could catch the known gunman and put him away before he reaches his victim then not only would we save a life, but we would stop future plans and future murders. The best place to catch the gunman is in the border area.

We must look carefully at co-operation between the Army, the police and the UDR. There is no doubt that cooperation between the Army and the UDR is well-nigh perfect. But I doubt whether the same can be said about cooperation and joint patrols between the RUC and the UDR. Here is a local force of men born in Ulster, who know every nook and cranny and almost every house in their area, but cannot operate unless they are in sixes and sevens. One, two or three men operating with the police patrol to give added protection and fire power would do much to overcome problems of co-operation existing between the two local forces and increase cover. Unlike the Army, the local forces remain and operate in the same area month after month and year after year.

When the Prime Minister spoke he referred to the thankless task of the security forces. Where in heavens name did he get the word "thankless"? Hundreds of thousands of men and women in Ulster are more than thankful for the activities of the police, the Army and the UDR who do their job of keeping Ulster alive. The Prime Minister also spoke of the stability of Ulster. If he was speaking of political stability there is political action which is possible only from him and his Government at this moment. I would direct his attention to an article in the Economist this week. It said that since the collapse—I never thought of it that way—of the Northern Ireland Convention there were only two hopeful signs. These were the independence movement and the peace people.

Whether these are hopeful signs or not is a matter of opinion, but I suggest that there is a third movement, an evil movement—the rising tide of assassinations of security forces and across the sectarian divide. That is a deadly sign. It is that to which the Prime Minister must direct his attention and discover the underlying causes.

Finally, although this has been a grim, and gloomy speech, I assure the House of the resolution of the people of Ulster. These are people who have been through, the fire. They have been refined as silver is refined. The dross—and I believe there are people who think there is only dross —is at the top of the furnace, but beneath it—and the dross is so easily swept aside —there are the pure qualities of sterling silver, of people who have seen arson, murder, rioting, violence and endless death and who have not been broken.

One good woman newly widowed returned her wreath to the Secretary of State against her own principles as her husband requested because she believed that something had to be done to shock the Government into the realisation of the price Ulster has paid. Another young woman who had buried her murdered husband the day before she spoke to me said that she and her four sisters were members of the RUC Reserve. Other members of her family were in the police, the police reserve and the UDR. Perhaps by mentioning that family, although I have not named them, I put their lives in danger, but they are determined to stay there and play their part.

Against such courage, no power on earth can prevail. The people of Ulster know what they need and their just demands will not be given up—either by the people on the ground or by their representatives in this House. We know our needs, both political and military, and we have stated them. All I ask at the beginning of this new year in Parliament is that this House will supply those needs.

5.47 p.m.

Mr. Jim Craigen (Glasgow, Maryhill)

It is no easy matter to follow the hon. Member for Londonderry (Mr. Ross) who has spoken with such feeling of the sombre and stark conditions in Northern Ireland at present. I felt as I listened to the Gracious Speech this morning that the investigations of the six members of the IMF team who are over here at the moment would probably be more formidable than the deliberations of the 600-odd hon. Members in this House during the coming year. It seems that the economic, industrial and employment situations are questions which overshadow the lives of most of our constituents, whether it is their anxieties about the cost of living or the spirit in factories, offices and shops, or the general atmosphere existing in society.

I have no doubt that during the course of discussion on the devolution Bill we shall have an opportunity to question just what Governments can and cannot do, but it does seem that one of the problems facing us as a society is that many of our decision takers, whether in Whitehall, in the trade unions, or in industrial sectors of society, have been largely influenced by their experiences of the 1930s. There is far too much emphasis on what occurred in times past. Too many people are writing memoirs about events which happened 10 or 20 years ago, and too few of our best brains are concentrated on writing this country's social and economic future.

The problems facing the United Kingdom in the 1970s are far more complex than is appreciated generally. In our search for constitutional change, we may be in danger of thinking that institutional changes of themselves will necessarily provide us with industrial rebirth. Moreover, our experience of the House of Lords in the recent past indicates just how unwilling we are at times to grasp the nettle of change. The House of Lords has refused to launch the shipbuilding Bill. I hope that when it considers the devolution Bill it will not beholding on to the chains that bind the Bill to the parliamentary stocks.

Let me turn to the industrial strategy, which is mentioned in the Queen's Speech. It seems right to me that we should be concentrating on improving the United Kingdom's productive capacity. But the importance of that strategy is not coming across to ordinary men and women. In the last century we were fortunate enough to be endowed with resources of iron and coal, and also with the brains and skills to use those resources. We have a second chance now to use some of our new-found resources such as oil and gas. I trust that the Government will exercise the necessary foresight to make the greatest use of those resources.

It has been the aim of all post-war Governments to encourage exports. If we are now to succeed in that it is equally important to try to discourage import dependence in the United Kingdom. We shall have to ensure that our domestic industries supply more of the needs of the consumer in the United Kingdom. It is a sad insight into our society that "British made" has become something of a music hall joke. Most of us take a pride in our country and consider it essential to strengthen the economic and industrial fabric of the nation.

I was not surprised when the Prime Minister referred this afternoon to the third year of pay policy. One major problem in introducing another stage of pay policy will be the need to raise the status of our managers, our foremen and the people who dirty their hands in industry. We see plenty of articles in the Press by university professors and lecturers about the number of people who have switched jobs from manufacturing industry to local government. If I had the choice between a university lecturer or professor and a dustman to sweep the streets, a fireman to put out a fire or a policeman walking the streets to keep law and order I know what I would choose. I think that most of my constituents know, too, what their choice would be.

There has been too much emphasis in recent years on academics who contribute so much to undermining this country's reputation abroad and who do so much to create despair and despondency at home.

I turn now to the rate support grant levels. This week our colleagues in local government have had devastating news about the drop in central Government support for their work. Many hon. Members have had experience of local government before entering the House and they know only too well the kind of front-line problems that local government members face every day. The legislation that they are obliged to implement passes through the House. We have reached the stage in local government at which many of our top officials are virtually paralysed in their offices working out revisions of budgets and therefore unable to get things done. One of the justifiable criticisms by local authority members is that of the constant chopping and changing in the allocation of moneys. This makes it difficult for them to plan on a longer-term basis.

The Treasury does not set a very good example on manpower. Last December I asked the Chancellor what effect an internal management review had had on the number of staff employed at the Treasury and how many upward regradings had occurred. The plain fact was that he had appointed more people to the Treasury, that there had been a 1½ per cent increase in the complement there.

Demographically we suffer from the problem of an increasing number of people who are reaching retirement age. Britain is becoming an ageing country. We talk a great deal about what we would like to do for old people, but what does the future hold for some of our young people? Are they to be written down? In what we are doing in public expenditure are we paying sufficient attention to the types of job that are available for young people? Local authorities are big employers. I do not suggest that we should create unnecessary jobs, but are we providing the jobs which should be done? The Conservatives would cut back even more on the rate support grant in pursuance of their proposed savage cuts in public expenditure.

I believe that we shall have to look more closely at the value of work. It has been said that many people on social security benefits are better off than the people who are at work. That is an argument for introducing a minimum wage policy. We discounted the idea in the late 1960s when the subject was investigated. I believe the time has now come to lift up the lower paid. That is the sort of incentive we should be giving.

Some people may be looking forward to the green pastures of free collective bargaining, but there are times when the trade unions are only too glad to have statutory intervention in order to secure for industrial relations those things which free collective bargaining cannot achieve.

The challenge facing parliamentarians is one of winning back the respect of the general public. I do not believe that a national Government, with a bag of liquorice allsorts of opinions, is the answer. The answer is for the politicians to take more effective command of the machinery of government than hitherto. We do not sense what is worrying the ordinary person—his standard of life, security of employment, and, perhaps above all, the need for some sense of purpose and identity to know where we as a nation are going. That will call for a more responsible Opposition.

The more I hear the Leader of the Opposition, the more I am reminded of Annie Oakley and "Get Your Gun". The right hon. Lady constantly tells the Prime Minister "Anything you do, I shall undo".

Mr. Neil Macfarlane (Sutton and Cheam)

That is not what Annie Oakley said.

Mr. Craigen

It seems to me that there is a need for something much more constructive in our parliamentary life.

6.1 p.m.

Mr. Gwynfor Evans (Carmarthen)

I welcome the paragraph in the Gracious Speech which refers to the changes proposed by the Government regarding the way in which Wales and Scotland are to be governed. I hope that when the devolution Bill is published it will be found that the Government will have repented of its unacceptable intention of giving Wales a second-class status compared with Scotland. I hope that that will be abandoned.

That is not the matter that I want to discuss tonight, because I have no doubt that there will be many opportunities later for discussing that big issue. I want to introduce a different subject, but one which is important to the nationhood of and the quality of life in Wales, which I should have liked to see referred to in the Queen's Speech. From our standpoint it is a serious omission that there is no reference in the Gracious Speech to the Welsh language and all that depends on it.

I think that there should be a Welsh Language Bill, which should become an Act incorporating a worked out and firm language policy which would give the Welsh language equality of status with English in Wales. Only a strong language policy can save the Welsh language in the the crisis now facing it. I fear that the Government and perhaps most Members of this House have little understanding of and sympathy with the situation in which Wales finds itself regarding its language.

The English language, for 500 or 600 years, has not been in any danger whatsoever. English people are sure that they will always be able to enjoy and profit from the glories of English literature.

The position of the Welsh language is very different. The Welsh language is an older literary tongue than English. Its literature goes back unbroken to the sixth century. It is a wonderful literature. It was the language not only of literature but of Welsh law. Even when French was the language of law in England for centuries, Welsh was the language of law in Wales. But today the Welsh language is fighting for existence. Only one in five people now understand and are able to speak Welsh. In the middle of the last century nine out of ten people in Wales were able to understand and speak the language.

It is often said that it does not matter what language people speak as long as they can communicate their ideas and feelings. Some would say that if they can do that through English, why bother about the Welsh language? But language is much more than a means of communicating thought and emotion. It concerns a people's identity.

When I visited a daughter of mine in prison, I was not allowed, nor was her mother when she later visited her, to speak to her in Welsh. It was in that prison that, for the first time, we spoke to her in English. We seemed to be strangers to each other. We were different people.

That is also true of a nation. A nation which loses its language loses a great deal of its character and identity. In Wales the Welsh language has been the main vehicle of the way of life, of a civilisation. That is its importance.

Language is immensely powerful. Language is powerful enough to create a culture and to recreate a culture. We have seen that, for example, in the experience of Israel. Every national culture is unique and every one should be treasured and succoured.

The State cannot absolve itself from its duty and responsibility in this matter. Every culture has its own pattern of values. The main function of nationhood is to transmit these values from one generation to another. The values incorporated in our tradition in Wales are Christian values, but there is also a long history of interest in things of the mind. There has been an intellectual stream running through our history from pre-Christian days. The Celts of Gaul, for instance, who shared our civilisation in Roman days, have been recorded as people who enjoyed and were devoted to poetry and public speaking. Those apparently fragile aspects have survived in Wales. Their teaching profession was highly intellectual. There is still this intellectual bent in our tradition. These are among the aspects of Welsh culture which, although they appear so vulnerable, have survived the millennia.

Last year, for example, during Whit-sun week, I arranged to meet two Danish friends, who were acting for the Danish Broadcasting Corporation, on the field of the National Youth Eisteddfod which was being held at Llanelli—a town famous for a different aspect of our culture. We met there on the first morning of the eisteddfod. On that morning 27,000 people had paid for admission to this festival of the arts, as it were, among the young people. It was a wholly Welsh language festival. My Danish friends were overwhelmed by what they saw about them. They had not seen anything like it in Europe. Indeed, I do not suppose that there is anything like it in Europe.

This year 220,000 people paid for admission to the various sessions of our National Eisteddfod, which was held at Cardigan. The whole of the Welsh-speaking population of Wales is only some half-million people, so a considerable proportion of that population must have attended that festival.

Mr. Donald Anderson (Swansea, East)

I am listening sympathetically to the hon. Member for Carmarthen (Mr. Evans). Does he concede that he is in some way romanticising the situation? How does he explain the appalling truancy figures in Wales over the past few months if our culture is subsisting as strongly as he suggested?

Mr. Evans

Certain social factors explain those figures. However, they do not explain away the fact which I am putting before the House. It is a fact that this year nearly a quarter of a million people attended this Welsh-speaking festival. I am trying to illustrate the interest which Welsh people still have in things of the mind and the fact that the language is the main vehicle of this tradition.

Mr. Norman Buchan (Renfrewshire, West)

Perhaps as a Scotsman I may say in very bad Welsh Cenedl heb iaith, cenedl heb galon —a nation without a language is a nation without a soul. The hon. Gentleman is arguing an identity between the Welsh nation and the Welsh language and from the nation the need for a Welsh State. But, by definition, is he not also cutting out four-fifths of the people who live within Wales from being part of that State and therefore disproving his own argument on the Welsh nationalist position? Secondly, how does this apply to Scottish nationalism, because we share a language with England?

Mr. Evans

The situation in Scotland is quite different from that in Wales. I regard everyone who lives in Wales, whether he comes from England or Wales, as a Welshman if he has identified himself with our national community in Wales. Ignorance of the Welsh language is no bar. Anyone who lives among us is one of us. However, the language is our main and most important tradition. It is very important that we retain this and that the State gives it the assistance that it has a duty to give in order that we can retain it.

I give another example. A few years ago, in the old county of Carmarthen, we published a book of poetry of the people of Carmarthen in Welsh. It was one of a series of volumes of poetry. Contributing to our volume, in Carmarthen, were some 59 poets whose work was selected. They were not only teachers and preachers, but colliers, tin-plate workers, farmers, insurance premium collectors and shopkeepers. Two of them in my parish were a village cobbler and a county council road worker. That is the tradition that we have. It makes life more human. It enriches life and gives people more dignity. It would be a great loss if it were lost. It is threatened today with destruction.

In the past, until recent times, the State has been rather antagonistic towards the language. The Act which incorporated Wales into this State, which was England then, not Britain—because Scotland was not in at all—excluded the language completely from legal and all official life. It sought to assimilate the Welsh into English. That was part of the purpose. There was the same kind of attitude with the Education Act 1870. We were partly responsible for that, but largely because we were brain-washed and had suffered much psychological violence. In that Act Welsh was excluded from the schools, and for a generation children who spoke in Welsh were punished. That is well known, although it has probably not been said in the House previously.

However, the new sympathy is reflected in the decision that has been announced to equip the splendid Exchange Hall in Cardiff and its committee rooms, which will be the home of our Assembly, with simultaneous translation equipment which will enable us to speak in either Welsh or English as we choose. That is the right kind of situation. We must become accustomed to being a country with two languages.

Alas, however, this does not show a complete change of heart, as we have seen recently. My hon. Friend the Member for Merioneth (Mr. Thomas) pressed that the new rural development board be made bilingual, in the sense that there should be two official languages for that board. That was rejected by the Government. The Welsh Office has just rejected an attempt to establish at Bangor a comprehensive school which would be bilingual That is a pity.

Mr. Macfarlane

I have been following the hon. Gentleman's argument, though not agreeing with it. Does he not draw any conclusion from what is happening in Canada at present in the difficult problems relating to that country as a result of the move to becoming, perhaps, a bilingual nation? Surely the recent election results in the Province of Quebec would strike a note of chill into the hon. Gentleman's argument.

Mr. Evans

What is happening in Canada is an argument in favour of what I am now saying. If the Canadian Government had acted sooner and had given French equality of status with English throughout Canada, as one of the two languages of Canada, the situation in Quebec would probably not have developed. It is always the history of multi-language nations to act too late and to do too little. I hope that that will not be the history of this State.

I am glad to say that the number of bilingual schools is growing, as is the number of pupils attending them. However, the fine work that they are doing is very much undone by television, which is overwhelmingly English, even on the Welsh channels. The few Welsh hours that we have on television do comparatively little to safeguard the language, and even these are bitterly resented by some non-Welsh-speaking people.

There is a desperately urgent need for a national television channel that will broadcast Welsh language programmes at peak viewing times every night, and for at least one hour every day for young people and children in Wales. That is urgently needed if we are to save the language at all. There is near unanimity in Wales that the fourth channel should be allotted for this purpose. The Government have announced their agreement, but the months have passed, and now the years are passing, and nothing is done about it. I hope that the Government's priorities have not been disclosed by what they did last year—the establishment in Germany of a television channel for English programmes for the British troops there, at a cost similar to that which the Government would have to face in Wales for a Welsh channel.

What value do the Government attach to a national language, the old British tongue in this case? I appeal to the Government to act quickly in this matter. The cost of a television channel is not all that great. It is a comparatively small fraction of the cost faced by every county of Wales in its educational budget. It is equivalent to a sort of national university of the air for us to have a channel of this kind.

Even Iceland has its own television system and programmes. That is for a country whose population is about the size of that of Swansea. Surely if Iceland can afford it, we can afford it. As things are, the English pouring into Welsh-speaking homes throughout Wales erodes the language. If one has television there, one hears more English than one hears Welsh, because television is so attractive and is accompanied by very attractive visual pictures on the screen. If this continues for a long time, there is little hope of retaining our tongue as a national literary language.

Therefore, the need for action to save an ancient language and culture is very urgent. In these circumstances the fate of the language and all that depends upon it cannot be left to the homes alone. A clear language policy is urgently needed. It should include the television element. As the Westminster Government are the only Government that Wales have at present, they obviously have the duty to provide the policy and a television channel as a part of that policy. An adequate policy will cover matters such as employment, housing and soon. One cannot separate language and cultural matters from economic matters. However, it would be good if the implementation of the policy were supervised and furthered by a language ombudsman, who could see that justice was done for both language groups, and for individual persons within them.

6.19 p.m.

Mr. John Parker (Dagenham)

I welcome most of the business in the Queen's Speech but I have grave doubts about some of the proposals about devolution. I do not think that it will in any way enhance the standard of living of people in any part of this United Kingdom if we Balkanise the country and divide it up into lots of small States. The Scandinavian countries would have been much more influential in the history of Europe in the past, and certainly would be at present, if they had had closer links one with the other. At present I believe strongly that we ought to be dealing with the problems of inflation, the need for industrial development and the problems of unemployment. All the discussions about devolution will not help to solve any of those problems in any way whatsoever.

Mr. D. E. Thomas (Merioneth)

In view of the hon. Gentleman's previous argument, will he tell the House what the level of unemployment is in the Scandinavian countries?

Mr. Parker

The Scandinavians happen to be fairly prosperous at present. They have great resources in their countries.

I take the view that the creation of Assemblies will only add to red tape and bureaucracy. Under the Conservative Government we had the reform of local government, which enormously increased the number of highly paid officials and the amount of red tape and bureaucracy. We shall add another level of government as a result of devolution.

Like the hon. Member for Carmarthen (Mr. Evans), I am jointly of English and Welsh extraction. I very much welcome the Welsh element in my ancestry, which comes from my mother's side. It is my experience, having been born in Bristol, that both sides of the Bristol Channel formed a joint area and felt themselves part of the same country. The building of the Severn Bridge has brought the two sides together much more than was the case in the past.

The hon. Member for Carmarthen talked about the Welsh language. I have nothing against that language and I strongly deprecate the persecution of it that took place in the past in the schools and elsewhere. However, it seems that there are those who want to go the other way and to persecute the English-speaking people in Wales. I am certain that if the Welsh Assembly is set up it will be necessary and compulsory to be a Welsh speaker before there will be any chance of employment on the staff of that Assembly.

Already some of the Welsh universities are trying to ensure that only Welsh-speaking people are appointed to university posts. My son was at Swansea University. We have probably all read Kingsley Amis's "Lucky Jim" and we know what took place within those pages.

I agree that it is right and reasonable that a Welsh-speaking person should be appointed as a professor of Welsh history, for example, but it is quite wrong that a Welsh-speaking person should be preferred instead of a better qualified English-speaking person in a post that demands a knowledge of medicine, mathematics or physics. Surely the best person should be appointed. Surely the appointment should not be made on the basis that a candidate is a Welsh-speaking person. However, fanatics are trying to force Welsh-speaking persons with Welsh-speaking qualifications into positions in a way that does not admit the appointment of the best person. That is something that we must safeguard against.

I take the view that the great majority of the people of Wales do not wish to repeal the Act of Union. That is the Act that a great Welsh family, the Tudors, carried through in 1536, when they united Wales and England. Most of the laws in Wales and England are the same at present. There are few differences. I believe that if we had a referendum the majority of people in Wales would be against the separation of the two countries.

First, I support a separate Bill for Wales. Secondly, I suggest that a referendum should be held on the issue of whether Wales should have an Assembly at all.

Mr. Anderson

What my hon. Friend has said is not merely his impression but what the latest opinion polls appear to have borne out. The recent Marplan survey showed that over 60 per cent. of the people of Wales are content with the status quo.

Mr. Parker

I am satisfied that that is the view of the majority of people in Wales. I am also certain that the local authorities in Wales would much prefer to be under the rather distant supervision of London than under too close control from Cardiff. That is certainly true of North Wales. The people of North Wales do not want to be controlled too closely from Cardiff.

As I speak with great Welsh sympathy, I do not want anything to be done to discourage the use of the Welsh language or to discourage any of the cultural activities that take place in Wales, whether they are in English or Welsh. I take the view that Wales does not want to be separated from England and should not be so separated. Such separation should take place only if Wales wants it. If the majority of people in Wales want that, they should have it. However, that can be decided only by a referendum.

I hope and trust that a referendum will take place before the Bill is introduced and before Second Reading. If that does not happen, we shall be wasting our time on Second Reading if it is found at a later stage that the Bill is not what the people of Wales want.

The Scottish position is rather different. I had some experience in the past of holding a referendum in Newfoundland after the war. During the depression the British Government took over the government of the country once more at the request of the local parliament and it had a colonial status. When the war was over, prosperity returned to the country, partly as a result of the war, and there was a demand for independence, especially from the wealthier merchants.

We decided to have a referendum and three questions were put to the people. The first was whether they wanted continuation of the status quo. The second was whether they wanted full independence. The third was whether they wanted to be a province of Canada with all the rights of a Canadian province.

On the first vote there was a greater vote than most people imagined would be the case for the status quo. There was a slight lead for independence. A second vote was taken seven weeks later and there was a majority for joining Canada.

I take the view that in Scotland we should have a vote on the three issues, namely, the status quo, the Government's devolution proposals and the Scottish nationalist proposals for separation. If necessary, a second referendum could be held within three weeks to decide the issue finally. I am almost certain that the majority would vote in favour of the Government's proposals for devolution in Scotland.

The people of Scotland should be given those two chances to vote. If that system were adopted, the Government would find it much easier to pass legislation through the House. That would surely be the position if the people expressed their opinions first on this issue both in Wales and in Scotland. I hope and trust that the Government will take steps to see that we have a referendum in both countries and that we have separate Bills.

If we have devolution, what will happen to the nationalised industries? I take the Government's view that we must keep the economic unity of the United Kingdom. Surely we must keep the economic unity of the nationalised industries in this country. What will happen to the Scottish coal mining industry, for example, if it is a separate industry on its own? At present it is subsidised by the National Coal Board. I am well aware that new coal seams have been found under the Firth of Forth, but it will be a long time before those finds are developed.

I happen to be especially interested in the Forestry Commission. Most forestry is in Scotland. The Commission's headquarters have rightly been removed to Scotland in recent years. The Commission is run from Scotland and we do not want it split into separate bodies for England, Wales and Scotland. Surely it should remain united and as one commission run from Scotland. I was pleased that an old colleague of ours was appointed the new chairman of the Commission. The Commission would be wrecked if it were split into three small bodies.

I turn to a matter that is apart from devolution. It is high time that we took forestry more seriously in the United Kingdom as a whole. In the past we have seen a great deal of cheap timber coming in from overseas. Nowadays countries overseas want to send in manufactured goods. We have to pay far more for them than for raw materials which can subsequently be made into manufactured goods in this country.

Our industries that use timber in various ways—for example, paper, furniture and chipboard—are finding it more difficult to get their supplies. The more raw material we can supply at home for these industries in future, the better. It is not merely a matter of providing employment in forestry itself but providing for it in the subsidiary industries that use wood products. They will all be assisted if we take the matter seriously. We must do so because in the world as a whole there will be an increased use of timber in future and an increased shortage. We must be planning and planting now for the years 2000, and thereafter. The Government should be prepared to assist in that direction.

I know that there is not an enormous amount of money available from Government sources at present. However, it is one instance where we should not subsidise unfairly as we have done in the past. Let us copy the Continental countries and ensure that as much assistance is given to private forestry as is given to hill and sheep farming, for example. In that way we shall make a contribution towards building up the total amount of timber through private forestry as well as through the Forestry Commission.

I hope that the Government will reconsider their forestry policy. The Treasury always takes the line that the results are all in the distant future, but it should do more to consider possible shortages of raw materials then and the needs of this industry. Since about 90 per cent of our timber is imported, that factor has a considerable effect on our balance of payments. Therefore, the more timber we can produce in this country, the better it is from a national point of view.

Mr. Jasper More (Ludlow)

I agree with every word the hon. Gentleman says, but with respect to public expenditure considerations does not he agree that the Government should do their utmost to assist forestry by revising the law on capital transfer tax?

Mr. Parker

I understand that a committee is now reviewing forestry policy. I hope that it will produce a compromise and, although it should not give undue favours to forestry, it should do its utmost to encourage private forestry. I agree with the hon. Gentleman that that is a most desirable aim.

Nothing has been more disturbing for forestry and all the people affected by it than continual changes of policy under varying Governments. An agreed policy of planting programmes until the year 2000 and beyond should now be laid down by all parties, and agreement should be reached on the implementation of such a programme. It should be a stable programme and not one that varies according to who is at the Treasury or in Government. These matters should be achieved if possible by a consensus.

I conclude on the subject of devolution by emphasising that there should be referenda for both Wales and Scotland on the lines I have suggested, with separate Bills on both issues. If the referenda have to be conducted following the Second Reading debate, they should at least be held before we start on the Committee stage.

I suggest that the referenda should take place early in the new year. There is no reason why the people of Wales and Scotland should not consider this matter in January and the people of Scotland could make their final decision if necessary three weeks later. I am concerned to see that this House does not waste its time dealing with legislation which, as a result of any decision in the referenda, may prove to be quite fruitless. I am sure that if this policy were to be pursued, the Government could facilitate their legislation with greater ease, and this would be to the benefit of all our people.

Divided as we were on the question of the Common Market, it must be said that the referendum settled the issue once and for all. I suggest that if a similar policy were pursued in regard to the devolution of both Wales and Scotland, the end result would be much less divisive.

6.32 p.m.

Mr. David Knox (Leek)

I shall not join other hon. Members in the dispute involving Wales and the Welsh language. I am conscious that my knowledge of Wales is limited and I apologise to you, Mr. Speaker, on that score. Indeed, the only connection I have with Wales is in the name of my constituency—and that is stretching things a little.

I did not regard the Prime Minister's speech as worthy of this occasion. Having heard his speech, one would have thought that this country was not facing the most serious crisis it has suffered since the end of the war. As the Leader of the Opposition rightly said, this Session of Parliament will eventually be judged on the success we have in dealing with that crisis. It is without doubt the deepest crisis that has faced us for a long time.

I find it alarming that so many people in the country are still blissfully unaware of the situation. To some extent the crisis is due to factors beyond our control, and in particular to the massive increase in commodity prices in the period 1972 to 1974, culminating in the quadrupling of oil prices which had such a devastating effect on our domestic price level and our balance of payments.

To a large extent the present crisis is self-inflicted. We as a nation have insisted year by year on paying ourselves more and more for doing the same amount of work and, recently, for doing rather less. As a nation we demand twentieth-century living standards, but refuse to will the means to achieve these. As a nation we are more bitterly divided today than at any time in my lifetime. As a nation we have lost our self-confidence.

To the extent that our crisis is selfinflicted—and I believe that that is largely the case—the reasons for it are political rather than economic, and the remedies are political rather than economic, too. It would seem to me that if our current divisions continue, there is no chance of this country emerging from the present crisis. Nobody should under-estimate how deep these divisions are.

At present attitudes in Britain are not just tinged with envy, but are based on it. We are obsessed with what other people are earning. We seek scapegoats for our own failings—be they the coloured population, the unemployed, the rich or the poor. Management blames the unions and finance. The unions blame management and finance. Finance blames management and the unions. The Opposition blame the Government, and the Government blame the Opposition. Everything that goes wrong is somebody else's fault.

We all know that this cannot be allowed to continue. We all know that unless there is a much greater measure of national unity, we cannot emerge from the present crisis. However important and necessary certain economic measures may be, without national unity they are doomed to failure.

It is to exaggerate the influence of politicians to say that they are entirely responsible for the divisions in our society, or that it rests in their power to remove those divisions, but I do not think that politicians can escape all responsibility for those divisions. I believe that we can make a contribution to removing them.

There is no doubt that a great deal of divisive legislation has passed through this House in recent years. It has happened because at various times the Government of the day have been unnecessarily under the influence of their extremist supporters. Things have been done by Governments that have been deeply offensive to sizeable minorities, and this has provoked a reaction in those minorities. Indeed, sometimes the actions of the Government have been offensive to the majority.

If politicians are to help to overcome the divisions in the country, the major political parties must reject divisive measures. They must emphasise their agreements rather than their disagreements. They must seek out a consensus on the great issues of the day and—at least until the crisis is resolved—absain from adversary politics.

Mr. Buchan

What is the consensus between the public ownership of the shipbuilding industry, which some of us consider to be necessary, and the hon. Gentleman's point of view, which considers that move to be unnecessary?

Mr. Knox

I was about to turn to that. I thought that the Prime Minister had a great opportunity this afternoon to deal precisely with that point by saying that the Government intend to drop the Bill to nationalise the aircraft and shipbuilding industries—a divisive measure if ever I have seen one, and a measure that is rejected by the great majority of citizens, as the hon. Gentleman should know only too well.

I am not raising this matter as a petty party point. I believe that such an announcement by the Prime Minister this afternoon would have rid the country of an unpopular divisive measure. That would have been a real step towards national unity, and I regret that the right hon. Gentleman did not take it, although I hope that he may yet do so.

There are concessions to be made from this side as well. I recognise that, although apparently some Labour Members do not recognise that they have a contribution to make as well. [Interruption.] I would say to the Whip, the hon. Member for Bury and Radcliffe (Mr. White), that Whips exist to be seen and not heard. For example, we on this side should accept the existence of the National Enterprise Board. It is in being, after all. That is a contribution that we could make towards the consensus. The hon. Member for Renfrewshire West (Mr. Buchan) asked me for an example and I have given one. I look forward to hearing some examples from Labour Members.

If we are to overcome the desperately serious economic and poltical problems which confront the country, we need a much greater degree of national unity than we have had in recent years. We must stop blaming one another for everything that goes wrong and start pulling together. Until the crisis is over, we cannot afford the luxury of the usual party political battle, any more than we could afford it at that other great moment of crisis in 1940. Both major parties must compromise for the common good as they did in 1940.

What we need today above all is a Government who seek and obtain a real national consensus. It may be only on that basis that we can survive as a democratic country. About 10 years ago the right hon. Member for Huyton (Sir H. Wilson), then Prime Minister, talked about "make or break year" for Britain. He was wrong then, but I suspect that 1977 may turn out to be just such a year—economically, politically and perhaps even democratically—and that we shall make it only if we are a united nation.

I should now like to turn to the Government's main legislative proposal for the coming session—devolution. Like many hon. Members, I have changed my mind on this matter in recent years. Without committing myself to the Government's Bill, which we have not seen yet, I believe that it is very important that a Bill devolving real power to Scotland—and, although I do not know as much about it, perhaps also to Wales —should be passed this Session. This matter is now urgent. Time is no longer on our side.

Even if devolution has not been the subject of great public discussion in England until recently, it has been in Scotland for some time. The Scots are not willing to wait for a long period for the public discussion to take place in England. Of course it is not surprising that there has not been much interest in this subject in England, because England is not directly affected. But it will be indirectly affected. For the English as much as for the Scots we must get devolution right.

There is no point in pretending that Scottish nationalism does not exist or that if it does it will somehow go away. [An HON. MEMBER: "It has gone away."] It certainly has not. There are strong feelings of nationalism which are held not just by those who support the Scottish National Party but by those who support the Conservative, Labour and Liberal Parties north of the border. That may be unpalatable to some people, but realism demands that it must be recognised and that we must come to terms with it.

Coming to terms with Scottish nationalism means that there must be a real devolution of power to Scotland. If we act quickly and decisively, devolution will not mean separation. The Union can and will be maintained. But it is a dangerous delusion to believe that the Union can be maintained by merely saying "No" to devolution. If we refuse the claims for devolution, that will merely serve to encourage more Scots to support complete separation—not necessarily because they want it but because their legitimate demands for a greater say over their own affairs have been denied and because separation will then seem to them the only way of achieving those legitimate demands.

I believe that separation would be an unmitigated disaster for Scotland—and no less a disaster for England. For those of us who wish to avoid these disasters and maintain the Union, a democratically elected Scottish Assembly with real powers to run Scottish affairs is the only way. If that does not happen, I suspect that Scotland will have left the Union in 10 years' time.

But devolution will also make possible better government in both Scotland and England. It will allow the present overburdened Westminster Parliament to free itself from much Scottish business and so concentrate on fewer tasks, perhaps doing them better. I should have thought that that would be to the advantage of everyone in Britain.

Devolution will also mean that the Scottish Parliament and much of Scotland's government will be nearer to the Scottish people and so, one would hope and expect, more responsive to their immediate wishes.

Perhaps I may now finally turn—

Mr. Nicholas Winterton (Macclesfield)

In talking about devolution of government from Westminster to Edinburgh, does my hon. Friend also suggest that Scottish Members in this House be reduced in number and that those who are, left should not vote on English matters?

Mr. Knox

That is a more detailed point than I had intended to deal with but it is perfectly legitimate. If there is a real devolution of political power which is legislative and executive, to Scotland, as my hon. Friend says there is a strong case for reducing the Scottish representation in this House. However, it would not be tolerable that Members elected to this House should be deprived of a vote on particular issues which do not necessarily affect them directly.

I should like to turn finally to an omission from the Gracious Speech. I mean the Bill to deal with homelessness, to which the Prime Minister referred today. I am very sorry that the Government are not committed to introducing that Bill this Session. Over the past 12 months we have been led to believe that the Government would introduce such a Bill, which would place a statutory responsibility for accommodating the homeless on housing authorities, and which would clarify the related responsibilities of social service authorities.

On 20th November last year, the right hon. Member for Grimsby (Mr. Crosland), then Secretary of State for the Environment, in a speech to the Association of District Councils announced the Government's intention to introduce such a Bill. On 15th December last year, the right hon. Member for Brent, East (Mr. Freeson) made a similar announcement in the House. In February this year, the hon. Member for Durham, North-West (Mr. Armstrong) announced in a debate on Mr. David Lane's Private Member's Bill that he hoped that a Government Bill would be introduced in the Session which has started today.

It is very regrettable that the Government are not committed to introducing such a Bill. The absence of such a Bill leaves a real vacuum as many people have been expecting this legislation to be introduced. The problem of homelessness has been growing at a terrifying rate of late. One wonders how much longer it is to be allowed to grow before the Government take action.

We need the Bill and it must go further than dealing merely with homeless families with children. So far, the provision for homelessness has been largely confined to such families and the elderly. But homelessness is also a problem which affects single people and childless couples. We need action for them and we need it quickly. I hope that the Government will have second thoughts and that during this Session they will introduce the Homelessness Bill after all.

6.48 p.m.

Mr. Arthur Blenkinsop (South Shields)

I would agree with the hon. Member for Leek (Mr. Knox) in one sense, that the whole question of economic policy is of supreme importance at this time although I would develop to rather different conclusions. I am doubtful when hon. Members urge the importance of consensus and coalition, because so often in my experience that has simply led to fudging of major issues and decisions which must be taken.

Our difficulty has rather been that we have been too much inclined already to take that course and that there are many decisions—including that in relation to shipbuilding and ship repairing—on which I believe that a conclusion must be reached and an answer must be given. I represent a large number of those who are deeply concerned with the shipbuilding and ship-repairing industries. They have been looking for a conclusion to that problem for a long time. Further delay and uncertainty would be highly damaging to the prospects of those industries. I very much welcome the reply of my right hon. Friend the Prime Minister to the Gracious Speech.

I wish to turn to the contribution which an area like my own, in the North of England, can make towards solving our commen problems, and to look at the practical way in which we can offer assistance. There is a direct impact of the proposals for devolution on the problems in England. It is a mistake to assume that the Government's intended proposals on devolution for Scotland and Wales will not affect the United Kingdom as a whole, for they certainly will. Anyone who thinks that the problems of the English regions are not intimately involved with the whole argument of devolution must think again.

It is important that the Government's general policy towards the regions is clarified, and that there is a reaffirmation of commitment to regional policy before we complete our examination of the proposals for devolution to Scotland and Wales. There are anxieties—I know I can speak for my colleagues from the North of England—about the possible weakening of the Government's resolve towards the implementation of regional policies. We have had announcements of some modifications to regional policies. We have had modifications to industrial development certificates which withdraw a whole category of development from that control. This may be understandable and rational; but it causes questions and anxiety.

There has also been a change in the regional employment premium and the reduction of the premium in respect of male employees. Again, there is natural concern about the way in which this would apply to an area like mine in the North of England, where, alas, we still have the unpleasant reputation of having consistently the highest unemployment figures of anywhere in the United Kingdom. It is not a reputation we wish to retain. We have on top of that the Government's proposals for devolution which will be presented to us within a matter of days.

There is no question about the impact of the establishment of the Assembly in Scotland and the establishment and working—as it is already—of the Scottish Development Agency. It must inevitably provide a focal point for pressure from Scotland. That is naturally looked at with anxiety and concern in other parts of England, especially across the border in the area with which I am directly concerned.

It is because of these anxieties that we ask for a clear reaffirmation of regional commitment, a commitment which will be part of the natural work of all Government Departments and not just of one. Some of us think that perhaps there should be clarification by a Minister responsible for regional policy over the whole country. It may be a Minister in the Department of Industry or perhaps a Minister at the Treasury, but there is a case for such a representative—not a Minister for one particular region but a Minister for regional policy.

We have proposed that there should be a Northern regional development agency. The Scots now have such an agency established for themselves. We do not have one voice in the region as a whole which can speak in the same way and can be as effective as we, think the Scottish Development Agency can be. We do not say that that is the only way in which that focal point can be provided. Perhaps more can be done through a strengthened version of the regional office of the National Enterprise Board. We arc prepared to consider how that can be established and worked out, but we want to know the Government's view.

Another choice is the possibility of making the regional economic advisory council more of a reality. If it were given real power and a truly representative democratic character, it could be used in the same way. We question whether action of this sort needs to be universal. It may be that one region—I would certainly suggest the Northern Region of England—could be used for experimental purposes to see how effectively we could work out and strengthen a regional pattern which could be of value later on in a wider context. In the Northern Region there is much more common concern and interest in industry and in other ways which might make it a suitable place for work of that kind.

We have already undoubtedly achieved a great deal by our regional policies. Unquestionably, in the North we have made a vast change in the whole of facilities for transport and development. Therefore, we are in a better position to develop from what we have achieved than we might have been some years ago. I do not think that that will be challenged by anyone. It would be tragic if that achievement were now to be destroyed in any way.

Most of us in the North accept that the form of regional aid needs to be reexamined. It may be true—indeed some of us have argued—that some of the forms of blanket aid over the region have not been as usefully developed as they might have been. It is possible, for example, that more effective alternatives can be found for the regional employment premium, or some parts of it. We do not reject that necessarily, but we want to know what the Government are proposing in this area.

How do the Government intend to relate the work of the National Enterprise Board and all the NEDCs, for example, in examining industrial problems of interest nationwide, to their approach to specific regional problems? There are examples of how that could be done. I hope the Government will say more about this.

There is, for example, the immediate problem of the shipbuilding and ship-repairing industries. Further examination is required of the industry's practical problems. Almost by definition, it is largely located in the development areas, where action could be of great value both for the industry's sake and as a matter of regional policy. Those two aspects might there coincide.

In spite of the delay in the legislation, I hope that htere will be no delay in the necessary investment in the ship-repairing industry, part of which in my constituency is already publicly owned because of the inefficiency of private financial deals in the past. That is an area where action can be taken, and I hope that we shall have an assurance that there will be no unnecessary delay in developments there.

There are crucial matters in the heavy electrical engineering industry in regard to power station ordering and developments of the home market that immediately affect some of our most important development areas and critically affect my own area in the North of England. We have heard unhappy rumours of the possibility of the compulsory linkage of some of the major firms. I hope that the Government will be able to deny those rumours. It is of the greatest importance to my constituents and those on Tyneside and elsewhere in the North to retain the major heavy electrical engineering industry that provides employment for such a large number of people. Again, that is an area where regional policy coincides with the need for an examination of the industry as a whole.

I am chiefly asking my hon. and right hon. Friends, in the course of this debate at the outset of the new parliamentary Session, to give assurances that I am sure they will be glad to give of their continuing commitment to a regional policy for the North. The people in the North want to make a bigger contribution towards the needs of the economy. We are not asking for charity. We are asking to have the opportunity to make the contribution that I believe we can make.

7.3 p.m.

Mr. Neil Macfarlane (Sutton and Cheam)

Before I delve too deeply into the interesting observations that have been made during the debate, I should like to refer to the delightful contribution made by the hon. Member for Huddersfield, East (Mr. Mallalieu), which was most enjoyable. The hon. Gentleman skilfully avoided the long-term implications for the country and the Labour Party of the small print of the Gracious Speech. He spoke of inventiveness. As a member of the Select Committee on Science and Technology, I very much approve of that reference.

For the past two or three years, perhaps longer, we have missed many opportunities. Much that has been produced by research and development has not been transferred into positive benefits for our balance of payments. Too often opportunities have disappeared to other countries. I wondered whether perhaps the hon. Gentleman had read the report of the Science Research Council for 1975–76 before he made his specific recommendation.

I am aware that "inventiveness" covers a multitude of scientific possibilities within our society. The Science and Research Council is crucial to the country and comes under the direct control of the Department of Education and Science. The chairman of the council says in the annual report: The cumulative effect of the successive cuts announced since 1973 is that by 1980 the SRC budget in real terms is expected to be one-sixth less than the 1973 budget. The Council's financial expectations are now such as to call into question its ability to support the balanced programme which is necessary to fulfil the responsibility given by the Government 'to sustain standards of education and research in the universities.' During the past 18 months or so the Select Committee on Science and Technology has been examining the relations between industry and university. We conclude in our recent report that the Government have a major responsibility to make certain that over the next two or three years an urgent inquiry is conducted into this matter by the Department of Education and Science. We comment in the report that the increase in student and graduate numbers has been generally much lower in the sciences, engineering and technology than in the non-science subjects. I was distressed to find no refer- ence in the Gracious Speech to this aspect.

The length of the Gracious Address could mean that there might be an election in 1977. There may be such a legislative backlog as to call into doubt the Government's capability of sustaining office for longer than three or four months.

The Gracious Speech refers to the Government's conviction that the key to a better economic future for the British people lies in improved levels of industrial output. I have no doubt that that conviction is right but how will an improved level of industrial output be encouraged by the disastrous legislation which was put on the statute book in the past Session? Excessive nationalisation will be a persistent deterrent to any economic advance.

Nothing will happen until the Government accept the basic fact that we have a punitive tax system in the United Kingdom, too high taxation on business and too high taxation on the individual. Until there is a positive reduction in those two levels of taxation there can be no response from the people. Incentives and rewards are two essential ingredients. There is no mention of that in the Gracious Speech.

I agree with what the hon. Member for Dagenham (Mr. Parker) said about the strengthening of democratic processes. I view the devolution threat with deep concern. As a Member of Parliament representing an English constituency, with a Scottish father and a Welsh mother, I view my presence here with a degree of impartiality. I am proud of my Welsh heritage and of my Scottish connection, but I believe that the measures outlined in the White Paper "Our Changing Democracy" if put into effect would be a disaster to the country and the Labour Party. I utter that word of warning to the Government. I said earlier that I did not foresee that the Government would stay in power. If anything brings down the Government it will be the Second Reading ofthe devolution Bill. It will founder as surely as eggs are eggs.

I say that because the Government will, presumably, embrace Scotland and Wales in the same Bill, as they did in the White Paper. The proposals might lead to separatism, not within the next five years but perhaps over the next10 or 15 years. The Welsh people want nothing to do with the proposals, as was made clear by the hon. Member for Carmarthen (Mr. Evans).

If separation occurred over the next 15 to 20 years, it would mean that the countries of the United Kingdom would become a series of small sovereign States. It could mean, therefore, that we should not have any representation on the United Nations Security Council. It could mean that our representation in the EEC would be equivalent to that of Luxembourg, Holland and Belgium, and we should then be inferior to Germany and France. This will be a bad Bill. It is a bad White Paper and if the legislation goes ahead there will be disaster for the Government and for the country.

I do not like kicking the ball into my own net, but I must say a word of criticism of my own party. During the 1970–74 Government I lost a by-election in 1972 to a Liberal. We had lost a lot of contact and communication with people and Scottish nationalism has grown in Scotland for the same reason that the English Conservative Party lost so many seats to the Liberals then. It could well be that the passing of the Local Government Act 1972 triggered off much disaffection and discontent with Government and with local government in Scotland and this country. I would utter a word of warning that we ought to be looking yet again at the role and structure of regional government and local government in this country.

My constituents in Sutton are very disenchanted with the role of the Greater London Council. It is too big and remote and it interferes in the lives of people. After the next election the Conservative Government should seek to disestablish both the GLC and the Inner London Education Authority. The majority of residents in inner London boroughs would be delighted to see power transferred back to the lower tier of local government.

A reference was made in the Gracious Speech to law and order. That was the only glimmer of hope my constituents will recognise in the Speech. The Prime Minister said that fines imposed under the Criminal Justice Act 1971 which are fixed at present at a maximum level of £400 would be raised to a maximum of £1,000. That is long overdue and I welcome it.

The growth of hooliganism, violence and disorder in our society worries us all. The Minister of State, Home Office, whose presence I welcome this evening, will know that in my recent Adjournment debate I referred to the problem of police recruitment in the United Kingdom. I made a plea for him to understand the great concern that exists in London about the low level of the police establishment. We are all pleased at the upturn in recruitment but it is inadequate to deal with the mounting number of jobs and activities we expect the police to take on as a result of new trends in our society. I hope the Minister of State will bear that in mind.

The Government announced in 1975 a White Paper on sport and recreation but 18 months later we have not yet debated it. Both the Minister for Sport and the Shadow Minister for Sport recently attended a conference in Bournemouth of 200 representatives of Government sports bodies. This conference criticised strongly the lack of a debate, and it is long overdue. The Government have produced many White Papers and almost all of them have been debated, but not this.

There was a reference in the Gracious Speech which said that the Government would contribute modern and effective forces to NATO. I imagine that United States Army General Brown, who received a degree of criticism some time ago for comments he made about our Forces, would permit himself a wry smile. The only mistake General Brown made in his observations was that he did not say the strength of our Forces was pathetic. If he had said that, he might not have received criticism from his own kith and kin in the United States of America.

Many Members of Parliament place sportsmen's bets on the length of the Gracious Speech. If it is longer than 10 minutes, they could be justified in saying that there will be an early election, and if it is less there probably will not be. The Gracious Speech was very much in excess of 10 minutes and I would suggest in view of that that those hon. Gentlemen who are Members of the Labour Party and who have majorities of less than 5,000 in constituencies of 60,000 should start penning letters for jobs some time after the second or third Thursday in March.

7.17 p.m.

Mr. Norman Buchan (Renfrewshire, West)

I should like to comment first on a point made by the hon. Member for Leek (Mr. Knox) who has now, unfortunately, left the Chamber. He spoke of the politics of envy. I notice that it is always the well heeled who complain about that.

The hon. Gentleman referred to attacks on national unity through divisive legislation. When I asked him what he would do to achieve consensus, he suggested that the Government should withdraw their Bill to nationalise the aircraft and shipbuilding industries. His is a party of no change which wants a consensus of no change, but the people of this country want change.

There can be no compromise or consensus about public ownership of the aircraft and shipbuilding industries. He was defending the status quo in the interests of the well heeled and this is what the argument to drop divisive legislation is all about. Such comments from Opposition Members are a bit much in view of some of the comments that we have heard over the last week or two. The House of Commons went into the gutter last week and certain hon. Gentlemen opposite revelled in it. The attack launched on the poor, the weak, the aged, the infirm—the so-called scroungers on the social services—was disgraceful and divisive.

So were the gutter smears about individual hon. Members. I would remind hon. Gentlemen opposite of the quotation: They came for the Communists. I was not a Communist so I did not act. They came for the Jews. I was not a Jew so I did not act. Then they came for trade unionists, but I was not a trade unionist so I did not act. Then they came for me and there was no one left to act. This is the situation which such smears precipitate. It ill behoves hon. Gentlemen opposite to discuss divisiveness in our society or in our legislation.

I regret something which was implicit in the Gracious Speech. I think a myth has been created which ought to be knocked on the head. It is that all our ailments are due to expenditure in the public sector. This is mistaken. I heard an Opposition Member suggest that we should develop forestry through tax concessions to the private sector. That would mean a loss of income to the public sector and less public expenditure on forestry.

Of course, the loss to public funds would be exactly the same whether the money was spent on public expenditure or lost through tax concessions. The truth is that it was an attack on public ownership. There is great danger in failing to understand properly what is meant by the various aspects of the role of public expenditure.

The Prime Minister fell into the same trap when he referred to the need to remove people from employment in the public sector into wealth-producing industry. This is a myth because this is not the ailment from which we suffer. The reason given for cutting public expenditure is to release resources into manufacturing, the wealth-producing sector. Of course this is a nonsense. Our resources consist of three elements—people, capital and physical resources. The last element, existing manufacturing industry, is not a user of physical resources in the public sector. We have 11 million people unemployed in this country, so why do we need to release people from the public sector when we already have those resources? This argument is a nonsense.

On the question of use of capital, it must be noted that capital has been present, but that British capitalism has not invested in our own industry. About £7,000 million has flowed into investment overseas in the last five years. While it is not a nonsense to talk about the need for capital, it is a nonsense to suggest that we shall get it by cuts in the public sector. The capital is there; what we are missing is the development of mechanisms and instruments by which that capital can be put to use in the manufacturing sector. This means control of banks and financial institutions and control over the outflow of our capital, which the workers, who are so much condemned, have created for the capitalists, into investment overseas and into wasteful areas in this country.

That is why instead of talking about divisive legislation in relation to taking control of certain sectors of our industry we ought to be recognising the need for unifying legislation to take control in the financial sector and manufacturing industry. Where British capitalism will not invest, we, the people, must invest and have the right to own.

Mr. Macfarlane

I think that the hon. Gentleman is being a little harsh on my hon. Friend the Member for Leek (Mr. Knox), who made clear that he apportioned blame for the so-called divisiveness of the last few years pretty equally.

Mr. Buchan

The hon. Member for Leek referred to recent divisive legislation. I asked him for a compromise on the so-called divisive legislation to nationalise the aircraft and shipbuilding industries. I was not referring to the hon. Gentleman's allocation of blame, though I must say that it was not much of a consensus either.

I welcome the firm affirmation in the Queen's Speech and the speech of the Prime Minister of the pledge immediately to reintroduce the Bill to nationalise the aircraft, shipbuilding and ship-repairing industries. We have seen an unholy alliance between their Lordships and the Tory Party.

I regret that the Scottish National Party is not blameless in this respect. Its members received many telegrams from workers on the Clyde saying that their jobs depended on this Bill. One hon. Member tore up some telegrams and threw them across the Chamber. Despite the needs and interests of the workers in Scotland, particularly those on Clyde-side, the SNP has lent itself to this unholy alliance.

If it comes to a choice between the well-being of their Lordships and the well-being of my workers on the Clyde, I know whom I shall support. The time has come when we must look with a steady eye along the corridor to another place and ask whether we can any longer tolerate an unrepresentative, privileged, unelected body interfering and directly destroying legislation from this House. I hope that the SNP, whose slogan is to put Scotland first, will on this occasion put democracy first and back the elected representatives of the people instead of kow towing to their Lordships and their uneasy allies, the Tory Party.

The Prime Minister also went wrong in his references to local government expen- diture. He said that the task of local government was to provide services and not to provide jobs which would not otherwise be needed. With due respect to my right hon. Friend, that is a complete misunderstanding of the situation. Local government services have expanded to meet the demand which we have properly placed upon them. No one is suggesting that jobs should be created unnecessarily in local government, but the services have expanded and it is a nonsense to suggest that by pruning one or two administrative jobs we shall make anything like the cuts demanded by the Government.

We must not dodge this issue. Even on this side of the House we tend to say that we could get rid of a few highly-paid administrators, but we must recognise that the only way that we shall achieve the savings envisaged by the Government is by drastically reducing services, especially health, education, transport and housing. The effect of removing a few administrators will be almost zero and we are conning ourselves if we pretend that it can be done that way.

The Strathclyde Regional Council is under attack in Scotland for its 2 per cent. increase in manpower, but that was entirely in two sectors—more police and more teachers—both of which, according to the Conservative Party, should be increased. For someone such as myself it should he a day of great joy to know that we are bringing forward a Bill on devolution, but I recognise the problems and dangers.

I am reminded of a Sherlock Holmes story about the curious case of the dog that did not bark. The curious incident today is that the SNP, which has campaigned for years for the beginning of a Parliament for Scotland and has now got it in the Queen's Speech, should not have a single hon. Member here to listen to the Speech or to comment on it. It is a disgrace. Plaid Cymru had one representative here earlier and I should have liked to refer to his speech, but as he has now left, I shall not do so.

The SNP Members have gone to great lengths to say what they wanted in the Queen's Speech. They wanted to change the two-tier structure of local government in Scotland. In effect, they were arguing for a highly centralised structure in Edinburgh and small and weak local government elsewhere. This is a centralised concept, not a local government concept.

Secondly, the SNP claims that one of the Commissioners to the EEC should come from the Scottish Assembly. The hon. Lady the Member for Dunbartonshire, East (Mrs. Bain) has just entered the Chamber, so let me deal with that claim. It is fine except for one thing. What about poor Wales? Has the SNP consulted Plaid Cymru? I should like to have seen a little more equality and a concept of nationhood from the SNP.

Hon. Members from the SNP also talk about powerful separate economic powers within Scotland. I believe that the devolution Bill is just about right. If economic devolution is extended beyond a certain point, it feeds back on itself and begins to give less economic power.

Let me give a constituency example of the problems which could arise if we had total separate economic power in Scotland. The firm Babcock and Wilcox makes heavy electrical engineering goods, high-pressure boilers and supplies power stations. Only the Government, through their nationalised board, the Central Electricity Generating Board, can order power stations. If we had a Scottish Government with a separate Scottish economy, we should have to order any new power stations from Scottish firms. No Scottish Government could do anything else. Indeed, and the SNP and I would be the first to protest if they did.

Consequently, the Scottish firm of Babcock and Wilcox would supply power stations in Scotland, but the English and Welsh generating boards would have to order from firms in their own countries. Babcock and Wilcox exists on the nine-tenths of its market which is south of the border. It could not exist on one-tenth of its present market. Therefore, with a separate economy of a separate Scotland, the firm would close because it could not sustain itself on only one-tenth of the potential market. There would be no power in the Scottish Assembly to maintain that factory in the circumstances.

I agree that we have to decide what the Assembly is going to do, and I do not mean by that the nuts and bolts. As I have said, there are things that I should like to see changed in the Government's proposals, but they are not a bad package, given the will to survive. The problem is whether the Assembly will be used to create tension and polarisation between London and Edinburgh, which would lead to separation.

The Scottish National Party says that it will allow the Assembly to work. Yet its demands—for example, for a separate EEC Commissioner and complete economic power—are the very things which would create a situation leading to separation. Frankly, I do not believe the SNP's promise that it wants to see the Assembly work. I must admit that if I were a Scottish nationalist, I would not want it to work and would use the opportunity to destroy it.

The answer is to give the Scottish people a referendum. I disagree with those who say that it should come before the Bill. We are pledged to bring in the Devolution Bill and that is right because it is an extension of democracy and a decentralisation of administration, and it brings democracy closer to the people.

We should therefore put the Bill through and then ask the people of Scotland their views in a referendum. There should be a preamble such as that in the Common Market referendum saying that the Government and Parliament have introduced an Act establishing an Assembly sitting in Edinburgh to deal with Scottish affairs. There should then be two questions—"Do you approve of that Assembly?" and "Do you wish Scotland to remain part of the United Kingdom?".

I think that the first question would get an overwhelming "Yes". But however the second question went the answer would at least let us know where we stood. If the people said "We want independence", the Assembly would be in existence and therefore the body equipped to negotiate for independence harmoniously. If the people said "No" it would mean that the Members of the Assembly could get down to work without having to look over their shoulders in those first and crucial two or three years. I believe that it would work. Otherwise, the Assembly could be wrecked. There are those of us here who could think of ways to wreck it. The response which the Leader of the House gave to my speech at the Labour Party Conference suggests that the Government will look at this proposition. If necessary, I shall put down an amendment to that effect when the Bill is before the House.

A poll in the Daily Record suggests that people are coming round to the idea of a referendum. No one should take that poll too seriously, of course. The paper has printed a ballot form and has asked those readers interested to fill it in. It is not a very sensible way of testing public opinion. Obviously, a very high percentage of Scottish nationalists will return the form. Nevertheless, in a properly run referendum, the Scottish people could be asked for the first time, coolly, following their own consciences in the privacy of the polling booth, to state their own views.

In the Putney debate, Colonel Rainsborough said every man that is to live under a government ought first by his own consent to put himself under that government …". That concept is correct. The referendum would also have the practical effect of enforcing the will of the people behind the will of Parliament so that the Members of the Assembly could get down to work. It would give the Assembly a chance to work in the first and crucial two or three years. That would be the case whether the Assembly was working within the framework of support for separation or otherwise. In either case, it would be done by the will of the people.

7.45 p.m.

Mr. Esmond Bulmer (Kidderminster)

I am sure that the hon. Member for Renfrewshire, West (Mr. Buchan) will not expect me to follow him over the ground he has covered. I wish to concentrate my remarks on the paragraph in the Gracious Speech devoted to industrial democracy.

The Government have not attempted to define what they mean by the term. The term is broad, ambiguous and fashionable. To the Left, it means workers' control; to the TUC, parity representation on boards of directors; to one of the researchers of the Bullock Committee, a form of suffrage which allows directors of a company to be dismissed by the employees; to most management and the EEC Commission, a degree of employee involvement in the decisions which shape their lives. It is the last definition to which I subscribe, and it is that involvement that I want to see encouraged.

I hope that in the debate a Minister will clarify the Government's approach and confirm that the Government will seek consensus. I hope that he will also tell us which Department will be responsible for drafting the legislation.

The Government have said that they will bring proposals after the Bullock Committee has reported. The Bullock Committee was created by accident—that is, if a sleeping Whip can be described as an accident. Became a Whip was asleep, the Industrial Democracy Bill introduced by the hon. Member for Chester-le-Street (Mr. Radice) was allowed to go into Committee. The Bill sought to put into law the TUC's proposals for parity representation on boards of directors where more than 2,000 people were employed. The Government were not prepared to vote against the Bill but sought to persuade the hon. Gentleman to withdraw it. So a formula was passed round between the Departments of Employment, Industry, and Trade, Downing Street and the TUC, and finally some sort of consensus emerged in the terms of reference given to the Bullock Committee.

But those terms of reference owe far more to the nuances of opinion within the Labour Party than to any genuine determination to find what is the case for the development of industrial democracy. Just as I beg leave to doubt the terms of reference of the committee, so I feel that its composition could be very much better than it is. It seems to me that it would have been reasonable to expect a chairman with a deep knowledge of industrial relations, that the academics would be both well qualified and neutral, that both sides of the argument within the trade union movement would be reflected in the composition of the committee, that some member of it had built up a business, and that it also included a member who had spent most of his life in the front line of the most difficult areas of industrial relations.

By those yardsticks, the Bullock Committee is found wanting. The Government are waiting for a report from a body whose terms of reference are biased, whose composition is unrepresentative of all the interests affected, and whose findings are certain to be divided and probably divisive. I am not optimistic that it will provide the basis for acceptable legislation in this Session of Parliament. I think that the best for which we can hope is that the report will trigger off a great debate, and I earnestly ask the Government to allow time for that great debate—time for a consensus to emerge, time to experiment, time to establish what experience is valid and what is not.

Professor Batstone, one of the researchers, has given a serious warning in his introduction to his report for the Bullock Committee, "Industrial Democracy and the European Experience". He said: There were a number of problems in preparing this report. First, the time constraints upon its preparation have meant that the review is necessarily more partial than would ideally be the case. Second, the introduction of worker directors is so recent in many countries that no reliable data on their actual performance are available. Third, much of the debate on industrial democracy is remarkable for its failure to take into account actual experience. And so it goes on, adding, In view of these problems, any discussion of worker directors and industrial democracy in an international context, including this one, is to be treated with caution.

The Under-Secretary of State for Wales (Mr. Alec Jones)

I should hate the hon. Gentleman to be under the delusion that our attitude to industrial democracy owes anything to a sleeping Whip. There was a commitment to it in the manifesto put to the people at the last General Election.

Mr. Bulmer

Does the Minister believe that the terms of reference of the Bullock Committee would be as they are if the hon. Member for Chester-le-Street had not had his Bill taken into Committee?

Mr. Alec Jones

I am quite sure that the terms of reference of the Bullock Committee meet the wording of the election manifesto, and I invite the hon. Gentleman to read it now, if not later.

Mr. Bulmer

We hear some unsatisfactory answers from the Government Front Bench. But I join the Prime Minister in commending the success of the Germans in this area. It might be opportune to remind the House of the framework in which those German unions operate so successfully.

There are only 16 unions and usually there is only one union per plant, whereas in this country a company employing as few as 1,500 people may have to deal with as many as 50 unions. There are no legal immunities for unions or their officials. Membership of unions must be voluntary. Closed shops are illegal. The union must be independent of any ties to a political organisation. As in virtually every country in the world save Britain, collective agreements are legally binding on all parties.

Strikes are illegal which are in breach of a collective agreement or individual contract of employment, and which are not aimed at the employer for the purposes of adjusting working conditions but against someone else—for example, sympathy strikes. Strikes are also illegal which take place before conciliation procedures have been exhausted, and which are not approved by a 75 per cent. majority, not only of trade unionists but of the entire work force, by means of a secret ballot. Strikes of which the aims are political are illegal. Strikes are illegal which are conducted with intent to cause loss to the employer in violation of public morals. This could arise if, for example, essential services in any establishment were not maintained, or if the aim were to induce an employer to dismiss an employee who refused to join a trade union. Finally, strikes are illegal which stop essential deliveries and services to the public.

If the Prime Minister admires that structure, so do I, and if our industrial relations were carried out within so well-defined a structure, I have no doubt that we should be more prosperous as a nation.

The German unions understand one thing which, unfortunately, very many British trade unions do not understand —that we have to enlarge the size of the cake before everybody can be better off.

The unions will want time in which to consider the recommendations of the Bullock Committee. So, too, will industry. It is sad that there are so few here who understand fully the variety and complexity of British industry. But I say to those who do that they should try to construct a participative framework which would be equally applicable to, for example, Gestetner, Unilever, IBM, Marks and Spencer, Bristol Channel Ship Repairers—if I dare mention them—and John Lewis.

Some companies have tens of unions to deal with. Others have one or even none. Some companies have a majority of their employees employed in this country. Others have a majority employed overseas. Some companies have large numbers in one place. Others have a lot of small unions. Some have sophisticated consultative procedures. Others have none at all. Some have unique constitutions. Others are subsidiaries of foreign companies. It must be right that companies should be encouraged to work out their own solutions.

The Bullock Committee findings are certain to open a fresh debate on structure and the relative merits of the unitary against the supervisory board, on the form and composition of Works Councils and Consultative Committees and methods of election. There are likely to be fierce arguments over property rights, rights of minorities and rights of non-union employees. There will be arguments over numbers and arguments between those who believe in the extension of collective bargaining and those who believe in participatory arrangements. There will be the need to take into account eventual harmonisation within the EEC and between the public and private sector.

The paramount need will be for training. Commissioner Gundelach has estimated between five and 10 years at the level of the board. But so much of the argument has been bedevilled by whether people are for or against employee directors. What is crucial is to see that employees are involved from the job up, and the TUC emphasis on board level by no means reflects the views of the majority of its members.

It is inconceivable that if the Government wished to introduce legislation covering all these issues in this Session of Parliament they could do so with a genuine consensus and within the parliamentary timetable. Wisely, I understand, the Government have not so committed themselves. A great deal of consultation is necessary. It must be meaningful consultation and not consultation of the sort that we had over the Dock Work Regulation Bill.

I hope that the Government will not be tempted, by the special power of the General Secretary of the Transport and General Workers' Union, to depart from what they regard as common sense and desirable in the interests of harmonious industrial relations generally.

This is not to say that there are not some things which the Government can rightly and properly do. They could define the responsibilities of a director so that the interests of the employee art taken into account. They could require the chairmen of companies to spell out how the employee interest was taken into account. They could move towards the fall-back position in the EEC, whereby there has to be a body representative of all employees with whom the board can consult.

The Government could ask ACAS to draw up codes of practice representative of the diversity of industry. Perhaps, when some worth while case history had been established, ACAS could be invited to make recommendations to Parliament on what further changes were necessary.

In conclusion, I urge the Government Front Bench to go carefully, to go sensibly and to build on consensus. If they do not, they will do irreparable damage to industrial relations.

7.47 p.m.

Mr. Harry Cowans (Newcastle upon Tyne, Central)

. Thank you, Mr. Deputy Speaker, for allowing me to catch your eye at this moment, possibly before some of my hon. Friends who are waiting to join in the debate—a privilege that naturally I shall not enjoy in future.

It will be a difficult task to follow my predecessor, the right hon. Edward Short. Ted was well known in the constituency over a period of 25 years and, indeed, before that he served well and long in local government. He was very well known for his acts of kindness and consideration to his constituents. Indeed, people still talk kindly—as I found while canvassing—of the many acts that Ted performed during his parliamentary career.

Hon. Members will be aware of Ted Short's many achievements within the House over a long period. To list but a few, he was Government Chief Whip, Secretary of State for Education, Postmaster-General, Leader of the House of Commons, and a Privy Councillor. That is, indeed, an eminent and enviable record to follow. It is one that I shall find very hard to live up to, but I can only try. I am honoured and proud to be able to serve his constituency—the constituency in which I was born, in which I grew up and in which, while canvassing, I have renewed many school acquaintances which I had all but forgotten.

I have been reminded while sitting in the Chamber listening to the debates of the smallness of the constituency. However, what it lacks in physical size it more than makes up for in the quality of the people resident within it. They are industrious, they call a spade a spade and, like many other inner city areas, the constituency has many problems. Housing is but one of them.

As an ex-chairman of housing and local government authorities, I am well aware of these housing problems. However, Newcastle City Council has an enviable record in slum clearance. When I compare the house in which I grew up with some of the houses built since, I feel that we have indeed achieved Utopia. Long may this continue.

One matter which concerns me is the drift of population away from our inner city areas. To some extent this has been caused by the advent of new towns, which were a good idea. However, they have had an unfortunate side effect on our inner city areas. Unfortunately, mostly it is the young who go, and they are the lifeblood of a city. Without the young, there is no future.

That is why I welcome the reference in the Gracious Speech to "special attention" being given to housing in the inner city areas. It is time to redress the balance. It is time to rebuild our inner cities and to stop this movement of population away from them. It is time that better facilities were provided in our inner city areas for both young and old people. An improvement in the environment is sadly overdue.

We have to attract the young back into the inner city areas. We have to have well laid-out industrial estates on the peripheries of our cities with diverse industries. By offering housing and jobs we have some hope of attracting people back to the inner city areas. Only these will stop the drift away from them.

We must have an efficient transport system in Newcastle. That is why I feel that a Metro is vital. I hope that it will proceed. We need new shopping facilities such as the Eldon Square shopping facility in Newcastle. If they have not seen it already, I recommend hon. Members to do so. They will find a visit very well worth while.

If we do not redress the balance, the future for our inner city areas in general and that of Newcastle in particular will be one of slow decay. Although the new towns allowed us to create the space in inner city areas for development, it is now time to redress the balance and to build up those areas. Any lack of effort in this direction would be fatal. I appreciate that it will take resources. However, I understand the reference in the Gracious Speech to "special attention" to mean just that.

Another aspect of the Gracious Speech which concerns me is the passage dealing with devolution. If there is to be devolution, adequate safeguards for cities like Newcastle are vital. Without them the situation would be like the attitude of a person who had tried for a considerable time to win one of the minor prizes on a football pool only to discover the person living next door winning a very big one. In Newcastle we live next door to Scotland and, as a result, we appreciate some of the aspects of devolution which may not be so apparent to those living some distance away.

Anyone living next door to a problem recognises it very early. That is why I shall be watching the devolution proposals very closely to see that those safeguards are forthcoming. Without them, not only Newcastle but the whole Tyneside area will feel a very cold draught. Obviously, it will be to the disadvantage of my constituents and to Tyneside as a whole. If those safeguards are not forthcoming, I shall find it very difficult to support the devolution proposals.

Those are the matters that I shall be looking out for on behalf of my constituents.

7.55 p.m.

Dr. Alan Glyn (Windsor and Maidenhead)

It falls to my happy lot to be able to congratulate the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) on his maiden speech. I do so for two reasons. I congratulate him, first, on winning his seat against the political tide. I congratulate him, secondly, on the excellence of his speech and the deep interest in his constituency that it demonstrated, to say nothing of the wider national topics of housing and depopulation from our city centres. The House looks forward to hearing contributions from the hon. Gentleman on many future occasions.

1 might perhaps add a personal note about his predecessor, who was always very helpful to me. I had a motion which proposed to restrict the speeches of Back-Bench Members to 15 minutes. He was always trying to help me get it through. Unfortunately, we were not able to succeed.

Turning to the Gracious Speech, I am afraid that I am able to agree with the Prime Minister in only one or two respects.

The first occurred when the right hon. Gentleman paid tribute to Her Majesty's 25 years of selfless service and made reference to the forthcoming events which I hope will start in my constituency and will very much concern it.

This brief document takes on considerable importance when we realise that we are looking at the country's economic position which is as bad as it was in the 1930s although, of course, it cannot be compared bearing in mind that the circumstances of the 1930s and those of today are entirely different. Nevertheless, I am sure that no hon. Member will disagree that the country faces very grave difficulties not only in the near future but in the middle term.

That being so, I ask myself one question about the Gracious Speech: does it deal with immediate problems or with long-term problems? I am afraid that my answer is "In most cases, no". The chief problems in the country today are inflation, inadequate defence, uncertainty among the people, a tendency towards violence and, I am afraid, the feeling among people "Well, is it really worthwhile, and is there any future to look forward to?"

The Prime Minister compared the rate of our indebtedness in 1964 with that of today, although I notice that he was careful not to give the figures for 1970. However, I think that we should take a more non-political look at the situation. I do not want to start comparing what the Labour Party did with what my party did. I do not approve of everything that we did when we were in power. But we have to realise that, with inflation running at the present rate, something has to be done, and one of the most important things that we have to do is to make our people realise the perilous situation in which our economy is at the moment.

It is no use, as the Prime Minister suggested, maintaining our high standards at the expense of someone else's money. because, sooner or later, that money has to be repaid. What worries me is not only that we have to repay the money that we are borrowing abroad but that, as a result of the fall in the value of the pound, we shall find ourselves very soon paying an additional 50 per cent. or more in interest and principal.

It is no good our saying that we are mortgaging our future to North Sea oil, because that may not come off.

I believe that the proper course in this instance is to tell the people the truth. We must say that it is essential to cut public expenditure and to control the money supply. We must make people realise that it is not just a matter of cutting their present high standard of living for a short period. We have to reduce our standards and go through a period of quiet living, at the end of which there is no reason why, with the help of our immense assets in North Sea oil and other reserves, we should not restore our economic position in the world. People must be made to realise that it is impossible for us to continue borrowing at the rate we are doing so at present.

Then there is the question of violence. One of my hon. Friends has already referred to the need for the fines to be raised to £1,000. I think it is more than that—it is a question of our attitude towards young people, a question of education, and the need for more parental responsibility which seems to have drifted out of our society completely. I was pleased to hear the Prime Minister mention these points. I believe that the acts of a child are the responsibility of its parents. If damage is done the parents should pay for it. If the parents are responsible they cannot then turn round and claim that it has nothing to do with them. They will have to go to court and pay the fine and damages. Schools and parents should be working together on these matters.

There is one point which particularly alarms me. Of course the Gracious Speech is right to say that we must do all we can to promote detente and peace—we are all one on that. But standing above all that is something much more important—the fact that the defences of this country are inadequate. I will not elaborate, because the whole world knows it. All our allies and our enemies know it. It is one thing for our allies to be aware of it, but it is very different when our enemies know how weak we are. It is very worrying to see the strength of the Russians, particularly their fleet. I know that adequate defence is expensive, and I believe that the cost should be shared more by our allies. I hope and pray that this Government will not only maintain our Forces but will see that we get a fairer quota of money, because we are contributing not only to our own defences but to those of NATO and the whole of the Western world. This is a low price for our allies to pay. Also it is vitally important that we and our allies should sort out the whole question of standardisation so that we can help one another in our defence programmes.

What sort of society do we want, and does this document provide it? I do not think it does. I want to see a society which offers rewards to people who work, offers differentials, and gives incentives to people to save. Savings are an important element in our economic structures and our whole monetary system, and if we do not provide incentives people will not save. It is incredible that there are many people in this country—and no one can deny this—who find themselves better off when they are not working than when they are. Whatever the reasons for this, it cannot be a sound approach to building up a better society.

Another point which worries me particularly is education, which has become far too political. Education should be judged by one thing and one thing alone —its value to the individual child. In my opinion every child is different and no one particular brand of education can suit every child. One school may be suitable for one child and another for another. Therefore, selection and choice are the rights of all parents.

Mr. Skinner

There would have to be a lot more schools. What about Tory cuts?

Dr. Glyn

The hon. Member for Bolsover (Mr. Skinner) has a habit of lying down in the Chamber and interrupting from a recumbent position.

Mr. Skinner

At least I do not drop off to sleep like some hon. Members.

Dr. Glyn

That may be, but perhaps the hon. Member for Bolsover does not have the capacity to do so.

Mr. Skinner

I am alert.

Dr. Glyn

Another point which worries me is the Government's desire for wholesale nationalisation. I do not think it is in anybody's interests to nationalise for the sake of nationalisation. The country is in a bad enough state as a result of Socialist measures taken in the last two years, and we do not want to repeat these mistakes. We do not want to divide society. We should make it known that we want to unite our people in a single purpose—to build up this country. We must encourage people to put as much effort and as much money as they can into doing that. But what private company will borrow money at 18 or 20 per cent. of rates of interest?

We must increase production and see that people are properly rewarded for their services. Incentives must be inserted into our society, and people must have a sense of duty and a realisation that this country has a great rôle and a great future if everyone plays his part, regardless of political party.

8.8 p.m.

Mr. George Rodgers (Chorley)

I have no intention of speaking at great length but I must extend my contribution to congratulate my hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Cowans) on his first-class maiden contribution. He made his speech with great lucidity and common sense—ingredients which are not always abundantly present in this Chamber. We look forward to hearing from him again.

There have been some fascinating contributions in this debate so far. My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) referred to Sherlock Holmes' sleeping dog, we have had recent comments about sleeping Members, and the hon. Member for Kidderminster (Mr. Bulmer) referred to a sleeping Whip. I found that very intriguing. I have many complaints against the Whips but the fact that one of them was sleeping is not one of them. They seem to sleep very infrequently and they are reluctant to let anybody else sleep—on this side of the House at least.

I am very concerned about the regional strategy practised by the Government and I note that in the fourth paragraph of the Gracious Speech the Government seek fairer distribution of the world's wealth in an expanding world economy between rich and poor countries. I hope that they will include internal distinctions in this. They should look at the differences in wealth and poverty between various regions of this country. Some Conservative Members have declared recently that regional strategy as such should be abandoned altogether, and that we should be prepared to see market forces establish the levels of employment in the different regions. The leading spokesmen of the Conservative Party have a duty to disown these remarks, or at least dissociate themselves from such comments.

With all its faults, the regional policies adopted by successive Governments have attracted hundreds of thousands of jobs to the regions. It is equally true that there has been an even greater drain of employment away from the stricken regions. However, but for Government intervention there is no doubt that those areas would now be desolate and anyone who advocates a policy which involves abandoning the regions has a lot to answer for.

Let me recommend certain practical steps in regional policy. I turn first to the EEC regional development fund. I am no enthusiast for the Common Market. I opposed membership originally, and I hoped that we would extricate ourselves from that quagmire through the referendum. The regional fund exists just the same, even though it is only a trickle. That is hardly surprising since 75 per cent. of the total Community budget is devoted to supporting the extraordinary common agricultural policy.

In each year of membership since the Market was founded the difference between the richer and poorer regions has grown. It is now greater than it was originally. As the years pass, the rich in the Common Market get richer and the poor get poorer. In each year of our membership our contributions to the Community have exceeded our receipts from it. It is estimated that this situation will continue into the 1980s. There was one year when we received more than we paid, and by a remarkable coincidence that was the year of the referendum.

I want us to use the fund. Offices should be set up in the North-West in the same way as they exist in Cardiff and Edinburgh to see that the fund is fairly distributed. It is not distributed on the basis of unemployment. If it were, a much greater proportion of it would go to the North-West. There is genuine resentment that any contribution made to the regions is deducted from what would have been available anyway from central Government funds. This situation should be remedied.

I turn now to the function of the Location of Offices Bureau. It was established in 1963 to encourage the decentralisation of private office employment from central London. In a way it has been almost too successful. The London boroughs have complained that office employment has drained from the centre of London. But 80 per cent. of the firms which have moved out have moved only to other areas of the South East, not to the deprived regions. The assisted regions have received only 7 per cent. of the supported relocations.

I understand the anxieties of the London boroughs about the flow of office employment away from London, but they exaggerate the position. At the moment there are six vacancies for every unemployed secretary in London. I spoke to a lass in my constituency who has just left school and is bristling with qualifications. She was seeking a job as a secretary but was one of 40 applicants. So perhaps for too long in the North. West we have been dependent on heavy industries which are now in decline, and we seriously need to seek a wider variety of job opportunities.

The Government should encourage the dispersal of office jobs to the regions, therefore. We expect that there will be an announcement on the establishment of the headquarters of British Aerospace and British Shipbuilders fairly soon. The Government should bear in mind that one-fifth of the total labour force employed in the manufacture and repair of aircraft and aerospace equipment is based in the North-West. There is, therefore, an overwhelming case for the establishment there of the aerospace headquarters. I say that not on the grounds only of the general needs of the area, which should be sufficient in themselves, but on the grounds of operational efficiency.

Similarly, there is a strong case for the establishment of the shipbuilding headquarters on Merseyside. Merseyside is advantageously placed in terms of communications and in its proximity to other shipbuilding areas. It is close and convenient to Belfast, Barrow-in-Furness, Clydeside and Tyneside. It has excellent transport links with the Continent.

However, we should not fall into the unfortunate and perhaps desperate error of depriving the poor regions in order to provide employment for the even poorer areas. We must be careful not to be parochial. However, the psychological effect of establishing these two headquarters in the Northern Region would be very great and would provide a thrust of confidence. They would not provide a great number of jobs, but they would be important psychologically.

I should like to see a greater degree of public enterprise within the regions that are declining. If we are to channel prosperity to them it is insufficient to develop a range of inducements and investment opportunities simply to attract private industry if we have to rely on a patchwork of response from private firms. There must be a more direct approach. If public funds are to be invested, why should not the return to the public be maximised? It is now apparent that private enterprise is often reluctant to exploit the resources which are made available from the public purse, and in that circumstance the State should not hesitate to establish its own productive enterprises.

There are 180 shadow factories either completed or in the course of construction or planning. Of these, 47 are in the North-West. A number of those are complete and lying idle. That is outrageous. If the Government make factories available to private enterprise on highly advantageous terms, and if private enterprise is reluctant to take advantage of them, it is not only reasonable but sound common sense that the Government should move in under the auspices of the National Enterprise Board to put the factories into production.

There is a special problem in the building industry. It is an obvious candidate for public ownership. However, I can recognise the problems involved in trying to take into public ownership an industry which contains so many large, small and medium-sized firms. I appreciate that these difficulties exist, but we should be prepared to establish public building consortia in each region so that they can compete for business with existing private contractors and thus establish a realistic pricing structure.

At the moment many tenders, certainly for major projects, are highly suspect. I remember serving as a member of the Liverpool Regional Hospital Board when a major hospital contract went out to tender. It was worth about £11 million. Only one contractor was prepared to put in a bid, and that bid was substantially higher than should have been necessary for the work. Long negotiations ensued, but the project was not the subject of fair or open competition when only one firm was prepared to take the job. The same applies to motorway construction. Only a few firms are prepared to take on work of any magnitude. That situation could be changed with the existence of publicly-owned consortia in each region.

If I may sum up, we see confirmation from all quarters, including the Opposition, of the absolute necessity for a regional strategy. I believe that we should tackle the EEC regional development fund with the aim of securing a greater share of it. There should be a greater distribution of office employment in Britain. A decision should be made to locate the shipbuilding and aerospace headquarters in the North-West. There should also be a review of the role of the building industry. Most important, a bold, far-reaching review of regional policy should be made to remedy once and for all the absurdity and unfairness of present regional deprivation.

8.20 p.m.

Mr. Jasper More (Ludlow)

The hon. Member for Chorley (Mr. Rodgers) led us down many nostalgic paths. Nothing would please me more than to resume at length all the old battles about the Common Market, and so on, about which he spoke so movingly.

My heart was also moved by the subject of regional development. I was not sure whether the hon. Gentleman was going as far as his hon. Friend the Member for South Shields (Mr. Blenkinsop) who was asking for a region of Northumbria to be created. I think that is credible. However, I am not sure whether Lancastria is credible. I come from the West Midlands. I have never felt that the Mercia region was credible, but I am subject to correction.

My immediate preoccupation is with Wales. This will interest the Under-Secretary of State for Wales who is now on the Government Front Bench. Unfortunately, I live on the border with Wales —so much so that, from my modest country house, the front drive finishes in England and the back drive finishes in Wales. I think that I am that suspect parliamentary object—a hybrid. If this fact becomes known to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), the Leader of the House will probably get into all kinds of trouble when he starts legislating for Wales. I just issue that general warning.

I was interested in the speech by the hon. Member for Dagenham (Mr. Parker) who, in the middle of moving passages about devolution for both Wales and Scotland, moved to the important subject of forestry. I also wish to speak about forestry.

The Gracious Speech, remarkable for many things, is also remarkable for saying nothing about forestry. It welcomes and encourages the expansion of home food production but it says nothing about home timber production. The Government have a blank spot about that. The position regarding forestry in this country is, on the one hand, very simple and, on the other hand, potentially very serious.

We produce about 8 per cent. of our timber requirements. Next to oil fuel and food, timber and timber products are our largest imports. It is estimated that in the present year the value of these imports will be about £2,000 million.

Attention should be drawn to four alarming features. First, the cost, as with the cost of all imports, has risen alarmingly as a result of inflation, which is estimated to be about 25 per cent. this year. Secondly, a considerable proportion of the potential supply of our timber imports is under Communist control.

Thirdly, year by year an increasingly larger proportion of our timber imports come in the form of timber products. That is damaging to our own timber processing industry and means increased import costs.

Fourthly—this matter is not often raised, but, having lived through two world wars, I certainly cannot ignore it —timber is a very bulky crop and is a dangerous commodity on which to have to depend for imports in an age when more and more submarines seem to be ranging the oceans of the world.

What can be done and what do the Government propose to do? The options are not all that numerous or encouraging. But there are two courses open to us. The first is to conserve our stocks of home timber and the second is to increase the planting and growth of home timber. In each case, the scope is limited.

As regards conserving our home timber, we can avoid felling it for a number of years and in that way create a small bank of timber, but we cannot do that indefinitely as trees age. As regards planting, the scope is limited by the simple equation of the rotation of the timber crop.

Estimates have been made of the extent to which we could increase timber production. It is now 8 per cent. There are optimists who say that, if we tried, we could increase production to 12 per cent. or 15 per cent. That is not very impressive compared with other countries. Still, it is better than nothing. However, that assumes two things: first, a regular planting programme, and. secondly, planting larger annual acreages than we are planting now.

Until two years ago we had achieved a kind of balance by which the public sector, in the person of the Forestry Commission, and the private sector, in the person of many private landowners and investors, were planting approximately equal acreages. But, owing to factors to which I shall refer, private planting in the last two years has probably been reduced by at least 50 per cent.

You, Mr. Speaker, will probably remember from your school days the emotive Latin phrase O mihi praeteritos referet Si Jupiter annos. Translated, it means "Dear God, bring me back the past years."

In forestry, this does not help. Planting trees in 1976, if we have not planted them in 1975, does not help, because we have already lost a year, and, when we come to fell trees in the year 2025, the 1975 crop will not be there. Therefore, it is necessary to face these particular difficulties in forestry.

However badly we may have failed in the last two years, we can now alter our plans and do better in future. It is clearly imperative common sense that we expand our planting programme considerably.

Recently, an informative booklet has been published under the auspices of the Centre for Agricultural Strategy, headed by Lord Rothschild. It has produced a book called "Land for Agriculture", which I recomend hon. Members to study. It faces the question of taking land for urban purposes and for forestry purposes. Regarding forestry purposes, it states: The area of new afforestation can be increased to 70,000 to 100,000 hectares per year with only a small loss of about 2 per cent. of agricultural production. We should clearly do that.

It is an astonishing fact that in Government circles there is still doubt whether investment in forestry is justified. I have been handed an extraordinary letter headed "Ministry of Agriculture, Fisheries and Food, Whitehall Place, London SW1"—so I suppose that it must be genuine—dated 5th August 1976. It is difficult to believe, so I must read bits of it to the House in order that we may understand the present state of political thought on these matters. It states: It cannot be denied that any increase in the production of British timber will reduce imports, but this fact cannot by itself serve as a justification for increased investment. In the Government's view it is necessary also to demonstrate that increased investment in forestry woud bring about a new benefit that would justify funds being diverted from other forms of investment. That is a fascinating throw-back to articles which I can remember reading in papers such as the Economist in the 1930s when the world was full of cheap food and writers in the Economist used to say that it was ridiculous to go on producing food in this country when it was cheaper to import it all and that we ought to concentrate on making washing machines and metal windows.

Those were the doctrines which prevailed in those days in highbrow economic papers of that kind before they were discarded in favour of the even more disastrous doctrines of the late John Maynard Keynes, but I shall not go into those now.

There are further extracts. These are extraordinary. One could have believed them in a letter from the Treasury, but to find them in a letter from the Minister of Agriculture is very disheartening. There ought to be an inquiry about what is going on in this Department.

The letter says, We are not convinced that any special measures are called for at present and we are hopeful that as the economy improves and confidence generally returns this will be reflected in an upturn in the planning rate. I think that is what is called wishful thinking.

There is later another remarkable sentence. This is about the accusation that the fall in private forestry planting has been caused by a lack of confidence. We are not convinced, however, that this is caused solely by the Government's fiscal measures. If they are not convinced of that, they will not be convinced of anything.

I think that this Department needs a good overhaul. If it so happens that it has now been populated by people from the Treasury, which is a possible explanation, there must be a very quick reorganisation of the whole thing.

For many years there has been a curious idea in the Treasury that all those engaged in private forestry are professional tax dodgers. I must declare an interest at this point. I have been interested in forestry and I agree that one can, if one is very clever, speculate in forestry land as one can speculate in any other land. If one is clever, one can make a profit, or if one is not clever, one can make a loss. Otherwise, the only way that I know of making money out of forestry is by cutting down all the trees and selling them. That is what is likely to happen increasingly under the fiscal regime of the last two or three years.

What has also irked the Treasury is the feeling that people are dodging taxes on death. That is a comparatively unselfish way of getting out of paying one's taxes which does not benefit one personally. It may benefit one's heirs, but not oneself. That has been done by what are called death-bed purchases. The Treasury has been extraordinarily cagey about all this. For years and years forestry simpletons such as myself have said "If this is an abuse, bring in legislation to stop it. Nothing could be easier. Half a clause in a Finance Bill could do it." The Government have never done it.

Admittedly, forestry has had revenue concessions. The object has been to encourage people to go into forestry. Admittedly, forestry has had grants. That has had the same object. Particularly has suspicion been focused on those organisations known as forestry companies. In fairness to those forestry companies, the House ought to know the record of the company that is probably the largest operator in this field. Since it came into existence it has channelled £25 million into forestry planting, plus £12 million into the purchase of forestry land. That has not come from public funds. It is a diversion of private funds—probably, I imagine, from the City—into what I should have thought was a useful form of investment, which the Treasury might still think would have been better employed in making metal windows and washing machines. I do not know. It has also established about 64,000 hectares—if I have the equation right—of new forests.

The present state of this particular forestry company, as a result of the fiscal measures recently taken, is that its planting for the present year is reduced by at least 50 per cent. I need not enlarge on the effect that this must have had on employment in areas which really cannot stand great blows of this kind or provide alternative forms of employment.

There is a general feeling among those who know about forestry that we should have a national objective of planting 40,000 hectares, or 100,000 acres, every year, and that we should aim to do this roughly fifty-fifty between the public sector and the private sector. What are the problems of the two? "Public sector" really means the Forestry Commission. I have always been full of praise for the Forestry Commission. If the Forestry Commission is to expand its planting, obviously that means more public expenditure. Therefore, as a Conservative Member of Parliament, obviously I am not very keen that it should embark on that immediately.

The second thing about the Forestry Commission is that with the best will in the world it is not very well suited to the planting and management of those areas which form such a vital part of the whole forestry equation of Britain—namely, the smaller woodlands. Although they are smaller woodlands, they can add up to enormous areas. It is very much better that they should be left to private initiative.

What about the private sector? Why has there been this fall in the area planted? The answer is very simple. It is simply the lack of confidence. Forestry is a long-term enterprise. Trees are not planted for personal profit. They are planted in the hope that they may benefit someone in future, possibly one's heirs. Surely that is not an unworthy hope. What has destroyed the basis of confidence for those who want to plant trees is primarily the imposition of capital transfer tax. I shall not go into the details of that tax at this stage. An interdepartmental committee is now sitting that is chaired, I think, by a gentleman from the Treasury. That is a rather sinister aspect that I pass over. It seems that at long last a Government body might face the current situation and decide to do something about it.

In all this discussion we are not talking about our own position. In forestry terms we are talking about the position in the year 2026, that being the length of the rotation. In justice to posterity we should be thinking about the situation that will then prevail. It may well be that after the North Sea oil bonanza that the Government are confidently promising, it will be found in the year 2026 that the oil is finished and the Government are back on their uppers wondering how to pay for the vital and expensive imports on which this country has to live. Among them will continue to be timber. Therefore, we are trustees for posterity.

The problems of timber and agriculture are different. If we were driven to extremes in agriculture-at present we produce about 50 per cent. of our requirements-the eggheads assure us that it would be possible, if we decided to cat no mutton, beef or pork and turned ourselves over entirely to a cereal diet, to feed a much higher proportion of the country's population. But there is no alternative strategy for timber. At least, none has so far been invented. An alternative strategy may happen, but we cannot presume that it will.

I repeat that we are trustees for posterity. It is my hope that in the year 2026 our descendants will not be going about the streets saying "They preferred metal windows and washing machines".

8.38 p.m.

Mr. Frank Hatton (Manchester, Moss Side)

Unfortunately, my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) has left the Chamber. I wished to congratulate him on his sincere speech, to which I listened with great interest. I think that he was the first Member to raise the problem of the inner city areas. He obviously spoke with a great deal of knowledge about his own city. I shall refer to similar matters as well as dealing with other subjects that are mentioned in the Queen's Speech.

About two months ago I was in the Manchester Town Hall listening to a speech by my right hon. Friend the Secretary of State for the Environment. He spoke on inner urban problems, following a tour of many such areas throughout the country. When speaking about the depopulation of our major centres of population in our cities, he said: What is more worrying is the unbalanced nature of the migration, with a disproportionately high number of skilled workers and young people moving out, leaving the inner areas with a disproportionate share of unskilled and semi-skilled workers, of unemployment, of one-parent families, of concentration of immigrant communities and overcrowded and inadequate housing. That is a fairly accurate description of parts of my constituency.

In the last decade in the Manchester conurbation there has been a loss of about 20 per cent. in population, and at the same time a great decline in jobs in the manufacturing sector of industry and a much greater emphasis on service sector jobs. That change in the structure of jobs available, particularly in the city of Manchester, has most affected people with the least choice in the labour market. Therefore, I very much welcome the vigour of the Manchester City Council's recent endeavours in its determination to tackle the situation and in setting aside considerable amounts of money to attract new industry into Manchester.

My hon. Friend the Member for South Shields (Mr. Blenkinsop) spoke of his concern about the devolution proposals and their effect on the regions. I share that concern, and I wish to mention the problem of the heavy electrical engineering industry in the Manchester conurbation. Several years ago that industry provided a large measure of employment for many Manchester citizens, particularly many constituents whom I have the honour to represent. Following reorganisation that industry suffered massive redundancies. Furthermore, there have been leaks and rumours about Government proposals that will lead to the merging of the turbine industry with other organisations if it is to survive. That type of merger will not give security of employment to employees of the General Electric Company in the Manchester area.

My constituents would like to see a more positive rôle being played by Her Majesty's Government to ensure a continuation of orders in the home market and a greater emphasis on assistance in dealing with overseas competitors. If this involves the expenditure of considerable sums of money, my constituents believe that that finance must be found, and it is certainly one form of public expenditure which I vigorously support.

One passage in the Queen's Speech clearly states Legislation will be introduced to remove unnecessary restrictions on the powers of local authorities to undertake construction work by direct labour. I warmly welcome that declaration, and during last week's massive lobby in the House I spent a good deal of time with representatives from the Manchester Corporation's direct works department. They expressed concern about the falling off in employment opportunities because of the lack of work in the building industry, but at the same time they have a viable organisation which is able to undertake work throughout the Manchester conurbation.

There are many local authorities in that area who would welcome the opportunity to use the resources of the direct works department. Many of my constituents live in good houses, many of their children attend schools, many constituents of other hon. Members attend universities and colleges in the city of Manchester built by Manchester's direct works department. I therefore welcome this declaration by the Government.

I want finally to refer to what may be regarded as a parochial matter but one which is of deep concern to many of my constituents. The Queen's Speech says: My Government will continue their programme of law reform as opportunity permits. One aspect of law reform which my constituents would like to see is the Government turning their attention to the final report of the working party on vagrancy and street offences. I said earlier that the Secretary of State for the Environment speaking in Manchester adequately described parts of my constituency. Some areas can be called red light districts and they cause great annoyance to my constituents.

The working party's report suggests that a law be devised to deal with the difficult problem of kerb crawling. I have discussed this matter with the Chief Constable of Greater Manchester, who is convinced that if Parliament will give him the law he can clean up these streets, thereby pleasing many of my constituents. I hope that the Government will take note of the anxiety that this legislation should not be lost, because other aspects of the report, affecting civil liberties, may be much more controversial. I hope that time will be found this Session to deal with this important matter.

8.47 p.m.

Mr. Nicholas Winterton (Macclesfield)

I am delighted to follow the speech of the hon. Member for Manchester, Moss Side (Mr. Hatton) because we are both North-West Members. I fully endorse what he said about kerb crawling and similar problems in his constituency. Many people who came to a meeting which I addressed in that area recently raised those very matters.

I congratulate my hon. Friend the Member for Ludlow (Mr. More) on his excellent speech about forestry. Successive Governments, particularly the present one, pay far too little attention to our heritage. The forestry industry in our country is very much part of our heritage, and that means that it is of tremendous value for the future. My hon. Friend's points should be borne in mind by the Government and the damaging effect of capital transfer tax on this vital industry should be removed. If it is not removed by the present Government, I believe fervently that it should be and perhaps will be removed by the next Conservative Government, who are likely to come to Whitehall in the not too distant future.

I shall deal first with devolution. I am pleased that I shall possibly be followed by a Labour Member who represents a Welsh constituency. The Gracious Speech states: My Government attach great importance to strengthening the democratic processes of our society. A Bill will be introduced for the establishment of Assemblies to give the Scottish and Welsh people direct and wide-ranging responsibilities for their domestic affairs within the economic and political framework of the United Kingdom. I detest, deplore and strongly oppose any form of devolution. Devolution is a diversion which has no real support in the United Kingdom, certainly not among Conservative supporters.

Devolution undermines centuries of history. Not for nothing is my party known as the Conservative and Unionist Party. The duty of the Conservative Party is to stand shoulder to shoulder for the unity of the United Kingdom; that is, Wales, Ulster, Scotland and England.

The strength of this country is its unity, the unity of the Principality and of the other parts of the United Kingdom. We shall gain more support and find true faith among our supporters—certainly those who traditionally support the Conservative Party in Scotland—if we have the courage to express our total opposition to the concept of devolution.

In an age when the process of government is already discredited and, what is more, over-burdened, it seems incredible that anyone, let alone a major political party, could support the creation of yet another tier of bureaucracy. In advocating another tier of bureaucracy no mention has been made of abolishing any existing tier of bureaucracy. Who wants to pay for huge bureaucracies in Cardiff and Edinburgh? The taxpayer certainly does not. Nor does the ratepayer. But someone has to pay for it. I look to the Government to be honest and to tell us who will pay for it.

Never in recent years has the case for a unified Great Britain, a United Kingdom, been so strong. Yet, once again, the party bureaucrats in Smith Square, both Labour and Conservative, and civil servants have been swept along by the rag-bag tide of ideas of a few fanatical nationalists. I am confident that I am supported in that statement by a number of Labour Members who feel as strongly as I do on the issue.

The day that we have the courage, Parliament and the Conservative Party, to state categorically to the country that we stand for the preservation of the United Kingdom will be the day that the electors of Scotland and Wales will return a Conservative Government and pass a death sentence on the Scottish and Welsh National Parties. I have no doubt about that whatsoever.

People are not voting for the Conservative Party in Scotland, have not done so in recent times and will not do so substantially in the future because they see no difference between any of the major parties in Scotland. We have to provide them with an alternative. We shall have a real banner and we shall have people flocking to that banner if we have the courage to stand up for what we are—a Unionist Party. If we provide Scotland and Wales with a clear alternative, the tide of support will sweep my right hon. Friend the Member for Finchley (Mrs. Thatcher) into Downing Street in a few months.

What then is the guiding philosophy of the Conservative Party which will ensure that we can re-assert our authority as the defenders of free enterprise? I pose that question because we heard in the Gracious Speech that the Government are determined: to remove unnecessary restrictions on the powers of the local authorities to undertake construction work by direct labour. As the party which represents the private enterprise system, we can start by opposing this unnecessary, costly and irrelevant measure. It is intolerable that private companies within the construction industry should have to compete with a direct labour department that is not properly costed and which, if it makes a loss, places that loss on the rates so that people with whom the direct labour department is competing have to pay increased rate precepts. That is wrong, intolerable and unacceptable. My party should oppose this measure with every possible bullet. If the Minister wishes to intervene, I shall be happy for him to do so. He and I pair when we are both away from the House.

The Under-Secretary of State for the Environment (Mr. Kenneth Marks)

The hon. Gentleman misunderstands the purpose of the Bill. Is he saying that local authorities should not be allowed to set up direct works departments? They may do so at present. All the Bill does is to give a local authority that does not have a direct works department the opportunity to use the direct works department of a larger authority.

Mr. Winterton

Having worked in the industry for 12 years, I do not believe that I have misunderstood the Bill. I have dealt with a number of direct works departments, or direct labour building departments as they were known. It is wrong that the authority to which a company pays rates should compete with that company when history has proved that the authority has not operated so effectively. Many other aspects, including the issue of the closed shop, can be drawn into the argument, elements which are a fundamental breach of individual trading freedom, and this I strongly deplore.

Dr. Glyn

What is of importance is that if there is a job to be done it should be put out to tender. Either the private sector or the public sector will get it. If the public sector is incapable of operating a proper accounting and costing system, the job should go to the private sector.

Mr. Winterton

My hon. Friend, who made an excellent speech earlier, has highlighted the point I was coming to, so there is no need for me to repeat it. Public authorities should have a proper accounting system, open to audit. They would then be competing on precisely the same basis as private companies for construction and other contracts; however, we do not want any extension of State activity.

Are the Conservative Opposition to deceive the country with bigger and better promises of electoral bribes? Are we to outspend the Socialists on health and welfare services? Are we—as some of my hon. Friends regrettably want us to do—to seek refuge in the middle and murky mire of the political moderate centre? I believe that it is time for the Conservative Party to reject electoral appeasement—yes, to seek out the common ground, but not to seek the middle way.

The people are desperately seeking a lead and it is up to us to provide that lead. Under my right hon. Friend the Leader of the Opposition we can provide it. The nation has endured a sentence of more than two year's "hard labour". Is it not time now for the Prime Minister to give us all some well-earned remission? It is surely time for us to be released from our Socialist prison.

What is the history of this Government? What have they achieved for the people of this country? They have achieved a record level of unemployment that can be compared only with the period of depression in the 1930s. They have achieved the highest rate of borrowing of any Government in the history of this country and the lowest level of investment. They have achieved the highest level of inflation and the greatest rise in the cost of living. I look forward to the next election be cause I believe that the Conservative Party has the policies which will once again set this country on the right path.

There are a couple of other matters to which I want to direct the House's attention. One is a matter which will, perhaps, be raised on another day of the debate on the Gracious Speech, and that is rates. A very important announcement was made recently by the Secretary of State for the Environment which has already had an effect upon my postbag. Ratepayers have written in deep anxiety about the bills which they will have to meet next year. The Government are passing the buck to local government and, particularly, to the rural areas, the county areas which are represented, surprisingly enough, by Conservative-controlled administrations.

Many of these authorities during the last couple of years have heeded the Government's request for a reduction in expenditure. Not only have they pruned their budgets—unlike many London boroughs such as Camden—but they have dipped into their balances to keep rate increases to an acceptable level. What happens now? They are faced with a disastrous announcement which —unless services are to be slashed beyond what is acceptable and unless large numbers of redundancies are to be declared—will inevitably lead to rate increases of 20 or 30 per cent.

Bearing in mind that the Government, through their social contract and prices and incomes policy, have held down the wages and salaries of the people of this country to about 4 per cent. this year, I ask the Government where these people are to get the money to pay their increased rates. Many of them are already fully committed and many are trying to provide for themselves in such areas as hospital treatment and education. I ask any Minister where these people are to get the money. Under a Socialist Government are they to be forced to reduce drastically their standard of living and sell their houses? Is this what Socialism means? If it is, I relish the next General Election, when the rabble on the other side of the House will be removed.

This does not just refer to company directors. It refers to skilled workers and middle management, to senior management and, what is more, to retired people who saved during their working lives and, therefore, have a small investment income. These people will be seriously affected.

In making this announcement, the Secretary of State, did not accompany it with any encouragement for a local authority to reduce expenditure, for the simple reason that this would inevitably increase unemployment. If that happened the Government's chance of retaining the support of the trade union movement would disappear. Who is governing this country and in whose interests?

I want to refer briefly to the position of industry and particularly to the position of smaller businesses. It is no wonder that every Minister with almost every breath talks about increased investment and increased incentive for investment, because that means employment. Yet what are the Government planning for next April? They propose an increase in the payroll tax—2 per cent. on the national insurance contributions of employers. Is this not hypocrisy and double standards? It will cost industry £1,000 million, yet the Government talk about the need for further investment while extracting this sum from industry.

Small businesses employ 51 per cent. of this country's working population and make a huge contribution to our economy. The increase will cost them about £250 million. With the minimum lending rate at a record level and money from other sources available only at even higher interest rates than those charged by the clearing banks, how is industry to get the money to provide the investment which in turn provides jobs? I wish that the Government talked sense and had a real understanding of the problems facing industry.

I have every possible respect for the person and position of Her Majesty, but this morning we unfortunately listened to another episode of irrelevant, costly and damaging Socialism. Whether on devolution, direct labour, the pique of the Government in forcing through the nationalisation of the aircraft and shipbuilding industries, or any of the other damaging measures in the Queen's Speech, it is clear that we are not being governed by a Government who care for the interests of all the people. They are a Government carried forward on bigotry and dogmatism. The sooner they are removed from office, the better for every man, woman and child in this country.

9.7 p.m.

Mr. Donald Anderson (Swansea, East)

The hon. Member for Macclesfield (Mr. Winterton) always makes a good and entertaining speech, but I always feel that at the end of his speeches he is about to declare open a Conservative fête.

The hon. Gentleman talked about hypocrisy, yet he referred to the intolerable burden caused by the Government's decision to reduce the percentage of local authority expenditure paid from the Exchequer. He knows that if that did not happen, the Government would have to increase borrowing or direct taxation. The hon. Gentleman cannot have it both ways.

The hon. Gentleman also spoke about a return to full-blooded private enterprise, but on the last occasion that this was attempted—during the Selsdon Man period—it meant freedom for the private landlord, the property speculator and the fringe banks but shackles on trade unionists. This is not a policy which inclines our people to turn to a Conservative Government.

My criticism of the Queen's Speech is that there is an unreal element to it. The only analogy I can think of is a dramatic representation I saw of "War and Peace" in which the Emperor and the Tsar were on a platform raised above the stage and the other characters were on the stage having decisions taken which affected them but over which they had little control.

We know that over the next year the decisions which will affect our economy will be taken not here but offstage. They include decisions on matters such as the funding of the sterling balances, the negotiations with the IMF over the current loan, the extent of oil price increases and the future of the incomes policy. The real crunch over incomes policy will come during the re-entry period next year. The sooner the anomalies and the pressure from higher-paid trade unionists for the restoration of differentials are sorted out, the better will be our overall economic picture and the more stable will be our sterling situation.

Given the fact that most of the key decisions will be taken off stage, what will be happening in this House as shown by the Gracious Speech? Clearly, much of the business in the Speech is wholly irrelevant to the major problems affecting the country. I think in particular of the constitutional discussions in relation to devolution. I look forward to many constructive exchanges with the hon. Member for Macclesfield during the almost Biblical 40 days and 40 nights or more this Session on devolution, and on the discussions on direct representation in the European Parliament.

But in the present economic situation can we really justify perhaps 85 per cent. or more of Parliament's time being devoted to these constitutional and rather irrelevant exercises? How can we seek to justify it? Some may say that the time so spent on arid constitutional discussion is a useful diversion, that it will keep Parliament busy while more important events take place, that the basic economic strategy of the Government is correct, with the real problem being to ensure time for that strategy to work, and that it is better in such circumstances that we in Parliament should while away our time in this diversionary tactic.

That concept would be all right were it not for the fact that such a diversionary tactic also has wrong psychological effects. It means that we are playing at constitutional games during a time of economic crisis and refusing thereby to tell our people what the facts of the situation are. They can go on by and large as if there is no such crisis because they can look to this place and think that things cannot be all that bad when they see the priorities as measured by our discussions in Parliament. I recall the phrase used by Voltaire about the irrelevant attitude of people at the time of the Lisbon earthquake. He said: Lisbonne est âbimée Et l'on danse à Paris. We here are dancing at a time of economic crisis. There seems to be some inability to see ourselves as others see us. We have not yet as a country come face to face with our true position in the world. That is shown, for example, by the defence policy we still attempt to pursue, and also by the staffing and extent of our missions overseas.

The Gracious Speech has missed an opportunity to tell our people of the economic facts of life. That could have been done by recasting the programme and concentrating on financial and economic matters and employment—the things which really concern our people—rather than by a constitutional diversion. Would it not have had a dramatic effect if we had dropped devolution and these other constitutional matters and concerned ourselves with the essential elements related to our national efficiency?

What has been omitted from the Gracious Speech? I look in vain for an attempt to deal with regional policy. In Wales, for example, the counties are preparing their structure plans without any coherent overall plan into which they can be fitted. I regret that there is no reference to a Bill on homelessness, transferring responsibility to the housing authorities. I am sorry that the Seatbelts Bill, a life-saving measure, has been omitted.

Again, at a time when we should be looking ahead, I am sad to see that there is no reference in the Gracious Speech to environment as defined, for example, in the use of land resources and the extent to which agricultural land is being gobbled up without thought for the future, as pointed out so dramatically in the recent Rothschild report.

Certainly transport is mentioned in the Queen's Speech. My own fear is that there is already a considerable crisis in public transport, in regard to which the Government are not acting speedily. Measured by my own local contact with both the bus industry and the railway industry, it would appear that there is a real lack of morale in the work force as people see the extent to which things have been allowed to drift. Everyone is worshipping at the shrine of the motor car when there should be positive interventionist policies in favour of public transport.

The biggest item in the Queen's Speech is devolution. This has been exercising us very much in Wales over the past years. I regret that I and other hon. Members on the Government Benches have been Cassandra-like in expressing our foreboding over the years. I hope that we shall not suffer the fate of Cassandra. I believe that we are proceeding blindly, without any coherent or thought-out policy, and we are on a very dangerous path for our nation's future.

We have raised false expectations among the people in Wales and Scotland as to the benefits which devolution is likely to bring. When it is shown that, whatever the form of government, Governments cannot wave magic wands to make long-standing structural problems disappear, the disillusion will be as great as was the disillusion following the build-up of expectations of local government reform.

I am convinced that there will be a long and deep-seated conflict between the rival Governments in Cardiff and Edinburgh and the Government here at Westminster—in part because of the fixed four-year terms and the inevitable buildup of local rivalries. I am amused that in paragraph 27 of "Our Changing Democracy", some civil servant has written airily of "harmonious co-operation" among the people as the basis of our constitutional development. It shows how ivory-towered and starry-eyed the drafter of such a report can be.

The financial basis of the relationship between Cardiff, Edinburgh and Westminster has not been thought through. There was talk of a precepting on the local authorities. This, for a whole series of reasons, was found impracticable. There is an element of complete financial irresponsibility, non-responsibility, in the Government's proposal, which is a recipe for disorder.

I am certain, whatever, the Government say, that the creation of these Assemblies at Cardiff and Edinburgh will have profound implications for local government in those areas, but for political reasons this is not mentioned at the moment. I am confident, too, that there will be a most profound implication concerning the weight which Scotland and Wales have here at Westminster, where for the foreseeable future the key decisions relaing to resource allocation on a United Kingdom basis will be made.

There are other longer-term possibilities that relate to the loss of parliamentary representation for both Wales and Scotland.

Mr. Gwynfor Evans

Is not the hon. Gentleman aware of a contradiction in his argument? At the beginning of his speech his main point was that the real decisions were not made here. Now he is complaining that we in Wales will not have as much weight in making the real decisions. If they are not made here, what does it matter?

Mr. Anderson

If a number of the key decisions are not made here, for the reasons which I gave earlier, how much less will those real decisions be made in the mini-Parliaments at Edinburgh and Cardiff? This, surely, is the point.

It may be that the coming Session, concerned with constitutional dimensions—the regional dimension for Wales and Scotland, and the European dimension—will mark some form of watershed in British development. This is a point that the hon. Member for Carmarthen (Mr. Evans) may follow. It may be that we are moving into a multi-party system in this country, as measured by the fact that whereas in 1970 the Labour and Conservative Parties had roughly 90 per cent. of the national vote, this was reduced to roughly 75 per cent. in the October 1974 election. This may be a longer trend which one does not know about.

I am certain that as yet we have not had a debate in depth among our people about the devolution road along which they are being taken, unwillingly and blindly. That is why I and a number of my colleagues have pressed for a referendum on the issue because, as it did during the EEC debate, a referendum will provoke discussion and there will be a debate such as there has not been thus far.

Mr. Gordon Wilson

I apologise for coming into the Chamber late in the course of the hon. Gentleman's remarks. However, I came in to hear what remained of his speech. I am surprised to hear him say there has not been any debate. In Scotland there has been a debate for many, many years. The last thing that can be said about the Scottish situation is that there is no support for even the minimal proposals which the Government are to put forward. Does the hon. Gentleman suggest that Scotland is in the same position as Wales in this respect?

Mr. Anderson

I do not know the Scottish situation as well as the hon. Member for Dundee, East (Mr. Wilson) does. However, so far as it is possible to judge from the results of opinion polls, it is clear that there has been a marked oscillation in Scottish opinion over the years. The 1974 and 1975 opinion polls suggest that the support, such as it is, for some form of devolution is more superficial than the hon. Gentleman and his friends are prepared to admit.

Let us have a referendum. Let there be a debate not just among the elite but among all our people. I think that my right hon. Friend the Leader of the House virtually has conceded the case for a referendum. If it is to come, let my right hon. Friend say so during his Second Reading speech so that we know from the start. I hope that it will not be grudgingly squeezed out of the Government in the course of one of the many long nights during which we shall discuss this matter. Let it be said early so that we know where we stand on this fundamental constitutional issue.

9.22 p.m.

Mr. Roger Sims (Chislehurst)

We have listened to a most interesting and forthright speech by the hon. Member for Swansea, East (Mr. Anderson). I hope that he will be neither offended nor surprised when I tell him that, at present, devolution is not exactly a burning issue in the London suburbs. However, I suspect that if in time my constituents find not only that Scotland and Wales are over represented in this House at the moment, but that as a result of these proposals Scottish and Welsh Members will have even more representation and that English Members will have less control over Scottish and Welsh affairs, they may take a different view.

A large number of my constituents work in the City of London and have a very deep comprehension of the economic problems that we face at present. I agree with the hon. Member for Swansea, East that, if this House devoted in the coming months more of its time to economic matters and less to devolution, the majority of the population might think then that we had our priorities right.

The aspect of the Gracious Speech to which I want to refer is that concerning law and order. I was concerned to find that the only passing reference was one to amending the criminal law, especially in relation to conspiracy. Therefore, I was relieved and pleased to hear the Prime Minister's comments today on this very real problem, especially his references to hooliganism. The increase in vandalism and crimes involving violence, especially by those under 21 years of age, is a worrying feature of our society today. It seems to demonstrate a mindlessness and a complete lack of consideration for other people and their property which it is extraordinarily difficult to understand. It is obvious that our main object must be to prevent incidents of this kind occurring at all, and the Prime Minister was right to call upon parents to become more involved in the bringing up of their children, although those of us who are parents know that there is a limit to the control that we can have over 16 and 17-year-olds.

There is no excuse for parents not knowing what children of 10, 11 and 12 are doing, where they are, what they are getting up to and what sort of company they are keeping. Children are not necessarily helped by the atmosphere in some schools where self-expression rather than self-discipline is the order of the day. Nor are they assisted by philosophies which encourage them to look to the State to provide for them rather than encourage them to stand on their own feet.

One way of preventing further increases in hooliganism and crime is to provide the real deterrent of more police, preferably pounding the beat. I share the Prime Minister's pleasure at the improved police recruitment figures, particularly seeing that when he was Home Secretary he imposed a complete standstill on police recruitment. We still need more police. At the moment the Metropolitan Police Force is smaller in number than it was in the 1920s, even though it has to deal with a larger area and far more problems. The Home Secretary's attitude to police pay is not particularly helpful either. I hope that he will recognise that the police have a genuine case and that he will reconsider his approach. Even though the police do not have the same kind of muscle as the seamen they are, nevertheless, a vital part of the community.

The other aspect of the problem is how to deal with offenders when they have committed crimes. Here we come to the controversial Children and Young Persons Act 1969, which covers the age range of 10 to 17. A sub-committee of the House of Commons Expenditure Committee examined very carefully the workings of this Act and produced a unanimous report in September last year. But it was not until May this year that the Government issued their White Paper with their observations on that report. Since then there has been virtually no action at all. There were some 40 recommendations in the original report, and hon. Members would not want me to go into them in detail.

At present a juvenile court can impose a fine on a boy or a girl appearing before it on a charge, but there is no way whatsoever in which the court can ensure that the fine is paid. Both the court and the child know this, and it brings the law into disrepute. The child comes out of the court knowing that he does not have to pay and knowing that there is nothing that can be done about it. The Government recognise this in their White Paper and propose that the court should be given the power by legislation to order the defaulter to attend an attendance centre, or require the defaulter's parents either to pay the fine or to ensure that the child does so. I hope that the legislation referred to in the White Paper will be introduced this Session.

Another reference in the report of the sub-committee was to the desirability of short periods of detention. At present the minimum time for detention is three months. The sub-committee felt that there was a lot to be said for relatively short stays in some cases. Unfortunately the Government came out against this, and said in their White Paper, The Government consider that it is wrong to impose a custodial sentence so short that it is likely to be seen, either by the offender or by the staff of the establishment concerned or by both, as having only a punitive intent. Why not? Some people think that there are occasions on which punishment as such may be effective. The Magistrates' Association has invited the Home Secretary to reconsider his decision and I hope that he will do just that.

At present if a supervision order is made on a child no conditions are attached to it, as is the case with an adult and as was the case with young persons. The child can virtually do as it pleases. If it does not report to the social worker there is little that the social worker can do about it. The sub-committee of the Expenditure Committee reported that some conditions should be imposed. The Government have said that they are looking into this and taking views, but no action has been taken.

The sub-committee drew attention to the problems of truancy. A large number of offences by children take place when the child is truanting. Yet the Act has blurred over what the courts can do in cases of truancy. The Government recognise this in the White Paper and say that they are discussing the matter, but again they have taken no action.

One other item in the report of the Expenditure Committee's sub-committee concerns attendance centres. These are on school premises on Saturday afternoons. Lads who have got into some sort of trouble are given 12 or 24-hour sentences to work off at these centres. They have to turn up, presentably dressed, to do physical training or some other creative activity. They therefore lose their liberty on Saturday afternoons. This is a relatively inexpensive but highly effective way of dealing with these lads. Quite rightly the sub-committee suggested that there would be a considerable advantage in increasing the number of attendance centres, but the Government's reaction has been lukewarm.

The Government have said that there are expenditure limitations, and I accept that. But expenditure on this sort of thing is minimal. The premises normally used are schools which are empty on a Saturday afternoon anyway. The cost is therefore no more than for heating and lighting. There is the cost of staffing by policemen and others willing to go in on a Saturday afternoon for relatively small payment. I think that the relatively small expenditure on attendance centres for young offenders would be money far better spent than expenditure on some of the other proposals in the Queen's Speech.

One might think that the attendance centres were a useful way of dealing not only with children from 12 to 17 but with youths between 17 and 21, particularly in connection with football hooliganism and so on. This afternoon the Prime Minister advocated bigger fines for this sort of offence. I am all in favour of that, but it is no use fining a lad if he does not have the money. He cannot pay the fine in those circumstances. How much more effective it would be if for a few Saturday afternoons, instead of going to the football match he had to go to an attendance centre and spend an hour or so on physical training, or in being taught some sort of creative hobby.

There are two such centres so far, one in Greenwich and one in Liverpool. They were set up in 1959 and 1962 respectively. The Home Office set them up as an experiment and, having ignored them for years, its eventual reaction is to plan to close them down. I hope that the Government will reconsider that decision and, far from closing them down will extend the system, the value of which I have amply demonstrated.

There are a number of other ways of dealing with young offenders in a non-custodial manner. These were dealt with under the advisory committee under Sir George Younger which looked into the treatment of offenders. Its report was issued in July 1974.

I shall not detain the House by going into detail on the proposals, except to say that a large number of them were warmly welcomed by the probation service, which is anxious to make progress on them. The report was published in July 1974—two-and-a-half years ago. What have the Government done about it? Nothing whatsoever. The report has not been discussed in this House, despite the fact that on two occasions the Leader of the House has assured me that he will try to make time for a debate on it.

I welcome the Government's firm words on the problems of hooliganism and vandalism, particularly those voiced by the Prime Minister. I hope now that we shall see equally firm and swift action.

9.35 p.m.

Mr. Leslie Spriggs (St. Helens)

I regret that the Gracious Speech did not go into any real detail about industrial relations and the success of the Govern- ment's conciliation and arbitration machinery. However, my right hon. Friend the Prime Minister, referring briefly to the conciliation and arbitration services, said that 80 per cent. of the cases heard had succeeded.

It is the duty of everyone in this country to use whatever conciliation or arbitration machinery is available. Trade unions, industrialists, their management and everybody else concerned with the economy should use that machinery rather than take precipitate action through strikes or lockouts. It is as important for management as for the trade union side to consider using that machinery. Poor management which does not understand the trade union viewpoint often forces lockout conditions and disputes which are unnecessary. I believe that the Prime Minister did the House credit this afternoon when he referred to the success of the conciliation and arbitration services since they came into being.

The industrial relations which we have experienced during the last few years represent a record of which this country can be proud. People overseas who are told dreadful stories about industrial relations in Great Britain should be told the truth. Not one-tenth of the industrial disputes have taken place which people overseas have been led to believe. Therefore, the Prime Minister did well to put the record straight this afternoon.

I regret that the Gracious Speech contains no mention of our serious trading deficit with EEC countries. There is a serious need for the Government to place on the agenda of the European Commission's next meeting the question of the re-export of goods which our partners import from other countries.

Time and again we bandy about the House the millions of pounds of trading deficit between the United Kingdom and other Common Market countries. That is why I regret that the Gracious Speech did not mention requesting Ministers to use their influence to have placed on the agenda of the European Commission the re-export of goods imported by our Common Market partners.

Then there is the question of the agencies that are in operation in Scotland and Wales. It has been said that it would be a good idea if the Government agreed to experiment with such an agency in the North-East of England. I have no quarrel with that. If experiments are to be carried out thoroughly, the North-West could very well do with the added powers that such an agency gives to a region.

One has only to look at the unemployment figures in the North-West. I come from an area of the North-West that has one of the highest percentage figures for unemployed of the whole country, for men, women and school leavers. I should like to add my hopes that when deciding whether the agencies play a useful part in the economy of a region, the Government, especially when they have sufficient evidence of the usefulness of the agencies in Scotland and Wales, should remember that in certain parts of England we have a large population.

In the North-West we can at least match the population of Scotland. If the Government are to take the number of people who live in a part of the United Kingdom as a guideline in deciding whether to give special powers to an area, I must point out that the North-West of England alone can compete with the population claims of Scotland.

That is not the only reason. The main reason is economic. I have mentioned placing on the agenda of the Common Market Commission's next meeting the re-export of goods to Britain from other member countries of the Community. I believe that areas such as the North-West are suffering as a result of hidden exports under preference agreements with Britain. Hence my plea to any Minister who has the authority to have an item of any kind placed on the Commission's agenda to remember that this item is one of the most important that the Commission could debate. If it is placed on the agenda and if Ministers representing the member nations discuss it, the fact that it has been raised in this House and then placed on that agenda will bring nothing but good to the United Kingdom.

9.44 p.m.

Mr. A. P. Costain (Folkestone and Hythe)

The television cameras have gone. The lights are dim. We are back to an ordinary evening in the House of Commons. I wonder what the millions who looked at television this morning would think of the sight that now faces us—just two hon. Members on the Government Back Benches. For those who have been Members of the House for a number of years, that is what one would expect on the evening following the Gracious Speech: one would expect to find the House nearly empty.

The very long hours that the House has had to sit are significant. Members have had to put up with extremely long hours in the past Session, and there is a tendency when we are not under great pressure for some hon. Members to go to their homes to make up for lost sleep, or for time when there has been no opportunity to sit and think. Those who have stayed here this evening have done so because they have general observations to make on the Gracious Speech. There is not much time left to me before the House has to adjourn, so I shall make four or five short but pertinent points.

First, I do not think that sufficient tribute has been paid to the fact that Her Gracious Majesty will celebrate her 25th anniversary of coming to the Throne. I welcome the fact that the Prime Minister has given a date when both Houses will be paying her their tribute. I know that Her Majesty is anxious that we should not spend great sums on celebrating this wonderful event during the present economic crisis. However, I hope that it will be borne in mind that there is a tourist attraction in these affairs. This is a method of bringing money into the country that is much needed for foreign exchange. I hope that the Government will not overdo the economy drive. The celebration is important for the tourist industry, an industry that I represent at Folkestone and Hythe.

I hope that all possible notice will be given of the functions that are to take place. There is no doubt that on these occasions many people like to be at home in their own villages and towns. There is always a tendency for people not to book up their holidays, or at least not to book up until the dates are known. I make a special appeal that the longest notice possible be given.

The Gracious Speech is like all Gracious Speeches formulated by the present Government in that it includes a whole host of Socialist rites that stem from their dogma. I pay special attention to those that affect my constituency particularly. The Gracious Speech states: My Government will continue to encourage the expansion of home food production in the interests of consumers, processors and producers. I have the honour of representing a number of farmers and I have not found them especially enthusiastic about the encouragement that they have had from the Government.

Fishing is also of special interest to my constituency. I hope that it will be appreciated and realised in any negotiations that take place that those of us who represent constituencies on the South Coast hear almost daily from our fishermen of their great anxiety about the conservation of fish. Obviously, a 50-mile limit or a 20-mile limit has little significance in an area like mine. A 50-mile limit would put us almost in the centre of France. A matter of the greatest significance is the need to conserve our stocks of young fish.

Fishermen are always extremely apprehensive about the fish that are caught with what we consider to be illegal nets and by beam trawlers, which are causing so much devastation to our stocks of fish. I ask for some assurance from the Government that these matters will be borne in mind.

I must congratulate the Government on their candour, for a change. I notice that the Gracious Speech states: There will be an annual increase in pensions and other social security benefits in order to protect the living standards of the most vulnerable. We welcome that. We welcome the fact that the Government have realised that as long as they are in power we shall need increases because of increased costs.

The hon. Member for St. Helens (Mr. Spriggs) instanced the high unemployment in his constituency over a number of years, but I wonder how many Labour Members appreciate that since the Labour Government came into power unemployment in my constituency has risen from 2 per cent. to a figure of 8 per cent.—almost high enough for us to qualify for development area benefits. Certainly over the years we have not been considered for such benefits because we are regarded by other parts of the country as the rich South-East. However, we are long past that situation.

Offices were built in the constituency in earlier years, but the Labour Government are doing their utmost to direct commerce and industry away from the area. At one time we hoped that the Channel Tunnel developments might bring additional work to our area, but that project has now been abandoned.

I wish to draw attention to that part of the Queen's Speech which reads: My Government, following their widespread consultation on transport, will bring before you proposals for developing a transport policy best suited to economic and social needs. I cannot wait to see that wonderful document. We have already had consultative documents of as much as 240 pages setting out all the alternatives and problems of transport, but putting forward no solutions. We are disturbed in our area because we feel that we are not being given a square deal in terms of the amount of industry in our area.

A number of my constituents came to the South-East Coast from London because they were offered special facilities by the railways. In earlier years the railways wanted to encourage long-distance travellers and they put on a good service from Folkestone to London, with a journey time of only one hour and 20 minutes. However, in these days the cost of travel to the capital is so enormous that people cannot afford to buy season tickets.

I have often pressed the Government to consider giving tax relief to season ticket holders who spend over a certain amount per annum. A person has to earn £3,000 per year to be able to afford to pay £700 for a second-class season ticket from Folkestone to London. The fact that such people cannot now afford to pay that fare means that they have to move nearer to London, and that situation is creating in my constituency an excess of houses. However, in the City of London and its suburbs the same situation is creating a shortage of dwellings. It would make a great deal of sense both from the point of view of housing and transport if some tax concession were to be given to these travellers.

Another factor to be considered in regard to positive proposals to help solve transport problems is shift work and flexibility in the number of hours worked. It seems ridiculous when our transport system is so heavily overloaded, particularly for commuters, that there shoud be no encouragement for people who are prepared to work what are now called unsocial hours but which used to be called normal working hours. I hope that in their conversations with the TUC the Government will discuss whether overtime has to be paid just because it is outside standard hours.

I have been putting down Questions about shift working. Only last week, in an extraordinary reply, the Minister responsible said that he did not have a clue about how many firms were working different shifts. I was able to enlighten him because I had got the information directly from the Library, which quoted me a White Paper produced by the Minister or his predecessor. It is remarkable how the Government are clamped down by their theories and dogma and do not look further ahead. I therefore suggest that we receive at an early opportunity this splendid document about our transport policy.

My hon. Friend the Member for Macclesfield (Mr. Winterton) referred to the statement in the Gracious Speech about direct labour. I have ceased to have close connections with the building industry, but when I read that reference my mind went back 25 years to the time when one of my jobs was to negotiate with the unions on pay and conditions. I am glad to say that the building industry has had a pretty good record.

I remember talking to Dick Coppock, one of the best-known union leaders in the industry. During a conference at Oxford on the safety of the industry, I said to him, "I expect that it is your life's ambition, Dick, to nationalise all building contractors." He said, "We do not need to do that. All we have to do is set up uneconomic, uncompetitive local authority direct labour organisations. All the builders will go broke and we shall get them for nothing." The proposals reported in the Press for nationalising the industry will be carried into effect much more cheaply by simply increasing direct labour powers and expecting the ratepayers to make up the losses.

I am glad that the Bill to reform patent law will come this Session. It is long overdue and should be accepted quickly. We shall then be able to get on developing our inventive methods and increasing our income from them.

Debate adjourned.—[Mr. Coleman.]

Debate to be resumed tomorrow.

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