Commons Sitting of 14 July 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    SOUTHERN WATER AUTHORITY BILL [Lords]
    Read a Second time and committed.
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: I hope that those who are called for supplementary questions will ask one question. In any case, I hope that the Minister will feel obliged to answer only one supplementary question.
  ORAL ANSWERS TO QUESTIONS
    TRADE

      Milk
      Mr. Wellbelovedasked the Secretary of State for Trade if he will refer the price of milk to the Director General of Fair Trading under the Competition Act.
      The Minister for Consumer Affairs (Mrs. Sally Oppenheim): No, Sir. My right hon. Friend the Minister of Agriculture, Fisheries and Food sets maximum wholesale and retail prices for milk, and he is currently reviewing the costings system on which maximum retail prices are based. A reference to the Director General of Fair Trading under section 13 of the Competition Act would not, therefore, be relevant.
      Mr. Wellbeloved: Given the right hon. Lady's record of betraying housewives, is not that an entirely unsatisfactory action? When will she take some positive steps to protect housewives from the Government's actions?
      Mrs. Oppenheim: The hon. Gentleman's interest in milk prices would be more convincing if it were not so recent. Milk prices have risen at an annual average rate of 19 per cent. under this Government, yet they rose by over 25 per cent. during the previous Labour Government's term of office. There is no evidence that the hon. Gentleman called for any investigation during that period.
      Mr. Arthur Lewis: When the Minister compares prices, will she note that milk will soon cost more per gallon than petrol? Is it not true that petrol is imported from the Middle East and that it bears a heavy tax? I do not think that cows are getting 144p a gallon for milk.
      Mrs. Oppenheim: As I have already pointed out, wholesale and retail prices are under review by my right hon. Friend the Minister of Agriculture. I know that the hon. Gentleman is genuinely concerned about prices, but a combination of the Government's economic policies and vigorous competition is bringing down the rate of inflation. That will be of far more benefit to consumers than any amount of crocodile tears from the Labour Party.
      Mr. John Fraser: If the right hon. Lady is concerned about the appalling rate of inflation, why is she so reluctant to use section 13 of the Competition Act and thus do something about prices and profits? Has she done anything about consumer prices since taking office?
      Mrs. Oppenheim: If the Labour Party is so concerned about competition, why do Labour Members constantly call on the Government to follow policies that will send inflation much higher? Section 13 is not relevant to milk prices.

      Japan
      Mr. Squireasked the Secretary of State for Trade what representations he has made to the Government of Japan concerning their non-tariff barriers to British exports.
      The Secretary of State for Trade (Mr. John Nott): Recent Japanese action benefiting United Kingdom exports has been mainly in the area of tariffs and taxes, although there has been some relaxation of other barriers. We propose

      1029
      to maintain pressure directly and through the European Commission for the continued opening up of the Japanese market to our goods.
      Mr. Squire: I am grateful to my right hon. Friend for that answer. Will he consider the tobacco industry, as there is a virtual monopoly in Japan covering both the import of tobacco and its distribution?
      Mr. Nott: My hon. Friend is right. We export some tobacco products to Japan, but my hon. Friend's comments are broadly correct.
      Mr. Hal Miller: Will my right lion. Friend put the question of our exports to Japan in the context of our overall trade with that country, including invisibles? Does he realise that unless there is a favourable balance on the whole, pressure will greatly increase for measures to be taken against the import of motor cars?
      Mr. Nott: Our deficit with Japan is larger than that with any other country. I think that my hon. Friend will agree that trade is multilateral. We have a large surplus on some of our trade with countries in that part of the world. That surplus would not be so large if we were to cease trading with Japan. That is an extreme example, but I am sure that my hon. Friend will agree with it. The deficit with Japan is a matter of concern to the Government.
      Mr. Marlow: As my right hon. Friend says, the deficit with Japan is of great concern to this country. It is a growing deficit. We import from the Japanese two and a half times as much as we export to them. The figure is over £1,000 million. Why must we have their motor cars in this country? Why cannot we stop them from coming in? It will not affect the competitive position of any industry in this country if we stop Japanese cars from coming in. The Japanese, because of their overwhelming balance of trade in favour of themselves with us, will not be able to take action against us. Why do we not stop their motor cars from coming in? That will benefit our industry.
      Mr. Nott: Principally because we are one of the world's major trading nations, and we are a signatory to a whole range of international agreements, as every
      1030
      British Government have been for the last 100 years. We cannot single out one product and ban that because it happens to be coming in to our disadvantage. Imports of Japanese cars have been relatively stable at about 10 to 11 per cent. of our market for the last three years.
      Mr. John Smith: Will the Secretary of State confirm that a treaty exists between this country and Japan which would permit the United Kingdom, if it wished, to impose import controls? Secondly, on the question of motor cars, will he clarify what the Lord Privy Seal was doing in discussions with Datsun? If Datsun intended to breach the informal agreement, what was the Secretary of State going to do about it? If it was not going to breach the informal agreement, what is the present position about that agreement? Will the Japanese adhere to it?
      Mr. Nott: Mr. Speaker, if I were to abide by your ruling I would say "Yes", and sit down, but the answer to the right hon. Gentleman's first question is "Yes". Secondly, the Lord Privy Seal was entertained by Nissan to what I understand was an excellent lunch. [HON. MEMBERS: "Oh!"] It is a serious matter. The present level of imports of Japanese cars is running at about the same level as last year, when the right hon. Gentleman had some responsibility in these matters. I do not know whether there is anything else with which I can help him.

      Steel Industry
      Mr. Patrick McNair-Wilsonasked the Secretary of State for Trade what are the implications for the United Kingdom's external trade of the threatened antidumping suits by the United States of America against European Economic Community steel industries.
      The Minister for Trade (Mr. Cecil Parkinson): The United States Steel Corporation filed seven anti-dumping suits against Community steel exporters on 21 March. It is impossible to predict the outcome of the investigations now being carried out by the United States authorities The case is inevitably causing some disruption of our steel exports to the United States, and the Government view with great concern any threat to such exports in the longer term.
      Mr. McNair-Wilson: When does my hon. Friend hope that this matter will be resolved? Does he agree that the longer it is delayed, the wider will be the implications and the greater the possible damage to our steel industry?
      Mr. Parkinson: I agree with my hon. Friend. It is impossible to say when the cases will be settled before the courts, but there are signs that the American steel producers now realise that a negotiated settlement out of court would be the best way of approaching the problem, and we agree wholeheartedly with them.
      Mr. Crowther: Without prejudging the cases of alleged dumping, may I ask whether the Minister is aware that a great deal of the difficulty facing British manufacturers is that they are having to cut their profits to the bone in order to be able to sell anything in the United States because of the unrealistically high exchange rate of sterling in relation to the dollar? What are the hon. Gentleman and his right hon. Friends doing about that?
      Mr. Parkinson: It is true that the problems in the American market are particularly grave, because the pound has moved more against the dollar than it has against several other currencies, but without abandoning the Government's economic policies—which are aimed at attacking inflation, which is the real cause of our exporters' problems—there is nothing that we can do to adjust the exchange rate. We have no intention of changing our economic policies. It is the combination of a strong exchange rate and a high rate of inflation that is the problem. Once inflation is under control, I do not believe that the exchange rate will be the problem.

      Small Independent Garages
      Mr. Goodladasked the Secretary of State for Trade what progress the Director General of Fair Trading has made in considering the representations from the Motor Agents' Association and others about the behaviour of large oil companies to small independent garages.
      Mrs. Sally Oppenheim: I am aware of the widespread concern among hon. Members and others on this issue, to which I, too, attach a good deal of importance, and the Director General is
      1032
      well aware of this. Meanwhile, he has also received representations from the major oil companies disputing the statements by the Motor Agents' Association. He is weighing all the evidence before reaching his decision, which he tells me he will be announcing soon.
      Mr. Goodlad: Bearing in mind that nearly 10,000 petrol stations have closed over the last 10 years—nearly all of them independents, many of them in rural areas—is my right hon. Friend satisfied that fair competition prevails in the trade? In particular, is she satisfied that the recent fall in the spot price of petroleum will be passed on by the oil companies to consumers?
      Mrs. Oppenheim: As my hon. Friend will be aware, vigorous competition in the petrol market has led to a welcome drop in petrol prices at many garages. It would appear that this has been triggered by those independent garages that buy petrol on the spot market, so there is no shortage of competition. I agree, however, that, as well as price, choice is an important factor. Like my hon. Friend, I would be very concerned if there were evidence that a large number of garages were going out of business because petrol was not available, but there is no evidence of that.
      Mr. Spriggs: I use my car quite a lot at weekends on parliamentary duties. During last weekend I took the trouble to check at a number of garages the prices that are being charged for petrol. At one garage it was £1·36·9 per gallon, at another it was £1·37·9 per gallon. Is that a reduction in price, or is it an increase? What will the right hon. Lady do about it?
      Mrs. Oppenheim: It is clear that the hon. Gentleman's researches in the matter were not as thorough as my own, since I found petrol on sale for £1·29 a gallon. Obviously, consumers will patronise those garages that offer petrol at the lowest price. It is competition that has brought about the prices at the lower end of the market and given consumers the opportunity to buy cheaper petrol.
      Mr. Emery: Does my right hon. Friend realise that when major oil companies begin talking about streamlining and rationalisation of distribution, that

      1033
      more often means streamlining and rationalisation for their benefit, to the detriment of small garages and of the country community, who need them? Will she, therefore, see the submission that has been put in by the major oil companies so that she, too, can make a judgment on this matter?
      Mrs. Oppenheim: Yes. I share my hon. Friend's concern about this matter. It is important that rural garages should continue in existence. My hon. Friend will understand that some always buy their petrol on the spot market. Therefore, they will always be vulnerable. If there were evidence that the major oil companies were not keeping to their agreement to maintain supplies to their present licensed dealers I should be very concerned, and the Director General is particularly aware of that.
      Mr. Ioan Evans: Is it not true that under this Government the price of petrol has risen from 75p a gallon to about £1·30? That is a tremendous increase, 20p of which has been imposed by the Government in taxation. Is not the closure of smaller filling stations in rural areas working against the conservation of energy, in that motorists have to travel far greater distances to fill their tanks?
      Mrs. Oppenheim: As I have already said, there is no evidence that the smaller rural garages are having difficulty in obtaining supplies. Should that evidence come forward, and should the existence of the smaller garages be threatened, I should be extremely concerned. The Director General is well aware of my views on this subject.
      Mrs. Fenner: My right hon. Friend will be aware, from correspondence that I have had with her, that there appears to be some inexplicable delay in commencing this investigation by the Director General. Will she make it clear to the Director General that this is a matter of urgency, because although at present there is a buyers' market in this commodity, the fact remains that with a finite source we know that it will not continue? I fear that the small independent garages might find themselves in the same situation again, which has caused them all to write letters to the press.
      Mrs. Oppenheim: I sympathise with my hon. Friend's argument, and I assure
      1034
      her that there is no delay. Evidence has to be submitted by both sides. The Director General has to wait until all the evidence is gathered before he can reach a decision. I am assured that that decision will be forthcoming shortly.
      Mr. John Fraser: The right hon. Lady is aware of complaints about discriminatory discounting and the price of petrol on motorways. Does she intend to do anything about those matters?
      Mrs. Oppenheim: The Director General can act under his powers in the Competition Act. That is precisely why those powers were given to him.

      European Economic Community
      Mr. Knoxasked the Secretary of State for Trade by how much United Kingdom exports to the European Economic Community grew in the most recent year for which figures are available; and how this compares with British exports to the rest of the world.
      Mr. Parkinson: In 1979 the value of United Kingdom exports to the European Community increased by 30 per cent. compared with a rise of 8 per cent. in shipments to the rest of the world.
      Mr. Knox: Do not those figures indicate how beneficial it is to the United Kingdom to be a member of the EEC? Will my hon. Friend say by how much British exports to the EEC have risen since Britain joined the Community in 1973?
      Mr. Parkinson: If my hon. Friend tables a question about exports to the EEC, I shall give him the exact answer, but he is right. The Community is by far and away our greatest market. It represents 45 per cent. of all our exports. Those who argue against our membership should remember that they are arguing for raising tariff barriers against countries with which we do 45 per cent. of our trade.
      Mr. Jay: Do the figures include oil?
      Mr. Parkinson: Yes, they do. I shall tell the right hon. Gentleman what the increase would be without oil. If we exclude oil, our exports last year to the EEC increased by 22 per cent. and to the rest of the world by 5½ per cent.

      Textile Industry
      Mr. Woolmerasked the Secretary of State for Trade what discussions he intends to have with both sides of the textile industry regarding the future of the multifibre arrangement.
      Mr. Jim Marshallasked the Secretary of State for Trade if he will meet the leaders of the textile trades unions to discuss the problems of the industry, in relation to cheap imports.
      Mr. Knott: My hon. Friend the Minister for Trade and I are in the process of taking the views of all interested parties on the arrangements to succeed the present MFA. We have already held discussions on a number of occasions with trade associations and trade unions, and further meetings are scheduled.
      Mr. Woolmer: I recognise that the position of the wool textile and carpet industries in West Yorkshire is so serious that more urgent action is required. Is the right hon. Gentleman able to give an assurance to the wool textile industry in West Yorkshire that it will be much more adequately protected by the new MFA? Will he ensure, specifically, that wool textile products are included in the most sensitive product sector that commands the greatest protection?
      Mr. Nott: I should like to be able to help the hon. Gentleman, hut the negotiations within the Community and on the GATT have not yet really begun. Therefore, I am not in a position to give the hon. Gentleman the assurance that he wants. As soon as we can get into further detailed discussion on this subject I shall be able to give more information to the House.
      Mr. Marshall: Is the right hon. Gentleman aware that there is a mounting crisis in the textile industry and that literally thousands of jobs are being lost each week? His statement on the Government's intention to renew the MFA is welcome, but the industry can be saved only if there is a fundamental change in the Government's economic policy, a policy which has led to high interest rates and a high value of the pound. That policy must be changed if the industry is to be saved.
      Mr. Nott: I recognise that there are grave problems in the textile industry. The only hope for the industry, as for any other industry in the long term, is for Conservative economic policies to succeed.
      Mrs. Kellett-Bowman: Does my right hon. Friend agree that in the new arrangements that are to succeed the present MFA, and the bilaterals that will doubtless go with it, it is essential to have a growth recession clause so that imports into Britain increase only if demand in Britain is increasing?
      Mr. Nott: The existing MFA was a negotiated settlement between the importing and exporting countries. It was not imposed by the EEC on other countries. I recognise that the restraint arrangements under the MFA may have been sufficient when demand was expanding, but at a time like the present, when there is a recession, my hon. Friend's concern is justified. We shall obviously discuss whether there should be a recession clause in MFA III. That will be a central matter for negotiation, and I take my hon. Friend's comments to heart.
      Mr. Barry Jones: Has the right hon. Gentleman read the 1980 Courtaulds' report, in which Mr. Hogg says that it is unwise of the Government to continue a total policy of laissez-faire towards the industry when our competitors are heavily subsidised? Does he know that many of my constituents' jobs are at risk because of Government policy?
      Mr. Nott: If Mr. Hogg really did say that, he is grossly misinformed about the position in the textile industry. There is a greater network of restraints for the textile industry than for almost any other industry, with the possible exception of agriculture. I cannot believe that Mr. Hogg took such an extreme view.
      Mr. Trippier: Does my right hon. Friend accept that if he does not give a commitment to fight for a strengthened MFA the British textile industry will deteriorate still further? Does he accept that if the industry continues to face the present pressures there may not be an industry left for which to negotiate an MFA? Does he expect consumers to continue to pay the fairly cheap price that they now pay for textiles when there

      1037
      is no home-based British industry with which to compete?
      Mr. Nott: I cannot accept the exaggerated nature of some of my hon. Friend's statements. The British textile industry exports about £2½ billion worth of goods to world markets. In spite of its great difficulties it remains a successful industry—
      Mr. Barry Jones: Where?
      Mr. Nott:—and it will continue to be so. It would not be able to export £2½ billion worth of goods around the world if parts of the industry were still not extremely successful. We shall do our utmost for the industry when the negotiations begin. That is our job. One day the House debates the Brandt report, and the next day it debates the problems of the British textile industry. Someone somewhere has to find a balance between the two issues.
      Mr. Cryer: Does the right hon. Gentleman accept that, in spite of all the exports, the industry had a deficit of £700 million on the import and export of textile goods in 1979, and that in West Yorkshire we are losing about 500 jobs a week? There are calls from both sides of the House for the Government to take some action to deal with the evasion of the MFA. What are the Government going to do about that between now and the negotiation of the new MFA, so that we have an industry left for which to negotiate? That call has been expressed strongly from both sides of the House. What more does it take to tell the Minister the position?
      Mr. Nott: The hon. Gentleman's figures are approximately correct. The Government continuously attempt to speed up the procedures through the EEC. Since we became the Government about 23 new quotas and other restraint arrangements have been entered into. We continuously do our best to monitor and strengthen the protection of the textile industry through the existing MFA. The suggestion that that is not taking place is inaccurate.

      Manufacturing Industry
      Mr. Winnickasked the Secretary of State for Trade if he will give further consideration, in view of the decline in
      1038
      manufacturing industry, to introducing selective import controls.
      Mr. Parkinson: I already give very careful consideration to all representations made to me for import controls in selected areas. A generally greater resort to such controls would not however be in the national interest.
      Mr. Winnick: Is it not obvious to Trade Ministers that without selective import controls a number of manufacturing firms will not survive? When will Ministers be rather less dogmatic and begin to act in the interests of British industry and the British work force?
      Mr. Parkinson: I shall answer the hon. Gentleman's question when he bothers to find out exactly what is being done, which embodies a considerable number of things, for the range of threatened industries which, within the rules of world trade, are entitled to help. Where they fit into those rules they get help.
      Mr. Dorrell: Is it not a fact that 30 per cent. of this country's gross domestic product is exported and that 30 per cent. of our jobs depend upon exports? Is it not also a fact that import controls will do nothing whatever to improve the job security of that 30 per cent of the population? Would it not be better if British industry concentrated on improving its competitiveness? Should not Government action be directed to that end rather than towards the imposition of import controls?
      Mr. Parkinson: I have a great deal of sympathy with what my hon. Friend says. A huge proportion of jobs in British industry depend on exports, and the moment our exports leave this shore they become someone else's imports. If we begin the argument for general import controls, we stand to be the big loser.
      Mr. John Smith: Is the Minister aware that my hon. Friend the Member for Walsall, North (Mr. Winnick) was asking not for general import controls, but for the Government to look more carefully at selective import controls? Given the difficulties now facing British industry, caused largely by the excessive value of the pound, will the Minister undertake to study more comprehensively the case for selective import controls, properly applied?
      Mr. Parkinson: We look at every case very carefully. Where it fits in with the rules of world trade and it is possible to take action, we do so. That is why we have controls on footwear, steels and monochrome television, as well as on a range of other products, because they all fit within the rules. We must not begin imposing controls where the circumstances do not justify it. That will only open us up to retaliation, and if the right hon. Gentleman does not believe that he should look at the way in which the Americans have reacted to controls on synthetic fibres.
      Mr. Chapman: Will my hon. Friend confirm that this country is in substantial surplus in its balance of payments with industrialising non-OPEC countries? If that is the case, and if my hon. Friend were minded to introduce controls, on what goods could he put them that would not either damage our wider trading interests or break international or multilateral trading agreements entered into by successive Governments?
      Mr. Parkinson: My hon. Friend is right. We run a surplus with the non-oil developing countries of about £2·8 billion a year. One of the least attractive features of the Labour Party is that it constantly argues about the dangers of low-cost imports and at the same time constantly demands an increase in our aid programme. Labour Members demand discrimination against the very people about whom they claim to care.

      Exports (Delivery Dates)
      Mr. Deakinsasked the Secretary of State for Trade what advice he gives to British manufacturers whose overseas customers have to wait a long time before they can get delivery of the goods they wish to buy.
      Mr. Nott: I tell them that it is of paramount importance to get their goods delivered on time, as indeed the great majority of British companies do.
      Mr. Deakins: Is the Minister satisfied with the fact that this country produces a number of world-beating industrial products, such as the Land Rover, the Range Rover and the Rolls-Royce, and yet it has not, in 30 years, increased investment and output sufficiently to satisfy overseas demands and avoid waiting lists of up to two years in many parts of the world?
      Mr. Nott: I agree. This has been one of the tragedies of the past decade. I take the hon. Gentleman's example. It is only now that we have a huge increase in Land Rover capacity coming on-stream and yet there has been a tremendous demand for British Land Rovers all over the world. I am delighted that we now have the production. Let us hope that we can sell the cars.
      Sir Frederick Burden: Is it not true that if there were fewer strikes the delivery of high-cost capital goods from this country to our overseas customers would be much more prompt in many instances?
      Mr. Nott: Yes.
      Mr. Spriggs: Is the Secretary of State aware that it is important that people who use cars should show a little self-discipline and not expect the Government to legislate to curtail imports? We, the citizens of this country, should discipline ourselves to buy British.
      Mr. Nott: I welcome the hon. Member's remarks. I am sure that he and Sir Michael Edwardes could, between them, conduct a very useful campaign.
      Mr. Gummer: Does my right hon. Friend agree that we could do more to get our goods delivered on time if we improved the productivity of British industry? Is it not true that the major stop on that productivity is the continual use of out-of-date work practices, which are constantly covered up by Labour Members demanding import controls? Let us put our own house in order first before we introduce import controls.
      Mr. Nott: My hon. Friend is right. In answer to a later question I shall give some interesting statistics which show that it is in our relatively low productivity that we have fallen down, not in any changed pattern of world trade.
      Mr. Clinton Davis: Does the Secretary of State never have a word of rebuke for inefficient management? Is it only trade unions which suffer his attacks? Is there not a case for the Government trying to do something positive to bring industrial democracy to this country?
      Mr. Nott: I was not aware that a word of rebuke for the trade unions had passed my lips today. In this Question

      1041
      Time the trade unions have been beyond any kind of criticism at all.

      Civil Aviation
      Mr. Colvinasked the Secretary of State for Trade if he has made any study of the effects of United States deregulation policies to assess the effects of such policies on United Kingdom civil aviation.
      The Under-Secretary of State for Trade (Mr. Norman Tebbit): Yes, Sir. The objective of promoting more competition in civil aviation is one that we fully share. But the great majority of services by American airlines are within their domestic market, which the United States Government can regulate. Our airlines by contrast operate mostly international services, where routes and fares have to be agreed with the other Governments concerned.
      Mr. Colvin: Does my hon. Friend agree that because United States airlines have the advantage of numerous pick-up points within the United States which feed their international services, they have a considerable advantage over British airlines, which do not have that benefit? What steps is he taking to promote fair international competition by obtaining for British operators cabotage rights within the United States so that we can compete fairly on an international basis?
      Mr. Tebbit: My hon. Friend is right. The existence of "behind points" in the United States gives United States carriers a great advantage. We have made it plain to the United States authorities that when they talk about open skies over the Atlantic that would be fine by us if they would allow our airlines to have open skies across the United States. I do not think that the United States authorities will agree to that, as it would not be in their commercial interests to do so.
      Mr. Clinton Davis: Is it not a fact that because of deregulation the American aviation authority feels considerable concern about deteriorating safety standards affecting smaller airlines? These small airlines are now called upon to serve many cities that the major airlines had covered before. Is not this trend directly related to the price-cutting exer
      1042
      cises that have gone on in the United States?
      Mr. Tebbit: No. The United States industry still has probably the finest safety record of a major industry anywhere in the world. It is vastly superior to that of countries where monopolistic price fixing is widely practised. There will be difficulties in adequately regulating the safety and efficiency of many new carriers as they come on to the market, but I am certain that the United States authorities are capable of carrying out that task.

      European Economic Community
      Mr. Beaumont-Darkasked the Secretary of State for Trade what assessment he has made of how the export-import ratio for the United Kingdom's trade with the European Economic Community has varied over the past decade.
      Mr. Parkinson: The export-import ratio for our visible trade with the European Community declined sharply during the first half of the last decade, but it has subsequently recovered and last year was at its highest level since 1971.
      Mr. Beaumont-Dark: I thank my hon. Friend for that interesting answer. Is he aware that most business men agree that we must export or die and therefore, obviously, they would support free trade between Common Market countries? However, is he aware that many manufacturers in this country feel that they are the only people who are playing the game by the rules? When such instances are brought to his attention, will my right hon. Friend ensure a speedy investigation and speedy answers, because that would help our exporters a great deal?
      Mr. Parkinson: My hon. Friend has voiced a widely held concern. Where the facts are presented to us we take action promptly. Our anti-dumping unit works with industry to produce cases to put to the Commission. We should not understate the measure of British achievement. Against these barriers, we have increased our exports to the Community by more than 500 per cent. since we joined.
      Mr. Straw: In 1970, the year before we applied to join, we were in surplus with the EEC Six to the tune of about £100 million. Are we now in surplus, or in deficit; and what are the figures?
      Mr. Parkinson: I am sure that the hon. Gentleman took the precaution of discovering the answer before he asked the question The figure is £2·7 billion in deficit.
      Mr. Skinner: In view of that enormous figure, which has been growing since we joned the Common Market, and bearing in mind that both sides of the House are anxious not to injure the Thirld world in any attempt to restore the balance of trade, does the Minister agree that we should try to get back to the £100 million in our favour, which was the position before we entered the Common Market? Does he agree also that if import controls are to be introduced, they should be introduced in that area?
      Mr. Parkinson: I am sorry to disappoint the hon. Gentleman. As he knows, I always like to please him. In 1970 our exports to the EEC covered 71 per cent. of our imports. Last year that figure was 86 per cent.
      Mr. Gummer: Game, set and match again.

      Exports (Japanese Comparison)
      Mr. Garel-Jonesasked the Secretary of State for Trade what is the current comparison between the level of exports per capita by the United Kingdom and Japan.
      Mr. Nott: United Kingdom exports of goods per capita are nearly twice those of Japan.
      Mr. Garel-Jones: Does my right hon. Friend agree that those figures give the lie to those who consistently try to denigrate British industry and workers? Does he agree also that they further underline the fact that if we can improve productivity this country has a great economic future?
      Mr. Nott: I agree with my hon. Friend. We export approximately the same amount of goods in value as do the Japanese, and their economy is two and a half times the size of ours. There is no reason why with our existing industrial base, we should not be even more successful. That is our objective.
      Mr. John Smith: Is the Secretary of State aware that the main handicaps faced by our exporters are Government
      1044
      policy and the persistently high over-valuation of the pound? Is he aware that it has been calculated that British competitiveness has declined by 30 per cent. since this Government took office? When will they take action to remove the terrible handicaps on our exporters?
      Mr. Nott: The principal decline in United Kingdom competitiveness has come about through labour costs, although it is true that with a strong pound it is more difficult to compete with other countries. However, the North Sea is there, and there is no way in which we can wish it away. If the right hon. Gentleman were in government he, too, would be unable to force the pound down.
      Mr. Adley: Does my right hon. Friend share my concern that a "Buy British" campaign over Japanese cars, or anything else, would be a form of economic nationalism that would leave us open to terrible retribution by other countries following the same policy? In view of the figures that have been given, which demonstrate the importance of our exports, should we not bear that in mind?
      Mr. Nott: I am in favour of nationalism of all kinds. In whatever practices we adopt, it is useful to take measures in our national interest rather than against it. I am in favour of economic nationalism if it does not damage our own interests.
      Mr. Dubs: Given the enormous disparity between the volume of goods that the Japanese export to us and the volume that we are allowed to export to them, what conclusions does the Minister draw from their tight import controls?
      Mr. Nott: No import controls as such are practised by the Japanese, except in a few limited areas.
      Mr. John Smith: What about whisky?
      Mr. Nott: Whisky is our largest export to Japan. There are controls against our footwear and leather goods. However, we have a network of restraint agreements. About one-third of our imports from Japan are under some kind of restraint, but the hon. Gentleman is right. The Japanese still maintain an unsatisfactory network of non-tariff barriers, and we are doing our best with our European partners to get these down.

      Product Liability
      Mr. Dudley Smithasked the Secretary of State for Trade when he anticipates the Council of Ministers will conclude its consideration of the revised draft of the European Economic Community directive on product liability.
      Mrs. Sally Oppenheim: A working party of the Council has only recently commenced its study of the draft directive, which raises a number of important issues that seem likely to be the subject of prolonged discussion and negotiation. I do not think, therefore, that any final conclusions are likely in the near future.
      Mr. Smith: At the end of the day, will the state of the art defence be a condition for acceptance of the draft directive?
      Mrs. Opepnheim: My hon. Friend is right. The state of the art defence will be an important factor. Widespread concern has been expressed by industry and other member States, and that issue is bound to play an important part in Community discussions.
      Mr. Greville Janner: Does the right hon. Lady accept that the legal position on product liability in this country is unsatisfactory and unfair? If she does, will she introduce legislation to change the law, without waiting the long time that it appears from her answer we shall have to wait for the outcome of the Common Market deliberations?
      Mrs. Oppenheim: Much as I sympathise with some aspects of what the hon. and learned Gentleman says, I do not believe that it would be in the interests of our consumers or industry for a fragmented system of product liability to exist in the Community, where, different insurance rates would apply. The hon. and learned Gentleman's suggestion, is, therefore, not a course of action that commends itself to the Government.
      Mr. Gummer: Although I understand the problems that manufacturers have, naturally, brought to my right hon. Friend's attention, will she ensure that the public have the protection that such liability would afford? Will she enter into the Common Market negotiations with an enthusiastic desire to provide such protection throughout Europe?
      Mrs. Oppenheim: The Government are aware of their obligations and duty to ensure that consumers are protected and that industry and consumers are not unduly burdened by the cost of such measures. In any decision that they take the Government will want to ensure that innovation and efficiency in industry are not undermined.
      Mr. John Fraser: May we have a more direct answer to that question and the question that I asked previously? In principle, is the right hon. Lady in favour of product liability, against it, or is she in a "Don't know" situation?
      Mrs. Oppenheim: It would be strange if one were not in favour of product liability, as it already exists under the Sale of Goods Act.

      British Airways Crews (Moscow)
      Mr. David Atkinsonasked the Secretary of State for Trade what steps he proposes to take on behalf of British Airways' pilots and crews in view of the restrictions imposed upon them when in Moscow compared with the freedom of movement enjoyed by their Aeroflot counterparts when in London.
      Mr. Tebbit: None, Sir. British Airways pilots and crews suffer the same restrictions on their freedom of movement in Moscow as the crews of aircraft of other foreign airlines operating to there.
      Mr. Atkinson: Is my hon. Friend aware that, unlike their Aeroflot counterparts, British Airways pilots and crews have to suffer the most time-consuming and strict passport controls and Customs inspections, often lasting up to an hour, and then have to face further restrictions on their movements in Moscow during their free time? Will he enter into international discussions to ensure that these procedures are fairly applied?
      Mr. Tebbit: Sir Denis Follows, who is in Moscow assisting a Russian propaganda exercise, is a former general secretary of the pilots' union. I hope that the British pilots there will take him on one side and explain the disadvantages of working in Russia, as opposed to being there for pleasure. I should be unhappy to degrade our democratic standards of conduct towards visitors to those imposed in Russia.
      Mr. Ioan Evans: Will our embassy staff in Moscow be allowed to attend the Olympic Games, or is it true that the Prime Minister has ordered the tickets allocated to the embassy to be destroyed?
      Mr. Tebbit: It is not a matter for me, but I hope that none of our embassy staff will attend the Games.
      Mr. Arthur Lewis: To use the Minister's own word, why must he degradingly attack someone who has gone to Moscow when there is no law against his doing so? Does he not accept that Sir Denis Follows is there doing his job as he sees it? Is it not wrong for a Minister to stand at the Dispatch Box and denigrate a man who is doing what he believes to be right?
      Mr. Tebbit: I am perfectly prepared to say outside this House about Sir Denis Follows what I have said inside it. I wish that every hon. Member was prepared to do the same when he attacked people.

      Exports (Departmental Promotion)
      Mr. Neubertasked the Secretary of State for Trade whether he will make a statement on his Department's activities in promoting exports of British goods and services.
      Mr. Parkinson: My Department provides a wide range of facilities to help British exporters promote their goods and services overseas. The facilities of the Export Credits Guarantee Department are also available to assist exporters.
      Mr. Neubert: Does my hon. Friend take the view that, in addition to his Department's activities in the direct promotion of exports, like the BBC's external services, the activities of the British Council abroad give indirect assistance to exports by creating a climate in which foreigners are more disposed to do business with the United Kingdom? Does my hon. Friend take regular opportunities to impress this on his colleagues at the Foreign and Commonwealth Office?
      Mr. Parkinson: I do, and when I visit other countries, taking groups of business men with me, I see the British Council. I find that is contains some of the most entrepreneurial people that one meets representing our country abroad.

    OVERSEAS DEVELOPMENT

      Zimbabwe
      Mr. Goodladasked the Lord Privy Seal how the £75 million being allocated for development in Zimbabwe over the next three years is to be spent; and if he will make a statement.
      The Minister for Overseas Development (Mr. Neil Marten): From the £75 million we have already committed £7 million for reconstruction, £1 million to the United Nations High Commissioner for Refugees, and £500,000 for joint funding with United Kingdom voluntary agencies. The United Kingdom contribution to any extension of the Lomé convention to Zimbabwe will come from the same source. The recent aid mission to Zimbabwe made proposals to the Zimbabwe Government for the allocation of the remainder, and we are awaiting their response.
      Mr. Goodlad: I thank my hon. Friend for that reply. Bearing in mind that the rate of increase in the population of Zimbabwe is as high as almost anywhere in the world at 3½ per cent. a year, will he say whether he has received any request from the Zimbabwe Government for population-related assistance and, if so, what his response has been?
      Mr. Marten: I share my hon. Friend's concern about the rate of growth of the population in Zimbabwe, but no request has been received, as far as I am aware, from the Government of Zimbabwe. However, detailed allocations have not yet been settled, and we shall be happy to use part of the £75 million for population programmes if that is the wish of the Zimbabwe Government.
      Mr. James Johnson: If the Minister believes, as I do, that the survival of this young Zimbabwe State is vital not only for Africa itself but for the Commonwealth as a whole, will he give a pledge to the House to stint nothing to enable the Mugabe Government to maintain themselves in Salisbury?
      Mr. Marten: Our aid contribution is a tremendous amount towards helping the Zimbabwe Government to maintain themselves. At the end of this year, or at the beginning of next year, the Zimbabwe Government hope to have a

      1049
      pledging conference of all aid donors. That will need a lot of preparation. We have told them that we shall be glad to help them in the preparation for that, so that other donors can come in with further aid over and above ours.
      Mr. Emery: How much of the $500 million that was estimated 18 months ago to be necessary for the rebuilding of that country has been subscribed by nations other than ourselves, and how much of that total has been reached?
      Mr. Marten: I cannot say that without notice, but I do not think that it has yet been reached.
      Mr. McElhone: Despite the Minister's answer, will he accept that the amount of aid offered by the Government is inadequate to meet the critical situation in Zimbabwe? Will he accept, further, that, unless aid is increased substantially to meet the needs of the Zimbabwe Government, especially for refugees, the situation could become even more critical than it is at present?
      Mr. Marten: I do not agree with the hon. Gentleman. The amount of our aid is substantial. It is greater than anyone else's, and it is one of our biggest aid programmes in Africa. The aid giving and pledging has not ended. If negotiations for membership of the International Bank for Reconstruction and Development and of the Lomé convention are successful, I think that that will pave the way for additional aid.

      Strategic Aid
      Mr. Deakinsasked the Lord Privy Seal what aid is given from the funds for which he is responsible for strategic reasons.
      Mr. Neil Marten: In my statement of 20 February on the Government's aid policy I referred to the basic developmental objective of aid and the need to relieve poverty in the developing world so as to create conditions for greater peace and stability. In that sense, the aid programme as a whole serves the broad policy objectives of the United Kingdom, including strategic considerations.
      Mr. Deakins: If the Government decide that aid to a specific country should be given solely for strategic reasons, will the Minister do his best to ensure that such
      1050
      aid comes out of the Ministry of Defence budget and not his own?
      Mr. Marten: The hon. Gentleman is probably thinking of military aid. None of our aid to Turkey is for military purposes. Under the aid Act we cannot give aid for military purposes.
      Mr. Robert Hughes: Bearing in mind that one of the strategic considerations which the overseas aid programme has in mind is to see that those who benefit from aid have some regard for the system of democracy in this country, is the Minister aware that about 300 Zimbabwe students who have just finished A-levels have been told that they are to receive no further assistance for their studies here? Will it help his strategic aims if these 300 go back to Zimbabwe feeling bitter about the way that the British Government have treated them?
      Mr. Marten: I do not think that they should feel bitter about the way that they have been treated. It is undeniable that the serious threat posed by the Soviet Union to the stability of the Middle East region is a factor of which Western Governments must take note, and our aid to Turkey—for example, the £15 million programme loan—forms part of the OECD collective effort to help a country in strategic need.

      Third World
      Mr. Ioan Evansasked the Lord Privy Seal if he will take action to assist in increasing food production in the Third world.
      Mr. Neil Marten: Yes, Sir. We wish to see developing countries give greater priority to agricultural and food production in their investment plans, and we shall continue to do what we can in answer to their requests and encourage international bodies to follow suit.
      Mr. Evans: Would not that policy be better carried out if, rather than reducing overseas aid and increasing arms expenditure, the Government sought to reduce arms expenditure and increase overseas aid? When will the Government make known their views on the proposals in the Brandt Commission report relating to this problem?
      Mr. Marten: I do not agree with the first part of the hon. Gentleman's

      1051
      question. As for the second part of it, the Government's views on the Brandt Commission report have gone to the Select Committee. I think that the Select Committee will put them in the Vote Office during the middle of this week.
      Dr. Mawhinney: Will my hon. Friend consider giving an increased proportion of overseas aid in the form of agricultural machinery, which will not only assist in increasing food production in the Third world but will help British manufacturing industry, including Perkins of Peterborough, which makes excellent diesel engines for such machinery?
      Mr. Marten: That is always a consideration, especially the export aspect of it. Whether a developing country is suitable for a particular piece of Perkins machinery is open to the developing country to decide.
      Mr. Greville Janner: What assistance does the Minister expect to give India during the forthcoming year? Will he re-examine the arrangements that may be made for matching grants in so far as people in this country are prepared to make gifts to India and other countries, which in turn could be matched by the Government?
      Mr. Marten: As I have told the hon. and learned Gentleman in correspondence, it is very much a question for the Indian Government to approve the gifts from this country first. That is the first priority.

      Commonwealth Development Corporation
      Mr. Hooleyasked the Lord Privy Seal what progress he is making with his review of the work of the Commonwealth Development Corporation.
      Mr. Neil Marten: As I said in my reply on 16 June to my hon. Friend the Member for Hertford and Stevenage (Mr. Wells), the review is a wide-ranging one and will take some time to complete. Progress is being made, but it is still too soon to say when the review will be completed.
      Mr. Hooley: In the light of the outstandingly successful record of the CDC over three decades under successive Governments, will the Minister assure the House that there will be no attempt to cut
      1052
      the resources made available to it in the future?
      Mr. Marten: I can give no such assurance. The sensible thing to do is to await the outcome of the review. The report will be made to Parliament.

      Guyana
      Mr. Whiteheadasked the Lord Privy Seal what is the number and value of current British aid projects in Guyana.
      Mr. Neil Marten: Four. The commitments outstanding on them amount to £5.5 million.
      Mr. Whitehead: Has the Minister seen the report brought back to this country recently by the former Attorney-General, my right hon. and learned Friend the Member for Dulwich (Mr. Silkin), about the increasing reign of terror in Guyana, culminating in the assassination of the Leader of the Opposition? Does he agree that our aid projects to Guyana should vary inversely with such behaviour? What steps are the Government taking to cut off aid to Guyana?
      Mr. Marten: The problem is that our capital aid to Guyana is provided under a loan made by the previous Government in 1978. In considering any new commitments we shall take into account all the relevant circumstances, such as human rights.

      Jamaica
      Mr. Welshasked the Lord Privy Seal if he now proposes to consider a programme loan to Jamaica.
      Mr. Neil Marten: As I said in my reply to the hon. Members for Lambeth, Central (Mr. Tilley) and for Battersea, South (Mr. Dubs) on 16 June, we do not consider that we should be justified in providing such a loan in the absence of an economic programme which has international support.
      Mr. Welsh: Is the hon. Gentleman aware that Jamaica is going through a very had economic period, and needs help as quickly as possible? Will the Government show a little bit of the milk of human kindness and try to get some help to Jamaica now? If help is given, will the hon. Gentleman give an assurance that it will be new money, not

      1053
      money that is given for overseas development?
      Mr. Marten: We have been extremely kind to Jamaica. Over the past two and a half years Britain has lent £27 million to Jamaica. In spite of that, and help from others, including the International Monetary Fund, Jamaica's economy has declined. What we really want to get round to is a medium-term economic programme, prepared by the Government of Jamaica, which would command international support. That is the key to further aid to Jamaica.

      CHILDREN'S BAND CONTEST (KIRKBY IN ASHFIELD)
      Mr. Skinner: On a point of order, Mr. Speaker. In view of the Government's failure to have a spokesman here today to make a report on the children that were fainting, sick and vomiting at Kirkby in Ashfield yesterday, and in view of the widespread public concern about the matter, especially as it appears to concern the spraying of crops, and as there has not been a private notice question—
      Mr. Speaker: Will the hon. Gentleman indicate what point of order he wants me to rule on, relating it to our Standing Orders?
      Mr. Skinner: As a private notice question was asked for, but not agreed—
      Mr. Speaker: Order. Surely the hon. Gentleman has been here long enough now to know that no reference is made to a private notice question. I have heard no point of order on which I can rule.

BRITISH RAILWAYS (SUBSIDIARY COMPANIES)
The Minister of Transport (Mr. Noman Fowler): With permission, Mr. Speaker, I should like to make a statement on the future of British Rail's subsidiaries.
I told the House on 17 March that I intended to find ways to involve private risk capital in the major subsidiary companies of British Railways and that I would make a further statement in the light of a joint examination of the prospects that I have been carrying out with the chairman of the British Railways Board. The Government and the chairman have now completed a preliminary examination of the opportunities for involving private risk capital to a significant extent in financing these subsidiaries. We both believe that it will be to the advantage of British Rail, as a significant element in the economy, its work force and the public using its services to take advantage of these opportunities. The businesses involved are Sealink UK Ltd., British Transport Hotels, British Rail Hovercraft Ltd. and British Rail's property holdings.
The Government and the board recognise that these subsidiary enterprises will not secure essential commercial freedom unless private capital is attracted in sufficient volume and unless private investors are assured of sufficient control through their shareholdings to ensure that the enterprises will be able to operate on equal terms with competitors in their respective markets.
We are satisfied that the important existing trading relationships between British Railways and the subsidiary enterprises can be sustained by commercial contracts. These arrangements cannot but work to the advantage of British Railways and the subsidiary enterprises. We are also convinced that it is only by maximising the opportunities for profitable services to the public that the work force at every level in these enterprises can look forward confidently to sharing in improving returns.
I intend, therefore, to seek the approval of Parliament at the first opportunity for the changes necessary in British Railways' present powers in order to secure

1055
the potential advantages to the fullest extent and from the earliest moment.
The board will propose the steps which will be necessary to achieve the purpose as quickly as possible, and will agree them with the Government. The Government will introduce the necessary legislation to ensure that any foreseeable obstacles are overcome.
I believe that the policy that I have outlined will provide significant new opportunities for the subsidary companies to develop and expand their businesses.
Mr. Booth: Can the right hon. Gentleman tell us whether British Rail will retain ownership of any or all of the four subsidiary companies that he mentioned in his statement?
Will the money obtained by selling to private shareholders part of the interest in the profitable public undertakings be made available to British Rail to finance its investment programme, in electrification, replacement of stock, or any other British Rail capital scheme?
If British Rail can maintain a majority holding in any of those subsidiaries, will the capital account of the subsidiary remain part of the public sector borrowing requirement?
Will the Minister force British Rail to sell off holdings in subsidiaries in order to finance essential rail interests? How is British Rail to cope with a situation in which it will be selling the means of financing many important operations? I draw the Minister's attention to the £13·7 million operating profit made by Sealink and the £29·4 million profit made by British Rail's property board. Surely this is a matter of eating the seedcorn of British Rail.
In the last analysis, how can it make sense to any nationalised industry, and its contribution to this country's economic strength, if a Conservative Government insist upon its selling off its profitable sections at the very time when it needs the wealth that they can create to sustain its essential business—in this case, the running of railways?
Mr. Fowler: The one point that the right hon. Gentleman ignores from beginning to end of his questions is that my statement was an agreed statement—agreed between me and the chairman of the British Railways Board and his col
1056
leagues. [Interruption.] I know that Opposition right hon. and hon. Members do not like proceeding with consent and with agreement, but let me tell them what we have agreed on. We have both agreed on the need for private investment. We have agreed on the subsidiaries concerned. We have agreed to get the advantage of having a number of public sector undertakings out of public sector controls, provided that control in the subsidiaries passes. We have also agreed on the need for legislation. It is vital for the right hon. Gentleman to understand what has been agreed, and, in relation to that, what his own position is.
British Rail will certainly be able to maintain an investment in the subsidiaries, but they will not have the opportunities of the private sector if they remain under public sector control, so it would not be a majority interest.
The proceeds will go to British Rail. We have made that absolutely clear.
As to the powers that would come hack to me—the power of direction, and so on—those are matters that I would retain, but I repeat that we intend to proceed by agreement and consent.
Mr. Higgins: Does my right hon. Friend agree that his proposals should increase competition in these important areas, which are not essential to the operation of British Rail? Is it not important that BR management should be able to concentrate on ensuring that commuter and other services provided by BR are made more efficient? In that context, does my right hon. Friend not also agree that it is right to divorce these subsidiary operations from British Rail so that it is possible to see its true financial position? What will the overall effect be on the public sector borrowing requirement and the need to keep rates of interest high, since we are about to have a debate on unemployment and high rates of interest?
Mr. Fowler: I agree with everything that my right hon. Friend said. The whole point of what we are doing is to encourage the growth of these businesses. There is no question but that, historically, their growth has been disappointing by any standards. We are encouraging the growth of these businesses by encouraging new investment in them. As my right hon. Friend reminded the House, the debate today is on unemployment.

1057
In this area, we are providing opportunities for new investment and new opportunities for jobs. What else do Labour Members want?
Mr. Stephen Ross: Will the Minister tell the House clearly and distinctly—did the chairman of British Rail and his board ask the Minister for permission to sell off these assets, or was this policy produced by the Minister's office? Also, what private company invested in the stretched version of the hovercraft, which is now carrying 40 per cent. more passengers from Dover to Calais? That was British Rail, not private enterprise. Has it not been traditional, since the railways were created, to have hotels and steamer services? Was it not a mistake, 10 years ago, to force British Rail to sell some of its hotels?
Mr. Fowler: I ask the hon. Gentleman to consult the Liberal spokesman on transport, who will remember that these talks with British Rail have been going on over the past months. I repeat that my statement—this is significant, because I always thought that the Liberal Party wanted agreement—is a statement agreed between myself and the chairman of the British Railways Board. Anyone who knows the chairman will know that he would not be forced into an agreement of that kind. I ask the hon. Gentleman to consider the terms of the statement and to see the advantages that will flow, including those to Sealink and to British Rail Hovercraft Ltd.
Mr. Adley: Are not the ritual noises from across the Chamber an insult to the intelligence and integrity—[Interruption.]
Mr. Speaker: Order. We will not hear either the questions or the answers unless—[Interruption.] Order. We shall make much better progress and I shall be able to call many more hon. Members if we have quiet to get on.
Mr. Adley: Are not the noises coming from hon. Members opposite an insult to the integrity and independence of Sir Peter Parker, who I believe was appointed chairman of the board by the last Labour Government? Since Mr. Weighell and Mr. Buckton appear, quite properly, to have confidence in Sir Peter Parker, will my right hon. Friend, after the furore
1058
has died down, seek a meeting with those two union leaders and Sir Peter Parker so that, around the table, they may discuss quietly what my right hon. Friend said about the increase in job prospects as a result of his announcement?
Mr. Fowler: Of course I will have talks, as my hon. Friend suggests, with the rail union leaders whom he mentions. I have already had talks with Sidney Weighell, of the NUR. I do not claim in any way that he will necessarily agree with these proposals, but I will have talks on this. As I said, the talks with the chairman of the BR board has continued over the past two or three months.
Mr. Walter Johnson: Is the Minister aware that in spite of his honeyed words, the unions concerned will regard his statement as the first stage of hiving off? These are the profitable sections of British Rail, and whether or not there is a short-term advantage, in the long run his proposals will worsen BR's financial position. Does the Minister recall giving me an assurance in the House just a few days ago that there would be full and adequate consultation with the unions? He says that he has met one of the union leaders, but he has not met the other leaders. Is it not disgraceful for him to make his statement today in advance of that consultation?
Mr. Fowler: I have obviously had preliminary talks with the NUR and I will certainly have talks with the other unions concerned, but the subject of what I am proposing today will require legislation, and we shall obviously have talks about the terms of that legislation. The advantages to the railways surely are, first, that the proceeds will go to British Rail entirely, unlike what the right hon. Member for Barrow-in-Furness (Mr. Booth) was saying. Secondly, BR will have a dividend from its investment. I would not rely too much on the success of the subsidiary companies if I were the hon. Member, bearing in mind the fact that the hotels last year made a profit of £328,000 on a turnover of £38 million.
Mr. Donald Stewart: Is the right hon. Gentleman aware that few people will believe that his agreement with the chairman of British Rail was anything other than the type of agreement that was made between Dick Turpin and the people

1059
whom he waylaid? Despite the eyewash about private risk capital, is this not in fact asset stripping and looting of British Rail?
Mr. Fowler: I should have thought that anyone who knew anything about British Rail—I think that I would exempt the right hon. Gentleman from that—would believe that there were considerable opportunities and advantages in the course, that we suggest. It is absolute rubbish to refer to this proposal as asset stripping. It is not. When the right hon. Gentleman has been able to consider my statement he will see how ludicrous that charge is.
Mr. Neubert: Is my right hon. Friend satisfied that nothing in these proposals will infringe the principle of free competition between British Rail's subsidiaries and private enterprise companies engaged in the same sectors? Wholesale denationalisation is one thing, but with partial denationalisation there are problems if benefits are conferred on private participants which arise from association with the public sector monopoly of the rail network.
Mr. Fowler: That is one reason why it is so important that control in the subsidiary companies should pass. That underlines the importance of what I am saying.
Mr. Spriggs: If it is the right hon. Gentleman's intention to attract private capital to British Rail and its ancillary companies, will he consider the setting up of a holding company by the British Railways Board to operate these four companies so that the profits may be fairly distributed and the board may get its fair share?
Mr. Fowler: I am grateful for that suggestion, because that is what we are doing. That is exactly in line with Government policy here. A holding company will he set up, which will be 100 per cent. owned by British Rail and the profits will go to that company. I therefore welcome the hon. Member's endorsement.
Sir Frederick Burden: Does not my right hon. Friend consider that Sir Peter Parker is an honourable man? If he thought that this proposal was against the best interests of British Rail, would he not resign?
Mr. Fowler: My hon. Friend is, of course, quite correct. Sir Peter Parker sees the advantage of this course, as I am sure many in the railway industry will once they have considered the implications of what I have said.
Mr. Ron Lewis: As the taxpayer is now subsidising British Rail—rightly so—can the Minister estimate how much more the taxpayer will have to pay to subsidise British Rail in order to maintain the present standard of service if his proposals go through?
Mr. Fowler: The answer to that is that there is no implication of the kind that the hon. Gentleman talks about. Railway investment will no longer compete with investment in the subsidiaries. I repeat—and I know of and respect the hon. Gentleman's interest in railways—that there are real advantages for those people working in the subsidiary companies in the policy that we are setting out.
Mr. Eldon Griffiths: I congratulate my right hon. Friend on bringing forward proposals that my right hon. Friends and I wished to bring forward but failed to bring forward in a previous Government. Is it not the case that it can only help the railways, and all who work for them, to be able to mobilise new capital in this way and put it to work for the benefit of the railway system? Will my right hon. Friend not be put off by the inflammatory statements made either by union leaders or by Opposition Members about boycotts and picket lines? My right hon. Friend should get on with his sensible policy.
Mr. Fowler: I am grateful to my hon. Friend. Of course, nothing will put me off the course that we are advocating because I believe, as he does, that it is in the interests of the board. One of the real interests of the board is to obtain access to capital. There is also the continuing interest of British Rail in the success of these subsidiary companies.
Mr. Cowans: It is not significant that the Minister has spoken only about those companies which happen, by pure chance, to be currently making a profit? The Minister had the sheer hypocrisy to move an amendment to the motion on unemployment. Would it not make more sense if he advocated that private capital

1061
should put money into those rural lines that are not necessarily making a profit rather than hived off the assets of a profitable company which contributes to rural lines? Without a shadow of a doubt he does not seek to do that. He wishes to hive off only those sections that are making a profit, to the detriment of those employed in the industry.
Mr. Fowler: The hon. Gentleman should calm down a bit. Of the four companies that I have mentioned, Hovercraft undoubtedly makes a loss. Last year hotels made a profit of £328,000 on a turnover of £38 million. I do not believe that the hon. Gentleman can honestly say what he has just said. Both the chairman of British Rail and I are convinced that there are real opportunities for development in these businesses. He knows rather better than most people how those businesses have suffered over the last 25 years because of lack of capital. That is the importance of what we are doing.
Mr. Speaker: Order. Before I call the next question let me say that it is un-parliamentary for an hon. Member to accuse another hon. Member of hypocrisy.
Mr. Henderson: Is my right hon. Friend aware that his statement will be welcomed, particularly if it means bringing forward, after a long delay, the replacement of the clapped-out multiple diesel units on the East Coast of Scotland line? Can he say whether the privatisation of the hotels operation will be treated as a whole or whether there may be opportunities for individual groups of hotels to be sold to encourage private investment?
Mr. Fowler: There will be opportunities to deal with the hotels in different ways. It does not involve private investment in the hotels as a complete group. That is a matter for the chairman and the individual holding company.
Mr. Stoddart: Does not the Minister's statement, stripped of all its verbiage, mean that what the Government are doing is robbing British Rail to enable City investors to make more money? Is that not the situation? Will the Minister tell me about Swindon? At Swindon we have British Rail workshops that are highly
1062
successful and are exporting goods profitably. Does Government policy mean that the more efficient and profitable they become the more likely they are to be sold off?
Mr. Fowler: On his first point I should remind the hon. Gentleman of the disadvantages that these subsidiary companies have had over the past 25 to 30 years. British Transport Hotels has built only one hotel since the war. That is the kind of situation that we are trying to tackle and that is why the chairman of British Rail supports this plan.
That is something that we shall look at. We are looking at the future of British Rail workshops, and I shall make a statement about them in due course.
Sir Albert Costain: Does my right hon. Friend realise that those of us who have Sealink ports in our constituencies are in much closer touch with the subject than are Opposition Members? Does the Minister realise that a deputation came to see me on the question whether the operation could be denationalised, on the ground that seamen have better opportunities in private enterprise? The deputation believed that the Sealink operation had been too restricted by being tied too tightly to British Rail timetables. It would make more profit if" it had more freedom.
Mr. Fowler: I think that my hon. Friend is right. I also think that it is a great mistake to believe that Opposition Members necessarily speak for those employed in the nationalised industries.
Mr. Whitehead: Is the Minister aware that there is all the difference in the world between feeding corn to a work horse and having turkey for Christmas? Is he not aware that this will be widely seen outside as an attempt to ripen up British Rail subsidiaries for sale? If that is the case, how can it be in the interest of British Rail whenever its interests clash, as they will, with those of private investment?
Mr. Fowler: The interests of British Rail, first, will be to get capital investment in the subsidiary businesses, which it will do. That having been done, it will get the proceeds from that sale, but at the same time it will have a continuing investment in the success of those subsidiary companies. I should have thought that that

1063
was something that the hon. Gentleman would welcome.
Mr. Aitken: Does my right hon. Friend agree that these subsidiary companies have suffered for many years from low investment and unimaginative management? Does he further agree that his privatisation policy could be an invigorating shot in the arm for job opportunities and commercial activity generally?
Mr. Fowler: It is beyond any doubt that those companies have suffered from low investment. That is, of course, one of the things that this policy is designed to tackle. I agree with my hon. Friend.
Mr. Snape: Why is the Minister transferring private capital into the subsidiary business, bearing in mind that ICI recently had some difficulties with a rights issue? What sort of package will be put together and what kind of compensation will he offer to British Rail for the loss of the subsidiary companies that are to be sold off? Why not consider selling off the outer London commuter services, which his hon. Friends are always bleating about? Does he agree that one of the reasons why the subsidiary companies have experienced low investment over the years is that successive Governments, particularly this one, have starved the railways of capital to run the services about which his hon. Friends complain?
Mr. Fowler: I think that the hon. Gentleman would be fair enough to believe, and to agree, that the problems with the subsidiary businesses go back much further than 12 months. In relation to the timetable, we hope that all four businesses will have private investment provided in the next two or three years. I visualise that Sealink will be the first. I hope that hotels will follow as soon as possible after that. I repeat that legislation is needed to enable the disposal of the subsidiary companies. Clearly we hope to make as much progress, as quickly, as we can.
Mr. Bowen Wells: When introducing this legislation will my right hon. Friend consider including British Rail engineering in the package for sale? It is a highly profitable part of the system. By selling engineering my right hon. Friend will be able fully to satisfy the Opposition, in that we are engaged in trying to make much more flexible and profitable the subsidiaries now owned by British Rail.
Mr. Fowler: As I said, we are examining the position of British Rail engineering not because it is so profitable but because its performance at the moment is not as good as it might be.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call only three more hon. Members, because the matter will come before the House again.
Mr. Cook: If the proposal is indeed the result of an agreement between the Minister and the board, will the Minister explain why, in February this year, the deputy chairman of the board was able to say that British Rail had no plans to sell any of its hotels or ferry services? Since the Minister has the figures for the profitability of each of the companies, will he confirm that the British Rail Property Board this year expects to make a profit of 76 per cent.? If hiving that off is not asset stripping, what does the Minister understand by asset stripping? Will he confirm that unless the proceeds from the sales are exempt from external finance limits they will not yield an additional penny for British Rail?
Mr. Fowler: The bulk of the property that we have in mind is non-operational. Some property that is now defined as non-operational, such as office blocks, might be included. I repeat that in discussions over a number of months we have come to an agreement. That is significant, and the hon. Gentleman should take note of it.
Mr. Dobson: Does the Minister agree that it would be closer to the truth to say that he is attempting to attract non-risk capital into the British Rail subsidiaries? Does he accept that there is no risk whatever for any private investment in the British Rail Property Board because the private investor will not be landed with a loss? Will he guarantee that the profits that have accrued to the property board, which so far have been transferred to British Rail, will continue to be so transferred, 100 per cent.?
Mr. Fowler: The British Railways Board, through its 100 per cent. holding company, will get the proceeds from the sales. What the hon. Gentleman says about one subsidiary company cannot he typical of the other three.
Mr. Alexander W. Lyon: If private directors are to control the activities of the individual companies and yet the board is to be the holding company, how can there be risk to private capital? Does the Minister agree that there must always be the possibility of an injection of money from the State if difficulties are encountered? If the Minister is to touch British Rail engineering, will he please keep his dirty paws off the York carriage works?
Mr. Fowler: The hon. Gentleman has misunderstood the proposed structure. The proposal is that subsidiary companies should initially go into a 100 per cent. holding company owned by British Rail. Clearly, after that, if one of the subsidiaries, such as Sealink, is floated, British Rail will retain a holding in that company. It will not be a majority shareholding, otherwise it would not be free of public sector controls.
Mr. Cowans: On a point of order, Mr. Speaker. I realise that you took exception to a word that I may have used. I in no way apologise for the word, but I hope that you realise that it is difficult to find a word to fit—
Mr. Speaker: Order.
Mr. Cowans: May I substitute what I said by saying that duplicity of purpose was expressed in the House today? I hope that that phrase fully expresses my sentiments.
Mr. Speaker: I am obliged to the hon. Member for recognising that the other word was out of order.
Mr. Cryer: On a point of order, Mr. Speaker.
Mr. Speaker: Has the hon. Member really a point of order? Whenever I fail to call him after a statement he raises a point of order.
Mr. Cryer: On a point of order, Mr. Speaker. I was elected to raise issues. I understand that there are problems. The Tory Benches are not well attended and, because not many Tory Members stood up, you—
Mr. Speaker: Order. I have to guard the interests of the House as best I can. I have a long list of hon. Members, particularly from the Opposition, who want
1066
to speak in the debate on unemployment. Half an hour of the time has gone already. I must guard the interests of the House as a whole. That is why I cut supplementary questions short.
Mr. English: Further to that point of order, Mr. Speaker. Can you explain what you do when a large number of hon. Members from one side of the House wishes to ask questions?
Mr. Speaker: I do what I did today, when I called three extra hon. Members from one side before I moved on.

TERRORISM (BBC BROADCAST)
Mr. Stanbrook: This is the first application of this kind that I have made for 10 years.
I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the decision by Mr. Attorney-General not to take criminal proceedings against the BBC under the Prevention of Terrorism (Temporary Provisions) Act 1976."
At first sight it appears that an application for an emergency debate on a decision made by the Attorney-General within his own responsibility is misconceived. The significance of the decision might have immediate and far-reaching consequences for the media in Northern Ireland.
My right hon. and learned Friend knows, as does every decent lawyer, that there was ample evidence against the BBC justifying a prosecution in this case. One of the incidents involved an interview with a self-confessed participant in the murder of Airey Neave. I should have thought that everyone could toll that that was a breach of section 11 of the Act.
My right hon. and learned Friend has not sought to base his decision on the ground that there is insufficient evidence. The decision, therefore, was made on the ground of public policy. In several cases in the past evidence against big and important institutions has not been forthcoming. Their size and importance has been considered by many people to be one of the ingredients in the decision not to prosecute.

1067
In this case the BBC clearly has breached section 11 of the Prevention of Terrorism (Temporary Provisions) Act. If the BBC is entitled to immunity, why are so many small publications prosecuted under the Official Secrets Act and under the contempt of court provisions? Why is a great and powerful institution such as the BBC allowed to go scot-free?
Public policy is a matter for the House to decide as the ultimate arbiter. For those reasons I ask that the House be given an early opportunity to tell the Attorney-General where the public interest lies.
Mr. Speaker: The hon. Member for Orpington (Mr. Stanbrook) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the decision by Mr. Attorney-General not to take criminal proceedings against the BBC under the Prevention of Terrorism (Temporary Provisions) Act 1976."
The hon. Gentleman gave me notice before 12 o'clock that he would seek leave to make the application under Standing Order No. 9.
As the House knows, under Standing-Order No. 9 I am directed to take into account all the factors set out in the order, but to give no reasons for my decision.
I listened carefully to the hon. Gentleman but I have to rule that his submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.
Mr. Alexander W. Lyon: On a point of order, Mr. Speaker. The hon. Member for Orpington (Mr. Stanbrook) asserted as fact that the BBC was in breach of a section of the Prevention of Terrorism Act, or that some of its employees were. That must be a debatable
1068
opinion. Expressed as it was, undoubtedly it was defamatory of the people involved. Is it not within the power of the Chair to call to order an hon. Member who makes a defamatory allegation, in order to indicate to him that it would be unwise to assert as fact that which is by no means proved?
Mr. Speaker: Order. I have said on many occasions that every hon. Member takes personal responsibility for any statement that he makes in the House.

TERRORISM (BBC BROADCAST)
  BILL PRESENTED
    FOOD PREMISES
    Mr. John Fraser, supported by Mr. John Tilley, Mr. Arthur Davidson, Mr. R. C. Mitchell and Mr. James Well-beloved, presented a Bill to amend the Food and Drugs Act 1955 and the Food and Drugs (Control of Food Premises) Act 1976: to make all food premises subject to registration and control; to enable the court to prohibit persons from engaging in activities giving rise to registration; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 250.]

  STATUTORY INSTRUMENTS, &c
  Mr. Speaker: By leave of the House, I shall put together motions Nos. 1, 2 and 4 relating to statutory instruments.
  Ordered,
  That the Legal Advice and Assistance (Prospective Cost) Regulations 1980 be referred to a Standing Committee on Statutory Instruments, &c.
  That the Legal Advice and Assistance (Scotland) (Prospective Cost) Regulations 1980 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft European Communities (Definition of Treaties) (International Railway Tariffs Agreements) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Le Marchant.]

ORDERS OF THE DAY
  SUPPLY
  [26TH ALLOTTED DAY]—considered
  SUPPLY

    UNEMPLOYMENT
    Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
    Before I call the right hon. Member for Chesterfield (Mr. Varley), I fear that I have to warn the House that such a large number of right hon. and hon. Members have indicated that they hope to catch my eye that it will be impossible to call them all. However, many more will be called if those who catch my eye realise that a long speech will prevent someone else from speaking. It is no good coming to the Chair, because that does not help. I am trying to be fair to hon. Members who have problems in their own constituencies.
    4.11 pm
    Mr. Eric G. Varley: I beg to move,
    That this House condemns the Government's deliberate creation of mass unemployment as an instrument of economic policy.
    I have in my hand a pamphlet which was compiled in 1977 and which contains the words:
    "No sensible person can really imagine that we do not understand—and care about—unemployment. For the breadwinner (and his or her family) it all too often means real hardship and acute depression. It is a particularly unhappy experience for young people leaving school and unable to find work. It is hard to exaggerate the damage that may be done to their vulnerable self-confidence. It is truly demoralising to have to rely on the help of parents, eked out by a few pounds of Supplementary Benefit, instead of enjoying the responsibility of earning, and spending one's own earnings along with more fortunate friends. We understand all this very well."
    Those words were compiled by the Chancellor of the Exchequer, the Secretary of State for Employment, the Secretary of State for Industry and the Secretary of State for Energy, and were edited and master-minded by the Paymaster-General, who I understand will wind up the debate.
    However, we have even more up-to-date information of what the Govern
    1070
    ment's intentions were, because 14 months ago, on a clear prospectus for providing for full employment, the Tory manifesto declared that it was their task
    "to restore incentives so that hard work pays, success is rewarded and genuine new jobs are created in an expanding economy."
    The manifesto went on to declare:
    "Too much emphasis has been placed on attempts to preserve existing jobs. We need to concentrate more on the creation of conditions in which new, more modern, more secure, better paid jobs come into existence. This is the best way of helping the unemployed and those threatened with the loss of their jobs in the future."
    What a shoddy, shabby deception that prospectus is now seen to be. The Tories promised that hard work would pay, yet hardworking men in Consett are faced with the destruction of their livelihood. The Tories promised that success would be rewarded, yet the success of workers in British Aerospace and Ferranti results in their companies being put up for auction. They promised that new jobs would be created, yet the Government procrastinate and delay vital decisions on Inmos which could create thousands of new jobs in this country.
    The reality of Tory industrial policy under a so-called liberal Tory at the Department of Employment is that the country is now facing its most severe unemployment crisis for a half a century. If Saatchi and Saatchi was conducting a publicity campaign against this Government, the poster hoardings would not be wide enough for the unemployment queues.
    There is also a very deep pessimism among industrialists. The headings in the Financial Times monthly survey of business opinion, published a week ago, were:
    "Confidence drops again. Further drop in orders. Companies working below target. More lay-offs expected. Inflationary pressures build up."
    The Conservatives used to claim some special affinity with small businesses, and in opposition they used to weep crocodile tears over their problems. But now the plight of small businesses is truly desperate. The Financial Times reported last week:
    "Company liquidations in England and Wales are occurring at more than 120 a week—a post-war record says Dun and Bradstreet, the international credit reporting and debt

    1071
    collection organisation. It is estimated that total company liquidations in the first half of this year, at just under 3,200, were 43 per cent. higher than in the same period of 1979. Compulsory liquidations show the sharpest increase. There were 1,544 winding-up orders, a jump of more than 66 per cent."
    The Sunday Telegraph reports that the bulk of the huge growth in liquidations seems to be smaller businesses. I was reading the other day that Sir Kenneth Cork, of Cork Gulley, one of the largest liquidators in the country, said
    "There are many more small or medium size companies which are having problems."
    The number of collapses means a big increase in bad debts and that means more trouble for other companies. Therefore, in a few months, the Government have created the sickest economy in the Western world.
    There are three main causes for this sickness. The first is the disastrous inflation rate which has more than doubled in 12 months. The second is penal interest rates, which are still too high even after the flicker of the downward movement a week ago, and which are still way above the levels at which the Prime Minister used to throw up her hands in horror more than a year ago. The third cause is an over-valued pound sterling, which is seriously damaging our exporters.
    That chain of catastrophes for industries and employment does not come about by accident. It is undeniable that every action taken by the Government has been a deliberate attack on employment and jobs, and every Conservative Member has played his or her part with zeal and enthusiasm headed, of course, by the Prime Minister and the Chancellor of the Exchequer. In fact, they are the stars of the show—"Maggie get your gun"—which we hope will not run too long. They are always ready to break into their favourite duet, "Anything you can do I can do worse".
    Let us look at some of the policies of the Government in action. The retail trade and its supplying industries have still not recovered from last year's doubling of VAT. It will be remembered that that was what the Daily Mail called "a Labour lie". It did so on the basis of the information that was supplied to it by the Paymaster-General, who at that time was at Conservative Party Central Office.
    1072
    The Chancellor of the Exchequer's massive interest rates have also delivered a savage blow to manufacturers and retailing. Practically every major store seems to have been having a continuous sale over the past, three months. However, the goods are not cleared, and, even worse, the shops are not re-ordering, so factories are not busy manufacturing replacement stocks. Only the other day, I saw the sale at Harrods. It was supposed to be a success. But so far as I could see, the only pictures of people in Harrods were those of Arabs and exiled Iranians. Not many British people shop in that store.
    Those industries which are not bowed under the burdens imposed by the Chancellor of the Exchequer flinch at the blows which have been inflicted by the Secretary of State for Industry.
    The steel and shipbuilding industries cower under his lash. The National Enterprise Board, one of the most helpful industrial organisations that has been established since the war, is now deprived of any constructive role. It has been completely muted. The country's most vulnerable regions suffer from the withdrawal of many investment incentives. Yesterday, even the Sunday Times called for assistance to the regions to be restored to its previous level.
    The Secretary of State for the Environment, in the intervals between preparing some of the most indigestible and ill-thought-out legislation that this House has seen for some years, if the Local Government, Planning and Land (No. 2) Bill is anything to go by, plays his part in the attack on employment. Local authority workers, not merely the white collar workers that the Secretary of State likes to make fun of, but all those who provide essential services that keep our towns and cities going, are faced with massive job losses. The Secretary of State for the Environment's particular target is the construction industry, which is already deep in depression. The Prime Minister and the Secretary of State now threaten that industry with a moratorium on new building.
    The Secretary of State for Education and Science aids and abets with a curtailed school building programme. Teachers and ancillary workers in schools face a clouded future. Not to be outdone, the Secretary of State for Social

    1073
    Services wields the same threat over the Health Service workers. At a time when fuel is becoming more and more expensive on the world market, the Prime Minister's pocket philosopher, the Secretary of State for Energy, launches an attack on the coal industry, which provides the only fuel on which the nation can securely rely.
    Others play their parts. The Minister of State, Civil Service Department, becomes the Minister for job cuts. As we have heard today, the Minister of Transport twists the arm of British Rail to sell off its profitable assets and then denies it funds that could provide civilised travelling conditions for commuters and other railway passengers. Even the Minister responsible for the Arts, the Chancellor of the Duchy of Lancaster—I am sorry he is not in the House—makes his modest contribution. The Prom concerts that survived even the blitz are the latest innocent victims of the cuts imposed by this penny-pinching Government of barbarians.
    What is the result of this orchestrated effort? I know that unemployment is always an amusing subject for Conservative Members. We can always guarantee a laugh from the Conservatives when we talk about unemployment. What is the result of this orchestrated effort? It is certainly impressive. It is the wanton destruction of hundreds of thousands of jobs. Self-respecting men and women are prevented from making their contribution to the well-being of the country.
    The Secretary of State for Employment insults the men and women he has helped to put on the dole—he has added an extra half a million people to the unemployment queues—and tells them that they should do voluntary work for their dole money. Since the Secretary of State made his original remarks to the Select Committee last week, they have been amplified by Lord Gowrie, a belted Earl, who had to be belted for what he said. But nobody has denied the proposals that the Secretary of State floated last week. What is more, we read in today's press that the Government are preparing proposals for the introduction of new schemes in the next Session.
    1074
    Those men and women who are unemployed do not want dole money. They want genuine jobs in productive work. The Secretary of State and his colleagues take away their jobs and their self-respect, and then Lord Gowrie and others insult them with cheap gimmicks. That is the best way that I can describe what has happened. The livelihood and the very existence of communities are at stake. Whole regions of the country fear for their future. Some areas of Britain have grown used to above average unemployment. People in Wales, Scotland, the North-East and the North-West have rightly fought against it and they have never accepted it.
    But what is especially frightening about this present crisis is that the frontier of Tory destruction is moving further and further south. Areas of Britain that have always known prosperity at the worst times are now darkened by the shadow of recession and slump. That is the reward for industry and hard work that this Conservative Government have bestowed upon them.
    The Potteries have also been affected. What have the Potteries done wrong? Consistently over the years they have been high performers with good productivity and good labour relations; a high percentage of their products has been exported; there has been no resistance to technological change; and they have done everything that the Government claim they should have done. Now employers and trade unions are at their wit's end, trying to combat an uncompetitive exchange rate and a deliberately imposed increase in gas prices, the major fuel that they now use.
    What is the purpose of this deliberately created suffering? According to the Prime Minister, the answer is to squeeze inflation out of the system. But the Government have deliberately created a good deal of the inflation. They doubled VAT and quintupled prescription charges. They have repeatedly increased the cost of school meals and, as an act of policy, are deliberately pushing up the cost of gas and other fuel prices. This Government's cash policy limits are forcing up fares to intolerable levels. Their squeeze on town halls is forcing up rates. Their Housing Bill is

    1075
    forcing up rents, and their interest rate policy is forcing up mortgages to a record level. We have the incredible spectacle of a Government who deliberately create inflation, and then create unemployment to cure the inflation.
    Mr. Robert Adley: I suppose that the right hon. Member for Chesterfield (Mr. Varley) is enjoying himself. Will he now tell us whether the draft Labour Party manifesto is his solution to the problem? Will he tell the House what he would like to see done?
    Mr. Varley: The only manifestos that I am interested in are actual manifestos. The actual manifesto produced by the Conservative Party is a false perspective, as I have already outlined. The Conservative Government promised that they would move to full employment. Instead, they are destroying hundreds of thousands of jobs.
    Mr. Michael Colvin: Will the right hon. Gentleman give way?
    Mr. Varley: No, I shall not give way. This is a serious debate about one of the gravest problems that face this nation. Unemployment afflicts the nation with an unnecessary disease; and, like a quack doctor, the Government concoct a remedy that is worse than the disease. They then have the nerve to tell us that all this suffering is necessary. The problem was summed up by the Chancellor of the Duchy of Lancaster recently when he was answering business questions. He said:
    "Of course, we very much regret the high level of unemployment, hut we feel that we must go through this period of difficulty."—[Official Report, 3 July 1980; Vol. 987, c.1765.]
    The only period of difficulty that the Chancellor of the Duchy of Lancaster has gone through in the last 14 months is missing the last act at Covent Garden so that he can get back here to vote for mass unemployment at 10 o'clock at night. He does not suffer. No Conservative Member suffers. The people who suffer are the hundreds and thousands of men and women whom the Government are throwing on the dole. What is more frightening is that the Government have now begun to delude themselves—they
    1076
    have also deluded the press—that their policies are actually working.
    Mr. John Bruce-Gardyne: Will the right hon. Gentleman give way?
    Mr. Varley: I shall not give way to the hon. Gentleman—he will no doubt make a contribution to the debate at some time—because he is one of the Members who glory in this policy.
    Mr. Bruce-Gardyne rose—
    Mr. Varley: I shall not? [HON. MEMBERS: "Scared."] I shall never be scared of the hon. Member for Knutsford (Mr. Bruce-Gardyne).
    Mr. Bruce-Gardyne rose—
    Mr. Deputy Speaker (Mr. Bernard Wetherill): If the right hon. Gentleman does not give way, the hon. Gentleman well knows the form.
    Mr. Varley: I remember the Prime Minister going up to the hon. Gentleman's by-election and saying that he was of Cabinet material.
    Mr. Michael Cocks: This Cabinet, yes.
    Mr. Varley: We are waiting for him to join this lot on the Government Front Bench. He would carry out the policy with much more relish than is shown by the Secretary of State for Employment.
    Mr. Bruce-Gardyne: On a point of order, Mr. Deputy Speaker. Is it not the usual custom of this House that if a right hon. Gentleman refers to an hon. Member by name he gives way to him? Since the right hon. Gentleman has referred to me personally, is it not the usual custom of the House—
    Mr. Deputy Speaker: Order. It will also be within the recollection of the House that the hon. Gentleman was seeking to make an intervention before he was referred to by the right hon. Gentleman.
    Mr. Varley: I referred to the hon. Gentleman, and I now give way to him.
    Mr. Bruce-Gardyne: I am most grateful to the right hon. Gentleman. He referred to my right hon. Friend the Chancellor of the Duchy of Lancaster coming back from Covent Garden to

    1077
    weep about the levels of unemployment. Will the right hon. Gentleman tell the House how he passed his leisure hours when the Government of whom he was a member were doubling the level of unemployment between 1975 and 1977?
    Mr. Varley: I was correct in the first place. I should not have given way to the hon. Gentleman, if that is the best he can do.
    What is frightening is that the Government have now begun to delude themselves—and the press that supports them—that their policies are actually working. Ministerial offices in Whitehall and editorial suites in Fleet Street are now the scenes of a mass orgy of self-hypnotism. Glory be, we are told, the inflation rate will come down perhaps in October to 16½ per cent. [Interruption.] Something like that. We do not know for sure. I shall be very surprised if the Chancellor of the Exchequer does not come to the House of Commons before the Summer Recess and revise the figure. But 16½per cent. is nearly double the inflation rate that the Government inherited. It is now presented as some kind of wonderful achievement. While the weekend handouts organised by the Paymaster General, and all the leading articles say, that the policies are working, the facts show that they are not. The object of this whole demented exercise is to squeeze inflation out of the system, but as the Financial Times reported last week,
    "Inflationary pressure on industry appears to be building up again … companies reported a sharply higher level of expected price increases over the next 12 months."
    Out in the country, beyond Whitehall and Fleet Street, there is a real world of bankruptcies and lay-offs. Last Thursday, my right hon. Friend the Member for Leeds, East (Mr. Healey) described the tragic scenes in Sheffield, where 500 teenagers queued up for hours for eight jobs at a boutique—not the productive industry that the Government claim to foster. Even that degradation of hopeful young people is sheer affluence compared with the crisis in other areas. In Consett, 1,400 teenagers were competing for eight jobs. In St. Helens, nearly 2,000 youngsters have entered an employment market offering only three jobs.
    When we debated youth unemployment on 25 June, the Secretary of State
    1078
    for Employment, in response to our request, undertook that the two youth opportunities programme guarantees would be maintained, although he was not unequivocal. We should like him to make plain today that there will be no watering down of the scheme.
    Some would argue that it is even more important that top priority be given to building up the special temporary employment programme and bringing help to the long-term unemployed. Over 350,000–25 per cent.—of the unemployed have now been without work for 12 months or more.
    Mr. Martin Stevens rose—
    Mr. Varley: I shall give way to the hon. Gentleman in a minute. The Man power Services Commission estimates that half a million people will be in this position shortly. The long-term unemployed suffer most from the brutal impact of high unemployment. They suffer severe poverty, desperate demoralisation, loss of self-respect and loss of self confidence. The strains on family life and friends become intolerable.
    The special temporary employment programme was cut back to 12,000 places by the Secretary of State in June of last year, in the full flush of the Tory election victory. It was restricted—the Secretary of State likes to use the phrase "concentrated on" but the correct phrase is "restricted to"—to the special development areas, the development areas and specially designated inner city areas. That act of restriction alone left well over 30 per cent. of the long-term unemployed outside the provision of the programme. In any case, a programme of only 12,000 places is totally inadequate to meet the needs of what will soon become half a million long-term unemployed.
    The case now for expanding the special temporary employment programme is overwhelming. It stems from a need to prevent a large proportion of our people from becoming even further demoralised, and eventually unemployable. Four out of five of the long-term unemployed are men. Surveys show that when thrown out of work there is the immediate effect of shock, followed by a period of intensive job hunting, and finally despair and apathy. The social and psychological impact is incalculable.
    Mr. Stevens: I am grateful to the right hon. Gentleman for giving way. I sought to intervene because he mentioned the figure of 350,000 people, or 25 per cent. of the unemployed. Accepting that much of what he said about the North may be true, does he agree that 350,000 of the registered unemployed come from London and the South-East, and that there is no excuse for them to be unemployed? What steps does he think my right hon. Friend the Secretary of State should take to make it much harder for people in London and the South-East to draw supplementary benefit after they have accepted jobs and failed to turn up for them?
    Mr. Varley: Outside the areas now qualifying for the special temporary employment programme there are people who have been unemployed for more than a year, in terms of the definition of long-term unemployment. Some have probably been unemployed for longer periods. It was the policy and intention of the previous Government that the special temporary employment scheme should cover the whole country.
    We ask the Secretary of State to think again about the restrictions that he has imposed on the scheme. I am sure that in his heart he must know that it was a great mistake to cut the programme and to make the cuts that he made within a month of the Tory election victory in May last year. It would be no loss of face if he were to announce today his intention to embark on a massive extension of the provisions for the long-term unemployed. I am sure that that is what the Manpower Services Commission is pressing on him. I hope that he will have some success in his own Department and with his Cabinet colleagues.
    There is another aspect of the Secretary of State's policy that should be reversed, and that is his decision to raise the age limit for those who would wish to take advantage of the job release scheme. The job release scheme has already taken thousands off the unemployment register. If it were developed further, it could make a modest impact on the position of the unemployed. Therefore, we hope that the right hon. Gentleman will look at that, too, in
    1080
    the weeks ahead, if he is not ready to announce it today.
    There is no substitute for a Government pursuing a range of economic policies which will overcome the harsh impact of depression and slump. I have no doubt that the Secretary of State and the Paymaster General, when they speak for the Government today, will make a lot of the world recession. Of course, throughout the developed world Governments are facing recession or inflation. It is right that Government and Opposition spokesmen should refer to the adverse conditions, not because they offer any kind of excuse for the policies being pursued by the Government but because they strengthen our indictment against the Government that they should be doing something to protect employment and to create new jobs.
    If the world and national economies were buoyant, the Government might have some ideological justification for pursuing an economic experiment which even their most enthusiastic supporters advocate is at the very best a high risk gamble. But to pursue, as they are doing, a single-minded policy of monetarism, and nothing but monetarism, is irresponsible in the extreme. If ever there was a time for the Government to act to soften at home the impact of hazardous conditions overseas, the time is now. Instead, they are obsessively implementing policies which make a bleak situation even worse. Practically every industrial and economic decision taken by Ministers in the past 12 months has been an attack on investment and jobs. Anyone looking at British industry today can see that tens of thousands have lost or will lose their jobs as a direct result of action taken by the Government. The Government are inflicting damage on the very fabric of our society—damage which may well be irreparable.
    The Prime Minister, in the way in which she pursues these policies, when she speaks inside or outside the House, is the political equivalent of the neutron bomb. When that bomb is detonated, factory chimneys stop smoking, wheels stop turning, the gates of steel mills and shipyards close, the inner cities rot, the sick get less attention and the opportunities and prospects for schoolchildren

    1081
    are restricted. But it turns out that all this misery is for nothing, because the whole crackpot exercise has been a mistake. Even Professor Milton Friedman, the author of the book of spells on which the Prime Minister relies for mixing her potions, tells her that she has now got it wrong.
    The Roman historian Tacitus summed it up when he said:
    "When they make a wilderness they call it peace."
    The Prime Minister is creating a waste land and calling upon St. Francis to bless it. The policies of the Government are not just misguided; they are inhuman and wicked. On behalf of the people of this country, particularly the hundreds of thousands that the Government have put on the dole and the hundreds of thousands more that they still intend to throw out of work, we shall fight them and their policies until they have been driven from office—the office that they have besmirched.
    4.43 pm
    The Secretary of State for Employment (Mr. James Prior): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
    "this House deeply regrets the high level of unemployment both here and in other parts of the world, but recognises that the conquest of inflation is a necessary pre-condition for the creation of new jobs in soundly-based and competitive industry upon which a realistic solution to the problem depends."
    The right hon. Member for Chesterfield (Mr. Varley), in what is now becoming a characteristic speech—I am beginning to wonder who his speech writer is—was pretty long on rhetoric but extraordinarily short on policy. I understand why he was in so much difficulty. If he talked about policy at all, he would be bound to fall out with at least three-quarters of his Back Benchers. If he talked about control of incomes, he would fall out with all the Left wing. If he talked about letting inflation go rip and more public expenditure, he would almost certainly fall out with the present Leader of the Opposition. Therefore, he spent the whole of his speech attacking us as if the last five years of Labour Government had never existed and as if during that period unemployment had not risen to unprecedented heights—
    Mr, Giles Radice: The right hon. Gentleman has said all this before.
    Mr. Prior:—so that, at the time of so-called economic boom in 1978–79, we had 1·3 million to 1·4 million unemployed.
    The right hon. Gentleman has called for massive increases in public expenditure. That could have the effect only of putting up interest rates considerably higher than they are now, as he must know. It would not be possible, as the Labour Government found out, to go on borrowing more and more money at the rate suggested by the right hon. Gentleman this afternoon without a massive increase in interest rates and, I suspect, a disastrous inflation rate.
    Has the right hon. Gentleman forgotten that one of the factors that more than anything else contributed to the increase in the public sector borrowing requirement was the hangover of postdated cheques that we were left to pick up at the beginning of May last year?
    The right hon. Gentleman and the Labour Party would carry more conviction outside and possibly inside the House if they addressed themselves to the real problems facing this country—problems which have faced us not just for the past year or 14 months, but perhaps for the past 20 years. As long as we are trying to squeeze inflation out of the economy, unemployment will unfortunately be one of the consequences. Do the Opposition agree with that? They do agree with it.
    Mr. Mark Hughes: Will the right hon. Gentleman tell the fishermen in his constituency and in the rest of the country how their loss of jobs is contributing to squeezing inflation out of the economy? They do not understand that, and I certainly do not.
    Mr. Prior: They understand that the price of fuel oil rose by a tremendous amount in the past year and that that had a bigger effect on their costs and on their ability to catch and sell fish than any other single factor. They know, as we know, that the movement of the money in the world, which is now pushed into the OPEC countries, does not allow the pattern of trade to continue as it did before. The OPEC countries, with all that money, are not able to buy the imports which would

    1083
    enable the rest of the world to absorb the increases in the price of oil. The result is that world trade is bound to go into recession and that countries, such as Britain, which are dependent on trade are bound to suffer most. Regrettably, we cannot isolate ourselves from the effects of inflation or recession. Therefore, we have had to take action, unpleasant though it may be, to try to make our position better.
    Mr. Dennis Skinner rose—
    Mr. Peter Hardy rose—
    Mr. Prior: Perhaps I may be allowed to get on with my speech.
    I want to return briefly to the Opposition motion—
    "That this House condemns the Government's deliberate creation of mass unemployment as an instrument of economic policy."
    I want to remind Opposition Members of what Peter Jenkins said in The Guardian about Labour's policy as recently as January 1978. He said:
    "Unemployment has been an instrument of policy under Labour. If it remains so, Labour has no business to hawk its social conscience around the country at election time."
    The only point I make there is that I do not think, at this stage, with the record that the Labour Party had when in government, that Labour Members have any right to hawk their social consciences around the House this afternoon. The right hon. Gentleman tries to make out that Conservative Members regard unemployment as a joke and that we laugh about it, but let me tell him that we in the Conservative Government have a better record on unemployment than the Labour Party has. It is because we believe that we must create the real jobs in the economy—[HON. MEMBERS: "When?"]—which we have not been creating for the last few years that we are prepared to go through and suffer the indignities and to have the desperate problems which high unemployment brings in order to make certain that at the end of the day real and proper jobs are created.
    Mr. Skinner: Like many more on the Government Front Bench, the Minister has been saying over the past few months that there is not an alternative. He will be aware that, even among his own Cabinet,
    1084
    the Minister of Agriculture, Fisheries and Food came up with a rather surprising remark at Warwick a week last Saturday, when he said that there was an alternative and that £7 billion in dole money at present—which could possibly increase to as much as £10 billion, based upon the increase in unemployment that we are seeing—would be too high a price to pay for squeezing inflation out of the economy. Taking into account the fact that we shall have had £15 billion worth of North Sea oil receipts before the end of 1983, would it not be sensible for any Government to ensure that that money was used in order to attract more employment, to introduce a 35-hour week, to have longer holidays and to introduce early retirement, using all that money and the £7 billion that is currently spent on dole money for useful work to attract people into jobs?
    Mr. Prior: The hon. Gentleman can make his own speech in his own time. My view of what he has just said is that it would result in much higher inflation and, in a comparatively short time, a great deal more unemployment. I thought that he would be referring to this.
    Mr. Skinner: Yes; it is in the document that all this lot ought to be supporting.
    Mr. Prior: I think that that, in a nutshell, sums up why the right hon. Member for Chesterfield could not this afternoon produce any policies at all. All that I can say is that I believe that this document was well summed up by Hugo Young in The Sunday Times. He said:
    "Unwilling to grapple with the ever changing nature of problems, its authors fall back on the unchanging nature of doctrinaire solutions."
    That is all that the hon. Gentleman has to offer.
    Several Hon. Members rose—
    Mr. Prior: I should like to get on.
    Mr. Phillip Whitehead: Will the right hon. Gentleman give way?
    Mr. Prior: No, I shall get on.
    The fact of the matter is that the long-term trend in unemployment has now been upwards for 20 years. It has risen at each succeeding economic cycle, and I believe that that was well dealt with during the debate last Thursday. As I

    1085
    have already stated this afternoon, we cannot avoid the world recession; nor can a great many other countries avoid it. What is more, import controls—about which I dare say we shall hear a good deal in this debate—are in themselves no answer. They merely invite retaliatory action, and as we have to export, and do export, a much higher percentage of our goods than almost any other advanced country, we would be bound to suffer.
    When I was in Huddersfield on Friday and was being asked by the woollen textile industry whether we could not impose greater restrictions on imports, I had to tell representatives of that industry that the action that we have taken against the polyester fibre imports from the United States, because of the Americans' low feedstock prices, has already resulted in the United States considering taking—it has not yet taken it—retaliatory action on wool, pottery and ceramic tiles. If that is to happen and we are to start that sort of trade war through that sort of protectionism, the people who will suffer most will be the British. Not only shall we suffer the most, but that will affect our unemployment position more than almost anything else that we could do.
    The control of inflation is, therefore, without doubt, the most important factor in the long run in getting down the levels of unemployment. I shall read the quotation again:
    "As long as we are trying to squeeze inflation out of the economy, unemployment is unfortunately one of the consequences we face."
    Those are not my words. They are the words of the right hon. Gentleman the Leader of the Opposition. He knows, as do most Opposition Members on the Benches behind him, that if we go on with a high rate of inflation or an increasing rate of inflation, as we were faced with in May 1979, we shall never get unemployment down or get this country prosperous again. We still have, in 1980, a lower manufacturing output than that which we had in 1973. All the time the British economy has been declining. That is why we start this recession, perhaps the most serious recession since the war, with 1·4 million unemployed. At previous times we have started recessions with 500,000 or
    1086
    600,000 unemployed. This time we start with 1·4 million.
    The right hon. Member for Chesterfield advocates a massive increase in public expenditure. However, does he realise that already our public sector borrowing requirement is very high. It is being added to considerably by the lack of profitability in a number of British industries, for some of which he was responsible. The British Steel Corporation, which this year is likely to lose up to £800 million, was an industry very much under his control when he was a Minister. Shipbuilding is another industry which is losing a great deal of money, as is British Leyland.
    We are having to support all those industries. At present I believe that it is quite right that we should be doing so. However, the price of supporting these industries is that we are unable to support the social services and the other things that ought to be supported by the money which we are having to pour into our basic industries. That, again, is another reason why we have to cut back on many desirable schemes that we should have liked to help.
    But, despite all that and the problems that the country and the Government face, we are endeavouring to help those who are worst hit by unemployment. At present, 314,000 people are being helped by our measures, as compared with 257.000 a year ago.
    More will need to be done, and, of course, unemployment hits some sectors much more than others, but I make it plain—
    Mr.Gordon Wilson: It hits some areas more than others, too.
    Mr.Prior:I make it plain that unemployment is very rarely the fault of an individual. It is the fault of society as a whole. I want to make absolutely clear—
    Mr. Jack Straw: Will the right hon. Gentleman give way?
    Mr. Prior: No I want to go on and say this. I want to get this bit off my chest rather badly.
    Yesterday, on the programme "The world This Weekend", I said—and I repeat it now—that the Government can

    1087
    not do everything. People have to do some things for themselves. As a nation we have always liked to blame someone else. We blame the Government, we blame management or we blame the unions. I think that we all have to take a share of the responsibility for what has happened in recent years. I should have been more impressed by the speech of the right hon. Member for Chesterfield if he had revealed a shred of shame for his part over the past few years, or the part of Labour Governments.
    Mr. Straw Mr. Straw rose—
    Mr. Prior: I shall not give way for the moment. I want to make some progress.
    It remains our task to help those most badly affected. That is a job to which everyone can contribute. My hon. Friend the Member for Chelsea (Mr. Scott) wrote to me and released his letter to the press at the weekend. He advanced some valuable suggestions for an employment guarantee scheme for those under 20 years of age. His is an idea that will take much working out if it is to come about. That has not stopped my hon. Friend from being willing to make a contribution to the debate.
    It was in the same spirit that Community Service Volunteers saw the Prime Minister last Monday. It is an organisation that has valuable experience in helping youngsters with the full co-operation of the trade union movement. Mrs. Hood-less states that the CSV is exploring
    "ways of immunising young people's sense of failure by helping them make good use of their enforced leisure."
    The youngsters receive board and lodging and pocket money or a training allowance. They enjoy helping others and "get a sense of work". It has proposed that it could help 4,000 or more youngsters and make a valuable contribution to the unemployment problem.
    Mr. Alexander W. Lyon rose—
    Mr. Prior: I wish to take this matter a little further.
    The same is true of my statement to the Select Committee last Wednesday, I spoke freely to the Committee. I believe that it is the wish of the House that Ministers should do so. No mem
    1088
    ber of the Committee thought the matter worthy of a further question.
    Mr. John Golding: It should be a matter of record that at least one member of the Committee chastised me for not calling him because he wished to ask a question. The Secretary of State cannot know what was in the minds of members of the Committee. If there is any responsibility for the matter not being pursued that is my responsibility as Chairman.
    Mr. Prior: I am grateful to the hon. Gentleman for that explanation. I did not notice much reticence on the part of any member of the Committee when it came to asking me questions or coming back and asking me further questions later. My statement had a quiet hearing from the Committee because what I said—I shall repeat what I said—met with acquiescence if not agreement.
    We do best by raising these matters in the formative stages and not merely presenting the House with cut-and-dried plans that do not take full advantage of the expertise and ideas of others. I do not apologise for that. I think that that is the right approach. However, over the past few days there have been occasions when I have been tempted to go back to the old ways and to place before the House only firm proposals. Frequently comment has been made entirely on false premises. There are many who have been unnecessarily worried.
    Mr. Alexander W. Lyon: The concern has not been about the existence of some form of voluntary service. As the Minister will agree, that was already available if the unemployed wanted to volunteer for it. The issue was whether the unemployed were to be compelled to take part in voluntary service. The statement made by Lord Gowrie, the Minister of State, Department of Employment, over the weekend was in total defiance of everything that the right hon. Gentleman said.
    Mr. Prior: Obviously I made a mistake when I gave way to the hon. Gentleman.
    Last Friday The Guardian advanced some complex conspiracy theories. It was suggesting that I was trying to save

    1089
    the pride of the Manpower Services Commission. We have had a gloss upon a gloss upon a gloss. I see no point in going over all that. There has been some misunderstanding and I take this opportunity to put the matter straight.
    I begin with what I said to the Select Committee last Wednesday. I said:
    "Basically it has always seemed wrong to me that we should pay out considerable sums of money in either unemployment benefit or supplementary benefit and yet actually provide no work and get no benefit from it. Here one would if humanly possible like to see schemes which said 'All right, the unemployment benefit must be put to a better use than doing nothing, which is happening at the moment.' I do not say that only from the point of view of a better use of Government money but also from the point of view of the unemployed. The long-term unemployed after a period of time are damaged by the psychological element attached to all this and it makes it much harder for them ever to pick up work again. It is thoroughly bad in social terms and quite often in mental and health terms as well. All that I am saying is that if we are going to look at these schemes we are going to need an immense amount of cooperation from the trade unions as well as from a lot of other people in society."
    That is what I said in front of the Select Committee. On Wednesday evening, for the avoidance of doubt, I issued a statement which read:
    "There is no question of the Government considering compelling unemployed people to work or of stopping their unemployment benefit if they do not. What we are doing, however, as always, is considering any constructive proposals for alleviating the effects of unemployment especially upon young people and the long-term unemployed. There may be scope for encouraging unemployed people to undertake some form of voluntary work but such a scheme would have to be worked out carefully and in consultation with interested groups including the trade unions. We are still very much in the early stages of considering the feasibility of this idea."
    Taken together, these statements represent the sum total of my published thoughts. The work of the CSV was in the forefront of my mind because I had seen its representatives a couple of days earlier and because that organisation has much to teach us. However, a project on the scale necessary could not be a carbon copy of its methods. I have no wish to interfere with the search for permanent and genuine employment. Equally, we should provide opportunities for voluntary effort for those whose energies cannot be found a satisfactory out
    1090
    let for the moment. There is no suggestion of any form of—
    Mr. Skinner: What about Lord Gowrie?
    Mr. Prior:—conscription or compulsion. People can benefit themselves and the community by taking part in voluntary activities.
    Sometimes it is thought that an unemployed person who did so take part would necessarily have to forgo his unemployment benefit. That is not so. I stress that such an arrangement would be purely voluntary. It would probably be on a local basis with the full involvement of existing voluntary agencies. Such organisations know the problem areas. They have experience of organising help for those in need. They would know how best to use the energies that the unemployed could offer.
    I understand that the Daily Mail and Independent Television News went to Widnes, which I visited on Thursday afternoon. They asked the unemployed what they thought of the views that I had expressed. Much to the astonishment and shock of the interviewers, they found that every unemployed person they approached was much in favour of the type of voluntary scheme to which I had referred.
    Mr. Skinner: What about Lord Gowrie?
    Mr. Eric S. Heffer rose—
    Mr. Prior: Before I give way, I want to finish this part of my speech. The hon. Member for Bolsover (Mr. Skinner) keeps shouting at me.
    This morning I read Lord Gowrie's speech. I do not understand what all the fuss is about. Confusion may have arisen—there was a good deal of confusion in people's minds—when at a press conference Lord Gowrie replied to a question and said that a degree of compulsion exists and has existed for many years under different Governments whereby unemployment benefit could be withdrawn if people persistently and unreasonably refused paid work.
    It is also true that refusal to enter a STEP scheme could result in the loss of unemployment benefit. At no stage did my noble Friend suggest that this

    1091
    should be applied to social security payments, which is the only meaningful way of making the joining of such a scheme compulsory. My noble Friend can answer for himself in another place, but I am quite satisfied that there is no difference of view between us about existing policies.
    Mrs. Elaine Kellett-Bowman: I am very interested in what my right hon. Friend is saying. How would a person doing voluntary work fulfil the test of being available for work? Some time ago there was a case in my constituency of a handicapped person who was helping to organise outings for the handicapped. He was not considered to be available for work. Would he be allowed to continue doing that sort of thing and still be considered to be available for work?
    Mr. Prior: My understanding is that, provided such a person was available for work, he would be allowed to do social work of that nature. If a permanent job came along, he would have to take it. There is nothing particularly new about that. It happens in the case of the 4,000 people who work for CSV at present. No particular problem has arisen.
    I shall now deal with the problems of young people which have been raised already in this debate. One of them is that more children were born in the affluent early 1960s and that means that there are now more young people than ever coming on to the job market. This year there will be 700,000 youngsters leaving school. We supported the youth opportunities programme when it was set up. We supported the Holland report and we have expanded the YOP considerably. This year it is 25 per cent. greater than it was last year, and last year it was 30 per cent. greater than it was the year before. That means that there has been an increase in the YOP of almost 60 per cent. over the past two years. There will be an additional 50,000 places this year. There will be about 180,000 places for school leavers and the rest will be available for young people under 19 who have been unemployed for 12 months or more.
    The two undertakings that were given by the last Government and which we gave again last year—that anyone who leaves school this summer will have the
    1092
    opportunity of a place by next Easter and that anyone who has been unemployed for more than a year can have a place on the scheme if he or she is under 19—will continue this year. I give an absolute guarantee that, if extra resources are required to meet that commitment, they will be provided. I make that absolutely clear.
    I wish to take up a point made by the hon. Member for Chester-le-Street (Mr. Radice) in the Select Committee. He said that he thought that it might be necessary to extend the courses because young people tended to take them and then go back on the dole. We shall consider that with the Manpower Services Commission. When I have had consultations with the MSC, I shall see whether there is something further that I can do.
    Mr. Hardy: Is the right hon. Gentleman aware that, if we are to maintain opportunities for unemployed young people in many parts of the country, local authorities will have to be relieved of the threats that they now face from the Secretary of State for the Environment? Perhaps the Secretary of State for Employment genuinely intends to provide help for the unemployed in areas such as mine, but if his right hon. Friend does not change his policy the Secretary of State for Employment will be made to look a knave.
    Mr. Prior: I do not think that that is likely to happen, but of course I will inquire into this as and when cases are brought to my notice. For the time being, however, it is not a problem.
    We shall keep the community industry scheme going with 6,000 places for the most disadvantaged. The special temporary employment programme was cut back to certain areas. By doing that we reduced the number of places from 18,000 to about 12,000 to 15,000. At present there are between 12,000 and 14,000 people in the scheme. It must be remembered that when we came into office we found that, although the scheme was basically for 19 to 24-year-olds who had been unemployed for six months or more, or those over 24 who had been unemployed for more than a year, only 40 per cent. of the take-up places was by people who fell into those categories. The other places were taken by people who were put into

    1093
    the scheme but who did not meet the criteria. Today, 70 per cent. of those in the scheme meet the criteria laid down, and therefore there are more of the designated long-term unemployed in the scheme than there were a year ago. What is more, in places such as Merseyside there are more places than were possible previously. It is right to concentrate our resources where the demand and the need are seen to be greatest.
    I agree that the ethnic minorities have suffered disproportionately, chiefly because they are young and unskilled. We are seeking, through the youth opportunities programme, to give them the extra help which arises in those areas of very high unemployment, particularly amongst youths.
    I turn now to three other short but related matters. I start with apprenticeships. This year the Manpower Services Commission will fund 23,500 apprenticeships—an increase of 2,500 over last year. That is fewer than in some earlier years because the MSC has decided that industrial training boards should be making a bigger contribution. Some training boards have considerable reserves of cash. The road transport industry training board, for example, has £4 million in reserve and I believe that it should put more money towards the cost of training apprentices. Both the EITB and the CITB have substantial sums and will be considering spending more on apprentices.
    Mr. Radice: Is the Secretary of State aware that the EITB has said that apprenticeships are being cut back by 5 per cent.? What will be do about that?
    Mr. Prior: We hope that the EITB, which will look at this again, will supply more cash for apprentices. The Government, through the MSC, are already providing for 2,500 more apprentices than last year. I do not deny that in a period of recession it is extremely difficult to find cash and to find people who are prepared to take on apprentices. The season is not yet over and I shall look at that again.
    I wish to refer briefly to the review of employment and training which has been going on under the auspices of the MSC. I hope that the MSC will let me have its report before the end of the month, because I believe that in the next Session
    1094
    the whole question of training will need a considerable overhaul and a fresh look.
    Mr. Andrew Faulds: I have been listening diligently to the right hon. Gentleman throughout his speech. What practical consolation is he suggesting for the unemployed young in my constituency, who number 2,463 in the Sandwell area with only 67 unfilled vacancies? What practical prospects are there for any of these young people in all the things that he has been talking about this afternoon?
    Mr. Prior: We are giving practical help through the youth opportunities programme and through the special temporary employment programme in certain inner city areas. I hope that the hon. Member will use his influence with young people to ensure that they take advantage of the youth opportunities programme. I hope that he will also recognise that we are giving the same guarantee about these young people being able to have a job as was given by his own Government.
    I accept that the problems of unemployment over the next few months will require more to be done. We can expand existing schemes and consider new ones. We can also help ourselves by making sure that our pay reflects what the country in its competitive position can afford. I repeat that the Conservative Party has a proud post-war record on unemployment. Conservative Governments have a better record than Labour Governments. Labour Members have no right to try to pin all that has gone wrong in the past year on us alone. That is a shallow approach. They are utterly wrong if they believe that it will carry weight with the unemployed. It is new jobs in soundly based and competitive industries, that will enable us to have full employment and a prosperous and responsible society. The proper use of our industrial resources, combined with our unique qualities, gives us the best chance of success for a generation.
    I have absolute confidence that we shall succeed in our policies, and I ask my hon. Friends to support the amendment.
    5.21 pm
    Mr. T. W. Urwin: I am sure that the Opposition have gained no comfort or satisfaction

    1095
    from the Secretary of State's remarks. He has made great play of the problems confronting the Government, with which we are all familiar. He claims that there must be casualties when war is being waged against inflation. However, he omits to mention that the battle against inflation has been made twice as difficult by the policies that his Government have pursued over the past 14 months. They have doubled inflation since May 1979. We are faced with the highest unemployment figures since the end of the last war. I am sure that the right hon. Gentleman does not wish to sound complacent, and he should not rest comfortably in his bed knowing that that situation has developed as a result of his Government's policies.
    There are massive redundancies in industry, even in manufacturing, which is the life blood of our industrial base. Areas of high prosperity and activity, such as the West Midlands, are now bearing the brunt of Government attacks. The problems of recession are compounded by the Government's public expenditure cuts. The Chancellor's tax cuts, hailed by the Cabinet as likely to have a salutary effect on industrial investment, have proved to be a shallow promise and an abortive exercise. Those who have profited most have not diverted their money to industrial investment.
    Over 1,500 companies have gone into liquidation since the Government took office, which is a post-war record. Those liquidations are accompanied by an increasing number of personal bankruptcies. Over the past three weeks The Sunday Times has produced a doleful register of the massive redundancies that have occurred since June 1979. A frightening situation has developed, which is likely to get worse. Thousands of people have been decanted into a non-existent labour market. That is the proud record of this Government. Masses of young people are going straight from school to the dole queues, which creates disillusionment, bitterness, frustration and, in some cases, shame. The situation is causing discriminatory recruitment for those jobs that are available against coloured or older people, which is an ingredient for social unrest and disharmony.
    I do not doubt that in this debate many of my hon. Friends will wish to
    1096
    draw attention to the problems in their constituencies and regions. I do not apologise for mentioning the imponderable difficulties that confront us in the Northern region, which will be similar to those in other development areas. Almost every day without exception we have news of another factory closure. My hon. Friend the Member for Consett (Mr. Atkins) has for months been heavily involved with the serious problems that his constituents will face as a result of the British Steel Corporation's decision to close the Consett steelworks, despite the fact that my hon. Friend and others can prove that they are profitable and viable. That is a measure of this Government's disgraceful attitude to unemployment. Jobs are disappearing at an all too rapid rate, and new job creation is lagging woefully behind.
    In Sunderland, part of which is in my constituency, there is substantially more than 15 per cent. male unemployment. It is a highly industrialised town, with a world-wide record for shipbuilding. It also has the entrepreneurial industries that are associated with shipbuilding. We hear daily of closures in shipbuilding, light and heavy engineering, marine engineering—where the death knell has been sounded for the Doxford engine—glass making, manufacturing generally, textiles and the construction industry. All those closures contribute substantially to the heavy job losses.
    At the end of June, 4,141 young people were unemployed in the borough of Sunderland—2,214 boys and 1,927 girls. That does not include the outlying areas, such as the constituency of my hon. Friend the Member for Chester-le-Street (Mr. Radice) and my own constituency. Careers officers are knocking at factory doors to plead with employers to take on even one young person. They are conducting an intensive trawl throughout the area. The situation is deteriorating rapidly. In June 1979 there were 929 vacancies, and there are now only 599 in the area.
    In Sunderland both seats are held by Labour Members. The Sunderland Echo circulates widely in my constituency. That newspaper has headlines such as:
    "A 'knock-knock' game for teenage jobs"
    "Town is heading for a disaster"
    "Briefing the P.M."

    1097
    I hope that the Prime Minister has been provided with that series of articles, which not only highlights the difficulties but proposes remedies. The headlines go on:
    "The N.E. needs help now—not tomorrow".
    "New peak of jobless youngsters".
    All that we hear from the Secretary of State and his Government colleagues is that this is bound to happen when we are trying to squeeze out inflation. However, I suggest that some action can be taken despite the importance of the battle against inflation.
    We have heard a great deal about the youth opportunities programme. All aspects of that programme should be extended rather than cut, as they are being cut in some respects. But the programme, important though it is, can be regarded as only a temporary measure to take up the slack against the time when young boys can be catered for through the medium of apprenticeships in different industries.
    I take up a point made by my hon. Friend the Member for Bolsover (Mr. Skinner) in the course of his intervention, to the effect that North Sea oil revenues should be diverted into industrial investment in an attempt to create the employment opportunities which we need so badly, instead of having to disburse valuable financial resources in the payment of unemployment benefit.
    I urge the Government to redeem their promise at the hustings 14 months ago, not for the first time, to pursue a strong and vigorous regional policy. If that promise has any meaning at all for the Government, it must mean the restoration of regional incentives to what they were at the time this Government took office. It cannot mean cutting them, which is what the Government have been doing. It also means relaxing the stranglehold which the Government have on the economy by reducing interest and mortgage rates. It means ensuring that the micro-chip production units operated by Inmos go to a development area—if not the Northern region, some other development area. Here again, the Secretary of State should seek to assert some influence over the Secretary of State for Industry.
    I reinforce the plea made with almost monotonous regularity by almost every
    1098
    hon. Member representing a constituency in the Northern region for the Government to consider more seriously the appeal for the establishment of a Northern development agency. Why cannot the Government set about revitalising the construction industry and put thousands of unemployed building craftsmen to work, building the houses which people need so badly, whether for rent or for private ownership?
    These are but a few of the steps which the Government should be able to take. I trust sincerely that, by the time we go through the Division Lobby tonight, at least some Conservative Back Benchers will have decided to indulge in the luxury of abstention as a protest which they ought rightly to make against one of the most viciously reactionary Conservative Governments in my lifetime.
    5.34 pm
    Mr. Dudley Smith: Understandably, the right hon. Member for Houghton-le-Spring (Mr. Urwin) spoke with some feeling on this subject, as would any hon. Member representing a Northern constituency. But perhaps I may remind the right hon. Gentleman of one salutary fact. It is that unemployment doubled in the Northern region in the last period of the Labour Government. The right hon. Gentleman should take that into account when he castigates the present Administration.
    I subscribe to the Government's basic policy. I believe it to be essential for our long-term economic recovery. No one has ever pretended that the way would be easy. Indeed, it was stressed that it would be painful.
    In an admirable speech, which I thought eclipsed that of the right hon. Member for Chesterfield (Mr. Varley), my right hon. Friend the Secretary of State put his finger right on the problem when he talked about the necessity for "real" jobs. Cosmetic exercises are no good. By all means let us take temporary measures, especially for young people. But, at the end of the day, unless we get right the infrastructure of our industry and economy and unless we get the kind of jobs which will last and provide people with lifelong employment, we shall decline very seriously as a nation.
    I shall try to examine the long-term outlook for employment. It is a

    1099
    problem which will have to be faced whichever Government are in power. As a former Minister in the Department of Employment, perhaps I can bring some thoughts to bear on it, bearing in mind especially that my outside activity is that of a management consultant.
    Opinions on future employment prospects tend to cut across party lines. However, it is essential that we in this country get into a position where our long-term employment decisions are right, even allowing for the predominantly regional differences which still exist.
    For too long—certainly over the last 20 years—we have taken too much of a piecemeal approach to the problem, with the result that throughout the 1960s and the 1970s we had declining employment, in the regions especially. There are not enough skilled workers to take up the challenge when expansion starts, as it will inevitably before too long. An enormous wastage of potential ability is suffered by the nation because of wrong guidance and indifference on the part of unions, managements and those who are sometimes supposedly skilled in advising people going into employment. Employment needs the right kind of guidance, right from the school through to eventual retirement. The schools have only tinkered with the subject over many years. Careers teachers leave all too much to be desired. Even in the public school sector, as I know from personal experience, careers masters are guilty in this respect.
    The job advisers in the employment services division of the Manpower Services Commission in my opinion often fail to measure up to our requirements. As a Minister, I was one of those responsible for setting up the Manpower Services Commission. I am disappointed by its performance to date, and I was sorry when my hon. Friend the Under-Secretary of State said in a written answer to the hon. Member for Middleton and Prestwich (Mr. Callaghan):
    "No special review of its record is being conducted."—[Official Report, 9 July 1980; Vol. 988, c. 165.]
    I should like to ask my right hon. Friend to consider whether it would not be a bad idea to see whether the employment services division of the Manpower Ser
    1100
    vices Commission is doing its job as well as it could.
    I was a little surprised to hear my right hon. Friend say that the training boards, for example, were a holding on to a lot of cash which they should be using towards apprenticeships. From the general tenor of some of my right hon. Friend's remarks, it appears that he is having to pressurise the Manpower Services Commission into action at a time when it should be going at full throttle to do all that it can. But, whatever view we take of the various functions of those who are skilled in employment advice, it is important that they do everything possible to help alleviate a difficult position.
    In addition, many managements often display a lack of imagination in the way that they deploy their work forces at all levels. Unions hamstring their members with outdated restrictive practices and often price their members out of jobs with unreasonable wage demands. We all know this. In many respects, it is what inflation is about.
    Many employees fail to display flexibility in modern conditions, in which they should display far less rigidity. Attitudes on both sides are often wrong, and they are partly responsible for today's situation.
    Understandably, a manual worker over 50 is well past his peak, but more and more we find that in other vocations, other professions, other work, those over the age of 50 are also regarded as being past their peak, and dispensable. The biggest discrimination in this country today is not against women, blacks or coloureds. It is not even against young people, though the position is serious enough for many of them, particularly in parts of the regions. It is against the man over the age of 45 or 50 who finds himself redundant and who has a tremendous struggle to get back to comparable employment over a period of time.
    A different attitude is needed on the part of management and unions, and also probably by the individual as regards his working ability. The lush clays of full employment, when it was easy to walk out of one job and into another, and to pick up reasonably good pay and

    1101
    to secure increases without any extra effort, have gone for ever. That is largely because of advancing technology, which will mean that there are fewer jobs available and far more competition for them.
    In those circumstances, the individual must be more flexible. He must be prepared to move to new employment, even if it is socially unpleasant for him to do so. In this he must be better aided by the State, with better housing provision and better education arrangements for his children.
    It is interesting that this point was taken up in the leading article in The Sunday Times to which reference has already been made. I do not agree with the general conclusions of that article. I rarely agree with The Sunday Times these days. It said:
    "The trouble is that housing subsidy and taxation policy has become a serious, perhaps decisive, deterrent to mobility in Britain."
    It is essential that people be far more mobile if they are to cope with an increasingly difficult employment situation. We should now train the majority of people to have at least two skills, so that it becomes normal for them to switch from one job to another with no particular anxiety, according to the economic circumstances and dictates of the time.
    My right hon. Friend the Secretary of State emphasised the question of apprenticeship. In an article yesterday, The Observer drew the conclusion that there were far too few apprenticeships in this country compared with those instituted by the West German Government and West German industry.
    We must develop a much healthier attitude to the service industries, which have a great future but which have all too often been despised by potential employees. They would rather go into manufacturing; they think that there is perhaps something demeaning about work in certain types of service industry.
    It has been all too easy over the past 20 years to earn good wages and obtain a better and increasing share with an indifferent performance. The result overall has been comparatively low pay, matched by lower standards of living compared with those in other industrial nations.
    1102
    Our general economic and commercial decline has been marked by much higher prices than there have been in other advanced countries, and by a general uncompetitiveness all round. This has led to the economic recession that my right hon. Friend has been talking about, through past Government extravagance and an unwillingness by the previous Government to grasp the economic nettle.
    I believe that we can still pull ourselves together and still give the unemployed a real chance, if we can get matters right. But time is short. The position is not assisted by the kind of superficial and specious attack that was mounted by the right hon. Member for Chesterfield. He is an able man, and I know that he is capable of much better than he produced this afternoon.
    We are far better off with the way that was spelt out by my right hon. Friend. I am confident that in due course the Government's policies will work.
    5.44 pm
    Mr. John Morris: I shall be very brief, because so many of my hon. Friends and hon. Members generally want to take part in the debate. I hope that the House will forgive me if I concentrate on the problems in my constituency, from which the House will judge the result and the adequacy of the Government's policies.
    The Port Talbot travel-to-work area is one of the worst hit areas, and it will became much worse hit in a matter of weeks, as a direct result of Government policies. The June figures for the area show 6,615 unemployed and 768 youth unemployed. Very shortly the work force of the British Steel Corporation at Port Talbot will be reduced from 12,584 to 5,701—that is, 6,783 people will be made redundant. That is imminent for most of them, or at least will occur in the course of the year. That means a doubling of unemployment, from over 6,000 to over 13,000 in the travel-to-work area. That is the tragedy that we face.
    Over half of the BSC work force at Port Talbot reside in the borough of Afan. Therefore, in that comparatively small borough alone we shall have 3,500 redundancies in a matter of weeks. I listened intently to the hon. Member for Warwick and Leamington (Mr. Smith)

    1103
    when he said that we had the opportunity to pull ourselves together. I should like to know the recipe of the hon. Gentleman and his party for dealing with the tragedy that will befall my area.
    In addition, there will be the ripple effect. Dozens of small firms are going out of business. We shall see increasing redundancies and bankruptcies right across South Wales. The public services and the public authorities are encountering exactly the same problems. We also forget the industries in which women are employed that are going on short time. Whatever the politics of the matter, no one can deny the reality of the catastrophe in my area.
    The Secretary of State for Industry is absent from this debate, and I cannot see one Welsh Conservative Member here. I find it odd that there is no Minister here from the Welsh Office. It shows the lack of concern by the Welsh Office that it has not fielded one Minister in the whole debate. That message will go home.
    The Secretary of State for Industry—that great Merlin, that great wizard—is always talking of taxpayers' money. I should like to know the total in my area of redundancy money and unemployment benefits over the next three to five years out of taxpayers' money, and how much better it could have been utilised if there had been proper plans to deal with the vast number of people in my area without hope. There is only one thing that the young people can do, and that is to repeat the exodus of the inter-war years; to leave our area to find occupations elsewhere.
    What I want to pinpoint is Ministers' lack of compassion and understanding of our problems. I do not know what the absent Secretary of State for Wales is paid for. He is undoubedly a born loser. In the Western Mail a fortnight ago the subeditor concerned was able to see many breaks in the cloud. He was the only man in Wales seeing sunshine, either literally or politically. Day after day there were "fed" headlines, I suppose coming from the Paymaster General's office. There were so many that the poor sub-editor must have been suffering from political sunstroke.
    The picture that we saw was of the Secretary of State for Wales sitting on the edge of a Welsh cliff washing his feet in the ocean. His role would have been
    1104
    much better typified in a different way, because he is coming much closer to resembling a man washing his hands. He is a Pontius Pilate by whom my poor constituents are being crucified. They are being sacrificed on the altar of the Government's policies.
    Ministers have no idea of the magnitude of the problem. They are powerless—and they want to be powerless, because they do not want to intervene. All last winter we had from the Secretary of State speeches in those great citadels of industry—Saundersfoot, St. Dogmaels and Haverfordwest—in which he repeated like a parrot the Government's monetary policies. In an article in the Western Mail the right hon. Gentleman reported as saying that our problems in the coalfield would probably be even worse than those in the steel areas, as a direct result of the Government's policies. His attitude to coal is that the NCB should sort out the problems. That is the noninterventionist philosophy. His attitude to steel is that there has been too much political interference in the past and that the troubles were all due to nationalisation.
    The Government are the bank manager of the NCB and the BSC. Their policies are resulting directly in severe hardship in many areas. When the Government tell us that countries across the world are suffering from the excess production of steel, whether their industries are public or private, it is arrant nonsense to pin the blame on the form of ownership of the industry.
    As for the claim that there has been too much interference in our industries, of course some of the problems in South Wales are the result of a Government decision many years ago to split investment between Llanwern in the constituency of my hon. Friend the Member for Newport (Mr. Hughes), and Ravenscriag. That political act of intervention took place under the Tory Government of Mr. Macmillan.
    No one in South Wales believes that there has not been direct political interference in the allocation of capacity between our area and elsewhere. We know that the lack of political muscle of the Secretary of State for Wales dates from before he took office—from the decision taken in Wales on 1 March last year. Today, the Secretary of State counts for

    1105
    nothing in the Cabinet. He is there not to defend our interests but to apologise for the Government's actions in Wales.
    The Government have juggled their policies on development area status in South Wales and elsewhere. Only last July they announced the downgrading of development areas across the country, and in South Wales in particular, and within a matter of weeks they had endorsed the slimming down of the steel industry.
    We have had the first U-turn. Time after time we went to see the Secretary of State for Industry because the world—particularly Wales—could not understand how the left hand could take away our development area status while the right sought to demolish our basic industries. We knew that it was only a matter of time before that policy would have to be reversed—and reversed it has had to be, in part. Unhappily, we have had only half a loaf. Although my area has benefited, it would have been better if it had been regraded more widely, because people do not stop going to work abruptly at a particular borough boundary.
    The months of dithering since last September have caused untold damage. We will never be told the damage. There is nothing worse for business than uncertainty. No one will invest in the steel areas of South Wales unless he knows the position on development area status. There was no excuse for the dithering. Despite the eventual U-turn, we must have lost many businesses in the meantime. That is the measure of the paralysis in Cabinet of the Secretaries of State for Industry and Wales.
    We have been allocated £48 million to deal with the problems of Llanwern and Port Talbot. Having had a modest experience in this field, I concede that there is a limit to how much money can be spent in two years, but the Welsh Office has lost an advantage with the Treasury by not ensuring that the spending programme to provide hope for these areas was agreed to last for five years. There will be many difficulties when the two years are up. We know what this amount of money can achieve and it will be difficult to seek more at the end of that period. Ministers should have learnt the lessons of the past and arranged a worthwhile programme spread over a
    1106
    number of years.
    I noticed what the Secretary of State for Employment said about the problems of getting cash and people. At Port Talbot the BSC can produce a large number of apprentices. Because of the slim-down, it wants to halve that number. I have been to see the Secretary of State for Wales and will see the chairman of the Manpower Services Commission and anyone else involved to get part of that £48 million spent on providing apprentices. The BSC has the capacity and it is willing to continue to use its apprentices school at its previous rate, provided that somebody pays for it.
    We are not fertilising the seed corn sufficiently. One day—I hope under another Government, if not before—industry will come into the area and complain of the shortage of skilled people because we have not responded to those who are willing to provide the apprentices. We face a tragedy, a major catastrophe. I only wish that there were time to deal at much greater length with the real problems that will face real people in my area—people who do not deserve it.
    5.56 pm
    Mr. Ralph Howell: In common with the right hon. and learned Member for Aberavon (Mr. Morris), I am concerned about rising unemployment in my constituency. This is a particularly difficult week, when one of the major works in my constituency has declared a high level of redundancies.
    I hope that my remarks will not be misunderstood. I detest unemployment, which is soul-destroying and wasteful. The present levels are a national disgrace particularly when young people cannot get work on leaving school. However, I am not happy with the debate so far. I have heard many such debates in my 10 years as a Member. There is only one difference between this debate and those that I heard in my first eight years. Then, both parties used to talk about returning to full employment. That was sheer hypocrisy. We now talk about reducing the levels of unemployment.
    We must completely rethink the unemployment problem and the waste of manpower. I congratulate the Secretary of State for Employment on his remarks to the Select Committee. It is too much to say that he has broken the ice. He

    1107
    has made a small chink—perhaps only a scratch—in the surface of the ice. But he has done a great service in opening up this debate and finding a useful way of using all our manpower.
    Just as shelter, a minimum income and a health service are basic rights, so is a job. It seems unthinkable, but many people believe that there will soon be 2 million to 2½ million unemployed. That is likely to happen unless there is a basic change. That is why I call for a complete rethink.
    When unemployment reached 1 million, I said in the House that probably no more than 250,000 people actually wanted to work and that the Government had been pushed into the wrong economic decisions by the level of those false figures. The Centre for Policy Studies did a two-year exercise on debunking figures, proving that a third of them were not real and that many more vacancies existed than were known.
    Mr. Nigel Forman: Is my hon. Friend aware of the argument that the official figures for unemployment are, paradoxically, too high and too low? Part of his argument is correct, but it is true to say that there are many hundreds of thousands of married women and others who do not register as unemployed. The figures, therefore, could well be much higher.
    Mr. Howell: I know of that argument, but I do not intend to be distracted from mine. If anything, the Centre for Policy Studies erred on the low side. I believe that the proportion of figures it said were unreal is higher than one-third. I also believe that there are currently well over half a million vacancies that should be filled.
    We must also recognise that because of our unco-ordinated and chaotic tax and welfare system we have created a situation where a great many unemployed people simply cannot afford to work. We all know that to be true. I wonder why we have a minimum income for people who are out of work but not for those in work. It is ludicrous that people can be worse off because they are conscientious enough to work.
    There is another side to the coin. Some people say that the black economy amounts to £5 billion and others say that it is as large as £15 billion. We all
    1108
    know that it exists in a big way. How is it that policemen, members of the Armed Forces and many others who have jobs take other jobs to supplement their income when many people are unable to find a job at all?
    I hope that we can agree upon one thing, namely, that there should be a high-level and serious study of the authenticity of the unemployment figures. There has been a minor internal study in the Department of Employment but I believe that a study should be undertaken on a grander scale so that we know much more about the figures.
    Mr. Frank Field: Is the hon. Gentleman aware that the Department of Employment report was published as a Command Paper and that it goes a long way to refuting the ideas that he is putting forward?
    Mr. Howell: I am aware of that, but I believe that there is need for a much greater inter-departmental examination of the matter as it affects taxation and welfare as well as employment.
    I wish to speak about the idea of getting people to work. There is nothing new about that. There have been two great turning points in relation to unemployment in this country. The first was the introduction by Lloyd George of a national insurance scheme, and the second was when William Beveridge looked into the matter in 1942.
    We should take a second look at the Beveridge report to see what went wrong. We implemented the soft, easy and attractive parts of the report and failed to implement the tougher counterbalances in it. I am glad to see one or two Liberal Members nodding in agreement. I wish to draw the attention of the House to paragraph 131 of the Beveridge report, which states:
    "This general principle leads to the following practical conclusions:
    (i) Men and women in receipt of unemployment benefit cannot be allowed to hold out indefinitely for work of the type to which they are used or in their present places of residence, if there is work which they could do available at the standard wage for that work."
    It goes on to say:
    "(ii) Men and women who have been unemployed for a certain period should be required as a condition of continued benefit to attend a work or training centre,

    1109
    such attendance being designed both as a means of preventing habituation to idleness and as a means of improving capacity for earning."
    Later the report states:
    "But for young persons who have not yet the habit of continuous work the period should be shorter; for boys and girls there should ideally be no unconditional benefit at all; their enforced abstention from work should be made an occasion of further training."
    I thought that we had arrived at a sensible conclusion in 1942. The Welfare State was grounded upon the Beveridge report, though it was not enacted entirely. There has been a suggestion of action in this direction, but I believe that we must be much bolder about it. We must realise that we are not only wasting manpower but destroying the moral fibre of the people who are doomed to idleness because the State cannot find work for them.
    There is a great deal of work to be done. Our railway stations, railway carriages and public places are in a pretty poor state. We do not need to go far from this House to find a great deal of litter. I was in Peckham the other day. There is much work to be clone there. Motorway verges and our roadsides are a total disgrace. They do not compare favourably with those of our Continental neighbours. There is work to be done and it should be done. A way should be found of ensuring that those who wish to work have an opportunity to do so.
    I conclude by calling for a new look at the Beveridge report. There should be a new Beveridge-type report for the 1980s. If a proper study were undertaken, I believe that we would come to conclusions similar to those reached by Beveridge in 1942.
    6.7 pm
    Mr. Cyril Smith: If I were to draw a moral from the speech of the hon. Member for Norfolk, North (Mr. Howell), it would be that what the Liberals say today the rest of the world says tomorrow. The hon. Gentleman quoted two eminent Liberals, one of them as far back as 1942. I am not sure that I agree with all the conclusions to which the hon. Gentleman drew attention in Beveridge, but it was interesting to listen to him.
    1110
    I am not certain that this debate has taken us far on the question of employment, which is more important than unemployment. It is more important in that if we increased employment we would presumably reduce unemployment. However, that does not necessarily follow, for if, for example, the size of the labour force were increased, the corollary would not follow.
    The interesting thing about the debate so far is that, having been here for eight years, I have heard most, if not all, of it before. The only difference is that the speakers have changed sides. When the Labour Government were in power, the Conservative Opposition made the kind of speeches that we have heard from the Labour Opposition today, and when there was a Tory Government Labour Members made similar speeches.
    The Labour Government's unemployment record is nothing to brag about. However, the present Government's attitude to unemployment is different. They are resigned to unemployment. Nobody can deny that unemployment rose to 1½ million under Labour. Under the Conservative Government it is about 1·6 million, and is rising. The difference is that the Labour Government tried to introduce schemes to alleviate the effects of unemployment and they tried to reduce the level of unemployment.
    What worries me is that the Government accept that a rise in unemployment is inevitable. They try to persuade us that it is almost to be welcomed because a high level of unemployment is the only way to conquer inflation. The amendment gives credence to that. They say that high unemployment is the price that the people must pay so that the Government can pursue the monetarist policies which they believe will reduce the rate of inflation. The lethargy of the Government's attitude and the consequence of that attitude worry me.
    Any politician worth his salt accepts that unemployment is a crude, antisocial weapon that should not be encouraged. The Government give the impression that they believe that unemployment should be encouraged because that is the only way to conquer inflation. The amendment talks of unemployment being
    "a necessary pre-condition for the creation of new jobs".

    1111
    What is the logic of creating new jobs if, in the process, it is necessary to destroy existing jobs? Unless more new jobs are created than are destroyed, fewer jobs will be available.
    The Paymaster General (Mr. Angus Maude): If the hon. Gentleman quotes from the Government amendment he must get it right. He suggests that the amendment states that unemployment is a pre-condition to solving the problem. The amendment says that
    "the conquest of inflation is a necessary precondition for the creation of new jobs".
    Perhaps the hon. Gentleman will withdraw his observation.
    Mr. Smith: The Paymaster General might be grammatically correct. I do not know what the Paymaster General is doing replying to the debate, because I do not know what he knows about unemployment. The inference of the amendment, taken as a whole, is that unemployment is necessary to conquer inflation. That is the view of Ministers. The Paymaster General shakes his head, but he obviously does not know what the Secretary of State for Industry and others are saying. They say that unemployment is the price that we have to pay to conquer inflation. The amendment goes on to say that conquering inflation is a necessary pre-condition to creating new jobs. The amendment displays an attitude of mind that is dangerous and demoralising for thousands of young people who will go on the dole this summer, and to thousands of adults who simply desperately want to work.
    It is ludicrous that we are able to pay people not to work but we are not able to create an economy in which we pay people to work. Two weeks ago I visited Edge Hill training college because it has connections with Lancaster university, of which I am an officer. I talked to scores of young graduates who will come out of college this year trained as teachers. Only three had obtained jobs so far, and one of them had a job on the Isle of Man. It is ludicrous to spend vast sums of training people to teach when some primary school classes contain 40 or more children, and to pay teachers to be on the dole. From the same public purse we could pay them to teach. I cannot understand the logic.
    1112
    A plea has been made for the construction industry. It is equally ludicrous that thousands of people need houses—in my part of the world thousands of elderly and handicapped people need specialised houses—and yet we pay brickies not to work. There must be a way round it.
    The Government are attempting to reduce the public sector borrowing requirement. That is what their policy is about. I cannot square that policy with a policy that deliberately creates unemployment, which in itself raises the public sector borrowing requirement. High unemployment reduces the Government's income because when people are working they pay income tax, but when they are drawing money from the public purse they do not.
    The hon. Member for Bolsover (Mr. Skinner), in an intervention, said that £7 billion, rising to £10 billion, was being paid out in unemployment pay. He said that he was quoting the Minister of Agriculture, Fisheries and Food. Since I did not read the right hon. Gentleman's speech I cannot vouch for the figure, but if it is correct, how does it square with the dire necessity to reduce the public sector borrowing requirement?
    Much of the unemployment comes from medium-sized businesses. I forecast that in the coming months more will come from the small businesses. Many small businesses are component suppliers to larger companies. As larger companies go to the wall or introduce short-time working, the smaller companies will follow. That will add to the problems of high interests rates and the effect that they have on the value of the pound.
    This afternoon the Secretary of State for Employment talked of commencing the recession with 1·4 million unemployed. He said that previous recessions commenced with between 400,000 and 500,000 unemployed. He used that phrase on two or three occasions. Therefore, one must assume that what we are now seeing—for example, in the textile industy in my part of the world—is only a nibble of what will happen in the next 12 to 18 months. The Minister says that we are only commencing the recession. If we are commencing it with 1·4 million unemployed, what will be the level of unemployment when we are in the middle of the recession, and what will be the

    1113
    state of British industry when we have reached the end of it? Will there be any British industry left worth talking about?
    Frankly, if the Government go down in history as anything, and if the coming winter portrays the picture that we are being led to believe, they will go down as having perpetrated the greatest betrayal of small business ever known in the history of British politics. One of the things on which the Government came to power was their promise of great help for small businesses. I remember the great conferences up and down the country, such as those by the National Federation of Self Employed and the small industries councils. I well remember the Minister of State, Department of Industry tripping off to Bournemouth and addressesing massive conferences of small business men. What the Government would do for small businesses in this country was nobody's business, but what they have done, and what we forecast they would do, is the opposite.
    Mr. Richard Needham: Does the hon. Gentleman accept that it is not only this country but the world that is entering a recession? Does he accept also that the unemployment rates in this country, which he rightly says are horrific, are matched, if not worsened, by those in Italy, France, America and Canada, to name but a few? Therefore, the hon. Gentleman should perhaps look at rather wider reasons than merely the policies of the Government.
    Mr. Smith: With great respect, some of the hon. Gentleman's points are correct, and some are not. The difference is that those other Governments are trying to do something about it. They are not accepting unemployment as inevitable. That goes back to my original point about an attitude of mind. They do not accept that a rise in unemployment is inevitable. They accept that they may not be able to conquer or control it, but at least they are trying to do so. What worries me is that this Government accept unemployment as inevitable, throw up their arms and say "Ah well, this is a price that we must pay".
    That brings me to my next point about what we do about people who are taking advantage of the world recession and putting their own house in order. Many
    1114
    of them are putting their house in order at our expense. That is something else at which the Government should be looking. The Government should seriously examine their buying policies and, indeed, the buying policies of Government and local government Departments where they control the funds.
    I recently received a letter from a senior executive of Chubb, who told me that education authorities throughout the country are purchasing cash registers because of a change in Government policy over school meals. No one is arguing about that, but they are buying them from Japan. I am ashamed to say it, but I have made inquiries within my own local authority of Rochdale and find that it is true. All the cash registers that Rochdale has bought to reorganise school meals into a cafeteria service have been bought from Japan. I am told by the director of Chubb that that is happening with education authorities throughout the country. We really must be cuckoo.
    The same is happening with textiles, about which I know a little. In addition, police forces in Britain are being supplied with uniforms that are purchased from Germany and other countries. The Minister talked this afternoon about what would happen if he went in for import controls and how other countries would retaliate. Some of us want this country to start retaliating itself. It is not a question of us starting import controls. They have already started. Other countries are going in for import controls and are assisting their industries to export to other parts of the world because their markets are collapsing, yet the Government are sitting there like a set of old Etonians and saying "Well. boys, we must be very gentle and do things according to the book. It really is not very British to go in for this sort of thing". It is time that we were British. It is time that we began sticking up for ourselves. It is time that the Government began to realise that they would do a great deal more for British industry if they demanded that many of the products that are now purchased abroad by British taxpapers' money were purchased in this country.
    Mr. Frank Hooley: The Government are doing even worse

    1115
    than that, because there is an extremely important computer contract, worth £150 million, which ought to go to ICL, and they are seriously thinking of giving it to an overseas competitor.
    Mr. Smith: I am grateful to the hon. Gentleman for that intervention, which merely strengthens my point. However, I must get on, otherwise I shall never catch Mr. Speaker's eye again.
    There is also a need for retraining. I seriously urge Ministers to consider the intervention made by the hon. Member for Lancaster (Mrs. Kellett-Bowman). She did not explore the point completely, but she touched on it, and I hope that the Government will look at it. Often—and I do not mean one a month—my constituents are willing to attend retraining courses at colleges but find that their dole money is stopped because they are told "You are not available for work". I tell them "Go back to the employment exchange, say that you are available for work and that if they offer you a job you will take it". I tell them "There is no possibility of their offering you a job before the end of the course anyway". It is a deterrent against retraining and training in new industries when people attending full-time courses on their own initiative, which will give them new skills and opportunities, are told that their dole money is to be stopped.
    Mr. David Alton: One of the issues that arose last week with regard to compulsory work, when the Secretary of State for Employment said that he was misquoted, was what happens to people who decide to do voluntary work and claim their dole. The sad truth is that at present it is illegal for people to do voluntary work. thereby gaining some elementary training in skills, and at the same time to claim their dole.
    Mr. Speaker: Order. That is a sufficiently long intervention. I appeal to other hon. Members not to interrupt the hon. Gentleman any more, because he has been speaking for 20 minutes and it would be unfair to others who wish to speak.
    Mr. Smith: Thank you, Mr. Speaker. Your point is noted by me. I shall try to draw to a close by making two other
    1116
    brief points. On retraining, I have constantly appealed, and I do so again, that the Government should look at the use of existing facilities. Government money is not needed in this respect. Some of our technical colleges and universities have superb capital equipment, but it stands idle for three or four months a year. I very much hope that the Government will consider the possibility of using some of those educational establishments for retraining purposes.
    Surely there could be some form of all-party approach to youth opportunities in this country. I am certain that more jobs could be created in British industry for young people if the right approach were adopted, and I do not mean financial incentives. I asked my own company this year how many apprentices it was taking on and I was told "Two". I asked it to increase the number to four. It has done so, and no one has said to me "We cannot find work for them to do". What is important is that companies have the will to do it. If we could make some sort of appeal through organisations such as the CBI and chamber of trade, urging companies seriously to examine the number of young people they employ, and whether or not they could employ more, that would help.
    I had intended to speak about the longer-term problem, which is extremely important. Suggestions such that the working week should be reduced and the age of retirement lowered should be examined by the Government and the country in the not-too-distant future. I do not necessarily mean in the next three or four years, but we should plan now for what will happen in 10, 15 or 20 years. We have a labour force that is greater than we need to produce the economic wealth that we need, provided that it produces at full capacity. The day will come when we shall have to look at issues in those terms and talk about employment in terms of the proper use of working hours. I hope that the Government will take the issue of unemployment seriously and not simply deal with it as a problem to which they are resigned, and which is inevitable.
    Mr. Speaker: I realise that all hon. Members would like to speak at length on this subject, but I hope that they will exercise some restraint.
    6.32 pm
    Mr. Gordon Wilson: I shall take your words to heart, Mr. Speaker, and not deliver about 50 per cent. of my speech.
    I approach the debate with a certain bitterness, because of the lack of action by the Government. It was announced this month that unemployment in Scotland had reached a total of 223,000—far more in relative terms than the 2 million who will be unemployed in the United Kingdom as a whole. Solutions to the unemployment problem in Scotland are not being examined. There has been a litany of failure on the part of the Secretary of State and the Shadow spokesman for employment.
    Between 1963 and 1974 manufacturing industry in Scotland lost 5,800 jobs annually. Of European countries, only the Netherlands experienced a similar fall. By 1976 manufacturing industry's share of employment had fallen below 30 per cent. In 1978 the Manpower Services Commission claimed that Scotland should expect high levels of unemployment to continue, and said that it was unwise to project any new improvements in the Scottish economy. So, in the 17 years since 1963, during which time the Labour Party has been in power for 12 years and the Conservatives for five years, the position has been aggravated and it has become clear that regional policy—the attempt to mobilise industry into areas where labour is available—has been unsuccessful. It has failed to match the demands that have been caused by the rundown of traditional industries in many areas. Although it was clear to successive Governments that that rundown was taking place, there were no solutions to the problem. We attempted to deal with the problem with sticking plaster, but the aggregate demand economic policies of successive Governments restricted the opportunities for advancement.
    On 26 June I asked the Minister of State, Treasury, whether the Government would be prepared to consider the use of differential interest rates in areas that suffered from high unemployment. The aim was to try to encourage industrial investment in those areas. The Minister refused to deal with the matter, and refused to accept that high interest rates without differentials were impossible. The
    1118
    Government were prepared to mumble on about inflation, but they were not concerned with the problems of job creation in those areas that were suffering from high unemployment prior to the beginning of this current bout of recession.
    I read the policy statement produced by the Labour Party for its one-day conference—"Peace Jobs and Freedom". There was virtually no reference to Scotland's industrial problems, apart from a brief reference to the Scottish Development Agency. Although considerable good will has been shown towards the Scottish Development Agency over the past four years, it has not produced the answers that would allow the wholesale creation of new jobs. I am particularly worried about the absence of new ideas from the Opposition Front Bench, and especially from the Government since they have certain responsibilities towards the people whom they govern. There was no reference in "Peace Jobs and Freedom" to a Scottish Assembly with economic powers—a proposal that was recently accepted by the Scottish Council of the Labour Party at its spring conference in Scotland.
    Mr. John Home Robertson: I remind the hon. Gentleman that there is more to the Labour Party than the National Executive Committee. I remind him also that the Labour Party remains committed to the setting up of an elected Assembly with economic powers.
    Mr. Wilson: I thought that the Labour Party was a unitary body. The draft manifesto for 1980 has no reference to the setting up of a Scottish Assembly with economic powers, and "Peace Jobs and Freedom" made no mention of it, so I can only assume that the hon. Gentleman was asleep at the time of their preparation.
    The Government cannot get off the hook. Their policies of high interest rates have made the problem worse. The press notice issued by the Manpower Services Commission on 2 June 1980 stated:
    "The current scale of provision for STEP … is clearly inadequate to meet the needs of the long-term adult unemployed, and a good deal more would be done if resources were available … The problems of high unemployment are likely to be with us for some years ahead, and the Commission recognises that many will look to it for a positive response

    1119
    regardless of its policy dilemmas and resource constraints."
    The Government must surely take on board the comments of the Manpower Services Commission—their own agency—and try to alleviate the problem.
    One of the problems in Scotland is that industrial aids and the regional preferential assistance to industry have dropped to their lowest level since 1973–74, and the Supply Estimates show further drops ahead. In the last quarter of 1979 the EEC regional development grants for Scotland were only 7 per cent. of the total for Great Britain, compared with 25 per cent. in the previous quarter. That shows the speed at which the recession is biting in Scotland. It gives little satisfaction to Scotland when squeals are heard from the South of England and other areas that enjoyed relative prosperity over many years.
    In the 35 years since the war the economy in Scotland has not changed its economic shape in the way that we would have wished, and we have been affected by high unemployment. The regional policies that were adopted by previous Governments of different views have not dealt with the overall problem.
    Taking the value of a barrel of oil these days at $32, a recent report showed that the share of that going to the Government and to the companies is about $22 and that the benefit coming to Scotland is only about $3. Very little of that massive resource is being deployed towards the solution of our industrial problems or to help with the regeneration of our economy. I appeal to the Government to set up an oil fund to provide the resources that are required.
    There are certain things that the Government could do immediately. Out of the £2 billion of oil revenue received this year, the Government could follow a policy of public investment. They could follow a policy of helping the construction industry. When money is put into the construction industry there is a fairly quick return in jobs, and the resulting infrastructure can be of help in future years.
    The Government should also invest in the modernisation of the railway system. This is vital in terms of energy and also for economic reasons, yet the rail stock is being allowed to deteriorate.
    1120
    With regard to Scotland in the longer term, it is necessary to build up the petrochemicals industry, plastics and the user industries. In electronics, we are being beaten hollow by the Republic of Ireland. I refer hon. Members to the evidence that has been given to the Select Committee on Scottish Affairs in relation to investment in Scotland.
    The financial package of tax reductions and so forth must be altered quickly by the Government, otherwise we shall lose many of the new industries on which we could build for the future. Indeed, a selective package is urgently required in the engineering industry, which has been one of the major industries in Scotland.
    I am disconsolate and distressed at the way in which employment is being lost in my constituency and in the rest of Scotland. While I sympathise with other hon. Members who are facing very similar problems, I demand of the Government that they take speedy action to deal with the Scottish problem.
    6.42 pm
    Mr. Robert Adley: I am very glad to follow the hon. Member for Dundee, East (Mr Wilson). He will remember that I spent a day with him in his constituency two or three years ago. I had meetings with the Scottish Development Agency in relation to a company in which I am involved, and which I shall mention in a moment.
    The hon. Member mentioned the Scottish Development Agency. One of the things that he will recall from our discussions is that its attitude towards the service industries resulted in a hotel not being built in his constituency that would otherwise have been built there. It would have created over 100 jobs in Dundee, the area with perhaps the highest urban unemployment rate in Scotland. The fact that the SDA came back a year later and said that it thought that it had got things wrong was no consolation, because by then the investment had been placed elsewhere.
    The hon. Member for Rochdale (Mr. Smith) said, I think rightly, that we spend a lot of time in the House talking of unemployment and perhaps not enough in talking about employment. I should like to concentrate briefly on the question

    1121
    of trying to create new employment in this country, because that, surely, is the constructive way to look at the problem.
    I imagine that one needs to have been declared redundant in order fully to appreciate the misery of being out of work. It does not help the unemployed merely to debate the question here, unless we can put forward some positive proposals to create new employment. It is to that aspect that the Government's amendment refers.
    My hon. Friend the Member for Norfolk, North (Mr. Howell) made a speech on a subject on which he has concentrated previously. We have to say that within a free society some people choose not to work. However, I want to dwell on the dilemma that faces Governments in catering for those who do want to work. There are two aspects of this problem. One of them was touched on by my hon. Friend the Member for Warwick and Leamington (Mr. Smith)—the attitude of Governments, the attitude of trade unions, the attitude of management, and the attitude of financial institutions. There is also, as my right hon. Friend the Secretary of State said, the attitude of individuals.
    The other aspect is the recognition of the effects that changes in technology are having on the social habits of people and on their leisure time. I declare an interest here as a marketing director of a hotel company, because I want to relate some of my remarks to the activities in the service sector of industry.
    I refer, first, to the attitude of Governments. I must say to Labour Members that I do not believe that nationalisation is a panacea for all our ills in this country. We have only to look at the state of the British Steel Corporation and British Leyland to see that the one thing that nationalisation has not provided is job security. The sooner Labour Members dump in the waste paper basket large quantities of the draft Labour manifesto for 1980, the better they will be.
    I say to my own Front Bench that I do not find the attitude of total nonintervention for its own sake particularly attractive, either. If there are opportunities available for the Government to take positive initiatives to help
    1122
    industry, for goodness sake let us take them. For what purpose, I ask myself, do we have a Department of Industry? Presumably, it is there to help industry, but in some sections of my party "help" has been turned into a sort of dirty word, as has "assistance". Those are the boo words, just as "self-reliance" and "confidence" are the boo words of Labour Members. These boo words are played up by the media.
    The right hon. and learned Member for Aberavon (Mr. Morris) spoke about U-turns. This is marvellous media stuff, but if we are asking for Governments to be flexible and to respond to circumstances, what on earth does it matter if Governments have slightly to adjust their policies in the light of prevailing circumstances? My party was always known as the party of pragmatic politics, and dogma does not lie easily on its shoulders. The phrase "incomes policy", which is not unrelated to employment, has been elevated to the position of some sort of tablet of stone.
    I do not believe that full employment can be created in a free society by Government action alone, although Labour's draft manifesto suggests that it can, Any-one in this House who has visited, for example, an East European bus factory in one of the countries that claim never to have unemployment, would know the fallacy of such claims—leaving aside the question of personal and individual freedom.
    The Labour draft manifesto has all the solutions that I believe to be unworkable. Like many other hon. Members, I receive weekly a copy of Soviet News, which also claims to have the solutions. This week's issue states:
    "Complex assignments in improving and planning and management of the vast economy are being successfully carried out. New ways and means of stimulating the working people morally and materially are being introduced."
    Mr. Straw: Will the hon. Gentleman give way?
    Mr. Adley: I am trying to stick to the admonition not to give way, but I will give way to the hon. Gentleman on this one occasion.
    Mr. Straw: Carry on.
    Mr. Adley: I am grateful to the hon. Gentleman. Perhaps those words in

    1123
    Soviet News this week, which are vaguely similar to much of what is in the Labour draft manifesto for 1980, would have been heard in the 1930s in Germany—"Ve have vays of making you verk yell".
    In a free society, some of the simplistic solutions that are put forward from the Opposition Benches are not available if we are to retain our freedom. I reject the solutions of Socialism, which I believe to be anathema not only to prosperity but to freedom itself.
    I turn now to the attitude of the trade unions, and I do not want to turn this into any sort of union-bashing speech. My right hon. Friend the Minister of Transport made a statement today about the privatisation of certain sections of the railway and railway-connected industries. We have heard noises from the National Union of Railwaymen and from the Associated Society of Locomotive Engineers and Firemen, but surely we must recognise that many of the subsidiary companies of British Rail have been suffering for years from under-investment. If we believe that a change in the financial relationship between British Rail and some of its subsidiaries will result in more investment and jobs, who will gainsay that, unless it be those who are more concerned to make political speeches than to help people to find jobs?
    Mr. Whitehead: Does the hon. Gentleman agree that there is all the difference in the world between investing in an asset that will provide continuing income and investing in something that will be sold off to the private sector? It is the fact that the latter is envisaged that is making us so angry.
    Mr. Adley: I understand that, as my right hon. Friend the Minister of Transport said, a holding company will be set up in which British Rail will have a substantial shareholding. Surely, from British Rail's point of view, 50 per cent. of a £100 million profit is better than 100 per cent. of a £5 million profit. That is the way that we should look at the matter.
    I suppose that if any one were to suggest the denationalisation of the coal mines there would be a riot on the Opposition Benches, but I read that British Petroleum and Shell are far advanced in developing ways in which to convert coal
    1124
    to oil and that in many countries the oil companies are going into coal mining. I suggest that here is a way of creating more employment in the coal mining industry—perhaps even to the extent of suggesting taking over mines the NCB might close—yet what would be the reaction of the unions if anybody were to make such a suggestion? Are we interested in jobs or in dogma? The hon. Member for Bolsover (Mr. Skinner) was not listening. Perhaps it is as well, or he would be bound to want to intervene.
    Mr. Skinner rose—
    Mr. Adley: I do not propose to give way. The hon. Gentleman has only just come in.
    I should now like to aim some of my criticisms at British management. It is not sensible to suggest that management is perfect and is not responsible for some of the situation in which we find ourselves. In my constituency, Shand Kydd, which is in the wallpaper business, is about to close its factory and put 450 people out of work. Yet it refuses to sell part of its factory to a group which is prepared, willing and able to buy part of the factory and thereby to maintain employment.
    I have a letter from the chairman of the wallcovering division, in which he says:
    "The alternative solution regarding a third party is not really a practical one either in terms of the overall industry problem or even on a parochial basis. If a new venture achieved any scale it would merely compound the existing problem; if it was on the scale you envisage with employment for a mere handful of people it surely has no appeal or respite for the majority of the Shand Kydd work force."
    That "mere handful of people" are human beings who want to work and are being denied the opportunity by what I regard as an unacceptable attitude on the part of Reed International Limited.
    I also have a letter from Sir Alex Jarrett, the chairman, in which he says:
    "Should someone come tip with a realistic offer for the whole Christchurch operation we would talk to them, but in the light of the current circumstances this seems to be extremely unlikely."
    There is a management deliberately preventing somebody from creating work for a small number of people because it does not want to allow any competition for itself.

    1125
    I pass briefly to the role of the financial institutions. My right hon. Friend the Member for Sidcup (Mr. Heath), when he was Prime Minister, in the end almost despaired of the financial institutions playing a role that the Government are entitled to expect them to play in the provision of risk capital. The role of the financial institutions over the MG affair illustrates the wetness, shortsightedness and unadventurous attitude of many of our financial institutions. At the moment they are stuffed full of money, but they will not take the slightest risk of promoting British industrial investment when they are suposed to be providers of risk capital. [Interruption.] I am trying to satisfy Opposition Members by showing that I am evenhanded about these matters.
    I turn now to a matter in which I have declared my interest before and which always interests the hon. Member for Bolsover, namely, my connection with Commonwealth Holiday Inns of Canada. I am delighted that the Evening Standard has suddenly begun to realise the imporance of tourism to London's economy. Why must we wait until we have 1½ million unemployed for people to realise that the service industries in general and tourism in particular are able to create worthwhile jobs for people who want to work? We still have an archaic and pre-Victorian attitude to the service industries.
    Mr. Skinner: Now that we have had the commercial, what is the hon. Gentleman going to say?
    Mr. Adley: If the hon. Gentleman wants me to go on, I shall be happy to do so. Perhaps I may give him some facts. We are building three new hotels in Aberdeen, Portsmouth and Glasgow and creating 400 new jobs. These hotels are creating jobs in the construction industry for more than 400 people. Should be not welcome that? Should he not be glad that in the middle of the city of Glasgow a company is creating work for more than 200 people? I should have thought that even the hon. Member for Bolsover would applaud that.
    I turn now to the point made by my hon. Friend the Member for Warwick and Leamington regarding education. Our education services still have an
    1126
    archaic attitude to the service industries. We suffer from the "dirty hand" syndrome—"If you get your hands dirty doing a job, it is all right; if you do not, it is all wrong".
    Parliament devotes its time in inverse proportion to the success of individual industries. Thus, steel generates endless hours of debate in both Government and Opposition time, whereas tourism merits virtually none. It is a symptom of the British disease of contemplating failure and ignoring success.
    I resist the panacea of State solutions, but we should not be afraid to intervene if intervention will be helpful. The role of the Department of Industry is presumably to help industry. As an example of intervention, I should be happy to see a huge sum—say, £500 million—invested in the electrification of our railways. That would help the infrastructure of British industry. Investing in our transport infrastructure is not the same as pouring money into British Leyland or the British Steel Corporation. It would provide better facilities for industry, better passenger transport, and work for many people in the electrical and engineering industries. The Channel tunnel is another project that should be high on our list of priorities—again because it would make British Rail a great deal more competitive, provide a large number of jobs and be a good investment.
    I believe that the mixed economy is here to stay. Incomes policies and intervention should not be regarded as ghastly phrases.
    Mr. Skinner: Your job has gone again.
    Mr. Adley: The hon. Gentleman is still intervening. [Interruption.] My job has gone again? If I had to rely on preferment for my living, I should have a very small dietary anticipation.
    I do not know what the phrase "incomes policy" means to anybody. It is a press shorthand news headline. When I was a child my mother always told me that to earn a pound and spend 19s. 6d was happiness but that to earn a pound and spend 20s. 6d. was misery. That seems like an incomes policy, yet it is called common sense. If we used a little more common sense and a little less

    1127
    jargon, we would realise that almost all our industrial competitors in Western Europe have been operating an incomes policy for years, some without formally realising it.
    The latest opinion poll tends to indicate that there is far wider acceptance among the general public of the Government's economic policy than the Opposition would have us believe. Their claims that the 1980s will be a repeat of the 1930s are absolute nonsense.
    Everybody knows that for years we have been living on the drug of borrowed money allied to low productivity and an ever-reducing standard of living compared with our industrial competitors. Now we have come face to face with a world recession and the Government have to decide whether to go on with the same old medicine of trying to get more money out of fewer people to maintain some form of standard of living, or of trying some new policies.
    We recognise that those policies will take time to work. It is unrealistic to expect the Government's policies to provide that kind of turn round in attitude and atmosphere in British industry in 12 months when, as my right hon. Friend the Secretary of State for Employment said, we have had 25 or 30 years of gently coasting downhill.
    Everybody knew that new treatment was needed. It will take time to work. I wish the Government luck. I hope that everybody from time to time will stop being afraid of the new medicine and will recognise that if it works we shall have a chance to pull ourselves up by our own bootlaces for the first time in a quarter of a century.
    6.59 pm
    Mr. Edwin Wainwright: I listened to the speech of the hon. Member for Christchurch and Lymington (Mr. Adley) who gave the impression that he knew a good deal about mining. I am afraid that he knows very little about it, although he may know a lot about Holiday Inns and their supporting industries. I was surprised when he said that the educational system did not give boys and girls an opportunity of going into the service industries. Why? Is it that the wages are insufficient to attract them? Is it because of non unionism, and because poor employees
    1128
    cannot get reasonable wages? Is it that our education system does not do what we should like it to do?
    We would like the education system to direct people into jobs that are of great value to the nation. If one were to criticise education, one could argue that we are not creating enough scientists, engineers and skilled people to create the wealth that we all want. On 24 June we had quite an affair in this House. On that day, we were told that unemployment had reached about 1,600,000. Labour Members were very distressed, although I am not sure that Conservative Members felt the same. I have the impression that, whenever the Prime Minister speaks about trade unionism, it is to weaken it. She wants to make it impossible for it to carry out its duties and responsibilities. If that is so, she will do great harm to society.
    I have no doubt that the unemployment figures for July will be even higher. A fear runs through the nation's mind about the results of the Government's policies. The Government are creating more and more unemployment. The Government seem to have no sense of responsibility, because they know that their policies will not provide the necessary wealth.
    It is hard to imagine that any Government would allow the nation's economy to sink to the level that existed at about the time of the last World War. There is a lot of talk about wages. At that time we had to fight not for increases but against reductions in wages. The Government believe that low wages will provide prosperity. We have the lowest wages in Europe and the lowest wages of all the developed countries. Whose fault is it? Conservative Members will probably say that it is the fault of the trade union movement. However, it is often the fault of the Tory Government and of managements, who do not appreciate that wealth and goodwill can be created in the trade union movement, if they appreciate what people are capable of doing.
    The Government do not have the common sense to realise what is happening. We are going through a long dark tunnel and no one can see the light. I cannot see the light. It is very disturbing. How can anybody believe the Government?

    1129
    The hon. Member for Rochdale (Mr. Smith) spoke about small businesses. The Government were going to build up small businesses. They said that they would create jobs. During the early part of the year, 1,500 firms went into liquidation. It is estimated that that figure will reach 6,000 by the end of the year. Small, useful firms cannot afford the high interest rates. They find it difficult to export, because of the excessively high value of the pound. The Government do not give the help and encouragement that small businesses require. Such difficulties are being experienced throughout the country. The number of personal bankruptcies has gone up. It is often said that there will be a turn-round by the end of 1981. There will be no turn-round until the Government make a U-turn. They should give serious thought to that. Are they determined to allow unemployment to rise beyond the 2 million mark, the 2½ million mark, or the 3 million mark? Do they not realise that that is the trend?
    Unemployment can be seen as a failure of the capitalist system, as it is taking place throughout the Western world.
    It is now estimated that about 24 million people are out of work. One-third of the world's population cannot be fed. They are suffering from malnutrition and their standard of living is so low that every member of society should feel ashamed that we cannot create the necessary wealth and understanding. We should ensure that our excellent labour force creates wealth to be shared out not only among ourselves, but among the undeveloped nations. We could do a lot.
    It is terrible that are short of hospital space and beds. We are short of education facilities. We have not got the education system that exists on the Continent. Insufficient numbers of boys and girls go to universities. Insufficient numbers of boys and girls are being trained by industry. We are failing, and the Government must give serious consideration to the problem.
    My constituency is in dire trouble. We are in a deplorable state. On 12 June the unemployment figure was 12.7 per cent. There were two vacancies for youths, but about 400 youths were signing on. The July figures may be better. What hope is there for young people? Who are we
    1130
    to tell young people that we cannot find them jobs unless they do voluntary work? That statement about voluntary work was the most ridiculous statement that has ever been made. I was surprised, because the Secretary of State for Employment—I nearly said unemployment—has a pretty good heart.
    Mr. Skinner: No, they are all the same.
    Mr. Wainwright: I wish that my hon. Friend the Member for Bolsover (Mr. Skinner) would sometimes allow me to say what I want to say. I do not agree with everything that my hon. Friend says, nor do I interrupt him all the time. [Interruption.] I was talking about Tories, not about members of the Labour Party. The statement about voluntary work was made. Everyone knows what it means. It is a principle which would allow the employer to take advantage of very cheap labour.
    I do not want boys and girls—or men and women—to suffer from boredom on the unemployment register. I wonder whether any Conservative Member present has ever suffered from that. I once suffered it for about nine months. It was not a good thing to have to experience. At the time, there were 3 million unemployed in this country. It was almost impossible to get a job outside the mining industry. I was prevented from doing certain things because of my activities, but I shall not pursue that matter now. I want to talk about what has happened in the last two weeks in Dearne Valley.
    At the Hotpoint plant 950 workers have been on a one-day week for a month. As I have said, the unemployment rate locally is 12·7 per cent. Redundancies numbering 477 have been declared. As far as I know, those workers are still on a one-day working week. We have the threat of the Manvers coking plant being closed down. It employes 650 workers and supplies gas to Canning Town Glass. That company employs 600 workers whose jobs could be in jeopardy unless we can get some gas supply to them. I hope that the various Government Departments involved will do something about that. It is essential that Canning Town Glass gets gas from the East Midlands gas board.

    1131
    The Croda works is affected. It is also lacking a supply of gas. All these problems are growing. The Stalrad firm is now ready for short time working, one day a week, one week in two. It is in great danger. This is all because the present Government's policies are not working. There is no desire on the part of the Government to change their attitude and policies.
    I get the impression—and it is foremost in the minds of many people—that the Conservative Government are deliberately attempting to weaken the unions and to create more unemployment so that the unions become weaker. The Government have not yet made any attempt to work with managements and the trade union movement. Every time the Conservatives get into power they bring in legislation which involves criticism of the trade union movement and efforts to cause conflicts and confrontation. That is no solution.
    The solution, of course, is that we must get together and work as a team, making moves towards each other, to make sure that confidence is created. It is no good a Government saying "We shall carry out such policies which have already been proved to be a mistake
    1132
    and a sheer loss to the nation." I hope that the Government will do more thinking about what is happening. For unemployed young people who cannot get a job, whose education has been a lot shorter than it should have been and who have all their time on their hands, for people who are mixing with their friends who are working and who have money whilst they have not, there is always a possibility that they will drift and become the opposite of what society wants them to become, eventually even drifting into crime.
    We ought to realise that that is what is happening to our young people. For goodness sake, let us make certain that every action by this House and the Government is for the benefit of the people and not for the benefit of just a few, especially the few who have so much money in their hands and who have never known what it is to suffer the degradation of unemployment and lack of money. That is what we should be doing.
    I hope that the Government will take note of what has been said from the Opposition Benches today and will change their policies. Let us have the U-turn.
    7.14 pm
    Mr. Nigel Forman: In the interests of brevity, Mr. Deputy Speaker, I shall not follow the remarks of the hon. Member for Dearne Valley (Mr. Wainwright), except to say that all Conservative Members share the sympathy of all hon. Members for those in the hon. Member's constituency and elsewhere who may find themselves unemployed both at present and in the foreseeable future.
    Having said that, and having got off to what I hope is a bipartisan start, I must add that I totally reject the terms of the Opposition's motion. I do not believe for a moment that it is the Government's deliberate intention, or any part of their policy, to create mass unemployment. Equally, I support very strongly the terms of the Government's amendment to the motion, with one vital qualification, to which I hope my right hon. Friend the Secretary of State will pay attention. That is that, although the conquest of inflation is a necessary pre-condition for a solution to the country's economic problems, it is not a sufficient condition, as I hope to show during my speech.
    I think that it has been made clear by my right hon. Friend the Secretary of State that Conservative Members recognise the tragedy of unemployment for the people most affected, especially the young, the unskilled, the long-term unemployed, some ethnic minorities and those in the hardest hit traditional industries. We recognise that it may be that this country will have to go through a vale of tears before emerging from the present period of both "stagflation" and economic decline. But I believe that the Government could do a number of things to ease the pain and suffering of the transition and to improve our competitive chances when we emerge into the light again. It is to those purposes that I direct the bulk of my remarks.
    I begin at the beginning, with the sphere of public education, as several of my hon. Friends have done already, by urging that we should continue to do everything that we can to improve our public education system. This means, as the recent report of the Central Policy Review Staff indicated, more emphasis on basic skills, more emphasis on meeting the vocational aspects and needs of edu
    1134
    cation, and, above all, the boosting of part-time opportunities in education, both at school and subsequently. I simply refer Ministers, in the interests of brevity, to paragraph 85 of the CPRS report, in which it talks about the "national curriculum framework." I hope that Ministers will pay attention to those very sensible recommendations.
    Secondly, we should see that much more is done on training and retraining. At this point, I pay tribute to the Government's expansion of both the youth opportunities programme and the special temporary employment programme. From what my right hon. Friend the Secretary of State said in opening the debate, there is no doubt that the Government's commitment to these programmes is wholehearted. I welcome the fact that he said that. If more public resources are necessary to meet those needs, resources will be found. However, he was absolutely right to stress that we must encourage employers to do a great deal more than they have done thus far via the industrial training boards, because this is in their own long-term enlightened self-interest, quite apart from the interests of those who are tragically unemployed.
    The whole House will have noted the criticisms of the present publicly funded training system in the CPRS report, in paragraphs 13 and 23, and the conclusion, in paragraph 16, which states clearly that the Government must give a more effective steer to training and retraining. I hope that when my right hon. Friend replies he will be able to say something more in that context about the Government's plan for an open tech. I know that my right hon. Friend wanted to say more about that subject at the end of the previous debate on employment. He would have done so if the opportunity had been open to him. I hope that further progress has been made on that score.
    It is worth while for the Government to examine the proposals in chapter 6 of the Anglo-German Foundation report entitled "Youth Unemployment and the Bridge from School to Work". That has already been referred to in a previous debate, on 25 June, by my hon. Friend the Member for Chippenham (Mr. Needham). I pay tribute to him for drawing that report to the attention of the House.

    1135
    It was satisfactory to learn from my hon. Friend that there are now about 23,000 MSC-funded apprenticeships. I hope that the Government will seek to do more as and when resources become available. I hope that they will seek to find ways of encouraging small firms to provide more apprenticeships in the same way as in the Federal Republic of Germany, Austria and Switzerland. I hope that they will even consider the idea in the report of extending MSC training allowances to all in the 16 to 18-year age group who are not in school.
    I am convinced that the latter idea can be put into effect. I am sure that it is not an absurd proposition. The Government spent about £250 million in 1978–79 on that area of provision and on that age group. Money could be redirected towards the vital area of apprenticeships. The House will do well to remember that the young people concerned come from families and have friends who are unlikely to forgive any Goverment at the next election who have shirked their responsibilities in this vital area.
    It is not only in the area of education and training that the Government can play a positive role—a role which I hope will be even more positive in the months ahead. They can do much to encourage innovation, new technology and new working practices in industry. That is especially important because it is the positive way to create employment. That was clearly recognised on page 106 of the 1979 report of the Department of Employment. It was clearly stated:
    "Past empirical work suggests that, in the long run, technological change has been beneficial to both output and employment."
    Further down the page there is the warning on the other side of the same coin—
    "if British industry fails to adapt to new technology at least as fast as its overseas competitors it will lose competitiveness and demand for its products will fall, with serious effects on employment levels."
    Once again employment is very much bound up with the need to react positively to technological change.
    The House and the country should understand that the effect of technology and increased productivity is chiefly to displace employment from one sector to another or from one job to another. That does not necessarily lead to net loss. The
    1136
    evidence of history usually indicates an overall net gain.
    The House and the Government have an educative and lubricant role to play. It is educative in the form of parliamentary and political rhetoric and lubricant in the form of providing the necessary pump-priming public funds for these desirable purposes.
    We shall definitely encounter more success if we do more to encourage the prosperity and growth of small firms. I was encouraged by the example of Job Creation Ltd. I refer to a piece of information that was circulated to all hon. Members that describes what is known as the Glasgow model. Labour Members will know of the model if they know the Glasgow area. The Tollcross Industrial Village, established at Cambuslang, has led to the establishment of over 60 small companies, more than 50 of which are in their first business premises. In all, over 400 new jobs have been produced in 70,000 sq ft of converted space. That is the sort of imaginative initiative that needs to be supported by the Government.
    Mr. Hooley rose—
    Mr. Forman: I want to press on in the interests of time.
    We know that in both the United States and in the Federal Republic of Germany there are better balanced industrial structures that are more employment-creative. Why? In the United States it is partly because the turnover of jobs is faster, greater and more efficient. That will have been one of the lessons learnt by my right hon. Friend the Secretary of State for Industry from his recent visit to California. In the Federal Republic of Germany it is because the number of small firms and their outlook is greater and more positive than in Britain. In addition, there are superior employment practices. I hope that the Department will be able to learn something more from the good example set in the Federal Republic.
    The lesson for Her Majesty's Government is that we need to implement a stronger anti-monopoly and anti-concentration policy to make competition work in both the public and private sectors. That is not merely a matter of hiving off parts of the public sector, as my right hon. Friend the Minister of

    1137
    Transport spoke of doing in his statement this afternoon. It is very much a matter of ensuring that competition works in favour of jobs and in favour of lower prices in the private sector as well.
    I shall not weary the House with quotations, but I refer the Government to pages 10 and 13 of the recent annual report of the Office of Fair Trading—namely, the introduction by Mr. Gordon Borne, in which he advances the argument powerfully.
    In recent years a uniquely vicious combination of historically low profits, high sectoral concentration and unrealistic wage settlements has been a recipe for both inflation and unemployment at the same time. That is what we have experienced under successive Governments. I submit that a vigorous anti-concentration policy would be employment creating. There is no doubt that the obsession of the 1960s with economies of scale was little more than a corporate cop-out in many forms and in many areas. I hope that the Government will take the lead against that approach. We want to reverse that trend. In reversing it we can create genuine lasting jobs.
    The Government can contribute to employment, especially in the private sector, by an intelligent and active public procurement policy. This is an argument that I have urged on my right hon. Friends on a number of occasions recently. I am emboldened so to do because I recall to the House that it was in the "no confidence" debate on 28 February that the Prime Minister said:
    "The Government, however, can and will help to influence these matters"—
    she was referring to industry's problems—
    "by policy on public sector purchasing, and on research and development."—[Official Report, 28 February 1977; Vol. 979, c. 1602.]
    My right hon. Friend is right, and I hope that the Department of Industry and all other parts of Whitehall are moving rapidly and effectively to turn that statement into practical reality.
    There is no doubt that the best example of public procurement—it has already been mentioned by the hon. Member for Sheffield, Heeley (Mr. Hooley)—is that of the Inland Revenue's prospective purchase, which may have been settled this afternoon, of new com
    1138
    puters for the computerisation of the tax system. That is an example of public procurement where we should back our own firms—in this instance, ICL. The French are good at that. They do it successfully. We should take a leaf out of their book. That applies to the use of computers, information technology and, above all, to Civil Service purchasing.
    The Government can make an important contribution by doing more to encourage trade with and investment in developing countries. That is the message of the Brandt report. I speak to those hon. Members who remember the report. I know that these things come and go rather quickly. I remind the House that on page 67 of the report it is stated:
    "It is now acknowledged in the post-1974 period"
    these are facts and not pieces of fiction—
    "when the capital surplus oil exporters placed large funds in the commercial banks, borrowing by the better-off developing countries played a large part in 'recycling' these funds and ensuring that they were turned into export orders for northern manufacturers.
    "Without this, the recession of that period would have been much worse; the effect has been estimated in one study to have been comparable in magnitude to a significant reflation of the West German economy; another study, by the OECD, suggests it was equivalent to 900,000 jobs in the industrialized countries every year during 1973–7."
    That is powerful argument, if arguments were needed, for global interdependence being not just a matter of rhetoric but a matter of fact.
    If the Government want to create lasting new jobs they could do a lot worse than look to the job-creating potential of aid, trade and investment in the developing countries. In that way we can create jobs for our own people in this country—jobs that will last and jobs that will be secure. In this connection, the idea of triangular arrangements with the OPEC countries needs looking at very closely because that is an area in which we can provide the expertise, OPEC can provide the bulk of the money and the developing countries can provide the markets. What could be a more neat, elegant and satisfactory arrangement for all concerned?
    I have referred briefly to six areas in which the Government could and should do more to alleviate unemployment and

    1139
    create employment. It is important for the House to realise that much of the responsibility still rests with management and trade unions. It is now common ground between both sides of the House that realistic wage settlements mean less unemployment than continuing unrealistic wage settlements. This point has been made by the Prime Minister many times, by the Chancellor of the Exchequer on 10 July and by the Bank of England in its recent bulletin, which I will not quote in the interests of time.
    The Government must realise that, while they may understand the need to put the economy on to automatic pilot in the form of a strict monetary control, and while they may understand the necessary implications in terms of lost output and high unemployment, as part of the so-called transitional costs, that understanding is not necessarily or sufficiently shared by all those who matter outside Government circles and outside Whitehall and Westminster. It is very important that in the educative role and in other ways this should be brought home to people.
    My precise point was mentioned in our manifesto. I am not one who believes in the mandate theory of government, but when it suits me I will use it. On this occasion I remind my right hon. and hon. Friends that our manifesto says:
    "There should also be more open and informed discussion of the Government's economic objectives (as happens, for example, in Germany and other countries) so that there is wider understanding of the consequences of unrealistic bargaining and industrial action."
    That is a commitment to what we call the wider economic forum. My right hon. Friend the Secretary of State for Employment said something about this during the last debate on employment, and I hope that the Paymaster General will dot the i's and cross the t's when he winds up the debate tonight. We should set up this body without further delay. The need is urgent because we want to spread the necessary realism about pay—especially in the public sector—and the connection between unreality and rising unemployment. This is the very argument that the Chancellor put so eloquently on 10 July.
    An example of the message which needs to be understood in such a forum was precisely the message put forward by the Prime Minister at Question Time
    1140
    some time ago, when she pointed out that if our unit labour costs were higher and our productivity lower than that of our main competitors we would be exporting jobs rather than goods and services. She underlined the argument by pointing out the sad truth that in the last three years—two of them under a Labour Government—the unit labour costs in this country went up by 25 per cent. In Germany they went up by 6 per cent. and in Japan they were unchanged. This is one of the major contributory factors to our alarming rates of unemployment. This must be understood in local government and throughout the entire public sector.
    I conclude that the Government are broadly on the right course, but I believe that they need to supplement—and I emphasise the word "supplement" their exhausting policies with some of the measures that I have proposed and many of those that I have not been able to mention. Additional measures are necessary economically and vital politically if we are to retain credibility as the party of one nation. Unemployment at the currently projected levels for next year—8 per cent. nationally, 14 per cent. for those in the 16 to 24 age group and perhaps even higher in certain localities—will be personally demoralising, economically wasteful and politically damaging. My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) hopes to make some points about the true costs of unemployment if he catches your eye, Mr. Deputy Speaker.
    I cannot accept the attitude of desiccated calculation which we saw in the latest Economic Progress Report from the Treasury, in which it said blandly:
    "The precise route through which a tight monetary policy brings down the rate of inflation is of secondary importance."
    I have never heard anything quite so desiccated since the late Aneurin Bevan threw the same jibe at the late Hugh Gaitskell. It matters fundamentally what that route is. We recognise the need for monetary control, but it is vital that the Government should realise that we are talking about the real economy. The real economy is the route through which the strategy works.
    Therefore, I hope that some of the measures that I have proposed this evening will he considered favourably.
    Surely the Government must realise the

    1141
    need for a certain flexibility of the PSBR in a recession. This was recognised by the Financial Times in an excellent leader on 10 July which I shall not quote, but to which I refer Ministers and other hon. Members. This was supported by the guru himself, Professor Milton Friedman, in his article in The Observer, when he made the same point about the PSBR. We should be more conscious of the economic cost of unemployment, which is estimated at £7 billion when 1·5 million people are out of work. This sort of thing must be a factor in the Government's calculations.
    Above all, the Government should realise that we can conquer inflation and unemployment and lay the basis for sustained economic recovery only if we make common cause with all the people of this country in a national effort to restore Britain to prosperity and greatness.
    7.37 pm
    Mr. Ron Brown: So often hon. Members are told that they must face reality, and we have heard that phrase repeatedly tonight. Obviously we must face reality, because reality means more than 1·5 million people unemployed, but of course the true figure is much higher—probably nearer 2 million. We are told that next year the official figure will rise to perhaps 2·5 million or 3 million. Whatever the exact figure, it still spells disaster for many working-class and middle-class families, particularly youngsters leaving school. Hundreds of thousands of young people will be looking for a job and they will have no hope whatsoever of finding one.
    It is clear that the problem is particularly serious in certain parts of the country. For example, earlier this year the Manpower Services Commission pointed out in its report that 40 per cent. of the unemployed in Scotland were under 25. and since then the problem has become much greater. These figures are dated, and the crisis has meant that many more youngsters in my area are now looking for jobs.
    I realise that it is not just a Scottish problem. Unlike the Scottish nationalists, I do not claim that Scotland is special in terms of unemployment. Unemployment affects the North of England, Merseyside and many other parts of the country. We must ask ourselves what it
    1142
    the cause of unemployment. That question must be answered by the Government.
    The reason for unemployment is that the capitalist system has failed in the past, and it is failing again with a vengeance. The Government's policies are making things much worse. We have seen a record number of firms going to the wall because they cannot compete or exist. Small companies particularly are hit by the phasing out of regional aid, high interest rates, cuts in public spending and the over-valued pound. The combination of those factors puts tremendous pressure on small companies.
    In my area of Leith a fairly large company, Parsons Peebles, has had to pay off one-quarter of its labour force. Not so long ago that firm won the Queen's Award for Industry because of its production and exporting of heavy electrical equipment. At the other end of the scale the Motherwell Bridge Offshore Company has closed down, despite the so-called North Sea oil bonanza. No oil company was willing to place an order with that firm, proving that the benefits from North Sea oil are not necessarily going to small local companies.
    The Government will claim that unemployment is essentially created by the trade union movement and the working class. We have repeatedly heard tonight that workers ask for too high wages. That is not true. The Secretary of State for Industry was in California not long ago telling companies to come to Britain and reap the benefits of cheap labour. He did not use those words, but that was the implication. How does that square with what has been said tonight? The EEC concedes that wage rates in this country are poor. Our standard of living is lower than even Italy's. The problem lies not with the working people but with the greedy bosses. During the boom they reaped vast profits, but they did not invest in new plant and factories. They chased the fast buck. They exported capital to various parts of the world, investing in dubious projects, which did not help our economy. We can see the results, particularly in Scotland, where 40 per cent. of factories are pre-war, some dating back to before the First World War.
    It is wrong to generalise. We have efficient and up-to-date industries. However, over a long period the lack of investment has meant that German,

    1143
    French and other European countries have taken a larger share of world trade, because they are more efficient. It is therefore ironic that the CBI has announced that there will be a cut in investment in manufacturing industry of not less than 47 per cent. this year.
    The world economic crisis puts economics to the test. The situation will be much worse than in the' thirties, when Britain had the advantage of guaranteed markets in the old empire and the benefits of raw materials from those countries. That has all gone. We are now tied to the Common Market, which is not working for this country, especially for working-class people. The balance of trade is to our disadvantage.
    We can see throughout the country the results of the Government's economic policy. About £5 billion of goods are stockpiled, and about 62 per cent. of industry is working below capacity, which increases unit costs. The only boom is in producing weapons to kill people, and not in saving lives or developing equipment and an environment to help people. The idea is that it is important to invest in armaments. That is illogical, as is the whole capitalist system. It has also been proved to be inefficient.
    Working people want to work, and they want to buy goods, but they are prevented from doing so. The Government must accept responsibility. The Labour movement should take up the cudgels. We should encourage the trade union movement to fight for basic demands, such as a 35-hour week, work-sharing instead of redundancies, a guaranteed wage and more apprenticeships. The achievement of those objectives would not cure all our problems, but it would help in the struggle against unemployment. There must be mass demonstrations and rallies against the Government. We need an early election. The Government have no mandate to destroy living standards.
    The new Labour Government should be pledged to introduce true Socialist policies. Unlike previous Governments, their role should not be to run capitalism. They must challenge the capitalist system and take over the commanding heights of the economy—the banks, land and basic industries. They must have a planned programme, involving workers
    1144
    in the running of their enterprises. Public enterprise should be turned into Socialist enterprise. I do not agree with the way in which nationalised industries are run, having served in them for some of my life. The working class will respond to such policies. Radical policies will win support. Lib-Lab policies will not. The new militants in the professions will rally to that fighting spirit. It is up to the Labour Party to move forward and raise the flag of Socialism. The PLP should not be frightened of the press. It should go forward and fight for Socialist principles.
    7.47 pm
    Mr. Nicholas Scott: I support the amendment, even though I have a reservation. Although it makes clear the ground on which the Government are conducting the battle against inflation, it says nothing about the casualties that are being caused and the need to take remedial action.
    The motion is a scandal. To pretend that the level of unemployment that the country is suffering is simply the result of deliberate Government action is a proposition that only someone like the hon. Member for Edinburgh, Leith (Mr. Brown) would believe in. There is no mention of world recession or of the Labour Party's responsibility for doubling unemployment during its period of office. There is no shame, no understanding and not a single constructive idea on how we should begin to overcome the problem.
    The strongest point coming from the Opposition—perhaps the hon. Member for Dearne Valley (Mr. Wainwright) made it best—was to impress on the Government the social consequences of unemployment. The speeches from the Opposition have been strong on rhetoric but short on constructive ideas. The most notable Back Bench speech came from my hon. Friend the Member for Carshalton (Mr. Forman). It should be compulsory reading for every member of the Cabinet committee dealing with future economic policy. It was a brilliant speech, and he made two specific points which I urge on my right hon. Friends.
    The first is the idea of a wider economic forum. We shall achieve long-term economic progress only if we work

    1145
    towards a wider understanding, and that means a conscious effort to educate a wider public about the realities of economic life. The second point concerned the fundamental importance—if we and the Western world as a whole are to pull out of the present recession—of learning the lessons put forward in the Brandt report. Unless we do that, the road out of recession will be much longer and much more painful, and we shall have to endure levels of unemployment much higher than otherwise.
    I wish to speak about one aspect of unemployment, and that is its effect on young people. My hon. Friend the Member for Warwick and Leamington (Mr. Smith) said that many people over the age of 50 had a very difficult job when they were out of work for a period and had to find employment again. However, I urge upon the House the argument that when young people leave school only to endure a period of unemployment they never get into what might be termed the work habit and therefore are particularly unsuited to fit themselves into the labour market even when the economy begins to grow again. The long-term social and economic damage that we do by allowing a high level of youth unemployment is such that it requires our special attention.
    The young have suffered disproportionately from the unemployment which has afflicted our society. The reason is that there are more and more young people coming on to the job market, and that will continue for another two years. They suffer because our education system to a very large extent has failed a signicant number of them. They come out into the world ill-fitted to compete in a shrinking labour market. They suffer because when the vast majority of employers, both public and private, see the need for a smaller work force, they achieve it by wastage. They stop recruiting and therefore the impact on the young again is disproportionate. They also suffer disproportionately because, as the activity rates among women are raised steadily—and they will eventually reach the levels common in Scandinanvia—those women frequently are in competition with the least skilled of our young people coming on to the labour market. As recession deepens, I believe that there
    1146
    will be a greater emphasis on women going out to work to make up the money in household budgets.
    The consequences of this level of unemployment among young people will be with us for a long time to come. It will not go away. I urge my right hon. Friends to realise that just because one day their policy succeeds and the economy begins to grow again, the problem of unemployment of young people will not disappear. We shall live with it for a long time in the future. It is a social waste and a social disaster of increasing proportions in many parts of the country, and it can lead to political extremism and severe social unrest if it is allowed to continue.
    Mr. Skinner: We have it now.
    Mr. Scott: I pay tribute to my right hon. Friend the Secretary of State for the way in which he has managed, with the constraints imposed on him by the Treasury, to protect the special employment measures and to expand the youth opportunities programme. He deserves a great deal of credit for that, but more will be needed, and I hope that the Opposition and the trade union movement outside do not instantly respond negatively to every constructive idea that is put forward. This is a time for all sorts of ideas to be investigated to try to meet the needs of this particularly vulnerable group in our society.
    There are many reasons why young people have suffered disproportionately and, without elaborating on them, there are many reasons why the problem is likely to be with us for some time to come. We are, of course, talking about a minority of young people. Most young people will get jobs. If they do not, they will get further or higher education, training opportunities or will be able to take advantage of the increased opportunities in the Armed Forces and the police which will flow from the commitments of the Government to additional expenditure in those directions. Incidentally, I hope that the Armed Forces can do more to attract people not only for commissions but, more especially, to fill the vacancies for technical NCOs that they will need increasingly.
    Mr. Albert Roberts: I left school in 1921. I signed the unemployment register as soon as I was 16,

    1147
    and I remained on it until the Second World War broke out. Is the hon. Gentleman suggesting that the only cure for unemployment is to have another world war? Does the hon. Gentleman agree with the Secretary of State that employment does very well under a Conservative Government? From 1921 to 1939, virtually we had a Conservative Government all the time. Despite all the experts, including economists, no answer was found to the tremendous problem of unemployment, which reached a level of 3 million during the 1930s.
    Mr. Scott: I make two points in reply to the hon. Member for Normanton (Mr. Roberts). First, every Labour Government since the war have left office with unemployment at a level higher than they inherited. Secondly, I look upon the Armed Forces as a guarantee of our future peace and security. They will need technically qualified young men and women to maintain the level of efficiency required. I believe that our Armed Forces could do more to encourage young people, many of whom lack motivation in our education service. We do it for those who are potential officers. We do not do it nearly to the extent that we could for people who might become technical NCOs.
    For the balance of our young people who at the moment are not able to take advantage of the opportunities that I have just outlined, is not it possible to seek to offer some sort of guarantee between the time that they leave school until they reach, say, the age of 20? It was said earlier by my hon. Friend the Member for Norfolk, North (Mr. Howell) that there was plenty of work to be done. I agree with him. There are plenty of unfilled needs in our society that able-bodied young people ought to be able to fulfil. It is not just a matter of voluntary service, and I outline three or four ideas which could fit into a package of this kind.
    In Britain, 75 per cent. of our homes lack basic insulation. If we embarked on an insulation drive, many trained people in the construction industry would have a role to play, but a great many young people would also be involved in it, at a time when we are energy-rich, to prepare us for the time when once again we are short of energy and need to be an energy-efficient country.
    1148
    There are thousands of acres of derelict land which are set fair to be areas of urban blight not just for a year or two but for tens of years ahead unless action is taken to put them into reasonable condition. They are dragging down the localities in which they are situated. There are ideas about material recycling to save imports, and they have all been talked about before.
    I believe that for a section of our young people we shall have to move to a system of recruitment subsidies and to cadetships in industrial and commercial companies and perhaps, too, a form of cadetship in community service, all of which brings me back to the idea floated in the Select Committee last week by my right hon. Friend. It has considerable merit.
    A growth of activity by small firms and further cuts in taxation can all help the general growth of our economy. However, we are fighting against a world recession in the immediate future, and the special items which I mentioned earlier will prolong our problems with youth unemployment. I am terrified that in putting up with the present levels of unemployment among young people, we are allowing the problem to grow and we are sowing the dragon's teeth for social unrest and political extremism in the future. I urge my right hon. and hon. Friends to take urgent action to resolve the problem.
    8 pm
    Mr. Roy Hughes: It was the 1945 Labour Government who established the principle of full employment in this country. There was a change of policy in the mid-1960s, because of the learned articles that we used to read then about the need for some slack in the economy. We eventually got that slack, but the economy did not improve, and neither did the relative competitive position of British industry. In economic terms, unemployment is like a tap that has been left running. It is a waste of resources—human resources, which are perhaps the most precious of all.
    The problem of unemployment in this country is not new. There has been a steady decline in employment over the years. That can be attributed to a number of factors. Over the years there has been a lack of investment in our manufacturing industry. At the end of the

    1149
    Second World War there was quite a boom for a number of years. A great deal of profit was made, but much of it was not reinvested in industry.
    Another important factor that I saw at first hand was what I would call Government coercion in the motor car industry. I was in Coventry at the time, and I remember how the industry was used as an economic regulator. Eventually that interference had a highly detrimental effect on industrial relations in the industry. The fact that successive Governments have allowed our car industry to deteriorate as it has is a terrible indictment of them. The industry is vital. The ripple effect of what happens to it has a tremendous impact in many other areas of industry throughout the country.
    I agree with most speakers from the Opposition Benches who have pointed out that the whole problem was greatly exacerbated by the election of the Conservative Government in May last year. Their dogmatic approach to economic problems is almost too stupid to believe. It was a fateful decision that the people of Britain took. Some of us said at the time that we should be taken back to the 1930s, and we have not been too far wrong.
    Another basic factor is the energy crisis, which has been coupled with the decision of the Arab countries to use oil as an economic weapon. That is partly to do with the issue of justice for the Palestinians. The West's failure to recognise the issue has caused us many problems. I want to be fair, and to praise the efforts of Lord Carrington, the Foreign and Commonwealth Secretary, who is at least trying to bring some reality back into a situation which has proved so detrimental to this country and its economy.
    The most important point of all for me is the momentous decision to join the Common Market, which has been an utter disaster for this country. It was certainly the worst decision taken by any Government since the end of the Second World War. If we were outside the Common Market, with our North Sea oil, we should be in a vastly different position. The decline in our manufacturing industry has been most marked since we joined. There has been a tremendous turnabout
    1150
    in our balance of trade with the other countries of Western Europe.
    There is also the issue of our food supplies. Before entering the Common Market we enjoyed the benefits of cheap food. The people represented by the Labour Party certainly benefited tremendously from that. From an economic and competitive point of view, that cheap food had the effect of keeping down the level of wages. It helped make our products more competitive. I saw a vivid example when I was attending a conference in Paris about seven years ago. I looked in a grocer's shop window just off a main street and saw cheese at £1 a pound. The same amount could then have been bought in this country for a quarter of that price. Harmonisation is the name of the game.
    Common Market foodstuff prices are well above world prices. Now, with our strong pound as a result of North Sea oil, we could again buy our food cheaply in the markets of the world. Before we entered the Common Market we still had small tariff barriers. Those two factors—cheap food and tariff barriers—meant that our products were still competitive in world markets.
    I shall be told, understandably, that we had a referendum on the issue. In my view it was a fraudulent vote, bought by the moneybags of the multinational com panies. The people of Britain were bombarded incessantly with propaganda about the benefits that would result from our membership. The opposite is clearly true.
    I recall an incident during the recent steel strike, when I went to meet the pickets outside the Llanwern steel works in Newport. One young lad on the official picket told me "I voted for us to join the Common Market, but if we could come out you could cut off my right hand tomorrow." I think that his analysis was right. Membership has unquestionably done immense harm to this country. It does not suit our trading pattern. It is noticeable that our trade with the rest of the world outside the Common Market has held up very well in recent years. The organisation called the Common Market Safeguards Committee recently produced a pamphlet saying of our membership "Enough is enough". I heartily endorse that sentiment. The sooner we come out the better.

    1151
    What we need are import controls. Proposals have long been put forward by a distinguished group of Cambridge economists. I believe that their analysis is correct. It is not for any contraction of trade but to bring about an expansion of British trade that important controls are needed. However, such a policy would be incompatible with our membership of the Common Market. It is no good people blaming the Japanese for our problems. What good would it be to this country to stop the 10 per cent. of Japanese cars coming in? It would merely be an invitation to bring in more Volkswagens, Fiats, Renaults, and so on.
    The steel industry is taking a tremendous battering at present. That has a great deal to do with membership of the Common Market. We had a large and viable steel industry before entry. Now all that we are getting is closures and many thousands of redundancies, yet the remarkable fact is that the long-term demand for steel will be tremendous. As Sir Monty Finniston pointed out recently, the demand for steel will be greater than has ever been known.
    This Government detest public expenditure like the plague, but we need it as never before to meet our social and community needs and to create jobs. We have heard a plea for help for the construction industry, and I endorse it. When our people are crying out for houses, when we need more hospitals and better schools, those who can produce them are in the dole queues. But above all, we need an end to this monetarist madness, which is only putting the British economy firmly on the rocks.
    8.10 pm
    Mr. Raymond Whitney: I am happy to agree with the hon. Member for Newport (Mr. Hughes) on one thing at least, namely, that the problem of unemployment did not begin in May last year. It is a deep-seated problem. I do not share his view that our membership of the Common Market has contributed to that problem. He says that the nation was hoodwinked by multinational companies over the referendum, but he is being unfair to himself and to his right hon. and hon. Friends. That prospect may not deter him, but he should recall that the renegotiation was conducted by his own leaders, above all his present leader, as Foreign Secretary.
    1152
    It was a Labour Government who commended it to the British people—and the British people accepted it.
    Mr. Roy Hughes: Certain Labour Ministers recommended it to the British people, but the Labour Party conference, specially convened for the purpose, turned it down by a big majority.
    Mr. Whitney: I am grateful. I know that the ways of the Labour Party are unique among political institutions in this country and in the world, and that the doctrine of Cabinet responsibility does not sit easily on most Labour Members or even on leaders of the party.
    Despite what Labour Members have said, I hope that no one doubts that we on the Conservative Benches sincerely share the concern about the significance of unemployment for everyone—not least young people and ethnic minorities. The thing to do is not to come to these debates, which we are having by courtesy of the Opposition, simply to bewail the problem. We know the problem: we must seek solutions.
    Time and again I have looked for the solutions of the official Opposition and have found none. The suggestions of the right hon. Member for Chesterfield (Mr. Varley) today added up only to an increase in the public sector borrowing requirement. He knows as well as anyone that such an increase would lead to an increase in the MLR and other interest rates. He said that the pressures on industry of a high MLR are intense. He must square that circle—but he cannot do so. Nor can any Labour Member; nor have they tried. Therefore, we must consider the only serious alternative to the policies followed by my right hon. Friends.
    Those policies, mirabile dictu, are those put forward by the right hon. Member for Bristol, South-East (Mr. Benn) and his hon. Friends. I was privileged to be in the Chamber last Thursday for the unique and distinctive speech of the right hon. Gentleman. He described, first, the iniquities that the terrible International Monetary Fund had inflicted on the Government of which he was a member. He did not resign in protest at those policies, and, as the whole world knows, such success as that Labour Government achieved was attained by following the advice of the IMF.

    1153
    The right hon. Gentleman was also very excited because he had found a new prophet—a new text, a new Holy Grail, a new solution for our problems that was well to the Left of the platform of his party at the last general election. That text was the work of a previous Conservative Member for Stockton, Mr. Harold Macmillan, in his book "The Middle Way", written 42 years ago. The right hon. Member for Bristol, South-East thought that that was a magnificent solution for the problems of 1980. Of course it was not, but it is a reflection of the out-of-date quality of the right hon. Gentleman's thinking that he should think so.
    That attitude is also shown in the draft manifesto, which was launched on an unsuspecting world by the right hon. Gentleman and his hon. Friends last Thursday—obviously a red letter day for him. What are the recipes in this, the only serious alternative that we have been offered? They are an increase in public spending and public ownership, nationalisation of the insurance companies and banks and a 35-hour week.
    That all adds up to an unworkable policy that has not solved the problems wherever it has been tried. The right hon. Gentleman and his hon. Friends know that they are in trouble. They know that it is difficult to state a case. He tries hard to encourage such diverse categories as animal welfare groups, Socialists of any persuasion, of whatever party—"Come and join us", he says—the ethnic minorities, the gays and the ecologists, knowing that the real people of this country, in whom I include all those categories, know that the solutions do not exist.
    The people know that the cumulative effect of mistaken policies is that there are no easy options. They believe the analysis propounded in earlier years by the present Leader of the Opposition and by my right hon. Friend the Secretary of State for Industry—that for too long, to quote the Leader of the Opposition, we have paid ourselves more than the value of the goods that we have produced. That is the problem of the un-competitiveness of British industry.
    I offer a word of advice to those of my hon. Friends who took part in a conference 10 days or so ago and who
    1154
    suggested that, because of a tightness in the British economic scene, the present circumstances and the pressure of unemployment would not lead to a lessening of wage demands. In the private sector at least that is wrong, because people do understand what is happening. They do not understand about the PSBR or the MLR, or any of these other sets of initials. What they do understand when they go to work in the morning is that the warehouses of their factories are stuffed with the goods that they have produced. They understand that. They know that that represents a threat to their jobs. They want to keep their jobs, and if the choice is between a 20 per cent. or 30 per cent. wage increase or keeping their jobs they will wish to keep their jobs.
    Therefore, one task facing British industry is to take the right decisions—I do not say take advantage of the situation. One of those decisions must, wherever possible, be to do away with national wage bargaining. Most people on both sides of industry know very well what a devastating and inflationary effect such bargaining has had. Inflation and the weakness of our competitiveness are the real killers of jobs.
    The Government must also understand what is happening. They must understand that now is the chance to get the industrial scene right to the extent that they have a role to play in that context. We all understand that that is a limited role, but it is an essential one. It will be no good in one or two years' time seeking to take extra action when inflation is down to low single figures. If we do that we shall be in danger of doing what we have done so often over the last 20 years, which is to go to the abyss, stare into it and then move away to let our belts out. We must make British industry competitive within the next 12 months. The workers in British industry know that.
    To help British industry, its workers and its management, the role of the Government must be to lighten the load of wages in the public sector. I particularly welcome the step announced by the Prime Minister 10 days ago on the pay of hon. Members and of the so-called top people. That is a beginning, and I hope that when we speak of 9·6 per cent.—never mind whether it is a pay policy

    1155
    —that will be the level at which we stay for public sector pay. Let those who write for The Sunday Times, and Mr. Emery, who writes for The Times, not get too excited about this being a U-turn or an incomes policy. Of course an employer must have a policy on income. I urge the Government to understand the importance of getting public sector pay within that range.
    I wish to encourage those Opposition Members who understand the folly of the proposals in this little red book, the "Draft Labour Manifesto 1980", to stop playing understandable party politics and urge the leaders of the trade union movement to recognise that the sooner they follow their own members and act in the light of the realities and pressures of the situation, the less painful and the shorter will be the period of pain that is inevitable if we are to get the country right.
    I end by quoting from a letter that I received on Saturday morning from a friend of mine who is a working man. He works for a large engineering company in a northern industrial town and I believe he made an important point which should be taken note of by the Opposition. He wrote:
    "You will he pleased to know that the majority of men at our factory agree with Maggie's policies, even though it hurts a little, because there appears to be a little more sanity in the place, with the unions losing some of their aristocratic bearing."
    8.23 pm
    Mr. Peter Hardy: Perhaps the hon. Member for Wycombe (Mr. Whitney) will forgive me if I do not follow him except to say that it might have been desirable if one of the speeches from Conservative Back Benchers had come from someone representing a constituency north of the Trent. It is that area of the country which is experiencing the results of Government policies and the situation is worse than anything experienced in the northern counties of England since the ravages of the bubonic plague.
    I wish to speak—I hope without too much anger—about South Yorkshire. I am extremely worried. The hon. Member for Chelsea (Mr. Scott) touched upon some of the reasons for my anxiety, as did my hon. Friend the Member for Dearne Valley (Mr. Wainwright). Youth
    1156
    unemployment in South Yorkshire had risen by 50 per cent. within 12 months of this Government taking office and at the same time the number of vacancies for young people had more than halved. That situation is now a great deal worse because 19,000 school leavers have entered the labour market.
    I am anxious about that because it seems that the Government have no idea, and cannot begin to understand, what the social implications of that may be. I was delighted to hear last week that Ministers in the Department of Employment wished to see youngsters active, engaged and occupied. So do I. There are quite a number of people like myself in South Yorkshire who have, in a voluntary capacity, been seeking to serve the interests of our young people. I am president of the Youth Association of South Yorkshire and I have become particularly familiar with the problem.
    Unfortunately, we face growing difficulty. I do not believe that the words of the Secretary of State will be particularly helpful unless he can provide some money and can encourage our local authorities to maintain their splendid commitment. A few days ago I saw people from the British Trust for Conservation Volunteers. The House may be aware that I am deeply involved in, and interested in, conservation and the environment. I would point out to the right hon. Gentleman that if he wishes to help he will have to ensure that the Department of the Environment also wishes to do so. In 1979–80 that organisation received £26,900 in grant. In the current year the grant has been reduced to £25,000. In 1981–82 the grant will be £15,000 and the year after that there will be nothing.
    The same thing applies, to some extent, to community industry. The right hon. Gentleman referred to that. I know splendid people engaged in community industry in my constituency and the scheme has done superbly well. However, it is now to operate at a lower level than in the 1970s. More than that, my local authority, which has been committing itself and which has done extremely well in supporting employment of various kinds—particularly the employment of young people—has now been told, as has every local authority in Britain, that jobs must go and that money must be saved. Not a thought has been given to the problem of the Department

    1157
    of Employment so long as the Secretary of State for the Environment can shovel the problem of expenditure away from his own Department in Marsham Street. It is no good the Secretary of State for Employment seeking to be helpful unless he can guarantee that public spending will be increased. If it does not increase, the consequences will be dreadful.
    I shall be speaking tomorrow at a conference in Westminster Cathedral. There is to be a discussion of the Government's White Paper in response to the report of the Expenditure Committee on the treatment of offenders. I believe that the actions of the Government in that area illustrate their lack of sensitivity and awareness.
    First, the Government do not intend to increase the number of prison places and, secondly, they do not intend to develop alternatives rapidly. The right hon. Gentleman may be aware—as clearly some of his Back Bench colleagues are, albeit they come from such places as Bognor Regis, Carshalton, Chelsea and other areas of the South which can hardly be described as traditional industrial bastions—that we may well have 500,000 young people unemployed in 1981. If that happens there will be serious social consequences.
    A few weeks ago I took the chair at a syposium of the sixth formers of the Rotherham metropolitan area. I was horrified. I know my area and the young people in it. The young people there were not to be immediately unemployed, but the fear, doubt and cynicism which they expressed was horrific in terms of the consequences and relevance to the nation's interests. Young people who are about to enter university and college and achieve superb results should not be feeling that anxiety and cynicism. If the Government are not prepared to ensure that money is spent to dispel such feelings the country will pay a bitter price.
    I do not want that price to be paid in South Yorkshire. We did not vote for that. I want local authorities to continue to spend money to provide decency for our people. I do not want the Secretary of State for the Environment to tell our local councils that jobs must go when unemployment is so high in my constituency. I do not want to see that compounded and matched by an increase in crime, disorder and vandalism.
    1158
    Some Government Members seem to understand that there is a problem. However, they did not question the Secretary of State on one matter. The right hon. Gentleman might have made a mistake, but he said that now 1·6 million people are unemployed at the start of a recession. The Chancellor of the Exchequer and other members of the Cabinet have been telling the country that we shall not see more than 1·8 million people unemployed. If we are at the start of a recession and if the present policies continue the right hon. Gentleman, with the expertise available in his Department, must accept that unemployment will be a great deal higher than is suggested. I hope that that will be cleared up.
    Every weekend when my hon. Friend the Member for Dearne Valley and I go home to South Yorkshire and look at the South Yorkshire Times, the Rotherham Advertiser, the Worksop Guardian and other media serving our community, we read appalling news. I am at the point where I do not want to open a local newspaper. I have not yet arranged my recess programme of visits to industrial establishments because I do not know whether a factory to which I write today will be open in September.
    Many factories in my constituency which have never given me cause for a moment's anxiety are now causing grave anxiety. I have arranged to visit one on 8 September. It has a record of good industry, good management, good plant and good trade unions. It has never before given cause for the slightest concern. Yet, in the last six or seven months between 60 and 70 per cent. of the labour force has gone. Heaven knows how long the remainder will find work there.
    It is time for an injection of urgency. It is no good the Secretary of State and his colleagues saying that public expenditure counts for all. If we are to retain decency among our young people we must provide materially for them. That means that organisations such as that of which I am president, community industry, and local authorities of good standing, such as my own, should have some capacity to make the contribution which the Government seek to prevent them making.

    1159
    I do not believe in rhetoric but I said earlier that the northern counties of England are facing a worse problem as a result of the present Government than they have faced throughout their history. It is becoming worse than the ravages of bubonic plague. The consequences of the Government's policies will give us cause to regret that the right hon. Lady and her colleagues wished public expenditure to become such a dirty word.
    8.34 pm
    Mr. Bill Walker: My constituency is a long way from the Thames—and even further from the Tweed in some respects. We are not unfamiliar with the ravages of unemployment. It is not new in Scotland. For as long as I have lived, unemployment has been that which we have feared most.
    If Governments alone are responsible for the level of unemployment, we are debating the result of about 12 years of Socialist. Government and about five years of Conservative Government. However, I do not accept that Governments alone are responsible for the level of unemployment. In the last 17 years there has been an increase in the number of people of working age. If my calculations are correct, more people are in work today than in 1964.
    I remind Opposition Members that the trade unions, during the winter of discontent, brought the Labour Government down in order to return to free collective bargaining. As I understand it from my days of activity in the trade unions, free collective bargaining and employment protection policies are not bedfellows—the two do not reside together—because wage demands which exceed what a firm or employer can pay will, in a situation of free collective bargaining, inevitably lead to a reduction in jobs. In fact, if we examine the near 20 per cent. wages increase which was demanded, and in many areas obtained, during the last pay round, I suggest that that not only helped to stoke inflation but contributed to a massive loss of jobs. That is what free collective bargaining does. It is wise that we should keep saying that to those who keep calling for it, because perhaps it is not quite what they want.
    The problem facing us in Scotland is the cumulative effect of many years of well-intentioned, ineffective policies by
    1160
    many successive Governments. Demand management and intervention on a massive scale, as have been practised, have failed Scotland. We must face up to that. Unemployment cannot be cured by job protection policies. More than anywhere else, my home city of Dundee is an example of that, where well-intentioned, job protection policies have resulted in a greater loss of jobs. Unemployment can be cured only by the creation of new permanent jobs, not by palliatives which are designed to obscure realities and which provide only temporary employment.
    When I left school it was considered to be wise and sensible to accept a job as a message boy or to take an apprenticeship with firms which had a record of providing good training. Since then, we have been exposed to the trendy theories which suggest that it is demeaning to accept such jobs. Indeed, much of the scarcity of skilled manpower in recent times has been brought about by the attitude which was developed by young people after exposure to these trendy theories, an attitude which for many years made many of them reject jobs which they had been conditioned to believe were demeaning, or demand wages when under training which reduced the number of training jobs that were to be made available.
    Today, sadly, we are short of trained, skilled people in many areas, at a time when we have so many people out of work. That can only be described as sad and depressing. Yet previously the message boy or apprentice was encouraged to start at the bottom. Although they may not have a field marshal's baton in their message or tool bag, they may have had a manager's or managing director's white collar. Fortunately for me, I had a managing director's white collar in my message bag.
    I therefore offer some constructive proposals to my right hon. Friend—first, to create lasting jobs for the young people of today and, secondly, to provide the skilled people which the nation and industry will require when the world trading slump ends, as it will. To do so, we must study the needs of industry, both present and potential. We must also look at the needs of individuals and see how in the real world we can best use the nation's resources in terms of people, finance,

    1161
    training facilities and the opportunities which can be made available.
    In my view, the training provided by skillcentres can be justified only if the trainees can obtain real jobs at the end of their training. That is important, because I know of a lot of people in Scotland who have been to skillcentres and who still cannot get jobs. We must avoid the dead hand of Government producing trainees whose training is not marketable. That can and does happen. Instead, we should accept the limitations of the real world and look to firms, in conjunction with the industrial training boards, to provide the bulk of the training and to make use of training facilities.
    We must surely acknowledge that training by Ferranti, ICI, Rolls-Royce, John Brown, the National Coal Board and Morganite, to name but a few, is a marketable training. Their trainees have a marketable skill that is acceptable to both employers and trade unions. Perhaps we should ask trade unions to review the period required for skilled training in order to arrive at standards that are acceptable to them in the light of today's needs. We may also wish to argue for a basic training module that would prepare a trainee for a variety of skilled training. We may call it youth opportunities training or whatever, but unless we have the agreement of the trade unions it is a nonstarter. We must live in the world as it is.
    We face a problem with some of the unions, and it would be wrong not to acknowledge it. Sadly, it is a fact of British life that in some instances trade unions will not acknowledge or recognise training skills that have been obtained outside what the unions consider to be acceptable avenues or periods of training. In present circumstances, unions may wish to review some of their attitudes to trainees, who may have obtained their training outside the age parameters of the accepted training schemes, or outside recognised apprenticeship schemes. However, if the unions are not prepared to carry out this review, and if they are unwilling to change, the Government should not be deterred. They would be wise to accept the limitations of what the unions will accept, and introduce schemes to encourage employers to recruit and train young people in a way that is acceptable and marketable.
    1162
    In addition to the Manpower Services Commission's apprenticeship schemes the Government should look at scholarships for apprenticeship and degree courses in areas where a shortage of skills is envisaged. That is important. The firms in question would select the individuals for the training opportunities, and the Government could then pay either all the wages or a proportion of the wages for up to three years for an apprentice and up to four years for a university graduate. At the end of the university graduate's training he would have to be guaranteed a job by the sponsoring firm. That would encourage some of our better people to go to areas where there is a shortage.
    The training and the standards could be monitored by the industrial training boards, with no extra cost to Government funds. That is important. We must make use of the facilities that exist. The training boards have been in existence for 16 years. Trade unions, employers and educationists have worked together successfully, and we should acknowledge and encourage them. That 16 years of experience should not be discarded lightly.
    Hon. Members are aware of the splendid example in Scotland of the offshore drilling centre at Montrose, where Government funds helped to establish the centre. But what is more important is that a fire fighting school has also been developed at that centre. It was established and paid for entirely by the petroleum industry, with no Government funds. Both centres are now fully self-financing. That clearly demonstrates what can be achieved when employers, employees and trade unionists work together through a training board. It shows that the petroleum industry is supporting its training board.
    In Scotland we are looking for lasting jobs. We do not want palliatives. We want jobs that make use of firms that are in existence, because the majority of our firms are still in existence. We should remember that, and we must encourage them to remain in existence. This is an effective and cost-effective way of doing so.
    8.44 pm
    Mr. William Hamilton: The general complaint coming from the Labour benches in this debate and in

    1163
    preceding debates on these matters is that whatever policy the Government have pursued in relation to the problems that we are facing—and no one denies that we are facing very serious problems—every one of them has got worse. As the problems have got worse, as a result of the Government's pursuing their rigid policies, so they have dug in their heels. Whatever the evidence produced by hon. Members in all parts of the House, the Government have insisted on continuing with these policies. The Government's policies—whether on inflation, unemployment, productivity or the standard of living—are all demonstrably failing, yet the Government are consistent in their determination to pursue them.
    When we look at the other side of the coin—the social services provision, housing, health and education—we find that the old, the young, the sick and the unemployed have all been clobbered by the Government. The only exceptions are people who happen to be earning more than £20,000 a year.
    That sense of division in the country has been epitomised in these debates. Reference has been made to the fact that, by and large, the Labour Members who are complaining, with understandable indignation, about the problems of deprivation and unemployment come from the North, and that for the relatively prosperous South it is more or less an academic exercise that we are engaged in today.
    Mr. David Stoddart rose—
    Mr. Hamilton: I know that there are exceptions to the rule, and my hon. Friend may be wishing to mention Swindon, but in general terms it is correct to refer to two nations. One is mainly north of the Wash and the other is south of the Wash. The Prime Minister is loathed in Scotland. The people there do not trust a word that she says.
    Mr. Skinner: Detested.
    Mr. Hamilton: We remember the Prime Minister at the time of the general election with her shopping basket, seeking to blame the Labour Government for all the price increases. We remember the Minister for Consumer Affairs doing the same with her shopping basket. We remember the Saatchi and Saatchi unemployment queues, the inference
    1164
    being that the Labour Government were responsible for those things. All those problems have got a damned sight worse, and there is no prospect that they will get better.
    In my constituency, in the area of Kirkcaldy district council, in less than 18 months, to the end of June this year, we had lost 3,300 jobs. I know that many of my hon. Friends have worse stories to tell. It would be silly to pretend that there have not been some new jobs, but the net loss over that period is about 2,000. In the last year alone, from June to June, there has been a one-third increase in the number of unemployed.
    In June 1979 there were nine men looking for every vacancy. This year, 23 men are looking for every vacancy. The figures for youth unemployment are very much worse than that. The latest figures show that we have 1,399 unemployed youngsters, plus 509 employed on a temporary basis through the special schemes. For those 1,900 youngsters there are 14 job vacancies—in other words, there are 136 youngsters chasing each job available.
    Mr. Skinner: That is what the Government want.
    Mr. Hamilton: That is the Government's deliberate policy. There is no incomes policy. The discipline is not statutory; it is not based on any kind of incomes policy. The discipline is that of the dole queue. The Government believe that, if they can frighten men into not asking for high wages, that will solve the problem. That is the Government's philosophy.
    Only last Friday youngsters were responding to advertisements by the Kirkcaldy district council for 10 apprenticeships for electricians, plumbers, joiners and plasterers—the very people about whom the Secretary of State is saying "You must not employ them; you must cut them out and reduce your work force." I tell the Minister that Kirkcaldy has no intention of doing that, and he can do his damnedest. There were 287 applications for those 10 apprenticeships. Yet one hon. Member this afternoon said that there were many folk on the dole because they did not want jobs. It is a damned lie. I do not believe that the vast majority of the unemployed do not want to work. There is no evidence to suggest that at all.

    1165
    My hon. Friend the Member for Rother Valley (Mr. Hardy) referred to his local newspaper. I am terrified to pick up the Glenrothes Gazette these days because every page contains a paragraph about a closure or an imminent closure. On 3 July it summarised the tale of misery still unfolding, and there is no sign of any improvement. The Buxted poultry plant, owned by the giant Imperial Foods Group, is to close on 3 October. Some 330 jobs will be lost there, plus the 46 dispensed with earlier in the year. That is nearly 400 jobs in that industry alone.
    Tullis Russell, an extremely efficient paper mill, has announced 50 redundancies. It has invested large sums in modernising its equipment. There are 20 redundancies at the Fettykil paper mills, too.
    The Dickinson paper mill, another efficient mill, has revealed that a £3½ million investment in new technology will mean 90 workers being paid off in Mark-inch. It is some consolation to know that the industry is efficient, but it throws those workers on the dole queue. There is not much sense in that kind of exercise.
    Beckman Instruments, an American-based firm, has announced 80 redundancies with more to come.
    Mr. Leslie Spriggs: The House must be interested in the figures given by my hon. Friend regarding his constituency, but is he aware that for three vacancies advertised in St. Helens on Merseyside 2,000 youngsters turned up and 1,997 were turned away?
    Mr. Hamilton: I am glad that I gave my hon. Friend the opportunity to make that point. We could debate these matters every day between now and the recess and not finish the story. I am sure that every hon. Member has a similar story to tell. We get no pleasure from looking at Conservative Members, because they and members of the Cabinet must be wondering whether these solutions will kill the beast before we get a solution.
    I am reminded of the story of the Tory—it would be a Tory—scrap dealer with his horse and cart. He had to cut his
    1166
    expenses, so he decided not to feed his horse. When it died, he said "The damned thing had just got used to it when it fell dead."
    We have the same story with the Government. The animal will be killed before we get within measurable distance of the so-called solution to the problem.
    The changes in regional policy have worsened the prospects in Levenmouth—about the worst affected area in Central Fife together with Cowdenbeath. The cutbacks in expenditure forced on the Scottish Development Agency have lessened the possibility of help from that quarter. The SDA could be of great help in these matters, but the Government have curbed its activities. Indeed, it has been forced to cease its investment in the No. 3 dock at Methil at a time when it was needed more than ever before.
    In the circumstances, what advice do the Government give to the unemployed? The madman in control of the Department of Industry visited the North-East last week. What did he say to the unemployed? He more or less told them to pull themselves up by their boot straps. Yesterday, The Sunday Times stated:
    "It was more than an insult, it was an irrelevance suggestive of daunting incomprehension."
    That is how The Sunday Times assessed the right hon. Gentleman.
    Lord Gowrie has been mentioned several times during the debate. It is no good the Secretary of State for Employment trying to excuse what Lord Gowrie said. Who had heard of the man before? Nobody hears about such fellows until they become Ministers in Tory Governments, although they sit in the House of Lords. They are not elected and they do not represent anybody. Lord Gowrie made a threat. He said that if the unemployed did not take voluntary jobs their unemployment benefit—to which they contribute—would be docked.
    Mr. Skinner: What about stopping the Lords' pay?
    Mr. Hamilton: My hon. Friend can make that speech at another time.
    There is much to be said for the principle of voluntary work. It does not need a ministerial statement. Many people are already doing voluntary work. The more

    1167
    who do so, the better. Yesterday, The Observer contained an article about the plan to encourage youngsters to undertake voluntary work. It stated that
    "the best way to launch it would have been at arm's length from Mrs. Thatcher."
    The article implied that she should not make that suggestion. We all know what she thinks about the unemployed and trade unions.
    From the beginning, the Government sought to make scapegoats of the previous Labour Government, of local authorities—especially those which are Labour-controlled—of trade unions and of everybody, including the Arabs. It appears that everybody is to blame except the Government. Even if young people on the dole were to undertake voluntary work in hospitals, old people's homes, and so on, it would be a palliative of minimal value. It would not meet the problem.
    Cold water has been poured on the article which appeared in The Sunday Times yesterday. There is a lot of sense in that article. It suggested that we should not make a totem pole of the public sector borrowing requirement. It suggested that the public sector borrowing requirement should not be made a whipping boy. Given the Government's statements, one would think that public expenditure was, of its very nature, evil, wrong, ill-advised and wasteful. It is nothing of the kind.
    The Scottish economy is almost completely based on public investment of one type or another, whether that investment be in schools, houses, hospitals, roads or the police force. The quality of ordinary people's lives depends on those services and on public expenditure. We want more. The United Kingdom has an asset in oil. It is an absolute scandal that a vast proportion of the profits and income from North Sea oil is being used not to modernise industry but to pay out £7 billion in unemployment benefit. Is there anything more absurd or indefensible than that? Everybody talks about modernising industry. One day that oil will no longer exist.
    Revenue from oil should be used for creating new jobs instead of financing the dole queue. That is what the Government are doing. I shall give one simple example. Several of my hon. Friends and I had a meeting with Fife regional council a few weeks ago about a desire
    1168
    to use Glenrothes technical college and Kirkcaldy technical college in order to build up ambitious programmes for training and retraining. The council put forward ambitious schemes to my Government as long ago as the late 1970s. They were to cost £900,000—a trifle. An election came. The present Government whittled that figure down to £400,000 and virtually killed the schemes. There is no prospect of those plans going ahead.
    One of the things that we must ensure gets the highest priority is increased facilities for training, retraining and apprenticeships. That has been said from both sides of the House in this debate. These are the areas in which we should increase public expenditure. We know that despite the horrific unemployment figures there are still shortages of skilled labour in various industries. There are still shortages of such labour in Glenrothes, in Fife. That is all the more reason why we should not be afraid of spending more money, encouraging Glenrothes technical college and encouraging the Fife education authority to give it its head. Let them use their common sense. They know the problems in their area. They want to attack them, but they cannot do that unless they get the wherewithal from the Government.
    As has been said by several of my hon. Friends, there is a difference of opinion—a contradiction—between what the Secretary of State for Employment said this afternoon and what the Secretary of State for the Environment is trying to do—to clobber local government expenditure in these areas. The Secretary of State for Employment is trying to say to us that he wants to encourage various things. The right hon. Gentleman had better sort themselves out.
    Meanwhile, our constituents must suffer these problems of increasing unemployment, with no evidence of any light at the end of any tunnel. The economic consequences of the Government's failure and the social consequences in terms of vandalism, increased crime rates and so on are too horrific to contemplate. Before it is too late, the Government must see the error of their ways. We shall not complain if they make a U-turn. They will have to make it soon, otherwise we shall have a bloody revolution on our hands.
    9.2 pm
    Mr. Stanley Orme: This debate is the conclusion of two days set aside by the Opposition to deal with the dramatic decline in our manufacturing industry and its consequent effect upon unemployment.
    My hon. Friend the Member for Fife, Central (Mr. Hamilton) and other hon. Friends who have spoken in the debate have emphasised the problem as they know it. It is interesting to contrast the case that they have put to the House with the case that we have heard from the Government and from Conservative Back Benchers. My hon. Friends have spoken with knowledge, experience and feeling about this issue. All that we got from the Secretary of State for Employment was a wringing of his hands and the statement that the Government could do little or nothing about this problem and could not directly intervene.
    We refute that. We say that the issues are too great and too important, not only for the economy but for the social effects, for the Government not to take action. Both effects are tragic. Over 1,000 jobs a day are being lost in manufacturing industry. The list of firms announcing redundancies, as published last month in The Sunday Times, read like a list of dead and injured from the First World War.
    From the increase in unemployment we can see that that list does not tell the whole story. Bad as the increase is, the fall in output implied is even worse. For the first time since 1945 we are truly becoming two nations—North versus South, blacks versus whites, and deserving poor versus undeserving poor. Conservative policy is underpinned by confrontation. This is the Government who expect union co-operation, when all that they offer is confrontation. What possible good is a policy that will cause real output to be no higher in 1982 than when the Labour Government left office in 1979? The Government said that they could raise output, yet they have succeeded only in setting a post-war unemployment record.
    I spent my working life in manufacturing industry. It is the economic base upon which Britain's prosperity must be founded. We can only view with concern the record fall in manufacturing employment over the past two years of
    1170
    about 400,000 jobs. That can cause only the gravest concern. We accept that there has been a change in the pattern of industry. We accept that changes must take place, but since January there has been a rapid acceleration in the number of jobs being lost. In manufacturing industry 1,000 jobs are disappearing every day. We are reaching a crescendo in June and July, and these consequences cannot be ignored by any thinking person.
    Long-established firms with national and international reputations have been going to the wall. Many have closed and other plants have made hundreds, if not thousands, of people redundant. High interest rates and an overvalued exchange rate have sounded the death knell for our manufacturing industry. In the area that I represent—Greater Manchester—we have seen the most dramatic decline in the manufacturing sector since the war. Thousands of jobs have been lost.
    I shall give a few examples. At Platts Clothiers, 340 jobs have been lost. At British Bakers there has been a loss of 325 jobs. A further 300 jobs have been lost at Mather and Platt. Gardners Limited, an internationally known firm, is on a four-day week for 2,000 employees. The same can be said about the East and West Midlands. Despite what my hon. Friend the Member for Fife, Central says, job losses are spreading and moving to other areas. They are occurring not only in the regions that have suffered for so long.
    I have received many letters on this subject. They epitomise some of the problems faced by those who work in industry. I shall read a letter from a Mr. Mills, who is the shop steward-convener at GKN in the Midlands. He writes:
    "I am a fully skilled man, time-served centre lathe turner … I am convenor for AUEW members, and we have striven to become most efficient, and worked along with GKN management to become viable. Because of the economic climate and the squeeze on the money supply, we have now been written off by GKN."
    That is what one gets from the Government for trade union co-operation. There are many other instances that I could cite. The dramatic change to which I have referred has been taking place against the background formed by the Government's economic policy. It

    1171
    is a monetarist policy. We were told that it would revitalise industry, get rid of the inefficient and leave a much stronger and virile economy, but the evidence is all too clear. The opposite is happening.
    The Secretary of State for Industry will go down in history as the Luddite of the 1980s. The combination of his policies, backed by the monetarist approach and the disastrous effects of VAT increases, has led to results that are now apparent for all to see. How long can this continue? The Government's unemployment record is appalling. Unemployment is now increasing at 40,000 a month—by 1,300 every day. This month over 200,000 school leavers will be forced to sign on as unemployed.
    Unemployment does not tell the whole story. The decrease in production is far worse than appears from the increase in unemployment. First, many men are being forced to retire early. The Employment Gazette for April shows that many of these men are in dire poverty. They would like to work but they find it impossible to get jobs so they leave the labour force for ever.
    Secondly, for the first time in a decade the female labour force has stopped growing. This is exactly what the Tories want. Their family policy consists of cuts in the real value of child benefit, cuts in nursery school provision, cuts in social services and now cuts in the number of jobs available for women. So much for the women who thought that a woman Prime Minister would improve their position in the labour market. It is well known that wives' jobs—certainly in many of the areas that my hon. Friends and I represent—are vital to keeping the family out of poverty. But the Tory family policy is now transparent—stay in the home and get into poverty.
    Thirdly, the Tories hoped that if the female labour supply stopped growing this would protect men. But that has not happened. Not only are manufacturing jobs disappearing at the rate of 1,000 a day, but overtime is down and short-time working is up. Short-time working in manufacturing rose by ¾million hours a week in December 1979 to 2¾ million hours a week in March 1980. That is a staggering threefold increase in little more than three months. The figure has continued to rise ever since. Despite the
    1172
    misery it causes, unemployment masks the true magnitude of the depression caused by the Government's politics.
    The Red Book says that the monetarist policy of this Government will cause GDP output to fall by 2½ per cent. between 1979 and 1980. That is the most severe drop since the war. In real money, not percentages, this means about £5,000 million. That is about the same amount as is spent in total on running the hospitals and community health services each year. It is almost twice as much as the Government spend on roads mid transport each year. It is half the education arts and science budget. This is the economics of the madhouse. The Government cause our GDP to fall by £5,000 million in one year, then add insult to injury by blaming it all on the workers. They say "If only your demands were more moderate or if only you would work a bit harder, everything would be all right." What nonsense. The reason why the Government have ruined the economy, cut production and increased unemployment is that they are a class Government. They want to turn the clock back to nineteenth century laissez-faire. They are intent to divide and rule.
    Mr. Skinner: Look at the Tories laughing.
    Mr. Orme: I wish that right hon. and hon. Members would listen. Far from healing the divisions in our society, the Prime Minister has driven a bigger wedge between people. Black and brown workers are bearing a disproportionate burden of unemployment. This can only intensify racial tensions. In the last 12 months the rate of black unemployment has been four times greater than that of white unemployment. At this stage I must add that I am sorry that the right hon. Member for Down, South (Mr. Powell) is not in his place. He has had a flash of madness again on this issue and it needs contradicting. The Labour Party contradicts it.
    About 200,000 school leavers will become unemployed this month. One third of all unemployed people are aged between 16 and 24. The longer term consequences will be a legacy that our children will have to take up.
    I now deal with unemployment itself and the tragedy and social consequences that it creates. I do not think that the

    1173
    Conservatives fully understand what it means to a young person to leave school today with a better education than ever before and not be able to find work. Young people give the impression of growing up much earlier and being sophisticated. At times they may exude a devil-may-care attitude, but in reality they are still young, bewildered and frightened by society, and looking for a base upon which to build their future.
    Because of family circumstances, when I was 14 I had to go out and search for an apprenticeship. The world seemed big and frightening when I had to take examinations at various firms to see whether I would be accepted. I was able to obtain an apprenticeship in a skilled industry. I was recently invited to a constituent's home to celebrate his son obtaining an apprenticeship for a skilled trade after 70 applications. The joy in that house was unbelievable. What a comment on the world that we live in! What about the hundreds of young people in St. Helens and Sheffield who are queuing for jobs? Conservative Members say that young people do not want jobs. Every young person should have the right to a job. We should see that society provides it.
    The State has a duty to see that employment is provided. In a modern technological society those who cannot devise a system whereby employment is there as of right should stand aside and let those who will attempt do so take over. The Labour Party understands the problems and the difficulties. The difference between our party and the Conservative Party is that we are prepared to do something about it.
    Mr. Scott: The Labour Party doubled unemployment.
    Mr. Bob Cryer: We did not do well enough, but the Conservative Government are doing a damned sight worse.
    Mr. Orme: All those factors will accumulate to put pressure on our society. Young people will be bewildered. They will see what is an apparently affluent society in many areas, although they will be denied even the basic right to work. The social consequences for our society cannot be calculated. Those who cling to
    1174
    the disastrous policies of this Government will have a lot to answer for in the future.
    At the other end of the scale are those made redundant after a lifetime's work, who are perhaps in their late forties or early fifties, and have no chance of finding work again. They face a Government who have cut benefit in real terms for the first time since the 1930s.
    Mr. Skinner: They are rotten to the core.
    Mr. Orme: Tory shires may feel that they are protected from the worst of the recession, while unemployment mounts daily in the North, Wales and Scotland. However, as I said to my hon. Friend the Member for Fife, Central, it will not be long before recession spreads further.
    J. B. Priestley spoke in 1934 of Gateshead as a "workshop with no work". Such a description will soon fit towns such as Coventry. Kent, which is hardly a Labour stronghold, already has unemployment in some areas of over 14 per cent. The only way that this nation will be united by the Government is in misery.
    The Government are repeating the error of believing that the unemployed bring unemployment on themselves. That erroneous concept is deeply rooted in history. In 1603 an English law called for the unemployed to be branded on the forehead with a large letter "R" for rogue. In 1905 J. S. Davy, as the chief inspector of the local government board, giving evidence to the Royal Commission on Poverty, stated:
    "The unemployed person must stand by his accidents; he must suffer for the general good of the body politic … What you have to consider is not this or that pauper, but the general good of the whole community."
    We know the attitude of the Conservative Party in the 1920s and the 1930s, and on radio yesterday and again in the House today the Secretary of State refused to take action to alleviate the rising unemployment rate. He implied that the Government were powerless to influence events.
    The Opposition reject that entirely. The Government's policies make the unemployed expendable. They are sacrificed to the community and, in this case, to a richer section of it. Essentially, unemployment means poverty. The poor are excluded from the community by the loss of status and respect which follows from losing one's job. Poverty diminishes

    1175
    pride. Unemployment robs purpose. It is that which we oppose and will continue to oppose.
    The Government rationalise their vicious campaign against the unemployed and their campaign against scroungers and, more seriously, their cuts in benefits. I refer specifically to the 5 per cent. cut, their intended abolition of the earnings-related supplement, and the fact that two-thirds of unemployed people at the moment are not getting any benefit.
    Today, the Secretary of State repeated his idea about getting the co-operation of the voluntary organisations. I hope that organisations such as CSV will not start playing the Government's game. Referring to his noble Friend the Earl of Gowrie, the Secretary of State said that there were proposals that unemployed people who did not accept jobs should be sent to training centres and be made to answer for the fact that they had not accepted jobs. However, we are talking about people who have not got jobs to go to.
    All this comes down to freedom of choice. Conservative Members make great play of their philosophy about the freedom of the individual. We know what Milton Friedman said in his recent book "Free to Choose", which has become part of the Government's philosophy. The Government believe that individuals should be free to choose. But what does that freedom imply, and who has that freedom? Are one-parent families free to choose when nursery schools are being closed? Are working-class children free to choose when the numbers of polytechnic and university places are under attack? Are school leavers and people over 50 in the Shotton area free to choose? So much for freedom in the community.
    Richard Titmuss summed it up when he said:
    "Socialism is about the community."
    It is the survival of the community about which we are talking.
    Mr. Stoddart: We have all been impressed by what my right hon. Friend said about poverty and the Government's attitude to the poor and the unemployed. Is he aware that, due to direct Government action, 500 school meals staff have been sacked in Wiltshire, and that in Dorset 800 staff are being sacked,
    1176
    with the ending of school meals in all primary schools? That is happening as a result of direct Government action.
    Mr. Orme: I endorse what my hon. Friend said. In fact, he is slightly wrong. In the area that he is talking about—Dorset—800 staff are to be dismissed. Children in primary schools are to be denied the right to a meal. That is the end product of the Government's policies—they are cutting school meals for primary school children and sacking people, many of them low earners, from jobs that they desperately need.
    Protests are not coming from the Labour Party and the trades unions alone. The employers, including engineering employers, and the CBI are at last beginning to wake up and raise their voices and question what is happening in industry. The Government have cut output by 2½ per cent. We would not have the public sector borrowing requirement as the very totem of economic policy. Even Milton Friedman has criticised recent Government policies. We would want to restore the public expenditure cuts, alter what has happened in regard to VAT, and give financial assistance to firms such as Alfred Herbert, which, for the sake of £4 million support, could be made viable and still employ 700 to 1,000 people.
    As my hon. Friend the Member for Bolsover (Mr. Skinner) and other hon. Members said, North Sea oil revenues must be taken into account, and selective import controls must be considered. Even granted that macro-economic policy, some other policies could still be employed to boost employment. Where the STEP programme has been cut, we say "Restore it". Where the Manpower Services Commission has been cut, we say "Restore it". The Secretary of State says that the same amount of money is going into the youth opportunities programme, but our information is that if the money from the local authorities is not there to back it up it could have a disastrous effect on the programme.
    The Government want to see unemployment at inter-war levels. They think that that will bring the unions into line. They try to make people believe that it is the people themselves, their unions and their firms that are responsible. The Government cut people's benefit, exhort union

    1177
    leaders and tell firms that it is their own fault if they cannot manage with 20 per cent. interest rates and a massively overvalued exchange rate. They say "We are only the Government. We cannot do anything"—all to achieve and buttress the class divisions that previous Governments, even Tory Governments, did not support. The present Government are supporting such divisions.
    Mr. Adley rose—
    Mr. Orme: I cannot give way.
    I return to the basic theme of freedom in society that the Tories talk so much about. If there is not economic freedom, there can be no other freedom within society. Many of my hon. Friends, and certainly their constituents, lived through a period when they had political freedom within their constituencies but did not have economic freedom, because millions of people were unemployed.
    As unemployment means poverty, by its very nature it deprives people of the freedom to choose. Nye Bevan said:
    "A free people will always refuse to put up with preventable poverty. If freedom is to be saved and enlarged, poverty must be ended."
    Therefore, while fighting the present disastrous Government policies, the Labour Party will settle for nothing less than what that quotation calls for. I urge my hon. Friends to vote against the Government tonight and show the country that the Labour Party stands up for full employment and a sane economy.
    9.30 pm
    The Paymaster General (Mr. Angus Maude) rose—
    Hon. Members: Hear, hear.
    Mr. Maude: I am aware that it may seem a matter of amusement to Labour Members that this is the first speech that I have had the honour to make from this Dispatch Box. I would not claim that that entitles me to any of the consideration due to a maiden speaker, but at least I should like the chance to answer this debate.
    There has been, as we understand, a great deal of concern among Opposition Members, as there is on this side, about the high and rising level of unemploy
    1178
    ment. We do not quarrel about an Opposition complaining and criticising the Government about high unemployment. We did it when the Labour Government were in power. All Oppositions do it, and it is their duty to do it. It is the duty of the Government to explain their policies.
    I believe—after listening to the right hon. Member for Salford, West (Mr. Orme), I am convinced of it—that the speeches of Labour Members have been a series of statements of what is going on in their constituences, with a high level of emotion and rhetoric but a marked shortage of practical suggestions. Where there were practical suggestions, I will deal with them in dealing with the individual speeches.
    Mr. Cryer: What are the Government's practical suggestions?
    Mr. Maude: I will come to that in a moment.
    Mr. Cryer: You have been in long enough.
    Mr. Maude: The hon. Gentleman's party was in government for five years, and look what happened then.
    The right hon. Member for Salford, West said that the Government can do something and that they must do something. That is not what the Leader of the Opposition said when he was Prime Minister—[Interruption.] That is absolutely typical of the Labour Party. The Labour Party as a whole and right hon. Members on the Front Bench in particular, are in one respect like the Bourbons. They have learnt nothing, but unlike the Bourbons they have forgotten everything that happened when they were the Government. The policies which they are now trying to suggest to us, when they do, are precisely the policies which they know failed when they were in office.
    When he was Prime Minister, the Leader of the Opposition said—[HON. MEMBERS: "Oh, no."] Why should I not quote what the Leader of the Opposition said? He has his name on this motion criticising the present Government. Let us see what he had to say when he was responsible—[HON. MEMBERS: "No."] I know that it must be painful for the Opposition to listen to the words

    1179
    of their leader, whom so few of them support, but the then Prime Minister said:
    "Despite the fact that we have done more than any other country in Europe and can keep introducing as many palliatives as we like, I can see no basic solution to the problem"
    of unemployment. It is obvious from the contributions this evening that the Opposition still see no solution. If they do, why have they not suggested one?
    The right hon. Member for Salford, West, talking about the difficulty of getting jobs or apprenticeships, said what a comment on society that was. Yes, it is a comment on society that we should have 1½ million unemployed. It is a comment on society that we should have had nearly 1½ million unemployed under the previous Labour Government. It is a comment on society that through several industrial recessions a large part of British industry has consistently failed to get its unit costs down and make itself competitive with our competitors abroad.
    The world recession came upon industry much more quickly than it expected. Our competitors got most of their inflation out of their systems and got their unit costs down during the last recession when the previous Labour Government poured money into the economy to no effect, and now our industries are finding themselves less able to compete.
    The Leader of the Opposition said:
    "The difference between Labour and the Government is that the Opposition are prepared to do something about it."
    What are they prepared to do?
    The only suggestion made so far is that more and more money should be poured into the economy. That is the old recipe which the previous Labour Government tried and which the Leader of the Opposition has admitted failed. Indeed, it was only when they were under the strict guidelines of the International Monetary Fund that they began to get inflation out of the system and to stop the steady rise in unemployment.
    Of course, if we are talking about a major increase in public expenditure, we recognise that there is always a case for increasing public expenditure during a recession provided that the public sector borrowing requirement does not start at an unacceptably high level. If we have a high inflation rate with a high public
    1180
    sector borrowing requirement, and if we further increase it, we simply fix inflation permanently in the economy and ensure that interest rates remain high or go higher. Everybody agrees that we need to get interest rates down if we are to get investment into industry.
    Mr. Straw rose—
    Mr. Maude: No. The right hon. Member for Salford, West did not give way to anyone.
    Mr. Robert MacLennan: The Minister has placed great importance on a reduction of the PSBR, Last week the Treasury published figures which showed the PSBR to be hopelessly out of control in the last quarter. The figures reveal that Government estimates in the Budget are wildly off target. Does this mean that the country is to be plunged into further recession to meet these wholly unrealistic targets, or does it mean that because the Government have failed to appreciate the depths of the recession we shall see the recession continue and the country undergoing worse suffering?
    Mr. Maude: The hon. Member is quite wrong. The figures did not show that the PSBR was hopelessly out of control. The figures are always higher during the first quarter of the financial year and there is no reason to suppose that they will not be on target at the end of the financial year. Even supposing that the hon. Member were right, that strengthens my argument. If it is true that the public sector borrowing requirement is becoming larger and is out of control, pouring more money into public borrowing would make inflation worse and ensure that interest rates remained high.
    Mr. Straw: Will the right hon. Gentleman give way?
    Mr. Maude: I have given way once. The right hon. Member for Salford, West gave way once—and to one of his hon. Friends.
    I should like to refer to some of the speeches that have been made during the debate—which, incidentally, the right hon. Gentleman did not do. I should like to do hon. Members who have spoken the courtesy of saying something about their speeches.

    1181
    I shall deal with some of the few practical proposals made by Opposition Members. The right hon. Member for Houghton-le-Spring (Mr. Urwin) called for a stronger regional policy. He said that we had made it weaker. When we took office, 50 per cent. of the country's population was covered by regional aid. Inadequate aid was being put into some areas at the expense of jobs in others. We have concentrated more aid on places where help is most needed.
    Mr. Urwin: Will the right hon. Gentleman give way?
    Mr. Maude: No.
    Mr. Urwin: Give way.
    Mr. Speaker: Order. It is clear that the Minister is not giving way.
    Hon. Members: Shame.
    Mr. Speaker: Order. The Minister must be allowed to continue.
    Mr. Maude: The right hon. Member for Salford, West did not give way. He seemed to think that he had good reason. I have more to say then he. [Interruption.] If hon. Members interrupted less, they might get answers more quickly.
    The hon. Member for Rochdale (Mr. Smith), who represented the Liberal Party massively today, said that the Labour Party had at least tried to mitigate the unemployment problem but that the Conservative Government seemed to be resigned to it. He said that Ministers believed that unemployment was essential if inflation was to be conquered and that that meant that we were deliberately creating unemployment.
    The hon. Gentleman knows well that that is untrue. He is enough of a politician to know that no Government and no Minister deliberately creates unemployment.
    Right hon. Members on the Opposition Front Bench were continually accused by Left-wing Members below the Gangway of deliberately creating unemployment in the last Government. At least they might be a little more shamefaced about it now. The fact is that if our industries were all competitive, and if pay awards bore more relation to productivity, inflation could be reduced without such heavy unemployment. We are now paying the price
    1182
    for persistent failure to get our unit costs down to competitive levels.
    The hon. Gentleman also asked a technical question about whether going on a training course disqualifies a person from benefit. That depends on the degree of involvement in the course. If it is a part-time or day-to-day course, it would not, because the trainee would be considered to be available for work. If it was a full-time or residential course, and obviously to complete it the trainee could not be available for work, a grant will be substituted for benefit. [Interruption.] If Opposition Members do not want to hear answers to the few sensible questions which were asked from their side of the House, so be it.
    There were several sensible and helpful speeches from the Conservative Benches. My hon. Friend the Member for Carshalton (Mr. Forman) talked about the need to improve education in the basic skills. That is true. Too many young people who are now coming out of secondary schools are not properly equipped to start a life in industry because they lack the basic skills. I know that the Manpower Services Commission, particularly in the North-West, has been carrying out a survey and hopes to make some recommendations before long. Also, as my hon. Friend asked, a review of the training system and policies is being considered, as soon as the report which is now imminent has been studied.
    My hon. Friend the Member for Chelsea (Mr. Scott) rightly said that youth unemployment is likely to be with us as a problem for a very long time. He said, too, that the education system has failed far too many young people.
    Part of the problem is the legacy which we were left by the previous Government, although the main problem is the conquest of inflation, which is what the Government amendment specifies. When Labour Members were in government and more than doubled unemployment, they knew that they had to do something to get inflation down, and under the guidance of the IMF they succeeded—[Interruption.]
    Mr. Speaker: Order. It is unfair not to allow the right hon. Gentleman to be heard. Every hon. Members has had a hearing today, and the Minister should also be heard.
    Mr. Maude: It does not surprise me in the slightest degree that Opposition Members, who purport to be so passionately caring about unemployment, should regard any part of this debate as anything more than a formal exercise and a charade, which is what they know this debate to be.
    As my hon. Friend the Member for Chelsea said, in the light of their record, the Opposition's motion is a scandal, and they must know it. They more than doubled unemployment, and, at the end, they chickened out in order to create an inflationary pre-election boom, and they left us with a legacy with which we are still having to grapple.
    Mr. Cryer: If the right hon. Gentleman is concerned that, from the point of view of the Government, this debate will be more than a charade of words, may I say that during the last 20 minutes he has trotted out and regurgitated all the old attacks on the previous Labour Government? He has promised an explanation of the practical steps that the Tory Government promised to take to put apprentices and new employees in work.
    Mr. Maude: I have already said that we do not believe it is possible to solve the problem simply by increasing public spending. That would simply fix inflation permanently in the system and lose more jobs in the long run than it could possibly preserve now. But—and it is perfectly well known—within the present public sector borrowing requirement it is possible for us to readjust expenditure to help the unemployed, particularly the young.
    On behalf of the Government, I can say that no sensible proposal within the existing public spending and borrowing limits will be turned down. We shall consider each one carefully. However, we are not prepared to jeopardise for short-term benefit the long-term need to create lasting jobs in an economy without inflation, and with some hope of getting interest rates down to a reasonable level.
    Mr. Cyril Smith: Will the Minister deal with the constructive point that I made earlier? I referred to cash registers in education and the Government's buying policies.
    Mr. Maude: The Government, in their buying policy, will do everything possible to help British industry. But we have an overriding duty to the taxpayer to ensure that we get reasonable value for money for the best service and products.
    I repeat that the Opposition's proposals, which amount to no more than pouring more borrowed money into the economy, will not provide lasting, well-paid jobs. Our aim is to get inflation out of the economy so that we can begin to create jobs.
    There are already signs that people are ready to invest where skills are available—[Interruption.] If Labour Members do not wish to hear what I am saying, it shows how incurably light-hearted they are about the problem. If Labour Members really want to keep inflation at its present level—it was a lot higher at one time under the previous Government, and we did not put it there—[Interruption.] The myth on the Labour Benches that it is possible to absorb the enormous world increase in oil prices without some fall in living standards has been responsible for half the nonsense that Labour Members talk.
    We are determined, in the interests of the people of this country—[Interruption.]—to get inflation down. [Interruption.] Labour Members know perfectly well that this is not a problem that is susceptible to easy cures. They know that the previous Labour Government grappled with it and failed to cure it. If they really believe that it is possible to keep the economy of this country going with a high level of inflation, with more public spending and with high interest rates—which ensure that there is no investment brought into our industry and no creation of lasting jobs—I can only say that that does not show the kind of intelligence or compassion on which they pride themselves.
    What compassion does it show to the old-age pensioners and the retired to recommend policies which Labour Members know will create high inflation and make life difficult for the poor, the disadvantaged and the weak? What sort of compassion—[Interruption.] Perhaps Labour Members will try to listen for one minute. What sort of compassion does it show—[Interruption.]—towards the unemployed to make certain—[Interruption.] For a party which claims to

    1185
    be concerned—[Interruption.] For a party which throughout the debate has been producing emotional pleas on behalf of constituents, its performance tonight shows—[Interruption.] If Labour Members really cared for the unemployed in their constituencies they would be doing something to support the Government in their efforts to get rid of inflation.[Interruption.] They obviously do not care about inflation or they would not be so keen to make it worse.
    If Labour Members have no more practical or better proposals to make than the ones that they have made tonight, and if they have no alternatives to the policies which they have tried
    before and which they know have failed—[Interruption.] If they have no alternatives to the policies which were rejected by the electorate last May, they are quite clearly unfit to govern this country again. [Interruption.] As for their talk of wanting a general election—[Interruption]—they must know perfectly well that they could not win one now if they tried. All the indications are that they would lose an election. [Interruption.] If they have no practical proposals to offer, they should belt up.
    Question put. That the original words stand part of the Question:—
    The House divided: Ayes 258, Noes 310.

    Division No. 398]

    AYES

    [10 pm

    Abse, Leo

    Dixon, Donald

    Howell, Rt Hon Denis (B'ham, Sm H)

    Adams, Allen

    Dobson, Frank

    Howells, Geraint

    Allaun, Frank

    Dormand, Jack

    Huckfield, Les

    Alton, David

    Douglas, Dick

    Hughes, Mark (Durham)

    Anderson, Donald

    Douglas-Mann, Bruce

    Hughes, Robert (Aberdeen North)

    Archer, Rt Hon Peter

    Dubs, Alfred

    Hughes, Roy (Newport)

    Armstrong, Rt Hon Ernest

    Duffy, A. E. P.

    Janner, Hon Greville

    Ashley, Rt Hon Jack

    Dunn, James A. (Liverpool, Kirkdale)

    Jay, Rt Hon Douglas

    Ashton, Joe

    Dunnett, Jack

    John, Brynmor

    Atkinson, Norman (H'gey, Tott'ham)

    Dunwoody, Mrs Gwyneth

    Johnson, James (Hull West)

    Bagler, Gordon A. T.

    Eadie, Alex

    Johnson, Walter (Derby South)

    Barnett, Guy (Greenwich)

    Eastham, Ken

    Jones, Rt Hon Alec (Rhondda)

    Barnett, Rt Hon Joel (Heywood)

    Edwards, Robert (Wolv SE)

    Jones, Barry (East Flint)

    Benn, Rt Hon Anthony Wedgwood

    Ellis, Raymond (NE Derbyshire)

    Jones, Dan (Burnley)

    Bennett, Andrew (Stockport N)

    Ellis, Tom (Wrexham)

    Kaufman, Rt Hon Gerald

    Bidwell, Sydney

    English, Michael

    Kerr, Russell

    Booth, Rt Hon Albert

    Ennals, Rt Hon. David

    Kilroy-Silk, Robert

    Boothroyd, Miss Betty

    Evans, Ioan (Aberdare)

    Kinnock, Neil

    Bottomley, Rt Hon Arthur (M'brough)

    Evans, John (Newton)

    Lambie, David

    Bradley, Tom

    Faulds, Andrew

    Lamborn, Harry

    Bray, Dr Jeremy

    Field, Frank

    Lamond, James

    Brown, Hugh D. (Provan)

    Fitch, Alan

    Lestor, Miss Joan (Eton & Slough)

    Brown, Robert C. (Newcastle W)

    Fitt, Gerard

    Lewis, Arthur (Newham North West)

    Brown, Ronald W. (Hackney S)

    Flannery, Martin

    Lewis, Ron (Carlisle)

    Brown, Ron (Edinburgh, Leith)

    Fletcher, L. R. (Ilkeston)

    Litherland, Robert

    Buchan, Norman

    Fletcher, Ted (Darlington)

    Lofthouse, Geoffrey

    Callaghan, Rt Hon J. (Cardiff SE)

    Foot, Rt Hon Michael

    Lyon, Alexander (York)

    Callaghan, Jim (Middleton & P)

    Ford, Ben

    Lyons, Edward (Bradford West)

    Campbell, Ian

    Forrester, John

    McDonald, Dr Oonagh

    Campbell-Savours, Dale

    Foster, Derek

    McElhone, Frank

    Canavan, Dennis

    Foulkes, George

    McKay, Allen (Penistone)

    Cant, R. B.

    Fraser, John (Lambeth, Norwood)

    McKelvey, William

    Carmichael, Neil

    Freeson, Rt Hon Reginald

    MacKenzie, Rt Hon Gregor

    Carter-Jones, Lewis

    Garrett, John (Norwich S)

    Maclennan, Robert

    Cartwright, John

    Garrett, W. E. (Wallsend)

    McNally, Thomas

    Clark, Dr David (South Shields)

    George, Bruce

    McNamara, Kevin

    Cocks, Rt Hon Michael (Bristol S)

    Gilbert, Rt Hon Dr John

    McQuade, John

    Cohen, Stanley

    Ginsburg, David

    McTaggart, Robert

    Coleman, Donald

    Gourlay, Harry

    McWilliam, John

    Concannon, Rt Hon J. D.

    Graham, Ted

    Magee, Bryan

    Conlan, Bernard

    Grant, George (Morpeth)

    Marshall, David (Gl'sgow, Shettles'n)

    Cook, Robin F.

    Grant, John (Islington C)

    Marshall, Dr Edmund (Goole)

    Cowans, Harry

    Grimond, Rt Hon J.

    Marshall, Jim (Leicester South)

    Crowther, J. S.

    Hamilton, James (Bothwell)

    Martin, Michael (Gl'gow, Springb'rn)

    Cryer, Bob

    Hamilton, W. W. (Central Fife)

    Mason, Rt Hon Roy

    Cunliffe, Lawrence

    Hardy, Peter

    Maynard, Miss Joan

    Cunningham, George (Islington S)

    Harrison, Rt Hon Walter

    Meacher, Michael

    Cunningham, Dr John (Whitehaven)

    Hattersley, Rt Hon Roy

    Mellish, Rt Hon Robert

    Davidson, Arthur

    Haynes, Frank

    Mikardo, Ian

    Davies, Rt Hon Denzil (Llanelli)

    Healey, Rt Hon Denis

    Millan, Rt Hon Bruce

    Davies, Ifor (Gower)

    Heffer, Eric S.

    Miller, Dr M. S. (East Kilbride)

    Davis, Clinton, (Hackney Central)

    Hogg, Norman (E Dunbartonshire)

    Mitchell, Austin (Grimsby)

    Davis, Terry (B'rm'ham, Stechford)

    Holland, Stuart (L'beth, Vauxhall)

    Mitchell, R. C. (Soton, Itchen)

    Deakins, Eric

    Home Robertson, John

    Morris, Rt Hon Alfred (Wythenshawe)

    Dean, Joseph (Leeds West)

    Homewood, William

    Morris, Rt Hon Charles (Openshaw)

    Dempsey, James

    Hooley, Frank

    Morris, Rt Hon John (Aberavon)

    Dewar, Donald

    Horam, John

    Moyle, Rt Hon Roland

    Newens, Stanley

    Roper, John

    Thorne, Stan (Preston South)

    Oakes, Rt Hon Gordon

    Ross, Ernest (Dundee West)

    Tilley, John

    Ogden, Eric

    Rowlands, Ted

    Tinn, James

    O'Halloran, Michael

    Sandelson, Neville

    Torney, Tom

    O'Neill, Martin

    Sever, John

    Urwin, Rt Hon Tom

    Orme, Rt Hon Stanley

    Sheerman, Barry

    Varley, Rt Hon Eric G.

    Owen, Rt Hon Dr David

    Sheldon, Rt Hon Robert (A'ton-u-L)

    Wainwright, Edwin (Dearne Valley)

    Paisley, Rev Ian

    Shore, Rt Hon Peter (Step and Pop)

    Wainwright, Richard (Colne Valley)

    Park, George

    Short, Mrs Renée

    Watkins, David

    Parker, John

    Silkin, Rt Hon John (Deptford)

    Weetch, Ken

    Parry, Robert

    Silkln, Rt Hon S. C. (Dulwich)

    Welsh, Michael

    Pavitt, Laurie

    Skinner, Dennis

    White, Frank R. (Bury & Radcliffe)

    Pendry, Tom

    Smith, Cyril (Rochdale)

    Whitehead, Phillip

    Penhaligon, David

    Smith, Rt Hon J (North Lanarkshire)

    Whitlock. William

    Powell, Raymond (Ogmore)

    Snape, Peter

    Wigley, Dafydd

    Prescott, John

    Soley, Clive

    Willey, Rt Hon Frederick

    Price, Christopher (Lewisham West)

    Spriggs, Leslie

    Williams, Rt Hon Alan (Swansea W)

    Race, Reg

    Stallard, A. W.

    Williams, Sir Thomas (Warrington)

    Radice, Giles

    Steel, Rt Hon David

    Wilson, Gordon (Dundee East)

    Rees, Rt Hon Merlyn (Leeds South)

    Stewart, Rt Hon Donald (W Isles)

    Wilson, William (Coventry SE)

    Richardson, Jo

    Stoddart, David

    Winnick, David

    Roberts, Albert (Normanton)

    Stott, Roger

    Woodall, Alec

    Roberts, Allan (Bootle)

    Strang, Gavin

    Woolmer, Kenneth

    Roberts, Ernest (Hackney North)

    Straw, Jack

    Wrigglesworth, Ian

    Roberts, Gwilym (Cannock)

    Summerskill, Hon Dr Shirley

    Wright, Sheila

    Robertson, George

    Taylor, Mrs Ann (Bolton West)

    Young, David (Bolton East)

    Robinson, Geoffrey (Coventry NW)

    Thomas, Dafydd (Merioneth)

    Robinson, Peter (Belfast East)

    Thomas, Jeffrey (Abertillery)

    TELLERS FOR THE AYES:

    Rodgers, Rt Hon William

    Thomas, Mike (Newcastle East)

    Mr. Hugh McCartney and

    Rooker, J. W.

    Thomas, Dr Roger (Carmarthen)

    Mr. George Morton.

    NOES

    Adley, Robert

    Clark, Sir William (Croydon South)

    Grant, Anthony (Harrow C)

    Aitken, Jonathan

    Clarke, Kenneth (Rushcliffe)

    Gray, Hamish

    Alexander, Richard

    Clegg, Sir Walter

    Greenway, Harry

    Amery, Rt Hon Julian

    Cockeram, Eric

    Grieve, Percy

    Ancram, Michael

    Colvin, Michael

    Griffiths, Eldon (Bury St. Edmonds)

    Arnold, Tom

    Cope, John

    Griffiths, Peter (Portsmouth N)

    Atkins, Rt Hon H. (Spelthorne)

    Cormack, Patrick

    Grist, Ian

    Atkins, Robert (Preston North)

    Corrie, John

    Grylls, Michael

    Atkinson, David (B'mouth, East)

    Costain, A. P.

    Gummer, John Selwyn

    Baker, Kenneth (St. Marylebone)

    Cranborne, Viscount

    Hamilton, Hon Archie (Eps'm & Ew'll)

    Baker, Nicholas (North Dorset)

    Critchley, Julian

    Hamilton, Michael (Salisbury)

    Banks, Robert

    Crouch, David

    Hampson, Dr Keith

    Beaumont-Dark, Anthony

    Dean, Paul (North Somerset)

    Hannam, John

    Bendall, Vivian

    Dickens, Geoffrey

    Haselhurst, Alan

    Benyon, Thomas (Abingdon)

    Dorrell, Stephen

    Hastings, Stephen

    Benyon, W. (Buckingham)

    Douglas-Hamilton, Lord James

    Havers, Rt Hon Sir Michael

    Best, Keith

    Dover, Denshore

    Hawkins, Paul

    Bevan, David Gilroy

    du Cann, Rt Hon Edward

    Hawksley, Warren

    Biffen, Rt Hon John

    Dunn, Robert (Dartford)

    Hayhoe, Barney

    Biggs-Davison, John

    Durant, Tony

    Heath, Rt Hon Edward

    Blackburn, John

    Eden, Rt Hon Sir John

    Heddle, John

    Blaker, Peter

    Edwards, Rt Hon N. (Pembroke)

    Henderson, Barry

    Body, Richard

    Eggar, Timothy

    Heseltine, Rt Hon Michael

    Bonsor, Sir Nicholas

    Elliott, Sir William

    Hicks, Robert

    Boscawen, Hon Robert

    Emery, Peter

    Higgins, Rt Hon Terence L.

    Bottomley, Peter (Woolwich West)

    Eyre, Reginald

    Hogg, Hon Douglas (Grantham)

    Bowden, Andrew

    Fairbairn, Nicholas

    Holland, Philip (Carlton)

    Boyson, Dr Rhodes

    Fairgrieve, Russell

    Hooson, Tom

    Bright, Graham

    Faith, Mrs. Sheila

    Hordern, Peter

    Brinton, Tim

    Farr, John

    Howe, Rt Hon Sir Geoffrey

    Brittan, Leon

    Fell, Anthony

    Howell, Rt Hon David (Guildford)

    Brocklebank-Fowler, Christopher

    Fanner, Mrs Peggy

    Howell, Ralph (North Norfolk)

    Brooke, Hon Peter

    Finsberg, Geoffrey

    Hunt, David (Wirral)

    Brotherton, Michael

    Fisher, Sir Nigel

    Hunt, John (Ravensbourne)

    Brown, Michael (Brigg & Sc'thorpe)

    Fletcher, Alexander (Edinburgh N)

    Irving, Charles (Cheltenham)

    Browne, John (Winchester)

    Fletcher-Cooke, Charles

    Jenkin, Rt Hon Patrick

    Bruce-Gardyne, John

    Fookes, Miss Janet

    Jessel, Toby

    Bryan, Sir Paul

    Forman, Nigel

    Johnson Smith, Geoffrey

    Buck, Antony

    Fowler, Rt Hon Norman

    Jopling, Rt Hon Michael

    Budgen, Nick

    Fox, Marcus

    Joseph, Rt Hon Sir Keith

    Bulmer, Esmond

    Fraser, Rt Hon. H. (Stafford & St)

    Kaberry, Sir Donald

    Burden, F. A.

    Fraser, Peter (South Angus)

    Kellett-Bowman, Mrs Elaine

    Butcher, John

    Fry, Peter

    Kershaw, Anthony

    Butler, Hon Adam

    Galbraith, Hon T. G. D.

    Kimball, Marcus

    Cadbury, Jocelyn

    Gardiner, George (Reigate)

    King, Rt Hon Tom

    Carlisle, John (Luton West)

    Gardner, Edward (South Fylde)

    Kitson, Sir Timothy

    Carlisle, Kenneth (Lincoln)

    Garel-Jones, Tristan

    Knight, Mrs Jill

    Chalker, Mrs. Lynda

    Gilmour, Rt Hon Sir Ian

    Knox, David

    Channon, Paul

    Glyn, Dr. Alan

    Lamont, Norman

    Chapman, Sydney

    Goodhart, Philip

    Lang, Ian

    Churchill, W. S.

    Goodlad, Alastair

    Langford-Holt, Sir John

    Clark, Hon Alan (Plymouth, Sutton)

    Gow, Ian

    Latham, Michael

    1188

    1189

    Lawrence, Ivan

    Oppenheim, Rt Hon Mrs Sally

    Sproat, Iain

    Lawson, Nigel

    Osborn, John

    Squire, Robin

    Lee, John

    Page, John (Harrow, West)

    Stainton, Keith

    Lennox-Boyd, Hon Mark

    Page, Rt Hon Sir R. Graham

    Stanbrook, Ivor

    Lester, Jim (Beeston)

    Page, Richard (SW Hertfordshire)

    Stanley, John

    Lewis, Kenneth (Rutland)

    Parkinson, Cecil

    Steen, Anthony

    Lloyd, Peter (Fareham)

    Parris, Matthew

    Stevens, Martin

    Loveridge, John

    Patten, Christopher (Bath)

    Stewart, Ian (Hitchin)

    Luce, Richard

    Patten, John (Oxford)

    Stewart, John (East Renfrewshire)

    Lyell, Nicholas

    Pattie, Geoffrey

    Stokes, John

    Macfarlane, Neil

    Pawsey, James

    Stradling Thomas, J.

    MacGregor, John

    Percival, Sir Ian

    Tapsell, Peter

    Mackay, John (Argyll)

    Peyton, Rt Hon John

    Taylor, Robert (Croydon NW)

    Macmillan, Rt Hon M. (Farnham)

    Pink, R. Bonner

    Taylor, Teddy (Southend East)

    McNair-Wilson, Michael (Newbury)

    Pollock, Alexander

    Tebbit, Norman

    McNair-Wilson, Patrick (New Forest)

    Porter, George

    Temple-Morris, Peter

    McQuarrie, Albert

    Powell, Rt Hon J. Enoch (S Down)

    Thatcher, Rt Hon Mrs Margaret

    Madel, David

    Prentice, Rt Hon Reg

    Thomas, Rt Hon Peter (Hendon S)

    Major, John

    Price, David (Eastleigh)

    Thorne, Neil (Ilford South)

    Marland, Paul

    Prior, Rt Hon James

    Thornton, Malcolm

    Marlow, Tony

    Proctor, K. Harvey

    Townsend, Cyril D. (Bexleyheath)

    Marshall, Michael (Arundel)

    Pym, Rt Hon Francis

    Trippier, David

    Marten, Neil (Banbury)

    Ralson, Timothy

    Trotter, Neville

    Mates, Michael

    Rees, Peter (Dover and Deal)

    van Straubenzee, W. R.

    Mather, Carol

    Rees-Davies, W. R.

    Vaughan, Dr. Gerard

    Maude, Rt Hon Angus

    Renton, Tim

    Viggers, Peter

    Mawby, Ray

    Rhodes James, Robert

    Waddington, David

    Mawhinney, Dr Brian

    Rhys Williams, Sir Brandon

    Waldegrave, Hon William

    Maxwell-Hyslop, Robin

    Ridley, Hon Nicholas

    Walker, Bill (Perth & E Perthshire)

    Mayhew, Patrick

    Ridsdale, Julian

    Walker-Smith, Rt Hon Sir Derek

    Meyer, Sir Anthony

    Rifkind, Malcolm

    Wall, Patrick

    Miller, Hal (Bromsgrove & Redditch)

    Rippon, Rt Hon Geoffrey

    Waller, Gary

    Mills, Iain (Meriden)

    Roberts, Michael (Cardiff NW)

    Walters, Dennis

    Mills, Peter (West Devon)

    Roberts, Wyn (Conway)

    Ward, John

    Miscampbell, Norman

    Rossi, Hugh

    Warren, Kenneth

    Mitchell, David (Basingstoke)

    Royle, Sir Anthony

    Wells, John (Maidstone)

    Moate, Roger

    Sainsbury, Hon Timothy

    Wells, Bowen (Hert'rd & Stevn'age)

    Monro, Hector

    St. John-Stevas, Rt Hon Norman

    Wheeler, John

    Montgomery, Fergus

    Scott, Nicholas

    Whitelaw, Rt Hon William

    Moore, John

    Shaw, Giles (Pudsey)

    Whitney, Raymond

    Morris, Michael (Northampton, Sth)

    Shaw, Michael (Scarborough)

    Wickenden, Keith

    Morrison, Hon Charles (Devizes)

    Shelton, William (Streatham)

    Wiggin, Jerry

    Morrison, Hon Peter (City of Chester)

    Shepherd, Colin (Hereford)

    Wilkinson, John

    Mudd, David

    Shepherd, Richard (Aldridge-Br'hills)

    Williams, Delwyn (Montgomery)

    Murphy, Christopher

    Shersby, Michael

    Winterton, Nicholas

    Myles, David

    Silvester, Fred

    Wolfson, Mark

    Neale, Gerrard

    Sims, Roger

    Young, Sir George (Acton)

    Needham, Richard

    Skeet, T H.H.

    Younger, Rt Hon George

    Nelson, Anthony

    Smith, Dudley (War. and Leam'ton)

    Neubert, Michael

    Speed, Keith

    TELLERS FOR THE NOES

    Normanton, Tom

    Spence, John

    Mr. Spencer Le Marchant and

    Nott, Rt. Hon John

    Spicer, Jim (West Dorset)

    Mr. Anthony Berry.

    Onslow, Cranley

    Spicer, Michael (S Worcestershire)

    Question accordingly negatived
    Question, That the proposed words be there added, put forthwith pursuant to
    Standing Order No. 32 (Questions on amendments):—
    The House divided: Ayes 311, Noes 257.

    Division No. 399]

    AYES

    [10.14 pm

    Adley, Robert

    Body, Richard

    Butler, Hon Adam

    Aitken, Jonathan

    Bonsor, Sir Nicholas

    Cadbury, Jocelyn

    Alexander, Richard

    Boscawen, Hon Robert

    Carlisle, John (Luton West)

    Amery, Rt Hon Julian

    Bottomley, Peter (Woolwich West)

    Carlisle, Kenneth (Lincoln)

    Ancram, Michael

    Bowden, Andrew

    Chalker, Mrs. Lynda

    Arnold, Tom

    Boyson, Dr Rhode

    Channon, Paul

    Atkins, Rt Hon H. (Spelthorne)

    Braine, Sir Bernard

    Chapman, Sydney

    Atkins, Robert (Preston North)

    Bright, Graham

    Churchill, W. S.

    Atkinson, David (B'mouth, East)

    Brinton, Tim

    Clark, Hon Alan (Plymouth, Sutton)

    Baker, Kenneth (St. Marylebone)

    Brittan, Leon

    Clark, Sir William (Croydon South)

    Baker, Nicholas (North Dorset)

    Brocklebank-Fowler, Christopher

    Clarke, Kenneth (Rushcliffe)

    Banks, Robert

    Brooke, Hon Peter

    Clegg, Sir Walter

    Beaumont-Dark, Anthony

    Brotherton, Michael

    Cockeram, Eric

    Bendall, Vivian

    Brown, Michael (Brigg & Sc'thorpe)

    Colvin, Michael

    Benyon, Thomas (Abingdon)

    Browne, John (Winchester)

    Cope, John

    Benyon, W. (Buckingham)

    Bruce-Gardyne, John

    Cormack, Patrick

    Best, Keith

    Bryan, Sir Paul

    Corrie, John

    Bevan, David Gilroy

    Buck, Antony

    Costain, A. P.

    Biffen, Rt Hon John

    Budgen, Nick

    Cranborne, Viscount

    Biggs-Davison, John

    Bulmer, Esmond

    Critchley, Julian

    Blackburn, John

    Burden, F. A.

    Crouch, David

    Blaker, Peter

    Butcher, John

    Dean, Paul (North Somerset)

    Dickens, Geoffrey

    King, Rt Hon Tom

    Raison, Timothy

    Dorrell, Stephen

    Kitson, Sir Timothy

    Rees, Peter (Dover and Deal)

    Douglas-Hamilton, Lord James

    Knight, Mrs Jill

    Rees-Davies. W. R.

    Dover, Denshore

    Knox, David

    Renton, Tim

    du Cann, Rt Hon Edward

    Lemont, Norman

    Rhodes James, Robert

    Dunn, Robert (Dartford)

    Lang, Ian

    Rhys Williams, Sir Brandon

    Durant, Tony

    Langford-Holt, Sir John

    Ridley, Hon Nicholas

    Eden, Rt Hon Sir John

    Latham, Michael

    Ridsdale, Julian

    Edwards, Rt Hon N. (Pembroke)

    Lawrence, Ivan

    Rifkind, Malcolm

    Eggar, Timothy

    Lawson, Nigel

    Rippon, Rt Hon Geoffrey

    Elliott, Sir William

    Lee, John

    Roberts, Michael (Cardiff NW)

    Emery, Peter

    Lennox-Boyd, Hon Mark

    Roberts, Wyn (Conway)

    Eyre, Reginald

    Lester, Jim (Beeston)

    Rossi, Hugh

    Fairbairn, Nicholas

    Lewis, Kenneth (Rutland)

    Royle, Sir Anthony

    Fairgrieve, Russell

    Lloyd, Peter (Fareham)

    Sainsbury, Hon Timothy

    Faith, Mrs. Sheila

    Loveridge, John

    St. John-Stevas, Rt Hon Norman

    Farr, John

    Luce, Richard

    Scott, Nicholas

    Fell, Anthony

    Lyell, Nicholas

    Shaw, Giles (Pudsey)

    Fenner, Mrs Peggy

    Macfarlane, Neil

    Shaw, Michael (Scarborough)

    Finsberg, Geoffrey

    MacGregor, John

    Shelton, William (Streatham)

    Fisher, Sir Nigel

    MacKay, John (Argyll)

    Shepherd, Colin (Hereford)

    Fletcher, Alexander (Edinburgh N)

    Macmillan, Rt Hon M. (Farnham)

    Shepherd, Richard (Aldridge-Br'hills)

    Fletcher-Cooke, Charles

    McNair-Wilson, Michael (Newbury)

    Shersby, Michael

    Fookes, Miss Janet

    McNair-Wilson, Patrick (New Forest)

    Silvester, Fred

    Forman, Nigel

    McQuarrie, Albert

    Sims, Roger

    Fowler, Rt Hon Norman

    Madel, David

    Skeet, T. H.H.

    Fox, Marcus

    Major, John

    Smith, Dudley (War. and Leam'ton)

    Fraser, Rt Hon. . (Stafford & St)

    Marland, Paul

    Speed, Keith

    Fraser, Peter (South Angus)

    Marlow, Tony

    Spence, John

    Fry, Peter

    Marshall, Michael (Arundel)

    Spicer, Jim (West Dorset)

    Galbraith, Hon T. G. D.

    Marten, Neil (Banbury)

    Spicer, Michael (S Worcestershire)

    Gardiner, George (Reigate)

    Mates, Michael

    Sproat, Iain

    Gardner, Edward (South Fylde)

    Mather, Carol

    Squire, Robin

    Garel-Jones, Tristan

    Maude, Rt Hon Angus

    Stainton, Keith

    Gilmour, Rt Hon Sir Ian

    Mawby, Ray

    Stanbrook, Ivor

    Glyn, Dr. Alan

    Mawhinney, Dr Brian

    Stanley, John

    Goodhart, Philip

    Maxwell-Hyslop, Robin

    Steen, Anthony

    Goodlad, Alastair

    Mayhew, Patrick

    Stevens, Martin

    Gow, Ian

    Meyer, Sir Anthony

    Stewart, Ian (Hitchin)

    Grant, Anthony (Harrow C)

    Miller, Hal (Bromsgrove & Redditch)

    Stewart, John (East Renfrewshire)

    Gray, Hamish

    Mills, Iain (Meriden)

    Stokes, John

    Greenway, Harry

    Mills, Peter (West Devon)

    Stradling Thomas, J.

    Grieve, Percy

    Miscampbell, Norman

    Tapsell, Peter

    Griffiths, Eldon (Bury St. Edmonds)

    Mitchell, David (Basingstoke)

    Taylor, Robert (Croydon NW)

    Griffiths, Peter (Portsmouth N)

    Moate, Roger

    Taylor, Teddy (Southend East)

    Grist, Ian

    Monro, Hector

    Tebbit, Norman

    Grylls, Michael

    Montgomery, Fergus

    Temple-Morris, Peter

    Gummer, John Selwyn

    Moore, John

    Thatcher, Rt Hon Mrs Margaret

    Hamilton, Hon Archie (Eps'm & Ew'll)

    Morris, Michael (Northampton, Sth)

    Thomas, Rt Hon Peter (Hendon S)

    Hamilton, Michael (Salisbury)

    Morrison, Hon Charles (Devizes)

    Thorne, Neil (Ilford South)

    Hampson, Dr Keith

    Morrison. Hon Peter (City of Chester)

    Thornton, Malcolm

    Hannam, John

    Mudd, David

    Townsend, Cyril D. (Bexleyheath)

    Haselhurst, Alan

    Murphy, Christopher

    Trippier, David

    Hastings, Stephen

    Myles, David

    Trotter, Neville

    Havers, Rt Hon Sir Michael

    Neale, Gerrard

    van Straubenzee, W. R.

    Hawkins, Paul

    Needham, Richard

    Vaughan, Dr. Gerard

    Hawksley, Warren

    Nelson, Anthony

    Viggers, Peter

    Hayhoe, Barney

    Neubert. Michael

    Waddington, David

    Heath, Rt Hon Edward

    Normanton, Tom

    Waldegrave, Hon William

    Heddle, John

    Nott, Rt. Hon John

    Walker, Bill (Perth & E Perthshire)

    Henderson, Barry

    Onslow, Cranley

    Walker-Smith, Rt Hon Sir Derek

    Heseltine, Rt Hon Michael

    Oppenheim, Rt Hon Mrs Sally

    Wall, Patrick

    Hicks, Robert

    Osborn, John

    Waller, Gary

    Higgins, Rt Hon Terence L.

    Page, John (Harrow, West)

    Walters, Dennis

    Hogg, Hon Douglas (Grantham)

    Page, Rt Hon Sir R. Graham

    Ward, John

    Holland, Philip (Carlton)

    Page, Richard (SW Hertfordshire)

    Warren, Kenneth

    Hooson, Tom

    Parkinson, Cecil

    Wells, John (Maidstone)

    Hordern, Peter

    Parris, Matthew

    Wells, Bowen (Hert'rd & Stevn'age)

    Howe, Rt Hon Sir Geoffrey

    Patten, Christopher (Bath)

    Wheeler, John

    Howell, Rt Hon David (Guildford)

    Patten, John (Oxford)

    Whitelaw, Rt Hon William

    Howell, Ralph (North Norfolk)

    Pattie, Geoffrey

    Whitney, Raymond

    Hunt, David (Wirral)

    Pawsey, James

    Wickenden, Keith

    Hunt, John (Ravensbourne)

    Percival, Sir Ian

    Wiggin, Jerry

    Irving, Charles (Cheltenham)

    Peyton, Rt Hon John

    Wilkinson, John

    Jenkin, Rt Hon Patrick

    Pink, R. Bonner

    Williams, Delwyn (Montgomery)

    Jessel, Toby

    Pollock, Alexander

    Winterton, Nicholas

    Johnson Smith, Geoffrey

    Porter, George

    Wolfson, Mark

    Jopling, Rt Hon Michael

    Powell. Rt Hon J. Enoch (S Down)

    Young, Sir George (Acton)

    Joseph, Rt Hon Sir Keith

    Prentice, Rt Hon Reg

    Younger, Rt Hon George

    Kaberry, Sir Donald

    Price, David (Eastleigh)

    Kellett-Bowman, Mrs Elaine

    Prior, Rt Hon James

    TELLERS FOR THE AYES:

    Kershaw, Anthony

    Proctor, K. Harvey

    Mr. Spencer Le Marchant and

    Kimball, Marcus

    Pym, Rt Hon Francis

    Mr. Anthony Berry

    1192

    1193

    NOES

    Abse, Leo

    Ford, Ben

    Morris, Rt Hon Alfred (Wythenshawe)

    Adams, Allen

    Forrester, John

    Morris, Rt Hon Charles (Openshaw)

    Allaun, Frank

    Foster, Derek

    Morris, Rt Hon John (Aberavon)

    Alton, David

    Foulkes, George

    Morton, George

    Anderson, Donald

    Fraser, John (Lambeth, Norwood)

    Moyle, Rt Hon Roland

    Archer, Rt Hon Peter

    Freeson, Rt Hon Reginald

    Newens, Stanley

    Armstrong, Rt Hon Ernest

    Garrett, John (Norwich S)

    Oakes, Rt Hon Gordon

    Ashley, Rt Hon Jack

    Garrett, W. E. (Wallsend)

    Ogden, Eric

    Ashton, Joe

    George, Bruce

    O'Halloran, Michael

    Atkinson, Norman (H'gey, Tott'ham)

    Gilbert, Rt Hon Dr John

    O'Neill, Martin

    Bagier, Gordon A. T.

    Ginsburg, David

    Orme, Rt Hon Stanley

    Barnett, Guy (Greenwich)

    Gourlay, Harry

    Owen, Rt Hon Dr David

    Barnett, Rt Hon Joel (Heywood)

    Graham, Ted

    Paisley, Rev Ian

    Benn, Rt Hon Anthony Wedgwood

    Grant, George (Morpeth)

    Park, George

    Bennett, Andrew (Stockport N)

    Grant, John (Islington C)

    Parker, John

    Bidwell, Sydney

    Grimond, Rt Hon J.

    Parry, Robert

    Booth, Rt Hon Albert

    Hamilton, James (Bothwell)

    Pavitt, Laurie

    Boothroyd, Miss Betty

    Hamilton, W. W. (Central Fife)

    Pendry, Tom

    Bottomley, Rt Hon Arthur (M'brough)

    Hardy, Peter

    Penhaligon, David

    Bradley, Tom

    Harrison, Rt Hon Walter

    Powell, Raymond (Ogmore)

    Bray, Dr Jeremy

    Hattersley, Rt Hon Roy

    Prescott, John

    Brown, Hugh D. (Provan)

    Haynes, Frank

    Price, Christopher (Lewisham West)

    Brown, Robert C. (Newcastle W)

    Healey, Rt Hon Denis

    Race, Reg

    Brown, Ronald W. (Hackney S)

    Heffer, Eric S.

    Radice, Giles

    Brown, Ron (Edinburgh, Leith)

    Hogg, Norman (E Dunbartonshire)

    Rees, Rt Hon Merlyn (Leeds South)

    Buchan, Norman

    Holland, Stuart (L'beth, Vauxhall)

    Richardson, Jo

    Callaghan, Rt Hon J. (Cardiff SE)

    Home Robertson, John

    Roberts, Albert (Normanton)

    Callaghan, Jim (Middleton & P)

    Homewood, William

    Roberts, Allan (Bootle)

    Campbell, Ian

    Hooley, Frank

    Roberts, Ernest (Hackney North)

    Campbell-Savours, Dale

    Horam, John

    Roberts, Gwilym (Cannock)

    Canavan, Dennis

    Howell, Rt Hon Denis (B'ham, Sm H)

    Robertson, George

    Cant, R. B.

    Howells, Geraint

    Robinson, Geoffrey (Coventry NW)

    Carmichael, Neil

    Huckfield, Les

    Robinson, Peter (Belfast East)

    Carter-Jones, Lewis

    Hughes, Mark (Durham)

    Rodgers, Rt Hon William

    Cartwright, John

    Hughes, Robert (Aberdeen North)

    Rooker, J. W.

    Clark, Dr David (South Shields)

    Hughes, Roy (Newport)

    Roper, John

    Cocks, Rt Hon Michael (Bristol S)

    Janner, Hon Greville

    Ross, Ernest (Dundee West)

    Cohen, Stanley

    Jay, Rt Hon Douglas

    Rowlands, Ted

    Coleman, Donald

    John, Brynmor

    Sandelson, Neville

    Concannon, Rt Hon J. D.

    Johnson, James (Hull West)

    Sever, John

    Conlan, Bernard

    Johnson, Walter (Derby South)

    Sheerman, Barry

    Cook, Robin F.

    Jones, Rt Hon Alec (Rhondda)

    Sheldon, Rt Hon Robert (A'ton-u-L)

    Cowans, Harry

    Jones, Barry (East Flint)

    Shore, Rt Hon Peter (Step and Pop)

    Crowther, J. S.

    Jones, Dan (Burnley)

    Short, Mrs Renée

    Cryer, Bob

    Kaufman, Rt Hon Gerald

    Silkin, Rt Hon John (Deptford)

    Cunliffe, Lawrence

    Kerr, Russell

    Silkin, Rt Hon S. C. (Dulwich)

    Cunningham, George (Islington S)

    Kilroy-Silk, Robert

    Skinner, Dennis

    Cunningham, Dr John (Whitehaven)

    Kinnock, Neil

    Smith, Cyril (Rochdale)

    Davidson, Arthur

    Lambie, David

    Smith, Rt Hon J (North Lanarkshire)

    Davies, Rt Hon Denzil (Llanelli)

    Lamborn, Harry

    Snape, Peter

    Davies, Ifor (Gower)

    Lamond, James

    Soley, Clive

    Davis, Clinton, (Hackney Central)

    Lestor, Miss Joan (Eton & Slough)

    Spriggs, Leslie

    Davis, Terry (B'rm'ham, Stechford)

    Lewis, Arthur (Newham North West)

    Stallard, A. W.

    Deakins, Eric

    Lewis, Ron (Carlisle)

    Steel, Rt Hon David

    Dempsey, James

    Litherland, Robert

    Stewart, Rt Hon Donald (W Isles)

    Dewar, Donald

    Lofthouse, Geoffrey

    Stoddart, David

    Dixon, Donald

    Lyon, Alexander (York)

    Stott, Roger

    Dobson, Frank

    Lyons, Edward (Bradford West)

    Strang, Gavin

    Dormand, Jack

    McCartney, Hugh

    Straw, Jack

    Douglas, Dick

    McDonald, Dr Oonagh

    Summerskill, Hon Dr Shirley

    Douglas-Mann, Bruce

    McElhone, Frank

    Taylor, Mrs Ann (Bolton West)

    Dubs, Alfred

    McKay, Allen (Penistone)

    Thomas, Dafydd (Merioneth)

    Duffy, A. E. P.

    McKelvey, William

    Thomas, Jeffrey (Abertillery)

    Dunn, James A. (Liverpool, Kirkdale)

    MacKenzie, Rt Hon Gregor

    Thomas, Mike (Newcastle East)

    Dunnett, Jack

    Maclennan, Robert

    Thomas, Dr Roger (Carmarthen)

    Dunwoody, Mrs Gwyneth

    McNally, Thomas

    Thorne, Stan (Preston South)

    Eadle, Alex

    McNamara, Kevin

    Tilley, John

    Eastham, Ken

    McQuade, John

    Tinn, James

    Edwards, Robert (Wolv SE)

    McTaggart, Robert

    Torney, Tom

    Ellis, Raymond (NE Derbyshire)

    McWilliam, John

    Urwin, Rt Hon Tom

    Ellis, Tom (Wrexham)

    Magee, Bryan

    Varley, Rt Hon Eric G.

    English, Michael

    Marshall, David (Gl'sgow, Shettles'n)

    Wainwright, Edwin (Dearne Valley)

    Ennals, Rt Hon. David

    Marshall, Dr Edmund (Goole)

    Wainwright, Richard (Colne Valley)

    Evans, Ioan (Aberdare)

    Marshall, Jim (Leicester South)

    Watkins, David

    Evans, John (Newton)

    Martin, Michael (Gl'gow, Springb'rn)

    Weetch, Ken

    Faulds, Andrew

    Mason, Rt Hon Roy

    Welsh, Michael

    Field, Frank

    Maynard, Miss Joan

    White, Frank R. (Bury & Radcliffe)

    Fitch, Alan

    Meacher, Michael

    Whitehead, Phillip

    Fitt, Gerard

    Mellish, Rt Hon Robert

    Whitlock, William

    Flannery, Martin

    Mikardo, Ian

    Wigley, Dafydd

    Fletcher, L. R. (IIkeston)

    Millan, Rt Hon Bruce

    Willey, Rt Hon Frederick

    Fletcher, Ted (Darlington)

    Miller, Dr M. S. (East Kilbride)

    Williams, Rt Hon Alan (Swansea W)

    Foot, Rt Hon Michael

    Mitchell, R. C. (Soton, ltchen)

    Williams, Sir Thomas (Warrington)

    1194

    1195

    Wilson, Gordon (Dundee East)

    Woolmer, Kenneth

    TELLERS FOR THE AYES

    Wilson, William (Coventry SE)

    Wrigglesworth, Ian

    Mr. Austin Mitchel

    Winnick, David

    Wright, Sheila

    Mr. Joseph Dean

    Woodall, Alec

    Young, David (Bolton East)

    Question accordingly agreed to.
    Mr. SPEAKER Mr. SPEAKER forthwith declared the Main Question, as amended, to be agreed to pursuant to Standing Order No. 18 (Business of Supply).
    Resolved,
    That this House deeply regrets the high levels of unemployment both here and in other parts of the world, but recognises that the conquest of inflation is a necessary precondition for the creation of new jobs in soundly-based and competitive industry upon which a realistic solution to the problem depends.

    UNEMPLOYMENT

      STATUTORY INSTRUMENTS, &c.
      Mr. Speaker Mr. Speaker: I understand that only the statutory instrument on agriculture is to be moved.
      Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

      AGRICULTURE
      That the draft Agricultural and Horticultural Co-operation (Variation) Scheme 1980, which was laid before this House on 25 June, be approved.—[Mr. Cope.]
      Question agreed to.

      SEA DEFENCES (WALTON ON THE NAZE)
      Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
      10.26 pm
      Mr. Julian Ridsdale: I raise the subject of the sea defences of the Naze at Walton on the Naze against the background of a policy of severe monetary restraint and Government economy. May I say at once that I support those policies to cure inflation, and therefore would not raise a subject on the Adjournment that necessitated spending even £320,000, as this project does, unless I believed that it was in the national interest. I know that I lay myself open to the charge of supporting economies in general but not in particular, and that
      1196
      I am fighting for a constituency interest. I therefore hope to prove that spending that small sum is wise.
      It is a stitch in time to save nine. This project is in the national interest, because if something is not done very soon, the Naze, a natural beauty spot will perish like a full blown rose. The sea and the rain will tear the silken tassel of its natural beauty, and its treasure will be in the sands. Rather like Humpty-Dumpty, all the Queen's horses and all the Queen's men will not be able to put it together again.
      The natural beauty of the Naze makes it a unique spot of its kind in Essex, which should appeal to the Minister with responsibility for the arts, as it does to many other lovers of natural beauty. Additionally, I hope to show that, in preserving it, we meet closely the criteria laid down by the Government that money can only be spent on sea defences where property and dwellings are in danger.
      Furthermore, I ask the Government to differentiate in their monetary policy between capital and revenue expenditure. The expenditure for which I am asking is, in my view, capital expenditure to save a priceless asset—our land. I am not asking for very much. Over a 10-year period it would give more than a 100 per cent. return and save a valuable asset. I hope that in his reply my hon. Friend the Under-Secretary will explain how the Government differentiate between capital and revenue expenditure, and how that applies in this case. Ts it regarded as a cut in capital expenditure or a cut in revenue expenditure?
      Before the last war the area of the Naze was a golf course. It was protected at the northern end by a sea defence wall called the Tamarisk wail, erected by the river authority, and by a series of groins to the south, erected by the former land owners. During the war the sea defences were not regularly maintained, and erosion continued to take place. The severe flooding of 1953 overwhelmed the Tamarisk wall, and a new line of defence was built to the south, in the form of an earthen embankment, by the river authority. Since then the history is as follows.

      1197
      In 1961 planning applications for commercial developments were made, and were refused after a public inquiry, on appeal. In 1963 the Essex county council, in conjunction with the local council, bought the area, of about 155 acres, for £75.000—the present value is about £250,000—as a regional open space. It is the only public open space in Essex on a cliff top overlooking the sea.
      After the Tendring council assumed responsibility in April 1974, on reorganisation, a scheme for the protection of the cliffs was approved for, first, blockwork protection to the base of the cliff; secondly, the artificial building up of the beaches to assist cliff base protection; thirdly, erecting timber groins to maintain the beach level; and, fourthly, the drainage of subsoil water in the cliffs.
      In September 1977 planning permission was granted for that scheme, and in October 1977 it was submitted to the Department of the Environment. In November 1978 a public inquiry was held. The cost of the scheme was estimated at £1,325,000. In June 1979, although the inspector appointed by the Department recommended approval of the scheme, the Secretary of State turned down the application, and directed the council not to carry out any work on it.
      In view of that, a much modified scheme was put forward in December 1979, to cost about £320,000. I advised the Secretary of State to support the scheme on the grounds that it was the least that could be done at present, although I am sure, on the basis of local advice, that drainage of subsoil water in the cliffs is at present of crucial importance, especially after the wet summer. Indeed, there is a strong case for that being done, even if at present the Department is not prepared to go any further. The advice that I have received from many local people is that the are still concerned about the wet summer and the subsoil adding to the problem of the sea defences. Even if nothing else can be done. will my hon. Friend obtain technical advice about the matter and at least let this part of the modified scheme go ahead at once?
      In June this year my right hon. Friend the Secretary of State turned down even the modified scheme. Because of this, it is being asked locally whether, if
      1198
      enough funds could be found privately, my right hon. Friend would allow even this modified scheme to be carried out, if it were backed by local fund-raising. Some voluntary work was carried out in the past initiated by Dora Cohen when she was chairman of the local council but I am doubtful, in these stringent times, whether enough private money could be found for the task in hand, though there are many well-wishers of the Naze.
      Since the Naze was purchased as a public open space about five acres have been lost to the sea and it is estimated that every three years one acre of public land is lost. From the date of the public inquiry in November 1978 erosion has continued at five feet per annum over the southern half of the cliffs with up to 36 feet being lost over a short section of front of the Naze tower.
      In recent weeks a further 36 feet of cliff has been eroded weighing about 2,500 tons of soil and sand. It seems certain that the rate of erosion is now increasing. That means that the Naze tower, erected in 1720 and which is 81 feet high, which is a grade III listed building and an important sea mark, and which contains vital radio equipment for both sea and air navigation, will disappear in just 12 years if something is not done. The tower is only 60 yards from the cliff.
      The houses in Hall Lane will be in jeopardy of collapse in due course and eventually the greater part of Walton would also be gravely affected. That underlines the point I make that we are almost, if not quite, meeting the principle laid down by the Ministry that houses and property are affected. That could possibly occur through erosion of the northern end of the Naze, exposing the Anglia Water Authority's sewage works and the backwaters of the Naze. Therefore, property is in danger.
      I had no alternative, once the Secretary of State had disapproved the modified scheme, but to do my best to bring home the serious consequences of the decision as strongly as I could. If, unfortunately, the Secretary of State still sticks to his point of view I ask the Minister to visit the site as soon as possible, possibly with the inspector who backed the larger scheme in the first place. I am sure, after this wet summer, that damage is occurring and that it is of vital importance that

      1199
      something should be done. After all my years as Member of Parliament for the area I could not stand aside and see nothing done.
      I want the Government to be aware of the very strong feeling that has been aroused locally as a result of the Secretary of State's decision. Take away the Naze and all the low land behind it lies equally open. I think that the feeling locally can best be described by some people who said that the Naze is Shakespeare's Naze for the people of Essex. To underline that fact they have sent me these words of Shakespeare.
      "This fortress, built by nature for herself, Against infection and the hand of war;… This precious stone set in the silver sea, Which serves it in the office of a wall, Or as a moat defensive to a house, Against the envy of less happier lands;"
      I trust that the Minister will hold out some hope to those who feel very strongly about this problem and who regard the Naze as a beauty spot which we should not allow to deteriorate for the sake of a minimum of capital expenditure this time, serious though I know that it may be to introduce some flexibility into the Government's monetary policy.
      I am talking about capital expenditure not revenue. Surely in that light the Government could take a longer view, important though it may be for the country to continue with a tough monetary policy until inflation has been beaten. I, therefore, ask the Minister to hold out some hope and be reasonable in response to the plea that I am making.
      10.40 pm
      Mr. Stanley Newens: I give my wholehearted support to the plea made by the hon. Member for Harwich (Mr. Ridsdale) for action to be taken to save the Naze from being eroded. Insisting on economy in this respect means that any conservation policy will be of no use in 10 or 15 years' time. The Naze will have been swept away. Once the Naze has gone no art of man will be able to restore that area of unique beauty.
      Sited there is a historic eighteenth century tower. We spend much money on conservation. Some consideration should be given to the Naze. It would be an appalling reflection on our generation if we allowed the area to be washed away.
      1200
      I am appalled that so little attention is paid to the erosion of our coastline. I was shocked to discover that no figures are kept nationally to show the extent of erosion.
      The Naze is not only of local importance—although that is considerable. It is important to many people who visit the area from London and Essex. The hon. Member for Harwich speaks not only for his constituents but for my constituents and the constituents of many other hon. Members. I do not always agree with the hon. Member on party political issues but on this occasion he speaks for people of all parties and from many constituencies. I am grateful for the opportunity to say how strongly I support the hon. Gentleman's plea. I add what strength I can to his appeal to the Government to take action before it is too late.
      10.41 pm
      The Under-Secretary of State for the Environment (Mr. Marcus Fox): I have listened with great interest and considerable sympathy to my hon. Friend the Member for Harwich (Mr. Ridsdale) and well understand his anxiety on behalf of his constituents about the problem of erosion by the sea of the land known as the Naze. It might be helpful if I explained some of the criteria applied when coast protection schemes are submitted for approval, particularly since my hon. Friend asked about the difference between capital and revenue. Although the Coast Protection Act 1949 provides for the protection of any land from erosion by the sea, the policy for implementing the Act has to have regard to the funds available.
      All coast protection schemes, other than works of maintenance and repair and emergency works, require the approval of the Secretary of State before being constructed. The statutory procedure provides for objections and these have to be considered before a decision is given.
      Schemes submitted by coast protection authorities for approval are examined to ensure that they are economically and technically sound and not extravagantly designed for their purpose. The Department also sees whether the cost of the scheme is justified by the value of the land and property it is designed to protect. This latter criterion almost invariably means that only schemes designed

      1201
      to protect urban areas are approved whilst those designed to protect open land—both agricultural and amenity land—are seldom justified.
      At present the scales are weighted more heavily in favour of the schemes protecting houses, factories and commercial properties. I am glad that my hon. Friend drew attention to current financial restraints. In common with all programmes of public expenditure coast protection works are subject to a cash limit. That for this financial year is already fully committed to schemes under construction and schemes protecting urban areas which have already been approved. The cash limits in this period of financial stringency are such that only schemes designed to protect urban development can hope to receive approval. We are seeing whether additional funds can be made available from other programmes but even if we are successful the list of schemes protecting urban areas and held in abeyance will certainly absorb those additional funds. The financial situation is extremely tight and as I have already said, in these circumstances it is right that available funds should be used to protect areas of development, particularly homes and places of employment.
      The total spent on coast protection capital works—to keep these matters in perspective—during the three years 1977–78 to 1979–80 was £19·7 million and the total grant paid out in that period was £10·9 million. Coast protection is not being neglected, but difficult decisions have to be made concerning what can be done immediately and what must wait, even for protection of urban areas.
      Many other cases are brought to my attention which fall within this criteria in terms of housing and employment, but which are not in this present programme. I have every sympathy for people of an area who may see storm tides easing away attractive land such as that at the Naze. But in present circumstances we cannot protect everything. We must be selective, and it is right that houses and property should have first call on the limited funds available. Having said that, I take note that my hon. Friend claimed that property will be in danger before long.
      In case hon. Members think that we have not paid due regard to the value of
      1202
      amenity land, I tell them that we have commissioned an investigation into the best way of carrying out the economic appraisal of coast protection schemes, including the problem of assessing the value of amenity land. A report from the local government operational research unit has just been received, and it will be studied carefully to ensure that fair assessments are made of schemes such as that before us tonight. The indications are that more exacting cost-benefit analyses will have to be made of all schemes, resulting in fewer schemes being approved.
      I now turn to the problem of the Naze itself.
      Mr. Ridsdale: Before the Minister leaves that point, will he deal with the fact that the money could possibly be found from private subscriptions? Would permission be given if private funds were available to carry out the work?
      Mr. Fox: Yest, indeed, I had intended to deal with that point towards the end of my remarks. My Department would be more than willing to look carefully at any private funds that were available for preservation of this sort. We would do everything possible to ensure that wherever the money came from, it could be used. However, I think I am correct in saying that my hon. Friend doubted whether the full cost could be found in that way. I pay tribute to the voluntary efforts that have already been made to preserve the Naze, and I hope that they will continue. Private capital could certainly be used in this case.
      The urban area of Walton is already protected from attack by the sea. The most recent work to be completed was the Mabel Greville sea wall which terminated at the Tower breakwater. At present, there is a small scheme before the Secretary of State to protect the northern end of this sea wall from outflanking by the sea. A slight modification has been suggested, and the Department is in correspondence with the district authority. I mention those points to show that we are concerned, within the limitations of finance, to do what we can.
      The area which is the subject of this debate is the open land north of the Tower breakwater. It is an area of some 70 acres, and is mainly rough grassland with bushes and some trees. As my hon. Friend said, a scheme for protection esti

      1203
      mated to cost £1,325,000 was submitted to the Department in December 1977. I was glad that my hon. Friend did not support that scheme. At a later stage he supported a more modfied scheme, which he mentioned tonight. This scheme seemed to be far too ambitious in terms of what was involved, and the finance is, of course, a major factor.
      Although there were no statutory objections, it was decided to hold a public local inquiry to enable all concerned to express their views. While the council and some organisations naturally want to protect the land, there are other bodies which are against the proposals.
      I welcomed the intervention from the hon. Member for Harlow (Mr. Newens). In spite of his plea on lines of conservation, he will, I think, accept that the cliffs in this area are recognised internationally as one of the finest pleistocene fossil locations in the world. The prime objector, the Nature Conservancy Council, stated that the coast protection works would lead to the progressive obliteration of the exposures in the cliff through the build-up of talus behind the proposed revetment. Collections of fossils from the Naze are distributed in museums all over the world and are of considerable importance in geology, since they provide a means of telling the age of rocks and the conditions under which they were deposited.
      I do not say that this is an argument for not carrying out the protection that I am asked to do, but I make the point that in a public inquiry, where people are objecting, a new factor is introduced.
      Mr. Ridsdale: Is the Minister aware that people who are objecting are supporting the land drainage scheme? Otherwise the erosion will take so much that all the arguments of which the Minister is in favour will be obliterated entirely.
      Mr. Fox: Of course, my hon. Friend is right. He will also be aware that it is not simply a matter for the Department of the Environment and that in terms of drainage my right hon. Friend the Minister of Agriculture, Fisheries and Food is also involved. I take my hon. Friend's point. I simply enlarge on what I said previously—that these are factors that we must bear in mind when we think of the order of priority.
      1204
      At the public local inquiry held in November 1978, the inspector was assisted by an engineering assessor and a geological assessor. Mindful of the policy on "open" land and the sincerity of those trying to save the Naze, he recommended that consideration be given to treating the matter as a special case with a view to determining whether expenditure to protect an area of high amenity value could be justified.
      After very careful consideration and assessment in the light of the current coast protection policy, the council was directed not to carry out the proposed works. Subsequently, the council submitted a cheaper scheme—my hon. Friend supported this and referred to it—estimated to cost £320,000, which was opposed by the Nature Conservancy Council. An engineer from the Department visited the area but, as my hon. Friend knows, the decision again was against approval.
      I appreciate that it is very difficult to talk about average rates of erosion because they vary along each stretch of coast and they vary year by year, but I accept what my hon. Friend has said in this respect. I note the concern that has been expressed for the historic tower. This is some 60 metres or more from the edge of the cliff at present and therefore not in immediate danger, although I recognise that the rate of erosion in this area has been substantial in the past year or so. I shall keep the matter under review.
      A number of coast protection schemes have been carried out in the council's area over the last decade, at Dovercourt, Clacton and Walton, to protect urban development. There are at present with the Department two schemes for work on the sea wall at Holland on Sea on which a decision must await the availability of additional funds. Members will appreciate that there are other areas of amenity and agricultural land which are in a similar position to the Naze, which, regrettably, cannot at present be protected from the ravages of the sea.
      I again express my appreciation of the efforts made by the local residents to arrest erosion at the Naze by their voluntary labours.

      1205
      My hon. Friend has done a great service to his constituents in calling attention to this matter, and I am sorry that I cannot be more helpful. I shall, of course, accept his invitation to visit the Naze. I cannot say that I shall be accompanied by the inspector; indeed, in no circumstances could I promise that. I shall certainly bring with me officials who will, I am sure, have the necessary expertise.
      The question of revenue and capital is difficult, because we are bound by the 1949 Act. That Act—my hon. Friend and the hon. Member for Harlow may
      1206
      regard as the most encouraging response—which has been in operation for 31 years, is overdue for investigation and possible changes. We have undertaken a nation-wide coast protection survey as a preliminary to the review that I have mentioned. That survey, which will cover the whole of the coastline of the United Kingdom, will give us more information than we have had in the past.
      Question put and agreed to.
      Adjourned accordingly at five minutes to Eleven o'clock.