Debate on the Address

HC Deb 04 November 1981 vol 12 cc7-103

[FIRST DAY]

Mr. Speaker

Before I call those hon. Members who are to propose and second the motion on the Loyal Address, it may help the House if I announce the proposed pattern of subjects for the debates on the Queen's Address. They are as follows: Thursday 5 November—foreign affairs; Friday 6 November—problems of the National Health Service; Monday 9 November—employment, industrial relations and the future of the statutory training boards; Tuesday 10 November—the financial arrangements of the National Coal Board and the privatisation of BNOC and British Gas; Wednesday 11 November—the continued decline of the British economy.

2.37 pm

Mr. Michael Shaw (Scarborough)

I beg to move, That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament. In accordance with tradition, I recall the day in March 1960 when, as a result of the first two by-elections of the then Parliament, my hon. Friend the Member for Harrow, West (Mr. Page) and I first took our seats in the House. May I say how nice it is to see my hon. Friend in his place today, looking as vigorous and cheerful as ever.

A consequence of that entry was the fact that for many years afterwards some of my colleagues were wont to refer to me as "Jack" and to assume a knowledge in me of Harrow that I have never possessed.

I also recall that after those heady days of that victory in 1960 what is now generally understood to be the normal consequence of a famous victory duly came upon me at the next general election. I lost my seat. So since 1966 I have been fortunate enough to represent first Scarborough and Whitby and now the Scarborough constituency.

It is a considerable honour to Scarborough that I have been asked to move this motion. Scarborough was the first of our seaside resorts and in no way has it stood still in seeking to attract to itself visitors both from home and abroad. Our hotels have been modernised, with the expenditure of a great deal of money, and so has our lovely old Spa. I regret only that it is still not possible for the major parties to hold their conferences in Scarborough. Many hon. Members have told me of the kind Yorkshire welcome that they used to receive when visiting the town.

I am glad to note that the Gracious Speech implies that there will be substantially less legislation during the coming year than during the past two years. Whoever is responsible for that has our heartfelt thanks. None the less, I expect that it could well be a very demanding Session, and, should any of my colleagues feel weary of good doing in this place, I remind him that occasionally Scarborough has other visitors. The Manor of Northstead is looking continually for stewards. I add, Sir, that one famous predecessor of yours, Mr. Speaker Selwyn Lloyd, complained to me that on taking up his new post there was neither desk nor notepaper on which he could reply to the many letters of congratulation and farewell that he received.

The Gracious Speech refers to maintaining progress in reducing inflation and the pursuit of policies designed to restore competitiveness abroad and prosperity at home. During the recess, I have visited many factories and many farms, talked with my hoteliers and been out with the fishing fleet. Wherever I have gone, I have found that there exists a general understanding of the difficult but necessary actions taken by the Government as well as a strong feeling of admiration and support for my right hon. Friend the Prime Minister. I know the many and often conflicting interests that have to be balanced by my right hon. and learned Friend the Chancellor of the Exchequer in fulfilling his difficult task. But I must faithfully report to him that in all the various enterprises that I visited I found the same two overriding hopes—that interest rates will be contained and reduced and that the value of the pound continues at a realistic and industrially competitive level. Given the fulfilment of those hopes, I found a general confidence in their capacity to compete that was greatly encouraging.

One of the most important pledges given in our manifesto at the last general election related to trade union reform. My right hon. Friend, now the new Secretary of State for Northern Ireland, put through the Employment Act in the first Session of this Parliament. He believed that legislation on this subject should be handled step by step and in principle I agreed entirely with him, except that I always felt that his Bill could have gone rather further than it did and that the first steps could have been greater.

Be that as it may, during the last Session we had a Green Paper and now we are promised another Bill. The Gracious Speech tells us A Bill will be introduced on employment and labour relations. Since that Bill is likely to be rather different from last year's Green Paper, I hope that we shall hear from my right hon. Friend the Secretary of State for Employment that he proposes to publish a discussion document at an early date so that consultations may take place before the Bill is introduced.

A moment ago I referred to my right hon. Friend the new Secretary of State for Northern Ireland, and reference is also made in the Gracious Speech to the complex problems of Northern Ireland. They are indeed complex and all too often heartbreaking as well. Unhappily, they must continue to hold the highest priority in our parliamentary programme. Both sides of the House have been united in their efforts to bring about a solution and, as the mover of this motion, it must be right that I should voice the good wishes of us all to my right hon. Friend as he takes on this new task.

I welcome especially that part of the Gracious Speech that refers to the Government's strong commitment to the European Community. It cannot be confirmed too often. Within the Community our task is twofold: first, to look after this country's legitimate interests, because, if we do not, no one else will; secondly, to play our full part in building up the strength and influence of this great European partnership. More and more the strength and influence of the Community as a whole will be found to exceed the totality of the strength and influence of its individual members.

I have the greatest admiration for the way in which my right hon. Friend the Prime Minister and her colleagues have worked to establish fair and proper conditions of membership for this country. The way in which she has managed to reduce our contribution to the EEC budget is quite remarkable. I do not believe that the general public—and apparently not all right hon. and hon. Members of the House—have yet realised the dramatic fall in our payments to Brussels in these past two years: from a forecast of £2,290 million to an outturn of £255 million, a saving of nearly £2,000 million. In addition, I ask right hon. and hon. Members to consider the efforts of my right hon. Friend the Minister of Agriculture, Fisheries and Food who, together with his tenacious Minister of State, has been handling our tough but vital negotiations in a way that deserves the thanks of every fisherman and farmer. But especially, during our Presidency, the Government have enhanced not only the respect in which we are held by other members but also the respect in which the rest of the world holds the Community. I am sure that the whole House wishes my right hon. Friend well in the remaining two months of that Presidency.

Finally, I welcome the references in the Gracious Speech to the importance of defence and the need to agree internationally on verifiable measures of arms control. For too long there has been allowed to grow up the idea that those who believe in the need for adequate defence forces, both nuclear and conventional, are in some way warmongers guilty of bringing nearer the horrors and destruction of modern warfare. In fact, the very opposite is true. History shows that where a people have not been prepared to defend themselves, they have in the end been attacked and overwhelmed. A strong defence must always be the best means of preserving peace. Of course, we all detest the awful potential of modern weapons. However, their threat cannot be lessened simply by declaring parts of our country nuclear-free. The threat can be lessened, as the Gracious Speech states, only by international agreement and by verifiable measures of control.

2.48 pm

Mr. Bob Dunn (Dartford)

It is a great honour and a privilege to second the motion moved so ably and robustly by my hon. Friend the Member for Scarborough (Mr. Shaw). My hon. Friend was first elected to the House for the Brighouse and Spenborough constituency in a famous by-election in March 1960, and was later elected as the hon. Member for Scarborough in 1966, a seat which he held at the last election with an increased majority in excess of 12,000 votes. Thus, it is in the knowledge of the great esteem in which my hon. Friend is held by the electors of Scarborough, and the sincere respect in which he is held by all on both sides of the House, that motivated us to listen with great interest and attention to his speech this afternoon.

I am deeply aware of the honour shown to my constituency in my being invited to second the motion. On making inquiries, it appears that, since 1885 at any rate, this is the first time that the hon. Member for Dartford has been so honoured. I hope, Mr. Speaker, that it will be the last—at least until after my retirement from the House, many years from now, on the ground of old age.

Although I have the great fortune to represent Dartford, and thus to regard myself as a Kentish man, I must inform the House that I am perhaps the personification of two nations. I was born in the North, in the damper climate of South-East Lancashire, where for many years my forebears were industriously employed in the mills and coal mines. However, like many of my fellow Lancastrians, notably my right hon. Friend the Paymaster General and my hon. Friend the Under-Secretary of State for Education and Science, the Member for Brent, North (Dr. Boyson), I decided in 1973 to leave the damp North-West for the drier South, and thus I became the hon. Member for Dartford at the last parliamentary election.

Dartford has for years made a significant contribution to the social, economic and political history of the United Kingdom. Wat Tyler was born there, Anne of Cleves lived there and Mrs. Beaton died there. Many great engineering and industrial enterprises were set up in Dartford from the end of the eighteenth century—notably J. and E. Hall Ltd, which, as the House will know, has made a major contribution to refrigeration and the general preservation of foodstuffs. To show that Dartford has made a contribution to the cultural life of the country, I also inform the House that Mick Jagger and Keith Richard of the Rolling Stones were both Dartfordians.

The constituency still takes enormous pride in the fact that my right hon. Friend the Prime Minister fought Dartford in the general elections of 1950 and 1951 and that she was followed in turn by my right hon. Friend the Minister of Agriculture, Fisheries and Food, who fought Dartford in the general elections of 1955 and 1959 Both my right hon. Friends are remembered with pride and affection and for their enthusiasm, energy and ambition.

Dartford is well placed for the future because of its proximity to London and the Channel ports and to the A2, A20 and M25, as well as its good links to the Midlands and the North via the Dartford tunnel—which one hears about on the radio almost every day. With the opening of the new industrial zones in Stone Marshes, industry will clearly be attracted to Dartford and thus contribute to a reduction in the level of unemployment from the current figure, which is in excess of 7.5 per cent. None the less, before these new ventures hear fruit, I welcome the Government's commitment to direct help to those groups and individuals most hard-pressed by the recession. I welcome the Gracious Speech on two grounds—first, that it is a speech with fewer legislative provisions than in previous years, and for Government Back Benchers that is welcome; and, secondly, that it contains specific commitments which will be vigorously endorsed on the Government Benches. I direct attention to the passage that states: Plans for public expenditure will reflect the importance of restricting the claims of the public sector on the nation's resources. That commitment will strike a responsive chord from those within the Dartford business community and especially those adversely affected by the operational practices of public utilities and the wealth consuming sector.

Like my hon. Friend the Member for Scarborough, during the recent parliamentary recess I was able to visit many local factories and other places of work to meet those responsible for the creation of wealth and job opportunities within the Dartford community. As this is a practice that I have consistently followed since my election, I can say with some confidence that employment prospects—both in maintaining existing jobs and creating new ones—have started to improve. Many firms with full order books and a good product range candidly admit that they possess a new aggressive determination to win back markets at home and abroad lost to the Japanese, the French, the Germans and the Americans. I know that they will succeed, because there is a new resolve among employers and employees to fight back and stay on top.

It is true that some local firms are not so well placed or so fortunate. Some are still experiencing real difficulties. Moreover, because of the relative improvement in industrial performance, it is more essential than ever for all aspects of State activity—and especially the public utilities—to reduce the burden on industry.

As a commitment to the elimination of State and public monopolies and as a sign of progress down the road towards further denationalisation, the House will view with interest the passage in the Gracious Speech that states: Measures will be introduced to amend the financial arrangements of the National Coal Board and some other public undertakings, and to facilitate private investment in the oil-producing business of the British National Oil Corporation. Measures will also be proposed to facilitate private investment and promote competition in the activities of the British Gas Corporation. Significantly, at a time when every effort is made by the Government to assist the expansion of small firms and the start of new enterprises, it appears to me from experience in Dartford that the inflexibility of the State monopolies in the form of public utilities, is retarding the expansion of small firms and thus preventing the creation of new employment opportunities. The introduction of competition will act as a necessary spur to those responsible for the provision of public utility services, and these new proposals, in addition to and in conjunction with the privatisation legislation introduced by the Government in earlier Sessions, will be a radical force for change.

On a constituency note—for and especially during the International Year of Disabled People—I welcome that part of the Gracious Speech which states: A Bill will be brought forward to improve the safeguards for detained patients and to make other reforms in the law of mental health in England and Wales. In my constituency there are five institutions and hospitals dealing with the mentally ill and mentally handicapped. That proposal will be welcomed by those undergoing treatment, by those related to them and by the many thousands of volunteers who endeavour to improve the lot of the mentally disabled.

As ever, it is not enough simply to be concerned. We must take action that will actively express concern and compassion about those less fortunate than ourselves. Caring has been a significant part of Conservative philosophy since the days of Shaftesbury and Oastler, and is a strand to which I subscribe. I am delighted with the proposal.

Finally, I am reminded of Governor Al Smith, who was a presidential candidate in the 1920s. While making a speech in New York during his campaign, he was interrupted by a heckler from the back of the hall, who said "Say, Al, tell us all that you know—it won't take very long". Governor Smith replied, "Say, Brother, I'll tell them all that we both know—it won't take any longer".

It is with the humility of that anecdote in mind that I welcome and second the motion and commend it to the House.

2.58 pm

Mr. Michael Foot (Ebbw Vale)

It is the custom of the House that the first speaker from the Opposition should congratulate those who have moved and seconded the motion of thanks for the Loyal Address, and I am glad to do so, not merely abiding by the convention but taking account of what has been said and of the constituencies of the hon. Members for Scarborough (Mr. Shaw) and for Dartford (Mr. Dunn), to which they alluded so happily.

I confess that I was a little mystifed by the statement of the hon. Member for Scarborough that wherever he went—presumably in his constituency and nearby—he found enthusiastic support and understanding for the Government's policies. If that is the case, the fishermen of Scarborough are not quite the men whom I used to know. They can express themselves a good deal more forcefully than that. I am sure that they were treating the hon. Gentleman with great kindness and consideration. If he can make arrangements for us to visit Scarborough again, we shall be happy to do so as soon as possible.

I naturally listened carefully to what the hon. Member for Dartford said about his constituency. I was grateful for his tribute to my old friend Wat Tyler. I recall the happy campaigns that we had together. I always found him an effective electioneer. I am sure that when we have the chance again, we shall be able to restore that constituency to its proper allegiance. I know that the hon. Gentleman will take that in good part because he has had some practice and has seen what can happen to others. Perhaps both the hon. Members for Dartford and Scarborough were selected by the Prime Minister for the task today precisely because they represent marginal constituencies in the sense that perhaps all Conservative Members represent marginal constituencies. [Interruption.]

There is some jollity among my ex-hon. Friends on this side of the House, who, if they were so confident, would not now be sitting in the House on false pretences. If they were so eager, they might have been prepared to face the electorate from whom the received such contradictory support before.

I congratulate the Prime Minister on a further ground on the selection of her two speakers. On the last occasion, a year ago, when I offered thanks to those who had moved and seconded the Address, I had to congratulate the right hon. Lady on her great generosity of mind in having selected two speakers who were dubious supporters of her Government's economic policy. She must have searched hard to close that gap now. She has selected the two speakers today with greater care than she selected her Cabinet.

I wish that the Prime Minister had shown the same consideration in the way in which she drew up the speech, because there are some serious objections to it and some defects to which I shall draw attention. Centuries ago mariners, in order to ward off attacks on their vessels, followed the ancient custom of throwing overboard a tub that would distract the attention of the powerful fish that might attack their vessel. Out of that was developed the title of "A tale of a tub". The Queen's Speech is based on the same principle. It is a tale of three tubs.

First, the hon. Member for Dartford referred to the following: Measures will be introduced to amend the financial arrangements of the National Coal Board". We shall examine that proposition with extreme care. I should have thought that the right hon. Lady's experience of a few months ago would have advised her to be careful in dealing either with the National Coal Board or with the National Union of Mineworkers. As she knows, she had to have second thoughts on such matters. I trust that she will have second thoughts— [Interruption.] Conservative Members must not be so testy. The right hon. Lady gave way with good grace in the end, and they should congratulate her on that.

The Queen's Speech states: Measures will be introduced to amend the financial arrangements of the National Coal Board and some other public undertakings, and to facilitate private investment in the oil-producing business of the British National Oil Corporation. Measures will also be proposed to facilitate private investment and promote competition in the activities of the British Gas Corporation. We denounced those sell-out proposals as soon as they were announced. As an Opposition we shall do everything in our power—with, I hope, support from other hon. Members—to oppose those measures. They are deeply opposed to the national interest. We shall call on the patriotism of hon. Members and of people throughout the country to oppose them as strongly as possible.

We have set aside one day next week when we shall move a motion, which will be the first part of our campaign. We shall fight those measures in the House by every means available to us. When we become the Government of the country again, we shall reverse the measures included in that paragraph. We hope that, even at this late stage, the Government will be prepared to look afresh at those measures and reconsider whether they are wise, when the domestic attention of the House and the country should be concentrated on our serious and growing economic and financial problems. The Government should avoid that number one distraction in the Queen's Speech.

I trust that the Secretary of State for the Environment is here. The Queen's Speech states that: Legislation will be introduced to improve the accountability of local authorities for the level of their rates. I do not know whether the right hon. Gentleman still adheres to doctrines that he stated before on that subject. We regard that proposal, in the form in which it has been outlined so far, as deeply hostile to democratic principles. I shall be surprised if all Conservative Members support it. It is not a good democratic principle to introduce the idea of a referendum on whether people want their rates or taxes raised, particularly when that is proposed by a Government who have raised taxes in contravention of their election pledges more than any other Government in our history.

We shall oppose that proposition as strongly as possible. We shall give an opportunity for the House to oppose it on the Supply day which is available to us next week. There will be a vote and we hope that all those who oppose that proposition, not merely on the grounds of local government expenditure—there may be differing views about that—but because of opposition to the use of a referendum on such constitutional grounds, will be prepared to support us in the Lobby.

I am sorry that the Secretary of State for the Environment is proceeding with the measure. In the recess we learnt that he was a new man. Some of us heard that news with suspicion. We heard that he had undergone a great conversion and that he had been struck by a blinding light in the city of Liverpool. However, now, when we have returned to the House, he is back to his old evil practices. He must be the first man on record who has insisted that the journey to Damascus be made in the form of a round trip. He is back, apparently performing the same tricks that we knew before. We shall oppose him as furiously and as strongly as possible.

A third major measure foreshadowed in the Gracious Speech that we regard with deep objection, although it is not yet stated in the exact terms in which it is to be framed is: A Bill will be introduced on employment and labour relations. Presumably the new Secretary of State for Employment is to introduce that measure. We have no faith in any measure introduced by him in any case, but we believe that it is a serious misjudgment of the situation and a serious misuse of the time of the House that, at the moment when the Government should be seeking to restore and re-establish the industrial relations that they have done so much to injure, we should have thrust before us another Bill which can only infuriate people and intensify the difficulties that we encounter in that area. I therefore assure the Government, the House and the country that we shall oppose that measure, too, with every power that we have. Again, we hope that even at this late stage the Government will reconsider it.

The Government say that they intend to publish a consultative paper or something of the kind on the subject. The hon. Member for Scarborough pleaded that there should be a consultative paper, but there is little point in a consultative paper if the Government have already made up their mind what they intend to do.

The Government propose that during the coming weeks and months the attention of the House and of the country should be directed into the channels to which I have referred. That is a gross distortion of national application at a time when we should be dealing with the great and mounting problems which face us.

That brings me to the remarkable statement about unemployment: My Government share the nation's concern at the growth of unemployment"— that is very gracious of them is it not?— and will continue to direct help to those groups and individuals most hard-pressed by the recession. That is a very mild way of expressing the mammoth task that should face the country and the House at this time, and it bears no relation to what has been happening. It is also a very strange statement from a Government who bear such a direct responsibility for unemployment itself. [Interruption.] If Conservative hon. Members contest that, they should consider what was said in July by the then Secretary of State for Employment, now Secretary of State for Northern Ireland, who knows something about the matter. Perhaps, indeed, that is why he was sacked. The right hon. Gentleman said: I was in Wales recently … There has been a 25 per cent. drop in manufacturing output. That is disastrous. We cannot afford to go on like that; the awful thing is that the recession has been far worse here than almost anywhere else in the world". Those are the words of the right hon. Gentleman, who until very recently was in charge of these matters and who knows what he is talking about.

The right hon. and learned Member for Hexham (Mr. Rippon) has now brought the matter up to date. I refer to the Government's direct responsibility for the unemployment about which they express concern. The right hon. and learned Gentleman said in a speech yesterday: The Treasury mind has been like an arid desert. Not a single oasis softens its bleak horizon. The harsh application of textbook money theories which ignore human and social relations have relentlessly eroded our industrial base and inflicted an unacceptable level of deep-seated unemployment. And all this, without succeeding in doing more than increase public expenditure in the wrong directions; so we face a budget deficit in the current year which is anticipated to be £10,500 million". In the face of such clear statements from both the ex-Secretary of State for Employment and the right hon. and learned Member, it is idle for any Conservative Member to say that the Government do not bear direct responsibility for the scale of unemployment and the heavy burden that we bear—the heaviest burden of unemployment that the country has known since 1945 and perhaps before.

When I read those statements again and I learn that My Government share the nation's concern at the growth of unemployment", I am reminded of the conversation in "Macbeth" when the compassionate, flexible Macbeth, viewing his own handiwork of destruction, says: This is a sorry sight. He was supposed to be too full of the milk of human kindness, of course. Lady Macbeth, however, replies: A foolish thought, to say a sorry sight. It is a foolish thought for the Government to say that they share the nation's concern at the growth of unemployment when they themselves have been so directly responsible for it and have contributed to it on a scale which, even a year ago, none of them would have thought possible and certainly none of them prophesied. Now, however, practically all who speak on the matter, except perhaps those who speak officially for the Government, prophesy that the crisis will become deeper still.

In our debate on this matter the other day, the chief defence of the Government was made not by the Government themselves but by the right hon. Member for Down, South (Mr. Powell), whose speech was greatly acclaimed. The right hon. Gentleman argued even more forcefully than the Prime Minister herself, but the argument is fundamentally not very different, that any Keynesian reflation was bound to run into the sand and to create even more unemployment. The right hon. Gentleman therefore opposes all such operations. He bases that argument on the experience of the last six or seven years.

The facts, however, are rather different. The effects of Keynesian reflation on the economy are nothing like so consistent as the right hon. Gentleman claims. On 15 or 20 occasions since the end of the war, Keynesian reflations of one kind or another have been effectively carried through to check an increase in unemployment. A very big Keynesian reflation was conducted by the right hon. Member for Sidcup (Mr. Heath) in 1972. [Interruption.] Conservative Members may claim that that is what led to the recession of 1974 and 1975, but they should be careful how strongly they argue that, because to do so would be to exclude altogether from the situation in those years the effects of the world recession and of an increase in oil prices far greater even than that with which the right hon. Lady and her Government have had to contend.

The House should therefore look carefully at those facts. Indeed, in this context there are few things that we should consider more carefully than how reflations can be conducted. It is my view and, I believe, that of growing numbers of people throughout the country, not that reflation alone will solve the problem but that without a considered reflation as one element in the recovery, there will be no recovery and unemployment will grow even deeper.

Mr. John Browne (Winchester)

I should be very interested if the right hon. Gentleman, even at a later date, could point to one occasion when Keynes actually mentioned the word "reflation". Does he agree that the correct word is not "reflation" but "re-inflation"?

Mr. Foot

I think that that is a pedantic quibble on the hon. Gentleman's part. What I am talking about and what the right hon. Gentleman was talking about—and what the House must continue to consider if we are ever to escape from today's mass unemployment—is a Keynesian expansion. It would have to be undertaken together with other measures. I do not say that it can succeed by itself. I believe that the House and the country will increasingly realise that if this is rejected in the flat terms in which the right hon. Member for Down, South and the Prime Minister reject it, there is no hope of escape from the present position. The right hon. Member for Down, South illustrated the case in a graphic manner, because he is now searching—he has not told us this yet, but I am sure that he will do so at some future date—for the explanation as to why unemployment is so great and for the feature in our society that gives rise to it.

The right hon. Gentleman gave only a hint. He referred to North Sea oil. I do not know whether at some future date he intends to propose that we should hand over the continental shelf to the Norwegians, who apparently are cleverer at using the oil than we are. But if the right hon. Gentleman and the House study the whole experience—we are not even talking about theories—of Britain, the United States and the other great democratic countries, they will discover that since 1945 we have had something approaching. full employment only in periods of Government financial intervention.

If that approach is to be discarded, the Government will head for an even greater disaster than we now face. Yet there is no glimmer at the end of the tunnel or even a glimpse of improvement, because the right hon. Lady has been unable to describe it in any of her speeches. A year ago, she described how she thought most things were moving in the right direction. She laid particular emphasis on the rate of inflation, which she said was the first of her objectives. I doubt whether she could lay such faith upon that now.

I turn to another major item in the Gracious Speech to which we all must direct our attention. Indeed, it is the most important question of all. The Gracious Speech says that the Government welcome the forthcoming negotiations between the United States and the Soviet Union on limiting long-range theatre nuclear forces. I hope that at last the Government are prepared to assist in forwarding those negotiations by every means in their power. They have been late in waking up to such propositions. When I went to Moscow with my right hon. Friend the Member for Leeds, East (Mr. Healey)— [Interruption.] I know that some hon. Members are only catching up with the seriousness of the situation, if that is not too heavy a compliment to pay to them. We went there because we believed that in some respects this is the most critical moment in the history of the world since nuclear weapons were first invented.

We believe that these negotiations about what may happen in Europe, and the way they turn, will be the decisive factor on which to judge whether we are able to proceed to a genuine, agreed disarmament, or whether we shall be forced into a new arms race with more terrifying implications that anything the world has known. That is why we went, and it was a perfectly good reason for doing so.

On the immediate question of negotiations, we sought to stress the case that I have discussed with many people both at home and abroad, particularly with leaders of the Socialist parties in Western Europe. Our discussions were concerned primarily with what is known as the zero option, whereby if theatre weapons were removed in the West the Russians would remove their SS20s. As it is the installation of the SS20s that is claimed on so many grounds to be the factor that has most severely upset the balance, I would have thought that the House would be interested in the proposition. There is no doubt that in the forthcoming negotiations, the Government will have to return to this aspect time and again.

We put our case as strongly as we could. The Soviet leaders said that in some forms of negotiation they would be prepared to reduce the number of SS20s. I would have thought that the Government would be interested in this, especially if the SS20s are likely to blow us to pieces in the event of nuclear war. It is quite conceivable that if such a war occurred in the next year or two, those weapons would cause the damage. I therefore would have thought that everyone would be interested in such discussions.

However, when we returned, the Foreign Office Minister protested strongly and said that the Russians had made similar proposals prior to December 1979. If that is so, what was the response of the British and American Governments at that time? It is said that prior to December 1979 the Russians had proposed a reduction in the number of those weapons. There were fewer SS20s then than there are now. They probably had 40 or 50 then, whereas the figure now is probably 200 or 250. Therefore, proposed reductions then was a matter of considerable interest, particularly as it occurred before the invasion of Afghanistan and before any agreement had been reached on these matters. I should emphasise that it was also at a time when the SALT II agreement was still likely to be ratified. All those possibilities still existed.

Are we to understand that, although the Soviet leaders made those propositions, the Foreign Office made no response? One would have thought that at least they would have notified our American allies. But that was not the case. In a speech by the American Assistant Secretary of State for European Affairs only a few days ago—[Interruption.] Apparently Conservative Members are not interested in this subject, but we are and we shall tell the whole. country. The American spokesman, Mr. Lawrence Eagleburger said on October 15: The Alliance's decision to modernise its theatre nuclear forces caused the Soviets to reverse their refusal to negotiate and for the first time to offer limits on their own theatre forces". He went on to repeat and emphasise that, which refutes everything that the Foreign Office has said. It has claimed that before 1979 no such proposals came from the Soviet leaders.

I repeat what I have already said, especially in the light of the controversy that has arisen in the last few weeks, the statement made by President Reagan about the possibilities of limited Nuclear War in Europe and the response and other factors involved. This is possibly the most delicate subject of all, in the sense that the whole NATO strategy based on a flexible response is collapsing.

If hon. Members read the letter in The Times today from Field Marshal Lord Carver, they will realise that no one can doubt the seriousness of the proposition that he put. He knows the situation as well as any military figure who has been involved in these matters over the past 20 years. He says that NATO's flexible response—the idea that Nuclear Weapons may be used first against conventional weapons—is collapsing.

It was because of the collapse of that strategy that there was such an outcry about President Reagan's statement, and it is because we have reached such a critical moment that the Opposition say— [Interruption.] It is difficult to turn the minds of Tories to this major question, but there is a growing feeling and determination in the country among people who are concerned about what is happening that Britain's influence will be properly used.

Anyone who looks at the whole controversy and how it is shaping must recognise that these theatre nuclear weapons negotiations are of absolute critical importance. If they were allowed to collapse—to fail—or if they run into the sand and are ineffective and the nuclear arms race is renewed, then what I said at the beginning of my speech—that this is the most dangerous moment in the period of nuclear negotiation—will have been underlined.

If, on the other hand, we can secure an intelligent agreement on these matters, we can move on to other questions. Indeed, this country has an obligation to do that. The undertaking on cruise missiles and so on was made only after an agreement that there should be an undertaking on the implementation of SALT II, which has already been abandoned.

Dr. David Owen (Plymouth, Devonport)

rose——

Mr. Foot

I should be happy to conduct a debate with the right hon. Gentleman in Devonport if he will go there and fight.

Dr. Owen

rose——

Mr. Speaker

Order. It is clear that the Leader of the Opposition is not giving way. He must be allowed to continue.

Mr. Foot

I give way to the right hon. Gentleman.

Dr. Owen

If the right hon. Gentleman wishes to conduct the debate in an election on the streets of Devonport, I should be very happy to challenge him. [HON. MEMBERS: "Resign."]

Mr. Speaker

Order. Dr. David Owen.

Dr. Owen

For fellow Plymothians and a spokesman representing the constituency of Plymouth, Devonport, it would be a good test if the right hon. Gentleman would fight me on the streets of Devonport.

On my point of intervention, the right hon. Gentleman made a serious point about a serious issue, with which I agree. However, will he clarify whether he is asking the House to support negotiations for the withdrawal of battlefield nuclear weapons that are possessed by the Soviet Union and the Warsaw Pact, as well as Britain and NATO, or is he arguing as he has often done in the past for a unilateral gesture? If he is arguing for negotiation, he will carry the support of my right hon. and hon. Friends.

Mr. Foot

I shall deal first with the personal question that the right hon. Gentleman raised and then come to the far more important question of how we are to proceed with the negotiations.

Regarding his position in the House, I say to him and to all his right hon. and hon. Friends who were elected as members of the Labour Party, that they are at present sitting in the House under false pretences. They should have the honesty and openness to resign. That is the answer that I gave to the right hon. Gentleman and his hon. Friends immediately after their action some months ago.

When we visited the Soviet Union, we put forward the proposals and arguments that I have outlined. There is no conflict between arguing for securing the zero option and the removal of weapons from both sides of Europe. Of course we are in favour of that. I know that there are definitions about such an arrangement, and there will be arguments about it over the coming weeks and months. I hope that we shall not be arguing about it for too many years.

There are areas in which unilateral action can be taken. The right hon. Member for Plymouth, Devonport (Dr. Owen) himself is in favour of some unilateral action because he says that he is not in favour of Trident. He, too, must sort these matters out. We, as a party, are seeking to ensure that these negotiations have a chance of success. I repeat that if they fail it will be a catastrophe for the whole world. If we can make them succeed, we can change the whole face of Europe and the prospects for mankind. If the multilateralists want to prove their case, the best way to do so is to try to get multilateral action in the near future. If that were to occur, a very different state of affairs would arise.

I repeat and emphasise that we do not intend to leave these matters out of discussion in the House. We shall carry them from one end of the country to another. The stronger and wider the debate, the better it will be for the country as a whole. On the grounds of the Government's international policy, as well as their appalling exhibition on domestic affairs, we believe that they are unfit to govern. It would be better for the country if this were the last Queen's Speech that they were allowed to introduce.

3.37 pm

The Prime Minister (Mrs. Margaret Thatcher)

First, I join the Leader of the Opposition in paying tribute to the speeches of the mover and seconder of the motion. My hon. Friend the Member for Scarborough (Mr. Shaw), like me, was elected to the House on his third attempt; and he is one of the most widely respected Members here. He spoke about economic matters, of which he has expert knowledge. We listened to his remarks with great attention. He also spoke on the European Economic Community, where he was a member for some time and played a prominent role. We know, too, of his interest in trade union reform and of the great interest that he has taken in defence. We heard and heeded his advice. Rarely has the House listened to a better or more constructive speech from the mover of the motion and we warmly congratulate him and thank him for his comments.

I also congratulate the seconder of the motion, my hon. Friend the Member for Dartford (Mr. Dunn). As he pointed out, I fought Dartford in 1950 and 1951, and lost. My right hon. Friend the Minister of Agriculture, Fisheries and Food fought Dartford in 1955 and 1959, and lost. My hon. Friend fought Dartford in 1979, and won. What a tremendous future must lie in store for him that he triumphed where the Front Bench could not succeed.

I also congratulate my hon. Friend on his speech. We listened with great interest as he retailed some of the improving industrial performance in his constituency, and also to his comments on nationalisation, how badly it serves the consumer, and the need to get more nationalised industry into the private sector. I, too, shall comment on that. I warmly congratulate my hon. Friend on his excellent speech.

I wish that I could warmly congratulate the Leader of the Opposition on his excellent speech, but I do not feel able to do that, either for what he said or for the way in which he said it. He made a number of references to the Gracious Speech. I shall pick up one or two. First, he spoke about the concern of my right hon. Friend the Secretary of State for the Environment about high rates. We are all concerned about very high rates. The system was never designed to bear the levels of taxation now being placed on it. It seemed as if the right hon. Gentleman was saying that it was undemocratic to refer such a matter to the vote of the people. I find that very puzzling. After all, rates are not exactly a shining example of a democratic tax. Only a minority of electors are ratepayers, and many ratepayers have no vote.

The Leader of the Opposition also mentioned the reference in the Gracious Speech to trade union reform. We remember that it was the Labour Government that introduced two new measures of legislation, which gave trade unions enormous extra powers and which ended up in the winter of discontent. We also remember that it was one of those measures that enabled a person to be sacked from his job for refusing to join a trade union. However, under the right hon. Gentleman's legislation that person would not have been entitled to any compensation. Yet, the right hon. Gentleman pleads humanity. That was hardly a humane piece of legislation.

We heard exactly what the right hon. Gentleman said about disarmament. However, the Gracious Speech urges talks on multilateral disarmament. What the right hon. Gentleman says and does makes it less likely that the talks will succeed. If he pursues a unilateral line, what reason will there be for getting the Soviet Union to come to the negotiating table? The right hon. Gentleman said "soon". The talks with the United States of America start on 30 November, and we wish them every success. Anyone who listened to the right hon. Gentleman's speech would hardly have thought that he was a member of a Government that preserved Britain's nuclear deterrent for five years because the right hon. Gentleman then thought that it was in Britain's true interest to do so. We believe that it is still in Britain's true interest to do so.

The Leader of the Opposition also talked about reflation and suggested that during the early years—the 1950s and 1960s—a measure of reflation was used. Indeed, in those early days a measure of reflation was used. Then it required only tens of millions of pounds to secure a few extra jobs. As time went on, the dose got bigger and bigger. It required £100 million to produce the same number of jobs. Then billions of pounds needed to be injected to produce the same number of extra jobs. Gradually the rate of inflation became higher and higher and the effect on unemployment became less and less. That produced the stop-go system of the 1950s and 1960s. Eventually, the rate of inflation became so high that the whole fixed exchange rate system broke and the discipline which applied in the 1950s and early 1960s no longer existed. We had to replace that discipline with something else.

The Leader of the Opposition also said that the period of high employment was in the early 1950s. That was nothing to do with Keynesian policies. That situation arose because there was a seller's market after the war and half of Europe's industries lay in ruins, while Japan's were not yet rebuilt. In addition, the pattern of world trade had not changed. The right hon. Gentleman must come into the 1980s and deal with the situation as it is.

Last week, we debated reflation. It would seem that the arguments of the right hon. Member for Down, South (Mr. Powell) fully triumphed over anything that the Leader of the Opposition said then or has said today. For example, does anyone imagine that the German Government would continue to pursue their responsible financial policies if they thought that they could solve their high rate of unemployment by means of reflation? Of course not. The German Social Democratic Party knows full well that reflation would not overcome its country's problems; it would only make them worse. So, too, in Britain a policy of reflation would not solve the problems of the unemployed. On the contrary, by increasing inflation it would put in jeopardy many of the jobs of the 23 million people who are in work and dash the hopes of the 3 million unemployed that they would ever find lasting jobs.

If reflation is not the answer—and it is not—the answer must lie in practical steps to help the unemployed. There are two types of practical steps that can be, and are being, taken. The first step involves special employment measures and the second involves encouraging small businesses and the technologies of the future.

As regards direct measures, we announced a number of decisions last July, which are only just beginning to come into effect. Last month, the number of trainees on the youth opportunities programme rose by 55,000. On Sunday of this week the age of entry to the job release scheme was lowered to 63 and in February, it will be lowered to 62. On 4 January the young workers scheme will start, but employers who take on young people now will still qualify in January for the help provided by the scheme. They do not have to wait until then to take youngsters off the unemployment register and on to the payroll.

By the turn of the year I expect my right hon. Friend the Secretary of State for Employment to announce substantial further measures in the form of a comprehensive training scheme for the young unemployed—arising from the consultations on a new training initiative. The whole of July's special package is beginning to take effect and new measures will be announced by the turn of the year. They do not——

Mr. Eric S. Heffer (Liverpool, Walton)

Will the right hon. Lady give way?

The Prime Minister

I have only just started. I shall give way to the hon. Gentleman. I usually do so, because he helps me along very well and I am always very grateful to him. Reflation would——

Mr. Heffer

rose——

The Prime Minister

Have patience. Reflation would put the jobs of the 23 million employed in jeopardy. The right policy is to help by means of special employment measures, and that is the policy that we are pursuing. After I have given way to the hon. Member for Liverpool, Walton (Mr. Heffer), I shall turn to some of the help that we are giving in order to stimulate new jobs.

Mr. Heffer

I intervene in order to help the right hon. Lady along. Does she agree that the proposals that she has just outlined and those put forward in July represent a reversion to policies that were pursued by the Labour Government, although this Government have still not achieved the levels of support to unemployed youngsters that were achieved when the Labour Party left office?

The Prime Minister

I understand that the hon. Gentleman fully agrees with the measures that were announced in July. I am delighted to have his support. I hope that my right hon. Friend the Secretary of State will have his support when he announces further comprehensive training measures. The hon. Gentleman could have fooled me that he was supporting our actions.

We must also stimulate the new jobs of the future. The combined tax incentives announced by my right hon. and learned Friend the Chancellor of the Exchequer in his last two Budgets are now widely recognised as providing the best conditions the world over for encouraging the birth and growth of new businesses. We have taken a range of initiatives on industries, such as information technology, to ensure that Britain does not fall behind the rest of the world. Later this month we shall identify some 20 sites, concentrated in inner cities, for training teenagers in computing and electronic skills. We have also launched a £25 million scheme designed to stimulate research and development in fibre optics.

Those are only a few of the many ways in which we have created a climate in which small businesses can start and grow, in which advanced technology can flourish and in which investment from overseas can be attracted. Under the Government's policies, investment from overseas in the high technologies is being attracted, and attracted into the development areas in which it is needed. That shows a great measure of confidence in the policies that the Government are pursuing.

Today, we see British industry slowly but inexorably improving—[HON. MEMBERS: "Where?".] Of course. Opposition Members do not like that. They love bad news and hate to hear good news. They know that reforms of labour practices that should have taken place decades ago have been achieved in a matter of months. They know that many firms have found new scope for co-operation between management and employees. In the manufacturing industries, we have seen productivity per man hour rising at a rate that is reminiscent of Germany or Japan. That has been achieved in the teeth of a world recession—at a time when increases in productivity are rarely achieved. For years, hon. Members on both sides of the House have spoken about export-led growth. Now, for the first time there is a real chance of that happening. This reflects falling inflation, moderating wage settlements, higher productivity, and an exchange rate at a level which enables British industry to compete in the markets of the world. Increasingly we see British firms winning contracts based on price and performance.

Some would say that the changing attitudes that we see in industry will not survive a return to growth. If that were to be so, we should all have failed. The Government want realism and a sense of partnership that will continue to grow when the lean years give way to expansion. Sound common sense policies are as vital to a nation coming out of recession as they are to one that is still in its grip. We must see that those sound policies endure.

We all welcome the fact that British Leyland is back at work today. Common sense has prevailed and the company, which is painfully hauling itself back to profitability, can now get on with the job of making and selling cars.

The British Leyland board has today decided to put forward the company's corporate plan to the Government. We shall, of course, study the details carefully, but it seems clear that the solid progress won, at much cost, over the last three and a half years, can be continued—and with it at least 200,000 jobs in British Leyland and its components suppliers and others can be safeguarded. We wish the company, its management and its work force every success.

To survive, all our industries must be competitive. There is no safe corner where the inefficient can shelter, indefinitely protected from the progress of more vigorous rivals. That ought to be as true for the nationalised industries as it is for the private sector, but many of the nationalised industries are monopolies, not pressed by normal market forces and with no fear of bankruptcy to spur them to greater efficiency. Their costs and their wage increases inevitably flow through to the rest of the community in higher prices for their goods and services. Those higher prices add to the costs of our private sector companies fighting for business in world markets. Yet, price control is no answer. It is the costs that must be brought down.

Our first aim is to try to expose these industries to competition. That is why we shall bring forward legislation to end the British Gas Corporation's monopoly in both the purchase and sale of gas to industrial consumers.

A number of my hon. Friends will recognise these words: The British Gas Corporation is a highly profitable organisation which enjoys both the monopoly purchase right to all the gas in the North Sea and a monopoly of gas distribution. There is no good reason why an oil company which produces gas from the North Sea should be forced to sell its entire production to the BGC, which then re-sells it to private industrial customers at a substantial mark-up. Because of the unrealistically low prices which BGC is able to impose on gas producers, output of gas has undoubtedly been lower than it might have been. There is no justification for the present situation in which gas producers are prevented from piping gas ashore and selling it direct to industrial customers such as the chemical industry. The breaking of the BGC purchase monopoly should be a high priority for a Conservative Government. Those words came from a recent much noticed pamphlet subtitled "What the Government should do next". I am sure that its authors will be happy to see that the Government have taken their advice at the first opportunity—[HON. MEMBERS: "Author?"] It is from a pamphlet called "Changing Gear—Proposals from a group of Conservative MPs". It is full of good stuff. Labour Members should read it.

Once there is competition, we must return as many industries as possible to the private sector, which can provide the best environment to stimulate further improvement and investment. We shall, therefore, be introducing a Bill to transfer to the private sector—that is, to genuine ownership by the people—the oil-producing business of both the British National Oil Corporation and the British Gas Corporation. It is private enterprise that has made North Sea oil the outstanding success story that it is. It is private enterprise that will be the key to its continuing success in the future.

Mr. Clinton Davis (Hackney, Central)

Will the Prime Minister tell the House what has happened to the much-vaunted proposals of last year to privatise British Airways? What are the Government's intentions in that respect? Have they all gone into the sand? Is not the reality that those proposals deflected British Airways from going ahead with capturing international markets and building up the morale of its work force?

The Prime Minister

No; that is nonsense. British Airways will be returned to the private sector when the market conditions are at their most propitious. The legislation is there, and it will be very beneficial.

But there are some nationalised industries, notably the big utilities, in which it is difficult to introduce competition and which are not easy to return to the private sector. In those industries we must ensure that the absence of market forces is replaced by other pressures to induce greater efficiency. Some have already been referred, with salutary effect, to the Monopolies and Mergers Commission.

We shall make certain that the monopoly suppliers know clearly what is expected of them. We shall set tough targets, because the health of the economy depends on their achievement. The future of many jobs outside the public sector lies in the hands of these monopolies, which, if their prices are too high, can push up the cost of industries in the private sector, so that jobs are lost. The House will have the opportunity to discuss the performance of the nationalised industries as we bring forward measures to deal with their financing.

Labour Members are constantly talking about gas. There is a positive return from gas. This year the positive return of the British Gas Corporation is about £400 million. That is more than swallowed up by the subsidy to the National Coal Board of £1,100 million—and that is only one such subsidy to a nationalised industry.

While I am referring to heavy costs imposed on the private sector, I emphasise that we have been increasingly concerned at the extravagant increase in the spending of a number of local authorities. The Government will, within a matter of weeks, be publishing a Green Paper on the alternatives to domestic rates.

In the meantime, we face an immediate problem. The majority of local authorities have co-operated with the Government to reduce current expenditure. I might wish that progress had been faster, but no one can question that the previous, almost automatic, annual increase has been reversed. But a small minority of authorities have absorbed virtually the whole of the economies achieved by the rest. If we as a Government pursued the traditional policy, we would simply cut the budgets of all authorities to compensate for the excesses of a few. The low-spenders and the prudent would suffer with the over spenders.

Some say that it is worth it in the name of local government freedom. It is a curious sort of freedom that argues that the profligacy of the few should be paid for by the sacrifices of the many.

We shall introduce a Bill to ensure greater accountability of high-spending authorities. At the same time, we shall introduce a measure of protection for the industrial and commercial ratepayers in those authorities.

But the problems of British industry are not confined to those of direct costs. They are concerned as well with industrial relations. The response to the Green Paper on trade union immunities has shown that opinion is now firmly in favour of further legislation.

My right hon. Friend the Secretary of State for Employment will therefore announce his proposals, and a Bill will be introduced in the New Year. It will be designed to meet two needs: first, to provide better redress for those harmed by the abuse of trade union powers, particularly of the closed shop; and, secondly, to redress the balance of bargaining power and to improve the prospects of a continuing growth in productivity. Although these proposals will meet with the customary opposition from some Opposition Members, we believe that they will be widely welcomed in the country as a whole.

Mr. John Page (Harrow, West)

While the Prime Minister is in the middle of her interesting and exciting speech, I wonder whether I could sow a seed in her mind about picketing. That might form a worthwhile part of the new legislation. Many people have been upset by what they have seen of the unsuccessful picketing that has occurred at BL over the last few days.

The Prime Minister

The proposals will be published before the Bill is brought forward. I have no doubt that a number of my hon. Friends will have advice to give to my right hon. Friend the Secretary of State.

In addition to widespread support for a new Bill on trade union matters, I believe that there will also be widespread support for our proposals for the social services. One of the sad fallacies much trumpeted by Opposition Members is the belief that only by spending more money can improvements in the social services be achieved. Because of that view, too little attention has been paid to efficient administration and to making benefits simple and clear. That is why our programme this year takes these matters into account.

A unified housing benefit, which we shall bring forward, is a sensible and worthwhile reform. It will end the confusion of two competing benefits—one from the social security office and the other from the local council. It will ensure that those most in need are more effectively helped and their rights are more clearly defined. Help with housing is one of the most valuable services of our Welfare State, and we can now provide it in a much more sensible way.

The Government's sick pay scheme has been discussed widely. We have decided that employers will receive 100 per cent. reimbursement for payments they make in the first eight weeks of sickness. The new scheme will be more efficient and will save some 3,000 posts in the Civil Service. Industry's careful and constructive advice has been heeded and the Bill should command a wide measure of support.

Both housing benefit and sick pay are part of the established provision which a compassionate society makes. Yet it is all too easy to be so committed to present provision that we fail to see other needs. The Government are particularly concerned to do more for those whose voice is hardly heard and who, by consequence, are often overlooked. My hon. Friend the Member for Dartford has mentioned the measure to which I now intend to refer.

In the last Session, our implementation of the report of the Warnock committee, which I set up as Secretary of State for Education and Science, marked a major step forward for the education of the mentally handicapped.

In this Session, we want to make some far-reaching reforms for the most severely mentally disordered. Here the last major change was introduced over 20 years ago by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith). It is to continue the pioneering work of the Mental Health Act 1959 that we shall bring forward a Bill to protect those who are confined to institutions for the mentally disordered.

The changes that we shall make will give to these people—perhaps the most vulnerable of our fellow citizens—additional rights and protection. The fact that they are a relatively small group who seem so easily to be forgotten only emphasises the real importance of this valuable humanitarian reform.

The Gracious Speech renews the Government's total commitment to uphold the rule of law. Many of our people feel unsafe in their own neighbourhoods and even in their own homes. The fact that crime, violence and terrorism are increasing throughout the world is no consolation.

Most of our people want to reassert the true values of family and society. They recognise the role of the family and the school in bringing up a new generation which respects the law and accepts the need for order. It is with this in mind that our new Criminal Justice Bill will strengthen the powers of the courts to make parents responsible for their children's fines. It underlines once again parental responsibility. It is only in a society where individuals take upon themselves the responsibility for restraining their own actions and teaching the virtue of self-discipline that both freedom and order can be guaranteed.

Our backing for the police will be unswerving as, with such courage and dedication, they uphold the rule of law. They are our front line of defence. Already, they have been dramatically strengthened in numbers and morale by the measures taken by my right hon. Friend the Home Secretary.

There are some who from time to time criticise the police for the way in which they carry out their exacting tasks. We, however, have made our support for the police clear and unequivocal. I believe that they themselves would be the first to insist on those high standards that we have come to expect. They will ensure that all our citizens, whatever their background and wherever they live, can rely upon them equally for the protection that they need.

It is natural that, in the face of recent events, I should turn from matters of law and order to Northern Ireland. We will concede nothing to terrorism. Demands advanced by the gun and the bomb will be rejected absolutely. The Government will meet the violence of the terrorists with implacable resolve.

The ballot box is the means of change. We shall continue to seek a political solution because that offers the only way forward. We shall also continue with the effort to create closer and stronger links between the United Kingdom and the Irish Republic, whose Prime Minister I shall be welcoming in London very shortly.

Abroad, the Government's pursuit of the true interests of the nation will remain resolute. No country in our geographical position, with our historic traditions, and with our pattern of trade, could turn its back on the rest of the world. We spurn the small-minded and disingenuous policies advocated by Opposition Members. They claim, for instance, that only they care about the arms race. It is a false claim. We all care. But we, on this side of the House, also believe that Britain should make a full contribution to its own defences.

Opposition Members intend to rely on the support which they assume the Alliance will provide whatever they do. That is a dishonourable policy.

They proclaim their intention to pull out of Europe. But they conceal the enormous political harm and economic hardship which would result. That is a dangerous policy.

They parade their concern for the developing world. But they favour schemes of general protection which would ruin many of the poorer countries and probably us as well. That is a dishonest policy.

Many Opposition Members know very well that the programme being adopted by their party would be profoundly damaging to this country. A few of them have acted on that knowledge. No doubt the rest hope to fudge their way to some dubious compromise. But composite motions have never solved real problems.

Unilateralism is once more in the forefront of political debate. I recognise that many of those involved are well intentioned and sincere. But motives—whether good or ill—are not the point. We have to reckon with facts as well as with feelings.

The facts are that last year the Soviet Union deployed 250 new intercontinental ballistic missiles, 400 new military helicopters, 1,300 new combat aircraft and 3,000 new tanks. The Soviet Union spends nearly twice as much on defence as it spends on health and education combined. We spend barely half as much on defence as we spend on health and education combined. That gives some idea of Soviet priorities.

Against that background, it is obvious that negotiated and balanced arms control agreements would be a great prize for this country. The Government therefore actively support the talks which are in progress in Geneva and Vienna.

We attach particular significance to the negotiations on theatre nuclear forces, which are due to begin later this month, between the United States and the Soviet Union.

Through those negotiations all can hope to achieve greater security at less expense, but unilateral disarmament offers no short cut to that goal. On the contrary, unilateral disarmament would prevent us from reaching it. Why should the Soviet Union come to the negotiating table if we had already given up our arms? Does anyone seriously think that the Soviet Government would follow our example? Of course not. Will unilateral disarmament make war less likely? No. It will make it more likely.

I do not say that because I believe that the Russians are intent on war. I am well aware how keenly the horrors of the last war are remembered. I say it because I am also aware that the Kremlin's only success since 1945 has been in developing Soviet military strength. In every other sphere it has failed either to meet its own targets or to keep pace with the West.

Where it was safe to do so, Soviet military power has been used to disguise, both from the Soviet people and the rest of us, the collapse of the party's political, economic and ideological ambitions. We have seen this in Eastern Germany, in Hungary and in Czechoslovakia. We have seen it in Afghanistan. We have, so far, narrowly avoided seeing it in Poland.

If we in the West allowed our resolve to waver, if, thanks to members of the Labour Party and people like them, the West became clearly weaker than the Warsaw Pact, the temptation for the Soviet Government to exploit our weakness and to put us under military pressure would be overwhelming.

Faced with that pressure, I do not believe that people in the West would allow their way of life to be destroyed without a struggle. At any rate, we in the Conservative Party would not allow that. I correct myself. I do not believe that anyone in the House would allow that, and certainly the people of this country would not allow it. We in the Conservative Party would see that our people were properly equipped with the weapons that they needed to defend their way of life. If we were weaker than the Soviets, the result would be war—a war no less destructive to the West for being unequal.

There must be no illusions about this matter. Anyone who doubts what I am saying should take an unblinkered look at this week's parade in Moscow and ponder the figures that I quoted a moment ago. That is why we must never accept what has happened in Afghanistan. I must say that it was heartening for me to see what was happening in Pakistan the other day. I saw the indomitable spirit of the refugees from Afghanistan. There is no failure of resolve there. That is why we must go on stressing the need for the Poles to decide their own destiny without interference. That is why, finally, the wishful thinking of the unilateralists must be exposed.

The policy of withdrawal from the European Community would also be deeply harmful. It could be carried out only at the cost of the most severe damage to the Western world, to our own political position, to our international trade, to the investment which we could otherwise expect from abroad and to employment in this country. It is folly to pretend otherwise.

To say this is not to close one's eyes to the Community's shortcomings. As my hon. Friend the Member for Scarborough said, we have to look after this country's legitimate interests. He pointed out how the Government had done just that, and will continue to do so.

There is to be a European Council meeting in London later this month. Dominating the agenda will be the questions of budgetary restructuring and common agriculture policy reform. Means of resolving the present problems, of resolving them on a lasting basis, must be agreed soon.

The impact of the Community on the rest of the world is growing politically. I have seen that on two visits to the Middle East. It is growing economically. I saw that in Melbourne and Cancun. Above all, the Community has been a growing source of strength and stability in Western Europe. The Government are determined that these achievements should be preserved and built upon.

In the coming year, I believe that Britain's confidence in herself will grow. That confidence will come from an increasing realisation that the signs of economic success are no mere passing hopes but are instead a testament to our new economic strength. We shall look for a continuing improvement in productivity as we become more able to compete in the markets of the world.

Real jobs will not be quickly won, nor will unemployment fall dramatically; but slowly and surely the British people will create the new jobs which these difficult years have made possible.

Above all, there will be a growing confidence that the major changes that we have so long needed and so often shirked have now been made, and that we shall secure the kind of success which our neighbours have achieved and which has eluded us since the war.

That success is not simply a matter of production figures, overseas earnings and income per head. Economic achievement is a vital part, but certainly not the whole of our national renewal. A new mood of realism and personal responsibility is taking hold in this country.

The generation which was brought up to believe that Governments can guarantee prosperity, full employment, and happiness for all now knows that life is really not like that—[Interruption.]—and that it never was and never could be in a free society. That generation has learnt that a successful community relies first upon individual effort. It has learnt that collective concern cannot replace personal responsibility. It has learnt that only when each one of us plays his part to the full will the whole nation benefit.

The Government have created the conditions in which out of the recession can come renewed confidence. It is in the coming year that our confidence will be rewarded. The success will be Britain's success, and the achievement will be the achievement of all our people.

Mr. Alex Eadie (Midlothian)

On a point of order, Mr. Speaker. May I ask whether the Prime Minister would be prepared to make an amendment to her speech, in which she said that the coal industry——

Mr. Speaker

Order. I am surprised at the hon. Gentleman. He knows that that is not a point of order.

4.19 pm

Mr. David Steel (Roxburgh, Selkirk and Peebles)

With one part of the closing passage of what the Prime Minister said I certainly agree. There is a new mood of realism sweeping the country. It was particularly evident at Croydon and in the local government by-elections last week.

The main achievement of the present Government has been to translate the short queues of actors whom we saw in the election programmes during the last election campaign into the long queues of the unemployed. That is why people are reacting as they are.

I begin by referring to the announcement that you made, Mr. Speaker, at the beginning of our debate, about the topics that we shall be discussing during the next four or five days. With that, as with the selection of amendments, you are entirely bound by the conventions of the House, but I must point out to the House that it is increasingly unrealistic to arrange the business of the House, in terms of subjects and of amendments on which we may vote, as if it were the exclusive preserve of the Government and Opposition Front Benches. If we continue in this way, there will be a danger of Parliament being seen to be completely out of touch with the prevailing mood of the country. Therefore, I hope that I shall carry at least some of the attention of both Front Benches in asking that some consideration be given to the new composition of the House, and that in future we have greater consultation as to what we shall be discussing and debating.

The Queen's Speech is the thinnest that I have seen in my 16 years in the House. It is remarkable that the section on foreign affairs occupies nearly 50 per cent. of the text. That is a measure of the thinness on the domestic front. But as so much of it is devoted to foreign affairs, and as both the Prime Minister and the Leader of the Opposition quite properly devoted part of their speeches to the question of disarmament, I, too, should like to begin on that topic.

Disarmament is an issue of increasing public concern. It is a matter that we ought to debate with increasing priority. During a conversation I had with the new Italian Prime Minister in Rome last month, he used a very interesting phrase about how he saw the European Community's potential as acting as a "protagonist for detente". We ought to explore that possibility, along with the proposals that Hans-Dietrich Genscher, the German Foreign Minister, has been putting forward for a sense of greater political union in Europe.

The anti-nuclear demonstrations that were seen throughout Europe 10 days ago do not deserve to be dismissed as they were by Vice-President Bush, as involving people filled with alarmist talk, or, indeed, by our Foreign Secretary, as involving people who are naive. I think that they represent a genuine and deep-seated moral concern about the present overkill stock of nuclear weaponry on our planet, and what seems to them to be an apparently endless commitment to increased expenditure by both East and West blocs. So, although it is my personal view that the anti-nuclear campaigners have not put forward any positive steps that will effectively maintain our security or reduce the holocaust threat, I believe that their demonstrations should be seen as a legitimate focus of public concern. The task for politicians is to find ways of meeting that concern.

The right thing to do is for the members of the European Community and the European members of NATO to speak far more effectively with one political voice. I know that that is a route that the Leader of the Opposition does not support, but I believe that it is the right way to deal with the matter. Then we could be a powerful influence for global disarmament, because collectively in Europe our pressure on our American allies could be direct and effective, and our pressure on the Soviet Union could be equally effective, especially if we in Europe were to ally our disarmament objectives to the needs of the Third world in the way in which the Brandt report did.

What is needed is for Europe as a whole, politically, to seize the initiative with the Third world by pointing out that the huge resources that we now devote to weaponry prevent the massive attack on poverty and hunger that the developed nations, East and West, are perfectly capable otherwise of mounting. If the Soviet Union remains obdurate in disarmament negotiations, a united European voice could rally world opinion against her.

What I am arguing for—the British Government could be playing a major part now as the current President of the Council—is a new determination among European leaders to act as a powerful bloc for effective transition to securing a peace and a global welfare planet in which the rich would be able to accept some responsibility for the poor.

It is against that philosophical background that my colleagues and I will continue our opposition to the Trident project, which, interestingly enough, is not mentioned in the Queen's Speech. When we argued our case 18 months or two years ago, we pointed out that it was most unlikely that the project would proceed at the estimated cost of £5 billion, and already it is known that the uprated version of Trident will cost very considerably more than that.

Mr. D. N. Campbell-Savours (Workington)

Why does not the right hon. Gentleman respond to the demands of the national Liberal conference for unilateralism?

Mr. Steel

First, the resolution was not a unilateralist resolution. I shall send the hon. Member a copy of its text. Perhaps he will allow me to conduct my arguments with my party. I shall happily do so. I am conducting the argument at present, and I hope that I am making a serious contribution to this debate.

Mr. Campbell-Savours

It was a very serious question.

Mr. Steel

I shall leave the hon. Gentleman to worry about differences within political parties on the issue of defence. I do not think that it is a particularly wise issue to raise from the Labour Benches.

When the Prime Minister returned from Mexico she positively boasted about our record being the best in the world in the context of taking aid, private investment and financial flows all together. I do not think that that boast can be sustained, looking at what is happening to our overseas aid programme. I tabled a written question last week. Naturally, being a written question, it has not received much attention. I asked about the numbers of people who are employed by the Overseas Development Administration in three disciplines—teaching, agriculture, and veterinary health. The figures are really appalling, considering the reductions between October 1980 and October 1981. The provision of teachers is down from 1,023 to 912. The number of those working in agriculture overseas is down from 137 to 84. The number of those working in veterinary skills overseas is down from 137 to 83. All of these cuts have come in one year, at the most basic level of technical assistance. We are not talking about prestige cash-giving projects. We are talking about practical help that British skills can give to the developing world being savagely reduced in the current year by the Government.

That is the reality of what has happened to our aid programme. The Government's aid priorities are hopelessly wrong.

Part of the Gracious Speech says: My Government's policies will seek to ensure that all individuals, whatever their race, colour or creed, have equal rights, responsibilities and opportunities. Whatever happened to sex? Why has that disappeared from this incantation? The truth is that in this recession some of those who have suffered most are the women workers, not only through unemployment but through the blatant breaches of the equal pay provisions on which this House has legislated.

I want to look at that excellent statement because I believe that those fine words must be translated into hard action. I draw the Prime Minister's attention to the decision of an appeal tribunal yesterday in a case that has become particularly well known in the North of England—that of Nasreen Aktar. For two years the Home Office has challenged the validity of her marriage, despite the fact that it was clearly carried out according to Pakistani law and Muslim custom. She was subsequently parted from her husband. Throughout the past two years my hon. Friend the Member for Rochdale (Mr. Smith) has argued her case with the Home Office, with the active support of the Manchester law centre and the Rochdale race relations council. Her first appeal application was refused and she was to be deported, but, after pressure, a second leave to appeal was granted. Just three weeks before that appeal was heard—a fortnight ago—the Minister of State, Home Office, who was responsible, in a letter to my hon. Friend still refused to concede the case, so the appeal was heard. When it came to the appeal, the Home Office advised the court that it had no evidence to offer. Yesterday, therefore, her appeal was upheld. For two years that woman has had the worry, fear and torment of mind that she and her children were to be deported.

That is the reality of what has been happening in Britain. I take that individual case because the actions of the Home Office have been absolutely disgraceful. It is no use putting fine words into a Queen's Speech when such cases are occurring throughout the country. My hon. Friend the Member for Rochdale intends to pursue the matter with the Home Office.

Late one night during a discussion on an amendment to the British Nationality Bill great fury was expressed from the Government Benches because I referred to the danger of moving into a "passlaw society". Since then newspapers have reported that some hospitals require passports and that even schoolchildren sometimes have to produce their parents' passports. The phrase that I used has turned out to be no exaggeration. My appeal is for the words in the Gracious Speech to be turned into reality.

The main part of the Gracious Speech deals with the economy. The two paragraphs relating to that are merely a dreary repetition of no hope for the country. One of the most important new influences that the Liberal Party, in association with the SDP, can bring to politics is a genuine commitment to making the mixed economy work. However, instead of that, the Gracious Speech contains yet more proposals for privatisation. I have no doubt that if the Opposition came to office we should hear more proposals for nationalisation.

In the last 30 years we have witnessed whole sections of industry being marched backwards and forwards over the frontier and divide between the private and public sectors. Successive Governments have taken their eyes off the real issues of how we achieve efficiency and industrial harmony because of their obsession with the fight between the public and private sectors.

When one examines our 30-year economic decline in relation to that which has occurred in other Western industrial democracies one finds that Britain's unique obsession with the fight between the public and private sectors is one of the main causes of that long-term decline. That is why I believe that we are right to oppose tinkering with financial arrangements for the oil, coal and gas industries. Pragmatic judgments on how to make a particular industry more efficient are not involved. Such judgments stem from a determination to change the basic doctrine on which an industry should run. They are irrelevant to the main issues.

The Gracious Speech refers to the continued reliance on monetary and fiscal policy. That sole determination is also one of the causes of our continued decline in the last few years. Indeed, the London Business School, which in some ways was the father of the present strategy, has criticised the Government's inability to meet their own monetary and fiscal targets. Mr. Blake, the economics editor of The Times, made an interesting comment this morning when he said: We should all be grateful for that. If the Government had squeezed the economy as much as it wanted to, the recession would have been even worse. Attempted murder is a far less serious crime than actual murder; but it is a crime nonetheless ….The flaw in the current strategy lies right at its centre. It is based on naive monetarism of a particulartly inept kind. Politicians are interested in watching the economists discussing these matters. During the summer I read a long article by Professor J. K. Galbraith which was anti-Friedman in its terms. However, he said one thing that struck a chord with me. He said: In a highly organised society monetary policy works against inflation. But it works, experience now tells us, both unequally and by producing a high and enduring volume of unemployment and a severe recession in business activity. It is one of Britain's great, useful and painful contributions to economic understanding that it has shown that this is not an economist's construct; it is a matter of practical experience. Frankly, I do not want to live in a country that has to make great, useful and painful contributions to economic understanding". I am sure that the 3 million people who are out of jobs do not believe that that is a useful role for them to play. The lesson should be learnt and the policy changed.

In the short term, as unemployment continues to grow, we are right to ask for a change in the Government's obsession with the public sector borrowing requirement. We are right to ask, not for a general reflation, but for the sensible investment in the public sector that can produce jobs in the private sector in the short term and help our economy in the long term. That is the case that has been argued, not only from these Benches but by many on the Conservative Benches.

Our constituency experience continues to show that the recession is continuing. The managing director of the latest firm to collapse in my constituency last week said to the local press that with present Government policies continuing there was no point in attempting to remain in business.

Mr. Raymond Whitney (Wycombe)

In his remarks about defence policy the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) forfeited his claim to speak for the Liberal Party. Speaking for himself, does he have a percentage in terms of increasing the money supply which he or even the Liberal Party would fix, given that in the past two years the money supply has increased by 30 per cent? Clearly, that is not enough for the right hon. Gentleman. Does he have a figure that will satisfy him?

Mr. Steel

The Government's figures have been wide of the mark in reality. The production of notional figures is a folly that we can do without.

I shall pursue the question of handling the economy in the long term. One of the conclusions to which we have come is that if we are to control inflation and at the same time try to produce more jobs, an incomes policy is inescapable. That is why we are right in our efforts to come to an incomes policy that can be produced at an election. That would be the difference. Such an incomes policy would be introduced at an election, argued carefully in an election campaign and put into effect by a new Government. That would be a major long-term change.

Another long-term change is important, particularly in the light of what has happened at British Leyland in the last few days. We must move to an industrial relations system which involves the modern practice of joint participation in both the running and financing of industry. It is not acceptable today for major decisions by the work forces of big firms to be taken by an open show of hands rather than a secret ballot. We shall not achieve the necessary new sense of urgency, co-operation and increased efficiency from a sullen work force returning to work. That is why I believe that the breaking down of big combines into effective industrial partnerships is one of the tasks that the Government should undertake. However, I fear that the present Secretary of State for Employment, with his obsession for tackling the unions head on, with his combination of bicycles and bashing, will not produce the policies that we need.

In her speech to the Conservative Party conference the Prime Minister suggested that my colleagues and I were producing easy answers. I do not believe that to be true. I do not believe that a properly worked out incomes policy is an easy answer. Any fool can moderate wage claims through the fear of unemployment. That is an easy answer. It is much more difficult to construct a policy that will carry the consent of the people with it.

When the Prime Minister talks about being a "conviction" politician she should not sneer at people with different convictions about the way in which the country could and should be run. I believe that our convictions increasingly are shared by the electorate, as the presence of my hon. Friend the Member for Croydon, North-West (Mr. Pitt) shows and as the local government by-elections showed last week.

I am not ashamed of the word "consensus" because it implies the consent of the people. That is what the present Government now lack. We are faced with a lame duck Government opposed by a lame duck Opposition. It is time that this lame duck Parliament came to an end.

Mr. David Crouch (Canterbury)

On a point of order, Mr. Speaker. In your determination of who should speak in the debate this afternoon, did you choose the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) as the leader of the Liberal Party or as the leader of the Liberal Party in alliance with the SDP? It is important that we should know what you, Mr. Speaker, determined in such circumstances.

Mr. Speaker

There are some secrets that I keep to myself because I want to stay alive.

4.40 pm

Sir Hector Monro (Dumfries)

I am glad of the opportunity to speak in the debate on the Gracious Speech. I am sorry that the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) cannot give support to the Prime Minister's speech, which was of remarkable quality, and was presented with force and clarity. I thought that his reply was incredibly thin and negative. I remind the right hon. Gentleman that one new Member, perhaps a bird of passage, does not make a summer. I am surprised that, so many weeks after the Liberal Party conference, he cannot yet tell the House what his party's defence and foreign affairs position is.

I welcome my right hon. Friend the Prime Minister's and the Government's commitment to the reduction of inflation, their continuing deep concern at the high level of unemployment and the assurance that assistance will be available to those most hard pressed by the recession. I shall speak today about unemployment and the problems facing agriculture in less favoured areas. The latter point should be covered in the Government's discussions in Europe to improve the CAP.

I start with a two-minute diversion. Recently I relinquished my post in the Department of the Environment where I had responsibility, through the Secretary of State, for the countryside, heritage, historic buildings, ancient monuments, parks and palaces. I am glad to have been associated during two and a half years with the National Heritage Act 1980, the Wildlife and Countryside Act 1981 and more recently the Zoo Licensing Act 1981.

I was also Minister with responsibility for sport. In both Government and in Opposition I was responsible for sport for around 10 years and became deeply involved in it. Sport today is of greater importance—and of increasing importance in terms of more leisure in the future—to Britain and to the electorate than perhaps Governments of either party over many years have recognised. I recommend strongly that sport and recreation receive the same priority and prestige as the arts. I do not mean that sport and recreation should receive the same funding, because the financial arrangements are different, but I wish to see equality of status. It has been a pleasure to work with the Sports Council, the Central Council of Physical Recreation, the governing bodies of our national sports and Governments overseas.

I wish my successor well in his new task and hope that the remarkable achievements of so many of our teams and individual competitors in world events continue. With the four home countries still in with a chance in the World Cup, there may be greater things to come next year. There may also be greater things in the Commonwealth Games, which Her Majesty graciously announced she would attend.

I wish to raise two issues on the Queen's Speech. I wish to bring home and reaffirm what many hon. Members said last week about the importance of containing the PSBR to its current level of £10.5 billion. Also, people must realise that more Government expenditure, which it is easy to call for, means higher taxes or more borrowing. The latter will have an impact on inflation and interest rates. We have very little room to adjust on overall expenditure, but when that moment comes I am sure that action will be taken.

Unemployment in the major part of my constituency of Dumfries is running at more than 12 per cent, with the remaining part at nearly 21 per cent. That is a very high figure. In the area of Upper Nithsdale, for example, it is higher today than it was at the time of the pit closures in the 1960s. That area is, rightly, a special development area and it retains all the incentives that are available from the Department of Industry and the Scottish Office.

However, the remainder of the area will lose its status as an intermediate area in August next year. That is subject to discussions between the Department of Industry and the Scottish Office. I hope that those discussions will be detailed and that they will take into account local opinion, particularly that of the regional council's industrial development committee. That committee has done well, as has the Scottish Development Agency and the Scottish Economic Planning Department. Together with the local authorities they have built 28 factories, although, sadly, 12 of them are still empty. However, they are available and ready for the moment that the economy begins to expand. Those factories are of all sizes, from 1,100 sq ft to 20,000 sq ft. There must be industries that are anxious to obtain sites of this value and quality.

I have never been in favour of blanket incentives to industry such as existed in the latter years of the previous Government, under which most of Britain north of the Midlands became a development area. There was no incentive to go to the areas of high unemployment such as the one that I mentioned, where the figure is 20 per cent. However, there is no doubt that incentives are important to industry, especially when companies have to overcome high transport costs because of the distance from the centre of sale.

The hard pressed are mentioned in the Gracious Speech. That must mean those who are involved in special programmes. I pay tribute to the Manpower Services Commission and the special programmes division. In my constituency there are 1,477 young people unemployed and registered with the careers offices, but 1,021 are in a youth opportunities programme scheme. That is 69 per cent. of young people obtaining work experience, which I believe is the highest figure in any region of Scotland. The Government's undertaking, given earlier this year, that the summer 1981 shool leavers would be offered a YOP place by Christmas is likely to be met.

We say "thank you" to those who are working so hard on behalf of the young unemployed who are now gaining experience of one sort or another. The Department of Employment deserves a pat on the back for its achievement, as does the region's education department which has done very well with day release schemes to further education centres. I am glad that the issue was emphasised in the Gracious Speech and will continue to receive close attention in the coming months, as my right hon. Friend the Prime Minister said this afternoon.

My final point concerns agriculture, which is also of great importance in my constituency as well as in livestock-rearing areas and the less favoured areas of Britain today. My right hon. Friend the Minister of Agriculture, Fisheries and Food has done well during the past two and a half years. He was able to announce much good news in a major speech at Blackpool last month. He told us how production and exports were increasing. He was right to pay tribute to the exceptional productivity of Britain's farm workers. There are no strikes and no restrictive practices. They carry out a skilled job very efficiently. He also referred to the improved level of assistance through grants. Together with the Government he effected a dramatic change in the relationship with the green pound, which caused so many problems in the previous Government. Economically, there has been an infinitely better agricultural climate during the past two years than there was in the late 1970s. The Minister responsible for fishing has had dramatic successes also.

Against that, some sections of the farming industry are in trouble, such as livestock and milk production. Inflation has produced a serious rise in costs, which has forced up bank borrowing and interest rates. That has left many farms in a precarious position. I am referring not to those that have had a successful harvest, but to those in the West of Scotland—where there is a high rainfall—that base their production on livestock.

During the past two months there has been a welcome improvement in store cattle and sheep prices. Nevertheless, we must accept that farmers in Scotland owe banks about £600 million. One accountant who services 105 farms from the far north to the south of Scotland noted that the total borrowing requirement of those farms during the past year had increased by 15.8 per cent. That is typical of the livestock sector and shows the importance of interest rates.

I wish to draw the plight of that sector to the attention of my right hon. Friends. The National Farmers Union of Scotland believes that it is in difficulty. The hill livestock compensatory allowances have never reached anything near the maximum permitted by the EEC. Although there was a welcome improvement between 1979 and 1981, from £29 to £42 per head, the allowance could be as much as £60. The allowances for hill and upland ewes have risen to £6.25 and £4.20 respectively, but they could be £9.

Naturally, people ask where additional money can be obtained. I have already said that I am not in favour of increased Government expenditure. However, there has been a dramatic fall in the money required for capital grants. The requirement for funds from they-agricultural and horticultural development scheme in Scotland has dropped from £10 million to £7 million this year, and from the capital grants scheme from £7.9 million to £4.4 million. That has produced an immediate saving of £7 million due to the recession and farmers' reluctance to make further capital expenditure. I hope that, during the coming months, my right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture, Fisheries and Food will hold careful and constructive discussions with the National Farmers Union and reach sympathetic and positive decisions.

I wish the Government programme well. I was pleased with the Gracious Speech. The Government's economic policy is crucial to Britain's future. I hope that, as Britain's position improves, adjustments can be made to provide additional assistance to the regions with highest unemployment.

4.53 pm

Mr. Gregor MacKenzie (Rutherglen)

My right hon. Friend the Member for Ebbw Vale (Mr. Foot) congratulated the hon. Members for Scarborough (Mr. Shaw) and Dartford (Mr. Dunn) on their speeches in moving and seconding the motion on the Address. I add my congratulations to his. I had the privilege of seconding a motion on the Address in 1964. My heart went out to both hon. Members, who acquitted themselves well.

The hon. Member for Scarborough said that he had spent part of the recess visiting factories in his constituency. I envy him. If his constituency is similar to mine, such visits are, I regret, becoming fewer and fewer for there are now fewer factories. That opinion will be the burden of my complaint about the Gracious Speech. I shall restrict my remarks to two areas, those of unemployment and the privatisation of the nation's assets in the North Sea.

During the past few months there have been a number of unemployment debates, which have shown the Opposition's concern about unemployment. However, the debates have not taken the turn that I wished. I do not expect the Prime Minister and her colleagues to listen to and applaud everything said from the Opposition Benches, yet I sometimes hope that she will read and applaud the comments of organisations that share her political views. The right hon. Lady undoubtedly noticed that recently the Association of British Chambers of Commerce published an interesting pamphlet, which said that the association feared that the great expression frequently used by those sitting on the Treasury Bench about British industry becoming leaner and fitter really meant it becoming smaller and weaker. The Prime Minister and her colleagues should take notice of comments from that organisation.

The Prime Minister, together with other hon. Members, has no doubt listened to the comments of leaders of British industry at the CBI conference. Had we heard some of those speeches a few years ago we would have thought that they were being made from a Labour Party platform. They showed the great concern of British management about the state of British industry today and they should be noted.

I have already expressed my concern about the unemployment debates. Many hon. Members, including some of my colleagues, talk about the PSBR, high interest rates, the over-valued pound, exchange rates and something called the medium-term financial strategy. We all speak glibly about billions of pounds here and there. Such comments go down badly with the unemployed. They think that the House is an academic talking shop that does not understand their problems. We must remember that we are talking about men and women, and consider the social consequences of unemployment on their lives. We should not wrap up the problems in a great deal of mumbo-jumbo economics.

Many hon. Members have relatives and friends who are unemployed for the first time in their lives. We see the problems at first hand, including the effect on their families, their well being and the conditions in which they live. One of my relatives worked for one firm for 25 years. He is a hard-working chap—I do not think that he NA, as ever late for work or that he ever missed a day, not even for illness. At the age of 48 or 49, and after 25 years of his life given to industry he has suddenly found himself thrown on the industrial scrapheap, with little hope of ever finding another job. That is the reality of unemployment for such people.

The hon. Member for Dumfries (Sir H. Monro) applauded the efforts of the Manpower Services Commission on behalf of unemployed youngsters. I agree that it does a useful job. I hope that he will agree that it is the responsibility of the Government to ensure that those in their late 40s or early 50s, who lose their jobs through no fault of their own, have a fairer crack of the whip than they have had recently. It is no good telling the unemployed men and women about the medium-term economic strategy, whatever that means. There is no point in saying that it will solve their problems. Their problems have to be solved within the next few years. They have very little hope that that will happen.

Unemployed men have to provide shelter, food and clothes for themselves and their wives when earning less than £30 or £40 a week. That is the reality of unemployment in Scotland now.

Unemployed men have become increasingly bitter because of the shabby way they have been treated. That is why we find, as I have found in my constituency, a mood of bitterness. That is what leads to the frustration and militancy which I thoroughly abhor.

I felt that the hon. Member for Dumfries might have mentioned in his speech the figure of 325,000 people unemployed in Scotland. There are 325,000 people in Scotland without a job. In my own area over 9,000 people are registered as unemployed. When I hear the Prime Minister talking about the figures doubling under any Prime Minister and so on, I cannot help reflecting that two and a half years—in my area alone—registered unemployment has risen by 99.8 per cent. Unemployment has doubled in 2½ years. That is a dreadful condemnation of what is happening in my constituency and many others like it in Scotland.

In the Glasgow area one male out of every five is registered as unemployed. That is a scandal, and something ought to be done about it. Something has to be done quickly and someone has to talk to these people about a real economic strategy.

The unemployed do not understand the medium-term economic strategy and neither do I. They are told that this is a rich nation but they are still poor. They know that we have considerable resources. They know that we have the North Sea oil. They are aware of the North Sea gas. From an announcement today, we now have onshore oil in Scotland in my own and other areas.

The unemployed wonder, as I do, why Government choose to fritter away all the revenue received from the North Sea on unemployment benefits rather than spending the money on creating jobs for the people of Scotland and other parts of the United Kingdom. They believe we should build up our older industries, create new industries and therefore create new jobs.

I am grateful for the Prime Minister's courtesy of listening to what I have to say since I mention one example of something which troubles me a great deal. Many of us were bitterly disappointed that the revenue we now receive from the North Sea was not used by the Government to give a lead to people in the oil and associated industries in the laying of the gas-gathering pipeline. I do not understand the complexities and technicalities involved in the laying of gas-carrying pipelines from the North Sea to the mainland of Scotland. However, I do know that it would have created many thousands of jobs within Scotland and in other parts of the United Kingdom. In addition, it would have been a further pillar on which we could have based a newer industry. We are all desperately anxious to build up the petrochemical and associated industries in Scotland so that more of our people can have work.

We have heard speeches today and in the past few weeks about the role of smaller firms. Like many other people, I am concerned about the role of smaller companies. The smaller company has a big role to play with major oil companies in the gas-gathering pipeline, the building of the ethylene crackers and all associated factors in the petrochemical industry.

I hope it is not too late for the Government to have second thoughts about giving a lead on the whole question of a gas-gathering pipeline. I believe, as do many of my colleagues from both parties, that it is nonsense to think that the oil companies will organise such a system by themselves. Many hon. Members on both sides of the House know that that is just not on.

Much concern has been shown over the petrochemical industry in the past few years. I hope that the Prime Minister and her colleagues will use the resources that we get from the North Sea to much better advantage—by means of something like the gas-gathering pipe system.

Having read the Queen's Speech, I am still very puzzled by the Government's attitude to the opportunities afforded to us by the oil and gas discovered in the North Sea. There may be members of the Government who, like Sir Michael Edwardes, believe that we should allow gas and oil simply to lie in the North Sea. I paraphrase his words: he described the gas and oil situation there in rather inelegant terms. In essence, he said that we should just leave it there because it created far too many problems for us. I do not believe this. I believe that is a great opportunity for us. I see great opportunities for the Scottish people and the rest of the United Kingdom.

Whatever Sir Michael Edwardes and people like him say, there is no doubt from reading Her Majesty's Gracious Address that the Secretary of State for Energy is not as daft as Sir Michael Edwardes. The Secretary of State for Energy knows that there is a lot of money in the North Sea. He knows which section of society that money should go to. Like many of my hon. and right hon. Friends, I was disappointed by the shabby way in which he chose to make his announcement. He handed over half the North Sea's resources to private enterprise in four paragraphs of Hansard. Fortunately, because of the Gracious Speech, we now get an opportunity of hearing more from him than those four rather sharpish paragraphs.

The oil and gas in the North Sea belong to the people of this country. It is a God-given opportunity and should be used for and on behalf of the people. It is the best opportunity we have had for decades. We must ensure that it is not simply gifted to private enterprise or frittered away in dole money. It must be used to improve our communications systems and the environment generally. Above all, it must be used to regenerate our industry, to create new industry and to create new jobs. It must be used to give some hope to the thoroughly demoralised group of people thrown on the dole queues.

5.9 pm

Mr. Geoffrey Rippon (Hexham)

I join those who have congratulated my hon. Friend the Member for Scarborough (Mr. Shaw) and my hon. Friend the Member for Dartford (Mr. Dunn) the splendid speeches they made in moving and seconding the motion on the Address.

My hon. Friend the Member for Scarborough was a valued colleague in the European Parliament. Like him, I warmly welcome the way in which the Gracious Speech reaffirmed the Government's commitment to the European Community. I hope that he will join me in pressing the Government to negotiate to join a strengthened European monetary system. That is one way we can begin to stabilise exchange rates and bring about a greater degree of international monetary order than we presently possess.

First, I warmly welcome everything the Prime Minister said about the Government's foreign, defence and arms control policy. I believe she spoke for us all in clear and unequivocal terms. The Prime Minister deserves full support for that. I am sure that what she said on these matters will give great encouragement to our friends and allies everywhere.

Last week I warmly welcomed the Prime Minister's references to flexibility, past, present and future, in the Government's policy, which appeared on no fewer than five occasions in two columns of Hansard. I took that as a happy augury for the future. I can, recall a time when discussions in the Cabinet, though fierce, normally took place in private. Even allowing for uninspired or inspired leaks, the Chief Secretary came on the air the day after a Cabinet meeting to give what I welcome as a firm assurance that the Government are not seeking £7½ billion worth of cuts, or even cuts amounting to £3½ billion. My right hon. and learned Friend said that the Government are considering an increase in expenditure in real terms next year. He said that there was no truth in the rumours of a mini-Budget. The proof will be in the eating of the pudding when it is presented to us.

I welcome the fact that press reports and reports elsewhere are no longer suggesting that only a small minority of the Cabinet is concerned with economic strategy. It was suggested that such matters were not being discussed in Cabinet and that some members of the Cabinet had, like the rest of us, to read the reports in the Sunday press to learn what was likely to appear in the Budget two days before the Budget was presented.

It is now clear that the entire Cabinet is considering economic strategy together. That is as it should be. I hope that my right hon. Friend the Prime Minister will be enforcing what should be the iron rule of collective Cabinet responsibility once decisions have been taken. Whatever package of measures may emerge on the economic or any other front, I hope that it will be clear that it is the responsibility of Her Majesty's Government as a whole. I trust that the waters will not be muddied by coded speeches in which people try to imply that they are not really the ones responsible. That is important because the impression was given that my right hon. Friend the then Secretary of State for Employment, who is now the Secretary of State for Northern Ireland, was reluctant to leave his appointment to go to Northern Ireland, as he thought that he might be deprived of the opportunity to consider economic strategy. That appears no longer to apply.

It is probably fair to say that the Government are prepared to be much more flexible than they are willing to give themselves credit for. It may be churlish to say that sometimes they are too flexible in the wrong direction—possibly in giving aids and subsidies to nationalised industries that would be better deployed in a public sector works programme creating infrastructure, real wealth and jobs of the sort that the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), the leader of the Liberal Party, was suggesting. Be that as it may, I hope that a flexible approach will apply to the proposed legislation as it is laid before the House in the coming Session.

I am glad that the number of measures to be introduced this Session is likely to be fewer than in the past two Sessions. It is clearly unsatisfactory for a parliamentary Session continually to overrun from the summer into the autumn. I remember my right hon. and learned Friend the Chancellor of the Exchequer addressing the Society of Conservative Lawyers at its annual general meeting in June 1977. I have far less criticism of what my right hon. and learned Friend says as a lawyer than as an economist. At the annual general meeting, he said that in recent years we had been suffering from what he cogently described as "legislative pollution". That is a correct diagnosis. We want less law. We should take whatever opportunity is available to us to repeal laws rather than to enact new ones.

Between 1943 and 1976, we added about 55,000 pages to our statute book. Most of them were completely unintelligible to those to whom they applied and to legal practitioners who had to interpret them; albeit the lawyers were rewarded in a suitable fashion for the inconvenience that was placed upon their shoulders.

Last week the Prime Minister said that a number of steps could be taken to create jobs. She observed: First, we must restrain some of the costs that the public sector imposes upon industry."—[Official Report, 28 October 1981; Vol. 10., c. 887.] How are we to achieve that? One appropriate step would be to remove the national insurance surcharge, or some part of it, which was originally imposed by the Labour Government, as my right hon. Friend the Prime Minister reminded us last week. As Mr. Walter Goldsmith and my right hon. and learned Friend the Chancellor of the Exchequer have suggested, there may be better ways of using the revenue that would be made available by such a move, but that is a step that should have a high priority in the Government's mind.

Another way of helping to create jobs would be to restrain some of the costs that are now imposed upon developers and the construction industry. These are Large employers of labour and their renewed activity is essential if we are to have an investment-led recovery. The present long delays in launching agreed public works schemes are costing the industry and the taxpayer many millions of pounds. In the present economic depression there is a case for a review of the operation of the Development Land Tax Act 1976. The Government have substantially modified the rate of tax and they have amended the Act, but any developer faces a cumulative burden of tax that discourages the investment that we need.

Virtually every page of the Development Land Tax Act has been described as a "minefield of potential danger" by leading expert, Mr. Kenneth Bagnall, QC. The repeal of such legislation would be fully in accord with the undertaking in the Conservative Party manifesto to simplify taxes and to reduce tax bureaucracy. That might apply also, as the manifesto indicated, to the need to simplify the operation of VAT. Practical actions of that sort designed to simplify the impact of tax legislation, especially on small businesses, would bring a benefit out of all proportion to the loss of revenue involved.

I dislike intensely being described as a "wet". I should much rather be called a "dry". As I am concerned, like other right hon. and hon. Members, not with easy options but with difficult choices, I think that the distinction is both artificial and to a great degree offensive. If I must give to myself a description, I should like to be called a "manifesto man". I found myself in great agreement with what the Prime Minister had to say before the election and with what the Conservative election manifesto had to say. I did not read in the manifesto of the arid monetarist theories on which I have had occasion to comment from time to time.

I endorse what we had to say in the manifesto on, for example, the general concept of trade union reform. There is a case for the reform of industrial relations law to the extent that no pressure group, however important, should be above the law or should be able to hold the community to ransom. Surely Labour Members cannot object to that as a statement of principle and policy.

At the same time our manifesto observed that we must have a strong and responsible trade union movement to play its part in our economic recovery. We must ensure that the legislative changes that the Government bring forward are seen by ordinary people to be fair and reasonable, above all by trade unionists on the shop floor. That was where the Industrial Relations Act 1971 foundered. We did not make the public understand that what we were doing was fair and reasonable. At the Brighton Conservative Party conference in 1980 the then Secretary of State for Employment said: our main objective must be to go at a pace that is acceptable to public opinion, to carry with us the support of the shop floor for what we are doing. I trust that that will remain the objective of Her Majesty's Government.

Mr. Frank Hooley (Sheffield, Heeley)

Is the right hon. and learned Gentleman seriously saying that those who were put in prison as a result of that Act did not understand what was going on?

Mr. Rippon

The people in the trade union movement did not understand that the purpose of that Act was not union bashing, but that it was designed to create a fair structure of law. For whatever reason that legislation failed. I believe that it failed in its main objective. We must take pains to see that we do not make the same mistake again.

Mr. Crouch

Does my right hon. and learned Friend agree that what we should aim for in industrial relations reform has been demonstrated in the last day in British Leyland by its workers, who have not so much demonstrated the need for law reform, but by a form of co-determination have shown that they are prepared to, and can, play a responsible part in the determination of decisions in British industry? Does not my right hon. and learned Friend think that that is more important than a legal determination?

Mr. Rippon

It is more important. That is why the newssheet distributed by Conservative trade unionists at the Blackpool conference deserves careful study. It states that: A careful examination of all the proposals put foreward by various CTU groups throughout the country highlighted that, as with the Employment Act 1980, a cautious and moderate approach in industrial relations is still vital. We should heed the warning that all important productivity agreements sought by British industry would come through greater co-operation and not by way of further legislation. That is borne out by what has happened in recent weeks. Legislation, unless it is carried with a degree of consent, will do nothing to solve the problem of unnecessary and foolish strikes or to re-establish good industrial relations where those do not already exist.

Any Prime Minister who seeks to act as the leader of the nation rather than of a party must always try to seek the widest possible consensus of opinion. That was why Sir Winston Churchill in 1951–1955 had a great final period of office. He always sought to win the support of trade union leaders on the broad issues of national importance. Without that effort, with its acknowledgement of the role of trade unions and their basic patriotism, policies and law, even if they are based on the deepest convictions, may fail to persuade the electorate of their fairness and justice, even when they deserve to succeed. The Prime Minister was right in her splendid speech to the Conservative Party conference in 1978 when she said: We must heal the wounds of a divided nation. Legislation and all Government policies must be related to their psychological effect on the people who are involved in and affected by that legislation. As our election manifesto said: We cannot go on year after year, tearing ourselves apart in increasingly bitter and calamitous industrial disputes. The decision of the British Leyland workers to go back to work against the advice given by their militant shop stewards shows that the vast majority of people on the shop floor, large numbers of whom vote for this party, understand that full well and will respond.

One thing that is generally understood to be unfair and unjust is the operation of the closed shop, by which people lose their jobs simply because they are not members of a trade union. Even here—given that any denial of freedom cannot be dealt with by a compensation payment, though that may help—it may be wiser to deal with that issue as one of human rights rather than of industrial law. Therefore, one omission from the Gracious Speech that I regret is an undertaking by the Government to introduce legislation incorporating the European Convention on Human Rights into our domestic law. That should be a high priority in the light of the Strasbourg decision on the railway closed shop cases. Perhaps the law has changed since, and different conclusions might be reached. However, that does not alter the fact that, as long as that convention remains only a treaty obligation and is not incorporated in our domestic law, our citizens have recourse only to a remote and expensive remedy in Strasbourg. The Lord Chancellor and others have urged that we should take those necessary steps to secure for our citizens all the rights and freedoms which, under international law, we have bound ourselves to secure for them.

Our trouble today, as the late Lord Radcliffe said in his Reith lecture about "The Problem of Power" as long ago as 1951, is that with what is practically single-chamber Government, which the Lord Chancellor has eloquently described as elective dictatorship, with the Executive and the legislature to a large extent combined, the security of what used to be called constitutional rights is a very frail thing. We should bear that in mind when we consider the legislation affecting local authorities contemplated by the Government.

The Government are absolutely right to seek to contain the total public expenditure locally as well as nationally. They also have a duty to introduce measures to reform the operation of the rating system. That is at the heart of the present crisis in relations between local and central government. However, we must have a care how we achieve that end. We would be entirely wrong if we were to arrogate to Government the responsibility of controlling the day-by-day actions of democratically elected local authorities. We must accept that they are one of the twin pillars of our constitution. There is no specific reference to a referendum in the Gracious Speech and no reference was made to it today by my right hon. Friend. Perhaps that is being reconsidered. The use of a referendum other than for a major constitutional issue is a dangerous innovation, particularly when it is imposed in relation to separate, albeit subordinate, levels of government.

The proposal that would require the Secretary of State's approval before an authority which loses its referendum could levy a rate is, as The Times of 26 September, states: bureaucratic centralisation decked out in democracy's borrowed plumes. This is from a party that has always said that it does not believe that the gentleman in Whitehall really does know best.

Last year we had the Local Government, Planning and Land Act, which was quaintly described as a measure to give greater freedom to local government. That monstrous legislative morass has still to be sorted out, if a measure that stabilises instability can ever be made to work satisfactorily.

A Conservative Government may believe that they will always exercise power wisely. That is not a good reason for any increased central control. Legislation should have regard not just to the good intentions of those who introduce it, but to the possibly bad intentions of those who might exercise power in future. One Government might deal with overspenders by withholding grants and another might deal with underspenders by withholding grants, assuming one can define which is which.

Some of my right hon. and hon. Friends tabled a motion at the end of last Session saying that they would welcome the right hon. Member for Down, South (Mr. Powell) back into the fold. I agree with what he said in his speech to the Bangor junior chamber of commerce when the Labour Government introduced their first monetarist and high interest policies. He talked of the folly of high interest rates and the lunacy of an international interest rate war. He said that if he were Chancellor of the Exchequer he would have an interest rate of 3 per cent. Perhaps we could do with the right hon. Gentleman. We might even encompass his views on the European Community, as my right hon. Friend the Prime Minister says that dissent weakens rather than strengthens a political party.

I hope that my right hon. and hon. Friends will accept the view expressed by the right hon. Member for Down, South in the Sunday Express on 11 October: How on earth came a Conservative Government of all Governments to attack the very principle of local democracy by denying the ratepayers' elected representatives the right to raise a rate. By all means limit Government grants, but, as the right hon. Gentleman points out: every monetarist knows that rates cannot cause inflation as local authorities cannot print money. So why set every elected council by the ears from one end of Britain to the other. It does not add up. In the present economic crisis, we should take every possible means to ensure that we do not have needlessly divisive legislation, whether we are dealing with trade unions, local authorities or anyone else.

I am a manifesto man. I stand firmly by the views expressed before the election. One of the things that I carried around my constituency was an article in the Daily Mail on Thursday 18 January 1979, which reads: In a speech to the nation on television last night, Margaret Thatcher— then Leader of the Opposition— chose to cut across party political lines and appeal to a country in crisis. It is one of the most significant and important TV broadcasts by a politician for years. At this moment of extreme crisis, it should be studied, thought about, and discussed by everyone. This is why the Mail has chosen to present it in full". The article is headed: Why we must be one nation, or no nation! The speech began: It is our country, the whole nation, that faces this crisis, not just one party or even one government. This is no time to put party before country. I start from there. It dealt at great length with the problems of industrial relations and emphasised that we must negotiate, we must discuss and we must agree.

That effort must consciously and deliberately he made by Government in the present situation. In the Prime Minister's words, we can appeal to a country in crisis only if we learn again to be one nation". If not, as she said then, one day we shall be no nation. Those words are as true today as when they were uttered on television. I beg the Prime Minister also to recall what she said in another great speech, in 1977, when she said that the Conservative approach was put very simply by a Chinese philosopher centuries ago: Govern a great nation as you would cook a small fish". Do not overdo it.

5.33 pm

Mr. Stan Thorne (Preston, South)

In common with other hon. Members, I went to the House of Lords to hear the Queen's Speech earlier today in the hope that there would be something in it to indicate an upturn in the economic and industrial prospects for the people of Preston. Having listened to the speech, and having read it again to be sure that I had it right, I could find nothing in it about which I could enthuse on behalf of the people of Preston, particularly in relation to unemployment.

The Government may argue that only in the medium and long term can unemployment be in any way diminished. But the Prime Minister's speech gave us not one iota of evidence for assuming that there will be an upturn in the economy, even in the medium term, let alone the short term. Government spokesmen and spokeswomen continue to refer to market forces, with the assumption in the presentation of their arguments that a new stimulus will somehow appear or, as Mr. Micawber believed, that "something will turn up".

The actual position, as my hon. Friends and I—and, indeed, some Conservative Members—can testify, is one of continuing deterioration. In the Preston travel-to-work area between April 1980 and April 1981 unemployment rose from 9,910 to 14,860—an increase of 49.9 per cent. In North-East Lancashire as a whole, the increase was 95.8 per cent. Those figures do not convey the suffering of those who are told that they are not required. In my view, the groundswell of anger generated by unemployment is yet to be felt in Britain, but the real impact is merely a question of time. Previous economic history shows the need for active intervention by the Government through the promotion of public works. A brief look round our towns and cities is sufficient to show the needs which currently exist.

A primary need in Preston is housing. Hon. Members representing many other towns and cities could say the same. Housing cuts by the Government in 1979–80 were £623 million, and in 1980–81 they were £1,576 million. The figure proposed for 1981–82 is £2,580 million, and for 1982–83 it is £3,290 million. In terms of the needs of people in my area, those are enormous cuts. Attending my surgery on Saturday mornings, mothers of small children living in multi-storey blocks of flats tell tragic stories of their experiences as a result of high electricity costs, unemployment and other aspects of social deprivation. The psychological damage to children residing on the fourteenth floor of a multi-storey block is a matter on which we have little evidence, because nobody is anxious to research problems of that kind in our inner city areas.

Related to that is the question of nursery school provision—another necessity of which there is no mention in the Queen's Speech. Is it because the Government have decided that the children in Britain have a limited life expectancy and that little therefore needs to be done to prepare them for the future in terms of life and work? There is nothing in the Queen's Speech to discount that notion. Indeed, the Government's nuclear policy and the Prime Minister's statements earlier today tend to confirm that view.

There is the question of educating the unemployed and school leavers in the changed technology of tomorrow. What provision is there for that in the Queen's Speech? A wide variety of youth facilities is needed in most of our towns and cities. Young people should be consulted about the provision of such facilities, which will mean more public works.

Public transport represents another aspect of local affairs. But, having read the Gracious Speech and listened to the Prime Minister's comments, I am still unable to determine precisely what is meant by the phrase State involvement in transport will be further reduced. The Queen's Speech should contain statements about the massive investment in British Rail that is long overdue, the electrification of certain railway lines, the repair and renewal of lines and stock and the ending of cuts in local travel areas. But it contains none of those things. Nor does it make any reference to public works, cuts in the rate support grant, cuts in urban aid or cuts in the partnership areas.

Renovation, conservation and complete renewal of many parts of our towns and cities is required. In fact, the urban aid programme should be restored to the figure of £220 million. It could even be argued that it should be increased by the amount of the annual investment in new towns, which is about £350 million.

Some hon. Members may ask how this additional public expenditure can be met. The answer is by increased borrowing, to be recouped through increased output and employment. More will be required in future years to regenerate our towns and cities. We should be extending the number of urban areas which the Government recognise as having special economic and social problems. The public sector must be the main vehicle for inner city regeneration. A wide range of public agencies should be used to achieve this task. Positive action must be taken to involve representatives of the ethnic minorities and a wide range of local voluntary groups.

The creation of jobs for those who live in our towns and cities is a major requirement. There should be a direct labour subsidy. Local authorities should have wide powers to make grants to firms for each job created. We need a five-year employment strategy backed by local enterprise agencies. We need the strengthening, not weakening, of training boards to assist these aims. We need more skillcentres. The role of local authorities in this regard is important. Yet we have seen the mutilation of the traditional roles of central and devolved local government, as is envisaged in parts of the Gracious Speech.

My right hon. Friend the Leader of the Opposition rightly made it clear that such measures will be strongly opposed. The Queen's Speech suggests that the Government are to go ahead in this area, despite massive opposition. I shall not bore the House by reading a four-page letter that I received today from the chief executive of Lancashire county council. It could be argued that it is unique, because the same servant has been closely involved in recent years with a Conservative-controlled Lancashire county council. He recognises the tremendous impact that these steps will have. As the right hon. and learned Member for Hexham (Mr. Rippon) said, that will be particularly true of referendums when supplementary rates are required to provide what are often purely minimum social services.

There is nothing in the Gracious Speech about education provision, such as books, equipment, buildings that require modernisation and repair, more teachers to cut the size of classes and, particularly, grants for more students, especially those over the age of 16. Yet those are the real needs which many of my constituents face.

It is interesting to recall how the Royal Commission report on the National Health Service has been quietly buried by the Government. I notice that we are blessed with the presence of the Minister for Health, and I shall refer later to something that the hon. Gentleman said in one of his speeches. We are concerned about community care and nursing as well as the greater use of health centres, but there is no mention of those matters in the Gracious Speech.

From what I have said, hon. Members no doubt realise that in my opinion the Gracious Speech is a disaster.

I now come to what was said by the Minister for Health. When the previous Labour Government announced their intention with regard to vaccine-damaged children, the hon. Gentleman, who was then Opposition spokesman on health, described it as "grossly inadequate". But since he became Minister for Health, he has said nothing to indicate that the Government intend to improve the compensation offered to vaccine-damaged children. If that is what they propose, it certainly is not contained in the Gracious Speech. It may be that they have this in mind for a pre-election Queen's Speech, but I doubt whether it will buy them a great deal of support.

Time prevents me from referring to many other areas of need that are not covered by the Gracious Speech, especially if I am to be fair to other hon. Members who wish to take part in the debate. However, there is one other matter that I should like to emphasise. Government Departments issue leaflets and material to the public almost ad nauseam. Often, a suggestion appears at the bottom of such material that if the public are in any doubt about what is intended, they should consult their citizens' advice bureaux.

In 1980–81, more than 20,000 inquiries were received by the bureau in Preston, which represents 20 per cent. of the local population. That was almost a 6 per cent. increase over the previous year, which itself represented a 3 per cent. increase over 1978–79. Therefore, people faced with a variety of social problems increasingly go to the citizens' advice bureau at a time when that organisation is being starved of resoures.

I have visited the staff of the bureau in my area. It is doing a tremendous job virtually on a shoestring. The Government are failing—in fact, evading—their responsibility by urging the public to seek access to a voluntary body or a body that is subsidised by local government while at the same time not making the necessary contribution.

Since May 1979, prices have risen by 40 per cent. and inflation by 11.4 per cent. Nationalised industry prices have gone up four times as fast as other prices. Unemployment has been used to keep wages down. The result has been deteriorating living standards. Far from meeting people's needs, the Government seek to place greater restrictions on the ability of trade unions to defend their members against exploitation. This is at a time when the deliberate policy is to generate fear among working people, as demonstrated in the recent activities of the British Leyland chairman and management, aided and abetted by the Government. Never has it been more apparent that in capitalist societies men and women are merely commodities to be bought at the cheapest price and thrown on the scrap heap when superfluous to requirements.

I am sorry that my hon. Friend the Member for West Lothian (Mr. Dalyell) is the only member of the Opposition Front Bench present, but I am sure that he will take this message back to his colleagues. The next Labour Government must put an end to this capitalist system once and for all.

5.50 pm

Lord James Douglas-Hamilton (Edinburgh, West)

I listened with interest to the hon. Member for Preston, South (Mr. Thorne) but I shall not follow his arguments because I wish to deal with a different aspect of the Loyal Address. After two and a half years of compulsory silence, it is a great pleasure to be able to speak again about the country's defences. I was delighted that the Government regard the security of the nation and the preservation of peace as matters of the first importance", that increased resources will be devoted to defence and that they will concentrate on specific, equitable and verifiable measures of arms control. I hope that, as one aspect of modernising the Armed Forces, the Territorial Army will be expanded. I say, as an Army reservist, that there is room for four territorial battalions in the Lowlands—the Royal Scots, the KOSB, the Royal Highland Fusiliers and my unit, the Cameronians. There is also room for four Highlands battalions—the Black Watch, the Argylls, the Queen's Own and the Gordons—as well as expansion throughout the United Kingdom. There are many reasons why expanding the TA is sensible. First, it is cost-effective. The annual salary of a rifleman in the TA is about £1,000. For a Regular Army rifleman the salary is £7,000—seven times as much. Secondly, many of those who join the TA will have an opportunity to learn a trade, which will stand them in good stead later.

We know that the pledge to increase resources "devoted to defence" will prove expensive and no doubt we shall hear a great deal from some Opposition Members about how many desirable projects may have to be sacrificed as a result. No doubt they will present a heart-rending picture. Expenditure on armaments is never in itself desirable. It is only a lesser evil. Hon. Members are entitled to ask "What is the greater evil?" If I were to say that it is a fear of Russian imperialistic expansion, there might be objections from several Opposition Members. [Interruption.] The hon. Member for Dundee, West (Mr. Ross) objects.

Some hon. Members might even talk about the peace-loving benevolent old gentlemen in the Kremlin I shall not go into detail about that, but I remind the House that those who do not learn from the lessons of history are doomed to repeat it. I give a quotation from Hansard of almost half a century ago: This country at the present time is appallingly weak as far as our home defence forces are concerned. I distrust the effete theory of disarmament by example. If we are to have disarmament it must be true disarmament, and true disarmament is all-round disarmament."—[Official Report, 10 March 1932; Vol. 262, c. 2054.] I know that speech, because it was made in the House by my father, as the hon. Member for Renfrewshire, East. At that time he argued strongly for the expansion of the Auxiliary Air Force. If he had been listened to, we should not have been so overwhelmingly outnumbered in the Battle of Britain. He spoke in favour of increasing the size of the Auxiliary Air Force, and then and for many years after certain hon. Members thought that that was a militarist point of view—with which they wholeheartedly disagreed.

To be fair to them, they appeared to have a point, because it was not until 1938 that the German armed forces moved outside their own boundaries.

This is, of course, completely different from our present position regarding the Soviet Union, whose forces are holding down people from Kabul to East Berlin.

Equally, it was not until the second half of the 1930s that German air power surged ahead. But today Russia and the Warsaw Pact have massive superiority over NATO in tanks, artillery and medium-range missiles. Under these circumstances any Government—particularly the previous Labour Government—who failed to meet defence requirements must be open to the severest censure. I regret that I do not have the eloquence to express the abhorrence that I feel for the policies put forward by those who would strip Britain of its defences. However, I do have some extremely eloquent statements from a most remarkable source to the effect that the soldiers of Britain had insufficient tanks and aeroplanes to protect themselves, for the simple reason that insufficient money had been spent to buy them … The struggle went on to induce the Government to give the country what every armament-maker knew was necessary if we intended to race Germany's multiplication of arms … The delay in the previous five years was criminal. I can give more quotations from the same source. The author was clearly condemning those who were too supine to rearm when rearmament was vitally necessary. Those words were written 40 years ago, and I had hoped to hear their author saying today with great emphasis how strongly he supported the commitment to strengthen our defences.

However, some people not only do not learn from history, they forget what history they once knew. The coauthor of those eloquent words was none other than the present Leader of the Opposition in his book "Guilty Men", which he wrote under the pseudonym "Cato".

If any hon. Member asks "Did he really make those statements?", the facts are given in that excellent biography by Simon Hoggart and David Leigh. They say that he was one of the three co-authors who decided to repay the score against the appeasers with a series of truly vitriolic character assassinations. The author, they decided, should be 'Cato', the man who cleaned out the sewers of Rome". I understand that the Leader of the Opposition suggested the title from a favourite life of the French revolutionary St. Just: 'The leader of the angry crowd replied. "The people haven't come here to be given a lot of phrases. They demand a dozen guilty men."' I can understand why the Leader of the Opposition was happy to be associated with the book. It was claimed later that it contributed considerably to the Labour Party winning the General Election in 1945. I quote a sentence from the book "Guilty Men" on page 31 that I believe will interest the House: Individuals and even groups of fools and fanatics of course continued to exist in the Labour Party, who were either for peace-at-any-price, or war-without-weapons … But the men who had control, who exercised the power, acted otherwise from now on. The man who wrote those words is now the leader of the Labour Party and those who exercise the power do not now "act otherwise". They are fulfilling the same role as those who were denounced as the "guilty men". It is not even necessary to ask who the guilty men are, since the facts speak for themselves.

Just as 40 years ago the guilty men were those who had encouraged the Nazis in the belief that they could get away with anything, so today we can point the finger at the new guilty men who are encouraging the Russians in the same illusion. It is particularly sad that the exposer of yesterday's guilty men should be leading their counterpart today. It is impossible to believe that his policy was ever in the interests of Britain. Indeed, in so far as such a policy might tempt the leaders of the Soviet Union into militaristic adventurism, it would not be in the interests of the Soviet people, who I suspect want to avoid war as much as we do.

In such circumstances I warmly welcome the commitments in the Queen's Speech for specific, equitable and verifiable measures of arms control", and to treat the security of the nation and the preservation of peace as matters of the first importance by producing a proper level of preparedness. I am glad to support those who I am certain will give Britain the security that it so strongly deserves.

5.58 pm

Mr. Gordon Wilson (Dundee, East)

It is an honour to follow the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) after his self-imposed silence of two and a half years. He indicated that his oratory was not equal to the occasion, but his pent-up feelings on defence were such that he certainly made his point. I can only assume that he has resigned as one of the patronage Under-Secretaries on these matters, because he has been watching "The Wilderness Years" and I detected some neo-Churchillian overtones in some of his comments.

The Queen's Speech is rather strange. At this stage, one would expect the Government to have many proposals for legislation and to give an indication in the Gracious Speech of the direction in which they are going. Even allowing for the tradition of such speeches, being clothed in ambiguities and generalities, I gained the impression—having read it—that it was representative of a fag end of a Parliament. It is almost as if the Government had run out of ideas. The Government certainly have ideas, but they seem to be lost when it comes to a comprehensive programme that might contain some direction. They seem to be floundering over what is happening within their party and over the divisions that exist. The Gracious Speech is an exercise in the politics of privilege and patronage. If implemented, it will not lead to any major improvement in the economic and social conditions that demand our attention.

In the first paragraph of the Gracious Speech there is some "doublespeak". It is almost as if the Queen's Speech had been delivered in 1984, not November 1981. The first paragraph on the economy is a sad reflection on those who drafted it. The Gracious Speech states: My Government attach the utmost importance to maintaining progress in reducing inflation"— that is a contradiction in terms, because inflation has not been reduced— by the pursuit of firm monetary and fiscal policies". Perhaps the word "pursuit" deals with the situation. The Government have certainly not achieved the targets that they fixed when they set out on the theories of monetarism two years ago. The Gracious Speech continues: to restore competitiveness abroad and prosperity at home. That is a general phrase, but the growing unemployment figures, the poverty and the way in which the imbalance in taxes has developed—money is being given to the rich, but being stripped from virtually everyone else—demonstrate the cynicism behind the drafting of that message.

The Leader of the Opposition has criticised the pallid phrase: share the nation's concern at the growth of unemployment and will continue to direct help to those groups and individuals most hard-pressed by the recession. If the Government intend to give direct help to those affected by the recession, it will be a change. Far from giving help to industry or to small businesses, the Government have caused them more problems than they can bear through the decrease in business, the increase in interest rates and the pressures of indebtedness.

Those on unemployment and supplementary benefit have found that the link with the rate of inflation that would have helped to keep them in line with rising prices has been cut. Many of the unemployed and sick are now in a worse position than they were. As the Government say, they are hard-pressed by the recession". In addition, they are hard-pressed by the Government's actions in cutting public expenditure at the expense of individuals. During their surgeries hon. Members will have heard sad stories about the difficulties that individuals find in obtaining help from the Department of Health and Social Security in relation to single payments. Harsh rules are imposed. All that results from the system of monetary control upon which the Government have sought to base their economic policies.

Yesterday, I read an article in the Fraser of Allender Institute quarterly economic commentary for October 1981. It had been written by Dr. J. Foster, a lecturer in the political economy department of Glasgow university. It contained the following heading: The political economy of Mrs. Thatcher's monetarism. I recommend Dr. Foster's critique to the Government. He said that there had been little support for monetarism among the bulk of British economists in recent times. He also said that the general view of the economists selected by the Government to advise them was that they were excessively ambitious, slightly mad or both. In addition, the position of many monetarist economists—in relation to events at Government level—has been ambiguous. Those economists who favoured monetarism have been disappointed because the desired results have not materialised from the Government's policies. They are rapidly distancing themselves from the Government's theories.

I shall make a passing reference to the proposed Bill on employment and labour relations, if only to warn the Government to be most careful. As has rightly been said, the spirit of consensus in industry is far more important than any rigid restrictions that a Government may lay down. Such restrictions might or might not work for a time, but would undoubtedly be stripped away by another Government. If the Government go ahead with major changes in our employment law without consultation or agreement, they will raise barriers to their hopes of making progress in industrial practices and in improving the efficiency and competitiveness of industry.

I turn to energy and energy prices and warn the Government to remember—when they consider the amendments to the financial arrangements of the National Coal Board—that they will soon be called upon to consider the nature of the subsidy that the Government give to the South of Scotland Electricity Board to enble it to maintain the purchase of coal at reasonable prices. The agreement, fixed several years ago, will soon run out. It is hoped that the Government will propose a subsidy that will allow the coal industry to expand within Scotland and to fulfill its purpose of supplying energy to our country.

The Scottish National Party would have preferred it if the British National Oil Corporation had been a Scottish Oil Corporation. In that way we might have ensured that the benefit of our oil resources went to the people of Scotland. Nevertheless, like other national oil corporations, the BNOC has a useful role to play in ensuring that the State's interest in such a resource is exercised and that the activities of the oil companies come under some scrutiny. If the Government go ahead with their proposals for reasons of ideology, or short-term gain, the country will suffer.

The Prime Minister said that the profits made by the gas industry were swallowed up by the money paid to the coal industry. If the Prime Minister is determined to sell parts of our gas industry, to restrict its operations or to increase the price of gas at the consumer's cost to pay the producers, the cash from gas will not be available for the coal industry.

If the Government are determined to go ahead with legislation on the British Gas Corporation, they should consider the system of standard charges. In recent years those charges have rocketed and are having a harsh effect, particularly on those on restricted incomes and on those who use gas and electricity, but who cannot afford to consume much. They find that standard charges are iniquitous and that they are paying for energy they do not receive.

As regards the Scottish content of the Gracious Speech, the Government would be well advised to consider carefully any solution that they might seek on fishing limits. From my visits to the fishing communities I have discovered that there is deep dissatisfacion about the nature of the compromise that the Government may make. As these issues have gone on year after year, it will be tempting for any Government to lose their patience and to try find a formula that will sweep the issue out of sight, even if that is to the disadvantage of our fishing fleets.

There are many jobs at stake both on the sea and in the ancillary and processing industries. I hope that the Government will recognise the fatal error made by the Conservative Government of the right hon. Member for Sidcup (Mr. Heath) when negotiating entry into the Common Market, and subsequently by the Labour Government of the right hon. Member for Huyton (Sir H. Wilson) in the renegotiations. Fishing was ignored, and fishing is an important industry for Scotland.

The proposals regarding Scotland in the Queen's Speech are thin gruel. From the 23 or so paragraphs, and allowing for the fact that some of the other paragraphs may have Scottish connotations, it would seem that the only two major pieces of legislation that the Government have in mind for Scotland are in local government. One is to implement the Stodart committee's recommendations. Although they are useful, they could not be described as important, because the Stodart committee was prevented from looking at the mess caused by the previous reform of local government.

The second proposal relates to the code of civic government—an extremely useful measure which will no doubt keep Scottish Members safely busy for many long months of excruciating boredom. It relates to pavements, cleaning windows and minor regulations of that kind. How is it that the legislative programme for Scotland designated in the Queen's Speech is confined only to those two items? It is almost as if Scotland is in the wilderness. No attempt has been made to look at the problems facing our country. It seems as if Scotland has become insignificant, that its political clout has departed, and that we must put up with this type of trivial legislation without anything important into which to get our teeth.

There must be some internal dispute within the Labour Party at the moment because both the Shadow Ministers and the Whips have gone somewhere else. [HON. MEMBERS: "Disgraceful."] It is a disgrace. At least the Government have managed to put two Scottish Ministers on their Front Bench. The Labour Opposition Front Bench is devoid of any Shadow Ministers. Perhaps the level of defections is running too high at the moment for the Labour Party to put any Shadow Ministers on show.

Nevertheless, the Leader of the Opposition came out firmly against the principle of a referendum. We know that the Labour Party's policy is not to have a referendum on withdrawal from the EEC. He is now against a referendum on the question of local government. But the Labour Party still maintains as part of its platform pledge concerning the Scottish Assembly that there must be a referendum. The Labour Party will have to straighten itself out on this question, as on others. Whereas, for instance, it gives the impression that it wants to take immediate, unilateral action on the EEC, it is prepared to huff and puff and waste time in relation to the more important question of a Scottish Assembly.

It is sad that the Queen's Speech gives few opportunities for dealing with the problems of unemployment, housing, health and industry, and that the Government are still pinning their banner to the mast of monetarism, regardless of the industrial desolation taking place not just in Scotland, but in the rest of the United Kingdom.

I am saddened that this is happening to my country. Scotland is suffering from its decision in 1979 to stay as a declining British province, because it is now being treated as an unimportant province. It is finding that its assets are being redeployed and used in ways in which the mass of the people do not approve.

6.14 pm

Dr. Alan Glyn (Windsor and Maidenhead)

As I put down a motion today requesting that the Speaker have the power to restrict the speeches of Back Benchers to 15 minutes, I can assure you, Mr. Deputy Speaker, that I shall not seek to exceed that time.

I am glad that the Queen's Speech shows the primary importance to this country of preserving peace through defence. I was most impressed by the speech of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton). I had intended to refer to many of the points that he made. I shall now be able to omit them from my speech. But I should like to reinforce his important point about the Territorial Army. It is interesting to note that the Queen's Speech does not use the word "money"; it refers instead to "resources". That might be one of the ways in which we can increase our strength. It is important that the members of the TA should be trained with regulars and treated with equality. There must be no second-class citizens. I am sure that my hon. Friend would agree with that.

The preservation of peace is of prime importance, for without it what else can we have? In a Soviet-dominated country, there might not be 3 million unemployed, but where should we all be under Soviet domination? We know from the Soviet Chief of General Staff that the Russians wish to impose their type of regime all over the world.

When we talk about the limitation of long-range nuclear weapons, let us remember one thing. We must never give up anything which in any way reduces our ability to speak from strength. That is a most important point.

My right hon. Friend the Prime Minister has already, with great clarity, referred to the differences in the numbers of weapons and other forms of attack between the Warsaw Pact countries and the NATO countries. But there is another aspect which should be considered. I had the good fortune during the recess to go to Mongolia. When one sees the China wall and the voluntary occupation of Mongolia, one realises the position with which Russia is faced. She faces the possibility of a war on two fronts, and who wants that? Did we not learn about that from the last war? Have we not learnt about it from the campaigns of Napoleon? The Russians face that possibility, but I do not regard it as an excuse for the degree of rearmament that the Soviet Union is now undertaking. It is an aggressive form of rearmament, and we must remember that it has been agreed by the Russians that they wish to impose their form of government on other countries.

There is, then, the possibility of the Russians having to meet a confrontation on two sides. I can assure hon. Members that there is no love lost at the moment between Russia and China. Both countries have targeted nuclear weapons in every form. My right hon. Friend the Prime Minister mentioned Afghanistan, but there are other countries bordering the Soviet Union. That long wall which was used to keep out invaders may yet be the line of the second front.

We are entirely dependent on the possession of Polaris and the knowledge that we are to go on to Trident. No country will entertain the idea of attacking us when we have the ability to use weapons of destruction which are perhaps a thousand times more powerful than those used on Hiroshima and Nagasaki. But the dangers which the Russians face do not provide them with any excuse for their refusal to negotiate. Negotiation must be accompanied, however, by the right of mutual inspection. It is no use coming to an agreement unless we can ensure that it is carried out.

We have also to remember that, however much we agree with United States policy and appreciate what the United States does for us in defence, its position is not quite the same as ours. Geographically, it is in a different position. It is our duty always to impress on the United States that, much as we appreciate everything that is done for us, its immediate, as distinct from long-term, security interests may not be identical with ours.

The Russians would benefit financially. As my right hon. Friend the Prime Minister said, they spend many times the amount that we spend. Everyone wants arms limitation. I warn the House and the country that this can be achieved only through our possessing the strength, power and will that is necessary.

I should have liked to see some reference to tax reform in the Queen's Speech. This matter has already been mentioned by my right hon. and learned Friend the Member for Hexham (Mr. Rippon). It is long overdue. There is, of course, room for industrial and union reform. That has to come. There must be good will on both sides and also a sensible code under which they can operate.

There is reference in the Queen's Speech to the breakup of some State industries. I believe that they are too big. I am sure that hon. Members on both sides of the House are asked why complaints cannot be made in Parliament about public departments and services. We have to say that we are sorry that questions cannot be put in the House about State industries. This is resented by the public. The break-up of some of our great State industries into smaller units run by private individuals who are responsible is to be welcomed.

Oil and the recession have altered the pattern of our lives. The right hon. Member for Down, South (Mr. Powell) was right recently when he stated that we are moving into a new pattern. I would list the reasons as old plant, no competition after the war, cheap goods produced in Taiwan, China and Korea and alterations in demand. I am convinced that these factors, combined with excessive wage claims—I do not wish to be political—have contributed to our difficulties and are rendering it impossible for us to export many of our conventional products.

It is the Government's duty to ensure that money is directed into those firms that will be profitable in the future. I enter one caveat. Many firms are profitable and running on an even keel but need an extra boost. They fall outside the ambit of the present scheme designed to help small businesses. Those are the sort of businesses that we need.

The worst feature of unemployment is its effect on young people who are unable to get a job. I believe that training programmes will come forward. We must make sure that the youth of our country is capable of taking on more skilled jobs when expansion occurs. If the Government continue their policy of containing inflation, I see no reason why we should not develop industries that are profitable, achieve the restoration of law and order and build up, through difficult times, a country of which we can be proud.

Mr. W. R. Rees-Davies (Thanet, West)

On a point of order, Mr. Deputy Speaker. I should like your guidance. Within my experience in the House, which goes back a quarter of a century, I do not recollect a time when there was no Opposition Front Bench Member present and no Liberal Member present for a Queen's Speech debate. I recognise that as there are fewer than 40 hon. Members present one might be in a position to call attention to the fact that there is no quorum. However, as a considerable number of Conservative Members are anxious to catch your eye, I should like your guidance on whether there is any way in which one can ensure attendance on the Labour and Liberal Benches. This is a most extraordinary situation.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

I am sure that the hon. and learned Gentleman reads Standing Orders. He will know that Standing Order No. 29 says: The House shall not be counted at any time. A count used to be possible, but that is no longer the case.

6.24 pm

Mr. Roy Hughes (Newport)

After reading the Queen's Speech and listening to the Prime Minister, my mind goes back to the time immediately before the general election when a great poster appeared on a huge hoarding in what is known as the Chepstow road in my constituency showing all the employees of Saatchi and Saatchi standing in a queue. The poster bore the caption "Labour isn't working". At that time, there were 1½ million people unemployed. The figure has now doubled to 3 million. My approach to the Queen's Speech is that I see no hope for those 3 million unemployed. It is a situation in which the hungry sheep look up, and are not fed". All that is contained in the Gracious Speech is a reiteration of monetarist policy. The unemployed represent a waste of human resources—a waste of skill of a large section of British people who are paid simply to rot in the dole queues. Such a level of unemployment in economic terms is like turning on a tap and leaving it to run. It is simply a waste.

The Gracious Speech states: A Bill will be introduced on employment and labour relations. This foreshadows a further attack on the trade unions that will breed resentment and unrest. As shown in the last few days, British Leyland seems now to be ruled by fear. There-has been engendered a hatred of the chairman, Sir Michael Edwardes, that I have never known in my experience of the motor industry. His best course is to take early retirement and return home to South Africa and so enable confidence, hope and co-operation to be restored to that troubled enterprise.

Another feature that looms large in the Gracious Speech is what has come to be known as privatisation. This symbolises to me an evil and a pilfering of public assets. There is the proposal to sell a majority stake in the oil-producing business of the British National Oil Corporation to private companies. Likewise, there is the proposal to abolish the British Gas Corporation's statutory rights over the purchase of gas and its sale to industry. There is no justification for these measures. The assets belong to the British people. If the Government go ahead, they will meet tremendous resistance on the Opposition Benches. If we fail, I hope that a future Labour Government will see that these assets are returned to public ownership.

Then there is the matter to which there was no direct reference in the Queen's Speech, the sale of gas showrooms. We know that that is the Government's wish—and, perhaps, their intention—but the newspapers tell us that because of certain safety factors this measure has to be postponed for about two years. The proposal has met with intense hostility from employees of the British Gas Corporation, and they are backed by the general public. I hope therefore that, before two years are out, the Government have been deposited in the dustbin of history, and that such a measure will never be enacted.

The basic criticism of the Queen's Speech is that it does not face up to Britain's social and economic crisis, spotlighted by the three million people who are unemployed. Now it seems that the Government have almost abdicated responsibility. They seem to have returned to the old adage that the unemployed, like the poor, will always be with us.

I should have liked the Queen's Speech to contain some basic items from Labour's alternative strategy. First, I should have liked it to contain a massive programme of public investment in rail electrification and other modernisation proposals for British Rail. Many road schemes are needed. As many hon. Members will be aware from their own surgeries, a tremendous housing shortage is developing. Yet at the same time construction workers are rotting in the dole queue and the materials are likewise rotting in the yards of builders merchants There is no division of opinion in the construction industry. I get regular visits at my surgeries from the building trades employers who support the policies that I am advocating. So there is nothing doctrinaire in what I am saying. The construction industry can stimulate the economy and give the orders that private companies are crying out for.

Further, there is the question that is posed, particularly by Conservative Members: how will this public investment be paid for? The basic problem, as I see it, is: what level of priority is to be given to solving the problem of getting three million unemployed people back to work? My opinion—and I believe that it is the opinion of my party—is that we should give it the highest priority In the first instance, we should need to borrow money, just as any private company would do. We would then save all the millions of pounds that are now being paid out in unemployment benefit. Those people would be put back into employment to do useful work in industry and public service, and would pay tax. Thus, more money would accrue to the Treasury.

Mr. John Major (Huntingdonshire)

If the solution is as seductively simple as the hon. Gentleman suggests, why did not the Labour Government adopt that solution and prevent unemployment rising from 650,000 to 1½ million?

Mr. Hughes

I must disillusion the hon. Member for Huntingdonshire (Mr. Major). I was not a member of that Government, and I cannot answer for them. I was putting forward similar proposals during the period of the Labour Government, but, in fairness to that Government,there were 1½ million unemployed at the time of the general election in May 1979, and that figure was actually coming down in the months prior to that date. Now, under this Government's policies, it has doubled.

A fortnight ago the hon. Member for Southend, East (Mr. Taylor) received an answer to his parliamentary question which pointed out that ever since Britain became a member of the Common Market on 1 January 1973 it has cost this country no less than £1 million per day in contributions. Of course, that is not to mention the benefits of cheap food that this country had before we entered the Common Market. That helped to keep down the level of our wages and to make our products more competitive in world markets. The small tariff barriers which still remained were swept away, and we were thrown into a competitive struggle with the industrialised nations of Western Europe. To my mind—and this is a belief that I hold most sincerely—taking Britain into the Common Market was the most fateful decision that was taken by any post-war British Government.

It has been noticeable how the attitudes of certain trade unions have changed over the years. Some trade unions which previously were in favour of Britain being in the Common Market are now all for coming out. Work-people and housewives are the reality of British membership of the Common Market. It is all very well to have all these highfalutin' statements about Britain's long-term interests, and so on, but it is the people in industry and the housewives who are at the sharp end. I sincerely hope that after the next general election a Labour Government will take this country out of the Common Market. It is a proposal that I long to see in a future Queen's Speech.

There is another item that I should have liked to see in the Queen's Speech, and that is the introduction of import controls. We need managed trade, not restricted trade, to allow the British economy to expand again. I notice that even the Liberals are coming round to this point of view. The speech of the leader of the Liberal Party was reported in The Times a few days ago, and he seemed to be putting forward the sort of argument that I am propounding this evening, because all that we are doing now in the British economy is importing unemployment and paying for much of it with precious North Sea oil.

Then, too, I should like to see a curb on investment overseas, and instead I should like to see us ensuring that adequate amounts are invested in British manufacturing industry. After all, that is relevant to the Queen's Speech. The Japanese do it, and they are always quoted as an example of what we should be doing. They insist that a certain sum is invested in their industry every year. Why not us? It could be part of our planning agreements with private industry.

There is an item that has been mentioned many times in this debate, and which is mentioned in paragraph 2 on page 1 of the Queen's Speech: Increased resources will be devoted to defence". To my mind, that is diabolical in our present situation. Presumably, it means a new range of nuclear weapons. It completely ignores the growing strength of unilateral opinion, not only in this country but in many other European countries. Under the Tory Government it seems that we are building up weapons of mass destruction which can lead only to our annihilation. Recently President Reagan let slip a warning that we should not ignore—that America was quite prepared to countenance what he referred to as a limited nuclear war in Europe. But whether such a war could ever be limited is very much open to question.

I understand that the official policy of my party is that a Labour Government would end Britain's nuclear commitment and would get rid of American bases in Britain. Should we have to be tough with the Russians at any time, Sweden has shown that a country does not need nuclear weapons to do that. Money spent on this new range of nuclear weapons would be better spent on investment in manufacturing industry.

The Queen's Speech heralds a further 12 months of unrest and class conflict in Britain. It could well result in a major industrial conflagration the ravages of which could do immense harm to this country. Eventually the pieces will have to be picked up by a future Labour Government, who will need to do more than a bit of pottering to put 3 million people back to work.

6.41 pm

Mr. John Browne (Winchester)

First, may I join others who have congratulated my hon. Friends the Members for Scarborough (Mr. Shaw) and for Dartford (Mr. Dunn) on their excellent speeches in proposing and seconding the Address.

I was in total agreement with what my hon. Friends the Members for Edinburgh, West (Lord James Douglas-Hamilton) and Windsor and Maidenhead (Dr. Glyn) said about defence. I was very pleased to see the subject of defence as the first substantive paragraph in the Queen's Speech, because defence is and should be recognised as the first and prime duty of any Government.

Many of us in Britain who have suffered the scourge of inflation—the biggest con trick of them all—will also be pleased to see that the Government are to maintain their aim and fight to restore financial integrity. But surely the restoration of financial integrity is not an end in itself. It is merely a means to an end. In a world of deep recession, of severe competition and where technology is king, we must go for the achievement of a technological revolution. It therefore worries me greatly that there is no mention in the Gracious Speech of a technological revolution, which surely must be our ultimate aim over the next decade.

Some disparaging commentators have discribed the selection and election of my right hon. Friend the Prime Minister as the peasants' revolt. If so, I for one am very proud to be a small part of it, because I believe that her policies, if carried through as planned, will genuinely and greatly benefit our country as a whole, especially ordinary men and women. Secondly, I believe that my right hon. Friend is the first Prime Minister since the war who has dared—yes, actually dared—to face our nation with reality. At last we have a reality to assess and, therefore, a chance to make real decisions, to take real action and to achieve real results.

This political integrity, or reality, is very important. Over the past two years we have heard many arguments in the House about unemployment, decay and so on. We have suffered 30 years or more of acute decay, which has been covered up by dishonest politicians who have used inflation, or re-inflation, to hide us from the realities. What a vicious and expensive con trick it has been. It will prove not only expensive to us but to our children and our children's children.

We used to complain about the rotten boroughs when Members of the House used to buy their votes, but at least they used their own cash. Since the war we have had politicians buying our votes with our own cash. That is the real con trick of inflation.

There can be few people today who have not, despite propaganda to the contrary, had at least a little glimpse of the economic realities that face Britain. Who now can deny that if all the overmanning in Britain were shed, the unemployment figure would be nearer 5 million than 3 million?

The fact that Government subsidies, both direct and indirect, account for between £30 billion and £40 billion surely indicates a strong desire on the part of the Government, far from wishing actively to create unemployment, to prevent unnecessary unemployment. What sane Government, what Government at all, in a modern democracy, would want to create unemployment? But that still does not answer the question why unemployment is so high.

The first answer is that there is a deep world recession. But that faces everyone else, so why is unemployment so high in Britain? Many issues are involved, but there are four overriding issues. First, for years we have overpaid ourselves relative to our productivity. Secondly, we have had 30 years of decay which has been hidden from us. When some companies would have died when they were in the wrong industries—industries which the market no longer wanted—they were salvaged. Money was pumped in by the Government with no regard for what the market wanted. The Government said "We shall produce X", when the market was wanting Y. Some of those companies that did change with the market have been highly successful.

Thirdly, the whole Western world—particularly this country, which was the first into the agricultural revolutions and the first into the Industrial Revolutions, heavy and light—is facing an agonising restructuring away from industry and towards technology and service industries. It is agonising, and, as some Opposition Members have said, there is disillusion in some places because for so long companies have been in the wrong industries and have been subsidised not by customers but by taxpayers, and then through borrowing and then by inflation. It is an agony that is made worse by housing policy and by non-transferable pensions, which militate against job mobility.

Fourthly, we have produced much counter-productive employment legislation, much of it designed with the best will in the world by right hon. and hon. Members of the Opposition, which has counted against rather than protected or increased employment.

Reality has also shown many of us that only true competition will lead to truly profitable jobs and that it is not a matter merely of price but of a marketing mix that makes us competitive. It is not good enough to have competition just on price. We must design the right cars for the 1980s, build them with the right quality, deliver them promptly and give competitive after sales service. Only then does price become part of the equation. British industry has now learnt this lesson and is now in a much more competitive position.

Who would deny today that sales to customers rather than mere productivity create real jobs? At long last, many of us can now see the great danger to our country and to the standard of living to which we all aspire of concentrating merely upon industry at the expense of technology. If we continue in this way, we shall consign ourselves to being an industrial, but under-developed nation within 10 years.

It is right to face reality. Therefore, I am a strong supporter of the so-called peasants' revolt. However, I recognise that all revolts, particularly peasants' revolts, must deliver.

We still have to deliver on law and order. Not enough action has been taken on this matter. Much more money must be spent on prisons. The prison at Winchester is an example. The little money spent there is an absolute disgrace when one considers the money spent on the nationalised industries. If we really mean business about law and order, the Home Secretary should take powers to make it a statutory obligation for local councils to buy the required modern riot control equipment.

I was glad to see in the Gracious Speech that the Government propose to increase parental responsibility.

A second matter of great importance on which we must deliver is rates. This grossly undemocratic tax must be changed. I realise that it is a complex and difficult matter, but I was glad to hear my right hon. Friend the Prime Minister give it such a high priority this afternoon because it is long overdue and democracy must be restored in this area.

The most important area in which we must show results is the economy. The Government's economic policies are based on the philosophy of the free market, and their policies are working well in the private sector—the free market. Of course there has been a restructuring. Labour Members may laugh. The agony of restructuring is no laughing matter, but it is an achievement.

Much of the help given to the private sector in other countries—such as America, Japan and West Germany—in the new high technology businesses such as videotex, communications and electronics is being siphoned off in this country to pay for the loss-making public sector.

I do not believe that the Government's policies are working in the public sector at the moment, simply because it is not a free market. Government expenditure on the nationalised industries this year is 200 per cent. over budget. It was to be £2 billion. But now we are faced with a bill of £6 billion. That is all extra money in the form of the national insurance surcharge, and it is being robbed from the private sector. North Sea oil revenue is being squandered.

The Government's policies are not working in the public sector because of the employment cartels. On the one hand, we have massive and, most often, undemocratic trade unions with the power to demand and, on the other hand, State-owned monopolies which can both pay wages and, because of their monopoly positions, charge any prices that they wish—usually totally out of relation to the market. There is no true market price in a monopoly situation on, be it telephones or gas.

How can monetarism work in such circumstances? I believe that urgent and strong action is still required in this vital area. First, the Government must press ahead urgently with massive privatisation to restore true public ownership as opposed to State ownership. State ownership is the great excuse for a bigger and bigger bureaucracy.

I believe there must also be much stronger action on industrial relations. In this Parliament we must set about introducing democracy to trade unions for the benefit of workers rather than of shirkers and trade union officials.

So far we have had the step-by-step approach. I hope that I shall be forgiven for saying that I believe that it was merely a shuffle, a political jive. We have done a lot of dancing around but now we are in more or less the same place as we were when we began in May 1979. We still have a closed shop. That is outrageous. I agree with my right hon. and learned Friend the Member for Hexham (Mr. Rippon) that, rather that what is now proposed we should go the human rights route to prevent the closed shop. We still have no effective voluntary secret ballot machinery for people on the shop floor. We still have secondary blacking. I agree with the individual's right to withdraw his labour, but I certainly cannot believe in the individual's right to withdraw somebody else's labour.

Mr. Allen McKay (Penistone)

The hon. Gentleman runs a broad brush across the trade union movement. Is he aware that in the National Union of Mineworkers, for example, every member is balloted before decisions are taken?

Mr. Browne

I fully accept that point. I am short of time, so I hope that the hon. Gentleman will excuse the broad brush approach. Time precludes me from naming all exceptions to the general rule.

I welcome and strongly support the Gracious Speech. We certainly face difficult times. However, I believe that the worst that we have to fear is ourselves. Without a national will, we are indeed in trouble. Therefore, I hope that each of us, both inside and outside the House, will recapture our own personal willingness to play for the national team and not to sabotage it.

I hope that we shall find loyalty within ourselves and give active support to the Government that the majority of us elected. In this the Government also have a key role. The Government must get their public relations act together. For, then, and only then, can we avoid unnecessary confusion and avert unnecessary fear. Most important, only then can we revive the scent of victory—a one nation, national victory.

6.57 pm

Mr. John Horam (Gateshead, West)

The hon. Member for Windsor and Maidenhead (Dr. Glyn) said that he hoped that the Conservative Party was showing that it was moving into the twentieth century. The speech by the hon. Member for Winchester (Mr. Browne) shows that they have hardly moved out of the stone age.

It is almost impossible to be anything but dismayed by the scene on the economic front. The depression into which the country has been plunged by the present Government bears direct and unfavourable comparison with the great depression of the late 1920s and early 1930s. Between 1929 and 1931 the national income fell by about 6 per cent. in real terms and we lost one-tenth of our total industrial production. By contrast, between June 1979 when the present Conservative Government came to power and 1981, the national income fell by about 7 per cent. in real terms and industrial production fell by almost one-fifth.

In 1931 and 1932 unemployment exceeded 3 million but then fell rapidly in the next five years as economic growth resumed, to reach about 1¾ million in 1937. In 1981 and 1982 unemployment will, similarly, exceed 3 million but there is no prospect of a rapid and steady fall in unemployment. Indeed, the Government's chief economic adviser told the International Monetary Fund conference that unemployment is expected to go on rising into the mid-1980s, by which time it could match, not only in numbers but as a percentage of the working population, the worst experience of the 1930s.

In terms of depth and duration, the current depression will prove to be worse than that of the 1930s. The prospects of work for the 3 million people who are officially unemployed are worse now than they were in 1931.

Mr. John Browne

Will the hon. Gentleman give way?

Mr. Horam

The hon. Member for Winchester has just completed his speech. He made the point about getting through his speech rapidly and I would like to do the same.

Placed in this context—that of unemployment today—the Queen's speech is insensitive and wrongheaded to an almost stupefying degree. What it says about unemployment is that my Government share the nation's concern at the growth of unemployment". In other words, it makes it clear that, as an objective of Government policy, it is not the Government's intention to reduce the general level of unemployment. It is not an objective of policy. They simply share the concern about the general level of unemployment.

Neither is there any mention of tackling the regional dimension of unemployment, which is much greater in the sort of area that I and the right hon. and learned Member for Hexham (Mr. Rippon) represent.

In the course of his speech, the right hon. and learned Gentleman declared himself to be a manifesto man. I remind him that I was once a member of the Manifesto Group, as were some of my colleagues. It is but a short step from that point to leaving a party and starting a new party. I advise him, from our fund of general experience on the matter, that he had better get on with it. We are selecting parliamentary candidates soon and if the right hon. and learned Gentleman wishes to be on board he had better do it quickly.

The Queen's Speech, by failing to make it clear that the Government wish to tackle the general or regional levels of unemployment, offers no hope to the people of the North-East, Scotland, the North-West or Wales. Today a writ was issued in the constituency of Crosby. What hope is there in the Queen's speech for the people of Crosby, Maghull, Freshfield or Formby or any of the small towns and villages that are so dependent on the work to be found in the Merseyside area? There is no hope.

I noted with amusement the rush to issue the writs and I wondered what that foretold about the unemployment figures in January and February. If the Government were reasonably confident about their case—that things will improve—they could have taken a more measured approach to such an important by-election. The truth is that the people of those regions have been returned to the days of depression. Yet the Government have the gall to say next to nothing about unemployment in the Queen's Speech, in the week when the CBI spent some considerable time at its conference talking about those issues and passing what I thought was a rather robust resolution.

The Government do not give primacy in the Queen's Speech to reducing unemployment. They give primacy, as the hon. Member for Winchester pointed out, to continuing to try to reduce inflation. In other words, they have carried on with the same old measures, undertaken with considerable incompetence, that they have pursued over the past few years, regardless of the changed circumstances. I believe that it is a mistake to pursue one aim to the virtual exclusion of all others in all circumstances, just as it is a mistake to rely on one weapon to prosecute that aim. In this case the objective has been inflation and the weapon has been monetary policy.

The fact is that economic policy is almost invariably a matter of keeping three or four balls in the air at the same time. It is usually sensible in those circumstances for the juggler to pay some attention to the ball that is just about to fall to the ground and wreck the whole show. Therefore, what is needed is a balanced approach that tries to minimise sudden and sharp changes in the economic climate and gives business men as much steadiness and predictability as can be achieved.

A balanced economic policy of that kind has demanded for some time that we re-expand the economy. To do that, the first imperative is to stimulate internal demand. We cannot expect business men to raise production without the prospect of higher demand or to increase investment when their factories at present are idle. If the Government pursue an expansionary policy they cannot detemine how much of the extra demand will translate itself into greater output and how much into higher prices. If too much is siphoned off into higher prices and increased pay settlements, the additional output and increase in jobs will be small. Then the Government may, in the last resort, be forced to cut back expansion to restrain the effect on prices.

Therefore, an expansionary package should be so arranged as to demonstrate the link between pay restraint and the amount of expansion that the Government can allow and, as a consequence, to restart the dialogue between the social partners—the trade unions, industry and the Government.

I propose that the Government should draw up a fiscal package totalling about £5 billion at 1981–82 prices. The package should include a reduction in the employer's national insurance surcharge, extra public sector investment and some trimming of public sector prices, especially telephone charges which I believe have gone up this week unnecessarily. The Government should also trim electricity charges, which are above what the market would dictate. Also, they should consider as part of the package a cut in VAT, remembering that a 1 per cent. cut in VAT will reduce revenue by about £800 million. In nominal terms the effect on the PSBR of such a package would be £3 million, allowing for the effect of higher revenue from higher income and reductions in unemployment benefit.

But the total package should not be implemented all at once. It should be introduced in two stages. There should be an autumn Budget, introduced immediately, bringing in half of the package. The second half should be promised for a spring Budget, providing—it is an important proviso—that pay settlements follow a satisfactory course in the intervening months. That should also provide the occasion for a resumption of the debate between Government, industry and the unions on a sensible voluntary incomes policy.

That is the first, and I believe essential, measure that the Government should be taking at this moment in our economic and social history. I would couple two other things with it. First of all, since our aim is to improve the competitiveness and profitability of British industry, we should pay some attention to the exchange rate. It has been far too high. It has come down to some extent, but it could go further. A monetary policy should be arranged to allow for further depreciation of the exchange rate. Monetary targets should be retained in some form as a guide to international holders of sterling about the likely path that inflation may take, but they should be relaxed sufficiently to permit the sort of recovery that is essential at this point in our economic history and to allow some further depreciation of currency.

It would also be worth considering the case for joining the European monetary system, since it may protect us in the future against a sudden rise in the currency due to oil price increases.

It is essential—since I hear the hon. Member for Huntingdonshire (Mr. Major) muttering something beneath his breath—to reintroduce exchange control. It was a sad mistake by the Government to abolish that. In order to have a proper foreign exchange policy, as opposed to the sort of monetary policy to which the Government are allied, we should have exchange controls.

Finally, we should introduce immediately the Warrington programme of directly related employment measures, which I believe are necessary, on top of the other two measures I have raised, to deal with the problem of unemployment. Those measures would lead to a reduction of around half a million in the level of unemployment over a period and would also be cost-effective in many ways.

Those three measures will be supported broadly by many people, privately in the Conservative Party—certainly those who wrote the "Changing Gear" pamphlet—by the CBI and by most economists. They will certainly be supported by most members of the public, especially in the regions. They would strengthen industry and commerce and help the unemployed without taking unacceptable risks with inflation and the balance of payments. The Queen's Speech should have contained such a package of measures.

7.10 pm

Mr. John Major (Huntingdonshire)

I am tempted to follow the hon. Member for Gateshead, West (Mr. Horam) down some of the byways that he led us along.

Mr. Horam

They were highways, not byways.

Mr. Major

The hon. Gentleman twitted my right hon. and learned Friend the Member for Hexham (Mr. Rippon) with the possibility of joining the Social Democratic Party. My right hon. and learned Friend is too wise and sensible ever to contemplate that. It was surprising that, a few seconds later, the hon. Gentleman produced a package of measures that would qualify him to cross the Floor and join the Left wing of the Conservative Party—and be welcomed with open arms.

I regret that the hon. Member for Newport (Mr. Hughes) is not with us. I followed his speech with great care. His remarks filled me with utter dismay. I hope that they did not represent the broad spread of opinion within the Labour Party. His suggestion that a key to Britain's future prosperity is to leave the Common Market is wholly wrong-headed. If we did that, we should sustain an unparalleled defeat for British industry and prospects. It would not hold out any hope of better things to come.

The hon. Gentleman's suggestion that import controls would be a measure of hope was equally wrong. Not only would that be wrong for Britain; it would damage—above all others—those Third world countries that his party so frequently claims to wish to help, and which so many on the Conservative side of the House eagerly wish to help by supporting the Government's measures in that area.

This afternoon the House heard talk about British industry—whether it is entirely comatose or whether, behind the headlines, a great deal is happening. When my right hon. Friend the Prime Minister and my hon. Friends referred to signs of change and an upturn in industry, there was a parrot cry from the Opposition—alas, so many have left the debate at this early stage for other pastures—of, "When will there be an upturn, and where is it coming from?" I concede that there is a patchy position throughout Britain at present. However, I can cite, without any equivocation, the evidence of my eyes gained from visits I paid to firms in my constituency during the recess. A small firm in St. Ives, in the paper and packaging industry—which has faced great difficulties—has put in hand a large capital investment of £600,000 because of a dramatic upturn in its orders.

A small computer software firm in St. Neots has found that its profitability and turnover have accelerated in geometric progression during the past two years. A small high technology firm in St. Ives is the remnant of the old Sinclair Radionics firm which failed to operate profitably. It has developed new high technology products and is selling them to the Japanese and the European markets. A small firm in Ramsey has been built, and is thriving, on the redundancy pay from the collapse of a large enterprise 12 months ago. It is beginning to thrive under the aegis of the Government's start-up scheme and finance from one of the four major banks.

I could give many examples of such enterprise in Huntingdonshire. My last example, however, is that of 5,000 new jobs that will be provided during the next few years by small and medium-sized firms developing in and around the New Ortons on the southern side of the Peterborough new town development. That is a reality.

Mr. Hooley

What is the current level of unemployment in the hon. Gentleman's constituency, and what was it 12 months ago?

Mr. Major

In the northern part of my constituency the figure is slightly below 10 per cent., while in the southern part it is 7 per cent. There has been no noticeable difference during the past 12 months. However, 12 months ago many firms were contemplating redundancies. Today, many of those same firms are contemplating reemployment as soon as prospects are a little better. That is the reality of what is happening, although it is subsumed so often by the glamour of the disputes at British Leyland and elsewhere.

Of course, there is a time delay between the collapse of great industries, with a great loss of employment, and the growth of new industries that will provide employment for hon. Members and their children in years to come. During the past few months I have not simply sat in the House listening to debates, even though that has been instructive. I have spoken to business men in and around my constituency. I was surprised by many of their comments—certainly at the extent to which they shrugged their shoulders with resignation about a level of interest rates that I regard as usuriously high. They have become used to that level, and say that they are learning to live with it. They understand the depths and difficulties of the recession. Their concern lies in different areas, among them the volatility of sterling.

At the beginning of the parliamentary recess I firmly believed that Britain should not enter the European monetary system. I have returned to the House, having spoken to firm after firm in my constituency, believing that the sooner we enter the European monetary system to improve exchange rate stability the better it will be for our exports and our interests generally. I have no doubt that that is the right course.

There is one matter that the Treasury Bench would do well to contemplate. It is a message that comes without equivocation and exception from every business that I have visited during the past few months. The message is that they have put up their turnover, have dealt with difficult problems and have productivity per man at a higher level than ever before, but that the fixed charges for gas, electricity, rates, telex and post are preventing them from re-employing, re-investing and building upon the base being constructed. That criticism of my Government must be accepted. I hope that we shall act upon it.

I have never been a supporter of large-scale domestic reflation. It would be the wrong policy—a damaging policy that would create more problems than it solved. Neither do I believe in rigidly sustaining public expenditure within a pre-ordained limit, irrespective of circumstances. There is a margin of some size between those two positions, and operating within it is sound and prudent economic management.

Nor do I believe, as the Government are so often charged with, that the public sector borrowing requirement is the totem pole around which we all dance. That has not been the reality, although it may sometimes have been the oratory. The reality of the money made available—sometimes later than it should have been—to British Steel, the National Coal Board and, although not on the last occasion, to British Leyland testifies to a degree of flexibility with which many people do not credit the Government. That flexibility is right. It is our policy, and should remain so.

I cannot accept the belief that an extension of the borrowing requirement alone, and of its own volition, necessarily increases the interest rate level in the way that is claimed. It is more complex than that. There are many more matters of concern. One is the enormous weight of Third country deposits in sterling in London and New York that can switch between the two, with the movement of interest rates, at such a speed that it may, of its own volition, affect the exchange rate and, consequently, the interest rate level. There is a great complexity about exchange rates and interest rates that requires a flexible approach. I hope that that approach will be taken in the coming months.

It is probably a matter of common agreement in the House that we live in the midst of a second industrial revolution. All revolutions, industrial or non-industrial, have their casualties. The growth in unemployment, that no one in the House wishes to see and everyone wishes to end is but one examplar of the casualties of the changes through which we are now going. That is illustrated by the attendant explosion in social expenditure, on benefits and other matters.

I hope that the Government will continue to sustain their commitments to those casualties of the industrial revolution through which we are passing. In the forthcoming Session of Parliament, I hope that there will be no reduction in the real purchasing power of long-term social benefits for those who are disadvantaged by present circumstances.

Many people depending on social benefits live very much at the margins of their incomes. I believe that the Conservative Party values cohesion above all things. I believe that, in these difficult times, we can maintain social cohesion best by caring for those who stand first in the face of the difficulties. They are people who have lost their jobs or who are in need of long-term social benefits for some other reason.

The hon. Member for Preston, South (Mr. Thorne), who has followed the example set by many Labour Members and left the Chamber, touched on the subject of health services. He did that selectively. He made no mention whatever in his speech of the additional expenditure of £3,500 million a year on the National Health Service since the last general election.

The hon. Member for Preston, South made no mention of the extra staff in the National Health Service. He ignored the extra medical staff; the extra 10,000 nurses, 1,000 doctors, 1,000 dentists and 2,000 occupational physiotherapists. It is no secret that I welcome that explosion of staff within the National Health Service. It is necessary within the National Health Service to reduce the waiting list of over half a million patients which was inherited after the 1979 general election.

The present Government—I hope I have illustrated this are willing to put resources where there is genuine need in social matters. If I had a criticism of the Government it would be that they so rarely tell people when they do good works. The Government tend to concentrate on the difficulties faced rather than the achievements they can legitimately claim.

One health matter that must be dealt with is the allocation of health resources under the Resource Allocation Working Party formula. That is not a wholly accurate formula. I hope that the Government will seek to improve the accuracy of that formula and to update the population and other statistics on which the allocation of resources is made.

The allocation of resources formula is working and it is fair. It is beginning to allocate resources to areas with the fastest population growth and the poorest historical medical provision.

The planning expectation—subject to cash limits—is that the Trent region and the East Anglian region will receive an increase in health cash to the regional health authorities of 3¼ per cent. That is against a national average of 1.7 per cent.

I welcome the Government's illustration of priorities. That is an illustration of the selection of priorities needed between different parts of the country. It is an accurate reflection of the population movement and past under-provision. I hope that the cash limits that may take effect will not damage that provision. I hope that cash goes to the areas where it is most sorely needed.

One matter has been raised by a number of Members. I mention it because it is of great and direct interest to my constituency. It is the questiion of defence. I make no apologies for the priority that my Government give to defence and to expenditure on defence.

Last year Molesworth, which is in my constituency, became a prospective site for the ground-launched cruise missiles. They are due to arrive in Molesworth in 1986.

The overwhelming majority of my constituents have been utterly and totally resolute about the stationing of those cruise missiles. The hon. Member for Newport criticised American bases in the United Kingdom. However, one elderly lady in my constituency had no doubts about the matter. She said, "Ah, yes, I remember when the Americans were last here. I enjoyed them then and I shall enjoy them this time." The arrival of the cruise missiles in my constituency has also brought the arrival of large numbers of people. They plant cherry trees for peace. There has also been the arrival of the hon. Member for Keighley (Mr. Cryer) who led a march to my constituency.

Another lady in the village of Molesworth wrote to me. She said that she thought that both the march and the cruise missiles were undesirable. However, on balance she much preferred the cruise missiles. I believe that that view predominates in Huntingdonshire.

Mr. Donald Thompson (Sowerby)

And in Keighley.

Mr. Major

My hon. Friend the Whip, who should be silenced but is not, says that is also the position in Keighley.

The Campaign for Nuclear Disarmament is enjoying a temporary boom. I believe it is placing an utterly false prospectus before the people of this country in order to engender confidence in its misguided views. I hope that it will be proclaimed from CND platforms and elsewhere that the reality—I hope that they will realise it—is that the Government do want peace. The Government want general, but not unilateral, disarmament and security. It must be recognised that we cannot have those things without resolution. However, resolution above all is the keynote of the Government's achievements in the last two years. I hope that it is resolution which will sustain us throughout the next parliamentary Session.

7.26 pm

Mr. Frank Hooley (Sheffield, Heeley)

I am staggered that the hon. Member for Huntingdonshire (Mr. Major) should paint such a rosy picture of his constituency's economy and admit in the same breath that one in 10 of his constituents are unemployed.

If I had to admit that one in 10 of my constituents were unemployed, I should not paint a rosy picture of Sheffield's economy. It is not one in 10 who are unemployed in Sheffield—one in eight have no job. When the Government were elected there were 13,000 unemployed in Sheffield. There are now 39,000—three times as many. That is the situation in the North. The hon. Gentleman referred to high-technology industry. One of the famous industries in Sheffield that has been hit ferociously is Special Steel, which produces products necessary for aircraft and other advanced technological industries. That has happened because of the Government's policies.

Mr. Major

rose——

Mr. Hooley

The hon. Member has spent the past 15 minutes lecturing the House. He can now sit and listen.

The Government's incompetence and failure are so bizarre as to be hardly believable, even if we accept the goals that the Prime Minister said were her main objectives of policy.

Inflation is now higher than when the Government took office in May 1979. The money supply, whatever that is supposed to mean, is wildly out of control. The Chancellor and everybody else know that he will probably overshoot his target by between £3 billion and £5 billion in this financial year.

The Prime Minister stated that she would cut taxation. Taxation is heavier than when the Government took office. It is heaviest on the poorest of the taxpayers.

Mr. Major

That is nonsence.

Mr. Hooley

The figures reveal that I am right, I invite the hon. Gentleman to study the figures.

We were told that the Government were going to cut public expenditure. Despite the desperate hacking and slashing of a whole cavalcade of Treasury Ministers and the bullying of the Secretary of State for the environment, public expenditure is higher. Why should that be so? That is because billions of pounds are being poured uselessly into the dole queues to pay for unemployment.

The right hon. Member for Sidcup (Mr. Heath) illustrated with great vigour and correctly, that the Government were running into an absurd spiral in running down the economy. The result is that the tax take is less and that social benefits such as unemployment pay have to be higher.

Even on his own objectives, the Chancellor has a potential overrun of his monetary target. Interest rates are sky-high again. The wretched Tory suburban voter is faced with a mortgage rate of 15 per cent. He is back to where he was 12 months ago.

Industrial production has come crashing down. The hon. Member for Huntingdon has painted a glowing picture of British industry. British industrial production has fallen by one-fifth since the Government took office and it is still falling.

Let us consider industrial investment. If 1975 is taken as the base year, industrial investment in 1979 was 110 per cent. of the 1975 level. In other words, it had increased over three years under a Labour Government by about 10 per cent. It is now 88 per cent. of the 1975 level. There has been an appalling crash in the basic necessity of a country which will depend on high technology. The hon. Member for Huntingdonshire babbled about technology. He must face the record that I have described in basic investment in our industrial and manufacturing base.

A short while ago I read a headline: Business failures exceed all previous records". That was the statement made by a company of accountants. It provided an account of the bankruptcies and failures that had occurred in the first and second quarters of 1981. That process is continuing.

Employment is now at a level that we had expunged from our imagination for over two generations. The pet theme of Conservative conference after conference is law and order. The Government are dedicated to make Britain safe and to allow everyone to wander around freely. We have seen this year the worst riots in major industrial cities since the days of Peterloo. In large part the riots are directly attributable to the Government's policies and to their neglect of younger people, who now see little hope for themselves under the Government's policies.

What is the Prime Minister's alibi? How does she respond to the clamour from her critics within the Conservative Party—their numbers are growing—and outside? The right hon. Lady whimpers plaintively "There is a world recession". We know that. However, we know that our major industrial rivals have lower inflation, lower unemployment, higher production and higher investment. The international tables that are produced by bodies such as the OECD, which set out important indicators of economic success and failure, reveal that the failures are heavily on the side of the United Kingdom. In the past two and a half years the successes, such as they have been, have been achieved by countries such as Germany and Japan. The Government have a disastrous record of failure. No shifting, turning or excuses can cover that.

The unemployment of our boys and girls has reached a major social crisis. In Sheffield on 1 October there were 8,281 boys and girls unemployed, of whom 2,407 were on various schemes such as YOP and WEEP. That meant that 5,874 boys and girls were pursuing 25 vacancies. The only suggestion that the new Secretary of State for Employment can make is that they should get on their bikes and look for a job. If that were not such a grotesque suggestion it would be ludicrous.

Mr. Major

My right hon. Friend did not say that.

Mr. Hooley

Is the right hon. Gentleman suggesting that 6,000 boys and girls should cycle along the streets of Sheffield looking for 25 jobs? Those are all of the jobs that are available in Sheffield under this Government.

The Government have boasted about the £700 million that they will provide for special schemes. They choose to ignore the fact that the Chancellor took £5,000 million out of the economy. To remove £5,000 million and to return £700 million is a bright form of Conservative generosity. The careers officers in Sheffield reckon that, notwithstanding the Government's schemes, there will be between 500 and 1,000 boys and girls who will have done nothing—they will have been on no course, they will have had no job and they will have received no training—since leaving school in the summer.

Progression through the YOP programme as originally envisaged and as it was constructed three years ago is becoming impossible. Those who participate in it pass through the programme and back to the dole queue. Serious disillusion is developing with the YOP concept. It is being seen as a short-term palliative that will provide no future for the boy or girl who goes through it. It may be argued that it is better to employ a youngster for six months in the YOP scheme than for him or her to do nothing. I accept that argument as far as it goes, but it is now being realised that the scheme is not solving the problem. It is not reducing the massive unemployment that boys and girls are suffering.

The further education and sixth form colleges in Sheffield are struggling to provide all the education and training that they can. The Government's policy of cutting local government expenditure gives the colleges no encouragement or help in that direction and merely compounds the difficulties.

I have dwelt on the problems of Sheffield as I have the privilege of representing part of the city. However, 750,000 boys and girls nationally left school in the middle of the year and fewer than half of them will find jobs. About two-thirds of those who pass through the YOP programme will return to the dole queue. That is the grim social problem that faces the country. It is the direct product of the Government's policies over two and a half years.

Our boys and girls want some message of hope. They want some encouragement to believe that they are wanted and are regarded as useful and productive members of society. They are not scroungers or loungers. They want a job. They want to contribute usefully to the economy and to the income of their families. They want to earn their personal incomes. As one or two Conservative Members have said, we must have a reflation of the economy. We must have a substantial injection of public money into housing, railways and industry. There must be massive capital investment if we are to regenerate the social and industrial economy. There are new industries such as microprocessing and biotechnology that are on the threshold of tremendous growth. There is little indication that private industry will respond to the need for investment.

The gas-gathering pipeline is a good example. It is a sensible and practical objective that is immediately possible. It would deliver hydrocarbon, an enormously valuable raw material for which the world is clamouring. As the project will involve public expenditure, the Government say "No". It would be all right if private money were to be used to build this important technological system. However, if we have to put public money into it, the Government will ensure that it becomes a non-starter. There is a stupid and blinkered ideological approach to the line between public and private enterprise.

The Government ask "Where is the money to come from?" That is asked by the Government who opened the stopcocks and allowed huge quantities of capital to drain abroad by destroying exchange controls. I noted that the right hon. Member for Sidcup condemned that policy in recent days. It will be possible to carry through a reflation of the economy, given the will. Until the Government change their central economic policy the progression towards higher unemployment, more serious deflation and industrial failure will continue.

The question of help for developing countries is a different matter, which I regard as being of equally fundamental importance. I am glad that it received at least a passing mention in the Gracious Speech.

The Prime Minister went sulkily to Cancun, in Mexico, but possibly she gained something useful from her experience by being forced to talk across the table for two days with President Nyerere, Mrs. Gandhi, M. Trudeau, M. Mitterrand and some other world leaders who take a different view of the world and of economic policy from her. Someone has said that Cancun was a major exercise in group therapy. Possibly the Prime Minister gained a little from that experience. I trust that it will mean a rethink of Government policies on overseas aid and a restoration of the stupid cuts in our overseas aid programme.

Mr. Robert Rhodes James (Cambridge)

The hon. Gentleman will recognise that since the Government came into office, the overseas aid budget has risen from £800 million to over £l billion per annum. How can that be described as a cut?

Mr. Hooley

The hon. Gentleman has totally ignored the effect of inflation. He has also ignored what he should know better than to ignore—official development assistance is calculated on a net basis, taking not only the gross output flow, but the net return, that our country receives on repayment of capital and interest and so on from previous loans. I am quoting the figures that the hon. Gentleman's Government published in the public expenditure White Paper. If he is now saying that they have changed their mind and that they will increase overseas aid, I am delighted to hear it, but what he said is not correct according to the figures published by the Government.

I hope that the Government will also rethink their brutal economic discrimination against overseas students. There has been a savage increase in overseas students' fees. This session in Sheffield university alone it has cut overseas undergraduate numbers by two thirds and overseas postgraduate numbers by one third. A crisis has been brought about in internationally famous institutions such as the London School of Hygiene and Tropical Medicine, a disaster that the Government said they would never allow to occur.

There are positive opportunities for this country following the outcome of Cancun, which unlocked a door that had been slammed 12 months ago by the silly action of the United Kingdom, the United States and West Germany. Developing countries need to make use of their indigenous energy resources and possibly to develop alternative resources which at the moment are not available. There is enormous technical, scientific and engineering expertise in the United Kingdom. The National Coal Board, British Gas, the CEGB and the BNOC have enormous expertise that could be made available to the developing countries to develop their indigenous resources if the Government were prepared to let them do so and to provide the money. We have distinguished scientists and engineers who are beginning to learn to harness some of the wave, wind and other renewable sources of power, knowledge which could be made available to developing countries. We have a unique institution, the Commonwealth Development Corporation, which over 30 years has had enormous success in utilities and agricultural development.

We are told frequently that the lady is not for turning. If madam TINA does not turn, she will be concertina—d by a rising avalanche of public anger and the crumbling of her party.

7.44 pm

Mr. Patrick McNair-Wilson (New Forest)

With respect, the speech of the hon. Member for Sheffield, Heeley (Mr. Hooley) was not only confusing but confused. Representing a constituency in Sheffield, he must be aware of the vast sums of money that have been poured into the steel industry in the past few years, particularity under this Administration. It is unfair to complain that the Government are being less than generous with their money when they have supported such industries to that extent. I congratulate the Government on the policies set out in the Gracious Speech, particularly my right hon. Friend the Prime Minister on her excellent speech this afternoon.

We do not need lessons from the Labour Opposition about running our economy. Their record was disastrous—disastrous at almost every point. The policies which they are now advocating would put us straight back into the hands of the IMF, which is where the Labour Government put us in 1976. As for the Social Democratic Party, which tries to give the impression that it has a magical cure, I hope that—[HON. MEMBERS: "Where are they?"] Indeed. I hope that some will recall that in the late 1960s Mr. Roy Jenkins, as Chancellor of the Exchequer, produced one of the most Draconian Budgets ever seen to protect sterling.

There are no easy ways of handling our economy. We are kidding ourselves if we believe that there are. I am prepared to accept that the most important single feature of the economy is a currency that retains its value, whether it be, as the right hon. Member for Huyton (Sir H. Wilson) said, the pound in your pocket, or the international value of sterling. One of my first recollections in the House when I came in 1964 was listening to the right hon. Gentleman, who was then the Prime Minister, explaining to the House that the run on sterling that was then taking place was a result of a lack of confidence in the Government's management of the economy. Those of us who have been watching those affairs over the years and have been in the House for some time have found that confidence is a fragile commodity.

I make no secret of the fact that I regard the pound sterling as being as fragile now as in those difficult days. If the Government were to be seen to be opting for any policy other than one of national solvency, it is certain that the pound would fall like a stone. If it fell like a stone, one can be certain that inflation would rise immediately. We pay for 40 per cent. of the goods that we import in dollars. If the pound falls against the dollar, as those who fill up their cars at the pump have found out, prices rise dramatically. We are a net importer of goods. We import about a quarter of all the food we eat. If we do not keep the value of our currency at a reasonable level, unemployment and inflation will rise once again. Surely that must be the lesson of the last 10 years. There can be no one in the Opposition who, having witnessed what happened to the currency when they were profligate spenders, would wish us to go back down that road.

There is definitely no alternative to the policies which are now being pursued. In the United States, Mr. Reagan is trying to employ similar policies to control his economy. He has used the interest rates and other measures to bring that about. I am prepared to admit that perhaps in 1982 we will see American interest rates once again rise sky high. I must say—and it brings no comfort to anybody—that in that situation we shall have to follow that policy because the whole Western world and its economies are under threat. If we are not prepared to protect our currency, our future will be one not of gradual industrial decline, but of becoming one of the poorest countries in the world when the oil runs out.

Many hon. Members have referred to what the Gracious Speech says about unemployment. There have been disparaging remarks about the fact that more has not been said about it in the printed copy. I do not want to make political capital out of unemployment because when Opposition Members talk about the rate having doubled since we have been in power, we can say that the rate doubled when they were in power. All that is true.

I do not see us ever going back to the low unemployment figures of the 1960s and early 1970s. I think that they have gone for ever. Indeed, I believe that the outlook for the unskilled is bleak in the extreme. Unless we take out the entire Metro production line and put back people with welding torches, we shall never create that level of employment again.

We have to deal with a new situation in which machines will increasingly do the work of people and people will be frustrated, bored and perhaps under-privileged because they cannot find work. We have to find a way of circulating money to people who may never work at all. Certainly, we must consider early retirement and the problems created by massive overtime which the provision of jobs could replace. We must examine all these matters. We shall not do ourselves much good by just swapping the arguments, depending upon which side of the House we sit.

Having made that general comment on the economy, I wish to deal briefly with two points in the Gracious Speech.

Reference is made to the privatisation of certain aspects of the British National Oil Corporation and the British Gas Corporation. It has been fashionable in the past for the Labour Party to attack monopoly when it is private monopoly. Indeed, when I was in the Iron and Steel Federation, before nationalisation, one of the main thrusts of the argument against the private steel producers was that they formed a sort of cartelised monopoly. In my view, a publicly owned monopoly can be every bit as objectionable and disadvantageous to the customer. Therefore, when I see the opportunity to take a very hard look at an organisation, such as the British Gas Corporation, I see nothing wrong in that. Indeed, I am sorry to hear that the Leader of the Opposition would treat it as a party matter. I would rather ask the consumers in this country whether they wish always to be forced to buy from a single source or whether they would rather see some competition in the industry. The supplier of gas in this country is the British Gas Corporation. It has, under statute, the power to buy the gas as it comes ashore and to sell it. I wish to see that monopoly changed in the interests of better competition and therefore, one hopes, better pricing for the ordinary consumer.

I am glad that the Government have decided to introduce a new coal Bill. It is no secret that I was uneasy about the last one. I believed that the targets set in it for the industry were unrealistic. I must point out, however that I am still uneasy about the future of the coal industry. We have large stocks of coal on the surface which are not being sold. Although coal is widely talked about as the fuel of the future, it is being mined in colossal quantities in parts of the world at prices we can never match. There was a time in the last century when the market price for a ton of coal was for that supplied by a West Virginian coalfield. Certainly, the United States and other countries, such as South Africa, India and so on, have massive supplies of coal at very low prices with none of the deep mining problems with which we have to contend. I am therefore most concerned that with about 40 million tonnes of coal on the surface our industry may be threatened by import penetration. That would be a terrible pity and a disaster for the industry.

I therefore hope that some thought can be given to meetings between the Central Electricity Generating Board and the National Coal Board to try to shift this mountain of coal. Every tonne of coal in stock costs about £6 to leave in stock. I have not carried out the multiplication between that and the 40 million tonnes, but it is clearly a substantial sum. It cannot make sense for the coal industry, which supplies 80 per cent. of the fuel used by the electricity industry, to have mountains of unsold coal costing £6 per tonne to stock while electricity consumers are faced with ever-increasing bills. Surely, without upsetting the general economic philosophy to which I have referred, it must be possible to do something about that.

I conclude with this point about energy costs. The Government have been beseeched by industry to review the energy costs that it has to bear. As those of us who are concerned with industries which use a great deal of electricity well know the competition that we have to face from Continental suppliers is appallingly unfair. In the last Budget, the Chancellor introduced a scheme to try to improve the position. Indeed, my right hon. Friend the new Secretary of State for Energy praised the scheme at Question Time only a week or so ago. He must be aware, however—I certainly am—that the scheme announced by the Chancellor falls far short of what is required. Indeed, I believe that it is almost totally useless for those industries which require continuous supplies of electricity. I shall elaborate on that in a moment.

I quote from a letter written to me by a company which examined the scheme and wrote to me asking for my help: Evaluation of the alternate electricity tariffs offered show possible savings of about £10,000 out of an annual electricity bill of some £4 million but at a process risk if the power reductions came at an inopportune time … thus no practical application at all. In summary our pleas for help in this field to become more competitive seem to have fallen on deaf ears. The companies and industries which would fall into that category are precisely those, such as steel, in which closing down furnaces or any process equipment at short notice would do such damage, not merely to what was being prepared but to the whole plant, as to make the scheme totally unusable.

I therefore ask my hon. Friend the Under-Secretary of State for the Armed Forces, who is currently representing the Government on the Front Bench, to impress upon the Secretary of State for Energy that the present scheme will not do and must be changed. Again, I am sorry that no reference is made to this in the Gracious Speech.

I repeat that I regard the Gracious Speech as a statement of the realities with which we live. I believe that it marks the only road forward and that once we have been able—let us not use monetarism and fiscal policy—to establish national solvency the future for Britain will be excellent.

7.58 pm

Mr. Robert C. Brown (Newcastle upon Tyne, West)

I am tempted to follow the hon. Member for New Forest (Mr. McNair-Wilson) in what I regarded as a very thoughtful speech. Suffice it to say that I agree with him completely and wholeheartedly on one point—the need to examine the question of early retirement. I recall that when the Labour Government were asked why we did not reduce the retirement age to 60 the stock answer was that it would cost £800 million, which was far too much and we could not afford it. I do not know what the current equivalent to that sum is, but whatever it is, we cannot afford not to consider early retirement.

In all my time in the House I have never read such a fag-end Queen's Speech in the mid-term of a Parliament. It is a fag-end speech of a fagged-out Government with a Prime Minister who knows that, whether the general election comes early or late, the electorate will say to her "Get out, we have had enough of you". Its contents are in many respects obnoxious. It is also appalling to find that so much of what a thinking, caring Government might have included has been omitted.

Law and order has always been a plank of Tory Party policy. That is something we all support. However, I recall that during the election campaign the Prime Minister and her cohorts seemed to suggest that they had the panacea for the problems associated with law and order. God knows, they badly need tackling. But it is not good enough simply to pour more money into police wages and so on. There is more to the problem than that.

There is more to it than having more and more police officers in Panda cars racing up and down and seeing nothing at all except the road in front of them—that Is, if they are driving carefully. In view of the number of police cars involved in accidents, one often wonders whether they are always driving with due care and attention. Having said that, we badly need the re-establishment of the police in the eyes of the public, and that can only be done by returning to old-fashioned police methods. By that I mean that the police should use Shanks's pony and get to know the people on their beat.

Mr. Campbell-Savours

Giving a clip around the ear.

Mr. Brown

I do not necessarily accept my hon. Friend's suggestion that in this day and age the police should dispense clouts around the ear. But having had one or the other of my ears clouted occasionally by the village policeman when I was a youngster, I cannot say that it did me too much harm.

The Home Office statistics show a 30 per cent. increase in burglary since the Prime Minister took office. She was the person who would do away with all that. But that figure does not even expose the true facts, because when the bad 'tin appears in court charged with one offence and confesses to another 139, that is not one case that has been detected and solved but 140. That has precious little to do with the forces of law and order, because 139 of those detections have resulted from the villain's confession.

As the deputy secretary of the TUC said in Jarrow on Saturday, the Home Office does not produce statistics for the burglaries that have taken place out of public assets by the Government in the last two years—an absolute scandal if ever there was one.

The Gracious Speech refers on page 2 to attaching the utmost importance to maintaining progress in reducing inflation". That might well have been picked out of the Queen's Speech of a pre-war Tory Government who followed precisely the same disastrous monetary and fiscal policies as the present Government are now pursuing. What is happening now happened then. There was crucifying unemployment at a time when there was no inflation at all. That is the only difference in the spots of the Tory leopard. There were appalling unemployment levels and no inflation in the immediate pre-war years. But it is worse today. Now we have unemployment and inflation which hammer hardest those least able to bear it. There is no way in which the poor can build hedges against the ravages of inflation. Not for them the opportunities to invest their steadily depreciating pound notes into assets such as works of art, bricks and mortar and so on. In the words of the old song "It's the rich wot gets the pleasure and the poor wot gets the blame".

The Government hope to see further reductions in wage settlements. They have 4 million ways of achieving that. The official statistics make it 3 million unemployed, but we all know that the actual figure is nearer 4 million, and 4 million people without work does much to exercise the minds of those in work. There can be no doubt about that at all. But what a wicked way in which to exercise wage restraint.

Not one sentence in the Gracious Speech refers to regional policy. Are we to assume that the Government have finally accepted the view so firmly held by the newly-appointed Secretary of State for Education and Science that regional policy should be scrapped once and for all? The right hon. Gentleman never apologised for that as his firm view.

I want to refer to unemployment in my own native city of Newcastle upon Tyne. In October 1979, 12,848 people were unemployed in Newcastle. Two years later, in October this year, there were 16,420 unemployed males and 6,198 unemployed females—in other words, 21.6 per cent. male unemployment and 10.7 per cent. female unemployment in the city. Put another way, 16.9 per cent. of the Newcastle population is now unemployed. That represents an increase of 34 per cent. in male unemployment in the last year—a damnable figure.

Three out of four Newcastle youngsters who left school in the summer are still without a job or opportunity of any sort. Unemployment in the city has all but doubled since the Tories came into office in May 1979. According to the Tyne-Wear county council economic bulletin, redundancies are still steadily increasing in the county—so much for the persistent talk from the Treasury Bench about the recession bottoming out. We in the Tyne-Wear county council and the city of Newcastle upon Tyne know that Ministers are lying through their teeth when they say that the recession is bottoming out and that things are getting better. We know well enough that that is not happening either on Tyneside or in the Northern region.

I have heard my neighbour, the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), slavishly trying to say something complimentary of the Prime Minister either at Question Time or when she intervenes in a censure debate and so on. He has said that Labour Members never seem to hear the good news. He has pointed out that in recent times several new factories have been opened in Newcastle. I do not deny that. Indeed, only a few weeks ago I had the pleasure of opening one which employs six people. But recently in my constituency two factories have closed, as a result of which 3,500 jobs have been lost. It takes a lot of nursery factories to replace the number of jobs that have been lost at Tress, Newburn; Vickers, Scotswood, and the shipyards down the river.

My constituents are suffering a massive haemorrhage in terms of employment. I say to the Prime Minister "For God's sake apply an economic tourniquet to the Northern region before it bleeds to death". There can be no stronger argument than that for a return to a strong and effective regional policy.

Let me come now to the second part of the Queen's Speech, which refers to a Bill on "employment and labour relations". We shall, of course, have to await the publication of the Bill, but if all the well-publicised briefings are anything to go by the Bill will do little for employment. I suspect that it will contain little about employment as such, but much about labour relations—the Tory term for "bash the unions". I warn Ministers on the Treasury Bench that they will make a sad mistake if they imagine that organised workers are likely easily to yield the rights that have been so hard won by trade union organisations over generations. Nor are the Opposition likely to give the Bill an easy ride. Why, at a time when our strike record is so good, should the Government embark on a measure that is calculated to worsen it?

Only the doctrinal hatred of successful public enterprise could cause any Government to seek to sell off the seed corn of our nation—the British National Oil Corporation. Long after this detested Government have been given marching orders by the British people, we shall badly need the oil from the North Sea to help to put right the ravages wreaked on this country by the Government's policies. It is disgraceful, by any standards, that the Government should seek to bail themselves out in the short term by selling off a major plank in the future of the nation in the long term.

Undoubtedly, British Gas is a most successful public undertaking, measured by any yardstick. Any measures seeking to undermine such an industry will be fiercely resisted by the Opposition, and there will be fierce resistance from the workers in the industry, whose livelihoods will be threatened by the promised legislation.

Equally, I was amazed to hear the hon. Member for New Forest speak about the need to introduce competition into the sales of gas. Is he suggesting that free enterprise would give consumers such a freedom of choice between, say, North Sea gas from one field and North Sea gas from another field? Is he seriously suggesting that that would affect the price mechanism? If so, why does he not look at the garage pumps? I cannot see any vast swingeing difference between one garage and another. All that I can see is that we are relentlessly paying more and more for our petrol and diesel.

Leaving that aside, of all the shameful proposals in the speech, none could be more shameful than the proposal to castrate local government. In spite of all the statements by the Prime Minister during the election campaign on the need for strong, democratically elected local government, here we have a complete denial of her party policy on which people supported her during that campaign. I would have applauded the Government if the speech had contained a proposal to introduce a Bill to alter the basis of the collection of local government income—in other words, to do away with the present inequitable rating system—which the right hon. Lady promised during the 1974 election campaign. She has been in office for two years and that proposal has still not surfaced.

Like other hon. Members, I hold constituency surgeries. At my last surgery, a female constituent complained bitterly about the level of rates. She told me that she lives alone in a three-bedroomed, semi-detached house—her husband died last year—and that living next door in an identical house is a family with three sons, a mother and father, all working. She asked me to compare the incomes of the two and told me that she was paying the same amount in rates as the family with three sons and a mother and father working. I told her that there was no justice in that, and that sooner or later the Government—whichever party is in power—must tackle it, and the sooner the better.

A "Tarzan of the Mace" is now ready to take steps that many of his political ilk view with alarm and despondency. Many Tories who have served on local councils for many years fear that this Government are now prepared to depart from the democratic road. They seriously fear for democracy in our country. The pretext for this appalling proposal is that of controlling prolific spending local authorities. If ever there is a case of the pot calling the kettle black, this is it. Local authorities are spending about 21 per cent. less than they were five years ago, while this Government are spending 8 per cent. more than the Government were spending five years ago.

The right hon. and learned Member for Hexham (Mr. Rippon) said that, although the proposed legislation seeks to control prolific spending authorities, a future Government could use the same legislation to force low-spending authorities to spend more. I get no pleasure from the thought of a future Labour Government forcing a shire county Tory council to spend more because this legislation gives them the power to do so. I sincerely hope that a future Labour Government would want to rescind immediately this pernicious legislation.

I would not complain that the Government are spending more than the Labour Government spent five years ago if it were not for the fact, as my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) pointed out, that the extra Government expenditure today is all going on supporting unemployment. In today's circumstances, we need a massive reflation of the economy and the Government must lead the way with public expenditure, particularly, as the right hon. and learned Member for Hexham said, on major capital schemes. He suggested that the Government should bring forward new schemes. I could not agree more.

Lots of capital schemes have literally been at the starting gate for years. One such scheme is the Newcastle upon Tyne western bypass. The land for the scheme has been held for 45 years to my knowledge, so the most difficult hurdle to any major scheme does not exist there. Why, then, cannot the scheme be started now, rather than having to wait until 1984? It would serve two purposes. First, it would provide badly needed employment in a badly hit area and, secondly, save about £1 million or £2 million on the final cost of the scheme. Everyone knows that the construction industry is on its back. Such a capital scheme is needed to give the industry a chance to get on its feet again. House building is at a standstill yet the construction industry badly needs an uplift.

Yet the Prime Minister continually protests—she protesteth too much—that she cares about the areas that suffer more than their share of unemployment. If she cares, she must take heed of some of the points that I have raised.

8.30 pm

Mr. Christopher Murphy (Welwyn and Hatfield)

I should like to add my welcome to the Gracious Speech, not merely for the outline that it gave of the legislative programme before us, but, perhaps more importantly, for its underlying confirmation that the Government are continuing resolutely to pursue the policies on which the Conservative Party was elected.

At the halfway stage in this Parliament, I am certain that my hon. Friends will be further encouraged by the characteristic determination being shown by my right hon. Friend the Prime Minister. At the last general election a key issue was decided upon by the electorate—that of the role of the State. The country has now embarked on what are generally termed social market policies, which are vastly at variance with the tenets of Socialism or any of its derivatives that may be found on the Opposition Benches. Those policies stand in contrast to the essentially collectivist concepts that have pervaded British politics for far too many years. Those policies hold that we should work with and through the market to achieve wider social aims and they recognise that the virtues of the market have been subjugated to the false hopes of interventionism.

The Gracious Speech gives further evidence of the Government's belief in a market economy within a humane framework of laws and social services that give the maximum scope for material, social and cultural development. Conservative Members should see it as their duty to further the success of that social market approach, for in that way we are fulfilling the trust of the voters who sent us here. It may take up to a decade to ensure that the nation has been thoroughly and completely weaned from the errors of the political attitudes adopted since the last war, mainly the consequence of a continuing slide towards a more and more Socialist environment.

As has been said many times since 1979, it will not be an easy or smooth task to achieve that aim, because so much needs to be reborn in the way of thought and action throughout our society. However, if Britain is to survive as a country that we are all proud to live in, it must be done. The Gracious Speech refers to the economy and employment and there can be little doubt that, above all else, curing inflation must remain the Government's paramount objective. It is clear that sound money will be achieved only by strict control of the money supply and that to that end the public sector borrowing requirement must be firmly reduced, with the necessary spending cuts and curbs on local government profligacy.

If we are then to encourage the economy to move forward and create the job opportunities that we are all anxious to see, incentive must be further stimulated by allowing people and firms to keep more of their money. In addition, further measures are urgently needed to overcome the unwarranted dominance exercised by the unions. The individual, too, is of crucial importance and the basic social structure that Government create should be beneficial, but never one that traps the citizen into a particular life style against his inclination.

There must be a right to education, but with a choice between the State system and the private sector. There must be a right to housing, but with a choice between home ownership and renting. There must be a right to social welfare, but with a choice between available care and providing for oneself. But no success will be gained if peace and security cannot be guaranteed for the realm and to that end the Government must rightly ensure the ultimate safeguards. Our guardians, the police and the Armed Forces, should always be able to act with the consistent knowledge that they are fully backed by the spirit of the people they seek to defend, but at the same time law and order will be retained and strengthened only if it is recognised that they are essential and if due example is given to each succeeding generation.

The Gracious Speech provides us once more with an opportunity to put into perspective the role of the State that people want to see; that is the background against which the Government must act. Already, well over three quarters of the promises in the Conservative manifesto are in the process of being fulfilled and there are clear signs of a fundamental change for the better in the fortunes of our country and the attitudes of our nation. I remain confident that this Session will see us closer to reaching our ultimate goal of success

8.35 pm

Mr. John McWilliam (Blaydon)

It is difficult to welcome the Gracious Speech. However, I shall speak about it not from any wish to insult her Majesty, but because an analogy can be drawn with fiddling while Rome burns. In the Gracious Speech no solutions are offered to the major problems that face our nation or to the difficulties that face our citizens. In addition, no solutions are offered to the divisions that rend our nation asunder.

It is difficult to think about this as a debate. The hon. Member for Welwyn and Hatfield (Mr. Murphy) clearly did not listen to one word of the speech made by my hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown). My hon. Friend gave the hon. Gentleman figures about the relative change between local government and central Government expenditure. My hon. Friend was correct. Local government expenditure has been cut by 21 per cent. Central Government expenditure has increased by 8 per cent. Local authorities cannot be blamed for that. They had nothing to do with central Government expenditure. Since that is the only area in which public expenditure has increased, local authorities cannot be responsible for the increases in public expenditure requirements. Central Government must be responsible.

I welcome the remarks made by my hon. Friend the Member for Newcastle upon Tyne, West. On the subject of law and order he reminded us that the number of burglaries had increased by 30 per cent. since the Conservative Government came to power. The House forgets at its peril something that my hon. Friend did not say—that the increase in burglaries and non-violent crimes coincides exactly with the increase in youth unemployment.

In my constituency, one young person in two, on leaving school, is unable to get a job and has no prospect of getting one. That is entirely due to the Government's policy. Can we be surprised, therefore, that young people in society are becoming disenchanted with the way in which society treats them? Can we be at all surprised that young people are becoming upset at the attitude of the police and authortity towards them?

Is it surprising that we worry about our relationship, as individual citizens, with the police when it is clear that nothing is being done to encourage the positive aspects of policing and that everything is being done to encourage the negative aspects? We seem to be content to spend money where it is least needed and to spend no money where it is most needed.

Great Britain is a democracy, yet nowhere in the Gracious Speech does the word "democracy" appear. I remind Conservative Members of the legacy that the Government have left the House in their legislation since 1979. Time after time, in Bill after Bill, there have been clauses which have taken away the rights of the House and the rights of local government to question the edicts of Ministers.

I remind Conservative Members that the various Secretaries of State were elected by their constituents not as Secretaries of State, but as Members of Parliament to look after their interests. They were appointed as Secretaries of State by the Prime Minister. Therefore, they have no democratic right to lay down edicts, save for those which are sanctioned by the democratically elected Members of the House.

It has been the attitude of the Government throughout this Parliament—and it is clear from the Gracious Speech that that attitude is continuing—that our democracy is to be eroded. It is clear that more power will be given to individual Secretaries of State without the House having the right to question those Secretaries of State on their decisions. Is that democracy?

The Gracious Speech mentions law and order, but there seems to be a lot of order and very little law. Indeed, the Secretary of State for the Environment ended up on the wrong side of the law and has been told by the courts that he has acted unlawfully.

Let us be clear who stands for law and order in this country. Labour Members stand for law and the rule of law. Conservative Members stand for order, and to blazes with law. People ought to realise that. We do not yet have a dictatorship, but if the Government continue in the way in which they have been going we shall soon have one.

The Gracious Speech states: Legislation will be introduced to improve the accountability of local authorities for the level of their rates. We are all of us, as Members of Parliament or councillors, accountable and answerable to our electorate for our actions. That is the basis of representative democracy under the constitution of this land, and we change that at our peril.

Conservative Members are fond of telling us that the spectre of totalitarianism is haunting the Labour Benches. Any consideration of the objective evidence shows that that is simply not true. The legislation which has been introduced and which is now being proposed shows that the Government are seeking to destroy every democratic institution simply because of dogma.

The Gracious Speech refers to the need to restore competitiveness abroad and prosperity at home. That is an extremely sterile statement. The aridity of it, in comparison with the achievements of the Government, is unbelievable. The economy is in an appalling state. Interest rates are being raised to the extent that our basic industries are crumbling. The Government are acting in such a way that our overseas competitors are able to cut the feet away from British industry when it tries to be competitive and to introduce new products.

There is no money available in the stock market for new technology. There is no risk capital available in the market—a fact recognised even by the former Secretary of State for Industry, now the Secretary of State for Education and Science. How can hon. Members, especially Conservative Members, say that they want to encourage entrepreneurs, innovation and people who will use a quality of which we have most in Britain—educated skills and energy—when the financial institutions cannot produce the capital that we need to underpin the innovations that we are capable of making?

How can we say that we are an effective Western democracy? In all honesty, we cannot. We have to look hard at ourselves. We should be considering where we go wrong. We should be considering the institutions that let us down. The trade unions cannot be blamed. Our industrial relations record is better than ever. It is better than that of our competitors. It is not the fault of wage levels, as the president of the CBI claimed recently. We pay ourselves far less than our overseas competitors.

Mr. John Stokes (Halesowen and Stourbridge)

We produce less.

Mr. McWilliam

Of course we produce less. We produce less because we do not have the capital investment behind us. We do not have the wealth needed to achieve success. We do not have the ability to combine all the aspects of finance, innovation, production and marketing together with help from the Government. In its place we are given the Queen's Speech. It is not good enough when half the kids in my constituency will not get jobs, when the adult unemployment rate is worse than that in the constituency of my hon. Friend the Member for Newcastle upon Tyne, West and when things look like getting even worse. To stand up and try to make excuses and to say "I am a loyal lad" is not good enough either. We have a duty to our party, but an even greater duty to our country. I wish that we spent more time thinking about that duty instead of trying to do whatever the blazes we have been attempting this evening.

8.38 pm

Mr. W. R. Rees-Davies (Thanet, West)

I should like to confine my attention to a number of crucial areas, affecting employment and particularly certain aspects of it, which require immediate action in the next year. On a local level, it is essential to revive industrial areas. It is also necessary to ensure that certain areas become tourist industrial development areas.

I congratulate my hon. Friends the Members for Scarborough (Mr. Shaw) and for Dartford (Mr. Dunn) on their opening speeches. My hon. Friend the Member for Scarborough referred to the first of the aspects I have mentioned. Scarborough happens to be situated in an industrial development area. It received over £1 million benefit for hotels and many of its tourist features. My hon. Friend was right in saying that Scarborough has good hotels all fitted with new bathrooms and other facilities that are a great advantage to the area. That happened because Scarborough is located in one of the five regional areas that receive tourist grants.

My hon. Friend the Member for Dartford pointed to the need to extend industry and employment in Kent. My figures for Thanet and Margate in particular show unemployment of 16 per cent. and consistently over 10 per cent. Clearly, the area would qualify not only for assistance as an industrial area, but also as an area, together with Herne Bay, Canterbury, Whitstable, Sandwich, Dover and Folkestone and the Isle of Thanet, which was suitable and ideal for assistance as a tourist industrial development area. It is a matter of immense and crucial importance that this year the Government should revise the industrial areas and decide to make particular areas eligible for assistance as tourist industrial development areas. Thus they would attract, in both instances, grants from the EEC for infrastructure and other matters, as well as the existing Government grants. That could do a great deal to help.

The Kent county council is now calling on all Kent Members of Parliament—I myself hope to assist in this respect—to get together to make the Government recognise that a county such as Kent needs to ensure, by taking unemployment as a perfectly fair yardstick, that certain areas will qualify for the necessary industrial grants. Anyone who visits Kent will find that our roads need substantial improvement and are nothing like as good as those in the Midlands and the north of England. In other respects, too, there is an urgent need for us to be able to conquer the serious problem of unemployment. We should be able to do so by means of these changes.

On another controversial aspect, I listened with care this afternoon to suggestions about the high level of youth unemployment, but no right hon. or hon. Member has suggested a positive scheme to conquer the problem. Nevertheless, one exists, and it can achieve its object. A youth national service in job training is needed for a minimum of 12 months, during which, those who cannot obtain a job—by which I mean those who are not fortunate enough to go to university or to get into a job training scheme to follow a craft—would then have jobs open to them. Jobs would be provided for them.

For women, no doubt those jobs would be in the National Health Service and in organisations such as Age Concern, caring for the elderly, and so on. For men, it would be well worth while for the Government to provide unskilled jobs on roads, farms, and so on. At the moment what tends to stand in the way of the provision of such jobs is the fact that wages which are too high have to be paid for the initial year in existing schemes. An alteration in the law may be needed to enable that to take place.

However, there is a great opportunity here to ensure that there is a job for every young person. It is better for young people to have a job, albeit not of their choice, in which they can do useful work for the community, than no job at all—and, of course, to be paid for it. The scheme that I envisage would have to be compulsory, to ensure that all those who are not otherwise involved in training of their own choice would be offered such a job and the pay that went with it.

In that way we could substantially reduce youth unemployment and cut the figures to a minimum. In my view, that is the right approach, and it is one that we should investigate and follow as soon as possible.

Meanwhile, the jobcentres and the Manpower Services Commission should exercise much more stringent and effective control to ensure that all young people take the jobs that they are offered. Many young people are refusing to take jobs in the hotel and catering industry, for example, because jobcentres and others often put off potential workers by saying that such jobs may not be attractive. There are now 80,000 to 90,000 jobs available for young people in hotels and catering, but many are not willing to take them.

This year we shall be introducing a new scheme of guaranteed sick pay, which will be operated by the employer. The Queen's Speech says that it will be for a short period—only eight weeks. We in the Select Committee on Social Services concluded that it would be right to introduce such an employer's statutory sick pay scheme for the full period—28 weeks. At the end of that period, any person who was still sick would go on to invalidity benefit. We believe that this will cut substantially the costs to the Government. At present, through the DHSS, the Government have to process over 10 million applications for sickness benefit. However, such a scheme would put the onus on the employer, where it properly belongs, to look after those who become sick.

It is not usually appreciated that within eight weeks 90 per cent. of those who have become sick have, fortunately, returned to work. At the end of 28 weeks, the figure is over 97 per cent. Only a minimal number are still off work through sickness after 28 weeks.

Employers ought to have the responsibility of looking after those who are ill. They will thereby come to appreciate and understand them, and they will be able to deal with the rare cases of the hypochondriacs or the shirkers, who are a tiny minority. For those who are doing their work to the best of their ability, the person who can best appreciate them is the employer. We were right to move along the lines of other European countries and introduce a statutory sick pay scheme whereby employers guarantee payments and ensure the care of those whom they employ.

Another aspect of the Queen's Speech with which we need to deal is trade union legislation. This greatly affects employment in many spheres. There is only one line in the Queen's Speech about this, and no indication of exactly where it is intended to legislate. Apart from some legislation dealing with the closed shop, which is clearly necessary, and some measures for obtaining compensation for those who suffer, payable by the employer if it is the employer who has caused the suffering, or by the trade union, if it is the trade union that has caused it—I do not rate this as the most important aspect, although it is important—there is the question of immunity from actions of tort. I am satisfied that this is unnecessary for the protection of any trade union in this modern age and that it should be abolished or changed.

Clauses in contracts in which local authorities and others lay down that only trade union labour is to be employed are wholly wrong and should be abolished.

Finally, a matter for urgent consideration is the vital services of great public need, the most apposite of which is air traffic control. We have seen what has happened recently in the United States. Air traffic controllers are essential to the operation and needs of Britain. By agreement they should have no right to strike, or the right to strike should be taken away by law, as it is in the United States, in France and other countries.

Computer operators in important sections of society, affecting pensions for instance, should either have a negotiated agreement not to strike or come within an emergency powers Bill. People involved in hospitals, fire brigades and a few other essential services should be subject to the same rules.

This can be achieved, but to give the maximum opportunity and protection to those who give up the precious right to strike, national tribunals should be set up. I refer to industrial State tribunals, which would consider not only wages but terms and conditions as a priority. The national State tribunals were successful in the past. They dealt with police and fire brigades' pay. Academics are not needed to sit on such tribunals because they might produce unpleasant shock results. However, satisfactory tribunals could be established to enable terms and conditions to be worked out quickly and easily to the benefit of the employer and the worker. If that is so, in areas of great public concern the right to strike would be obviated. That would be of material benefit to Britain's employment position.

It comes down to this: we must ensure that there is a good national scheme for youth unemployment. We can ensure that every young person has the benefit of the £1½ billion that the Government are investing in the coming year, or the benefit of going to university, polytechnic or one of the many training schemes. Failing that, we can ensure that every young person has a job which will enable him to do something effective and useful.

Many young people favour that. For instance, in many of our hospitals large numbers of young people are offering their services free. Unfortunately, many of them are unemployed. It would be better if they were given, and paid to do, such jobs. That is the right approach. We can deal with many employment problems this year by revising industrial areas, introducing tourist development areas and good youth schemes and, if need be, legislation to ensure that young people are obliged to take up such jobs.

On trade unions, we shall hear tremendous noise from some of the shop stewards about the proposals which might be contained in legislation. It is plain today that the whole scene has changed. The ordinary man on the shop floor well understands his rights and opportunities. He does not need the advice of the shop stewards as he did in the old days. I hope that we shall see a substantial change in the law. It should have been introduced earlier.

Now we have the chance to take measures and to look in the round at how we can improve the employment problem. We have the chance to examine how to improve the nation's productivity by the reduction of overmanning and the abolition of many restrictive practices. In a couple of years that will help us to put our feet on the right road to prosperity.

8.55 pm

Mr. Andrew F. Bennett (Stockport, North)

I have listened with considerable interest to the hon. and learned Member for Thanet, West (Mr. Rees-Davies). I would have a little more sympathy with his wish to place curbs on the trade unions if he would first insist that those curbs were placed on the legal profession. Many people give good advice about how trade unions should be organised. Almost all of their advice deals with breaking up the privileges that the trade unions enjoy, which are almost identical to those enjoyed by the legal profession. If the curbs were placed on the legal profession first, I might have a little more sympathy. Lawyers will always tell us exactly why they and society need the protections that lawyers enjoy. If lawyers need that protection, other groups who band together in trade unions should also enjoy the same privileges.

I turn now to the Gracious Speech. I found it profoundly disappointing, as I am sure my constituents will, because they wished to hear some clear news of how jobs were to be brought to my constituency of Stockport, North. They believe that the Government should be solving the problem of jobs, and especially the problem of jobs for youngsters. I agree with the hon. and learned Member for Thanet that it is important that youngsters should have more training. But it is no good offering training schemes unless at the end of them there are jobs available. It is frustrating not to have a job. Youngsters find themselves on a training scheme at the end of which there is no job available. That is why they feel bitter and cynical.

The Government must aim for improvements in that area. They are already providing the training schemes—which are a palliative—but there must be jobs available at the end of those schemes. The Gracious Speech shows no evidence that the Government are meeting that challenge and providing jobs for youngsters. In particular, the Government are not providing jobs via apprenticeships. My daughter could have left school this year. She had many friends in the same class who had good exam results and who searched desperately for apprenticeships. They all came back with the same story—there were 40 or 50 people applying for the same job. School leavers five or six years ago, with the same exam results, could almost have been guaranteed a good apprenticeship. That is what young people really want—an apprenticeship leading to a guaranteed job with a decent wage. The Queen's Speech offers them little or no hope.

The hon. and learned Member for Thanet made a plea that jobs should be brought back to his part of Kent. I make the same plea for Stockport. While there are not enough jobs, each of us will plead the same case, that is, that better status and grants be given to our areas to try to bring in jobs. I ask that the area of Greater Manchester, and especially Stockport, shall once again receive more favourable industrial grants so that people are attracted to set up industries.

Stockport has many advantages. The local council has done a good job in providing sites for industrial development and, in some instances, modern factory units. Stockport also has ideal facilities, such as good road communication. It is on the main railway line between London and Manchester. There is an airport within two or three miles of the town centre. Within the town there are good areas of land for industrial development. The town also has good amenities. The town council has set out to sell those attractions. The disadvantage is that the Government took intermediate status away from the area.

I ask the Government to give back intermediate status to the whole of Greater Manchester. The Government should look at ways to equalise grant opportunities in the whole of the North-West at least. Unless they do that, it will be an uphill path to attract new jobs to Stockport.

Stockport has an unparalleled tradition in engineering, with a high level of skill. The women have skills in textile and other industries. Both groups offer good opportunities to employers. However, Stockport needs development area status, or at least intermediate status, to encourage jobs to go to the town.

Other aspects of the Queen's Speech will cause bitter resentment in my constituency, for example, the assault on local government. My constituency is part of Stockport, which has a Conservative-controlled council. I am often critical of it because it rarely spends the necessary funds on the facilities needed for the area. However, it has a good record in providing many services of an experimental nature that are highly imaginative. It must be commended for that. Many of the facilities in the social services and education areas are very good, and there are excellent sports centres. The snag is that too many of the schemes are experimental and the council is not prepared to provide sufficient money to expand them to cover the whole town.

The council, although reluctant to spend money, was bitterly aggrieved when the Government described it as an over-spender, and threatened to penalise it. Stockport has seen genuine, democratic discussion about the level of expenditure. The people of Stockport, especially the Tory councillors, do not want the Secretary of State telling them what they can spend and insisting that they hold a phoney referendum. They want to return to a position in which local democracy works effectively and where they can make choices about how to spend their money. They feel that the assault on local government is a sad blow. They do not want to be rubber stamps for Whitehall. They want to make independent decisions and face the electorate in a personal manner rather than through a referendum.

The sick pay scheme will be a disaster. The Government have already put forward proposals that employers found wholly unacceptable, and the plan was abandoned last Session. They now appear to be trying to buy off the employers. They have not met most of the major objections to the scheme, such as those from the disabled and those in poor health. In the present economic climate their job opportunities are not good. They know that the vast majority of firms do not fulfil their obligation to ensure that disabled people make up 3 per cent. of their work force. Employers are reluctant to employ the disabled or those in poor health. The proposed legislation will make matters worse. Already, workers are going to work regardless of their poor health, which is not necessarily to the advantage of their employers or the general public.

The number claiming sickness benefit has fallen during the past nine months. Let us consider some of the implications of that. If someone is forced to work while in poor health they may fail to receive medical treatment that will save them from a serious illness. Do we really wish to go into a bread shop where the person behind the counter, rather than taking off three days because he has influenza, is still working? That will happen if people are reluctant to take time off because of the change in sickness benefit regulations. Those working for a small employer—perhaps with only one employee—know the problems caused if they take time off work. The employer is not pleased. If he has to pay the sickness benefit also, most small employers will be even less happy. They will apply pressure and their employees will struggle to work. As a result, they may pass on their illness to customers or other employees. I suggest that it is a very unsatisfactory scheme that will run into many snags.

The Government's proposal for a combined housing subsidy is one which I would welcome if the Government were saying that they would make some extra money available to phase in the scheme. Most hon. Members have at some time had to advise constituents whether they would be better off claiming rent rebate or social security payments. It is often difficult to calculate which benefit will be the most beneficial. However, there are snags with a combined housing benefit. The only way to escape those snags is for the Government to provide more money in the form of subsidy and to incorporate careful safeguards in the legislation.

One of the first snags to be noted in the Stockport housing procedure is that it is rare for the council to take into account an individual's ability to pay. If it knows that someone receives social security it knows that the rent will be paid for him.

If the council grants the subsidy, there is a tendency for it to think "We do not want to put someone who needs a large subsidy into an expensive house." The danger with the scheme is that the council will insist tht those who are unable to pay the whole of their rent must go into the cheapest houses. Without careful consideration the scheme would further develop the ghettoes in council housing. The ghettoes would contain only those on total benefit rather than a cross-section.

What is the position of a mortgagor? Should he become unemployed, will the mortgage have to be paid by social security? I hope that the scheme will make that possible. I also hope that the scheme will not push individuals from one office to another. That is an event that causes bitter resentment and it occurs in Stockport. People visit the Department of Employment and when it is questioned whether they have the right number of contributions they are often pushed to the social security department.

The danger with the combined housing subsidy is that, having been to the Department of Employment and social security, applicants are told that they must go to the housing department as well. That totals three calls to get assistance. Such pushing around does not help when individuals are feeling bitter at being made redundant.

When we debate the scheme in detail, I hope that the Government will guarantee applicants that they will have to visit only one office to acquire the necessary benefits. That would be preferable to trailing from office to office.

It is a major disappointment to find that the Government have nothing to say about the question of civil liberties in the Queen's Speech. I can detail 12 or 13 major areas where the Government ought to have put forward major proposals for an improvement in civil rights and liberties.

First, it is a great disappointment that there is no reference to the police complaints procedure. Everyone now accepts that the 1976 Act has proved a disastrous failure. That Act has done nothing to improve the status of or respect for the police. It has given complainants little or no satisfaction. We need a major new procedure so that serious complaints can be investigated by a truly independent body.

It is essential that trivial complaints be eliminated from the system. It should be made easy for the policeman—who is only human like the rest of us—to apologise when he makes mistakes. It should not be necessary for a policeman's apology to become the centre of a major complaint. There have been three or four fairly trivial complaints recently in my constituency. Instead of being dealt with by a simple apology, it was necessary to go through the whole complaints procedure.

At the end of the present complaints procedure, a policeman feels bitterly resentful. One little slip may become the subject of a major investigation. In the end, the constituent feels bitter, and that the police have covered up something. All that is necessary is for the policeman to be able to say, quickly and promptly, "I am sorry, I made a mistake". The present procedure does not deal satisfactorily with major, serious complaints. It merely fudges the minor complaints. We need a major overhaul of the 1976 legislation.

Another civil right to which the Government should have responded is the need for a public prosecutor. Provision should have been made in the Queen's Speech for compensation for those who have been wrongly imprisoned, especially for those kept in prison for a long time awaiting trial and subsequently acquitted. There is a need for legislation on data processing and the protection of privacy.

There is a major need for legislation to reform the Official Secrets Act and to give us freedom of information. It is appalling that so often we have to call on others in the United States to use their official information legislation to ascertain what the British Government are doing. There are vast areas where we could benefit from freedom of information legislation.

The laws on homosexuality in Northern Ireland are anomalous when compared with those in the rest of the United Kingdom. We have what is supposed to be a united kingdom and yet we have different laws in different parts. It is high time that the legislation in Northern Ireland was changed to bring it into line with that which prevails in the rest of the United Kingdom. It is amazing that some of those in Northern Ireland who are most enthusiastic about the Province remaining part of the United Kingdom do not want that unity for one area of the law.

Two more important issues are women's rights and prison rules. However, I appreciate that many other hon. Members want to participate in the debate and I shall not take those issues any further. I conclude by suggesting that many other areas of civil liberty need to be considered. I and five of my hon. Friends have tabled an amendment to the Queen's Speech which contains a list of the civil rights and liberties that we bitterly regret have not been included in the proposed legislation.

The Queen's Speech is extremely disappointing. It will disappoint my constituents. There will be many fears about the legislation that is in the pipeline. That legislation will further disappoint my constituents. There are sad omissions in many areas of civil liberty and civil rights that should have been included in the legislation to come before the House in the next 12 months.

9.13 pm

Mr. John Stokes (Halesowen and Stourbridge)

This is an important debate, and it seems to me to have been a fairly long one. It has been characterised by the absence for virtually its entirety of those representing the Liberal Party and the Social Democratic Party. There were so few Labour Members present that others had to be called into the Chamber one by one to make speeches without having heard preceding speeches, and that made any orderly and proper debate virtually impossible.

I think that I am the first Member from the West Midlands to be called to contribute to the debate. That being so, I shall first say something about BL.

Mr. Tam Dalyell (West Lothian)

rose——

Mr. Stokes

No, I shall not give way to the hon. Gentleman. I have been waiting to participate in the debate since half-past two and I have been speaking for only two minutes. I shall give way to the hon. Gentleman later.

Mr. Dalyell

rose——

Mr. Frank R. White (Bury and Radcliffe)

The hon. Member for Halesowen and Stourbridge (Mr. Stokes) challenged the Opposition, and he should give way to my hon. Friend the Member for West Lothian (Mr. Dalyell).

Mr. Stokes

I welcome the return to work of BL workers. I always felt that it would happen. That was confirmed on a visit that I made to my constituency on Monday night, during which I talked to the wives of many BL workers and to many workers themselves. I object to the behaviour of some members of the media who constantly harassed Members in the West Midlands to try to get them to make comments which would have been unwise at that time.

I congratulate my right hon. Friend the Prime Minister and the Government on not interfering, in spite of the pleas of the Leader of the Opposition. The BL management must now improve its labour relations. I am sure that Sir Michael Edwardes realises that one cannot run a great enterprise on a succession of cliff-hanging threats. Management in the large works needs strenthening, and communications can still be improved. The shop stewards should have the honesty to resign. Meanwhile, let us hope that production can go forward full steam ahead.

Mr. Dalyell

It is a deeply unsatisfactory parliamentary proceeding to have a loose, wide-ranging debate rather than to use the time on a specific matter. If the hon. Gentleman is complaining about the absence of members of the Opposition Front Bench, I suggest that the usual channels should look at the whole proceeding, which is deeply unsatisfactory and open, one might almost say. to abuse on the first day of the Queen's Speech.

Mr. Stokes

No doubt the hon. Gentleman's remarks will be noted. I was making a charge not against the Opposition Front Bench, but against the Labour Party in general. However, I do not wish to make a partisan speech. The situation is too serious.

We are debating the Gracious Speech at a sombre period in the country's fortunes. Long years of low productivity and overmanning, combined with the most severe world recession that we have seen since the 1930s, have led to a fall of almost one-fifth in manufacturing production and to great difficulties in many, but not all, companies. Many new companies are now starting and flourishing. In general, I support the Government's economic measures, particularly those to reduce and, I hope, to eradicate inflation. I am glad that there is no change in that policy in the Queen's Speech.

The Government still have a huge task in telling everyone in the country what they are trying to do. It is no use our opponents or even our candid friends saying that the Government are pursuing harsh or extreme policies. That is not true. Unfortunately, the Government have not controlled the money supply severely enough. We all know that they have poured out millions of pounds of taxpayers' money to British Steel, British Leyland and other public concerns.

What the Government are trying to do, however painful it may be, is to make the country live within its means—in the same way that every family in the land must live within its means—to pay its way as a nation and to compete more effectively with its trade rivals overseas. That means that the country must have a basis of sound money. I cannot understand how people can say that such a common sense approach is harsh or extreme. Those who oppose that way have no alternative to suggest except, as we have heard so often today, borrowing still more money, which would almost certainly make interest rates higher, or resorting to printing more money, which would open the floodgates to dangerous inflation.

Where manufacturing industry has a genuine grievance is in the Government's failure to cut their expenditure. Industry has to bear almost all the burdens, while the Civil Service, many of the quangos and much of local government service appear to have escaped the cuts. Nevertheless, the Government must carry the country with them during the painful and unpleasant months before the recession is over and recovery starts.

I welcome the measures to denationalise more concerns. I also welcome the intention to strengthen industry where possible. However, unemployment, particularly youth unemployment, continues to be deeply worrying as it must affect the morale of a considerable part of the nation and the nation's future.

The Government must cherish the national spirit. Man does not live by bread alone. The rapturous welcome given to the Prince and Princess of Wales on their recent tour of Wales shows that people are looking for something other than mere economic success. Of course, there is an element of romance in that, as in the splendid ceremonies this morning. The Princess seems like a fairy princess. There is nothing wrong in that. However, underneath there is a deep fount of patriotism which has welled up and which longs to be satisfied.

The Government must therefore appeal to the whole nation in what they are doing, not just to their supporters. We may indeed have to spend more on the young unemployed. I favour a simple form of military training. I think that, say, six months would be an excellent idea. I know that all these schemes cost a great deal of money, but in the end such a scheme might produce good dividends for the youth of the country in the future.

I welcome the Government's firm adherence to the Atlantic Alliance. Here again, however, all Ministers, not just defence Ministers, must spell out the vital importance of the Western Alliance and point out the dangers of unilateral disarmament. The worrying growth of the CND movement must be checked. Here, once again, some of our Church leaders seem to be taking a wrong line.

I believe that people are longing for a moral and spiritual basis for their lives. Unfortunately, there is little sign in the Gracious Speech that the Government fully realise this. I welcome the plans to improve criminal justice in England, but I am sorry, for instance, that there are still no plans to control the proliferation of sex shops which cause so much offence. I am sorry that there is no mention of reintroducing corporal punishment for young thugs who, for instance, attack old women.

We all know that there is a strong demand in the country for the reintroduction of capital punishment for terrorists. We all look up to the Home Office in these matters—the hungry sheep indeed look up, but are not fed. While the Government are unpopular—I believe unfairly—on economic matters, it is surely unwise for them to neglect those social matters on which the whole country knows the Tory Party to be most strong.

I was sorry that there was no mention in the Gracious Speech of immigration being further controlled. In spite of all that the Government have said, about 50,000 people are still settling in this country every year. The figures are deeply disturbing. If these very large numbers continue to come here each year, I fear for the character and cohesion of the nation.

A large majority in the country will welcome the proposed laws to curb the worst excesses of trade union power. Not least among those who welcome them will be ordinary trade unionists themselves, of whom I have a great many in my constituency. I urge the Minister concerned "Press on and press on fast; the people want what you are going to do."

I hope that the Government will not be deflected in what they are doing either by faint hearts in our own ranks or by the growth of the SDP, which I believe is merely a party of escape and of protest. As the economy recovers and the reality of a general election approaches, it may not seem so formidable as it does now.

As was pointed out in an earlier contribution, the English have lived on illusions for 30 years. We have lived on the illusion that the world owes us a living and that something can be had for nothing. The present Government are the first since the war to try to do away with that and to make us face the harsh world in which we live. The alliance parties offer soft options, but we all know that we are faced only with hard choices.

I welcome the courage of the Government. I welcome the confidence of the ringing tones of the Prime Minister this afternoon. I welcome the Gracious Speech. But I implore the Government to put forward their measures with a deep understanding of the strengths and the frailties of our people.

9.24 pm

Mr. Allen McKay (Penistone)

I shall not follow the hon. Member for Halesowen and Stourbridge (Mr. Stokes) down the path that he took regarding capital punishment. That question has been asked many times in the House, and time and again the House has answered it and will continue to do so, in the freedom of the House and the judgment of hon. Members.

I cannot welcome the Gracious Speech. In saying that I am not being disrespectful either to Her Majesty, the Royal Family, the House or its institutions. For this ceremony, we turn out the Air Force, Navy, Army and police. Her Majesty and her family come here, all dressed up, and within a few minutes the Queen's Speech is over. I am sure that Her Majesty will be wondering whether it was all worth it.

Fifty per cent. of the Gracious Speech relates to foreign affairs—in fact, the whole first page. The second page refers to strengthening industry so as to restore competitiveness abroad and prosperity at home". It adds: They hope to see this assisted by further reductions in the level of wage settlements. That will cause problems, because the Government themselves entered into a system of free collective bargaining, and wage restraint cannot be achieved under a free collective bargaining system. Under such a system, the ultimate is always the strike weapon. Therefore, the Government have condemned themselves when they say that they hope to see this assisted, apparently by further compulsory reductions in the level of wage settlements so as to restore competitiveness abroad.

Indeed, some of the Government's own policies have destroyed the competitiveness of industry. As an example, I cite one industry whose directors I recently met. It is about to close and 400 people will lose their jobs. Aurora Holdings acquired this industry in a profitable state about three years ago from Osborne Steels, but it has decided that it is making such a loss that it must close. I accused the directors of asset-stripping and asked them to come and talk about it. Quite straightforwardly and openly, they blamed the policies of the Government for their present predicament. They blamed high energy costs, the exchange rate and high interest charges.

This firm is unique. It is probably the best, not only in Britain but in Europe, in manufacturing high special steels. It is the only firm of that calibre. When it disappears, the only way in which we shall get that steel is from abroad, as a result of which imports will increase.

The directors examined the costs to try to discover the problem. However, if the company's operations were rate-free, if the men worked without wages and if heating and rolling costs were excluded, it still could not be competitive with the same type of steel that is flooding into Britain from France, Germany, Austria and the Eastern bloc via Sweden. Therefore, heavily subsidised steel has closed one of the main manufacturers in my area and has thrown 400 people out of work.

The Gracious Speech also states: A Bill will be introduced on employment and labour relations. The Government should tread carefully in that direction. The relationship between industry and the trade unions is at present on an upward turn. It would be hurtful to throw legislation into the arena that will spoil the relationship between employer, employee and the Government.

Another part of the Queen's Speech states: My Government share the nation's concern at the growth of unemployment"— they should, because their policies have caused it— and will continue to direct help to those groups and individuals most hard-pressed. That is an ironic and cynical phrase coming from a Government who in the last Budget cut sickness and unemployment benefit by 5 per cent. They raised it to 11 per cent., rather than 16 per cent.—virtually a cut of 5 per cent.

The Government introduced legislation to make sure that people could not claim social security benefits if they had more than £2,000 in the bank. Thus people who are made redundant and receive a lump sum in redundancy pay cannot draw supplementary benefit until they have spent most of the money that they have acquired and have less than £2,000 in the bank. That has another effect, which should also be examined. People who have been thrifty—people in Yorkshire are thrifty—and have saved for retirement but are made redundant at 59 or 60 are having to spend their life savings, on which they had relied for retirement, before they can claim supplementary benefits.

It is stated in the Queen's Speech that: measures will be introduced to amend the financial arrangements of the National Coal Board. We should like to think that that would put right the effects of the Coal Industry Act 1980, but I do not think that is what is meant. The financial straitjacket that was placed on the National Coal Board by that Act will not make it profitable in three years. The Government knew that because the National Coal Board, the trade unions and the CBI told them. Everyone knew it except, it seems, the Government. If we are to amend the arrangements, it should be to the benefit of the National Coal Board, to give it a longer period in which to become profitable.

If the proposal means that the Government are trying to do a BL on the National Coal Board, I am afraid that the position will not be the same. The National Union of Mineworkers will not accept a rundown or a privatisation exercise on their industry, either from this Government or any other Government.

The next paragraph of the Queen's Speech reads: State involvement in transport will be further reduced". Do the Government know what harm they have already done to transport in rural areas by the cuts in public expenditure? Do they know what it means to people when a bus runs only every two hours, and then is curtailed? Do they know what it means to live in a rural area where the post office facilities are not what they used to be? Not only do people have to travel to the next village to a post office, but, often, there are no buses to take them. The high cost of petrol in those areas means that some people can no longer afford to run their cars. Those matters need to be examined. Services must not be eroded further, as the Gracious Speech suggests they will.

The proposal to "establish a scheme of unified housing benefit" must be examined carefully. Otherwise the Government will be doing a disservice to people who need to be helped rather than hindered. Local authorities in Yorkshire have consulted closely with the Department of Health and Social Security to find out which scheme benefits a person most, and the most beneficial scheme is always used. If the Government are not careful they will deprive people who should not be deprived if the housing benefit is unified without regard to its implications.

The Gracious Speech contains the phrase: To place a duty on employers to provide sick pay during the early weeks of sickness". That is another means of putting sick pay into the income tax bracket. That, plus the destruction of earnings-related benefits, decries and makes cynical the promise in the Gracious Speech to examine welfare benefits.

I turn to the proposed legislation to improve the accountability of local authorities. This Government have done more to harm the relationship between central and local government than any other Government. It is not only Labour-controlled authorities that are squealing out, but, even more, Conservative-controlled authorities. Pressure is being placed on hon. Members by the Association of Metropolitan Authorities because of the effect of such legislation on local government. Instead of knocking local government—as the Government are doing—they should co-operate with it. After all, unemployment will be reduced through local government and local government measures.

I regret that the Government would not co-operate with Sheffield city council on its proposals to take 1,000 people out of the dole queue and to employ them. It was proposed that the Government should give the council enough money to pay for the youth opportunities scheme and unemployment benefit and that the rest should be found from the rates. If the Government had accepted the proposal, 1,000 people would be gainfully employed and would no longer walk the streets, kicking their heels.

Therefore, I do not welcome the Gracious Speech. As we discuss its contents in the next few days we shall explore the Government's position and their thinking on what is now expressed in the few lines of the Gracious Speech.

9.36 pm

Mr. Harry Greenway (Ealing, North)

I welcome the Gracious Speech, and particularly the proposed introduction of a Bill on employment and labour relations. I shall never forget an experience that I had shortly after being elected a Member of Parliament. A young constituent aged 18 was excluded from his place of employment by the imposition of the closed shop in the most ruthless, disgraceful and unfair manner that one could witness. He was put out of a job that he had done well and honestly by a union that was totally unsympathetic to his pleas for redress and for a hearing. It ignored his wish to work although, as a union, it had pleaded for job creation. That man was thrown on the scrap-heap by the imposition of the closed shop. Because of that case and many others I shall always be firmly against the closed shop.

It amazes me to hear Labour Members speak as they have when I remember that they voted for the strong closed shop legislation that we still have. Labour Members fought and pressed for a closed shop that would curb even editorial and press freedom and reduce the right to speak and write freely.

Labour Members have no right whatever to talk about the curbing of democracy in relation to the Government's proposals on rates. Those Labour Members who live in London should be pleased that some action is eventually being taken to get rid of rates and to curb a situation that allows the GLC to impose a rate increase of 20 per cent. in such a wanton way. In my constituency that has led to one rate increase of £50,000 and to another—on a factory—of £100,000. If hon. Members think that such rate increases do not cost jobs, they should come to my constituency.

That brings me to another crucial point. The time has come for job sharing and for a stronger curb on cheap imports, such as domestic appliances, from Eastern Europe. I represent a constituency in a borough that has more jobs in manufacturing than any other London borough. I made it my business—both before and after the election—to visit factories in my constituency regularly to get to know them and to see what they were doing.

In particular, I have visited the Hoover factory at Perivale many times. I am disgusted and furious at the proposal that the company should close a factory where people have a brilliant work record. The Hoover name was built upon the backs of the people at Perivale, and the soundness of the product was built on its work force there. The factory has operated without industrial difficulties for many years. Hoover has become 70 per cent. American owned and 30 per cent. British owned. The company has expanded, with Government assistance, into Wales at Merthyr Tydfil and into Scotland at Cambuslang.

The work force, through their taxes and rates, have contributed to the establishment of new factories and technology for the company, allowing it to expand into Scotland and Wales. The company has been threatening to take its business out of the United Kingdom altogether. After a battle of many months, it has conceded that It will continue operations in Wales and Scotland, but suggests that Perivale be closed.

This is a scandal and a deep insult to a community which has worked hard for the company over a long period. It is preposterous that, through their own tax contributions, people should put themselves out of work by contributing to the establishment of factories which have become rivals to them elsewhere. My plea to that company—and I ask the Government to help—is to share the available work between the Scottish, Welsh and Perivale factories.

The unions must relax their approach to work sharing. If people are allowed to work only a basic working week—say 37 hours—without overtime, there will be much more work for everybody. To our disgust, shock and shame, unions will not countenance work sharing on the scale required. However, it would be a great step forward to reducing unemployment from its present scale.

I have referred to Hoover. That company has been undermined not by the Government's policies, but by the imports of units from Eastern Europe at "political" prices, and the company is not allowed to compete in return. In 1978, 80,000 units were imported, in 1979, 110,000 units were imported, and in 1980, 132,000 were imported.

There are no two ways about this. For the Hoover company, it is the straw that has broken the camel's back. It is costing jobs in my constituency, and it will continue to do so. The Government must introduce import controls against Poland, Czechoslavakia and East Germany immediately and against those products which I have described which are so damaging to our home industry.

Much as I am disturbed by the problem of the Hoover factory at Perivale, and determined as I am that something must be done to hold work for the people of that community, I do not want people to feel that there is not considerable resilience in Ealing and West London. A new, privately financed town centre is being built, having been inspired by the Conservative-controlled Ealing borough council. It will establish 4,000 jobs and a great deal of additional rateable value. Glaxo Limited is setting up a new headquarters building in Greenford, with many more jobs to come. IBM has built a brand new factory in Greenford, currently with 500 jobs, which will soon increase to 1,000. There are new buildings in Hangar Lane—in particular the new AGB research building, which itself has brought 1,200 jobs. Others alongside it have brought a total in that area of 4,000 jobs, and an additional rateable value to the borough of £750,000.

All these industries and new factories will have to cope with a situation in which the GLC, as it is presently run. could undermine them by excessive and exorbitant rate demands. Labour Members talk about local democracy and suggest that it is being undermined, but I remind them that industrial ratepayers have no say and no vote. For them it is taxation without representation, and we know what that led to on the other side of the Atlantic. It is a recipe for the very reverse of democracy—for totalitarianism. That is, in a sense, very much what we are seeing in London.

I particularly plead with the Government to do all they can, in addition to what is proposed in the Gracious Speech, to encourage the principle of work sharing on the basis that I have described and to eliminate the importing of goods from Eastern Europe where there is no reciprocal trade agreement, because such imports are undermining our own industries.

I specially welcome what is proposed concerning employment and labour relations. I hope it will mean that we shall tackle the closed shop and give to the individuals victimised by it full legal and financial redress, because that is what they deserve.

9.47 pm

Mr. Frank R. White (Bury and Radcliffe)

The hon. member for Ealing, North (Mr. Greenway) gave his views about the closed shop. He is a distinguished member of the education service which, like the legal profession, operates one of the most efficient and best closed shops in the business. People in glasshouses should not throw bricks.

I assure the hon. Gentleman that the closed shop issue is just not that simple. The history of the closed shop and its principles goes back to the reign of Elizabeth I, and I should like to debate it with him, perhaps, on another occasion. But I can tell him authoritatively that the trade union movement does not regard the closed shop as a perfect instrument. It is a key instrument in trade union affairs and trade union philosophy——

Mr. Greenway

rose——

Mr. White

—but it tries to operate the closed shop with tolerance, understanding and compassion for people with genuine cases.

Mr. Greenway

rose——

Mr. White

The problem on each side in industrial relations is that of the freeloaders and freebooters—not the men of conscience but the people who are instruments of disruption in industrial relations. The problem is much more complex than the hon. Gentleman suggests, and it cannot be dealt with simply by a strident anti-closed shop voice.

It is regrettable that the hon. Member for Halesowen and Stourbridge (Mr. Stokes) has left the Chamber. He had a distinguished war record, but it is most annoying when people with his record and his standing start to talk in terms of the red, white and blue and "Rule Britannia", and say that our troubles are all the fault of the blacks and of the unions, and that if he were to export the blacks and bash the unions that would go halfway to solving some of the problems. The other half of the argument is that we should flog and hang people. I thought that, from an hon. Member of his standing, it was a petty speech.

The hon. Member said that the Government were the first Government to place the facts of the new world before the country. Perhaps he should keep his mouth shut, for every time he opens it he presents us with the old world of Toryism.

A key area of the Gracious Speech has been the emphasis placed by the Government on further improving the efficiency of the economy and strengthening industry. I congratulate the hon. Members for Scarborough (Mr. Shaw) and for Dartford (Mr. Dunn) who moved and seconded the motion. The hon. Member for Dartford laid great store by the fact that he was born in Lancashire and came south from a wet climate to a dry climate. Whether he was referring to geography and topography or to his political position within the Tory Party, I do not know.

The hon. Gentleman referred to 7 per cent. unemployment in Dartford. I have news for him. The area of his birth is suffering between 15 and 25 per cent. unemployment. Hon. Members representing that area are concerned about the Government's industrial strategy. We are concerned that we shall not be able to get back to level footing with our competitors. We are concerned that our industries will not be able to improve efficiency because of the factors operated against us by foreign Governments such as fuel subsidies and preferential treatment for manufacturers exporting to this country.

I speak as chairman of the all-party paper group. There is great understanding on both sides of the House that the Government must act on the issue of unfair trade practices both in terms of imports into this country and in terms of fuel charges.

I was interested in the single line in the Gracious Speech which states: A Bill will be introduced on employment and labour relations". Hon. Members will know that during the past two years I have twice presented to the House a home workers' protection Bill. There are 250,000 people in this country who have no protection—mostly housewives who have to work at home while looking after the children because of the absence of nursery or creche facilities. In addition, there are those who have to care for sick or disabled relatives because of lack of sheltered accommodation or warden accommodation. There are also people from ethnic minority groups who, because of language and cultural problems, have to work at home.

A common factor is that they are prisoners in their homes. They are ready prey to the exploiter—and they are exploited. Rates of pay among home workers are as low as 15p an hour. These are slave conditions. Nothing has been done for home workers since 1909. This House has continually ignored them.

If the Prime Minister wishes to make a reality of her claim that her party is compassionate and understands the plight of working people, this is an area where, without any sacrifice of political principle, she can act to extend to home workers the present protection enjoyed by people in outside industry. I do not know whether my plea will be heard. I do not have much expectation that it will be met. I hope, however, that hon. Members will support my efforts at some future date if no measure is brought before the House.

I support my right hon. Friend the Leader of the Opposition when he says that the Queen's Speech disguises from the country the true problems that we face. It disguises them in the form of an anti-union attack. The attitude is "Have a bash at the unions. Make them the fall guys." It is like Nero—fiddling while Rome burns. He would not bring in the grain to feed the starving millions but brought in the gladiators for the gladiatorial massacres in the arena. That is what we shall see over the next 12 months. The last sentence of the Gracious Speech states: I pray that the blessing of Almighty God may rest upon your counsels". I extend that to the whole country.

9.53 pm

Mr. Ivan Lawrence (Burton)

The hon. Member for Bury and Radcliffe (Mr. White) has been so generous in allowing me a few minutes to speak that I shall forbear to answer his absurd argument that a barrister may not speak on matters of the closed shop because no one may join the barristers' profession without being properly qualified.

I shall also forbear, because of shortage of time, to enter the arid economic argument heard from the Opposition Benches in this debate. There is no help for Labour Members who want to go on pretending that they were a success in Government, that somehow a policy to spend, spend, spend when there is nothing to spend is a sensible one, that it is sensible to go on criticising this Government, who are only halfway through their programme, for not completing the whole of their programme to date, or to think that somehow we will make more jobs if we come out of the Common Market and put at risk 5 million over two years, or that we will create more jobs by borrowing more, driving up interest rates and thereby bankrupting companies. There is no point in entering into that arid argument.

I welcome the Queen's Speech. I am not disappointed by it. The commitment to treat inflation as pre-eminently important is only too sensible. The sooner we get down inflation, the sooner we shall become competitive again and the sooner we shall get our people back to work. The determination to help groups and individuals most hard pressed by the recession, and to improve the protection for the mentally ill, gives the lie to the criticism that the Government are hard-hearted and uncaring.

I have doubts about the proposals for local government, but we must wait to see what the legislation says. I have strong doubts about the undertaking to support the European Community's approach to a settlement of the Arab-Israeli dispute, if that means giving recognition and status to terrorists while they continue to refuse unequivocally to recognise the right of the State of Israel to exist and refuse to stop their terrorism.

I have absolutely no doubt that a strong defence with multilateral disarmament is wise. I have no doubt at all that the overwhelming majority of our people want that.

One very heartening theme of my right hon. Friend the Prime Minister was her desire to look ahead and to deal with problems that will face us when we come out of the recession. She dealt with one aspect of that in her observations on the proposal to introduce a Bill on employment and labour relations. My constituents in Burton will be particularly interested in that Bill, because it could not be more relevant to the economic problems facing the nation.

One of the root causes of our economic decline has been the abuse of power by some trade unions or their officials. The most objectionable abuse of that power has been by the instrument of the closed shop. That has given the power to union officials, all too often, however misguided, however Communist-motivated, however incompetent, however careless of the need to keep their people in work and to run an efficient business, to say "No union card, no job."

That has done untold harm in some parts of the country. In the Dunlop factory at Speke there was continuous industrial disruption. Workers dared not disagree with their union officials and refuse to take industrial action. As a result, productivity fell 30 per cent. behind that of Germany and France, and 2,300 people were sacked. How could that happen? The closed shop. What was it that enabled the dock unions in London to require 70 men to move 350 tons per shift when in Rotterdam the work is done by 12 men, so that 1,800 people had to be laid off in London? Answer: the closed shop. What was it that enabled the Transport and General Workers Union to say "All out" at Ansell's Brewery this year, causing hundreds of men to lose their jobs in Birmingham? Answer: the closed shop.

The harm done to the country's economy in overmanning, low productivity, industrial disruption and high costs is one of the greatest causes of our uncompetitiveness today, and much of it is because of the closed shop. The Government have recognised that as an evil. The Government said that they would do something about it. They began to do something about it, but unfortunately the Employment Act 1980 did not give people their jobs back, it did not protect businesses that were threatened because they would not unionise, it did not stop people from having to argue, invidiously, that they had a deeply held conviction in order to save their jobs. Moreover, it did not stop people believing that unemployment would be the result of defying a closed shop.

Further action is necessary. It is possible to do away with the closed shop. The GLC has done so and there has been no noise about that. Nearly every country in Europe has no closed shop. I hope that the legislation that the Government introduce in this connection will be not only one further step but also a sufficient step. I hope that it will give the people of this country the right to choose whether they want to join a union or not. Nothing less will restore the freedom of the individual in our society, which right hon. and hon. Gentlemen on both sides say they seek. There is no greater policy of consensus than the policy to do something far more fundamental in legislation about the closed shop.

Debate adjourned.—[Mr. Lang.]

Debate to be resumed tomorrow.