AMENDMENT OF THE LAW

HC Deb 12 June 1979 vol 968 cc263-309

Motion made, and Question proposed,

That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but, without prejudice to any authorisation by virtue of any other Resolution, this Resolution does not extend to the making of—

264
1. (a) any amendment with respect to value added tax so as to provide—
1. (i) for zero-rating or exempting any supply;
2. (ii) for refunding any amount of tax;
3. (iii) for reducing the rate at which tax is for the time being chargeable on any supply or importation otherwise than by reducing that rate in relation to all supplies and importations on which tax is for the time being chargeable at that rate; or
4. (iv) for any relief other than relief applicable to goods of whatever description or services of whatever description; or
2. (b) any amendment relating to the surcharge imposed by the National Insurance Surcharge Act 1976 and applying to some only of the persons by or in respect of whom the surcharge is payable.—[Sir Geoffrey Howe.]

4.45 p.m.

Mr. James Callaghan (Cardiff, South-East)

Any Chancellor of the Exchequer occupies one of the most onerous positions in government. The present occupant, like his predecessors, is one of the loneliest figures in the Cabinet. Usually he has only the Chief Secretary to defend him when all the interests of his other colleagues are pointing in the direction of more spending—irrespective of how far they have come along with him on this occasion. Therefore, the Chancellor is deserving of the understanding of the House in the task that he has to perform.

It is customary to congratulate the Chancellor upon the manner in which he has prepared and delivered his Budget. I believe that, now and again, it has even been possible for an Opposition Front Bench speaker to congratulate the Chancellor on the substance of the Budget. However, I fear that I shall not wholly be able to do that this afternoon, but I do, with pleasure, compliment him on the lucidity, clarity and shortness with which he has presented it. The House appreciates shortness on these occasions.

He presented an extremely full and comprehensive Budget which will undoubtedly set the pattern for the next few years for the British economy. To do that is an ordeal which, perhaps, is appreciated most by those who have been through the fire. I agree with him that when he has had a few weeks only to grapple with the material the task is that much harder. Of course, he will be fully blooded only when he has got his Finance Bill through Third Reading.

I beg the right hon. and learned Gentleman to beware of the plaudits that the press will heap upon him tomorrow. I have seen how rapidly the garlands fade. I have no doubt that he will be greeted, as he was this afternoon, with great enthusiasm—with greater enthusiasm by the newcomers to the Conservative Benches than by those who were here in 1970. I shall return to that point. After 24 hours of favourable publicity—this applies not only to him—the rot sets in. He will find that the defects of the Budget will loom larger and that the virtues will be forgotten. Before the garlands fade, let me mention some of the things of which my hon. Friends and I heartily approve.

There was reference to the European Community budget. The Chancellor has the full support of the House on the question of reducing Britain's contribution. The Labour Government pursued that. I believe that the time is now more favourable—as I have said on earlier occasions—for pursuing that purpose. I hope that the Government will take full opportunity to pursue that. It may be that if the Chancellor is unable to secure the reduction by negotiation, one of our ideas will have to be taken up—a firm decision will have to be taken by the Government. The Government may have to put a ceiling on the contribution that they are ready to make to the Community budget, and to announce that they will do so. I do not suggest that they should do so until there have been the fullest negotiations on the matter. I believe that the time may come when that idea should be put into operation. That is the first thing of which we approve.

Second, I approve of the Chancellor's proposal to increase pensions and other social security benefits, including that for the single-parent family. However, we regret and will oppose the Bill that is introduced to limit the increases in pensions only to price movements. The whole purpose of this reform, which was introduced by the last Government, was to enable the ordinary pensioner to share in the increased prosperity of the wage earner. That was why the pension was fixed to be adjusted according to the increase in prices or the increase in earnings. I am afraid, therefore, that we shall be able to give only halfhearted approval in this direction.

We approve of the doubled relief on tax thresholds. We believe that that is something that could and should be done, and we think that the Chancellor was right to do it.

I referred to the enthusiasm of the newcomers to the House when the Chancellor sat down. They waved their Order Papers. Perhaps the enthusiasm was not quite as strong among the older Members. One is struck by the similarity of this Budget to that of 1970. The basic rate of income tax then was reduced by 2½p. Prescription charges were then put up. There seems to be a certain similarity with what is proposed today. The cost of school meals went up, industrial investment grants were cut, company taxation was reduced and London commuter rail fares were increased. So the whole programme today is unfolding as it unfolded in 1970.

In that Budget the lame ducks were to be strangled and rents and rates were increased through cutting subsidies. All the things that the Chancellor has today told us were tried in 1970 for the purpose of reviving the lack-lustre performance of British industry. This, then, is like the rerun of an old film—and we know how the old film ended. It ended in December 1973 with tax increases, but I will not go through the entire panoply of events that took place in that period.

The Chancellor is therefore embarking upon a colossal gamble this afternoon. It is a gamble that is almost equivalent to a man robbing the gas meter in order to put his money on a horse that he is not even sure will run and that he has seen fail in its previous outings. I do not have confidence that the right hon. and learned Gentleman's prescription—what he called the keystone of his policy, a reduction in taxation—will achieve all the wonderful virtues that he has outlined to us.

The other point that occurs to me immediately is the cavalier manner in which the Chancellor treats the increase in the retail price index. One would almost think that it had ceased to matter. We are told that 3½ per cent. will go on inflation as a result of the VAT increase, a quarter per cent., which will be a half per cent. by the time it has worked through, on petrol duty, and that other increases will arise out of the cuts that he is making in services, especially in the public industries, that are bound to feed through into the retail price index.

I must press the Chancellor on one point that I am astonished he did not explain. What is his estimate of the increase in the retail price index? Where does he think it will be by the end of this year? I make my own rough calculation. It was our view, when we left office, that as a result of what was happening in terms of commodity price increases, oil price increases and earnings increases it might rise to about 12 per cent. by the end of the year. These are factors that the right hon. and learned Gentleman should be taking into account. He is operating against a most unfavourable international background—

Mr. Denis Healey (Leeds, East)

The figure is 16 per cent. It is in the Red Book.

Mr. Callaghan

I am grateful to my right hon. Friend.

The Chancellor will be entering, in seven weeks' time, upon a new pay round without any guidance as to what he thinks should emerge, except that the public sector will pay what the Government can afford, whatever that means, and that in the private sector the negotiators will go for what they can get. If the Chancellor believes that in 12 months' time he will be able to stand at the Dispatch Box and defend that policy, he is more naïve than I thought him to be.

I am grateful to the Chancellor for having sent us the Financial Statement and Budget Report. My right hon. Friend the Member for Leeds, East (Mr. Healey) says that the figure is in the document. The Chancellor did not give it, so perhaps I may. It says that the retail price index, between the third quarter of 1978 and the third quarter of 1979, will be increased by 16 per cent. That will be by the third quarter, not by the end of the year. There will be more to feed through after that. I had intended to give an estimate of 17 per cent. by the end of the year. I reckon that I shall not be far out. Indeed, I may be my usual moderate self on this.

Does the Chancellor truly believe that, whatever he says and whatever sermons he preaches, the trade union conferences and negotiators will be able to go into the next round with no guidance and claim on behalf of their members anything less than the increase in the retail price index? Of course they cannot.

We were brought down in the end by the fact that we were over-ambitious in trying to reduce the retail price index to 5 per cent. by the end of 1980. It is clear that that gave rise to last winter's troubles. That was the beginning of them. But I would sooner fail on the basis of trying to get the retail price index down to 5 per cent. by the end of 1980 than enter on the next pay round informing the workers of this country beforehand that they will start on the basis that they can anticipate that the index will be going up by 16 per cent. within the next four months and by much more by the end of the year.

If the right hon. and learned Gentleman is relying, as are some of his Back Bench supporters, on tax cuts to ease the wage claims, they have learnt nothing from our experience. Tax cuts last year amounted to £2.4 billion. What was the response to that of the Prime Minister, then the Leader of the Opposition, speaking from this Dispatch Box? She said "£2.4 billion? That will be eaten up by inflation during the coming year". I can tell her and the Chancellor that his tax cuts will be eaten up by inflation within the next six months. I am bound to say that one of the classic parliamentary phrases that will go ringing down the pantheons of time will be his immortal words "I am putting more money into their pockets so that they may pay the value added tax".

I shall not go into the impact of the value added tax or of those other imposts that are proposed on those who will not benefit from tax reliefs. I am most grateful to the Chancellor for increasing pensions. That was the least he could have done in that area.

But what about the low-paid workers? How will they benefit? I am speaking of those who are not subject to tax or who are paying very little. It is upon these people—and let us learn from our own errors and our past mistakes—and it is upon their claims that the whole of the incomes structure and the structure of wage claims is built. Trade union negotiators will, in the next few months, base their claims upon the lowest paid. It is the lowest paid who we will not be able to prove are getting benefits out of this Budget Indeed, they are suffering severe burdens. I merely add on the industrial side that I am astonished that at a time when the Chancellor claims he is putting a lot of money into people's pockets it should be estimated—he estimates—that there will be no increase in output during the coming year. If that is so, what is all that money to go on? It is to go on imports. Is that where it is supposed to go, or is he hoping that it will all be saved?

Here we are with the basic weakness. I do not disagree with the Chancellor's analysis, the familiar litany that we heard at the beginning of his speech, which has been preached by every Chancellor—and I have heard 13 in this House-on the need to increase the productivity of British industry or the need to meet the needs of our overseas customers and all the rest of it. Does he really believe that the lack-lustre performance of British industry will be overcome by a reduction in income tax of 3p? If he does, he is living in a world of wonderland.

The plain truth is, as I have said many times from that Dispatch Box—and I have no reason to change my view now that I am here—that it will be a long job for Britain to overcome its deficiencies. Of course taxation has a part to play; nobody denies that. But I deeply regret that the Chancellor had not one word to say about the industrial strategy. Tories used to jeer at it, but now that they are on the Government side of the House I had hoped that they might have some words to say about it, because they will not succeed until they can secure the total co-operation of workers and management of this country, working with industry through the working parties which were set up. In other words, they must preach in every factory the moral that the Chancellor preached today. If the right hon. and learned Gentleman really believes that by raising the minimum lending rate to 14 per cent. he will encourage industrialists, who will now be paying 17 per cent. or 18 per cent. for the money that they borrow from the banks, that, too, is an astonshing phenomenon.

I am grateful for what the Chancellor said about the work of my right hon. Friend the Member for Leeds, East. What I said about the Chancellor's burdens applies equally, if I may say so, to the burdens of my right hon. Friend, who carried us through a very difficult time. That was a time of world recession in which oil prices had increased fivefold. At that time we protected those who were in need and those who were sick. We did not visit the consequences of tax cuts, or our difficulties, on them, and I am grateful for the work of my right hon. Friend, as I am grateful for what the Chancellor has said.

This is not the Conservative Budget that was promised on 24 April, the Budget that would raise production and bring real prosperity. It has nothing to do with that. This Budget is unfair in the distribution of reliefs, unjust in the additional burdens that it imposes, inflationary in its effects on costs and prices, and a reckless gamble with our economic future.

5.4 p.m.

Mr. Geoffrey Dickens (Huddersfield, West)

Mr. Deputy Speaker, I crave the indulgence of the House for my maiden speech. I was sad to hear the Leader of the Opposition make fun of the new Members and their enthusiasm in waving their Order Papers because they approved of the Budget. It is because we new Members have arived in Parliament that the Prime Minister and the Chancellor of the Exchequer have the opportunity of a new beginning for this country. This Budget laid the foundations for that today.

I start by paying tribute to the man I succeeded, Kenneth Lomas, who served the House of Commons and the constituency of Huddersfield, West, in West Yorkshire, for 15 years. He commanded the respect of all political parties in my constituency for the sympathetic way he understood the problems of that constituency and for the way he dealt with those problems. I am pleased to follow him, even though he sat on the then Government Benches. He did a thoroughly good job. I am sad to say that he has not enjoyed the best of health for a number of years. He has just had his fourth operation. It will interest the House to know that unfortunately his wife, Helen, was recently taken seriously ill. I am sure, Mr. Deputy Speaker, that you and Members of the House will wish to join me in sending our good wishes for better health and for their continued happiness to both of them.

I should like, if I may, being the first Conservative Member of Parliament for 100 years to serve Huddersfield, West, to briefly to describe my constituency. It is a very busy, bustling town lying, like many West Yorkshire towns, within a valley close to the Pennines and close to the Derbyshire Peaks. It serves the world extremely well through its textile industries. These have been established in Huddersfield for generations. If any Member is wearing a suit of Huddersfield cloth, he is travelling first-class, because the woollen worsted materials of Huddersfield are recognised to be the finest materials in the world.

The textile industry—not only the weavers but also the yarn spinners and dyers, and all the small businesses which trade with the giants—is the largest employer in the Huddersfield area. We also have many engineering giants as well, which produce valves for power stations, gear boxes, environmental plants and drilling equipment. The area has a wealth of engineering, and Huddersfield, as I am sure the hon. Member for Huddersfield, East (Mr. Sheerman) will agree, is a town that can take off again very rapidly because we now have the benefit of the M62 and Ml motorways. They provide us with very good communication links, and I am sure that Huddersfield will once more be one of the most important towns in Yorkshire. I am honoured to be one of the two Members of Parliament to serve the town.

The small businesses play a very important part within the constituency, as they do in most other constituencies. They are very big employers and we rely greatly on them. However, Huddersfield enjoys fame in other spheres. We have the Huddersfield Choral Society, known throughout the world, and we produced Anita Lonsborough, the Olympic gold medallist, as well as Derek Ibbotson, the mile world record holder. We also won the first division of the Football League for three consecutive years. I was not born at the time but we did it. It would be unfair if I did not say that the right hon. Member for Huyton (Sir H. Wilson) went to school in Huddersfield, so I will be fair and say it.

There were certain omissions from the Budget which disturbed me. I am sure they also disturbed the ratepayers of the United Kingdom and the ratepayers of Huddersfield in particular. In the 1970 general election campaign the Conservative Party campaigned very forcefully for the abolition of the domestic rate. We felt, quite rightly, that it was an unjust and unfair rate to levy on our people. It is unjust because there are elderly people, perhaps widowed, living in accommodation which may have a larger roof than that of the house across the road. Perhaps such people have full central heating and have to pay a very big share towards local government finances. Yet across the road we have the slightly smaller house with perhaps six wage earners living there and only one of them making any contribution towards local government.

The present system cannot be fair and it cannot be just. Already we are hearing rumblings about the water rates that are being levied. There are instances of seven people using water and paying less than one dear old lady living on her own who uses only one-seventh of the water that they use. That cannot be a fair system, yet nothing has been said about it in the Budget Statement today.

I fully understand why we have been unwilling to raise the question, since we are committed to reduce taxation and, naturally, if we collect local revenue in any other way it must be done either through a local tax or through direct or indirect taxation of some kind. Nevertheless, it remains a burden, and I imagine that local councillors will probably face a big problem when this subject comes up again because they fear that if rates are collected nationally they will not be able to call the tune locally.

I believe, however, that local councillors who hold that belief are wrong. For example, many right hon. and hon. Members have experience of parish councils precepting the district council, and the system works very well. The parish still makes up its mind on where it will spend the money and what its priorities shall be. I do not, therefore, feel that we need worry too much about that. I think that local councils will still be able to say how the money will be spent and what the priorities should be.

It remains my firm conviction, however, that what we must move towards is a just and fair system. We owe this to the ratepayers. We in the Conservative Party in particular owe it to the ratepayers because we have encouraged them to believe that it is something for which we stand. As I say, I understand why there has been no mention of it in the Budget today, and I do not wish to detain the House on this occasion, but hon. Members can be assured that they will hear from me again on the issue. Although there has been no reference to it today, it is an issue on which I have campaigned and shall continue to campaign because I regard the present system as totally unjust and unfair.

I thank right hon. and hon. Members for their attention.

5.11 p.m.

Mr. Ken Eastham (Manchester, Blackley)

I am grateful for this opportunity to make my maiden speech, although, obviously, since I sit on the Opposition Benches, I shall not put quite the same interpretation on today's events as did the hon. Member for Huddersfield, West (Mr. Dickens) in his maiden speech.

I have the honour to represent the northern area of Manchester known as Blackley. It is a traditionally sound area with its people drawn from the professions and the artisan skills. As a new Member for part of Manchester, I am delighted to say that, although the Conservatives claimed many times during the election campaign and afterwards that the nation supported them, this proved not to be the case among Mancunians, who, with their good sense, stayed solid in support of the Labour Government and the Labour Party.

A great deal of sterling work was put into the election campaign, and I know that the House will allow me to pay tribute to the workers in the Blackley constituency. In particular, I mention my agent, Mrs. Alison Kelly, a lady of great reputation in the Manchester area, and I pay tribute to the solid work which she did. I am much indebted to Mrs. Kelly for the support which I had during my campaign, just as I am indebted to the other workers who also contributed to such an outstanding victory in the general election.

I feel that I should pay tribute also to the new Under-Secretary of State for Education and Science, the hon. Member for Brent, North (Dr. Boyson), because he chose to visit the constituency during my campaign. He is not someone really well thought of in education circles in Manchester, and he may well have contributed to my success. Perhaps, when we fight the next election campaign, the hon. Gentleman could be invited to come to my constituency on two occasions instead of one. I am sure that that would help us in Manchester, as I believe it did just recently.

I pay tribute also to Paul Rose, my predecessor as Member for Blackley. When Paul Rose was elected as Member for Blackley in 1964, he was at that time the youngest Labour Member of Parliament. He enjoyed a fund of good will and respect among all right hon. and hon. Members. He took a stand on many vital issues, being well known for his positive attitudes on such questions as Rhodesia, Northern Ireland, racialism and Fascism. It was a sad day for Blackley when Paul Rose decided not to stand again, due to illness, and I know that the good wishes of all Mancunians will be extended to him, with a debt of gratitude for the vital work which he did and the contribution which he made to the life of the city of Manchester.

I cannot pay the same glowing tributes to the Chancellor of the Exchequer for his Budget as the hon. Member for Huddersfield, West felt able to do. As I see it, the rich will get richer and the poor will get poorer. There is no doubt about that. It is a fact of political life—I have pointed this out in many public speeches in the past—that the Conservatives fight elections not to do more but to do less, and the consequence is that they lower the quality of life.

We see already what is in store through cuts in public expenditure. I think in particular of curtailment in local government, and I foresee dire consequences for many things which go to the standard and quality of life of our people. Having been a member of the Manchester city council for 17 years, I have gone through some of these episodes many times in the past when, at the direction of the central Government, cuts have been made in local government services and funds. Immediately, there are grave consequences. Local government is labour-intensive, so the first natural consequence that comes to mind is an inevitable loss of jobs.

Perhaps I may be permitted to quote the words of a former distinguished Member of the House, and a great friend of mine, Will Griffiths. He told me once of an occasion when he visited America. He said "There is great wealth there, without doubt. People live in big houses, and there are three large cars to be seen outside almost anybody's front door, but if you look round the back there is a mass of garbage spilling over because local government money is not being spent to improve the quality of life" It is that kind of order of priorities that we see when expenditure is curtailed.

For a number of years I have been interested in education in my own city, and I noted during the election campaign that Conservatives talked about our standards of education not being high enough. Education also is labour-intensive, and I do not believe that standards of education will be improved when the instruction goes out to curtail expenditure. This is one area which will immediately suffer, and suffer seriously.

We should remind ourselves also that local authorities programme their building schemes on a three-year cycle, and projects which were planned three years ago will now just be coming to fruition. If they are coming to fruition and the instruction goes out that no more money is to be spent, what will be the result? If local authorities are not to have the manpower to open new schools or welfare service establishments because they cannot afford the people to operate them, they cannot provide the services which people need. That is the logical conclusion that I forecast.

We shall soon see unemployment soar. Any balanced and sensible Government should be thinking about creating more jobs, not fewer jobs. Will there be consultation with and protection for organised labour? The trade union movement has been saying for many years that we should be thinking about reducing the working week to 35 hours. Such a reduction would create more jobs. We pride ourselves on so-called efficiency, but often the result is a loss of jobs.

The unemployed have to be fed and clothed. They still have to be provided for in society. However, we are told that they must be unemployed, and that is the consequence of the Budget. It is a Budget that will eat away the seedcorn of the nation's future. I can forecast only that we shall be heading for a grave disaster.

5.22 p.m.

Mr. John Townend (Bridlington)

I congratulate the hon. Member for Manchester, Blackley (Mr. Eastham) on his maiden speech. I only hope that I manage to cross the hurdle as well and as satisfactorily as the hon. Gentleman. I also thank you, Mr. Deputy Speaker, for allowing me to catch your eye on Budget day. It will certainly make by birthday this year a very memorable occasion. I have been impressed with the staff of the House and with the friendliness shown to new Members by Members on both sides of the House.

I understand that it is the tradition in a maiden speech to pay tribute to one's predecessor. No doubt that is easier in some instances than in others. I am fortunate in that respect as my predecessor, Richard Wood, was much liked and respected throughout his constituency. In the few weeks that I have been in the House I have found that these feelings are shared by Members on both sides of the House. He had an excellent war record but was unfortunately severely disabled by the loss of both legs. A lesser man would have retired to his beloved Yorkshire countryside. Richard made light of his disability to such an extent that many people in his constituency thought he had lost the use of only one leg.

Richard Wood entered Parliament as the first Member for the new constituency of Bridlington in 1950. The son of a former Foreign Secretary, he obtained high office, serving as Minister of Pensions and National Insurance, Minister of Overseas Development, Minister of Power and as a member of the Privy Council. By his example he has been a constant inspiration to the disabled throughout the country to overcome their disabilities.

I am grateful for the kindness and friendship Richard Wood has shown me over the past six years. He is indeed a fine English gentleman and I am sure all hon. Members will join me in wishing him every success in his new business venture, which involves providing employment for disabled people.

I consider myself fortunate to have succeeded Richard Wood and become the Member for Bridlington. It is without doubt the finest constituency in the country. It is one of the longest constituencies in England, with a coastline 70 miles long, and at the centre where I live it is only two miles wide. Tourism is an important industry and Bridlington is one of the finest resorts in the country. I cannot say that it is the finest resort—if I did I would upset my constituents in the delightful seaside towns of Filey, Hornsea and Withernsea.

Agriculture is our most important industry. In Holderness we have some of the most fertile and productive land in Britain. It is said that we have more pigs than people. However, that will not continue unless the Government act quickly to enable our pig farmers to compete on equal terms with the pig farmers in the EEC. To do that they will have to obtain the reform of the method of calculating MCAs, which is heavily biased against the United Kingdom producer.

We have an important and growing inshore fishing industry and we are looking to the Government to maintain the 12-mile exclusive limit and obtain preferential limits up to 50 miles.

Apart from the large BP chemical plant, we depend for employment in the Bridlington constituency on small businesses. We have a very high level of unemployment. I welcome the measures proposed today by my right hon. and learned Friend the Chancellor of the Exchequer to encourage the expansion of small businesses. I am particularly pleased with his taxation proposals. The Budget is bold and imaginative. As the Chancellor said, it is only the first step in a fundamental change of direction. If it does not encourage the entrepreneurs, the small and medium-sized business men, to invest and provide more jobs, nothing will and Britain's future will be bleak.

I welcome my right hon. and learned Friend's undertaking to reform the capital gains and capital transfer taxes, which weigh so heavily on small businesses. If we are to solve our unemployment prob- lem in Bridlington, the Government will have to take action to change the farcical situation where Bridlington, with an unemployment rate of twice the national average, is not a development area but is surrounded by the development area of Scarborough and Hull, with a much lower unemployment level.

Although I fully support the Government's proposals to cut public expenditure, I welcome their emphasis on the protection of the realm. I support the increased expenditure on defence. There is, however, one aspect of the protection of the realm that seems to have been ignored, namely, the prevention of parts of our country from disappearing by being washed away. Coast erosion is a major problem in my constituency. On the Holderness coast over 2½ metres of land are lost every year. Nothing has been done to protect the coast in rural areas. Responsibility for coast protection comes within the 1949 legislation and rests with the maritime district council, in my constituency principally Holderness but to a lesser extent North Wolds. Holderness is a small rural district council with a low rate base and it cannot possibly contend with the problem.

Government grants are limited to protection works in urban areas because the Ministry considers that coast protection of agricultural land is not cost effective. That might seem logical to a bureaucrat sitting in an office in London. However, if a farmer sees some of his best land disappear every year into the sea it is a different matter. The loss is cumulative every year. In my constituency we are losing 30 acres a year.

There are two additional danger points that the Ministry does not seem to have taken into consideration. At certain points along the coast, at Sand-le-Mere, Kilnsea and Barmston, where the hinterland is below the high-water mark, there is a dange of the sea breaking through. As the fall of the land is inland, that could result in thousands of acres of good farm land being flooded. That would be serious for many fanners who could be put out of business and it could result in a substantial loss of food production.

If the land flooded by salt water were subsequently redrained, it would cost a lot of money to bring it back into production. The Yorkshire water authority is responsible for building the flood banks, but that is only a short-term palliative because they in turn will be washed into the sea.

The second danger point is at Spurn peninsula at the mouth of the Humber where the sea defences were maintained by the military until the early 1960s. Since then they have been allowed to fall into a state of disrepair. At Spurn there is imminent danger of the sea breaking through the narrow land and turning Spurn into an island. That could result in the mud flats that protect the flood banks on the northern banks of the Humber being washed away with, again, flooding of thousands of acres of good agricultural land. More important, it could affect the navigation in the Humber and, consequently, the port of Hull.

The Humberside county council, of which I was the leader, approached the previous Government and invited the hon. Member for Manchester, Gorton (Mr. Marks), a Minister in the previous Government, to visit the area and see the problem on the ground. We thought that it would be advantageous if he saw the problem from the air. We hired a helicopter. Unfortunately, as often happens in the United Kindom, the weather was appalling and the helicopter could not get off the ground. Therefore, the Minister was not able to get a bird's eye view.

The protection of our coast is not a local problem; it is a national problem. It should be financed by the Government. Small rural maritime districts do not have the resources to deal with it. It is ridiculous that flooding caused by coast erosion is dealt with by the water board, yet coast protection is dealt with by the district council. The responsibility should be with one body, the national Government. Immediate action must be taken at Spurn, to protect the prosperity of Hull. The long-term problem could be solved if we reclaimed the land inside Spurn Head. That would provide several thousand additional acres of agricultural land. If this had been Holland, that would have been done 30 years ago.

Action must also be taken where the hinterland is below sea level. I am the first to admit that there is no easy answer to this problem. But it would be money well spent if some of the Government's oil revenues could be spent on more widespread experimental work and on non- traditional methods of coast protection, which could have national implications and, if successful, would be more effective than traditional methods.

There is one certainty. We shall not obtain any more land as a commodity. Let us guard what we have. It is precious.

5.34 p.m.

Mr. Allan Roberts (Bootle)

It is a great honour to be making a maiden speech in the House of Commons.

First, I should like to refer to my election campaign. It was fair as far as the Conservative opponent was concerned. However, it was marred somewhat by the importation by the Liberals of a nephew of the retiring Member of Parliament, Mr. Simon Mahon. If Mr. Mahon were here, he would be equally strong in rejecting the idea of nepotism. Nepotism would not be accepted by the people of Bootle. Mr. Mahon owed his success—as did I at this general election—to the people, the Labour Party and movement and the loyal Labour voters of Bootle who returned him as Member of Parliament on many occasions from 1951 onwards and who returned me with an overwhelming majority. That was a good result for the Labour Party in Bootle.

I pay tribute to Simon Mahon. I shall continue the work that he did in the constituency. If he were here today, he would agree that we both owe everything to the Labour movement and the Labour voters in Bootle.

My constituency has many problems. Their resolution will not be helped by the speech of the Chancellor of the Exchequer and the consequences of the Budget. If I look at the situation in Bootle in the light of the Chancellor's speech, perhaps hon. Members may realise what I have in mind.

Nationally, there are about 1½ million people unemployed. The facts in Bootle and Merseyside are far more serious than the national figure indicates. Bootle is characterised by a strong dependence upon the port, which has been declining for a considerable number of years. There is a weak manufacturing sector in Bootle and on Merseyside. Unemployment among active males in the constituency is between 12 per cent. and 14 per cent. The majority of the unemployed unskilled men are not benefiting from any expansion which has taken place in white collar employment in central Bootle in the past 10 years.

Between 1961 and 1971, the population of the inner part of the city—the major part of my constituency—declined by 24 per cent.;15,000 people left the area as there were no employment prospects. Only 5.3 per cent. of the economically active men in the area between the ages of 17 and 65 are in the professional classes, about 24 per cent. are unskilled manual workers, 74 per cent. of the house-holds do not own a car, and 21 out of the 24 primary schools are classified as social priority schools.

It is obvious from those statistics that there is a great deal of deprivation in the area. Many people receive unemployment benefit and social security payments and are on low incomes. Not one of them will benefit from the Budget. They will suffer considerably in a number of ways. First, industrial and employment subsidies will be cut. No doubt the Secretary of State for Industry will say whether Merseyside will retain its development area status. Nationally as a result of the Budget we shall lose £380 million, which would have gone directly to support and help and create jobs that were provided by the previous Labour Government.

The people of the area are sick and tired of politicians in London and else where blaming Merseyside's problems on the militancy of the trade union movement and the work force. The militancy occurs as a consequence of the problems and unemployment—and not the other way round. The unemployment and the problems came first.

In the early 1970s, Liverpool saw the continuation of the trend of the previous decades in declining job opportunities in the city. Over the 10 years from 1961 to 1971, 75,000 jobs were lost from the city and 19 per cent. of the local work force left Liverpool. That dramatic decline was halted only temporarily by the national economic boom of 1972 and 1973. Further substantial losses have been recorded since then, according to the planning officer of the city of Liverpool.

I come to the Government's cut of £440 million in the environment programme. When the Chancellor announced that he would repeal the Community Land Act and that that would save money, and spoke of the water authorities and cuts in housing, Government supporters cheered. They especially cheered the announcement about the Community Land Act. The budget for the Community Land Act in this financial year is only £54 million. Of the £440 million to be cut from environmental expenditure, only £54 million can be taken from the Community Land Act—and that will happen if everything in the pipeline is stopped and no more loans sanctions are given.

From where will the £440 million come? Not from Community Land Act expenditure. It will come from the water authorities and housing. There is provision of £478 million in this year's Budget for the water authorities. Before the Budget, local authorities and regional water boards had been instructed to stop letting out capital contracts. What will happen? The water rate will go up over and above the 3½ per cent. increase in the cost of living resulting from the VAT increase.

; There is underground dereliction in the North-West. Merseyside and Manchester are ignored. Sewers are already collapsing. That problem must be dealt with. Proposed industrial development and housing schemes, either for sale or rent, will not be able to go ahead as the water authority must not let the capital contracts to provide the infrastructure and drains.

Then there is housing, with £1,500 million revenue spent this year and £2,146 million on capital. That is where the cuts will come. In addition to the increase in VAT and rents going up, housing programmes will be halted. Council houses will not be built. How can this help the people of Bootle, the people of Merseyside, the people in industrial areas, who are on waiting lists? These people will face a terrible situation.

Then we have the bank rate going up from 12 per cent. to 14 per cent. That will hit small businesses. It will also hit the owner-occupier with his mortgage. I do not know how the so-called enforced sale of council houses will be funded. How will local authorities lend the money when they are having to borrow it at more than 14 per cent.? No one will be able to afford to buy a council house. That is the position before the new policy is even introduced.

There will be more cuts. The Chancellor of the Exchequer said so. I urge all Labour local authorities, wherever they are in the country, to levy a supplementary rate now. I urge them not to wait until next April, when the Chancellor's Budget has been forgotten and the voters might blame the Labour councillors. I advise them to put on a supplementary rate now. Every Labour councillor in the country should tell the people in his area that it is the consequence of the Chancellor's budget, and that the authority intends to raise the money now so that the house-building programme and the essential social services may be maintained. The people in areas such as Bootle need these services because they are on low incomes and are entirely dependent on the social wage. They cannot afford to pay for their use of the Health Service, or for their housing, without help from the Government.

I am very concerned about the drift towards the means-test State. I am by profession a social worker. I am probably the first social worker, if not one of the first social workers, by profession to be elected to Parliament. I believe that in that respect I have some responsibility for fighting in this House for the deprived, for the underprivileged and for the very people who were stigmatised during the election campaign by the right hon. Lady who is now the Prime Minister. These are the people to whom Conservative Members refer so easily and so glibly as the scroungers.

I have the duty as a social worker to fight for the people who represent minority groups in our society. I am a member of the British Association of Social Workers. I pay tribute to the work that social workers do, and I shall fight on behalf of the underprivileged. The underprivileged will not benefit from measures designed to shift the burden of taxation from direct to indirect taxation. The very idea that this shift will give more freedom to poor people to decide how to spend their money when they have no money to spend anyway is absolute nonsense. The widow, on a pension, buying something in the shops, pays the same amount of VAT as a millionaire buying the same product. It is absolute nonsense to talk about giving people more freedom.

The Tories intend to increase the cost of housing, prescription charges and so on. Instead of giving a universal benefit and providing everybody with a subsidy, their intention is to put up the charges and then to tell the people who are in need that they can fill in a form in order to apply for a rebate, and fill in a form in order to have an annual means test. It is annual financial striptease that these people are being asked to undertake. This must be fought on behalf of the people who are underprivileged, the people who are in need and the people who often do not get the benefits and rights to which they are entitled.

Bootle is a Labour constituency and the problems of my constituents are not helped by the fact that it is situated in the metropolitan district of Sefton, which seems to be permanently Tory-controlled. The area includes Crosby, Formby and Southport. We have in Bootle government from Southport. The Southport Conservatives are so Rightwing that they make the Stockport and the Tameside Conservatives look like Communists. I do not know why Stockport and Tameside get all the publicity and Sefton does not. It absolutely amazes me. I shall fight in this House to stop government from Southport and to get a change in local government boundaries, so that the people of Bootle and Litherland, the area that I represent, can have their own council back and decide their own future for themselves.

The hon. Member for Brent, North (Dr. Boyson) once said that the increase in crime was in proportion to the increase in the number of social workers. There is one fewer social worker since I was elected for Bootle, so the crime rate should go down.

5.45 p.m.

Mr. John Stokes (Halesowen and Stourbridge)

I congratulate the four maiden speakers who have spoken in the debate this afternoon. Three of them observed the long-standing convention of the House that a maiden speech should not be controversial. The last speaker, the hon. Member for Bootle (Mr. Roberts), chose to ignore that convention. I admire and salute his sincerity and passion. In the nine years that I have been in this Chamber I have found that it is a kind and tolerant place. In the end it is the sort of person that an hon. Member is that matters more than the party label.

I think that it is for the ease of everybody if those of us who are less senior than many others—and I am less senior than many others here—pay at least some attention to how affairs are conducted in what is, after all, the greatest debating Chamber in the world. I congratulate the maiden speakers on their confidence and fluency, and also on their devotion to their constituencies. I am glad that here we still have a close link between a Member and his constituency.

It is difficult, after such a Budget, full of meat, to review all aspects of it. I congratulate my right hon. and learned Friend the Chancellor of the Exchequer most warmly on his Budget. Representing, as I do, an industrial seat, composed mainly of people who work in factories, I know that they will be as pleased as I am with the emphasis in the Budget on the individual and on manufacturing industry.

I welcome the help for small companies, as I believe that it is from the small companies that the greatest contribution will come, in the end, to reducing unemployment. I am glad about the increases in pensions and the help for old people. I welcome the encouragement to savers by the improvement in the investment income surcharge—I felt that the previous level was most unfair—and also the ending of dividend controls, which were mischievous and quite irrelevant.

The cuts in public expenditure had to come. There is great resentment in the West Midlands at the shrinking of the manufacturing sector and the increase of the public sector. This Budget starts to reduce that imbalance. I felt that the whole tone of the Budget and its trend set the standard for the future recovery of our country.

I was disappointed that the Leader of the Opposition did not rise to the level of events. There was no apology at all from him for the failures of his own Administration, and his speech left a taste of sour grapes in the mouth.

We have this Budget in the last quarter of the century, when this old and great country of ours faces two supreme challenges. One, as we all know, is related to the loss of morale, or national pride, which has been continuing since the end of the war, and which I believe will be redressed by the return of the national and patriotic party of this country. But to halt the decline in the economic performance of this country and to start building up our productive capacity will, I believe, take much longer than a five-year term of office. It will mean a complete change of attitude for many people.

Perhaps the hon. Member for Bootle will listen, if only to this part of my speech, because the transition will be painful for some people. I believe that we must instil into everyone—above all, into our young people—that their individual effort will count much more than actions by the Government. That is where the Budget will be helpful. It is on the actions and decisions of millions of ordinary people that economic success will come to this country. The Government cannot do it; individuals and firms can.

The stark fact—there is no disagreement between the two sides of the House on this—is that we are failing to produce either enough or with the efficiency and competitiveness which the modern world demands and in which France, Germany, the United States of America and Japan are so far ahead of us. That is why this country is now flooded with foreign goods, from cars to refrigerators and textiles. That cannot go on indefinitely without the country facing ruin.

The tax changes in the Budget will not alone suddenly transform the situation and improve the sluggish performance of our factories overnight, with their gross overmanning and underutilisation of plant and machinery, but they will at least be a start. They will be an encouragement to our directors, managers, foremen and chargehands to lead their workpeople better and to put them more in the picture about the aims and objects of their enterprise. They will encourage the skilled men, of whom there are many in my constituency and in the West Midlands, and they will encourage also young men and women to enter industry and consider learning a skilled trade. We must make the phrase "British made" once more the hallmark of quality and excellence. We have the brainpower. We need to harness it to commercial development and success.

All that I have been saying, and the theme of the Budget, is not sordid materialism. It is natural for a man to want to work harder to give his children a better start in life than he had. Similarly, if a nation wants hospitals, schools, roads, city centres and social services, it can provide the means only from the wealth-producing sector of the economy—the products of its factories. These products must be well designed, properly made, produced on time, delivered punctually and, if need be, well serviced afterwards. If the French, Germans, Americans and Japanese can do that, there is no reason why we cannot. More of our young people should be encouraged to consider a career in manufacturing industry rather than in the public service. This is primarily a job for industry.

There remains the tremendously difficult problem, which has built up over many years in this country, of too many people, unfortunately, being employed in the Civil Service, both nationally and locally. I welcome the cuts in the Budget in this regard. They are essential to this country's health and well-being. It is no use the Opposition bemoaning the lack of jobs. Jobs which the nation can neither support nor afford are not real jobs. They merely camouflage unemployment. If our industrial base were to contract any more, we should have a rapid and disastrous decline in our standard of living and fearful cuts in all our social services.

This Budget, like the Government, supports industry, which supplies the life-blood for almost the whole of our national life. Within industry I include salesmen, both home and export, who are vital to our industrial success, and the service industries—banking, insurance and so on—which support them.

I believe that our industrial success as a nation will be helped if we denationalise some of the public corporations as rapidly as possible. I welcome the Budget proposals in that direction.

As a small business man before I entered the House and now, having previously been a manager in industry for many years, I know that it is the necessity to make profits and to avoid bankruptcy which supply the necessary disciplines to all ranks in industry. The absurdly high redundancy payments in the steel industry and in the docks, and the proposed granting of large increases in wages to miners, whose productivity is falling, would be avoided—in the long run to the benefit of all concerned—if those organisations were responsible to shareholders for the success of their operations and had to show a profit at the end of the year.

Socialism has had nothing to offer industry. It only seems to reinforce failure and to bolster up what should be allowed to die. It also stifles invention and incentive. For 11 out of the last 15 years we have had a Socialist Government. I believe that they have held back the country grievously, and that is one reason why our industrial performance has fallen so far behind that of our competitors. I am grateful that the industrial heartlands of this country, such as my own, returned the biggest swings against the previous Socialist Government.

I hope that we shall see a faster dismantling of the various bodies—a matter touched on in the Budget—which presume to advise industry and, indeed, all of us. I see that the noble Lord Diamond's Royal Commission on the distribution of income and wealth has now gone. Good riddance. The whole thing was a complete waste of time and money to the tune of £1½n. If each day we can cancel one of these boards, we shall not only save public money and a great deal of time but release the men and women working for them into more profitable work and lift a burden which has been lying for too long on industry.

I wish that it had been possible in the Budget to reduce the borrowing requirement still further. We must get back to paying our way and balancing our budgets if we are to rid ourselves of inflation. I believe that inflation is caused by Governments. There is no other way to do it.

The increase in bank rate is harsh. It will affect small businesses badly. Nevertheless, it is essential as we were fast running into a dangerous period of inflation yet again.

The Budget will undoubtedly prove strong medicine for some. It appears to be strong medicine, as we have heard today from one speaker, but I believe that it is exactly the medicine that the patient needs.

This is probably our last chance as a country to pull ourselves together in 1979 economically, financially and industrially. We must learn to survive in a hard and competitive world. In the end, no one will help us but ourselves—certainly not the EEC. The world is now looking at us, at this Budget and at the House of Commons to see whether at last we really intend to turn the corner. I believe that we do. I have the utmost confidence that the Prime Minister, the Chancellor of the Exchequer and the Government will steer this great nation on to the high seas of success, where we can again earn the admiration of the world.

6.0 p.m.

Mr. Alfred Dubs (Battersea, South)

Thank you, Mr. Deputy Speaker, for giving me this opportunity to speak in the House for the first time. I hesitate to use the word "maiden" because there are some members of the women's movement in my constituency who query that adjective.

Many years ago, when I was canvassing during the course of an earlier election campaign, I rang the doorbell of a multi-occupied house and a lady and a small child of about four came to the door. I did not know who she was because the doorbells did not have names on them. I stated that I was canvassing, and the lady slammed the door in my face. As I was puzzling which name I should mark as being a supporter of the opposite party to my own, the door again opened, the lady with the small child was still there, and she said to the child "There is nothing to see. It is only a politician."

That comment set me thinking, over the years, whether we politicians—I presume I have now become one through becoming a Member of the House—have established the right level of credibility with the people whom we represent. If the people sneer at us and say "It is only a politician" and slam the door—I believe that was not an isolated reaction—we must be careful to ensure that we do not distance ourselves too far from the communities and the people whom we represent.

My predecessor, Ernie Perry, was a Member of this House from 1964 to 1979. He was undefeated throughout his series of election campaigns. He had been on Wandsworth borough council, had previously served on Battersea council—indeed, he had been a mayor of Battersea —and whilst in the House was an assistant Government Whip. I also mention another previous Member of Parliament, Mrs. Ganley, born 100 years ago this year, who served Battersea, South from 1945 to 1951 and was an active Socialist and co-operator in the London area.

Battersea, South is a constituency which has suffered more than its share of boundary changes, and I suspect that it may indeed disappear when the next lot of boundary changes are announced in the course of, I believe, this week. Batter-sea, South has also suffered through being a typical inner city area. It has suffered from a declining population and the effect that that has had on local services. It has suffered because of the disappearance of much employment, and it is suffering so much because of poor public transport that one could almost say that the main occupation in Battersea, South is waiting for a bus, a tube train or a train.

As with so many inner city areas, Battersea, South has been under attack over the years. Perhaps a symbol of the attack on Battersea is what occurred as recently as last week to the mural on what was locally called "Morgan's wall" the remains of which can still be seen as one comes over Battersea Bridge. I appreciate that that it is not in Battersea, South. It is in Battersea, North. However, it has been a symbol of the whole community. It was a vivid mural, depicting the feelings of the people of Battersea. That mural was bulldozed at three o'clock one morning last week in order to prevent people knowing that it was happening. It was an act of stealth, and in some ways it symbolised the sort of attacks that are made on people who live in inner city areas.

I appreciate that one is not supposed to be controversial when making one's first speech in the House, but that is difficult if one has recently been elected in the course of a controversial campaign and when one represents a constituency in an area which has, perhaps, one of the most controversial local authorities in the country. I am speaking of Wandsworth council.

Wandsworth town hall is in my constituency, and since the Conservative Party won control last year Wandsworth council has been held up as the sort of local authority which typifies, at local level, what the Conservative Party would wish to do nationally if it had the chance. Indeed, the Conservative Party now has that chance and we have seen, in today's Budget, how it intends to use it.

Before the Government get too excited about the opportunities that are ahead of them over the next few years, perhaps I could just comment that although there was a big swing to the Conservatives during the local elections in Wandsworth last year, there was a large swing away from the Conservatives in the general election. I doubt very much whether I should be here today had the people of my constituency not had the evidence before them of what happens when a council such as Wandsworth comes under Conservative control.

In terms of the Budget, I believe that many of the fundamental problems facing our economy have not come to light over the last few years, or, indeed, the last 25 years. Many of the real problems facing our economy have been with us for 100 years or longer. What we have seen is a steady trend of events which have weakened our economic position as a country on a long-term basis. Therefore, I should like to make a judgment of the Budget both in terms of its short-term effects on the people in my constituency, and others, and in terms of whether it will make a long-term contribution to the real problems that affect the British economy.

Without wishing to enter into any area of controversy, I do not see that this Budget will do much for people of the inner city areas such as Battersea in terms of providing more jobs or making it possible for local authorities to improve housing conditions, or, indeed, that it will do anything significant about achieving economic growth, which I believe is the key to creating more jobs. I find it difficult to see how our long-term economic problems will be solved unless one Chancellor or another introduces a measure of import control to make possible the more rapid economic growth that will give us more jobs and the prosperity that we have long been seeking.

Both in the short and long term I do not see this Budget making a significant contribution to solving the overall prob- lems facing this country, though it may well help certain sectors—usually the better off—within it. I fear that by this time next year we shall see increasing levels of unemployment, inflation and imports, and the sort of debate that we shall have a year from now will be very different.

It was said this afternoon that one of the underlying philosophies of the Budget was freedom of choice. It has always been my understanding that there is not, as it were, a sum of freedom which can be increased or diminished. The truth is that there is more freedom for some and less for others. The real issue is how widely the freedom of choice about which the Government talk will be distributed. It seems to me that giving more freedom of choice to, say, certain council tenants to purchase their council houses will lessen the freedom of choice for those waiting for decent housing or seeking a housing transfer. Similar considerations apply in many other aspects of the freedom about which we are talking. I fear that the freedom that has been increased for some people today will have to be balanced against the lessening of real freedom for other members of our community.

When I began talking I mentioned what happened when I once canvassed during an election campaign and I quoted the searing comment that was made about politicians by the person who answered the door. One of my personal aims is to try, as best I can, to lessen the gap of credibility between politicians and the community they serve. I shall do my best to achieve that as regards the people to whom I am accountable in my constituency, both the members of my party and my constituents in Battersea, South.

6.9 p.m.

Mr. David Knox (Leek)

It will be nine years next Monday since I was first elected to the House. Over that period of nine years I have not yet followed a maiden speaker. Today, however, with the exception of my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes), I am following five maiden speakers. I should like to congratulate all five—my hon. Friends the Members for Huddersfield, West (Mr. Dickens) and for Bridlington (Mr. Townend) and the hon. Members for Manchester, Blackley (Mr. Eastham), for Bootle (Mr. Roberts) and for Battersea, South (Mr. Dubs).

I remember only too well the trepidation with which I approached my maiden speech. I am sure that it showed on that occasion. Certainly there was no sign of any similar trepidation on the part of any maiden speaker whom we heard today. All spoke with great confidence and all showed great ability. I am sure that I speak on behalf of all hon. Members when I say that I hope we shall hear often from all of them in the future. But perhaps I can make the point that I hope not too often when I am trying to catch the eye of the Chair.

All the maiden speakers paid tribute to their predecessors. It was right that they should do so, because all five had predecessors who were held in high regard on both sides of the House. As their daughter teaches in my constituency, perhaps I can say how sorry I am to hear that both Kenneth Lomas and his wife are ill. I hope that both will soon be restored to full health.

I congratulate my right hon. and learned Friend the Chancellor on his first Budget. In the debate on the Gracious Speech four weeks ago today I said that I hoped he would be a bold Chancellor. Certainly he has introduced his first Budget with a boldness to which we were not accustomed during the many Budgets which his predecessor introduced over the five years that he was Chancellor. I hope that this boldness will continue.

I welcome my right hon. and learned Friend's general strategy. I believe that it is essential to cut direct taxation. The people of this country think that they are paying too much tax, and, because they think that, it has an effect on them in terms of disincentive to hard work, initiative and enterprise. I believe that the Chancellor has today taken the right first steps towards reducing this strong disincentive effect.

I believe also that the effect of the direct tax cuts will be to encourage economic expansion and to get economic growth going once again. As the hon. Member for Battersea, South pointed out, it is only if we can get economic growth that we can achieve the rising living standards and better social and public services that all of us want. I welcome also the pension increases which my right hon. and learned Friend announced today, as well as the improvement in the mobility allow- ance. These and other measures that have been mentioned should make it clear that the Conservative Party cares quite as much for the disadvantaged in our society as does the Labour Party.

Although I welcome my right hon. and learned Friend's strategy, I welcome some of the specific measures rather less than others. I was sorry that he felt it necessary to make the VAT rate quite as high as 15 per cent., although I strongly welcome the unification of the rate. It always seemed to me to be absurd to have two different rates, causing excessive complications to those running businesses as well as encouraging bureaucracy. The fact that we are now reverting to one rate only will, to my way of thinking, be a great advantage to industry and commerce.

In the current oil situation, I believe that my right hon. and learned Friend might have gone a little further in increasing the tax on petrol. I gathered from what he said that there will be a total addition of 10p per gallon, and this seems somewhat modest in view of the extraordinarily difficult energy situation which faces not just this country but the whole world.

I should now like to say a few words about the effect of the Budget on jobs. I am particularly concerned, as I have been during my period in this House, about the unemployment situation. I am hopeful that today's Budget will lead to a reduction in the level of unemployment, but this will inevitably take time. Under the Labour Government, unemployment more than doubled over the past five years. On a seasonally adjusted basis, it rose from 574,000 in March 1974, when the Labour Party came into office, to 1,247,500 last month, when the electorate eventually rejected the Labour Party. Since September 1975 over 1 million people have been out of work.

I remember, as do all of us who sat in this House between 1970 and 1974, the noise and synthetic anger which the then Labour Opposition showed in the early 1970s, when unemployment briefly and temporarily exceeded the 1 million mark. I noticed that the attitudes and reactions of Labour Members were somewhat different after September 1975. The fact is that unemployment under the Labour Government was higher than at any time since the war, and it has been far too high for far too long. The Labour Government did precious little to reverse the rising trend of unemployment over which they presided or to create real jobs. It is true that they more than compensated for this lack of real action by a great package of cosmetic measures. That approach may well have satisfied the Labour Party, but it did not satisfy anyone else. It did not satisfy the British electorate, as it showed last month in the general election.

There is great public concern about the level of unemployment in Britain today, and rightly so. There is a great public demand for the creation of real jobs for the people at present without work. There is no doubt in my mind that unemployment is one of the greatest social evils in our society. It creates bitterness against society in general, and bitterness between those out of work and those in work.

The Leader of the Opposition, when Prime Minister was right when he said that that biggest differential of all was between those in work and those out of work. Unemployment also undermines the self-confidence of those affected, with a detrimental effect on the quality of their lives. High unemployment alienates those affected from the society in which they live, particularly from a society, such as that in this country, which is organised on democratic lines.

High unemployment among young people, especially young black people, has had a serious effect on the fabric of our society. It is, therefore, necessary and urgent that something should be done about it. Unemployment is also bad from an economic point of view. It is wasteful of valuable economic resources, and the most valuable economic resource of all is human beings. After all, if the unemployed were at work we would produce more as a nation and there would be a bigger cake for all of us to share in terms of both personal living standards and better social and public services.

For those and other reasons, it is imperative that we get unemployment down considerably. The previous Government failed miserably. I hope that my right hon. and learned Friend's Budget will start the process of reducing unemployment. If we are to succeed in this task we must raise the level of economic activity in this country. We must create a demand for more goods and services to be produced within this country, which in turn will create a demand for more people to produce those goods and services. In taking action to deal with unemployment in the future, I hope that my right hon. and learned Friend will be even bolder than he has been already. There is always a danger that he might take what can be described as an accountant's attitude to the problem and adopt an accountant's approach. Even though some of the measures that can be taken to reduce unemployment might initially result in an increase in the borrowing requirement, it should be remembered that if one succeeds in creating new jobs and reducing the level of unemployment the borrowing requirement will then be reduced, because less money will have to be spent on benefits for the unemployed.

When considering unemployment we must also remember that there is a time lag of about 12 to 18 months between the taking of measures to deal with unemployment and those measures becoming effective. However much I hope that we have started on the right road today, I believe that it will be some time—at least a year from now—before we see the effect of these measures.

I turn finally and briefly to the question of the European monetary system. Last week we had the Euro elections. I think most people will agree that the turnout was very disappointing. I believe that that showed great public apathy about the EEC rather than necessarily great opposition to it. If we are to engender a greater degree of enthusiasm among the public, we in this House and the Government must show a much more enthusiastic attitude towards the Community. In economic terms, I believe this means that we should aim to join the EMS at the earliest possible moment.

I am sorry that my right hon. and learned Friend did not mention this today, but there are plenty of other opportunities for him to do so. I certainly hope that he will set about the task of preparing the country for joining the EMS at the earliest possible moment. I should like him to set a firm date for our joining, because the greater the degree of economic integration that we have in Europe, the greater the degree of economic prosperity there will be among the member countries of the Community, and that means, as we are a member country, a greater degree of economic prosperity for Britain. Britain's economic future undoubtedly depends upon the prosperity of the Common Market. We must start contributing much more positively to that to make it work much better, and that means joining the EMS as soon as possible.

6.20 p.m.

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

I have been a Member of the House for about 13 years. Whenever I have spoken in Budget debates I have generally made a sort of critical appraisal of whatever diet has been put before us in monetary or fiscal terms. On this occasion, however, as I suppose that once again I shall be serving on the Finance Bill Committee, I propose merely to isolate one item of the Budget and to talk in general terms about that.

I want to refer to the cuts that are to take place under the heading of trade and industry, cuts amounting to about £250 million, because within this particular sector of the accounts there is one item to which I hope the Government will turn their attention, perhaps in a slightly reforming spirit.

There is no doubt that the most significant set of statistics to emerge during the past week—not those contained in the Budget—indicated the deterioration in the balance of payments and, in particular, the growth in the volume of imports and the relative decline in the volume of exports. We can see quite easily that the de-industrialisation of Britain is going on apace. It seems absolutely appalling that, in the face of this major economic issue which confronts us, the Government should be cutting down in this area.

I want to make a few comments on one subheading under this item—regional support and regeneration. That is a very grand title. It covers what I think we normally refer to as regional policy.

The Conservative Party manifesto said: We do not propose sudden, sharp changes in the measures now in force. Lord Trenchard made a statement in Newcastle the other day saying that he refused to give any commitment that Government grants, even for the special development areas, would not be cut. He gave an oblique warning to the intermediate areas. He questioned whether it was cost-effective to treat nearly half of the country as a special case.

The cutting process has begun. As Peter Jenkins said in The Guardian, Just watch out for this particular item, because what you see is just the tip of an iceberg". This is what worries me if the present Government are allowed to continue for a full five-year term. I wonder whether cuts in this area will have damaging consequences for the country.

I am really making a plea to the Government—I shall not please all my hon. Friends by doing so—for an agonising reappraisal of this thing called regional policy. It has been with us for about 50 years, going back to 1934, when we had the Special Areas (Development and Improvement) Act. At present half of the country, the whole area north of a line from Wrexham to the Wash and west of a line from Wrexham to Plymouth, has some sort of special treatment. The time has come when we should examine this situation more carefully—without, of course, throwing out the baby with the bath water. I live in an area which is totally unassisted, apart from assistance in the matter of land dereliction. My plea is that we should no longer tolerate the anomalies which have arisen.

I am sorry that the hon. Member for Macclesfield (Mr. Winterton) is not present. I take Cheshire as an example. This prosperous county, on any possible indicator of prosperity, growth, wealth and so on, is an intermediate area. That is so for one simple reason: three Tory Members of Parliament, at a particular moment in time, had sufficient political clout to get it designated as an area which should enjoy intermediate status.

But the greatest irony and the greatest anomaly of all is the intermediate area status of Oswestry. Oswestry is a remarkable little place. It has a remarkable Member of Parliament. We all know him to be dedicated to the whole spirit of competition, free enterprise and so forth. He has been appointed to the Treasury and he is responsible for these cuts in public expenditure, aided and abetted by the Financial Secretary to the Treasury. Yet here is a man who, when it suits his own purpose—perhaps I should have mentioned this to him; I thought that he would be present—tries to get bestowed upon his own constituency that little bit of assistance which makes all the difference.

The Financial Secretary to the Treasury (Mr. Nigel Lawson)

As my right hon. Friend is not present, I think it only fair to point out that the question of which areas shall be intermediate areas and which shall not be such areas is entirely a matter for the Secretary of State for Industry and his Department, and it has nothing whatever to do with the Treasury.

Mr. Cant

That is quite true, but I do not see how it affects the argument I am putting forward. Even if another Department is involved—and Ministers occasionally meet one another—a little bit of arm twisting in the right place can do a world of good.

When some areas have totally outgrown the need for assistance, the prospect of ever getting these areas demoted so that they no longer attract these privileges is extremely remote. I have asked one of my right hon. Friends who has been responsible in the Department of Industry for the designation of intermediate areas "What right have you to allow Aberdeen to continue to enjoy special development area status?" He has said "Well, it is impossible to demote any area once it has got the privilege." Ministers always duck out of the question. If I had been a Minister, I would have done the same.

The situation has been further complicated by the fact that the previous Government and, no doubt, the present Government have gone soft on industrial development certificates. It is much easier to get them than it used to be, but there is no real operative policy.

Mr. Donald Anderson (Swansea, East)

And on offices.

Mr. Cant

And offices. The situation has also been further complicated by the policy of the Department of the Environment on the inner city areas.

I am not saying that the Labour Government's policy was in any sense a failure. The previous Minister of State said that we could be well satisfied with the achievement through the scheme of 325,000 jobs in assisted areas, and that certainly is not a failure. If this Government are to start making cuts in regional support and regeneration, they must reevaluate the policies and programmes.

The Select Committee on Expenditure said that Parliament needs to be put in a position to assess the effectiveness of the programmes more accurately than has hitherto been possible. The difficulty is that once one decides to revise existing policies, the changes that emerge may be too drastic.

Dr. David Eversley, speaking of regions in change at a meeting of the Royal Town Planning Institute, said that the Government's regional policies were flying in the face of economic logic. He envisaged the emergence of a sun belt, a new commercial and industrial zone covering large areas of the East, South-East and South-West of England, which is thriving and likely to continue to thrive despite all Government attempts to frustrate it. We do not want that.

The blanket approach to regional policy should be modified by greater selectivity and flexibility. Some areas and towns in the country that have chronic problems not only get special development area status but receive more money than is implicit in the policy. The hon. Member for Bootle (Mr. Roberts) spoke of the terrible level of unemployment in his area. In Sunderland the unemployment figure is 13 per cent. It is ridiculous that between a development area and a special development area the difference is only 2 per cent. in the assistance given. We should not adopt such a blanket approach, and more money should go to those areas that need it more desperately.

On the other hand, we must start declassifying some areas. An analysis of the position in Cheshire no longer justifies intermediate area status, and money could be saved here to be spent elsewhere. Like my constituency, Crewe is an old town, yet it enjoys intermediate area status. The level of unemployment there is the same as in Stoke-on-Trent, but because Crewe is in an intermediate area it has today attracted a new industry offering 1,000 new jobs. That will be appreciated in Crewe but not in Stoke-on-Trent, which is just a few miles down the road.

Grants to highly capital-intensive Industries should be reviewed, which would also save money. Substantial grants are automatically offered to firms on administrative and economic grounds, and, for example, with a petroleum refinery plant, a grant can amount to millions of pounds. For a project costing £10 million, for example, with a petroleum refinery plant and it may employ only 48 men.

There are firms such as GEC, sitting on a cash mountain of about £700 million, which may want to link up with Fairchild to get on the microprocessor bandwagon. It asks for a grant and that is automatically given. But why should the Government pour out the taxpayers' money to provide GEC with £17 million, or £70 million—one gets lost with these petty cash sums—when it has substantial cash reserves? That has no justification or logic.

The main thrust of the Government's regional policy should be directed to development in those areas where the industrial potential is essential to our future, and they must look carefully at de-industrialisation. More money must be spent on areas where our future industries will develop. In the industries, areas and firm that are in decline, money should be used to reduce the impact of unemployment, but unless we start backing the winners we shall not win the battle for our industrial future.

My area of North Staffordshire gives us a key to the problem and contains the foundation for a new regional policy. The criterion for giving aid should not be the imminence of collapse but whether the industry of an area is strong on import substitution and export ratios. Money should be put into those industries that save us importing and that make a considerable contribution to exports—for example, the pottery industry in my constituency. In that industry 60 per cent. of a growing volume of output goes to exports, yet we get nothing to assist in future development, apart from land reclamation and making the area more beautiful—though that is doing a fine job.

The Government will obviously make cuts in regional policy—no one can stop them—but there should be a total reshaping of regional policy financing. The industry sector schemes should continue with a reactivation of selective investment schemes.

My main point relates to industrial development certificates. This is one of the great mystery areas. People talk about the number of refusals being very low, but no one ever talks about the volume of applications that are never made. Obviously people do not bother to apply to go to an area that does not enjoy intermediate or development area status. I believe that the IDC exemption limit should be raised to 30,000 sq. ft. and that IDCs should not be required for firms that wish to expand in their present premises, for example, throughout the whole of the West Midlands region. Also, I believe that IDC control should be removed for foreign firms, whatever their size and wherever they propose to develop.

We must remove the restraints on development in those areas that will make a key contribution to our industrial future. If this means spending more money on regional support and regeneration, so be it. There is no doubt that our future is bound up with industry. This is the fundamental national economic weakness, and as long as we put constraints on those areas which obviously will make a contribution to this country's future we shall diminish our hopes of national success.

6.41

Mr. Michael Morris (Northampton, South)

It has been a great pleasure to listen to the five new Members who have contributed to the debate this evening. It is particularly pleasing that four of them have joined the House of Commons from local government. I am not sure about the hon. Member for Battersea, South (Mr. Dubs). Everyone in this House held the hon. Member's predecessor in great respect. He was dearly loved and we wish the hon. Member as happy a time here as his predecessor had. If it is true that the parliamentary constituency of Battersea, South will disappear, we hope that the hon. Member who has recently joined us will still be here after the next election—provided that it is not in a marginal seat.

The most surprising thing about the response of the Leader of the Opposition to the Chancellor's Budget was his complaint that the Chancellor had spent no time on the industrial strategy. When one reflects on the industrial strategy, the time and energy that the previous Government spent on it and the result, one wonders whether that was time well spent. Of all the policies that the previous Government followed, the industrial strategy was singularly the most ineffective. My right hon. and learned Friend was quite right in not devoting a single word to it.

The Chancellor itemised four principles that had guided him in constructing his Budget. I shall comment on three of them: the need to provide greater incentives for our people, the need to provide them some freedom of choice, and the very important need to reduce the burden of public finance.

There is no doubt that if there is one word that encapsulates this Budget it is "incentive" During the election the then Leader of the Opposition who is now Prime Minister went around the country with one clear message. The then Government thought that she would be put off her stride, but her clear message was that this country needs incentives at every level if it is to succeed in getting out of its problems of the last decade. The Budget today is a very large step along the road of incentives.

The key to the Budget came right at the end, and it related to income tax, first of all to the standard rate. Many of us felt that a 3p reduction was the minimum that could be considered as being a significant step forward. I welcome the fact that the Chancellor has put on the record that his target is to get income tax down to 25p in the pound. We must look to that target within the lifespan of this Parliament.

The Chancellor was also right to draw attention to the fact that across Europe the top rate of tax is about 60 per cent. I am so glad that my right hon. and learned Friend did not follow the traditional British approach of nibbling at the problem and cutting down from 80 per cent. to 73 per cent. to whatever. The Treasury team took the decisive step of going straight down to what it considered was an appropriate rate of 60 per cent. with adjustments. That is the central theme of the Budget, and my right hon. and learned Friend is to be congratulated.

There is also an understanding of where the problems lie. Take, for example, land supply. I am only sorry that the hon. Member for Bootle (Mr. Roberts) has left the Chamber. There is no doubt—and Labour Members know this as well as I do—that the amount of land coming forward in the last two years has decreased because those who own it believed that the situation was too fluid. We have now had a positive statement about a 60 per cent. rate of tax. That is still a fairly stiff tax and there will not be any great windfall gains to be made out of land. I think that 60 per cent. is a realistic level and it should ensure that those who have the land will now bring it forward so that the private housing sector can move for-word apace to meet the demand.

The other dimension on which I wish to reflect is that of social benefits. I have known the Chancellor ever since he was chairman of the Bow group, and the image that I had of him long before he achieved high office was that of a man of great social conscience who spent a good deal of his early political life trying to find ways to help those in greatest need. He has always tried to ensure that the nation used its money and resources to look after those in need as well as to give incentives to others.

I believe that when Labour Members have had time to reflect they will see that in this Budget the incentives to those who are able bodied and who can respond to the challenge are counterbalanced by help for those who cannot respond. Not before time—and this is to the shame of all hon. Members—war widows' pensions are to be removed from taxation. That was the very least that could be done. I congratulate my right hon. and learned Friend on doing it. Many have talked about doing it, but he has actually done it.

Alongside that, I noted the extra contribution for single-parent families. That has been debated in this Chamber over the last couple of years, but it is my right hon. and learned Friend who has responded. He has responded, too, to the point that was made that the pensioners were short-changed in the last year. Some hon. Members may say that they were short-changed by only a week, but the fact remains that they were short-changed and they feel very strongly about it. It is right that that has been corrected.

In addition, I am pleased that pensions are to be increased by more than originally stated. Indeed the Budget goes further. We have had news of the increase in mobility allowance but, most important of all, there is the removal from tax altogether of 1˙3 million families. I hope that, if we reach the prosperity we expect, next year we shall see even more families outside the tax net. Therefore, there will be a quid pro quo in respect of those in the lowest earning bracket who will benefit from a Conservative Budget.

I wish to say a few words about exports. I am sorry that the hon. Member for Stoke-on-Trent, Central (Mr. Cant) has left the Chamber. I agree with some of his remarks, and his words are worth considering. Undoubtedly part of the problem of exports is associated with the new-found strength of sterling. It is easy for exporters—and I speak as somebody who was engaged in exporting—to sell when sterling is declining. However, it is much more difficult to sell against an international market when one's currency is stable on increasing in value.

I am not surprised that the figures now illustrate that the volume and value of our manufactured exports and our invisibles have declined in the last quarter. What the country is looking for is not commodity exporting but exporting by British industry on a value-added basis. That means that we must sell goods the quality of which cannot be matched by other countries. Those are the exports that need encouragement.

There is one area in which incentives will also help industry. I believe that we must re-examine the incentives given to exporters. Such incentives have suffered changes over a period of time. My colleagues on the Treasury Bench should listen to our trade colleagues who ask for a switch to export incentives. I welcome my right hon. Friend's relaxation in respect of direct investment overseas.

Many Labour Members are worried about the loss of employment opportunities in the short term. I wish to point out to them—and I have worked in this area of activity—that that is not the result in my experience. Those companies which wish to invest directly overseas are often the most profitable and successful companies in the nation. There is a great deal of activity between the United Kingdom and the EEC and the developing world. I believe that we as a country are right to safeguard our future by in- vesting directly overseas. Thanks to North Sea oil, we have some room for manoeuvrability. We should make good use of that factor and should not be too inward-looking. We must recognise that we work and trade in a world market. We should go where we get the greatest return—not just in the short term but in the medium and long term.

Furthermore—and this possibly is a more controversial part of my speech—I believe that we should all respond to my right hon. and learned Friend's plea on energy. I believe that as a nation we would be foolish to seek to avoid paying the world price of oil. If in isolation we seek to keep up our home consumption, I believe that that will be to the disadvantage of our balance of payments in the longer term.

I wish to deal with the need to reduce the burden of financing the public sector. My right hon. and learned Friend rightly said that he expected to have an income of £1,000 million arising from the realisation of assets. The only company he mentioned was BP, and I thought that he was right not to mention the others in public. I remind the Government that the New Towns Commission is sitting on several hundred million pounds worth of publicly owned assets. We do not need the New Towns Commission. Its job is completed and its assets must be returned to the people. The sooner that job is carried out, the better. I believe that it should be done in the coming year or so.

There are many other aspects to be considered. I hope that we shall be ruthless in closing down direct-labour departments which consistently make losses. It is time that the continued comments of district auditors and the adverse reports about some direct labour departments were acted upon, instead of these losses being allowed to continue year after year.

I wish, in passing, to mention another small investment—namely, the minority State holding in the British Sugar Corporation. I believe that we do not need that holding.

My right hon. and learned Friend was right to say that cash limits should remain, because those limits are to do with revenue. I hope that I have the message loud and clear. We have at last got through to the Treasury Bench the fact that it is not merely a matter of cutting Treasury expenditure and forgetting all about revenue. There needs to be a balance between the two. I think I discern such a balance in the proposed cuts.

I wish to make clear to my hon. Friend the Financial Secretary that local government accounts for one-third of expenditure and central Government for two-thirds. On my rough calculations, local government has provided more than its one-third share of the cuts announced so far. I urge the Government to recognise that those proportions should not be violently altered. Local government has a job to do and it should do it. I shall respond as much as anybody else to any call to ensure that that happens. I also hope that we shall not forget the words of the headmaster at a recent conference who said that it is nonsense to spend £400 million on school milk as a subsidy when there is still a need for more books and equipment.

Let me mention a further piece of nonsense. I gather that serious consideration

is being given by a working party set up by the Labour Government to the establishment of a third London airport. That will involve the expenditure of enormous capital sums and will have a great effect on the environment in certain parts of the country—not least on Northampton, South. I believe that the House should reject such a proposal because it can only be a white elephant.

This Budget is unique. It is a great step forward and will be talked of for a very long time in political circles. It takes the steps that we all hoped would be embarked upon. We went into the election with a manifesto containing a clear commitment. The Treasury Bench has had 40 days and 40 long nights to work on it. It is a pioneering Budget, and I believe that the country will respond to it. I very much look forward to the next instalment.

Motion made, and Question put, That the debate be now adjourned.—[Lord James Douglas-Hamilton.]

The House divided: Ayes 146, Noes 58.

Division No. 7]	AYES	[7.0 p.m.
Alexander, Richard	Finsberg, Geoffrey	Mawby, Ray
Alton, David	Fletcher, Alexander (Edinburgh N)	Maxwell-Hyslop, Robin
Ancram, Michael	Forman, Nigel	Mellish, Rt. Hon. Robert
Aspinwall, Jack	Fraser, Peter (South Angus)	Meyer, Sir Anthony
Atkins, Robert (Preston North)	Garel-Jones, Tristan	Miller, Hal (Bromsgrove & Redditch)
Atkinson, David (B'mouth, East)	Glyn, Dr Alan	Mills, Iain (Meriden)
Banks, Robert	Goodhew, Victor	Miscampbell, Norman
Beaumont-Dark, Anthony	Gow, Ian	Moate, Roger
Beith, A. J.	Gower, Sir Raymond	Molyneaux, James
Best, Keith	Graham, Ted	Monro, Hector
Blackburn, John	Gray, Hamish	Moore, John
Body, Richard	Grieve, Percy	Morrison, Hon. Charles (Devizes)
Bonsor, Sir Nicholas	Griffiths, Peter (Portsmouth N)	Morrison, Hon. Peter (City of Chester)
Boscawen, Hon. Robert	Grimond, Rt. Hon. J.	Mudd, David
Boyson, Dr Rhodes	Grist, Ian	Murphy, Christopher
Bright, Graham	Gummer, John Selwyn	Myles, David
Brinton, Timothy	Hamilton, Hon. Archie (Eps'm & Ew'll)	Needham, Richard
Brocklebank-Fowler, Christopher	Hamilton, Michael (Salisbury)	Neubert, Michael
Brown, Michael (Brigg & Sc'thorpe)	Harrison, Rt. Hon. Walter	Newton, Tony
Bruce-Gardyne, John	Hawksley, Warren	Normanton, Tom
Butcher, John	Henderson, Barry	Nott, Rt. Hon. John
Cadbury, Jocelyn	Hogg, Hon. Douglas (Grantham)	Onslow, Cranley
Carlisle, John (Luton West)	Holland, Philip (Canton)	Page, Rt. Hon. R. Graham (Crosby)
Carlisle, Kenneth (Lincoln)	Howell, Ralph (North Norfolk)	Pattie, Geoffrey
Clarke, Kenneth (Rushcliffe)	Hunt, David (Wirral)	Pawsey, James
Cockeram, Eric	Hunt, John (Ravensbourne)	Pollock, Alexander
Cocks, Rt. Hon. Michael (Bristol S)	Jenkin, Rt. Hon. Patrick	Proctor, K. Harvey
Cope, John	Jopling, Rt. Hon. Michael	Pym, Rt. Hon. Francis
Cormack, Patrick	Kellett-Bowman, Mrs. Elaine	Raison, Timothy
Costain, A. P.	Kitson, Sir Timothy	Rathbone, Tim
Cranborne, Viscount	Lang, Ian	Rhodes James, Robert
Dean, Paul (North Somerset)	Lawrence, Ivan	Roberts, Allan (Bootle)
Dickens, Geoffrey	Lawson, Nigel	Rodgers, Rt. Hon. William
Dover, Denshore	Lloyd, Ian (Havant & Waterloo)	Ross, Stephen (Isle of Wight)
Dunlop, John	Lloyd, Peter (Fareham)	Shaw, Michael (Scarborough)
Dunn, Robert (Dartford)	MacGregor, John	Shelton, William (Streatham)
Durant, Tony	McQuarrie, Albert	Shepherd, Colin (Hereford)
Edwards, Rt. Hon. N. (Pembroke)	Major, John	Shepherd, Richard (Aldridge-Br'hills)
Eyre, Reginald	Marland, Paul	Skeet, T. H. H.
Fairgrieve, Russell	Marlow, Antony	Smith, Dudley (War, and Leam'ton)
Faith, Mrs. Sheila	Marten, Neil (Banbury)	Speller, Tony
Fenner, Mrs. Peggy	Mather, Carol	Steel, Rt. Hon. David
Stevens, Martin	Walker-Smith, Rt. Hon. Sir Derek	Whitney, Raymond
Stewart, Rt. Hon. Donald (W. Isles)	Wall, Patrick	Wilkinson, John
Stradling Thomas, J.	Waller, Gary	Williams, Delwyn (Montgomery)
Taylor, Robert (Croydon N. W.)	Ward, John	Winterton, Nicholas
Thorne, Neil (Ilford South)	Warren, Kenneth
Trippler, David	Watson, J.	TELLERS FOR THE AYES:
Waddington, David	Wells, P. Bowen (Hert'rd & Stev'nage)	Lord James Douglas-Hamilton and
Wainwright, Richard (Colne Valley)	White, Frank R. (Bury & Radclifle)	Mr. Anthony Berry.
NOES
Bidwell, Sydney	Hogg, Norman (E Dunbartonshire)	Race, Reg
Brown, Ronald W. (Hackney S.)	Holland, Stuart (L'beth, Vauxhall)	Rooker, J. W.
Campbell-Savours, Dale	Home Robertson, John	Ross, Ernest (Dundee West)
Canavan, Dennis	Homewood, William	Sever, John
Carter-Jones, Lewis	Janner, Hon. Greville	Short, Mrs. Renée
Cartwright, John	Lambie, David	Skinner, Dennis
Craigen, J. M. (Glasgow, Maryhill)	Lofthouse, Geoffrey	Soley, Clive
Cryer, Bob	McGuire, Michael (Ince)	Spriggs, Leslie
Cunliffe, Lawrence	McKay, Allen (Penistone)	Stallard, A. W.
Dalyell, Tam	McNally, Thomas	Stoddart, David
Davis, Terry (Br'm'ham, Stechford)	McNamara, Kevin	Straw, Jack
Dean, Joseph (Leeds West)	Marshall, Jim (Leicester South)	Taylor, Mrs. Ann (Bolton West)
Dixon, Donald	Martin, Michael (Gl'gow, Springb'm)	Thomas, Dafydd (Merioneth)
Dobson, Frank	Maxton, John	Welsh, Michael
English, Michael	Maynard, Miss Joan	Whitehead, Phillip
Fletcher, Ted (Darlington)	Mikardo, Ian	Woodall, Alec
Foster, Derek	Mitchell, Austin (Grimsby)
Foulkes, George	Newens, Stanley	TELLERS FOR THE NOES:
George, Bruce	O'Halloran, Michael	Mr. Stan Thorne and
Grant, George (Morpeth)	O'Neill, Martin	Miss. Jo Richardson.
Haynes, David	Powell, Raymond (Ogmore)

Question accordingly agreed to.

Debate to be resumed tomorrow.