Debate on the Address

HC Deb 03 November 1982 vol 31 cc6-102

[FIRST DAY]

Mr. Speaker

Before I call those 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 4 November—foreign affairs; Friday 5 November—urban affairs; Monday 8 November—the dismantling of the Welfare State; Tuesday 8 November—the attack on public enterprise and its effect on unemployment; Wednesday 10 November—unemployment and the economy.

2.36 pm

Sir John Eden (Bournemouth, West)

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.

This is quite one of the nicest things that has ever happened to me in this place. It is made all the more thrilling because so many of my constituents are eager to share the occasion with me. It is a great honour for them, as it is for me.

Not so long ago, Bournemouth was a sparsely populated expanse of heathland between the ancient boroughs of Poole and Christchurch. If the Boundary Commission has its way, the unthinkable will soon happen and parts of Bournemouth and Poole will actually be joined together to form a new constituency. In many ways, I am sad that I will not be there to act as interpreter and honest broker, but be assured, Mr. Speaker, that Bournemouth will always be Bournemouth.

The first Bournemouth guide of 1840 described the town as being: endowed by nature with those especial features and circumstances which eminently fitted it to become an approved resort of those who … seek on the coast that envigorating repose … It is still very like that today. At least, I hope that that is what the Leader of the Liberal Party found when he visited the place recently with some of his friends.

Of course, things have had to change a bit since those early days. The attractions have been almost too great. Hardly any of the original heathland is left. Instead, the Bourne stream winds its way out to sea through parks and beautifully landscaped pleasure gardens and past fine hotels, shops and offices, down to the new pier leisure centre.

Recent developments have been substantial. Bournemouth is the centre of a thriving conurbation and many nationally known commercial companies have made their headquarters there, drawn, I am sure, not least by the fact that they will be able to employ some of the young people who have benefited from our first-class system of secondary education. We are proud of our schools and we are prepared to fight hard to keep them.

We are also proud of the internationally renowned Bournemouth symphony orchestra and Sinfonietta which have done so much for classical music throughout the South and the West. I hope that they will soon be able to give concerts in the magnificent Bournemouth international centre which it is planned to have in full operation by the autumn of 1984. That would be an appropriate time for the Leader of the Opposition to visit Bournemouth. I can promise him a nice quiet place in Bournemouth for his party conference and assure him that he will feel fully at home. Thirty per cent. of Bournemouth people are over retirement age. That is twice the national average. Obviously, that requires extra effort in the form of special housing, social and health care provision.

Many of the elderly live on their own and are naturally afraid to go out after dark. Therefore, effective policing and good communications are particularly important and that is why I welcome the following assertion in the Gracious Speech: My Government will continue to support the work of the services for the prevention of crime and the maintenance of law and order. That passage will be warmly applauded by the Dorset police. They have taken great trouble to identify themselves with the people of Bournemouth and to respond to the special needs of the community that they serve.

I am glad to see that we can soon expect legislation to deal with police powers, complaints and other relevant matters. I am sure that the new proposals—reflecting, as I hope that they will, the recommendations of the Home Affairs Committee—will do much further to improve understanding between the police and the public. To win out against crime, vandalism and mindless violence it is essential for the police and public to work in the closest possible co-operation.

As the Member for Bournemouth, West, I have many famous predecessors who were men of great distinction. Among those who still hold a place in my constituents' memory is the much loved father of my hon. Friend the Member for Dorset, South (Viscount Cranborne). Before the war, there was Sir Henry Page Croft, who was a great Empire man. He was a Member of Parliament for 30 years. I know that I cannot beat his record of service, but I hope that the fates—or whoever determines such matters—will conspire to ensure that at least I can equal it. After Sir Henry Page Croft there came two Members of Parliament, Sir Leonard Lyle and Brendan Bracken who—among their many distinctive characteristics—were both great campaigners against nationalisation. Although, sadly, Leo Lyle died soon after I became a Member of Parliament in 1954, his "Mr. Cube" lives on as a challenging symbol of freedom and enterprise.

Many hon. Members will remember the tremendous parliamentary battles against the early nationalisation measures. Brendan Bracken then led for the Conservatives and he was strongly supported by John Boyd-Carpenter—who is happily still with us, but in the other place—and by Oliver Crosthwaite-Eyre, who introduced me in the House and to whom I owe so much. They would have been distressed that so many of their predictions came true and they would all now give a warm welcome—as I do—to the references in the Gracious Speech that presage the introduction of private capital into some parts of the public sector.

Over the years, I have come to know many of Bournemouth's telephone engineers and technicians. I have a high regard for their competence, dedication and skill. I know how much the expansion and improvement of the network has been held back because the business has been unable to borrow all the funds that it needs. With the prospect of greater financial freedom and direct access to financial markets—as outlined in the Gracious Speech—British Telecom will be much better placed to advance the interests of its employees and customers alike.

I am also delighted with the reference in the Gracious Speech to further development and expansion of cable systems. Many of the things that I dreamt about when I had the privilege to serve as a Minister in the Government of my right hon. Friend the Member for Sidcup (Mr. Heath), are now beginning to take shape and are coming to life. We have Channel 4 and also, I am told, Channel S4C which will cater for a minority. I do not know whether there is any special significance in the fact that it has chosen "Superted" as its mascot and symbol, but I know that any community with its own television or radio station is extremely fortunate. In Bournemouth, we are well served by 2CR, a stimulating and energetic radio station that has won many friends and admirers.

Earlier paragraphs in the Gracious Speech remind us of the dangerous world in which we live and of the threat to our survival, which is both real and close. For more than 30 years we have enjoyed peace in Europe because we have worked in partnership with our NATO allies and have been able to maintain an effective nuclear and conventional strength. To weaken our security now by running down any aspects of the collective defence system would be to commit an act of suicidal folly. Instead of calling for unilateral disarmament, we should—as the Gracious Speech suggests—be working for balanced and verifiable measures of arms control. The Gracious Speech also affirms the Government's intention to honour our worldwide commitments and protect the dependent territories. Surely, since the Falklands campaign, no one can doubt our willingness or ability to do that. That campaign proved, once again, that, when given clear, resolute and bold leadership, our people are ready to tackle anything and to risk everything for their country. The Government put their trust in the people and the people did not let them down. That is the spirit that inspires so much of the Gracious Speech and which will, I know, ensure that the Government's programme is carried through to success.

2.47 pm

Mr. Michael Ancram (Edinburgh, South)

It is a great honour for me to second the motion and to speak after the able and interesting speech made by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden). For myself, used as I am to the more informal experience of addressing no more hon. Members than I can count on the fingers of two hands, today is indeed a special occasion and also the proof of good advice. Many years ago, an old politician told me that if I could always arrange to be preceded by a good speaker and followed by an even better speaker, I would always get a good audience.

My constituency of Edinburgh, South is also very honoured. I believe that I am the first Member of Parliament for that constituency to be asked to undertake this pleasant duty. However, in my previous incarnation between the elections of 1974 as the hon. Member for Berwick and East Lothian, I would have been unable to make that claim. Lord Kilmany, then William Anstruther-Gray, trod this path in 1952.

I am fortunate to represent one of Edinburgh's seven constituencies, which are known locally—and somewhat irreverantly—as the seven deadly sins. I shall not speculate today on which one I represent. As its name suggests, my constituency consists of the southern part of the great capital city of Scotland—a city that has played an important part in the colourful history of Scotland. It is almost completely residential and is built around the small communities and large houses that once lay outside the city's bounds, but whose names—such as the Braids, the Blackets, Liberton, Gilmerton and of legendary fame, Morningside, of "The Prime of Miss Jean Brodie"—continue in the street names of my constituency.

We have little industry, but the name of Bartholemews stands supreme among the atlas and map makers of the world and is a great source of pride to my constituency.

I hope that you will forgive me, Mr. Speaker, if I take some pride in representing a part of Edinburgh, because you will know its beauty and its tradition. As a city, Edinburgh has moved with the times, yet it has managed to preserve that which is best, both of its architecture and of its quality of life, not least in the fact that it continually returns a majority of Conservative Members to this House.

That aside, I believe that the seven of us who have the honour to represent that city are linked by a desire to see its beauty and history preserved. Conservation of that which is good is a common cause in Edinburgh. Indeed, Edinburgh will welcome the commitment in the Gracious Speech to enhance our national role in international affairs. We have always regarded ourselves at the forefront of international affairs. The great judge and man of letters, Lord Cockburn, over a hundred years ago recorded in his memorials the following: In 1798 the civic fathers of Edinburgh passed a self-denying ordinance by which they resolved to ruin the French by abstaining from claret … at all … municipal festivals". Lord Cockburn continued: The vow, however, was not kept; and so the French were not ruined". I am sure that there is a lesson for all of us here, perhaps particularly for the Opposition party which has so spectacularly revived the fortunes and reputation of that wine.

I wish to mention briefly my predecessor, Michael Clark Hutchison, who will be remembered with affection by many hon. Members. He would have warmly welcomed the Gracious Speech, especially its commitment to the Falkland Islands. Those islands were of abiding interest to him during his 20 years in the House. Indeed, when I succeeded him, he advised me never to ignore them and said that their problems and their significance would one day become apparent. How accurate his foresight proved to be.

I welcome, too, the passage in the Gracious Speech which foreshadows legislation for Scotland. Measures to reform the Scottish law on mental health, to enable divorce actions to be heard in sheriff courts, and to alter the control of legal aid fees in Scotland will, I am sure, be welcomed, not least for the comparative lightness of that legislative programme.

I hope that the reference in the Gracious Speech, already mentioned by my right hon Friend the Member for Bournemouth, West, to continuing to support the work of the services for the … maintenance of law and order will also apply to Scotland. I, too, have in my constituency the desperate and unacceptable circumstance where elderly people—and, indeed, many not so old—are virtually prisoners in their homes after dark for fear of violence should they venture forth. None of us can contemplate such a state of affairs without the gravest disquiet, and all of us must work to change it.

Equally, I believe, we shall all welcome efforts to enable improvements to be made to the health and social services. The improvement of health provision for patients and those in need must always remain a constant and continuing claim of Government and a monument to a caring democracy—as, indeed, must the protection of privacy. The reference in the Gracious Speech to a Bill to protect personal information held on computers is timely. It has been a matter of increasing concern that for all the untold benefits that the new technology will bring, that fast-developing technology has created, or may create, the potential for an invasion of personal privacy on a scale hitherto unknown. Those malignant side effects of the computer society must be controlled, and whether or not we agree on the extent of the proposed legislation, I believe that that commitment will be widely supported.

However, a dark cloud, to which the Gracious Speech refers, casts a shadow over all our deliberations. None of us can regard with other than deep concern the human tragedy of unemployment which bedevils so much of the Western world today. Least of all can we do so in Scotland, where, inevitably, the draught of recession always seems to blow strongest. We are a United Kingdom, and those of us who live north of the border look to Westminster to ensure that in economic, as in constitutional, matters we remain one community. In the North, we suffer from the same economic and industrial ills as the rest of the country, only more so. We look for the same remedies, the same understanding, and the same opportunities for recovery. We have been particularly vulnerable to inflation, and I applaud the continued commitment in the Gracious Speech to bring it down still further.

For Scotland and for my constituency, however, I welcome especially the reference in the Gracious Speech to the determination to secure a sustainable growth in output, and thus a lasting reduction in the numbers out of work", and also the reference to further steps to encourage initiative and enterprise. The old industrial greatness of Scotland was built on enterprise, and I believe that, given the chance, we can do it again. The industrial countries of the West are all suffering from the same disease. The distinction will be the will to accept a strong and lasting cure and to pursue it with all the strength and nerve at our disposal. The Gracious Speech gives me the confidence that we shall do so, however hard or long that road may be. We owe that at least to those in our constituencies who suffer today without jobs. For them too, I welcome the reference in the Gracious Speech to the fact that Continued help will be given … to those worst affected by unemployment. I welcome that for them all but particularly for the young, whose lives lie before them. I believe that that must be the wish of us all.

In a similar speech some three years ago, my hon. Friend the Member for St. Marylebone (Mr. Baker) warned us of the narrow strip of land that lies between sycophancy and rebellion. I hope that today I have stood fimly upon it.

We in this House at this time represent an anxious nation in a troubled world. Our constituents look to us for leadership and commitment. I believe that the Gracious Speech provides the scope and the direction for us to give it to them, and I have much pleasure in seconding the motion.

2.57 pm

Mr. Michael Foot (Ebbw Vale)

It is the custom of this House, with which I am happy to comply, that the first speaker from the Opposition side on this occasion should pay tribute to the mover and seconder of the reply to the Gracious Speech. I am happy to do so on every ground, and I am sure that the House will appreciate the terms in which the motion was presented to us.

The hon. Member for Edinburgh, South (Mr. Ancram) suggested that some of us have not heard him addressing such large numbers. However, I recall some of the debates that we had in the House on devolution, when his party still had a policy on devolution, and I think that he contributed notably on that occasion. As for the right hon. Member for Bournemouth, West (Sir J. Eden), I remember his contributions to the debates that we had on the steel industry, when we still had a steel industry, when he spoke with great authority. However, I am sure that we all appreciate the terms in which he spoke today.

If the Prime Minister is looking for others to assist her on a future occasion—if she has a future occasion on which to make these nominations—I suggest that she looks even more carefully at some of the unemployment figures. I looked at them, and I was astounded by them. The percentage of unemployment in Bournemouth is 11.7 per cent. and in Edinburgh 12.2 per cent. Many people will find it remarkable that in two places such as Edinburgh and Bournemouth we should now have unemployment on a scale which previously was regarded as a disgraceful national average. That is an example of the situation.

If the right hon. Lady had gone further and selected someone in another part of Britain, she might have moved to the Midlands where I went the other day. I passed through the Selly Oak constituency. I read an article in the paper yesterday, which I am sure many hon. Members read, but just in case the Prime Minister missed it I shall read it to her. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) was quoted as saying: Manufacturing industry has not got its back against the wall—it's against the precipice … The thing I keep telling the Government"— I hope that he will be gratified that I am helping to tell them too— is that we are asking people to be their own executioners. He went on, in language which might almost have been used by the right hon. Member for Sidcup (Mr. Heath): We must not get so carried away with the new industries of computers, cable television and information technology. They are important and would have happened anyway … At the end of the day you have to manufacture the things people use in their everyday lives—the motor cars, the pots and pans, the mundane things. I hope that all that will be taken to heart, both by the Government and by everyone who has heard it. I thank the hon. Member for Selly Oak for his anticipatory speech. Perhaps he will not be selected to move the Address next year, but I hope that his words will still be remembered.

I look now at some of the items in the Gracious Speech. I shall not go through all of them because I wish to concentrate on those parts of it which refer to the overriding problems of unemployment and industrial depression. However, I must refer to a few of them.

It is said that: Proposals will be brought forward to amend the law on equal pay in the light of a recent judgment of the European Court. As the Minister who was responsible in 1975 for ensuring that the equal pay legislation introduced by one of my predecessors, Barbara Castle, was implemented, I am gratified that this proposal should be brought forward now because it means an improvement in Britain's laws on equal pay. I hope that there will be no talk of this law's application pricing women out of jobs. I give a special welcome to the measure because, as far as I can discover, it is the first measure referring to women's work or rights in Britain to be introduced by the Government which has not either taken away rights from women or thrown more women on the dole. Therefore, I am gratified that the Government have been prepared to bring it forward.

Then there is the statement that legislation will be introduced to improve the control of subsidies to public transport in the conurbations. I suppose that that means that subsidies to public transport in conurbations will be stopped—the "High Fares Bill" that the Government will introduce at some stage in our proceedings.

There is a chunk of measures dealing with privatisation or denationalisation—handing over industries to private concerns of one form or another. The right hon. Lady and the Government never seem to look upon public enterprise and industry as a means of dealing with the overriding unemployment problem. They just look upon them as places to plunder. As Field Marshal Blucher said when he came to London: What a city to sack. That is the way in which the right hon. Lady seems to look upon Britain's great public industries.

I say to the right hon. Lady that we must look even more carefully at her statement that: Legislation will be introduced to enable improvements to be made to health and social services. If the Government were proposing measures to improve the British Health Service, Labour Members would be extremely gratified. We give her the absolute assurance that if she introduces any such measure she will have the full support of the Labour Party in getting it through. I shall tell her now some of the items that we would like to see in a measure designed to improve the British Health Service.

We would like to see a decision to integrate family practitioner committees into the National Health Service, thus ensuring for primary care the importance and emphasis that it deserves; a return to the system whereby hospital consultants are genuinely full-time and not expected to obtain at least part of their income from private practice on the side; a decision to remove all pay beds from the National Health Service to stop the abuse of queue jumping by private patients; a cancellation of the £4 million tax concessions already given to the purchasers of private health insurance; and an end once and for all to the system whereby the wages of National Health Service workers depend on their willingness to take industrial action. We have had no signs whatever from the Government of an intelligent approach to settling that dispute. Above all, and finally, there should be the abolition of all charges for prescriptions, dental and optical treatment. We want to see a whole programme—[Interruption.] I hope that hon. Members will contain themselves for a moment because I have a special reason for wishing to underline the necessity for a fresh approach to the Health Service. I hope that the right hon. Lady will acknowledge that I am extremely fair in doing so. Even though it takes a second or so, I wish to quote to the House what she said at Brighton on this extremely important subject—[interruption] Yes, a very good speech. Let me take a chunk which, I agree, is good: But let me make one thing absolutely clear: the National Health Service is safe with us. As I said in the House of Commons on 1 December: 'The principle that adequate health care should be provided for all, regardless of ability to pay, must be the foundation of any arrangements for financing the Health Service.". I note the cheers from Conservative Members. The right hon. Lady will certainly win them from the Labour Party. If that is the principle which is to be sustained, she shall have our backing. That should dispose altogether of the argument. However, there was some other argument about the matter. I wish to put to the House now the exact proposition, as reported in The Economist, that was contained in the Think Tank report that was presented to the Cabinet—although we do not know yet how far it was discussed—on 9 September. The proposition was very different from what the right hon. Lady described at Brighton.

The Economist said: The paper suggests replacing the national health service with private health insurance: this could save £3 billion to £4 billion a year from a 1982–83 health budget of £10 billion. The problem is that the less well-off might underinsure, so the paper suggests that there might have to be a compulsory minimum of private insurance for everyone. In the meantime savings could be made by charging for visits to the doctor and more for drugs. I presume that that proposition was one of those which the right hon. Lady joined others in turning down. Indeed, as I understand it, the right hon. Lady refused to allow the matter to be discussed, or did not wish it to be discussed.

Let us come to the further evidence. The right hon. Lady also said at Brighton: We will tell the people the truth". I hope that today she will tell us the truth about what happened at the Cabinet meeting on 9 September. I doubt whether she will wish to elaborate on the details of the Cabinet's discussions. Of course not. I understand that. However, there has been so much public discussion, and public discussion by members of the Cabinet on the matter, that if keeping the Health Service safe in the Government's hands is so important we are entitled to have from the right hon. Lady today an account of what really happened and the part that she took in the matter.

I say that because of the reports that appeared at the time of the Brighton conference. Apparently it was arranged, no doubt by the Falklands hero, that there should be no discussion at the conference on that major matter. A report of what really happened appeared in the newpapers after the Brighton conference. One report said: A great many lies were being told at Brighton last week about the controversy over that report. Some of the most blatant were emanating from the Prime Minister herself, spread by colleagues and employees whose occupation it is to distribute such falsehoods. The untruth which formed the foundation of this web of inaccuracy was the claim that Mrs. Thatcher had never had anything to do with the idea that the welfare state should be dismantled in order to cut the costs. This has been the message from official and unofficial sources on the Downing Street network over the past two weeks, and it formed the backdrop for much of the discussion which took place at the Conservative Party conference last week. However, it should be clearly understood that it is a whopper and that every single member of the Cabinet knows it to be a whopper. What is even more unusual is that many of them were prepared to say so last week.

What really happened in the Cabinet is not an academic question. Members of the Cabinet thought it important that they should discuss the matter. We want to know which Ministers took part in the discussions and what part they played. We are entitled to know whether the Prime Minister was telling the truth when she said that the Health Service was safe in her hands.

The Think Tank report is important, not only because it affects the Health Service, important though that is, but because it puts forward the proposition that because of the low growth of the economy, its failure to grow appreciably, and because of its similar prospects, the cost of public expenditure is so great that the Government must examine the whole question of expenditure on the Health Service, insurance, education and defence.

That brings me back to the question of what has happened to the economy and what the Government believe will happen to it. The Chancellor of the Exchequer said that his May Budget was for industry and jobs. At about the time of that Budget the Chief Secretary to the Treasury said: The evidence of a start of recovery is all about us and not even the most blinkered pessimist could fail to see it. It would be harsh to put such a burden on the wilting shoulders of the Chief Secretary because the Prime Minister, in a speech a year ago, made optimistic prophesies about what would happen. She said then: Today, we see British industry slowly but inexorably improving". Before that she said: The combined tax incentives announced by my right hon. and learned Friend the Chancellor of the Exchequer in his last two Budgets"— that was before the one that he introduced for industry and jobs— are now widely recognised as providing the best conditions the world over for encouraging the birth and growth of new businesses … slowly and surely the British people will create the new jobs which these difficult years have made possible."— [Official Report, 4 November 1981, Vol. 12, c. 22-28.]

Since the right hon. Lady made that speech, unemployment in Britain has risen by over 300,000. That is bad enough, but the number of jobs lost in recent months in some respects has become even more severe. There are now fewer jobs in Britain than there have been since 1950. In the last few months the problem has intensified. Department of Employment figures published last week show that employment, as opposed to unemployment, fell by 182,000 in the second quarter of the year. That is considerably more than the 150,000 thought to be probable.

The Department of Employment predicts an acceleration in the rate of decline in manufacturing industries and a resumption of falling employment in the service industries. That is the real position.

The Prime Minister often prides herself upon being a realist. When we will she face the reality of her policies? When will she face the havoc that her policies have created for industry? What about the refusal of her Government to face their responsibility? The right hon. Lady continually suggests to the country—and she has had some success in persuading people to believe her—that the problem is similar in other countries. She says that the manufacturing problem is much the same elsewhere. She says that there is a world slump.

That claim was disproved in a recent answer to my hon. Friend the Member for Blackburn (Mr. Straw). The Minister of State, Department of Industry said: Between the first half of 1979 and the second quarter of this year, manufacturing output in the United Kingdom fell by 16 per cent. Between the same two periods, the level of manufacturing output in France did not change. In West Germany and the United States of America production fell by 2 per cent. and 10 per cent., respectively, and in Japan production increased by 13 per cent."—[Official Report, 25 October 1982; Vol. 29, c. 284.] Where is the honesty in the Prime Minister and the Chancellor of the Exchequer telling the country that our problems are the same as the problems in other countries?

Of course we know that there is a world slump. We knew that at the time of the last election, but a search of the right hon. Lady's speeches at that time reveals few references to it. What has happened since, in the past three years, is the most serious collapse of British industry for generations. The right hon. Member for Sidcup says that consistently. The CBI says that reasonably consistently, or at any rate has said it recently. We have been saying it for years. It is the truth. The right hon. Lady must at last accept her responsibilities. She is responsible for what is happening.

The Prime Minister says that she will tell the truth to the British people. Let us have the truth about taxation proposals. At Brighton the Chancellor said: We do need to go on cutting taxation. That was a remarkable statement, considering that he has not done much cutting, except for some of his friends. Perhaps remembering what he had done, he continued: This Government is not in the business of cutting taxes to buy votes. That sounds honest enough. To ensure that the gleeful message was heard correctly, he continued I give you this assurance: Tax reductions will be made only as and when we can afford them. That is not what the right hon. and learned Gentleman said before the election, is it? On 24 April 1979 The Sun carried an article headed: How the Tories will cut your tax. The right hon. Lady was the greatest tax-cutter demagogue of all time. She went from one end of the country to the other promising tax cuts. Instead of enjoying tax cuts the majority of people are now paying extra tax. The vast majority of British people are paying 15 per cent. more tax and, the poorer one is, the more one pays.

Some leaks have suggested that there will be a fresh round of tax cuts. Signs of that were given just before the Brighton conference, when it was said that £3 billion might be given away either next May or in an interim Budget. However, as The Times economic correspondent said, there has already been an increase in taxes of about £6 billion since the Government came to power. So, even if they give away £3 billion either next week or next year, it will not make up for the £6 billion increased taxation that has already been imposed by a Government elected on the promise of cutting taxes. Such figures underrate the huge increase in taxation for the vast majority of British people that has been imposed by this Government of tax-cutting demagogues, who were elected only because they promised tax cuts from one end of Britain to the other.

There must be swift action to deal with the problem. My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) outlined many measures in a speech a few weeks ago. The national insurance contribution must be cut immediately and measures must be taken to protect the industries that the hon. Member for Selly Oak said were threatened. Several measures must be taken this autumn to correct the devastating position.

During the closing moments of the CBI conference, and in an interview on Sunday, Sir Terence Beckett said: We need something of the imaginative scope of the Bretton Woods agreement". I and other Labour Members agree with that. He also said: We need to dust off the Brandt report. I am not sure in which pigeon hole or dungeon the Government have put that report, but we must produce it now. Sir Terence went on: The real worry now is the level of total world demand. We can't just allow it to keep on going down. Of course, we all need to be more effective and efficient, but worldwide we need business to go at. The plight of the third world is a very serious one. We need further development loans, which can be of great assistance.

The Prime Minister has been to several summits, each of which has been a larger fiasco than the previous one. She returned from Versailles without any prospect of achieving the objectives described by Sir Terence Beckett, which we need if we are to escape the crisis. The Government should not only introduce the measures described by my right hon. Friend the Member for Stepney and Poplar at the weekend but should organise an imaginative summit when we can try to put this slump-ridden world into reverse. I know that such conferences take time to arrange, but so far the Government have not shown the slightest inclination to achieve any such proposal.

The Government must also deal with world-wide disarmament. The best way to use the resources that are being squandered in order to alleviate the present appalling position would be to provide a much more imaginative and energetic attack on the nuclear arms race. Britain should be prepared to take the lead in such matters and to produce our own non-nuclear defence policy at the same time as joining other countries in trying to put real momentum behind the attempt to achieve multilateral disarmament. The idea that those two propositions cannot be achieved at the same time is a fundamental fallacy. One can present it in another way that reveals the dangers threatening the world. If Britain insists, whatever may be happening elsewhere, on building up fresh stacks of nuclear weapons, many other countries could do the same. We need a greater emphasis on the anti-proliferation drive. If we do not take such urgent steps in the next few months or years, the proliferation of nuclear weapons will become so serious that the world will be condemned.

As the right hon. Lady and her Government Show such little imagination on those matters, they must be removed. However, remembering especially the debates that will take place during the coming months until the British people decide those matters, I say again that the Government were elected on the proposition that they would cut taxes. They said that that was one of the main means by which they would restore something approaching full employment. The right hon. Lady has tried since then to persuade Britain, with assistance from her supporters, that there is no alternative to her desperate and dismal policy. Her Government were elected on a lie and are sustained on a lie. Our business is to tell the truth to the nation.

3.27 pm

The Prime Minister (Mrs. Margaret Thatcher)

I am happy to join the Leader of the Opposition in congratulating the mover and seconder of the Address. During his 29 years here, the House has listened to many notable contributions from my right hon. Friend the Member for Bournemouth, West (Sir J. Eden). His speech this afternoon was one of outstanding quality, drawing on his experience as a Minister and on his conviction that free enterprise and competition are the customer's friend. I pay tribute to my right hon. Friend's work as Chairman of the Select Committee on Home Affairs.

I have looked up my right hon. Friend's maiden speech in 1954. He spoke then of the Communist threat to the free world and called on us to be "spiritually determined people". The House listened today to a speech by one of its most determined Members. To my regret, my right hon. Friend will not seek re-election at the end of this Parliament. I shall bear it in mind that, if this Parliament should run its full course, that, as he said, would enable him to equal the record of Bournemouth's longest-serving Member of Parliament.

I also pay tribute to the speech of my hon. Friend the Member for Edinburgh, South (Mr. Ancram), who spoke with deep feeling about the growth of unemployment in Scotland. I am encouraged by his support for the measures that the Government are taking to secure a sustainable growth in output. My hon. Friend has a deep knowledge of the problems of Scotland, and the House listened to his speech with close attention.

My hon. Friend represented Berwick and East Lothian in the February 1974 Parliament. I like the story of how he was canvassing during that general election when a Labour voter said to him "You are quite the nicest conservative I have ever met", and then went on to say "If you were the candidate instead of that terrible belted earl, I would certainly vote for you".

The right hon. Member for Ebbw Vale (Mr. Foot) made his customary speech. It is difficult to say anything more about it than that, except perhaps two things. He mentioned the CBI survey and the CBI conference and some of its references to policies. I shall have something more to say about that later, but at the recent CBI conference Sir Terence Beckett is reported as having contrasted the CBI package with the £9,000 million boost demanded by the Labour Party, which he said was wrong and would be disastrous for the country. It would increase inflation, reduce Britain's international competitiveness, and would 'blow the top off the economy'". That is what the CBI thinks of the right hon. Gentleman's policies—that they would be disastrous for Britain.

The second matter in the right hon. Gentleman's speech that I must mention is unemployment. Indeed, he devoted a good deal of his speech to unemployment. I would agree with him that unemployment is a scar on our national life. I would agree with him that the tragedy of unemployment deserves the most serious and sustained response. But it is not enough to delve deeply into the surface of things, as the right hon. Gentleman has a habit of doing.

We owe it to the unemployed to make the most rigorous assault on tackling the causes and not just the symptoms of unemployment. [Interruption.] A major cause is the failure of the right hon. Gentleman and his right hon. and hon. Friends to attack the roots of unemployment when they were in office. It is no service to the unemployed to build false hopes by making false promises, as the right hon. Gentleman did in so much of what he said today. it is no service to the unemployed to promise to spend huge sums of money that the right hon. Gentleman does not possess to create jobs whose short-lived existence would be paid for at the expense of the jobs of some of those now in work.

Mr. Jack Straw (Blackburn)

Will the right hon. Lady give way?

The Prime Minister

Not at the moment.

The extra spending that the right hon. Gentleman wants would have to be paid for by higher borrowing, higher interest rates, higher taxes and, inevitably, by higher inflation. But employers who face higher taxes and higher interest rates often find themselves forced to shed jobs. Surely the right hon. Gentleman understands that. His recipe for more jobs has just three ingredients—borrow more, and more again, in order to spend more; pay back the lenders in debased currency by printing money; and control nearly everything in an attempt to hide from economic reality.

The right hon. Gentleman mentioned several other matters, with some of which I shall try to deal later in my speech, but first, in spite of what he said, I want to set Britain's problems in the context of some of the harsh truths of the world economic scene which he tried to brush aside. [Interruption.] If Labour Members do not wish to make a measured or deep analysis, they will, of course, ignore these truths. [Interruption.] I have come to the conclusion many times that they do not want to get rid of unemployment. They wallow in it.

The 1970s world-wide saw the highest inflation rates in living memory. Even before the sharp increases in oil prices in 1973 and 1979, inflation had destroyed the fixed exchange rate system agreed at Bretton Woods. Inflation, and the oil price increases, ravaged the economies of Europe and North America. Growth in the major OECD countries, which in the late 1960s and early 1970s averaged 5 per cent. a year, has now fallen to nil. The recession has spared few industries and no country.

Unemployment has been rising in other countries, too. Recession has hit some of them later than it hit us. [Interruption.] I know that Labour members do not want to listen to facts. They wish to fashion their policies without them. But they are going to listen to facts. [Interruption.] At any rate, I am going to talk facts. Whether they wish to listen is up to them.

Mr. Speaker

Order. The Leader of the Opposition had a good hearing.—[Interruption.] Order. It is no use hon. Members howling when there is an argument with which they disagree.—[Interruption.] Order. The House cannot function unless we allow free speech.

The Prime Minister

In the last 12 months for which figures are available, unemployment rose by 51 per cent. in Canada, 45 per cent. in Germany, 40 per cent. in the Netherlands, 17 per cent. in Italy, 15 per cent. in Belgium, and 10 per cent. in the United Kingdom. The figures are from the OECD standardised basis, seasonally adjusted.

If the answers to Britain's problems were as easy as the right hon. Gentleman thinks, why cannot the Governments—

Mr. Straw

rose—

The Prime Minister

I prefer to make my own speech. I have not yet had much opportunity to do so.

If the answers to Britain's problems were as easy as the right hon. Gentleman thinks, why cannot the Governments of those countries banish recession and unemployment?

The true answer has been given by responsible Governments throughout the world. It is that the reflationary policies which failed last time would also fail next time. Governments in most countries are convinced that a significant part of any stimulus to demand would increase public sector deficits and dissipate itself rather quickly as an increase in inflation". So said the OECD as recently as July this year.

There is no future in returning to the days when the Government's reputation at home and Britain's reputation abroad was that of a spendthrift and a supplicant. There is an ever wider international understanding of the need for an unremitting fight against inflation. Nevertheless, the right hon. Gentleman and his right hon. and hon. Friends are always telling us that there is a shortage of demand in our economy. That just is not true.

Total money demand in the second quarter of this year was about 11 per cent. higher than a year earlier. Real demand was about 3 per cent. higher, but output here rose by only 1 per cent. The difference was met by higher imports. The trouble was not shortage of demand, but that the demand was not met by goods produced here.

During the first nine months of this year, out of every 100 new cars bought in Britain, 58 came from abroad, but the trouble was not shortage of demand. According to CBI estimates, had we retained the share of home and export markets that we had 12 years ago, there would now be 1½ million more jobs in Britain. The task of retaining those jobs rested considerably on management and the work force producing goods at the right price and the right design to sell.

Last year British industry became more competitive. We began to catch up with our rivals. Our productivity increase was a record. Our pay settlements were more realistic. But this year other counties have been improving their performance too. That should spur us on to greater efforts, instead of Labour Members urging people to increase pay claims and to increase strikes. That is why it is important to achieve lower pay settlements and to go on improving productivity. There are no rewards for doing better if others are doing better still.

I come now to the CBI survey, of which so much has been said recently. The proposals of the CBI have been constructive throughout.

Dr. David Owen (Plymouth, Devonport)

Before the Prime Minister leaves trade unions, and in the light of the miners' ballot, will she explain why, having said in June that she hoped that before the election she would be able to bring forward proposals for postal ballots, they are absent from the Queen's Speech? Why have they been excluded?

The Prime Minister

We brought forward proposals for postal ballots in 1980. I think that the right hon. Gentleman means secret ballots. There is plenty of time.

The proposals of the CBI have been constructive throughout. The CBI has consistenly said that it wanted inflation down. It has come down. It is at its lowest for 10 years. When the Labour Government left office, it was 10.3 per cent. and rising, notwithstanding the Labour Government's panoply of controls. It is now 7.3 per cent. and falling. There is a good prospect of reaching 5 per cent. in the spring of next year. But even a 5 per cent. annual increase in prices halves the value of money in less than 15 years, so we must get inflation down still further.

The CBI has also said that it wanted interest rates down. Over the past 12 months they have come down 6½ points. That saves industry some £1,500 million a year.

The CBI said that it wanted help with energy costs. My right hon. and learned Friend's Budget—in March, incidentally, not May—gave industry relief worth £160 million this year.

The CBI asked for a reduction in Labour's national insurance surcharge. We did that, too. It wanted help for small businesses. We introduced the best range of measures in the Western World. [HON. MEMBERS: "Oh!".] Of course, the Opposition are not interested in good news. They are not interested that we have the best record for getting down inflation, which is far better than that of the Labour Government. We have a good record for getting down interest rates. We have a good record for helping energy prices. If the Opposition would lend us a hand with getting coal prices down, electricity prices would come down further. But the Opposition are interested not in getting electricity prices down, only in trying to boost coal prices.

The CBI has also urged us to restrict public spending. The Government have completed this year's annual review of public expenditure. For next year expenditure will be held to the total of £120.5 billion announced at the time of the last Budget. That includes the cost of the Falklands campaign and garrison, a continued real increase in NHS expenditure, an increase of over £100 million in provision for law and order, and £950 million for youth training, including our new and ambitious youth training scheme, which starts next September. The point is that we have managed to do all that and hold the public expenditure totals to the amount that was announced last March. That is a considerable achievement.

Mr. Guy Barnett (Greenwich)

The Prime Minister will recall that one of the CBI's requests was that she should get the Brandt report off the shelf, give it a dust and see what could be done about it. Is she aware that, in addition to the campaign against inflation, there is also the campaign against world poverty? About 700 million people are living in absolute poverty. What positive steps has the right hon. Lady taken on the international scene to ensure that something is done about that?

The Prime Minister

One of the ways of helping to deal with international poverty is by keeping an open trade market. I shall come to that shortly.

The right hon. Member for Ebbw Vale and many other hon. Members have over the months urged us to increase capital expenditure especially on construction. I agree. We need more capital spending by local government and in the public sector generally. I agree that it is vital to maintain the nation's infrastructure, its roads, its buildings, its water supply and its drains.

Indeed, we are so much in agreement with those propositions that we earmarked last year and this year very large sums for precisely that purpose, all within our total public expenditure limits. What happened was that actual expenditure on water, housing, local authority capital and nationalised industry investment fell short of our allocation by a staggering £1,600 million. It is a sorry catalogue: housing underspend £500 million; local authority capital other than housing £200 million; water £70 million; nationalised industry investment £900 million.

What a difference it would have made if those capital expenditure plans had been fulfilled. Most of the authorities certainly spent the money, but not on the purposes for which it was intended. Some of them sacrificed investment and therefore jobs in order to finance higher pay awards. What clearer demonstration could there be that more pay for some means fewer jobs for others?

In the nationalised industries this year, we provided for capital investment 26 per cent. greater in cash terms than was spent last year. This year, too, many of these and local authorities seem to be underspending their capital programmes. I have therefore written to the local authority associations and to the group of nationalised industries chairmen urging them to make full and proper use of the sums we have allocated to capital—not, I stress, to increase their total expenditure but to make proper provision within that total for capital investment.

Mr. Gerald Kaufman (Manchester, Ardwick)

If the local authorities go ahead and carry out the Government's advice to increase their capital spending, will the Prime Minister guarantee that the servicing of the borrowing that is necessary will not mean that they will be penalised for overspending?

The Prime Minister

The right hon. Gentleman cannot have heard what I said. He heard only part of it. I urged local authorities to spend on capital the sums allocated to capital within the total capital expenditure that we had budgeted for. Therefore, by virtue of that definition, no increase in borrowing would be required.

Mr. Kaufman

The right hon. Lady has not answered my question. Will she now say that the revenue consequences of the borrowing by the local authorities to carry out her advice will not count against spending targets and, therefore, they will not be subject to any penalty for overspending?

The Prime Minister

The right hon. Gentleman has put his question on a false premise. I am talking about capital expenditure within the total amount that we have budgeted for. Therefore, no question arises of extra expenditure. As the right hon. Gentleman knows, the local authorities can also spend some of their capital receipts from the sale of council houses, if more Labour authorities will sell council houses.

But if the control of public spending is important to our economy, so, too, is the health of the international trading system. With around 30 per cent. of our GDP exported we are more affected than most other major industrial countries by a deterioration in world trading conditions. When those conditions are as difficult as they are today, it is not surprising that those who seek an easy life look round for easy solutions. "Don't trouble to keep our costs down", they say, "just keep low cost imports cut. Protection will shield you from the chill wind of competition."

For a time, the protection road is more comfortable, especially for the slow coaches, but there would be no surer way of destroying our own competitiveness. Why should companies exert themselves to reduce their costs and improve their products if their overseas competitors could be shut out of our domestic market? They would, instead, subside into a comfortable mediocrity—with poor design, outmoded technology, lower production, higher costs, poorer job prospects and the slow suffocation of effort and enterprise.

That would be the effect on producers. Consumers would pay higher prices for a more restricted range of poorer quality goods. They would be losers all round.

We have, and need to have, strict quotas for textiles and footwear and we have special arrangements for steel through the Community. We must have these to cushion the pace of change but if, as a general belief, we reject protectionist measures for ourselves, equally, and just as emphatically, we must oppose the efforts of those countries which raise protectionist barriers against us—especially those countries to whose products we offer virtually an open door.

The one-sided trade agreement of 1970 between the Community and Spain in which our tariff on cars is 4 per cent. and theirs is 37 per cent. is one obvious case where we have every cause to feel aggrieved. In the case of Japan, exports to our free and open markets have doubled in the past five years, but few British companies—despite determined efforts and first-class goods that have sold well elsewhere—have managed to surmount the obstacles which make the Japanese market so difficult to penetrate.

For example, in 1980 we sold £1,700 million worth of aerospace products world-wide, only £30 million of which were sold to Japan. Moreover, we sold more than £170 million worth of vehicle components to the United States, another £280 million worth to Germany, but only £7 million worth to Japan. That is clearly unfair and leads to a great imbalance of trade. We shall be pursuing these matters in the special GATT meeting this month and through the European Community.

We hope that those countries with unnecessarily protective markets will realise that it is in their own long-term interests to have a more equitable and open trading relationship with us and other nations. Our aim is to open up world markets. To do that we must fight the protectionism that is imposed by others.

The right hon. Member for Ebbw Vale referred to some of the legislative proposals in the Gracious Speech. Many of them are designed to help industry to become more competitive, more efficient, and to take advantage of the opportunities offered by new technology.

The Bill to denationalise British Telecommunications will be the most ambitious measure of that kind ever to be presented to the House. It offers real opportunities for growth in the telecommunications sector.

We are opening up the electricity industry to competition and taking steps to introduce private capital into British Shipbuilders. We are encouraging British industry to exploit the latest technologies—the development of cable systems is an example. We shall be announcing our conclusions on this and on Lord Hunt's report on cable television soon.

We are also introducing legislation on data protection. It will protect individuals and enable British firms to satisfy the international standards on data protection.

The programme will also contain measures to reduce bureaucracy and the overheads on industry through a simpler system of building controls—which is what the construction industry has always wanted—a simpler structure for the water industry, a transport Bill which will establish a reasonable and lawful level of subsidy and help to keep down the burden of rates on industry.

There is one other measure that I should like to mention. We shall be extending to 50,000 tenants of municipal leasehold property and to 80,000 tenants of charitable housing associations the right to buy their own homes. That will further extend the right that has already been exercised by one-third of a million families under this Government and which is available to many more.

Both management and unions are beginning to settle back into the habits of a nation with steady prices. For the first time in more than a decade we see trade union negotiators who are willing to put their signatures to pay deals that are to last for two or even three years—because they are confident that inflation will not be allowed to get out of hand again, so long as this Government are in power. There could be no surer vote of confidence in our economic policy.

For their part, companies are beginning to return to the capital markets to raise fixed-interest stock—a practice which completely disappeared during the years of very high inflation.

Many of our critics have become reluctant converts to realism. Those who, only a few months ago, were bandying tens of billions as the minimum scale of reflation required have been sobering up recently. Even the right hon. Member for Stepney and Poplar (Mr. Shore) seems to have been a little less astronomical in his demands—or perhaps a little less explicit.

The Social Democrats used to call for £7 billion—or was it £8 billion?—reflation. [HON. MEMBERS: "No."] Now their recipe for recovery calls for a mere £3 billion or £4 billion. The truth is that they know that it will not wash any more. The electorate is profoundly sceptical of the big spenders. The easy fix finds few takers.

In the trade unions, the membership have adjusted to an era of low inflation rather more quickly than some of their leaders.

Time and again, the secret ballot shows that a fair and reasonable offer is likely to receive a fair and reasonable response. High and accelerating rates of inflation—[Interruption.] The nurses are being paid more under the present Government than they were under the previous Administration. The Labour Government left the nurses with a promise to go to the Clegg commission. We honoured that, whatever the right hon. Member for Leeds, East (Mr. Healey) may say. His stewardship took us to the IMF as a supplicant. Moreover, he gave the nurses and the Health Service a far worse deal than they are getting now.

Time and again, the secret ballot shows that a fair and reasonable offer is likely to receive a fair and reasonable response. High and accelerating rates of inflation were to blame for much industrial unrest and led to so many of the unreasonable pay settlements of the past 10 years.—[Interruption.] At no stage have I egged people on to demand increased pay. Nor have I ever supported a strike, unlike Opposition Members who do everything they can to support strikes. Nor, indeed, have I supported statutory incomes and wage controls. Without them, we now have lower inflation than at any time during the previous Administration and, indeed, the lowest inflation for 10 years. We shall take it down even further.

For the benefit of Opposition Members who do not want to hear, I shall repeat myself. Under this Conservative Government inflation is at its lowest level for 10 years. Interest rates are falling fast and the public deficit is under control. The Government go to the IMF as creditors, not supplicants and we have laid the foundations upon which enterprise and inventive genius can make good use of the opportunities. We have sufficient faith in British industry and the British people to believe that they will make use of those opportunities.

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

Does the right hon. Lady admit that she has used unemployment to restrain wages?

The Prime Minister

That is simply not true. As the hon. Gentleman knows, Britain became uncompetitive largely because it paid itself 90 per cent. more during the 1970s for producing the same amount while other countries overseas paid themselves amounts very similar to the increase in output. If right hon. Members opposite will not recognise that, they will recognise nothing.

This Government have earned for Britain abroad a reputation for resolution in maintaining and defending the values of the free world, for reliability as an ally, for determination in honouring our obligations both close to home and across the world and for the firm pursuit of our legitimate national interests. We shall maintain that reputation.

Mr. Tam Dalyell (West Lothian)

Will the right hon. Lady give way?

The Prime Minister

No, I intend to go on now. I have given way a great deal. It is time that I continued my speech.

The principal threat to our security and our values has not changed. We remain committed to our four NATO roles—the central front in Europe, the eastern Atlantic, the defence of the home base and the strategic deterrent.

Mr. Dalyell

Will the right hon. Lady give way?

The Prime Minister

No, Sir.

We are also strengthening our capability to deploy out of the NATO area at short notice. No NATO Government find it easy to increase defence spending at a time of recession. We shall maintain our commitment to plan for 3 per cent. annual increases in defence spending in real terms, and we shall provide funds for the Falklands on top of that.

Mr. Dalyell

Will the right hon. Lady give way?

The Prime Minister

No, Sir.

We shall implement NATO's decision—

Mr. Dalyell

Will the right hon. Lady give way?

The Prime Minister

No, Sir.

We shall implement NATO's decision to install cruise and Pershing missiles from late 1985 onwards if the talks in Geneva on the zero option are not successful.

Mr. George Foulkes (South Ayrshire)

The Iron Lady.

The Prime Minister

The voices raised in favour of unilateral disarmament are music to Soviet ears.

Mr. Denis Healey (Leeds, East)

rose—

The Prime Minister

That campaign is positively harmful to our search for a balanced reduction in the nuclear weaponry of both sides.

Mr. Healey

rose—

The Prime Minister

I shall give way in just a moment.

That campaign ignores the fact that the defence policies of the Western Alliance have preserved the peace for 37 years. Unilateralism would put at risk our security and our way of life. I give way to the right hon. Gentleman.

Mr. Healey

As I heard it, the right hon. Lady said that she planned to introduce cruise and Pershing from late 1985 onwards. That is two years later than the date that she had previously fixed. Was it a slip of the tongue?

The Prime Minister

I am sorry if it came out as 1985. It will be from late 1983 onwards.

Mr. Dalyell

Will the Prime Minister give way?

The Prime Minister

I should prefer to get on now.

Mr. Dalyell

rose—

Mr. Speaker

Order. I think that the Prime Minister has made it clear that she is not giving way. Like everyone else, the Prime Minister, or whoever is called to speak, has the right to decide when to give way.

The Prime Minister

Those who argue that the assumptions on which we have nuclear weapons are wrong, that the Soviet Union does not want to or could not invade Western Europe, or would not do so for fear of American retaliation, and that the nuclear deterrent is therefore not necessary, must ask themselves whether, if in Government, they would take the risk of assuming that their analysis was right. This Government will not put the nation's interests and security at risk in that way.

Mr. Dalyell

Will the Prime Minister give way?

Mr. Speaker

Order. The hon. Gentleman must understand that merely jumping up constantly attempting to intervene makes it no more likely that he will succeed.

Mr. Foulkes

The right hon. Lady might change her mind.

Mr. Speaker

Order. The Prime Minister must be allowed to continue if she is not giving way.

Mr. Foulkes

You never know. She might summon up the courage to change her mind.

The Prime Minister

The behaviour of the Soviet Union continues to cloud East-West relations. The Soviet arms build-up has not stopped, or even slowed down. This year alone, 132 SS20 warheads have been installed.

Soviet forces in Afghanistan have not been withdrawn but have been strengthened. Martial law in Poland, far from being lifted as the regime in Warsaw has repeatedly promised, has been used to declare illegal a trade union organisation which a year ago numbered 10 million members.

Mr. Dalyell

rose—

The Prime Minister

We want to build a safer and more co-operative relationship with the countries in the eastern half of our continent but, as I said in Berlin last week, that will require them to have more respect for international law and human rights than we have seen from them in recent years.

Mr. Dalyell

Will the Prime Minister give way?

The Prime Minister

No.

In Europe, I have had two constructive meetings with the new German Chancellor—

Mr. Dalyell

rose—

Mr. Speaker

Order. It is impossible for anyone to make a coherent speech when the hon. Gentleman is constantly rising in an attempt to intervene. He must not get up when it has been made clear to him that the Prime Minister is not giving way. I must ask him not to gel up again.

The Prime Minister

I look forward to meeting President Mitterrand in Paris tomorrow.

I welcome the progress that the Community has recently made in settling some of its problems. We are now a short step from agreement on a common fisheries policy, which my right hon. Friend the Minister of Agriculture, Fisheries and Food has negotiated with such skill, and which our fishing industry has welcomed. I hope that the Danish Government will now join the other nine member States in implementing that policy.

Last week the problem of Britain's 1982 budget refund was also satisfactorily settled. With that behind us, the Government now look to their European partners to make a serious, fresh attempt to solve the more fundamental budget problem. Equity and commonsense demand that a long-term solution be found—and soon. The present situation cannot and will not continue.

The Gracious Speech refers to the Falklands, my right hon. Friend the Secretary of State for Defence has just returned and has reported that the Services are doing splendid work in restoring conditions of life on the islands and in constructing the facilities necessary for their permanent defence.

A runway has been completed at Port Stanley to provide for an air link with Ascension and for air defence operations by Phantom aircraft.

A great deal of work is in hand to ensure that the difficult living conditions which our troops have had to endure since the re-possession of the islands will be substantially improved before the next Falklands winter.

Good progress has also been made on restoring essential services and on the immediate tasks of reconstruction. The Government have been studying the recommendations in the Shackleton report for long-term development and will take decisions in the near future.

Mr. Dalyell

rose—

The Prime Minister

The defences of the islands must be sufficient to deter and defeat any future threat. Everything possible will be done to create a secure and bright future for the islanders who have suffered so much and who have earned our admiration for their courage and their resilience.

Today marks the fourth Gracious Speech of this Parliament.

Mr. Edward Rowlands (Merthyr Tydfil)

Will the right hon. Lady give way?

The Prime Minister

No, Sir.

Although there is a full programme of legislation, not all of it is entirely uncontroversial, I know that my right hon. Friend the Patronage Secretary and the right hon. Member for Bristol, South (Mr. Cocks) will do their utmost to get the legislative programme through expeditiously—preferably before the schools in Scotland break up for the summer holidays which, I understand, is at the end of June or the beginning of July.

Mr. Rowlands

rose—

The Prime Minister

By the end of this Session the Government will have completed nearly all of the programme that it placed before the British people three and a half years ago, but there will still be plenty of work to do before this Parliament runs its full term.

The progamme contained in this Gracious Speech will continue on the consistent course that the Government have followed since May 1979: the restoration of honest money and sound finance; the control of public borrowing, lower interest rates and lower inflation; a realistic link between earnings and output; the creation of conditions in which Britain will become competitive again; the introduction of private capital into the public sector; freer and fairer world trade; replacing monopoly by competition; the extension of home ownership; an unrelenting war on crime; and a determination to strengthen our defences and to stand up for British interests throughout the world.

It is a programme which deserves, and which I believe will receive, the support of the House.

4.10 pm

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I readily join the Prime Minister and the Leader of the Opposition in their tributes to the mover and seconder of the motion on the Loyal Address.

The right hon. Member for Bournemouth, West (Sir J. Eden) was kind enough to refer to my recent visit to Bournemouth in the company of a large number of Liberals and some Social Democrats. I am happy to assure him that we received a warm welcome from Bournemouth. I pay tribute to the far sightedness of the Bournemouth council which, knowing of our intention to return there in future, decided to build a conference hall twice as large as the one that we used this year.

The most memorable remark of the right hon. Member for Bournemouth, West was that the heath land was fast disappearing. I can only assume that he has been reading the article in the Daily Mirror written by the right hon. Member for Sidcup (Mr. Heath). That remark is true with regard to the present policies of the Government.

The hon. Member for Edinburgh, South (Mr. Ancram) made the kind of speech that we have come to expect of him—one of felicity and kindness. The hon. Gentleman is a constituent, although perhaps not a supporter, of mine. I have a particular fondness for Edinburgh, South, because it was the constituency in which I made my first ever public speech in a by-election in 1957 in support of the then Liberal candidate, Mr. William Douglas-Home. He was the first in a long line of Liberal candidates for whom I have spoken, but who were not elected to the House.

I join in congratulating both the mover and the seconder of the motion for the pleasant way in which they began our proceedings.

I make no apology for not doing a tour d'horizon over the Government's programme or the Queen's Speech, or for concentrating on what I regard as the main failure of the Address—the failure on the part of the Government to show any change of heart or any intention to deal with the appalling problem of unemployment. The title of the Gracious Speech might be "No change. A wasted year ahead." The country would be better off, if this is all that the Government have to offer us as a full legislative programme, to have the chance to vote for the return of a different kind of Government.

The Prime Minister began by referring to the worldwide recession. This is a theme with which we are now familiar, but the right hon. Lady was highly selective in the statistics that she used. It would be fair—I hope that the right hon. Lady agrees with me—to look at the levels of unemployment among our competitors over the whole period of her Government, not just for the last little part of it, when other countries have been rising from relatively low to high unemployment levels.

If we examine the period since the Government took office, we find that unemployment has risen in Japan by 20 per cent., Canada by 44 per cent., France by 50 per cent., America—partly because it followed some of our own foolish policies—by 75 per cent., and in the United Kingdom by 127 per cent. While we can accept that the world recession has had, and would have had whatever Government were in power, some effect on the increase in unemployment, undeniaby the extra increase in unemployment that we have suffered in comparison with these other countries is due entirely to the chosen policies of this Administration.

We have reached a stage where manufacturing output is back to the level of 1967 and manufacturing investment is back to the level of 1963. A few minutes ago, the Prime Minister chose to chastise local authorities for their failure in capital investment programmes. In doing so, she demonstrated that she knows even less about local government than I do, which is saying something. Even I understand that the right hon. Lady's charge that local authorities have been taking part of their capital allocation and spending it on higher wages is absolute nonsense. It cannot be done.

I hope that the right hon. Lady receives some tart replies to the letters that she is proposing to send to local authorities because the one complaint that I find from local authorities of every political persuasion is that they have been financially mucked about by the Government. It is impossible to tell them "Go and spend more of your capital allocation" unless they are expected to ignore the implications. That policy would have an effect on their rates. If they put their rates up, the Government will use the punitive clawback procedures against them. The local authorities are in a Catch-22 situation because of the policies of this Administration.

That is not the whole record of the Government. During their period of office, there has been a 65 per cent. increase in the number of bankruptcies, and a 300 per cent. increase in the number of liquidations. These figures conceal a terrible decline among hitherto prosperous companies in every sphere of our industrial life. Perhaps most ominous of all for our long-term future is the fact that over the period of the Government the number of apprenticeships in manufacturing industry has more than halved. That is a disastrous feature of our future manufacturing output, for which we shall pay the penalty over many years to come.

On the credit side, the Prime Minister can say that the inflation rate is down from the 10.3 per cent. she inherited to 7.3 per cent. It is right to give the Government credit for that. However, politics is about making value judgments between different options. The Prime Minister is saying that the price paid for the 3 per cent. fall in inflation—which we welcome—is worth paying. The Liberal Party fundamentally disagrees with that. We do not believe that the unacceptably high level of unemployment in our society is a price worth paying for that relatively modest decline in the impact of inflation.

The right hon. Lady ignores the facts when she talks about realism in pay, and does not accept that it is caused by fear of unemployment. If the upturn in the economy ever comes, as even the right hon. Lady must hope that it does, that restraint will be removed and nothing has been done by the Government to alter the procedures for wage bargaining or to free us from the possibility of inflation increasing again.

It is right to assess the true cost of the unemployment policy. I have read some political analyses which suggest that the Government can get away with their present programme because there are only 3⅓ million people unemployed, that the high levels of unemployment tend to be in the areas mainly of high labour concentration and that politically the impact is not all that great. I do not believe that for a minute. The impact of unemployment is colossal on the country as a whole. Unemployment is devastating for those without work, but it also has an impact on the rest of society.

The present financial cost of the Government's policy, in benefits paid out and taxes forgone, is estimated at £15 billion. That represents £1,000 a year for every household in the land. It is an enormous piece of the public expenditure cake. What has happened under this Government is that unemployment has become the cuckoo in the expenditure nest, squeezing out other items to which any rational Government would wish to give priority in public expenditure. That is why we have the Think Tank reports about the NHS, the education services, and so on. There is a limit to what every Government can afford to spend, and if so much is earmarked for unemployment benefit, other things suffer.

There is another consequence of unemployment. The economic failure of the Government has meant the abandonment of several specific and clear promises made by the Conservative Party in its manifesto for the last general election. I shall deal with just two points which affect many people. The manifesto says: We shall … at all levels … reward hard work, responsibility and success; tackle the poverty trap". However, the Government incentives have achieved the opposite.

The report of the Institute of Economic Affairs shows that about 20 per cent. of the work force are now at risk from poverty and unemployment traps. They have seen their incentive to work stifled by the tug-of-war between the tax system and the social security system. The report said that more than 10 million people had their incentive to work undermined by means-tested benefits, and that for most people a wage of three-quarters of average manual earnings was hardly worth working for because supplementary benefits could provide at least 80 per cent. to 90 per cent. as much spending power, and even more for some.

That is an appalling state of affairs—and not simply for 1982. It is appalling when set against what the Conservative Party specifically promised at the election. It promised to cut income tax. As the Leader of the Opposition said, that policy has been carried out for those in the higher tax bracket. The total tax burden on an average family, including indirect taxation and national insurance contributions, but excluding child benefit, has increased in real terms by 14.7 per cent. during the lifetime of the Government. That is one of the sharpest rises in taxation on ordinary families that has ever been experienced.

At the end of the Conservative manifesto, there appeared the sentence: The years of make-believe and false optimism are over. My charge is that "make-believe" and "false optimism" have become the stock-in-trade of the Government. At the beginning of the year, the Prime Minister told us in a New Year message that

1982 has all the signs of being a year of great opportunity. In 1981, she said there is real hope that a year from now things will be looking distinctly brighter. The false optimism positively runs through every weekend ministerial speech. There is a great gap between the promise and the performance.

The right hon. Member for Sidcup was right when, in an article in the Daily Mirror today, he said: We cannot delude ourselves any longer. We have not just turned the corner. There is no light at the end of the tunnel. Everything will not work out all right in the end. There are other, intelligent voices within the ranks of the Conservative Party who are increasingly questioning the direction of the Government's policies. I wonder how many hon. Members read the interesting article by the hon. Member for Bath (Mr. Patten) in The Observer on Sunday. He referred to the intellectually ramshackle case which we are obliged to swallow. That is strong language from a supporter of the Government.

There is a further, serious cost of the unemployment trend—that of maintenance of law and order. Some of the areas of high unemployment coincide with areas of dramatic increases in the crime rate. On Merseyside, which is an area of high unemployment, one crime is committed every four minutes. Since the general election, robberies and woundings have risen by 40 per cent., burglaries by 35 per cent. and criminal damage by 60 per cent.

In April the Prime Minister said that there was no clear connection between the levels of crime and unemployment. If she has read the Scarman report since then, I hope that she will recognise the argument that there is a complex interplay between the high level of unemployment and crime. If she does not believe Lord Scarman, or any hon. Member who may speak in the debate, let her think back to what her Home Secretary said when he spoke for the Opposition on 27 February 1978. I shall quote him in full. He said: There has been a dramatic rise in unemployment among boys and girls". He was talking about levels that were one-third of those today. He said: That is the responsibility of this Government. Let no one have any doubt about the danger that that has created in terms of crime of all sorts, violence and vandalism. If boys and girls do not obtain jobs when they leave school, they feel that society has no need of them. If they feel that, they do not see any reason why they should take part in that society and comply with its rules. That is what is happening and, wherever we sit in this House, that is what we have to recognise."—[Official Report, 27 February 1978; Vol. 945, c. 40.] The Home Secretary no longer sits on the Opposition Benches. He now has responsibility as Home Secretary and deputy to the Prime Minister. I hope that he recognises the truth of his words now even more forcibly than he did then.

Of course, the Government deserve credit for having restored the manning levels of the police forces. But one item in the Gracious Speech that we shall view with the greatest suspicion is the Government's belief that the way to deal with the crime wave is to give the police new and contentious powers that might only worsen relations between the police and the public. It is not fair to the police to use them as firemen—putting out fires that have been caused by social unrest, which is the result of the Government's economic policies. The Government should deal with the root cause of the crime wave, which is the economic condition of Britain.

Instead of concentrating on that aspect—anguish and distress were mentioned only in passing in the Gracious Speech—there will be a series of irrelevant measures that will bring us back to the old battle between privatisation and nationalisation. When will we learn the lesson of the post-war decline of some of our major industries? When will we remember that the British steel industry has five times been shuttled backwards and forwards across the frontier of private and public ownership? Politicians have the nerve to criticise unions and poor management when the industry has been interfered with politically for a long time.

Neither I nor my party are against pragmatic adjustments in the frontier between the private and public sectors. There is no reason why people should not have a wide choice of telephone instruments, rather than obtaining them from one public supplier. There is no reason why a public industry, such as British Rail, should operate hotels. But making such adjustments is different from the doctrinaire approach that the Conservative Party is adopting towards privatisation. We are reaching a stage in the House where we do not have to wait for Bills to come forward before the Opposition pledge themselves to undo them before they have considered them. That is ludicrous. Because of the Government's deep-seated approach to privatisation, and in view of the Prime Minister's reaction to both the Falkland's service at St. Paul's and the recent report of the Church of England on nuclear disarmament, I am surprised to find that the Church of England is not among the candidates for privatisation.

We must take the issue more seriously. The Director-General of NEDO, Mr. Chandler, has pleaded with the Government to declare a truce over the frontiers of ownership and to concentrate instead on efficiency. He spoke about the success of Governments imposing changes on industry that were irrelevant and damaging to industrial success. He said: Nowhere has this been more evident than in the obsessive debate about ownership which has completely overshadowed discussions on efficiency … Party political links hang like albatrosses round the necks of both the CBI and TUC whose prime responsibilities should be the health of industry which can only be attained by the joint efforts of their members over time. That is true.

The report produced by the committee under Sir Richard Cave of the CBI was also right when it said: There is no doubt that outmoded and adversarial attitudes and sheer reluctance to change by both managers and employees have contributed greatly to the loss of jobs.

I accept that Governments do not usually listen to Opposition parties. However, I hope that the Government will listen more seriously—if not to us, at least to some of the proposals that the CBI has brought forward. It has challenged the Government to cut unemployment by 1½ million during the next five years. That is similar to the programme that we produced in the joint commission between the Liberals and the SDP entitled "Back to Work". We believe that not only should the Chancellor of the Exchequer abolish the national insurance surcharge—which may be in his mind—but that there is a case for the public financing of projects that will result in contracts for private industry.

If we take the Prime Minister seriously in what she said towards the end of her speech about the sucking in of imports—and I agree with her—the Chancellor should be thinking not of another consumer-led boom, but of an investment-led boom. That is a major difference in approach between the Government and ourselves.

Sir Terence Beckett, in his speech to the CBI, spoke about the aid and assistance that must come from the national pot. He said: Industry is like a squeezed lemon, absolutely dry. He stressed that it is the responsibility of the Government now to take the initiative.

All over the country, we can see work waiting to be done. There is no shortage of candidates for the kind of employment projects that we have suggested. The Prime Minister talks about spendthrifts. I have to tell her that, even though I may not have great faith in the Treasury economic model—she should have, as she is operating it—we have put our proposals through that model and they have been found to be consistent, cost-effective and workable.

We are going to have a wasted year for another reason. Nothing will be done during this coming year to bring the two sides of industry together. Industrial partnership is not a route that is open to the Conservative Party because of its lack of sympathy, knowledge and interest in the problems of the shop floor—

Mr. John Stokes (Halesowen and Stourbridge)

Absolute rubbish.

Mr. Steel

—most of all epitomised by the hon. Member for Halesowen and Stourbridge (Mr. Stokes) who now addresses me from a sitting position. It is also a route not open to the Labour Party. That party, as all now clearly see from the current arguments going on inside it, has become virtually a wholly-owned subsidiary of the trade union bosses.

The country needs not just a change of Government, but a change of the present political system where the two sides of industry appear to be backed by the two sides of this House of Commons. The time has come for a major advance towards industrial partnership to help to pull this country out of the rut. It is a question not simply of getting Britain working again, but of getting Britain working together. For that to happen, this Government will have to go.

4.31 pm

Mr. Gareth Wardell (Gower)

I feel sure that the House will offer me its especial indulgence for the first maiden speech in this new Session of Parliament. The Gower constituency, which I have the honour and privilege to represent, has been associated in this House with another name for 22 years. I refer, of course, to the name of Ifor Davies. On 3 November 1959, Dr. Davies made his maiden speech. I should like to pay tribute to his great services to the House, to its debates and discussions. As he was, I am proud to be a Welsh-speaking Welshman. I shall endeavour to the best of my ability to follow Dr. Davies's great regard for parliamentary democracy and his love and affection for the traditions of this, the Mother of Parliaments.

The Gower constituency is well known to hon. Members for its natural beauty and its fascinating seascapes. But the majority of people of Gower do not live on the peninsula. They live in the valleys and on the interfluves of the Loughor, the Tawe and the Amman, where coal mining, tin plate and nickel remain key industries. It is vital to the preservation of my constituents' dignity that the Government spare no effort to infuse expansion into those industries. Behind the mask of Gower's outstanding natural beauty lies the worst variety of unemployment—chronic and stubborn.

In July 1979 in the county of West Glamorgan, in which lies the constituency of Gower, one in five of those registered as unemployed had been on the dole for more than a year. Three years later, the figure is two in five. Over the same period, the percentage of unemployed 18 and 19-year-olds on the dole for more than a year has risen from 7.4 per cent. to 25 per cent. On my visits to plants in my constituency, the overwhelming impression gained is the low morale of the work force. It views the future with trepidation. That leads not to greater effort to improve productivity, but to the opposite. It is a vicious circle of despondency combined with a temptation to indulge in higher absenteeism with its attendant negative feedback on productivity.

The key to future prosperity in Britain, if Gower is an accurate microcosm, is the adoption of measures to inspire confidence and hope in the work force. I see little in the Gracious Speech that encourages me to go back to my constituents and give them that confidence. Without that confidence, every movement of the exchange rate and every movement in the structure of interest rates, in whichever direction and in whatever fascinating esoteric combination, will be of little significance. It is absurd that we see around us so many desperate tasks that cry out for action while the human resources necessary for those tasks languish in underpaid and involuntary misery. The system fails to channel the wasting resources into the satisfying of desperate needs.

The tourists to Gower do not see, and do not want to see, the rotting windows, the damp bedrooms, the badly fitting doors and the cracked pavements of our older council house estates. The tourists do not see the raw human sewage pouring into the kitchens and living rooms of my constituents in Clydach after periods of heavy rainfall. The tourists do not see old-age pensioners struggling to walk the private, unadopted, rutted, water-filled and pot-holed roads that serve their houses in the villages of Cwmllynfell and Gwaun-Cae-Gurwen. These problems that affect the communities of my constituency are with my people today. The tourist does not see them but they are there.

I am sure that the item in the Gracious Speech dealing with British Telecom will send ripples of anxiety through the rural areas of my constituency. Before Ifor Davies, David Rhys Grenfell represented Gower in this House for 37 years. It is my firm belief that these words spoken by Grenfell in 1935 point a new way forward for the Britain of today. He said: It is by co-operation that individuals attain larger freedom and security. The form of service needs to be essentially changed. The individual who now is forced to seek his livelihood at the expense of his neighbour will gladly join him in the greater enterprise of making a living for the whole community. I thank the House for its indulgence.

4.38 pm

Dr. Alan Glyn (Windsor and Maidenhead)

It is my great privilege to congratulate the hon. Member for Gower (Mr. Wardell) on his remarkable speech. The hon. Gentleman showed tremendous compassion and feeling for the constituents whom he has the privilege to represent. We recognise that his speech came from his heart. It was extremely well expounded and also short and to the point. We hope to hear him again. He did not necessarily have to request the indulgence of the House. Hon. Members would have listened to his words with interest and quietness in any case.

I turn to the speech of the right hon. Member for Roxburgh, Selkirk and Peebles, (Mr. Steel), who preceded the hon. Gentleman. I know that he will forgive me for not mentioning him before because we often follow each other. He said that he had spoken many times for candidates who were unsuccessful. I hope that he will continue that practice during the general election. I agree with him that unemployment was not the fault of any one Government, although the remedies may have been different. The point that he made about the gap between the earnings of the lower paid and unemployment benefit is a relevant factor in our society.

The Gracious Speech deals with defence, unemployment and law and order. They are the three main problems facing our country today. I should like to deal with them in the order in which they present themselves. I believe that the Government have shown consistency in their policies throughout under the leadership of my right hon. Friend the Prime Minister.

The first paragraph of the Gracious Speech contains a very important passage. Her Majesty has visited many places and next year she is due to visit the United States of America. Whatever we may say, the United States of America is our natural partner, and I am sure that the good will and friendship that was shown when the President of the United States of America visited this country and stayed at Windsor Castle will be reciprocated, and that the rapprochement between our two leaders will lead to a better understanding and to the dimunition of the points of difference that there may be between our countries' policies. May I pay a humble tribute to Her Majesty? She has visited many parts of the Commonwealth that no reigning Monarch has visited before.

We have committed ourselves to the defence of our dependent territories. The Falkland Islands is a classic example. I am glad that the Government have pledged themselves to the economic development of those islands, and that they have promised that the future political development and security will be determined in consultation with the islanders. In that connection, we must remember that the assets in the Antarctic are immensely valuable. The investment which we make in the Falkland Islands, apart from being right, may also be beneficial.

The Gracious Speech cites our links to the Commonwealth and to the United Nations. I emphasise the Commonwealth rather than the United Nations. I believe the Commonwealth to be more important. There is a bond between our country and the Commonwealth, and, although we may have our small differences, we can rely on it. We cannot rely so much on United Nations decisions.

Following that in the same paragraph, the Government said: They will work for balanced and verifiable measures of arms control. The word "verifiable" should mean verifiable on both sides, because every time we have made a proposal to the Soviet Union it has refused to allow mutual inspection, and that surely is the key factor. If one cannot ensure that the other side is disarming to the same extent as we are, we cannot possibly disarm. The nuclear deterrent—as has been said so often—has provided us with security for the past 30 years, and will continue to do so while the Soviet Government retains its present position. East-West relations, Afghanistan and Poland are mentioned in the Gracious Speech. While the Soviet Union continues with its regime—recent speeches made by the Soviet President have reinforced that policy—there is no move for any form of mutual disarmament on the part of the Soviets.

The country is perhaps more involved with the tragic question of unemployment. Both sides of the House recognise it, and all constituencies are affected. In various paragraphs the Government have set out the essential things that need to be done to reduce the unemployment figures: first, a fall in the rate of inflation; secondly, a reduction in public spending, and the promotion of efficiency and good management. I should have put the paragraph that refers to school leavers after the paragraph that mentions the injection of private money into the public sector. Privatisation gives the country the opportunity to inject new capital into State industries. When they have been denationalised, there will be competition.

Although I welcome the new youth training system for school leavers, I am a little worried about it. It is important that all those who go on the course should get a job at the end, because there is nothing worse than training a person only to find at the end that he has no better chance of getting employment than he had when he started.

Many of us have had an enormous number of complaints about the difficulties of the security of tenure of those living in mobile homes. We must be careful to balance evenly the rights of the landlord and those of the tenant. Their interests must both be regarded equally.

The National Health Service is mentioned in the Gracious Speech. I have studied the question, and I believe that the proper balance is achieved not by scrapping either the National Health Service or private medicine, but by marrying the two to produce a better service. There would be a benefit in having the two services integrated. Do not let one side say "No" and the other side say "Yes". Let us make the two systems work together. By doing that individuals will be able to contribute more to a service that is increasing in cost, and which, if we do not watch it, will disintegrate entirely.

Law and order is the last subject mentioned in the Gracious Speech. I concede that the Government have done a great deal for law and order, but it is not only the Government's responsibility. Parents, teachers and others interested in our youth are as responsible as the police. I support the police. I hope that we can produce a code which will make law and order more enforceable, and make it possible for my constituents and those of other hon. Members to go about their business without let or hindrance.

Mr. Arthur Lewis (Newham, North-West)

I agree with every word said by the hon. Gentleman, but I want to put this to him in the form of a question in the hope that the Prime Minister will hear it.

Can the hon. Gentleman explain why, in 1982, when conditions are nowhere near as bad as they were in 1932, when we have more police, both men and women, more cadets, more two-way radios, more vans, and so on, Buckingham Palace apparently cannot be protected? I am not getting at the police, but it is factually true that it is unsafe to walk the streets of London. The hon. Gentleman remembers 1932, when there was no unemployment benefit and no social security, but when it was safe to walk anywhere. Should not we try to get back to the conditions that the hon. Gentleman and I knew in the 1930s?

Dr. Glyn

I am grateful to the hon. Gentleman. He touches on a very important matter with which I thought I had dealt. In the 1930s, the rule of the schoolmaster was absolute, as was the rule of the parents. That has changed, and that is why society has broken down. It has broken down because of a lack of discipline. We can have as many police as we like, but an undisciplined society is impossible to control.

4.50 pm

Mr. Gregor MacKenzie (Rutherglen)

I know that my hon. Friend the Member for Gower (Mr. Wardell) will not misunderstand me when I say that, proud and delighted as we are to welcome him to the House of Commons, we greatly regret the circumstances which created the vacancy in his constituency. In his predecessor, Dr. Ifor Davies, we had a highly respected colleague who enjoyed the friendship of all right hon. and hon. Members. We know of the great work that he did for his constituency and for the university. I remember especially his distinguished work when he was a Minister at the Welsh Office. My hon. Friend, therefore, will have difficulty in following in Ifor Davies's footsteps, but I am sure that his speech today proved to us all that he is a worthy successor, and we are all very proud of him. He spoke with experience. He spoke eloquently and with feeling. Above all, he spoke with sincerity, and that is always appreciated by all in the House, no matter which Benches they occupy. We hope that we shall hear from my hon. Friend on many more occasions, which I am sure is a great deal more than will be said by the hon. Gentleman who speaks after me, because our speeches tend to be more and more controversial as the years go by. My hon. Friend the Member for Gower and I have one important common interest in coal mining and the steel industry, and it is to the steel industry that I wish to address my comments, because it is our most serious problem in Scotland.

We have the announcement of the almost complete closure of the Clydebridge steel plant, and we have part-time working at many of our other plants. Above all, however, we are concerned about the future of the entire Scottish steel industry. I speak on behalf of all my Scottish colleagues when I say that we are bitterly disappointed that there is no mention of the steel industry in the Gracious Speech.

The first example of our concern is the unilateral decision of the British Steel Corporation to close part—indeed, almost all—of the Clydebridge steel works in my constituency. The decision shocked all my constituents and shattered the hopes of all who work in the steel industry and the firms which supply it.

The background to this shock is the present figure of 9,500 men, women and young people registered as unemployed in the two exchanges in my constituency. If this closure goes ahead, as I understand it will, more than 10,000 people will be unemployed in my constituency, because 575 people are about to be declared redundant by the British Steel Corporation. It is quite reasonable, therefore, that people in the area should now be saying that enough is enough and that something has to be done for the Scottish steel industry.

Following the announcement of the closure of this works in my constituency, I went to see the chairman of the BSC. He told me about the problems of the industry, about the targets set for him by the Government and about the losses sustained by the corporation in its Scottish division and throughout the United Kingdom. But he went on to say that by closing this works he would save some £6 million.

Everything is relative, of course. Bearing in mind the expenditure and income of the corporation, £6 million is a pretty small sum, and it strikes me that that £6 million will be swallowed up very quickly by redundancy payments and unemployment benefit. If the corporation closes a plant to save £6 million, it is true that its balance sheet will look a little tidier, but its action will cost the Department of Health and Social Security a fortune in unemployment benefit.

The BSC has decided to close a plant where productivity and industrial relations are good and where the materials produced over many years have been well-used and highly respected in the steel market. But that is only the material side of the problem. What of the men?

Mr. David Steel

Does the right hon. Gentleman agree that some of his criticism should be directed less at the BSC and more at the Government? If, for example, the Department of Energy had got its way with the Government over the gas-gathering pipeline, that would have been an example of public expenditure made constructively to help the steel industry.

Mr. MacKenzie

The right hon. Gentleman has anticipated my comments by about four paragraphs, because I intend to turn in a moment to what the Government's attitude to the problem should be.

As I was saying, my main concern now is the human problem. I have in mind the men who have worked in the plant for many years. Some of them have been employed there for 30 and 40 years. They are now 55 or 56 years old. They are to be cast aside with very little prospect of finding other jobs anywhere in the West of Scotland. They are men with considerable skills and talents, and it was these skills and talents that created such plants as that at Clydebridge. Now they are to go. There were no talks. There was no consultation. There was simply an edict in August, issued in nineteenth century industrial terms, saying that the works was to close and that that was that.

Only an hour or two ago, I learnt that the workers at the plant had decided to accept the proposed redundancy payments, against the advice of their shop stewards. I want to comment on that, although I had not planned to do so originally. About a week or so ago, the workers in the plant were told, "The plant will no longer be closing in December. We are bring the closure forward to November. If you do not co-operate with the corporation in the closure of the plant. it will have an adverse effect on your redundancy payments." There is no doubt that that threat conditioned the vote taken at Clydebridge this morning. It was a brutal announcement. It was blunt. In my view the letter verged on the dishonest and the illegal. It is a classic example of the worst type of industrial relations. If that sort of precedent is to be set, it represents a poor outlook for steel works in other parts of the country.

The decision to close the works has caused great bitterness in my constituency and in the surrounding area. Not only steel workers and their families, but the local councils, other trade unions, the church and voluntary organisations, as well as local traders and small firms in my constituency were all stunned. The Government make much of the help that they want to give small firms, and I am always delighted when I hear that the Government intend to do something to help them. However, here we see a real body blow being dealt at small firms in Lanarkshire and the surrounding areas. By closing this works, many of the small firms which supply it with equipment and which depend almost exclusively on Clydebridge and works like it, will now have to close. The Government can give financial incentives, but they cannot give orders. Clydebridge gave them the orders, and those orders will now disappear.

I have used Clydebridge to illustrate the fear and uncertainty of the Scottish people, not only in Lanarkshire and Ayrshire, where steel is made, but throughout Scotland about the Scottish steel industry. No doubt others of my right hon. and hon. Friends during this debate and in the subsequent debates will tell us how they feel about the future of Scottish steel.

I now turn, as the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) suggested, to the Government's role. There was a time when one went to the Minister to complain about the attitude of a nationalised industry. The Minister would say "This is a matter for the chairman and board of the British Steel Corporation, the Post Office, or whatever. I do not want to interfere in the day-to-day management of that industry." However, we are now past the stage of saying that Ministers cannot interfere, because the future of the whole steel industry in Scotland—and, indeed, in the United Kingdom—is at stake. In my view, it is too important to leave the future of the steel industry simply to the chairman and board of the British Steel Corporation. It is for the Government to take the decisions. It is the responsibility of the Secretary of State for Industry, the Secretary of State for Scotland and his junior Ministers and, above all, of the Prime Minister. The decisions to be made are for them, and them alone. I hope that the Government Whip, the hon. Member for Sowerby (Mr. Thompson), will tell the industry Ministers who are not here to listen to the debate that in the course of the next few days we expect the Government publicly to accept that responsibility, and that the decision on the Scottish steel industry is for the Government and not for the chairman and the board of the British Steel Corporation. In accepting that responsibility, Ministers should bear in mind what the chairman of the British Steel Corporation said in his annual report: In the home market, BSC is already faced with a substantial fall in order intake, with increasing imports". In his view, therefore, it boils down to demand and imports.

My view is that the Government should not saddle the corporation with unrealistic cash limits. Certainly, the Government should act on energy prices. I shall not rehearse all the arguments. We have been through them many times before. However, the Government should stimulate demand and, above all, take urgent measures to deal with the flow of foreign steel into this country. I am not an isolationist on trade. We are a great trading nation, and we should encourage imports and exports. However, the tonnage of steel that is being imported into this country—I would go so far as to say being dumped—demands quick Government action. I hope that the Ministers concerned will do what they can and do it quickly to curb this flow of imported steel.

Ministers constantly tell us that things are picking up and the business is getting better. I have, and I know that many of my right hon. and hon. Friends have, serious doubts about that attitude. Nevertheless, we shall have to be prepared for that upturn in trade at some stage.

Sir Albert Costain (Folkestone and Hythe)

The right hon. Member says that the Government should do something about it. Let me give him a case in my constituency, where a firm has been buying steel wires and manufactured components from British steel manufacturers for years. When the steel companies went on strike, he had to sack his men or import steel. My constituency is near the Continent, and the firm was able to import steel from Germany. The steel was so satisfactory that he has continued to import it. So our firms have lost the market. How can the Government get over that?

Mr. MacKenzie

If I may so with respect, the hon. Member for Folkestone and Hythe (Sir A. Costain) is not in the steel industry, and perhaps is not as wise in these matters as some of his hon. Friends. If he were to examine some of the barriers that have been put up by other countries against our steel, he might change his attitude. If he considers the situation in the United States and elsewhere, he may take a quite different attitude.

I was about to say, before the hon. Member intervened, that although we have reservations, we all look forward to an upturn in demand and business. Nevertheless, how can we hope to attract, say, a car plant to Scotland if we do not Lave strip steel available to help those manufacturers? How can we hope to get orders for ships or oil platforms if we do not have the steel plates readily and easily available for those who produce such items in Scotland?

The people of Scotland look to the Government to protect their jobs, to create jobs, help small firms, attract inward investment and, above all, improve our manufacturing base. We can do those things only if Ministers take up the challenge of maintaining a healthy steel industry in Scotland.

5.7 pm

Mr. Tim Rathbone (Lewes)

I fully appreciate the concern expressed by the right hon. Member for Rutherglen (Mr. MacKenzie) about the steel industry, but I am sure that he will understand if I do not follow his line of argument, because steel is one of the few items that do not feature largely in my constituency. However, I join him in congratulating the hon. Member for Gower (Mr. Wardell) on his excellent maiden speech, delivered in those musical Welsh tones that we usually associate with Mr. Speaker who occupies the Chair when you are not present, Mr. Deputy Speaker.

I unequivocally support the Gracious Speech. In my view, it is a plan for more constructive and radical Conservatism, which has become a mark of this Government. It is a plan for protecting individual liberties and privacy, restoring and protecting the national currency, rewarding entrepreneurial activity, and removing Government intervention and interference where they are no longer needed. Yet it is also a plan for maintaining Government involvement and concern to ensure maximum opportunities for self-advancement for those who are capable of it, and help for those who are not.

The Government's achievements so far are to be applauded—as they have been and will be, come the next general election. The plans for this Session are to be endorsed as a further advance towards the eventual resolution of Britains's economic and industrial problems. That must be the Government's first priority, and it continues to be so.

However, there are some areas where I and many other people in Britain would wish the Government to take action, and perhaps can take action under the "other measures" which we are told in the Gracious Speech will be laid before us.

In the Conservative manifesto for the 1979 general election five specific tasks were identified for this period of Government. Real achievements have been made against all of them, but more needs to be achieved against some. One in particular which stands out is the need "to uphold Parliament". To say that more needs to be done in that area is not to deny the real achievements that have been made. Much has been done to improve the way in which the House of Commons scrutinises public spending. Much has been done to improve House of Commons scrutiny of the work of Government Departments through, most particularly, the new Select Committees. Some first steps have been taken to improve the way in which the House reviews legislation.

However, important matters have somehow become subsumed as the Government have tackled the other major problems facing us over the past few years. One such matter is the need for a Bill of Rights. As one who is committed to Britain's continuing and expanding role within the European Community, I find it peculiar and even a little embarrassing that the final point of resource for an individual who feels that his personal rights or freedoms have been impinged should be a European court and European judges rather than a British point of appeal—a British court with British judges.

Furthermore, should a Left-wing Government ever again be elected in Britain, and if they took Britain out of the EEC, as it is likely they would be committed to do, their legislative power to circumscribe individual freedom and erode individual rights would be entirely unfettered. Every person in Britain could and would be the loser, all for the lack of a protective British Bill of Rights.

There has also been far too little progress in drawing together and building a proper understanding and working relationship between Members of this Parliament and those of the European Parliament. Scrutiny and debate of EEC matters has improved, particularly in Select Committees of the other place. However, facilities for MEPs and permission for them to use our parliamentary facilities are still sadly lacking and that leads to a chasm of disagreement between the parliamentary parties here and in Brussels.

A third area where, to the best of my knowledge, no agreements have been made—indeed, probably no discussions have taken place—concerns the future use, if any, of referendums.

All those items deserve more attention than they seem to have received, but none of them is more important than the question of how to protect and enhance the other place. The 1979 Conservative manifesto was categorical in few places, but it was concisely categorical in stating: A strong Second Chamber is necessary not only to revise legislation but also to guarantee our constitution and liberties. Those were and remain forceful words, yet in our parliamentary Sessions so far, and in the outline for the forthcoming Session in the Queen's Speech, there is nothing about protecting the House of Lords as it is presently constituted, or about its reform to give it greater self-protection. That is at a time when the Labour Party has clearly stated its intention to abolish the House of Lords in the lifetime of the next Parliament should it win the next election or be a leading influence in the next Government. That is endorsed by the hon. Member for Keighley (Mr. Cryer), even though all Conservative Members hope that he will be in no position to take such action.

To advocate reform of the House of Lords is in no way to denigrate or to call into question the magnificent job that it does at present. Nor should such advocacy be interpreted as underestimating the difficulties of agreeing the form of reform. However, it should be mentioned that Lord Home of the Hirsel put forward some good ideas as chairman of the Conservative review committee in 1978. Nor does it underestimate the difficulties of carrying such reform through without cross-party support.

It is not sufficient only to claim, as did my right hon. Friend Baroness Young recently, that the present House of Lords is infinitely better than no House of Lords when the threat now is that there will be no House of Lords. The Government, the House and Britain must know how that threat is all the stronger so long as the House of Lords remains unprotected—as my right hon. Friend Lord Soames stated some years ago that it should so remain—and unreformed, as my right hon. Friend Baroness Young advocated. That is all the more peculiar because she was a member of Lord Home's committee which so clearly and unanimously agreed that reform is needed and proposed a most suitable method for bringing it about.

Reform of the House of Lords is not a new idea. Reforms have continued over the years—most recently and dramatically by the creation of life peers. Indeed, the Parliament Act 1911, which generally established the form and powers of the present House of Lords, was only a temporary Act pending legislation for an elected second Chamber.

Further reform of the House of Lords, though time-consuming and perhaps painful, with false starts in the face of cross-party combinations such as defeated previous proposals, should be considered by the House now. It is the only alternative to the Labour Party perhaps one day killing it off and, having done so, instituting and using more and more Government by decree or, in that tine phrase, establishing an elective dictatorship.

Mr. Douglas Hogg (Grantham)

does my hon. Friend agree that if we put the second Chamber onto an elected basis, we could take advantage of that to give to the second Chamber greater powers of revision and prohibition, which would be a desirable added advantage?

Mr. Rathbone

That is a possibility, although it would compound the problem of reform of the House of Lords in the first place. This House will naturally and properly be jealous of its powers and reluctant to relinquish some of them to the other place. If the other place were reformed and used its present powers properly at all times, it would become a better second Chamber than it can be now.

Conservatives particularly should be impatient for this reform. It is crucial that the Government should start the process of active consultation and planning now. Even without mention in the Queen's Speech, perhaps it is not too late to achieve something in this Parliament.

Whether with regard to votes for a reformed House of Lords, for the House or for the European Parliament, there is an urgent need to give the right to vote to Britons living abroad. For too long now the thousands of Britons living abroad—estimated to be about 100,000 over the age of 18 in continental Europe alone—have been denied the right to cast their vote here. That is in spite of continual reassurances from the Government that they accept the desirability of giving those people the right to vote and that they are seeking ways to do so. It is also in spite of the great pressure building up among those so disfranchised—pressures on individuals, in groups in the countries in which they are presently residing, and through the legal affairs committee of the European Parliament.

That lack of action is furthermore in spite of general and specific reassurances about the way in which it is possible to overcome the administrative difficulties of the qualification of voters, validation of votes, poll location and method of voting. Britons living abroad want the right to a British vote now. They deserve that right to representation now. The Government seem to want them to have it now, and there seems to be no insuperable obstacle to their being given that right now.

Is there a chance that action will be taken in this parliamentary year's legislative programme, so that people given the vote will be able to use their electoral right in the general election which cannot now be too far hence?

Mr. John Maxton (Glasgow, Cathcart)

I am following the argument with interest. Where would British citizens living abroad vote if they had the right, because they do not have addresses in Britain? In which constituencies would they vote?

Mr. Tom McNally (Stockport, South)

In the Tory marginals.

Mr. Rathbone

I shall not be drawn into discussing the details, but allowing them to vote in the Tory marginals is not a bad idea.

An acceptable system has been worked out in other EEC countries. Various methods are used. If the hon. Member for Glasgow, Cathcart (Mr. Maxton) calls for a debate on the subject I shall support him.

That leads me to a broader question about voting in Britain—the problematical but serious question of electoral reform. Economic uncertainty has been and is matched and magnified by uncertainties inherent in our electoral system. Professor Rose of Strathclyde university said only a few weeks ago: The British electoral system is now so unstable that neither politicians nor voters can predict that they will get what they want when all the seats are awarded in the next Parliament. I shall give three brief examples. The first relates to 1974 when the Conservatives obtained 250,000 more votes than the Labour Party, yet obtained far fewer seats. The Liberal Party obtained half the votes of the Labour Party, yet gained only one-twentieth of the seats. The freedom to choose the party that one wishes to vote for is no freedom unless the choice is reflected more closely than that.

The second example relates to the election of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) and his alliance party which obtained only 33.4 per cent. of the vote. Two out of three people voted against the right hon. Gentleman.

The third example relates to the by-elections last week in Birmingham, Northfield and Peckham where four times as many electors did not support the winning candidates as voted for them.

Mr. David Winnick (Walsall, North)

I am aware of the hon. Gentleman's interest in a change in the electoral system. He has made his views known in letters and articles. Does he accept that in virtually every European country operating a PR system a coalition is essential? Even if one leaves aside countries such as Italy, in most PR countries, including the Republic of Ireland, it is necessary for the Government to go to the country frequently. It is almost impossible to have a secure mandate except under a system such as that which operates here, with all its defects.

Mr. Rathbone

That comment comes ill from an hon. Gentleman whose party was kept in power by a liaison with another party under the present system. Such events are not peculiar to proportional representation.

Local, regional and national misrepresentation is a growing fact of political life. Scotland swung away from the Conservative Party towards the Labour Party in the 1979 election which gave the Conservatives their wonderful election victory in Britain as a whole. That is even more likely now with the advent of a stronger third party.

Precise computer projections show that an alliance vote of about 28 per cent. of the poll—which is unlikely—and an equal split of remaining votes between Conservative and Labour would give Labour 313 seats, only four short of an absolute majority, and Conservatives only 255.

What would a Labour Government then not do to throw Britain into reverse, to waste this Government's real achievements, and even to destroy the established and proven constitutional methods of British Government, however contrary to the wishes of most people? It is so easy for members of the Labour Party to destroy that which should be enhanced and conserved.

Such a threat to stability dissipates national human resources and self-confidence. Since the Conservative Party believes in stability, the Conservative Government should study carefully how best our electoral system should be reformed to give us more of that precious commodity.

Some hon. Members on both sides of the House have reservations about the way in which a more proportional system would affect their party's electoral chances. Conservatives have always believed in real democracy. We cannot be so faint-hearted as to believe that we no longer represent the true character and essence of the British people or their own personal attitudes. We represent true Britishness as never before. The people know that and will vote accordingly.

Some hon. Members on both sides have reservations about changing our electoral system because they believe that any change threatens to destroy the much-valued traditional relationship between hon. Members and their constituents. That is not necessarily so, but we would have to choose the right system. Believing as we do in evolutionary rather than revolutionary change, Conservatives should be planning the next stage of parliamentary reform to get it right, to improve our Commons now and to protect our political institutions for the future.

Coincidentally, most people in Britain want a vote which is as valid as other people's and the opportunity to cast it effectively. That is why most people support the adoption of a more proportionate electoral system. It is therefore sad, from a constitutional and party political standpoint, that the Queen's Speech does not contain a commitment by the Conservative Government to study the criticism of our present electoral system, however good it is, and to identify the steps needed to make it an even better system. In this, by history and by nature, a Conservative Government should be giving a lead.

In the Conservative manifesto for 1979 the Prime Minister, above her signature, says that the manifesto contains no magic formula or lavish promises. It is not a recipe for an easy or a perfect life. But it sets out a broad framework for the recovery of our country based not on dogma, but on reason, on common sense, above all on the liberty of the people under the law. The things we have in common as a nation far outnumber those that set us apart. It is in that spirit that I commend to the Government my few comments on the Gracious Speech.

5.28 pm

Mr. Tom McNally (Stockport, South)

The arguments by the hon. Member for Lewes (Mr. Rathbone) came close to alliance arguments. The hon. Gentleman made an interesting and thought-provoking speech.

I pay tribute to the hon. Member for Gower (Mr. Wardell) on an outstanding maiden speech. I noticed the benign look on Mr. Speaker's face. Perhaps it was because, for a change, he was listening to an hon. Member without an accent.

Now that we have heard the Gracious Speech, speculation by the pundits that it is the last of this Parliament will increase. The Speech is irrelevant to the country's problems, and where it is not irrelevant it is encrusted with ideology.

The Gracious Speech will take us into the fifth year of the Government's life with a record that sits ill against the promises that were made in 1979. We compare the 2 million people whom the Government have put on the dole queue with the great Saatchi and Saatchi advertising campaign—that marvellous poster saying that "Labour isn't working" and showing a long queue of actors fading into the distance. As one woman in Manchester said last week, "If the Prime Minister wanted a street party for the unemployed, she would have to hire the M6". That is the true picture of the Government's record.

The other great promise of the Government—to cut taxes—must be set against an increase of 14.7 per cent. in the tax burden. National income, industrial production and manufacturing output are down. The background to the Gracious Speech is one of no change and no hope for the unemployed.

My right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) mentioned an article that appeared in The Observer on Sunday by the hon. Member for Bath (Mr. Patten): Our faith may well, of course, have been stretched on the rack both by the evidence of our own eyes (and of the Central Statistical Office's figures) and by the intellectually ramshackle case which we are obliged to swallow. Inflation and interest rates have plummeted—not perhaps all that surprising in the mother and father of a recession yet the great recovery seems to have been indefinitely postponed. This year, next year, some time, never. The hon. Gentleman may well have given the epitaph to this Government—"The next year, some time, never Government."

It has been said many times by the Opposition that the only successes that the Government could claim—on inflation rates and industrial relations—are based on fear and despair, not on breeding a new spirit of co-operation in our industrial life. Nowhere is that more typified than in the irrelevant commitment in the Gracious Speech to interfere with the work of British Telecom. If we listen to the Minister for Industry and Information Technology trying to sell his arguments about Britain's need to invest in new technologies, the idea that now, of all times, we should make British Telecom a political football, with all the resultant uncertainties, when instead we should be investing and planning, is nonsense. The Government are making a serious mistake. Although they may win Brownie points with the hard Right of the Conservative Party, they are doing grave damage to Britain's industrial future by throwing doubt on a key industry at such a crucial time.

Mr. Harry Greenway (Ealing, North)

It is easy to do absolutely nothing, but is the hon. Gentleman aware of the deplorable response of British Telecom to the needs of modern industry? In my constituency, many firms with important export orders cannot get that organisation to move, as a result of which they lose millions of pounds of orders. Something must be done, and it is no good to be as complacent as the hon. Gentleman.

Mr. McNally

I am far from being complacent. If there are faults and shortcomings in the workings of British Telecom, I hope they can be remedied. Such faults will not be remedied if we throw the future of the industry into doubt during an entire parliamentary year and perhaps during an election. If the Government find weaknesses in the industry they should talk to it and help to sort them out. It is not good enough now to cast uncertainty on such a key industry.

Mr. John Major (Huntingdonshire)

rose—

Mr. McNally

We are always hearing such complaints about the nationalised industries from the Conservative Party. One good thing that may come out of the debate is that we shall test some of the prejudices against the facts. The Post Office Engineering Union and the industry are willing to take on some hon. Members on those points.

Mr. Major

Will the hon. Gentleman give way?

Mr. McNally

No. The hon. Member for Huntingdonshire (Mr. Major) will have plenty of time later if he catches Mr. Speaker's eye.

An interesting absence from the Gracious Speech, after much huffing and puffing, not least from the Prime Minister, is new legislation on industrial relations. That is probably a good thing, because another Industrial Relations Act or Employment Act from the present Secretary of State for Employment would do no good to British industrial relations. His desire to play to the gallery of the Conservative Party has rid him of any credibility as someone who must create the co-operation and harmony that should be the real mandate of one who occupies his high office. It is better to leave industrial relations to a new Government with fresher and less prejudiced ideas than the Secretary of State.

Nevertheless, the SDP must make it clear that it will press for the reform of the trade unions to make officers more accountable to the membership. But anyone who believes that that is a total solution is misguided. Through a democratic process in the trade unions, one can achieve a sensible solution to a pay dispute. Indeed, everyone revels in the fact that the miners rebuffed Mr. Scargill. However, the same system can throw up a Mr. Scargill to lead a trade union. We must install the machinery and ensure that it is democratic and accountable, but we must never lose sight of the fact that industrial relations are human relations that must be worked out on the shop floor and that will never be solved entirely by legislation. We can provide the framework and the machinery, but the effort and good will must be provided at the place of work.

To throw one lifeline to the Government in defence of their record, we must face the fact that many of our present problems are not those of a single Administration or a single period of two to three years. It is 13 years since the TUC gave solemn and binding assurances to the then Prime Minister that it would reform itself if "In Place of Strife" were withdrawn. The TUC wasted those 13 years. It has made no effort to reform itself internally and one reason for some members still being on the backs of the trade union movement is its total inertia and lack of willingness to reform itself.

Mr. Maxton

Does the hon. Gentleman agree that "In Place of Strife" was based on the Donovan report, the major complaint of which was the "who does what strike"—the dispute between craftsmen about jobs and overmanning and strikes as a result of such disputes? Can the hon. Gentleman tell the House how many strikes there have been during the past five or six years about the manning of jobs and how many days have been lost? The trade unions have reformed themselves in terms of the Donovan report.

Mr. McNally

The craft unions have reformed themselves partly because they have found the industries disappearing from under their feet.

However, we have shied away from reality in other areas. Also absent from the Gracious Speech, and from the bulky document "Labour's programme 1982", which is dotted around the Benches, is a realisation of the need for a prices and incomes policy. I am sorry that the hon. Member for Walsall, North (Mr. Winnick) is not present. because I remember him at a meeting saying passionately that a prices and incomes policy would be accepted only when Socialism was in place. It was to be the cherry on the top of the cake of Socialism.

Addressing now not the official Opposition but the trade union movement, I suggest that if it thinks that the desire for greater fairness and equality in our society to which it pays lip service can be achieved without incomes playing some part in the planning and the development of that society, it is fooling itself.

Therefore, we shall continue to press the argument that in a fairer and more equal society an incomes policy has a role to play. We believe that much of the strife in the National Health Service and in other caring sections of the community could be cured if those with more powerful industrial muscle would accept that, in the long term, their interests and the interests of society as a whole would be best fulfilled by an incomes policy.

Mr. Gary Waller (Brighouse and Spenborough)

Does the hon. Gentleman recall what happened when we had an incomes policy? Does he recall the distortions that existed? Does he recall the poaching that took place between one firm and another? Does he recall that when that period came to an end there was an enormous escalation which resulted from the pent-up demands which had been frustrated during that period? Is the hon. Gentleman in favour of a permanent prices and incomes policy, or does he think that it should be temporary?

Mr. McNally

I would argue very strongly for a permanent prices and incomes policy. The hon. Gentleman appears to be suggesting that because three or four times in the past 20 years we have backed away from the wisdom of a permanent prices and incomes policy, and paid heavily for that failure, the argument for such a policy falls. That is not logical. My argument is that part of our industrial failure and industrial decline results from the fact that so often in the past, when we have been reaching the point where the discipline of an incomes policy was at last beginning to produce dividends in terms of industrial performance, we have lost our nerve, gone for free collective bargaining—or whatever was the vogue term at the time—and slipped back and lost the gains that had been made. That was as true of the incomes policy of the right hon. Member for Sidcup (Mr. Heath) as it was of the incomes policy of the right hon. Member for Cardiff, South (Mr. Callaghan).

The periods of incomes policy have been periods of relative economic success, and that relative economic success has been dissipated just when we have lost our nerve. I have no fear whatever in putting the case to the country with the empirical evidence showing that when incomes policies have been in operation there has been a period of relative economic recovery, and that when we have lost our nerve we have gone back on the old road to failure.

One of the problems in considering unemployment is that the Prime Minister's strengths—they are undoubted strengths—are often negative and reactive. Nowhere in her speeches or in her policies do we find any sign of her taking the lead in pursuing international co-operation. Several hon. Members today have advocated that she should use her voice and influence. She is now one of the senior world leaders in terms of length of office, yet nowhere do we hear from her any overview or any sense of a global role in facing some of the problems. She often blames the world situation for the statistics that she has to give at the Dispatch Box, but never does she seem to have any positive ideas about a global reaction to the problems. That is equally true in regard to her role in the European Economic Community.

I am convinced that part of the problem of unemployment in Britain cannot be solved by Britain alone. One of the more positive aspects of the Community—and one of the aspects which could identify with ordinary people rather than the bureaucracy and the wrangle over budgets—relates to the possibility of having a co-ordinated response to the problem of unemployment. Although the Prime Minister attends the various summit meetings, one is always left with the feeling that she goes with little enthusiasm and with few ideas.

At the end of her speech today, the Prime Minister spelt out the dilemma that the Government face. She realises—unlike previous Tory leaders—that a pre-election boom in the old style is not acceptable, because the indications already are that, if such a boom were to be initiated, the champagne corks would pop in Japan rather than in Birmingham or Manchester. The Iron Lady would simply become Tokyo Rose.

If we are not to say—recalling a memorable phrase of the Prime Minister—"steady as she sinks", and if we are not simply to accept the "same as before" recipe, which seems to be implied in the Queen's Speech, we have to consider where we could have some reflation of the ecomomy without the dangers, of which the Prime Minister warned, of a general reflation resulting in a crisis in our balance of trade.

It is interesting that the CBI this week—I was at the conference on Monday—and many local authorities, trade unions, and chambers of commerce and industry have been coming forward with the argument for selective public investment.

People do not understand what is happening when they look around their own town, see the dilapidation, and read that the Government are spending £15 billion or £16 billion on unemployment. They do not understand why it should be beyond the wit of man to match the expenditure that has been wasted on keeping people idle with the needs that they see around them. Many of us as politicians will have to answer that basic question posed by the electorate in the next few months.

I do not want to be narrowly regional, but I should like to quote a few examples from Greater Manchester in order to show how a policy of selective investment could help the economy in general. The chamber of commerce and industry told the Chancellor of the Exchequer only last week that the North-West as a whole cannot recover without some stimulus from the Government. Greater Manchester faces unemployment of 15 per cent. In inner Manchester, as the hon. Member for Manchester, Moss Side (Mr. Morton) will readily appreciate, that means figures of 25 per cent. or even 40 per cent. Commerce and industry want a change in regional policy and an acceptance by the Government that the regional policy announced by the right hon. Member for Leeds, North-East (Sir K. Joseph) at the beginning of this Government no longer works. The metropolitan authority said that, when taken together, the various elements of the Government's regional policies no longer make sound common sense.

The Government should try to give confidence to the regions. The Government have refused to allow Greater Manchester to have the European trade marks office and have nominated London, despite the EEC having said that it does not want the office to be sited in a capital city.

The Government could try to put right the ravages of the first Industrial Revolution. The most infamous and obvious example is the Manchester sewerage system. At present budgeting, it would cost £100 million to put it right. It will have to be put right at some time. We all know that Manchester's sewers will have to be rebuilt. At present they could be rebuilt for £100 million. It would put workers back to work, so why not do it now?

Manchester has more derelict land than can be found in other part of Western Europe. That land and the industrial buildings could be reclaimed, many of them for use by the small businesses that the Government claim to help.

Many constituents have often asked "What legacy will be offered to the next generation of people who are responsible for public housing stock?" In large council estates anyone can see the council houses falling into disrepair and becoming slums, which will be bequeathed to a future generation, who will have to repair them. Why can we not employ men who are down at the employment exchange to keep such houses in good repair, as any prudent owner would?

On one other matter, the Prime Minister is showing a lack of leadership where it is important that Britain should take a lead. I refer to disarmament, particularly nuclear disarmament. It is no accident of history that the Campaign for Nuclear Disaramament and the pacifist movement have been at their strongest when Governments have shown lack of interest in disarmament. The CND grew in the late 1950s and early 1960s. It faded away under the pressure of the successful partial test ban treaty. It faded away under the Ostpolitik and the early SALT arrangements. It has grown again because of a despair, particularly among the young, that there is not enough positive, thinking about disarmament.

Mr. Greenway

What about the 1930s? The hon. Gentleman is a poor historian.

Mr. McNally

I am looking forward to the hon. Gentleman's speech. He has already made one from a sedentary position.

Little effort has been made. Successful British Prime Ministers since Macmillan's time have constantly shown an interest in disarmament issues, particularly nuclear disarmament issues. This Prime Minister has shown no interest. She has revelled in her stance as the Iron Lady. If we are to meet some of the genuine concerns of the young, we must take some initiatives on disarmament. My right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) has put forward the idea of a battlefield nuclear-free zone. Some Conservative Members would benefit greatly from reading the Palme report on disarmament. There must be some movement on that matter. Otherwise there will be cynicism and a drift towards neutralism among the young for which we shall pay heavily in future. We need movement, positive thinking and positive ideas on disarmament. If they will not come from Conservative Benches, they will come from the SDP's Benches.

5.52 pm

Mr. Peter Bottomley (Woolwich, West)

I have listened with interest to the hon. Member for Stockport, South (Mr. McNally). He has made a courageous speech, but he has got a number of things wrong. If he had put his weight behind many of the things that the Government are doing with which he agrees, we would start to broaden the areas of consensus on international disarmament, for which he was arguing.

I was at a meeting last night when one of the local clergy asked about nuclear disarmament. I said that many people believed that the Falklands crisis was caused in part by Argentina misinterpreting the withdrawal of HMS "Endurance". We would send an equally misleading signal to the Russians if we went for unilateral disarmament when we are trying to aim for mutual and balanced disarmament of conventional weapons and multilateral nuclear disarmament. It is important that we state that clearly.

Mr. Major

Will my hon. Friend make it clear for the benefit of the hon. Member for Stockport, South (Mr. McNally) that the Government are as committed to multilateral disarmament as any Government in recent years, that it is not the Government's policy to be disinterested in disarmament, but that it is a matter that we all regard as the prime concern? The hon. Member for Stockport, South should not state that it is otherwise.

Mr. Bottomley

I am sure that the hon. Member for Stockport, South heard that. I do not want to push him too far. I look forward to when he joins us as a Conservative. He started as the most Left-wing member of the Social Democratic Party. I look forward to his joining me as the most Left-wing member of the Conservative Party.

I shall talk about the other side of the nuclear disarmament issue. Some people ask, "How can the West even threaten first use of nuclear weapons?" The simple reason is that the West has a deficiency in conventional arms on the border between eastern and western Europe. One way that one can easily stop a great wave of Russian tanks advancing across Europe is to have as many tanks as the Russians. We do not have them, as we are not prepared to afford them. The other side of the argument is the question: "What would happen if the West had a vast preponderance of tanks on the border and threatened to invade the East"—no one seriously believes that we are likely to invade—"and the Russians said that they were willing to go into first use of nuclear weapons to stop the tank invasion?" We would not invade. That has led to the position where we must either vastly increase spending on conventional weapons or maintain nuclear deterrence. Some hon. Members have said that electoral reform was not mentioned in the Queen's Speech. It is important to recognise that the present system is highly imperfect. I would be happy if there were electoral reform. However, I doubt whether we can have it on the basis suggested by the alliance. It proposes that there will be multi-member constituencies everywhere except for the islands where there are Liberal Members of Parliament. Without declaring too many family interests in one of those islands, I cannot see the majority of hon. Members in the House of Commons who will be losing individual seats to go into multi-member seats being willing to give up their individual patches, their constituencies, on the mainland, and to allow a few people on important islands in the north and south to remain unaffected by the change. I would prefer the French system or the added member system, which can preserve, albeit with large constituencies, the individual links. It is important that competition works in politics as much as in enterprise. The competition that arises from hon. Members serving individual constituencies helps to encourage what most hon. Members try to do anyway, which is to represent their constituents in the best way possible. One point that worries me about representing constituents is that too many local councillors nowadays forget that their job is to represent all their constituents.

The appendix to the Salmon report on the national code of local government conduct says in paragraph 2, which is entitled Public Duty and Private Interest":

1. "(i) Your over-riding duty as a councillor is to the whole local community.
2. (ii) You have a special duty to your own constituents, including those who did not vote for you."

In my constituency many council tenants are trying to buy their homes. Greenwich council, re-elected with a Labour majority earlier this year, has been doing everything possible to frustrate the desire of many tenants to buy their homes. During the next two weeks I intend to draw a great deal of attention to some of the precise ways in which it has been frustrating the intention of Parliament and the way in which for a long time it has ignored the law.

I shall not take up the time of the House by going through many cases, but I shall give some illustrative examples. The first is that between five and nine homes were acquired by the local authority for purposes other than ordinary housing, yet the council refuses to sell those homes to tenants who want to buy them because, for a historical reason, they were acquired for some other purpose. There are also tenants who have bought the freehold of their homes but the council will not sell them the leasehold, which it owns. People outside have as great a desire to own their own homes as have many hon. Members in all political parties and many councillors in Greenwich. They are being exploited. There is a deliberate attempt to make people remain as serfs. The people in power in the town hall in Greenwich are showing their political prejudices.

Mr. Greenway

Does my hon. Friend agree that many Labour councillors and Members of Parliament who stand firmly against people's right to buy council homes, themselves own homes and would not do otherwise?

Mr. Bottomley

That is correct. I am trying to put on record the importance of one of the proposals in the Queen's Speech. I do not know how far my right hon. and hon. Friends intend to go with amendments to allow people to buy their homes, but I hope that they will examine all these stupid but apparently clever ways in which Greenwich council and others have been frustrating their constituents' desire to buy.

I hope that Greenwich council will not wait for legislation that requires it to do what it should already be doing.

Mr. Maxton

rose—

Mr. Bottomley

Perhaps the hon. Gentleman would like to wait a little longer. Few of his hon. Friends are present. They seem to be as uninterested in tenants who want to buy their own homes as they are uninterested in most of the desires of ordinary British people.

Mr. Maxton

rose—

Mr. Bottomley

No, I shall not give way. I have another example of a tenant who, with her son, applied to buy her house. She heard nothing within the four weeks that the Housing Act 1980 allows a council to respond. Shortly after that four-week period had expired, the tenant died. The son, who is in his fifties, has lived in the house in question, cared for an elderly parent and paid rent rather than rely on his mother receiving rent rebates, is under notice to quit. He might be made to leave a home just because Greenwich council object to his wanting to buy it.

Another case came to my notice recently. The council threatened to evict and successfully removed a surviving child. During the two months since he left, the house has been empty and weeds have started to grow round it. That is the type of heartlessness that some Opposition Members have accused some Conservative Members of demonstrating towards council tenants. The position has swung round. I hope that Opposition Members who speak on housing matters or on amendments to the Housing Act 1980 will condemn what Greenwich council and others are doing. I doubt that they will have the guts to stand up against their party.

Mr. Maxton

rose—

Mr. Bottomley

If the hon. Gentleman wishes to agree with me, I shall gladly give way. If, on the other hand, he does not, I hope that he will keep his place.

Mr. Maxton

The hon. Gentleman can choose whether he gives way. I shall not agree with him. If he wants me to resume my seat that is up to him. He has talked about a dictatorial Greenwich council, but it was elected by the people of Greenwich. The Labour Party was returned since the Conservative Government was elected. Moreover, the council was elected on a platform of opposition to the sale of council houses. How does the hon. Gentleman explain that to the people of Greenwich?

Mr. Bottomley

The hon. Gentleman did not listen to what I said. I said that I would give way if he would demonstrate the guts that he clearly does not have. I understand that he fully supports what Greenwich council is doing. He sounds like the sort of person that it would welcome—uncaring, unthinking and interrupting.

I shall return to the importance of the individual in politics being willing to stand up and speak for those with problems. The speech made by the new hon. Member for Gower (Mr. Wardell) shows that he is the type of person who is prepared to do that. I look forward to his speeches more keenly than I do to those of the hon. Member for Glasgow, Cathcart (Mr. Maxton).

Some people who were recently involved in by-elections were not successful. I pay tribute to John Redwood who was the Conservative candidate in Peckham. He managed to maintain a high standard of political debate and activity during the election campaign. The people of Peckham responded to his campaign. I am sorry that he was not elected. I have spent some time in Peckham. Having suffered under a Labour Government for many years, many of the people of Peckham are voting with their feet. There are more applications to leave that constituency than in many other areas in London. The reason is that that constitutency has a higher proportion of council housing than almost any other constitutency in London.

I hope that the Labour Party does not survive. It would be better if it split into a Left wing under another name and a Right wing that joined the centre, in which I include the Conservative Party. Most people accept that I am in the middle.

I often have to preface my non-party political speeches by saying that I hope that when my prejudices show I shall not upset too many people who are not Conservative and, even more important, I shall not upset those who are.

I turn now to anti-inflation and reducing the level of unemployment. We have had a short debate on incomes policy. We need the effects of an incomes policy irrespective of whether we have such a policy. There is no point in having an incomes policy that breaks down into Cleggery, comparability and everything that produces a spiral of competing pay claims. If we have no formal incomes policy, there is still no point in accepting spiralling and competing pay claims that lead to the loss of competitiveness. My right hon. Friend the Prime Minister gave a good example. She pointed out that we are importing cars from Spain. where people are paid less than in Britain, and from Germany where they are paid more. We must be competitive and have the effects of a benign incomes policy.

My great friend, the Treasury model of the economy, works to Britain's advantage only if we include the effects of a benign incomes policy. How are we to make realistic pay increases—those between nil per cent. and 3 or 4 per cent.—bearable for the low paid with family responsibilities? The only solution lies in increasing child benefit. Some hon. Members may recollect my saying more often than they care to remember that child benefit is 20 to 30 per cent. lower in real terms that it was 25 years ago.

Few trade unionists are willing to talk about the matter—I make an honourable exception of Douglas Grieve, the general secretary of the Tobacco Workers Union. Almost no employers are willing to talk about it. I have asked the CBI why it does not enter discussions with the Government or trade unions about the importance of child benefit to protect the lower paid with family responsibilities and to help reduce the level pf pay inflation. It argues that increasing child benefit will lead to an increase in public spending. But the greatest increase in public spending is caused by inflation. I suspect that Treasury Ministers have had an easier time with spending Departments during the public expenditure negotiations because of the benign effect of a lower rate of inflation on public expenditure.

The past two or three years are the only time in the past 20 years that the real level of child benefit has been protected. It is no coincidence that that is the time that pay settlements have been coming down almost voluntarily. I hope that it will be possible to secure an all-party alliance of those who care or are interested to elevate child benefit to being one of the most important announcements that my right hon. and learned Friend the Chancellor makes in his Budget Statement. I hope that he will price protect it, allow the retention of the overestimate for inflation this year and, because of the importance of helping the lower paid with family responsibilities and the importance of maintaining lower inflation, increase child benefit by more than inflation in November 1983.

Mr. John Page (Harrow, West)

Does my hon. Friend fancy the idea of child benefit being paid in increasing amounts to families in which the mother does not work, and reduced or extinguished when the mother does work?

Mr. Bottomley

No. That is a serious point. The married man's tax allowance should be frozen or reduced. I expect that the Social Democrats will make proposals on that matter soon. The married man's allowance should be converted into child benefit on the one hand and home responsibility payments on the other. It makes no sense that when a married couple work the husband receives a married man's tax allowance and the wife receives the single person's allowance. The time of greatest need for income support is during family formation—when three mouths must be fed by one income rather than two mouths being fed by two incomes. Perhaps we shall have an opportunity to discuss that matter and find a solution. It is already a matter of common concern. Child benefit is not a tax allowance—it looks like public expenditure—but its net effect and importance are the same.

Finally, I turn to the proposals outlined in the Gracious Speech for telecommunications. I think that it is mad that over the past few years Governments have interfered with the development of the telecommunications business. One form of interference was the negative one of not splitting telecommunications from the Post Office years ago. Just as it is ridiculous for a Cabinet to try to make decisions about posts, telecommunications and all the other nationalised industries, because it is impossible for a Cabinet to do that job well, so it is ridiculous for one board to have been considering the problems both of the letter service and of the fast-developing telecommunications business. If earlier Governments had got around to splitting the old Post Office, telecommunications would have been far better off.

Since then, I believe that the Treasury and the Government have been wrong in not allowing the telecommunications business to borrow money on the commercial market when it could clearly have obtained a greater return than the cost of borrowing. It should not have been required to obtain most of its investment funds from customers by setting prices higher than it would otherwise have wished. That is just a way of choking back demand. It smacks of Socialism. In effect, it is rationing by allocation rather than allowing the capital market and the current cost market to decide how fast the system should expand.

Many people have said that there will be a great risk to jobs if the telecommunications business is sold off, but the reduction in the number of jobs required is in fact a function of the changes in technology. For instance, the introduction of electronic exchanges will lead to a reduction in the number of repair men needed.

I believe that the expansion of telecommunications and the competition to be allowed in by the Government will provide higher rates of pay for those employed in the industry. Competition between employers for good employees tends to raise rates of pay and competition between suppliers tends to lower costs to customers. Finding that balance is the most important part of economics. That is the real reason why more people should become Conservatives and why the Labour Party and the SDP should be converted to the same kind of competition in employment, in pricing and in the supply of goods as they believe in at their party conferences, when they compete with each other as hard as they possibly can and with a great deal more viciousness than is ever seen in private markets.

6.23 pm

Mr. Jim Craigen (Glasgow, Maryhill)

I know that the honourable and Left-wing Conservative Member for Woolwich, West (Mr. Bottomley) will understand if I do not follow him on the subject of electoral reform, and I am more judicious than to comment on English housing matters. I agree, however, with his point about the need to strengthen the support system in terms of child benefit as there is no doubt that in this country the low paid bear an unfair share of the burden of income tax and national insurance and radical reform is clearly needed in that area.

The hon. Members for Woolwich, West and Lewes (Mr. Rathbone) both took up the subject of electoral reform. The Prime Minister seems to have in mind a general election within the next 12 months rather than any reform of the present electoral system. The Gracious Speech signals that the decks are clear for an election to be called at any time in the coming months. Indeed, its whole content is somewhat cynical in view of the problems currently facing this country. There is a notable absence of any meaningful references or specific proposals relating to the economy and to employment.

Last year the Gracious Speech referred to unemployment as follows: My Government 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."—[Official Report, 4 November 1981; Vol. 12, c.5.] This year's Gracious Speech says a little more about unemployment. I also note that the price of the Gracious Speech is 5p more than last year, but the content is rather thinner.

Only this week the CBI conference at Eastbourne faced a considerable dilemma—it was not sure whether it wanted to stab the Government in the back or to cry on their shoulder. Listening to the business men of Britain, the Government could not have taken much comfort from the country's economic and industrial prospects. Looking through the package of material put out by the CBI to Members of Parliament, it is interesting to note that, despite the Prime Minister's comments today, "uncertainty about demand" is one of the main factors in the minds of business men in taking investment decisions. Indeed, it is the major factor. One can only conclude from that that the business men of this country do not share the Government view that demand is likely to increase. Indeed, everywhere the message from business men seems to be that demand is likely to continue to slide downwards. As one CBI member put it, the situation appears to be that of a plateau tilting downwards.

It cannot give the unemployed man or woman in Maryhill much comfort to know that unemployment in Canada rose by 51 per cent last year. Indeed, I am puzzled then as to why people still wish to emigrate to Canada, but of course more people seem to see prospects elsewhere than in the United Kingdom. That disturbs me very much.

I am sure that Welsh hon. Members will welcome the construction of a road tunnel in the Conwy estuary. On the subject of tunnels, this Government as much as their predecessors are always talking about seeing the light at the end of the tunnel—and that light seems to be narrowing almost to the point of eclipse. Following the comments of my right hon. Friend the Member for Rutherglen (Mr. MacKenzie) about the steel industry, I suggest that the Government give serious thought to the prospects for a Channel tunnel. Although in the past I had misgivings about such a project, the steel industry needs something dramatic at this time and that might be not just a project to which our steel industry would rise but one which would help it up off its knees.

I am glad to see the Under-Secretary of State for Scotland here today, as unfortunately we do not always see Scottish Ministers in the Chamber during United Kingdom debates. He well knows the importance of Ravenscraig to the west of Scotland and the interdependence of the industries there. We have seen the decline of shipbuilding, the demise of the car industry, and the decline of the construction industries. We cannot afford to see the obliteration of the steel industry in the west of Scotland as that industry still has enormous significance to Strathclyde—a region in which more than 200,000 people are already out of work, that is, one in five of the work force, or rather the potential work force, of the region. I hope, therefore, that the Government will earnestly consider this.

If all this private capital is as enterprising as Ministers keep telling us, I hope that private capital will propose major projects of this kind. The trouble is that perhaps, as with the gas-gathering pipeline, the companies will be expecting the taxpayer to underwrite the risk because so often they are interested only in the profits.

It is something of a legislative gamble that the Government are proposing to prepare for the statute book legislation that they say will be enacted only after a general election. The Government assume that they will be returned. Why waste time during this Session in putting through its various stages a Bill that the Government will not enact, as with the Bill for British Telecom?

More seriously, there is the matter of the document that the Secretary of State for Industry circulated to Members of Parliament last month about the proposals to privatise British Telecom. It struck me, when I read the document, that if the Government are as serious about helping consumers as they claim to be, there is nothing in the proposals that they could not now do through public enterprise. Why do we need to open the door to shareholders who want only to participate in the profits or the management of an organisation? If the Government wish to help the consumer, there are various measures they could take without going through all the rigmarole of privatising industries. The truth is that the Government's friends in the City see more lush opportunities for making a fortune. We are spending a fortune in public money on privatisation, which is one of the big growth industries in the City.

It would be interesting to have a breakdown of that growth industry. I received some figures last week on the amount of public money that is being spent. I was given £12 million as being the cost of privatisation thus far. Who are the beneficiaries of the financial transactions that arise from privatisation? Moreover, despite what is said about the new disciplines that would be brought into BT, when we read the document we see that there would be various "dos" and "don'ts" imposed on the new public limited company. I dare say that it would be loth to carry those "dos" and "don'ts" into effect. Knowing the difficulties already in many parts of the country that are sparsely populated, we are asking a great deal of this new body to take on many of the social responsibilities that will be imposed on it by the Secretary of State's document.

On the data protection proposals, one welcomes anything that will strengthen protection for individuals. The Prime Minister and the Gracious Speech might have said a little more about what is proposed. I am not sure whether we are moving towards a central registry, which sounds fine in practice. However, how controllable is this matter? Sometimes the technology can outstrip the capacity of the bureaucracy to handle matters for the consumer. The turmoil in the videotape industry is a demonstration of some of the difficulties that may be involved.

The privatisation of energy development is proposed in the Gracious Speech. The Government should be concentrating on more purposeful activities. I am glad that the Scottish Office Minister who is responsible for industry is here because I hope that the full weight of the Scottish Office will be put behind proposals to develop a combined heat and power scheme in Scotland. I hope, too, that he will take on board the needs of Glasgow in this respect. I have no doubt that the project will not go to my constituency, but I hope that a project of this kind, with its job potential and investment possibilities, will go to Glasgow. I know that it will receive the full co-operation of Glasgow district council and Strathclyde region.

I say that this project will not come to my constituency because some years ago the electricity board looked at the possibility of the former Pinkston power station becoming a centre for a district heating scheme, but the economics made it impossible. However, I do not want us to spend more and more on research simply to keep the researchers in a job. Judging by the smile on the Minister's face, I think that he takes my point. I hope that we shall see this practical example of a scheme with enormous possibilities being developed in Glasgow.

It is fine that developments are taking place in new industries such as computers and electronics. However, I am a little worried by what I heard this morning. About 60 per cent. of the footwear in this country will be imported this year. There are limits to the numbers of computers that one wants in one's pocket when the nation is becoming more dependent on imports for the shoes on its feet. So much of our economy has become vulnerable and is in a dangerous position. The other day I was in a shop looking for a hacksaw. The woman beside me, looking at all the labels, asked whether there was anything made in Britain these days. I was looking for a metal product, the kind of thing that traditionally we were good at making.

The Prime Minister said that 58 per cent. of new cars were being imported. No doubt hon. Members will be receiving yet more calls from the journalists, although we never see what cars the journalists drive. I drive a British Leyland car. However, the more that British Leyland dispenses with the services of its agents, the more that the Japanese, the Germans, the French and the others pick up the franchises. Many of these people—and I cannot fault them—do not wish to put themselves out of business. If they cannot sell British cars, they will sell foreign cars. British Leyland should wake up to the realities of what has happened in the past 10 years.

The Gracious Speech in no way addresses itself to the central problems facing the United Kingdom. Nor did the Prime Minister give any clear sign of where the country is going economically or industrially, although one knows from looking around our constituencies that unfortunately it is going backwards. What is called for is greater leadership from the Government and leadership that recognises that international collaboration, discussion and agreement are essential if the Western world is to get out of the current economic trough.

6.30 pm

Sir Anthony Meyer (Flint, West)

The hon. Member for Glasgow, Maryhill (Mr. Craigen) always talks a good deal of sense, but he rather missed the point about privatisation. It is much more important than he suggests because it is a way of restoring some flexibility to the British economy, which is becoming horridly arthritic. The giant monopolies at the centre of industry have been a powerful element in inducing that arthritis.

I understand that I am to be the only Welsh speaker from the Conservative Benches. Therefore, I have a double, pleasant duty to perform. The first is to congratulate in his absence—no doubt he will read about this—the hon. Member for Gower (Mr. Wardell) on his maiden speech. It was one of the finest maiden speeches to which it has been my pleasure to listen, and one that would find a place in any anthology of maiden speeches. I and my fellow Welsh Members of Parliament will rejoice in the new addition to our ranks. However, we deeply deplore the loss of Dr. Ifor Davies, who was dearly beloved of every hon. Member, especially those who knew him well in the Welsh Grand Committee.

My second duty is to welcome the announcement in the Gracious Speech of the decision to go ahead with the tunnel under the River Conwy. That vital project will, at one and the same time, ensure the continued scenic beauty of one of the finest pieces of landscape in the British Isles, and also enable the dualling of the A55—which is the lifeline of North Wales—to proceed without further hindrance. That lifeline is essential if the new industries that are beginning to spring up along the coast of North Wales are not to be strangled at birth by a wholly unsatisfactory road network.

I wish to say a few words about the subject that has dominated the debate—it will probably dominate the remainder of the debate—and that is unemployment. Before doing so, I must say that I have never pretended to enjoy what is happening. However, I cannot in honesty refrain from congratulating the Prime Minister and the Chancellor of the Exchequer on sticking to their often misunderstood and nearly always unpopular policies. They have their reward, and it is a glittering one. They have dried inflation out of the system. That is a much more difficult thing to do than it sounds. Nothing more clearly demonstrates the grim determination that they have brought to their task than the course of the National Health Service dispute. At one stage Government support among public opinion fell away in an alarming fashion. They appeared to be locked in conflict with the nurses. The one lesson to be learnt from Harold Macmillan is that one should never become locked in conflict with either the miners or the nurses.

Throughout the NHS dispute, the Labour Party has pressed the Government to capitulate—as though the Labour Government had never had to face the same ordeal of public opinion demanding inflationary wage settlements during the winter of discontent. The Liberal-SDP alliance, which talks about the need for an incomes policy—or did so until its militants disowned it—demonstrated exactly what everyone expected. It was in favour of being tough with any public sector wage claim, other than the present one—whichever that happens to be. That explained why even those of us who hanker for policies to unite the nation have no choice, if we are honest with ourselves, but to support the Government and their policies, as we have done.

In exchange for that support, we are perhaps entitled to ask for a rather clearer indication of exactly where we are going—not during the next few months, because that is clear enough, but by the end of the decade. Is the objective to provide ever more incentives for those who have the will to succeed so that they can create enough national wealth to ensure at least a tolerable existence for the less successful? Or do we want to spread a reasonable level of achievement and prosperity as widely as possible? I shall not try to answer that question in my speech. However, I am clear in my mind that the problem of unemployment should be tackled by the Government here and now, even before their other policies have borne fruit. I cannot asquiesce a day longer than is necessary in a position where anyone over the age of 45 who loses his job is unlikely ever to work again, and where a majority of school leavers cannot confidently look forward to steady employment throughout their working lives.

Unemployment matters more to me than anything else, other than the preservation of peace. That is not because the issue loses votes. The result of the Northfield by-election proves that it does not lose votes. An electoral strategy that concentrates on improving the lot of those in work by tax cuts, at the expense of those out of work, might be a winner, and the House should be aware of that. Nor is unemployment important simply because it is wasteful of resources. On the whole, those who have most to contribute in creating wealth for the nation manage to find work somehow or other.

Given those considerations, it is praiseworthy of Ministers to devote so many resources—far more than their predecessors—to schemes for reducing unemployment through various job creation programmes. They understood only too clearly the real horror of unemployment—its profoundly demoralising and divisive effect on the nation. Nowhere is that more grimly evident than among school leavers who, for all the excellent intentions of the youth opportunities programme and the even better opportunities of a new training programme, know that they may never have a proper job, and that when their YOP or training programme expires they may not have an occupation at all.

Of course, the present recession will come to an end. But automation and the emergence of new industrial giants in Asia and elsewhere surely mean that the days of mass employment in industry have gone for ever. The new generation of industries will bring new jobs for the more skilled workers, provided only that we politicians do not try to hold on to the old jobs for too long, as we are all too likely to do. But even the skilled jobs have only a limited life. What is to be the future of those who have hitherto found their life's work in a job in industry?

I have been rather shattered by the absence of rational discussion about these matters in politicial circles. Conversely, I was struck by the number of interesting and constructive suggestions put forward at the CBI conference this week. But now Ministers are coming forward with some imaginative and bold ideas, apart from the clear evidence given by the Secretary of State for Employment of his determination to devote large resources to job creation and training.

What I intend to say is in line with what Government policy is clearly being seen to be—even if, at first, it may sound a little like Utopia. I do not propose to deal with the broader question of the management of the economy beyond saying that the CBI probably has it about right, but that its preferred rhythm of expansion may turn out to be not very much different from that of the Government.

We must begin and end with one overriding consideration—the United Kingdom depends on trade more than any other industrial nation. In consequence, we are irrevocably committed to an open trading system and to memberhip of the EEC. Those considerations rule out almost all the ideas put forward by the Labour Party for cutting unemployment. Because of our dependence on trade and on earning our living in the world, we must rule out any policies that increase labour costs, and that eliminates most of the ideas put forward by the TUC.

None the less, even with those severe constraints, it is possible to cut the numbers of unemployed—or at any rate, the numbers of young unemployed—by moving quickly towards widespread and systematic job sharing among new entrants to industry. After all, what really matters is to get young people into the work habit so that they get up in the morning, have a regular pattern to their days, budget their weekly expenditure and so on. It is still more important to give them the feeling that they have their place in society, that they are needed and that they belong. One can give them all that almost as well with 20 hours of work a week as with 40 hours. Of course, the overriding need not to increase labour costs means that they can be paid only for 20 hours. This can, however, be topped up in part with the dole money that they would otherwise have been receiving.

This does not perhaps sound too cheerful for young people setting out on their working lives, but the picture may not be quite as grey as I have painted it. Once people are working 20 hours a week, it should be much easier to persuade them to work so-called unsocial hours without incurring disproportionate overtime rates. This opens the way to more intensive use of expensive capital equipment, or heavily-rated and expensive-to-rent office accommodation, without having to pay extortionately high sums in overtime. This, in turn, should mean lower production costs and so lead to greater competitiveness, to more sales and to more jobs, or to better paid jobs, for young people.

The process need not be confined to manufacturing industry. If it proved a success, it might spread to existing workers, including professional workers. What about the services that one so badly needs at times when they are not normally available? Why should shops run by enterprising Asians be the only ones open till 10 pm or midnight? Why should one have to wait until tomorrow to get a leaking pipe or tap repaired or have one's television mended without having to pay an unreasonable surcharge? Why cannot one bank a shop's takings at 6 pm on a Saturday afternoon? Why does one have to put up with the pain of toothache over the weekend?

Why should this country not be the first to have a 120-hour week, with most people working only 20 or so hours, while still keeping down labour costs? Infinitely better use of transport and communications facilities would result. There would be immense benefits to the tourist and leisure industries which must be the great employers of the future. I am glad that in my constituency the concept of leisure provision has taken an effective form in a highly successful all-weather Sun Centre at Rhyl which lengthens the tourist season and tourists' day at the seaside, thus providing many jobs.

All these ideas would be a recipe for disaster under a Labour Government or while the unions are in a position to extort unreasonable pay increases in return for shorter hours. A programme such as the one that I have sketched, or any kind of programme to expand job opportunities by sharing and splitting can work only under a Conservative Government who will demonstrate, like this Government, that they will not allow the competitiveness of British industry to be destroyed.

For that reason, I welcome the Queen's Speech and the evident determination of the Government to press their policies to a successful conclusion.

6.43 pm

Mr. John Maxton (Glasgow, Cathcart)

There was one point during the speech of the hon. Member for Flint, West (Sir A. Meyer) when I suddenly got toothache over the thought of youth opportunities programme personnel pulling out my teeth at the weekend. That seemed to be what the hon. Member for Flint, West was suggesting.

I am sorely tempted to pursue a number of questions, including reform of the House of Lords. I am committed fully to the Labour Party's policy to abolish the House of Lords and to have a unicameral system of Government. I appreciate that there is a need to devise ways to protect the right of individuals under a unicameral system. I would, however, prefer that system, together with some form of plebiscite when we change the constitution, to reform of the House of Lords which will not, in my view, operate. It would make today's performance involving the Queen's Speech extremely difficult. The question of which was the Upper House would have to be resolved. Would hon. Members be going to the other place if it was a chamber based on equality rather than a House above us as it is at present wrongly regarded? It is strange that we, the elected representatives of the people, have to go to a place where no one has been elected to hear what we shall be doing in the following year. It is nonsense that such a system still exists. The Prime Minister of the day should tell hon. Members the Government's programme. We should not have to go to another Chamber to find out.

I am sorely tempted also to discuss the privatisation of industry. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) dealt with the issue most adequately. My hon. Friend made the point about the public money that is being used to privatise industry. That is right. There is also the fact that large amounts of private capital, which the Government say should be creating new jobs, is being used to purchase existing public properties. The Government are not using the money that they obtain from the sale of assets for reinvestment in new industry and the creation of new jobs. They do not believe that the State should invest in that manner. As a result, private capital is being equally wasted in the privatisation of industry.

The basic theme to which I wish to devote myself is what should be happening but is not happening in Scotland. I wish to refer specifically to Scottish affairs. The Queen's Speech states: Measures will be brought forward to reform the Scottish law on mental health, to enable divorce actions to be heard in sheriff courts, and to alter the control of legal aid fees in Scotland.

That is not exactly the most dynamic and controversial legislation for Scotland. I am glad to see that the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) is now sitting on the Government Front Bench, although he is no longer a Scottish Minister. Scotland is glad of that. At least he represents a Scottish constituency, as few Tories do.

The proposed reforms are important in many respects. In fact, the Government will probably receive support from most Opposition Members for their proposals on mental health and divorce. There are, however, a number of major problems facing Scotland.

What about housing? The hon. Member for Woolwich, West (Mr. Bottomley) accused me of being unfeeling and uncaring because I did not share his concern for council house tenants who wish to buy their own houses. I invite the hon. Gentleman to come to my constituency to see the effects of his Government's policy on the 95 per cent. of council house tenants who do not wish to buy their own houses and who are not in the economic position to buy them.

I cannot obtain the true figures for unemployment among those living on the large housing scheme at Castlemilk in my constituency, but 25 per cent. would be a conservative estimate. There is no unemployment benefit office there from which I can obtain the figure. In parts of that area, the figure will be over 50 per cent. Those people cannot buy the council houses in which they live. At the same time, they face ever-increasing rents. They have to contend with a poor record on repairs with the prospect of no renovation of houses built almost 30 years ago. There is a need for rewiring or, in some cases, for complete new roofs. The scheme requires massive environmental development to meet the needs of the area. The Government are cutting the money that the local authority should have to deal with that problem. The Government are facing—I should be interested to find out the answer at some time—a major problem.

Recently, in Paisley, the Renfrew district council—Labour-controlled I admit—was taken to court by some of its tenants because of dampness. The action was brought under a late nineteenth century Health Act. The tenants claimed that dampness was a nuisance. I shall read an extract of what the sheriff ordered the local authority to do. He ordered, first, that all fireplaces in bedrooms should be altered in a certain way. Mechanical extractor fans should be fitted in the bathroom. Self-closing devices on the bathroom door should be fitted. Those are all the minor matters. The judgment continued: Insulate the walls to U-value of not more than 1"— and, most important of all— replace the existing central heating system with a system which (a) does not require to be in continuous operation for 24 hours a day"— that gets rid of the majority of council houses that have underfloor heating— (b) which the average council tenant can afford to operate. That is dynamite for the local authority. It has to install a central heating system that the average council tenant can afford to operate.

In large areas of Scotland the average council tenant is unemployed and receives little money to pay his heating bills. The average that he can afford to pay will be downscale. We shall require a cheap energy policy to enable the tenants to have cheap energy. What are the Government going to do about that order?

My constituents in Castlemilk are considering taking Glasgow district council to court in the same way to get it to carry out major dampness repairs. What will the Government do for local councils which are faced with that problem, about which Scotland has been telling the Government for a long time? Are they going to give extra funds to local authorities in Scotland to deal with that urgent problem that the sheriff's judgment has no more than highlighted?

Secondly, there is the declining public transport system in Scotland. The problem in rural areas was highlighted last Session by a report of the Scottish Select Committee, of which I am a member. The hon. Member for Pentlands was one of the junior Ministers who made great play of the introduction of road equivalent tariffs for ferries to the islands, which, in response to that report, the Secretary of State for Scotland had nearly abandoned. Rural and city bus services are being cut. I receive many letters from my constituents about two bus services that have been cut in Kings Park, and train services that have been cut from half-hourly to hourly at non-peak times. Between 15,000 and 20,000 people face major public transport problems.

We see similar problems to those of the rest of the United Kingdom in the Health Service. We are suffering from cutbacks. Glasgow MPs met the Greater Glasgow health board during the recess. It has a problem of an overspend last year of £6 million. The board is being forced to close health facilities in the Greater Glasgow area. That is being forced upon it by a Government who said they were not going to cut money for the Health Service. That is just not so. The Health Service is being cut. At the same time we are seeing the growth of private medicine in Scotland.

Mr. Major

Good.

Mr. Maxton

The hon. Gentleman says "Good", but we all know that private medicine is for fashionable diseases. It is not for those who are poor or old or who require geriatric or long-term medicine. It drains the facilities and trained staff away from those who require them.

Mr. Major

Perhaps the hon. Gentleman would consider the fact that in the Peterborough health district, which covers a substantial part of my constituency, a private hospital has just been constructed and opened. That private hospital will significantly assist in coping with many of the less serious non-geriatric patients who would otherwise be waiting in the queue for National Health Service treatment. The effect is that other people move more rapidly up the queue. That is a significant advantage which, notwithstanding the hon. Gentleman's reservations, he would be wise to acknowledge.

Mr. Maxton

There is a great deal of evidence in the west of Scotland that doctors use the so-called queue to develop their private practice by saying to people "You will have to queue, but if you go privately I can do it straight away." The queue does not exist. If there was a proper Health Service and no private medicine, many of those queues would disappear.

Mr. Foulkes

Blood transfusions.

Mr. Maxton

As my hon. Friend the Member for South Ayrshire (Mr. Foulkes) said, private hospitals use the blood transfusion service and other National Health Service facilities. In many cases, if a patient goes in with a minor ailment which is a little more serious than was thought, the consultant, who is a consultant in a National Health hospital, gets a priority bed for him in that National Health Service hospital.

Mr. Foulkes

Leeches.

Mr. Maxton

As my hon. Friend says, they are leeches.

The point about the three matters that I have raised—housing, transport and the Health Service, and I could make the same point about social work, roads and other areas of Scottish life—is that they are covered by the Scottish Office, the Secretary of State for Scotland and his Ministers. In her speech, the Prime Minister—it is the only reference I shall make to her—said that she hoped that legislation would be finished in time for the end of the summer term in Scotland, which is at the end of June, so that Scottish Members could go on holiday with their children.

Last week my hon. Friend the Member for South Ayrshire was attacked in The Scotsman newspaper—

Mr. Foulkes

It was disgraceful.

Mr. Maxton

—as being the most unpopular Member in the House because—when a debate was running until 7 o'clock, followed by Private Business, and was due to start again after Private Business—he insisted on his right to speak until 7 o'clock and to start again when the debate recommenced. He was attacked from both sides of the House. Those hon. Members who speak on Scottish affairs are often attacked by our English colleagues on both sides of the House, because many of them feel that we waste the time of the House. How many times do we hear the complaint—I am sure that you would not make the same point, Mr. Deputy Speaker—when it is a Scottish order until half-past 11 at night or 1 o'clock in the morning "Why are we being kept here by you Jocks?" That is the expression used.

Mr. Foulkes

Or worse.

Mr. Maxton

That is the mildest term used.

The House and the Government have it in their power to deal with the matter by reintroducing devolution for Scotland. The Scottish people voted for a Scottish Assembly. Unfortunately, in that campaign we did not achieve the 40 per cent. that the hon. Member for Islington, South and Finsbury (Mr. Cunningham) managed to insert into the legislation. Incidentally, the hon. Gentleman has now joined a party which is committed to devolution. I do not know how he resolves his conscience with that commitment. The majority of Scottish people who voted came down on the side of a "Yes" vote. Many of those who voted "No" followed the advice of Lord Home, who said that what was required in Scotland was an Assembly with greater economic powers. That is why many people voted "No". Many Conservatives who respect Lord Home took his advice and voted "No". As a result, we did not get the 40 per cent. for the Assembly that the Scottish people wanted.

An Assembly would have protected the Scottish people from some of the worst effects of this Government's policies. I do not say that it would have stopped the economic blizzard that has overtaken Scotland as a result of this Government's economic policies, but we would not have had the sale of council houses in Scotland if we had had a Scottish Assembly. We would not have had the Criminal Justice Act with increased police powers which are causing immense problems to our youth and to police-public relations in Scotland. We would not have had the assisted places schemes in education. We would not have had the parental choice, which again is causing problems to schools in my constituency which suffer because a few pupils are moving to other schools and thereby lowering standards in schools in the big housing schemes. We would not have had the effect of this Government's policies.

Just now, a Government supporter reminded us that the Scottish people voted overwhelmingly for the Labour Party. The Labour Party has a two-to-one majority over the Conservative Party in Scotland. Surely it would have been to the benefit of the Conservative Party to give an Assembly to Scotland rather than to impose an English majority upon the Scottish people.

The hon. Member for Pentlands voted "Yes" for an Assembly. I still hope that people who hold that view will persuade the Government even now to introduce a Bill to revive an Assembly with economic powers for Scotland.

7.3 pm

Mr. John Major (Huntingdonshire)

The hon. Member for Glasgow, Cathcart (Mr. Maxton) is always very entertaining, but I do not propose to take up any of his remarks.

I was about to say how pleased I was that the hon. Member for Gower (Mr. Wardell) had returned to the Chamber and to congratulate him on his admirable maiden speech, but he appears to have departed yet again. In his absence, may I say that the House enjoyed his speech and his delightful accent. I have no doubt that we shall enjoy listening to him on many occasions between now and the next general election.

I wish that I could be as flattering about the hon. Member for Stockport, South (Mr. McNally) who made a very contentious speech. Subsequently he fled the Chamber, together with the admiring gallery from the Liberal-SDP Benches who joined him simply for the lengthy duration of his speech. I regret that the hon. Gentleman's interest in democracy apparently does not extend to listening to alternative arguments—[Interruption.] I welcome back the hon. Gentleman. He may have anticipated the remarks that I am about to make with the prescience which encouraged him to anticipate the decline of the Labour Party and to leave it.

The hon. Member for Stockport, South made some criticisms of the Government's proposal to sell a majority shareholding in British Telecom. He did not, although pressed, provide many sound reasons for his opposition other than the rather amorphous reason that it would give rise to uncertainty. In general, he was unspecific on the matter.

I must tell the hon. Member for Stockport, South that there is no uncertainty. A majority stake in British Telecom will be sold shortly after the next general election, and those workers in the industry may be sure that that is right. It is not to be sold just for dogmatic reasons. That is not why the Government have adopted that policy, and it is not why I support it. There are sound reasons for such a policy, not least the advantages of competition in private enterprise that have been proved over many years.

There are also more technical advantages. I suspect that many hon. Members share my view that one of the problems in the British telecommunications industry is that it has not always had the access to the capital that it needed at the time that it needed it. As a private enterprise company, it will able to go to the market as and when conditions are satisfactory and as and when it wishes, without necessarily suffering the same impositions from the Government—a Government of either party—that it may have suffered in the past. I should have thought that that was an attractive thought for those hon. Members who wished the industry well. It is an attractive reason to me for supporting the Government's proposals in this instance.

I do not propose to deal with the fantasies of the SDP on this occasion. I want instead to discuss a more substantial matter, the Gracious Speech.

This year we are debating a more slender Gracious Speech. Those many Government supporters who listen to late night Scottish debates with great pleasure so frequently, in the absence of having a pair, may themselves offer up a small prayer of thanks to the Government for making the Gracious Speech less bulky than in previous years. But it is also a courageous Gracious Speech in that it does not defer to fashionable opinion and does not wring its hands about the problems that we face. Instead, it touches upon matters which are of great personal concern to many individuals of whatever party.

I turn to some of the opening sentences of the Gracious Speech. In the second paragraph, we read: My Government consider the security of the nation and the preservation of peace their highest priority. They plan to meet NATO expenditure targets, and to seek a more efficient use of the resources of the Alliance"— the NATO Alliance, I hasten to add. They will honour our worldwide commitments and protect the dependent territories.

I welcome that commitment unreservedly. I am prepared willingly to defend the taxation necessary to achieve that commitment against other important competing claims. My constituency is in an area which contains a very large Royal Air Force presence at RAF Brampton and RAF Wyton and a significant United States Air Force presence at Alconbury. It is also very likely to be the site for cruise missiles at Molesworth from 1987 or 1988 if they are not successfully negotiated out of existence between now and then.

My constituency sees at close quarters the burden of defence and the commitment of the Armed Forces who serve us all. Those of us who see it at close quarters admire that commitment. We also note that it is made predominantly by men and women who are significantly younger than most hon. Members. We owe those young men and women the best equipment and the best conditions of service that we can obtain for them. I welcome the Government's acceptance of that implicit obligation. I am delighted that it takes such a high priority in their programme.

We also need to win for those Service men the argument that their role is worth while. In some quarters, it is under attack. There is a minority of our nation—

Mr. Maxton

indicated assent.

Mr. Major

I see the hon. Member for Cathcart agreeing with me. It may be that he is part of that minority. That minority challenges the Government's defence policy, especially the extent to which it refers to nuclear defence policy. Such people challenge it for a variety of reasons—some good, some not so good, and some bad. Some of them might prefer the money to be spent elsewhere. Some of them may simply be pacifists, and I can understand their point of view. Some of them may simply want to see a weak Britain, and my contempt for them is boundless.

I suspect that most of the people who oppose the Government's defence policy do so because they are bewildered and peaceable people who cannot conceive the dangers that premature and unilateral disarmament might bring upon us.

I understand that emotion. Perhaps few hon. Members have met as many delegations as I have to discuss it, because of the likely proximity in my constituency of cruise missiles. However, I cannot agree with those fears or with the opposition to the Government policy on defence.

Peace is not a lottery for this or any other Government to gamble with. I hope that the Leader of the Opposition will understand that in the coming months, as we move towards a general election. The gamble with our defence policy—unilateral disarmament, at best, is a terrible gamble—would be to fly in the face of logic, common sense, and the lessons of our history. Surely the right course is that set out in the Queen's Speech—to honour the defence commitments that we have established for ourselves, and to work for a balanced and verifiable measure of arms control. I hope fervently, at least as fervently as any other Member, that we shall get a reduction in nuclear armaments, but I do not believe that we would be safe to offer it unilaterally.

The prime concern of most right hon. and hon. Members, apart from defence, lies in the problems of unemployment, its causes, and its medium and long-term solutions. It is clear that one of the underlying causes of current unemployment is the past policies that have produced high inflation, high interest rates and low productivity. Whatever our political differences, we must recognise that as a significant cause.

If we are to reduce unemployment and provide future prosperous and secure employment for our younger generation, one of our prime aims should be to reduce inflation and interest rates to the lowest possible level. Unless and until we achieve that, much else that we hope for may turn out to be fruitless. We simply will not achieve it.

In recent months there has been a considerable improvement—I put it no higher—but I hope that there is no complacency about the current levels of inflation and interest rates. They are still not tolerable, if there is to be the investment in industry that we all want. However, it is worth noting that interest base rate levels—minimum lending rate—have dropped in the past year by 6½ per cent., from 16 per cent. to 9½ per cent. Every half per cent. saves manufacturing industry £90 million, making a total of just under £600 million in the year, and each half per cent. saves industry and commerce £325 million, making a total of about £2,000 million in the past year or so. That is attractive and desirable and a considerable bonus, but there is still a problem.

The problem is that the real rate of interest—the difference between the nominal rate of interest of 9½ per cent. plus the bankers' margin of, say 1½ per cent., less the rate of inflation—is still about 4 per cent., and historically high to encourage large-scale investment. That is a problem that we shall have to deal with in the coming months if we are to have investment on the necessary scale. I hope, therefore, that the Chancellor of the Exchequer and the Governor of the Bank of England, both of whom have been very enlightened on this matter in recent months, will continue to press for reductions in interest rates, notwithstanding their understandable concern about the external exchange rate of sterling.

When we look at current unemployment, we should accept that haste in reducing industry's costs is urgent, as I am sure all right hon. and hon. Members would accept. However, the reduction of industry's costs lies not just in the Government's hands but in the hands of many of our fellow citizens who work in those industries. Latterly, there have been welcome and realistic signs on pay. The two-year pay agreement at British Leyland was thoroughly good news. The settlement by the miners was very good news. I also welcome without reservation the settlement, effectively at 4 per cent., by British Rail. I hope that the mood of realism will spread. In particular, I hope that the Opposition will not back large wage claims simply because it is politically expedient to do so. There is a suspicion that that is what they have done in the case of the National Health Service wage claim, and it has not helped either the NHS or the economy generally.

Moreover, such wage claims tend to be against the interests not only of the unemployed, but of those who are employed in industry. They may prove to be so, because if they are granted under duress, they may well price those same workers out of their jobs. That would be a tragedy.

I hope, therefore, that the Government will regard it as central to their aims in this Session to play a part in pricing workers back into jobs, and not letting them price themselves out of jobs. For those who wish to work, unemployment is degrading. It chips away at self-respect. It removes the capacity of the man to feed and clothe his family in the fashion that he would wish. For my party, which believes that the family is the core of society, that can be especially damaging. Nothing is more undignified for the unemployed person who wishes to work than being unable to work.

So there is a role that the Government can play, and I have partly outlined it. We suspect that some practical help may soon be forthcoming. A reduction in the national insurance surcharge would be welcome, although I understand the fear of Treasury Ministers that such a reduction may simply work its way through to larger wage settlements in the forthcoming 12 months. For that reason, I prefer a gradual reduction in the surcharge rather than immediate abolition, and perhaps an alternative use for any money that may be saved by not abolishing the whole surcharge immediately. Let us see how industry will use the improved cash flow that it may achieve.

However, the principal hopes that we must have for long-term job creation must remain the achieving and maintenance of low inflation, low interest rates, and low wage demands. There is no escaping that harsh reality now or in the future, in any part of the United Kingdom. The Government may have the opportunity for tax changes in the spring. If that should prove to be the case, I am in no doubt about where those tax changes should be directed. I very much hope that they will be directed exclusively to the lower end of the tax scale to take as many of our fellow citizens out of taxation as possible. I am delighted to see that Opposition Members agree on that issue. That step has a social and economic value, too. The hon. Member for Sheffield, Heeley (Mr. Hooley), who has not graced us with his presence throughout the afternoon, may comment on that later. Perhaps he will take up what I am about to say, if he will permit me to say it.

I suspect that tax reductions of the kind I described would play a large role in reducing wage demands in the coming 12 months. That would be a great economic benefit to industry—at least as great as an artificial injection of spending power through capital schemes. Secondly, it will substantially diminish the problems of the "Why work?" syndrome, of which we have heard a certain amount this afternoon. Thirdly, I believe that on its own merits it is just to reduce taxes at the lower end of the scale, and it is certainly what the Government have always sought and wished to do. [Interruption.] I am surprised that the hon. Member for Heeley does not believe that we seek to reduce taxes. 1 should have thought that his fear would be that we should succeed, and he would probably be right. We probably shall succeed, and then he will criticise us for it. I hope that the hon. Member will bear that in mind during the coming months.

Finally, I suspect that the reduction in taxation at the lower end of the scale will find its way rapidly into demand for products—British products, I hope. That, too, would be welcome, although I should emphasise that there has been a substantial increase in demand in the past year. It is a fallacy to assume that lack of demand is the cause of our problems.

While I welcome the measures for privatisation, computer privacy, better police powers and all the other matters that are contained in the Gracious Speech, it is upon the economy that much of our future depends. I hope that we shall not lose sight of that.

Last year the Opposition mocked loudly when we said that interest rates would fall. They have fallen. They mocked last year when we said that inflation would fall. It has fallen. They mock this year when we say that the reduction of inflation and interest rates will fuel an industrial recovery. They must wait for a while and see how accurate that turns out to be. They have been consistently wrong in the past. They are consistently wrong now, and I have no reservations whatever in welcoming the Gracious Speech.

7.20 pm

Mr. Frank Hooley (Sheffield, Heeley)

The hallmarks of the Government's record so far have been incompetence, corruption and disillusion. They have been incompetent in their management of the country's economy. They have been corrupt in their stewardship of public assets. They have created cynicism and despair among the young people of Britain who are now unemployed not in tens of thousands but in hundreds of thousands. That record has been compounded by a farrago of deceitful excuses and rotten alibis for the Government's failures. Their failure is grotesque, and for the British people it has been tragic.

Let us consider the Government's industrial policy failure. On 4 January 1981 the Prime Minister said: 1981 will be the year when results begin to show. By gum, she was right. The results of Tory policies, which were bad enough in 1979 and 1980, began to cascade with a vengeance on the electorate's heads in 1980 and 1981 and have gone from bad to worse in 1982. The economy is producing 6.5 per cent. less than when the Government took office. Manufacturing output has fallen to its lowest point since 1967. It is down to a level of 15 years ago, and it is one fifth below what it was when the Labour Government left office in May 1979.

Investment in manufacturing fell in the second quarter of 1982 for the tenth quarter in succession. In other words, there were 30 successive months—2½ years—of falling investment in manufacturing industry under this Government. It has been cut by a third since May 1979. That is a key factor. It was not mentioned by the hon. Member for Huntingdonshire (Mr. Major). He made several points about inflation and interest rates, but he did not touch on investment at all. Of course, he, Ministers and the Prime Minister know that the whole key to competitiveness in a modern industrial economy is a sustained high level of investment. In this day and age output is not improved by men and animals using their muscles more and more or working 30 hours instead of 20 hours. The only effective way to raise the output and competitiveness of a modern industrial economy is by a massive and sustained investment in new equipment, products, and so forth.

The Government's major failure is that their policies, so far from encouraging investment in new technology and a general high level of investment in manufacturing industry, have cut investment back. It is now running at only two-thirds of the level at which it was running when the Labour Party took office.

The Government have expressed much concern about small businesses. I am sure that they will be interested to know that bankruptcies this year are at the rate of 233 a week. That is a 40 per cent. increase over the previous year. Forty per cent. more companies are now going bankrupt week by week under the pressure of the Government's economic policies.

It is nice to see in the Gracious Speech that the Prime Minister and the Cabinet appreciate at last the anxieties and distress caused by unemployment. However, what is their record on that aspect? In September this year there were 3,340,000 people out of work. They cannot even claim this year that this is the product of the large number of school leavers, because of that figure more than 3 million are adults registered as unemployed. The major tragedy is that 1 million of those people have now been out of work for more than 12 months and there is no sign for them of any hope of jobs.

Almost every time I open a local morning or evening newspaper in Sheffield I read that some firm or other is closing down or laying off not 10 or 20, but 100, 200 or 600 people at a time, and that goes on and on. In the national and local press the story is the same. Even Government spokesmen admit that there is practically no prospect that unemployment in 1983 will fall below 3 million—and most people think that it will rise.

Last year living standards fell by 2.3 per cent.—the biggest fall in a year since the war. What is the Government's reaction to that? I quote the fatuous comment of the Chief Secretary to the Treasury in May this year. He said: The evidence of a start of a recovery is all about us and not even the most blinkered pessimist could fail to see it. There are many people in the CBI and elsewhere who are not blinkered pessimists and who cannot see any evidence of that recovery. I do not know of a group of economists or an economist who seriously believes that we are anywhere near the beginning of an economic recovery.

It is true that in the past 12 months our exports have risen a little—4 per cent. By contrast, imports have risen by 16 per cent. and imports of manufactured goods have risen by 19 per cent.

The hon. Member for Huntingdonshire was right to say that the tax burden on the poorest should be relieved. I welcome his conversion to that. However, there was no evidence of that in the Chancellor's first, second, and third Budgets. The problem is that, by doing that rather than changing policies overall, we are merely compounding the difficulty of sucking in imports and not necessarily creating a market for British products.

One of the Government's worst blunders has been deliberately to encourage a massive flow of capital overseas by destroying exchange controls. The Prime Minister has argued that one of the tests of success of the Government's economic policy is the willingness of overseas investors to invest in the United Kingdom. She sneered somewhat at the Labour Government's record on that point. However, what happened in 1981? There was, it is true, an inflow of about £3,400 million of capital from abroad, but there was an outflow of £10,600 million of valuable capital assets to finance the competitiveness of the industrial countries which are competing with us in world markets.

The investment by United Kingdom companies overseas, at £6.5 billion, was more than the total investment by manufacturing companies in the United Kingdom. In other words, the Government's policies have been such that valuable capital, which could have provided new machinery, equipment, factories and jobs for Britain, has been flowing abroad unrestrained and financing our industrial competitors and jobs.

If anyone should hasten to say that that is to help the 800 million poorest people in the world, that is nonsense. A great deal of that money has gone to countries, such as South Africa, that are not interested in helping the poorest people of the world. That argument cannot be adduced.

We have experienced rising unemployment, a fall in investment and output and an increase in bankruptcies. To achieve what? It was to bring inflation down by August 1982 to the level achieved by Labour in 1978. After four years, this Government have achieved a level of inflation almost identical with that achieved by the Labour Government in September 1978. The level has slid a little since then, but even now it is only 2 per cent. below the level at which it stood when Labour left office.

The Government have deceived the electorate over taxation more than anything else. They came to office boasting that they intended to cut taxes. What has happened? A family earning three quarters of the national average income is paying 17 per cent. more in tax than in 1979. A family on average income is paying 16 per cent. more. A family on double average earnings is paying 10 per cent. more. The only people who have benefited from the Chancellor's taxation policies are among the tiny proportion of the population with incomes between £100,000 and £200,000 a year. That is the shoddiest deceit in the Government's record.

Faced with such failures the Government produce a series of alibis. Alibi number one is that the Labour Government left a mess when they left office. The Government say that all their problems are the result of the incompetence of the previous Government.

The seven years between 1975 and 1982 were divided almost equally between Labour and Conservative Governments. If one takes output in 1975 to be 100, by 1979 when the Labour Government left office output was 112. Today it has slumped to 105. When the Labour Government left office 23 million people were in work. Today that figure has slumped to 20½ million. Under this Government there are 2½ million fewer jobs. Unemployment reached 1.3 million under the Labour Government. That was sad and tragic, and I take no pleasure in quoting that figure, but today the figure is 3.3 million—an increase of 2 million since the Conservatives took office.

If one takes industrial output to be 100 in 1975, by 1979 it was 115. Today it is back to 100. The Government's manufacturing industry record is disastrous. Between 1975 and 1979 manufacturing output increased by 7 per cent. That was nothing to be excited about. It was not ambitious or startling and it was below what the Labour Government wished. Nevertheless, it went up from 100 to 107. Today the figure is 89. That is the most appalling slump in manufacturing industry in Britain's post-war history. When the Labour Government left office investment in manufacturing industry was running at about £1 billion a quarter. It has slumped to £660 million—a cut of one third.

In 1979 overseas investment was running at £4.3 billion. The figure today is £2.3 billion. The outflow was £6.5 billion under Labour and it is £10.6 billion today. The figures show that this Government's record is far worse than the Labour Government's record.

Alibi number two is the world recession. Output in Britain is minus 5 per cent. The OECD average is plus 1.4 per cent. Industrial production in Britain is down by 12 per cent. The OECD figure is down slightly under 2 per cent. Some OECD countries have improved their output. Our investment index is 17.8 per cent. The OECD average is 21.8 per cent. In the first quarter of this year the average unemployment figure in the United Kingdom was 12.4 per cent. It has risen considerably since then. The OECD figure was 8.3 per cent. Of the industrialised countries in the OECD only Spain has an unemployment figure that is worse than ours.

It will not do for the Government to claim that our economic ills are the result of the world recession. Almost every industrial country in the Western world has a better record for output, investment, employment and all the categories that matter in terms of economic success. It is extraordinary, because we, of all the industrial countries, are the best endowed with energy resources. We have more gas, oil and coal per capita than any other industrialised nation.

Alibi number three is that is all the fault of the trade unions. The Government say that if trade unionists would accept no wage increases and stop restrictive practices everything would be all right. The Government say that the fault is that of organised labour. Yet considerably fewer days were lost through industrial disputes in 1980 and 1981 than in any of the past 10 or 15 years. It cannot, therefore, be claimed that the unions have tried to thwart or damage Government policies.

If trade unions are such a key factor in the country's economy, any sensible Government would take the opportunity to bring them in, consult them and seek their co-operation in running industrial affairs. But not a bit of it. The Government have hampered, obstructed and made more difficult the operation of the proper business of trade unions.

I referred earlier to corruption. I used the word advisedly. I believe that the sale of public assets at cut-price levels, deliberately below their proper market value, is corruption. The sale of Amersham was a public scandal and was denounced as such by all responsible press commentators. The sale of Redpath Dorman Long was not much better. The sale of Britoil is a gross scandal. It means the alienation not of property and products that have been built up by private capital, but of a fundamental natural resource which is of enormous value to the country. The sale of Telecom is further evidence of the Government's corrupt desire to hand over to friends and supporters in the City and elsewhere the chance of rich pickings in an advanced technology. There is no rush to sell British Rail or the mines. The Government have decided that the pickings are in advanced technology.

I have referred to disillusion, cynicism and despair. Today 10,000 boys and girls in Sheffield are without proper jobs. The local paper, the Morning Telegraph, is by no means pro-Labour. On 21 July it had an article headed: Jobless plight is worst ever. Sheffield nudges 40,000. Today that figure is 42,000. The article stated: Vacancies are few and far between for adults. There has been a marginal increase in recent months, says the divisional manager of the Sheffield unemployment service, Mr. Geoff Akeroyd, and there is now one vacancy for every 47 on the unemployment register. As for youngsters—'I doubt that we have got more than 15 jobs on our books', said Mr. Coates, 'although it could be that we will get another ten tomorrow.' Those jobs will be snapped up by the fortunate few among the city's 6,965 unemployed teenagers. That represents 25 jobs for 6,965 boys and girls in Sheffield.

We all know that unemployment is a worse problem for the handicapped, women and black boys and girls. We also know that, despite the Government's pretended anxiety about unemployment, they have cut the facilities that might offer an alternative to full-time jobs—training boards, higher education and further education—so that those boys and girls who are not fortunate enough to have a job have even less opportunity of finding places in the universities and polytechnics.

There is an alternative to this catalogue of error, disaster and incompetence. The Labour Party has published a far-reaching and coherent programme for economic recovery and for putting Britain back on the road to industrial success. The programme requires massive public investment. I find it ironic that the Secretary of State for the Environment, who has cut local authority expenditure for a long time is rushing around telling local authorities that they must spend £1,000 million in four months. That is a ridiculous proposition.

We need massive public investment. We need to stop the ghastly haemorrhage of investment capital flowing abroad. We must cut out wasteful programmes, such as Trident, and use North Sea oil to finance jobs, not dole queues. We must increase overseas aid to stimulate overseas economies and create new markets for our goods. We must plan our international trade and not suppose that a Gladstonian attitude in the latter part of the twentieth century has any relevance to international commerce.

The Labour Party will save the steel industry, modernise railways, keep British Telecom in public ownership and boost investment in it. We shall keep the advantage of Britoil for the British people and not sell it to corrupt private enterprise and we shall make sure that the City wolves do not get their teeth into public assets, as they have under the Government. The alternative is there. All that we are waiting for is the election to put it into practice.

7.42 pm

Mr. John Stokes (Halesowen and Stourbridge)

I congratulate the hon. Member for Gower (Mr. Wardell) on his excellent maiden speech. He was fluent and obviously sincere. I knew his predecessor well and I regarded him highly. I am sorry that the leader of the Liberal Party, the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), is no longer here, nor any members of his party or the other branch of the alliance. The right hon. Gentleman cast an unwarranted aspersion on my party about our attitude to people who work on the shop floor. He said that Conservatives had no knowledge of what they did and no sympathy for them. That came strangely from someone with a largely country constituency whom I suspect has little personal knowledge of factories. I strongly resent his remarks since there are about 100 factories in my constituency to every one factory in his. There are far more supporters of the Conservative Party on the shop floor than of the Liberal Party.

I welcome the Gracious Speech. I am glad that not too many Bills are foreshadowed in it. The country wishes to have a continuation of steady and stable government. Ministers need time to get on top of the work of their Departments and to concentrate on good administration. Fewer Bills will also mean fewer civil servants, which is a good thing.

I am sorry that public expenditure is still far too high, at about 44 per cent. of GNP, but I note with the greatest satisfaction the steady fall in inflation and interest rates—two important factors that were omitted from the enormously long catalogue of figures given by the hon. Member for Sheffield, Heeley (Mr. Hooley).

It is natural that people should concentrate on the economy and unemployment. It is a reflection of the world slump. I was a boy during the 1931 slump and I know that the world's troubles are almost as great now as they were then. We have many world problems—lack of demand for the commodities produced in more backward countries, and the poor prices for those commodities, and the dangers to the world banking system with countries such as Mexico, Poland, Nigeria and Argentina running up enormous debts. There is a danger of countries reverting to protectionism, which would be disastrous for British and world trade. Ordinary people understand those complex matters extraordinarily well and that is why most ordinary people do not blame the Government for unemployment.

My right hon. Friend the Prime Minister, with her courage and energy, has now become a world leader. I hope that she can influence Mr. Reagan and the EEC countries to put behind them any thought of protectionism. There is a lack of confidence in world trading. We must restore faith in the capitalist system which alone, we know from experience, can produce the goods and services that we need. By contrast, the Soviet bloc continues to fail to do that. For example, the regular failure of grain harvests in the USSR contrasts strongly with Russia under the Czars when it exported grain.

It is natural for me to mention British industry, because there are many industries in my constituency in the hard-hit West Midlands. Industrialists there do not blame the Government for their troubles. Most of the firms are honest enough to know that they brought many troubles upon themselves by not being competitive enough. However, industry looks for some relief—I share the view—from the Government on the national insurance surcharge, energy costs, rates and the continual rise in the costs of nationalised industries that bear so heavily upon them.

At this time last year, I said: 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."—[Official Report, 4 November 1981; Vol. 12, c. 93.] Industry also hopes this year for substantial tax cuts. That must apply as well to our oil companies which are operating in the North Sea, where the Government, by overtaxation, have been in danger of killing the goose that lays the golden egg.

I welcome the steps promised in the Gracious Speech to denationalise more industries. That is the only way in which we can make those organisations respond to market forces and, above all, to satisfy their customers. I hope that there will be further legislation to curb trade union power.

During the past week there have been growing signs of a welcome realism, for instance, among British Leyland workers and coal miners. During my frequent visits to the factories in my constituency, I have found that shop floor workers are sensible and intelligent about British and world problems. However, the shop floor is crying out for a lead not only from politicians—how well my right hon. Friend the Prime Minister does that—but from their managers, who have a marvellous chance now to improve productivity, marketing, research and development.

Mr. Robert Parry (Liverpool, Scotland)

What does the hon. Member know about the shop floor?

Mr. Stokes

The hon. Gentleman shows his ignorance by asking what I know of these subjects. I happen to have spent the whole of my life, apart from being a soldier, in industry and commerce.

There are other serious problems that the Government have to tackle vigorously. Foremost in most people's minds is the question of law and order. The other night, at a large gathering of pensioners in my constituency, they told me they were quite satisfied with their pensions but frightened to go out at night. That is a terrible indictment of our present society. I should like to see an iron hand at the Home Office to deal with the awful muggings, street crimes and burglaries.

The police have been very well supported by the Home Secretary and they must now improve their performance by concentrating on the best possible type of officer for the most senior command. I congratulate the police on the way in which they handled the riot in Brixton on Monday night.

Mr. Donald Stewart (Western Isles)

What about the violence when the Home Secretary was speaking to the police?

Mr. Stokes

I was deeply distressed by the new immigration laws concerning the admission of husbands and fiancés to the United Kingdom. The House should remember that very few countries, if any, would allow similar concessions. When many people in Britain felt that we were at last, after 25 years—a whole generation—beginning to get on top of the problem of immigration, the Government chose to reopen an old wound. Public confidence will be hurt by the doubt whether the Government are in deadly earnest about strict immigration control. I know that a significant number of my party are opposed to the new changes, which will be open to abuse, and I hope that the Government will think again and will withdraw the new rules.

In spite of the economic and social problems, and in spite off some o the extremely depressing speeches that we have heard from the Labour Benches—including the one of the hon. Member for Heeley—I believe that the country is still in good heart. No one could have lived through those weeks in the early summer, when the whole nation day by day watched the Falklands drama so closely, without realising that there is a deep and profound patriotism and love of country among all classes and all age groups, which surprised the world and even surprised some of our compatriots. It did not surprise me, and it is something on which the country now has to build. Nor was I surprised by the valour of our Armed Forces and their extreme professionalism, high training and morale. What an example they have set to the rest of the nation. With people such as that—many of them very young—there is nothing we cannot do if only we are united and put our minds to it.

In all the anxious days last summer it was the Prime Minister's courage and steadfastness that saw us through. She and the Government now have to show similar leadership in facing our difficult economic and social problems. I am sure that they will, but they need more time. That is why I hope that there will be no question of another general election before all the opportunities of this Parliament have been used to the full.

7.53 pm

Mr. David Winnick (Walsall, North)

I congratulate my hon. Friend the Member for Gower (Mr. Wardell) on the eloquent way in which he made his maiden speech. His predecessor, Ifor Davies, whom we greatly miss, was a highly respected member of my union, APEX—the Association of Professional, Executive, Clerical and Computer Staffs—and we greatly miss him.

The Queen's Speech offers no prospect for the recovery of the economy and for the millions of unemployed. It offers only a drab, dreary prospect for our country. and clearly the Government have no intention of taking measures that would reduce unemployment. But before I speak about the economic situation—which I see rather differently from the way it is seen by the hon. Member for Halesowen and Stourbridge (Mr. Stokes), who spoke before me—I should like to say something about Northern Ireland. There is a brief mention of the Province in the Queen's Speech.

We were all deeply shocked by the recent outbreak of sectarian bloodshed in the Province. The Secretary of State for Northern Ireland has taken a lot of stick—some of it from his own side—in recent days over the Assembly. I should like to make it clear, as I did when I was involved in some of the debates on Northern Ireland, that I was not in favour of the Assembly. I considered it to be an irrelevance. I did not join some of the Conservative Members—one of whom is sitting in the Chamber now—who kept their colleagues up night after night in strong opposition to the proposals being tabled. But it is entirely wrong to blame the Secretary of State or the proposed Assembly for the bloodshed that has taken place. The responsibility for that bloodshed lies with the killers on each side who are so willing to take lives simply because of religious differences. A person is murdered for no other reason than that he happens to be a Catholic or a Protestant, so let us put the blame where it must belong.

I hope that there will be the opportunity for an early debate on Northern Ireland, because I firmly believe that there is no possibility of finding anything like a satisfactory outcome or an end to the bloodshed without recognising the existence of an Irish dimension. The Dublin authorities must be involved in any constitutional arrangements for the future of Northern Ireland. It is important to bear in mind that we are talking about Northern Ireland, and not about northern England, northern Scotland or northern Wales. I hope that when we have such a debate we shall be able to go further into some of the matters that I have briefly mentioned.

In the debate some Conservative Members have spoken of the possibility of recovery. Some of them, including the Prime Minister, have been optimistic, but it is interesting to note what was said on previous occasions.

In April 1979, just before the May general election, the present Prime Minister, then leader of the Opposition, said: Another Labour accusation is that the Tories plan to increase unemployment. But we Tories believe in policies that will create real jobs—not just in paying younsters to do artificial jobs without a future … We say Labour isn't working. They are the party of unemployment. We are the party of opportunity. In November 1980, 18 months after the general election, the Prime Minister said: We shall in future see a real revival of our country's fortunes if we hold to the path we are now on. We are reaching the trough of the recession and it will start to turn up towards the end of next year. We are still waiting.

The Prime Minister said on 4 January 1981: 1981 will be the year when results begin to show. On 25 June in the same year the Prime Minister said: There are now clear signs that the worst of the recession is over. That would be news to us. The Chief Secretary to the Treasury said in May 1982: The evidence of a start of a recovery is all about us and not even the most blinkered pessimist could fail to see it. Unemployment was just under 3 million. When Conservative Members speak about the need for optimism and recovery, it is as well to bear in mind what was said by the Prime Minister and her Ministers recently.

Since May 1979 manufacturing output has fallen by 17.8 per cent. That figure reflects well the rise in unemployment, short-time working and factory closures. The hon. Member for Halesowen and Stourbridge referred to the West Midlands. I see the position there in a different light, as do my hon. Friends from that region. I think that the hon. Gentleman had blinkers on when he was looking at the current position there.

Industry in the West Midlands has been decimated in the past three years. The registered unemployment figure there is 16.6 per cent. When the Government took office it was 5.1 per cent. Now, over 380,000 people are registered unemployed in the West Midlands. Many more people are unemployed, such as women who are made jobless and who do not register.

We are concerned not only about unemployment but about how long people will be unemployed. If it was for a few weeks or two or three months, that would be bad enough, but an increasing number of people are unemployed for over a year. For those made redundant at the age of 40, 45 and certainly over 50, the chances of now getting another job in the West Midlands are extremely remote. If there were to be no recovery, if the Government's policies were to continue and if there were another Tory Government, some of the people in their late 40s and early 50s who are now redundant would never have another chance to earn their living. Their only prospect would be to receive their old-age pensions.

If Labour candidates in the West Midlands had said in May 1979 that within three years of a Thatcher Government there would be a return to the region of mass unemployment which in some ways was worse than that of the 1930s, I can imagine how Conservative Members would have accused us of gross exaggeration and distortion. The worst has come to pass.

Last week I tabled a question asking what had been the increase in the past three years of people in the West Midlands who had been unemployed for longer than 12 months. The answer was that from June 1979 to July this year there had been an increase of some 322 per cent. In my travel-to-work area in Walsall in the Black Country, which the hon. Member for Halesowen and Stourbridge knows so well, the rise has been 411 per cent. Those figures are to be compared to a national rise in the same period of 197 per cent.

In May 1979 total unemployment in the Walsall travel-to-work area was the same as in the West Midlands at 5.1 per cent. It is now 18.9 per cent. It has been around that figure, at 16 per cent., 16½ per cent., 17 per cent. and sometimes over 19 per cent., for the past 12 to 18 months. Those figures show the rise in unemployment, and reflect the redundancies and factory closures in part of the area that I have the honour to represent.

We should be under no illusions. Unemployment was the deliberate policy of the Government. It is no use Conservative Members saying that unemployment is due to conditions external to the United Kingdom. To a large extent unemployment was created deliberately by the Government. Mass unemployment is a weapon that is being used in industry. It is a form of incomes policy in the private sector. It is used to keep the workers in line and to try to weaken and demoralise the trade union movement. There is a purpose behind unemployment.

If I were asked: "Is the Prime Minister worried about unemployment? Does the problem keep her awake at night when so many of our constituents are unemployed for such long periods?", I would give the obvious reply: "Of course she is not worried. Neither is the Chancellor of the Exchequer or the Chief Secretary to the Treasury." Can anyone imagine that the Prime Minister, the Chancellor of the Exchequer and the Chief Secretary are the sort of people who cannot sleep because of unemployment? The only concern of the Prime Minister and her immediate colleagues about unemployment is the obvious one. It is the electoral concern of how far mass unemployment will prevent her Government from being re-elected next time.

More and more people understand and appreciate what I am saying. There is no real concern, sympathy or compassion about the plight of the unemployed. That was well illustrated last year when the Secretary of State for Employment spoke to one of his favourite audiences, the Conservative Party conference, and implied that unemployed people should get on their bikes. He meant that if only the unemployed would use some initiative and go around the country they would find jobs. That is the extent of his concern.

As my right hon. and hon. Friends know only too well, unemployment has meant the return of much hardship for so many of the people whom we represent. It has meant the return of poverty or near-poverty to many families. After the end of the last war when the Welfare State was created and there was full employment, we hoped that the stigma and shame of the poverty that people knew before the war were gone for good. It is not my job to exaggerate. I am not suggesting that the poverty of pre-war days is now upon us. However, there is increasing evidence that many families who otherwise would not be poor, because of unemployment and the figures that I have mentioned are faced with great personal financial problems. They find it extremely difficult to cope with bringing up children on the most limited of incomes.

One of our accusations against the Government is that not only are so many people now unemployed, they have also been made worse off while jobless by Government policies. We are not likely to forget that. I hope that reports in some of today's newspapers are true. It is reported that the 5 per cent. that was taken away from the unemployed in lieu of taxation will be restored. It has not been mentioned in the debate so far. Unemployment benefit is now subject to tax. We hope that the 5 per cent. will be restored as every penny counts when one is trying to maintain one's living standards on the dole.

Many unemployed people suffer because earnings related benefit was phased out and abolished. If it had been retained, the unemployed would have been assisted. The irritation of not being able to claim a tax rebate when one goes back to work at the end of a tax year is making an already difficult situation even worse for the victims of the mass unemployment that has been created by the Prime Minister's policies. All British citizens, all those who are resident in Britain and all those who want to work have the right to lead their lives with dignity and respect. It has been estimated that 10 million people—about one fifth of the population—are poverty-stricken. Those figures, which appeared in a review of a book in the Financial Times recently, are unlikely to be disputed.

Measures must be taken. They will be the subject of debate in the next few days. Unlike the hon. Member for Halesowen and Stourbridge, I believe that it is necessary to introduce selective import controls. I cannot envisage the revival of British industry without taking what I believe are necessary measures to give British industry a minimum of protection. I am sure that it is as true of other areas as it is of the West Midlands that the continued flood of imports seriously damages industry and helps to undermine employment. I am also sure that no hon. Member argues from a point of principle about import controls. I take the pragmatic line that it is necessary to protect industry. Selective import controls have been introduced for the textile industry—

Mr. Nicholas Winterton (Macclesfield)

Not enough.

Mr. Winnick

I see that the hon. Gentleman shares my opinion. Perhaps, however, they came a little late. We do not know the Government's intentions—we must rely on press reports and speculation—but if selective import controls are introduced for such industries as engineering, there is a danger that they will be introduced too late. I hope that the Cabinet will consider the matter as seriously as the press reports suggest they are.

I agree with my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley). There is an urgent need to reintroduce exchange controls. Their abolition was a direct incentive to export the capital that is vital for the revival of British industry and the possibility of substantially reducing unemployment. Capital is draining away, perhaps to South Africa or other countries, when it should be used in Britain. Hence the Labour Party has said that one of the first actions of a Labour Chancellor would be the reintroduction of exchange controls.

I began by saying that the Queen's Speech offers no prospect for the British people. It is drab and dreary. It is essential to revive British industry and to take steps to reduce unemployment substantially.

The Government should declare their objective as was the case in the war years and afterwards. They should aim to restore and maintain full employment, but there is no hope that they will do anything of the kind. There is no hope for the British people. There is no hope for the millions of unemployed and those who are likely to be made unemployed in the next few months.

There have been more redundancies in the West Midlands and in my constituency in the last few days. The only hope lies in the removal of the Government and the election of a Labour Government with a working majority so that it can carry out the economic policies that the Labour Party has outlined. The sooner that day comes, the better it will be.

8.14 pm

Mr. Parick McNair-Wilson (New Forest)

The hon. Member for Walsall, North (Mr. Winnick) was fierce in his criticism of the Government but I did not detect one word of condemnation from him of the behaviour of the Labour-controlled Walsall metropolitan borough council which through its action has made a major engineering company in this country—Rubery Owen—take the roofs off its plant to save on the rate bill.

Mr. Winnick

Will the hon. Gentleman give way?

Mr. McNair-Wilson

No, the hon. Gentleman has had his say. He was sweeping in his condemnations, but the report is in today's newspapers for all to see. A spokesman of Rubery Owen made the position clear when he said: It was de-roofed purely because of the rates situation. Most industrialists in this area are faced with a similar problem. The report goes on to state: The company asked the Labour-controlled Walsall Metropolitan Borough Council to give rates relief on the empty buildings, but the council refused.

Mr. Winnick

We could all debate the rating of empty industrial premises, but perhaps the hon. Gentleman can tell us why Rubery Owen—our largest employer, situated in Darlaston just outside my constituency—closed its factory. That closure was a great blow to the area. The hon. Gentleman may read press reports, but he should keep a little more up to date with election results. The local council there is not Labour-controlled.

Mr. McNair-Wilson

Its performance certainly contrasts very strangely with the Tory-controlled Dudley metropolitan council which in a similar situation did something to help. Instead of attacking private industry and firms such as Rubery Owen on the ground that they are all rich, large employers, the hon. Gentleman should be doing his best to ensure that every business in dificulties receives as much support as possible.

Mr. Winnick

Why was the plant closed?

Mr. McNair-Wilson

My right hon. Friend the Prime Minister today made one of the best speeches that I have heard her make in this Parliament—in stark contrast with the "yesterday's men" approach of the Leader of the Opposition. My right hon. Friend made it clear that the two principal objectives that the Government set out to achieve—to bring inflation under control and to restore competitiveness to the British economy—are now well on the way to their achievement. In my estimation, that is a magnificent tribute to the work of the Government since 1979.

I also congratulate my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), who moved the motion on the Loyal Address. The name of Eden is well known in the New Forest constituency. Indeed, I first knew him when he was an active young Conservative in the constituency. I know that my friends in the New Forest will be delighted by the way in which he moved the motion and will wish him every success in everything that he does when he finally lays down the burden of representing his present constituency.

Invevitably, the Gracious Speech is an amalgam of those things that can be done within a Session of Parliament and an indicator of those things that the Government have in mind to do in the longer term In the short term, I am especially delighted that the Government intend to take action to bring those who live in mobile homes more into the scope of statutory control. In my constituency, those who live in such homes are frequently the less well off and older people. It has been a crying shame that for many years they have been treated almost as an entirely separate entity. The only legislation that has benefited them has been Conservative legislation and I am delighted that the Gracious Speech makes it clear that we now intend to finish the job that we started and to give those people the protection that they need, without which many of them feel extremely nervous and frightened.

This country is one of those in the developed world that is facing recession. Therefore, there are no sudden, easy answers. The Opposition try to pretend that by some magic formula they will be able to reduce the level of unemployment to 1 million, suddenly create a steel industry that produces 25 million tons of steel a year and create a sort of economic Utopia. All that is impossible. The world recession, which started in the 1973–74 period of energy price rises, and which was given a further sharp upward twist by the Iran revolution of 1978–79, will take some time to pass. It is more important to concentrate on what is reasonably possible than to make grandiose promises.

The CBI, at its conference in Eastbourne, discussed, among other matters, the possibility of relying on a reduced exchange rate. I am delighted that that resolution was defeated because while superficially it might give a boost to our export business, we should once again be importing inflation. Since, as we know, 40 per cent. of our imports are paid for in dollars, even in North Sea oil, we should be undoing all the good work that has already been done.

At a time of recession there is a natural desire by companies to try to protect themselves from what might be described as unfair competition. However, in trade matters there are no saints or sinners. Dumping is a two-edged sword, and it would be wrong to introduce any pattern of import control. As a trading nation, if this were to happen, we should be cutting off our nose to spite our face. What we can and should do is to give to our industries the level of internal support that many of our competitors are giving to their industries.

Mr. Donald Stewart

Does the hon. Gentleman agree that import controls could operate in selected areas? For instance, if we operated import controls against Japan, what could it do against that?

Mr. McNair-Wilson

Once the warfare of import controls breaks out, one would not be able to have selected areas. It would become a general pattern of activity, and a trading country such as ours would find itself more at risk than many others. I would rather that we created an atmosphere in which our industries were able to compete. We should be able to compete on all fours with what has been described as unfair competition.

Mr. Campbell-Savours

Does the hon. Gentleman accept that in some ways protectionism, as argued in the House, is not protectionist, and that in certain conditions it may be in the interests of those who feel they may stiffer as a result of protectionism to allow us to enter into formal agreements on the terms of trade by way of bilateral. agreements which in their long-term effect could be more beneficial to them? If we take that sort of view of it, we can proceed by way of sweet reason and get our balance of payments right.

Mr. McNair-Wilson

If we could proceed by way of sweet reason, I should be very happy, as would everybody else. However, in the present trading situation, there are problems that require a measure of Government interference that will correct that unfairness. The steel industry is a good example because it is very much in the public eye—the right hon. Member for Rutherglen (Mr. MacKenzie) spoke about this at length. However, the British steel industry is a fraction of the size of the industry that I left in 1962–63.

I declare an interest, as I still work for a company that is closely associated with the industry. It provides a substantial part of its melting electrode business. Today, with five major plants, the British steel industry is producing about 14 million tonnes capacity—yet the market is nearer 10 million tonnes. That is obviously a small steel business compared with the steel business before nationalisation. Indeed, when I left the British Iron and Steel Federation in 1962, the industry's annual production was about 27 million tonnes. In 1967, when the steel industry was nationalised, the market share of British steel was about 80 per cent. That figure has shrunk to 45 per cent. It is not difficult to see why. I still drive one and a half tonnes of British steel around the roads, but many people do not. I do not hold that against them. However, if there is to be a high level of motor car import penetration, obviously the demand for British steel will substantially reduce.

The right hon. Member for Rutherglen referred to Ravenscraig. It makes flat products. With the closure of the Linwood factory, and shipbuilding in Scotland in its present state, we can envisage the shadow inevitably passing over that sort of production unit. Even so, we would be ill advised to suggest that we do not need a British steel industry. Some argue that all that is required is to import semi-finished products and become nothing more than a re-roller. That would be a mistake. Strategic considerations are involved. We must play the competition at its own game.

I am delighted to see the Under-Secretary of State for Energy on the Front Bench, as he has a central role to play. I have explained that the organisation in which I am involved makes melting electrodes. It uses a great deal of electricity with a bill of about £4 million a year. It owns a similar plant in France. The difference in energy costs between the two plants is about 40 per cent. Therefore, it is not surprising to learn that the French plant is making the cheaper and more competitive product.

A serious omission from the Gracious Speech is mention of rates. The rate bill of the company to which I refer is colossal—about £800,000 a year. That is far more than it gives to the tax man. Surely it would be possible to create for industry an electricity tariff that would allow the real bulk users—this is especially important to the steel industry—to have a proper differential that would give them an opportunity to compete on all fours. At the same time, there should be a new form of turnover tax that would remove the colossal rate burden. After all, the largest single industry in Britain is agriculture, and agricultural land is not rated. I wish that the Government had tackled rating in the Gracious Speech because it is of concern not only to industry, but to the private citizen who feels aggrieved by a rating system that is clearly unfair.

I congratulate the Under-Secretary of State for Energy on what he has done about gas prices. Industry is now paying marginally less than the domestic consumer. It is a totally different situation from that applying under the Labour Government, who deliberately held down domestic consumer prices to encourage support for their policies. I should like to think that if a statutory change is required, and if the law needs to be amended to enable the CEGB to differentiate seriously between customers and to provide cheaper electricity to the steel industry and other heavy electricity users, those changes will be brought forward. They could perhaps be found a place under those words in the Gracious Speech: Other measures will be laid before you. The Gracious Speech says that the Government will promote efficiency and good management, especially in their own operations, and will take further steps to encourage initiative and enterprise". I am delighted that part of this approach presages a breakup of the State monopolies to which we have become accustomed since 1947. Opposition Members are always quick to attack a private monopoly but oddly slow ever to say anything critical about a State monopoly. I look forward to the day when we can break up these State giants. I do not mean that they should be dissolved altogether. We should, however, encourage the arrival of private investment in these businesses. This would take a weight off the taxpayers and stimulate efficiency and competition in the businesses themselves.

One business that is central to the price of electricity and, to some extent, to prospects for the steel industry is coal. I am glad that the coal industry appears to be entering a period of calm and that the excellent production figures which have been a feature of the industry over the last year or so will continue. There are about 50 million tons of coal on the surface unsold. I was told in a parliamentary answer that every ton of that coal costs about £10 to keep in stock. Even assuming that the figure is correct, hon. Members will know that not every ton of coal is recoverable from stock.

As electricity depends to the tune of 70 per cent. upon coal for its generation and there are these colossal mountains of coal around the country, something surely can be done to shift this coal and, at the same time, to change the price of electricity. I hope that the Gracious Speech means that the Government will get to grips with the fact that Britain has the largest coal industry in Europe, with substantial quantities already extracted, yet its biggest customer, the Central Electricity Generating Board, charges prices which militate against our industrial performance.

The future of so-called uneconomic capacity has obviously been an issue of great concern. I do not wish to scratch old wounds, but I cannot see the sense of condemning people who have given a lifetime of service to an industry to kneel in 3 in of water to extract coal from a narrow seam in geologically faulted workings to produce what will never be commercially viable. The alternative is, I hope, to buy back the jobs with substantial payments,, as was done in the steel industry, and to allow the coal industry to become an efficient industry through the development of the thick seams and stand-up mining that hold the promise for the future. The Gracious Speech and those preceding it have shown that the Prime Minister is a radical realist. Unlike those who want to create the world as it was 10 years ago, when all the hard decisions were avoided, leading to our present position, my right hon. Friend and the Government have made it clear that they intend to make substantial structural changes in our economy. We have now won the major battle against inflation. The next battle is to ensure that the British economy is not only as good as the competition but even better.

8.34 pm

Mr. Robert Parry (Liverpool, Scotland Exchange)

I offer my congratulations to my hon. Friend the Member for Gower (Mr. Wardell) on his excellent speech. I am sure that he is glad that he has got that out of the way. We all look forward to hearing more from him in the future.

I am astounded that with 4 million people seeking work in the United Kingdom there is only a small paragraph in the Queen's Speech dealing with unemployment and the jobless: My Government are deeply aware of the anxieties and distress caused by unemployment. Their economic and other policies will be determined by the need to secure a sustainable growth in output, and thus a lasting reduction in the numbers out of work.

My hon. Friends and hon. Members on the Conservative Benches will not be surprised when I deal mainly with the problem of mass unemployment. Figures have recently been released by the Government following the 1981 census. The figures have been sent to all hon. Members and were published last week in the New Statesman. They show a staggering 43.5 per cent. unemployment in my constituency. In other Liverpool seats unemployment is as follows: Toxteth 28.5 per cent., Edge Hill 26.9 per cent., and West Derby 26.8 per cent. Four of the top 10 levels of unemployment in England and Wales are in Liverpool.

At the other end of the scale, in Aldershot and Croydon, South the level is 4.3 per cent. The level of unemployment in Scotland, Exchange is 10 times that in the affluent South. Without any argument, that is massive unemployment. Unfortunately, those figures have increased since November 1981.

Over 400 permanent and seasonal jobs are at stake if the proposed closure of the Lyons Maid ice-cream factory in December goes through. Only two weeks ago we had the closure of a Whitbread brewery in my constituency. In parts of my constituency, and I feel sure in Toxteth and Edge Hill also, the real level of unemployment is over 60 per cent. The Government sit back and do nothing about it.

Unemployment is not an act of God. The hon. Member for Halesowen and Stourbridge (Mr. Stokes) said that the Government cannot do anything about it, but it is the result of the Government's deliberate monetary policies. I wrote to the Secretary of State for the Environment asking him to meet hon. Members from both sides of the House to discuss unemployment and the closure of the Lyons Maid factory. I received a letter from him today in which he said: I am not prepared to be persuaded to try to interfere with the commercial judgment of Allied Lyons". That is typical of the Government's attitude and of their replies not only to letters over the past couple of years but to questions in the House. They say that they cannot intervene in the commercial judgments of individual companies.

We have a Minister who is responsible for Merseyside. He came to Liverpool with a flourish of trumpets after the Toxteth riots and we were told that he intended to bring about improvements in Liverpool. Since his coming, however, he has not created one job. I am sure that he himself will admit that. We have a few gimmicks in the pipeline. We have the enterprise zone, the proposed urban development corporation and a garden festival. In the long term they may create a couple of hundred jobs. Meanwhile, hundreds of jobs are flowing out of Merseyside every month.

Over the past three years, I have raised on the Floor of the House with the Secretary of State for Employment, the Secretary of State for the Environment and the Home Secretary the problems of unemployment and urban decay. The Government's response only recently has been to decide to close jobcentres and even to transfer the main employment centre from my constituency to Manchester. This makes me very bitter and angry, bearing in mind the unemployment statistics that I have quoted for Scotland Exchange.

The Government's actions demonstrate that they have no feeling for the people of Liverpool and no real concern about the horrendous level of unemployment. By their actions they have been responsible for people's deaths—poor people who have been unemployed for a long time and have committed suicide. Two young people took their lives a year or so ago on Merseyside, making it clear that the reason for their tragic decision was that they had been out of work for a very long time and had given up hope of ever getting a job. Old people have died of hypothermia because they have not been able to afford heat for their homes.

We have pre-war tenements in Liverpool, and we have slums. We have a long waiting list for new homes. At the same time, we have the highest level of unemployment in the building and construction industry in the United Kingdom, with the exception of Belfast. This is the reality of the problems of Liverpool.

Hon. Members have seen the recent television series "The Boys from the Blackstuff." It showed that, despite the horrific levels of unemployment and the urban decay, the people of Liverpool still had a sense of humour.

Despite the slave labour of the YOP and the Government's other gimmicks, thousands of young people in Liverpool are still roaming the streets and getting into trouble. Since this Government came to power three and a half years ago, 1,600 jobs have been lost every day of the week, every week of the year. There is growing frustration and anger among young people in Merseyside and Liverpool. On several occasions prior to the Toxteth riots, I warned that there would be trouble on our streets. I warn the Government again that if some action is not taken, there will be more trouble in Liverpool, and it will not be confined to Toxteth because whole inner areas are seething about this massive level of unemployment, especially among youngsters. Some action must be taken to reduce these horrific statistics.

The Government say that they are pumping money into the gimmicks to which I have referred, but it will only scratch the surface of the problems that we face. It appears to me that the Government are trying to give a blood transfusion to a dying patient whose life blood is rushing away through a severed artery. They are wasting Government money if they do not make a positive attempt to provide jobs in the regions.

I vividly remember the Prime Minister at 10 Downing Street when I was fighting to save the Tate and Lyle sugar refinery in my constituency. I told her then that if the corporate plan which had been drawn up by the three main unions had received any support from the Government, it could have saved the 2,000 jobs that were at stake. I made it very clear that if those 2,000 jobs were lost, whole families would be thrown on the scrapheap with no possible hope of a job. Unfortunately, my forecast came true. I know that hundreds and thousands of people have had no chance of finding alternative work. I know the length of the dole queues in Liverpool.

I also pointed out the grave danger of the knock-on effects that the closure would have. Again, unfortunately, what I said came true. I have already mentioned the closure of a brewery which needed sugar for its brew. I have mentioned the grave danger of the Lyons Maid ice-cream factory closing. If Lyons Maid closes, there will be further problems in the edible oil industry which is based mainly in Liverpool and Merseyside, and there will be further problems in the port of Liverpool. Apart from that, question marks hang over the sweets and confectionery industry—Tavener Rutledge and Barker and Dobson. There are also problems in the biscuit and cake industry, with Huntley and Palmer. So one can see the effect that the closure of one factory, Tate and Lyle, had on unemployment in Merseyside.

I am sorry that the Prime Minister is not in her place. I noticed that her PPS was in the Chamber a few moments ago. He was present when I made my pleas to the Prime Minister. All I received, a week or so after meeting the Prime Minister, was a curt letter saying that Her Majesty's Government would not intervene in the commercial judgment of a company.

The Iron Lady, as she is now called, has been wallowing for the past two or three months in the blood of those who have been killed and wounded in the Falklands. She has been making jingoistic noises. She has been shedding crocodile tears. I know, having met the right hon. Lady, that she is cold and callous and has no compassion whatever. [HON. MEMBERS: "Disgraceful."] If any Conservative Members had suffered the level of deprivation and unemployment which I and my colleagues in Liverpool have suffered, they would say that was disgraceful. When the Prime Minister says at the Dispatch Box that she is concerned or sad about the level of unemployment on Merseyside, I say to her that she is a liar and a hypocrite.

Mr. Deputy Speaker (Mr. Paul Dean)

Order. I think that the hon. Gentleman has just used a phrase which is out of order. If he did use that phrase, I am sure that, on reflection, he would wish to withdraw it.

Mr. Parry

What I said is true. The Prime Minister is not interested in the levels of unemployment on Merseyside. She is callous, she is ruthless, and she is a hypocrite.

Mr. Greenway

On a point of order, Mr. Deputy Speaker. The hon. Gentleman said that the Prime Minister was a liar. That is an unparliamentary term. I demand that he withdraw it immediately.

Mr. Deputy Speaker

I appeal to the hon. Gentleman again. If he did use that word, he knows that it is out of order, and I ask him to withdraw it.

Mr. Parry

What I said I meant, Mr. Deputy Speaker. It is the truth and I shall not withdraw it.

Mr. Deputy Speaker

I appeal to the hon. Gentleman again. He has used a phrase which is out of order. He knows that I have ruled it out of order. I hope that, on reflection, he will agree to withdraw it. If not, I have no option but to ask him to withdraw from the House.

Mr. Parry

I do not wish to cause you any embarrassment, Mr. Deputy Speaker. However, I feel strongly; I feel angry; I feel bitter. I know that the Government can reduce unemployment on Merseyside, and I know that the Prime Minister could have saved the Tate and Lyle factory in Liverpool. Therefore, I cannot withdraw that statement.

Mr. Deputy Speaker

In view of that, in accordance with the power given to me by Standing Order No. 23, I order the hon. Gentleman to withdraw immediately from the House for the remainder of this day's sitting.

The hon. Member then withdrew from the Chamber.

8.50 pm

Mr. Christopher Murphy (Welwyn and Hatfield)

In welcoming the Gracious Speech, I do so for one reason above all others. It once again demonstrates the determination of Her Majesty's Government and the Prime Minister to carry out the policies on which they were elected.

This is the fourth Gracious Speech of the Parliament and on each occasion the Government's priorities have been clear. The first priority is to beat inflation. The country must learn to live within its means. Secondly, the freedom of the individual must be protected. Our common-sense policies are ensuring that that is the case. Thirdly, those in real need must be cared for while at the same time others must be helped to help themselves.

The opening of the new Session of Parliament comes hard on the heels of the political party conference season. If Socialist Members, who struggle to keep the red flag flying, had their way, the Gracious Speech would be the most Marxist ever presented to the House—an awesome prospect. However, it is encouraging to remember that their anthem contains the line: This song shall be our parting hymn. Such policies have certainly parted them from the majority views of the electorate.

Conservative Members will know that in "Land of Hope and Glory" comes the line: Thine equal laws, by Freedom gained, Have ruled thee well and long. The Gracious Speech shows clearly that the Government rightly intend to build upon such a basis and that they are far more closely in tune with the wishes of the British people.

It is right to recognise, as the Gracious Speech does, the concern felt by all hon. Members about the number of our fellow citizens who are unfortunately at present without work. It is a legitimate concern and one felt keenly by Conservative Members. However, at the same time we recognise the need to end inflation in order to create real job opportunities. There are some encouraging signs of gradual economic recovery, not least in my area of Mid-Hertfordshire, with increased orders in established firms and increased abilities provided by new small businesses.

Inflation is now around 7 per cent. compared with being well into double figures when the Government came to power in May 1979 and it is expected to fall further by the year end. Bank base lending rates have fallen further to lower than the 1979 levels and retail sales are higher now, as are share prices.

The structural changes within industry have in many cases been massive. Attitudes, especially in labour relations, have altered dramatically. Union power is undergoing a considerable upheaval.

The continuing economic problems of which unemployment and low output are among the most alarming, take place against a background of the worst international economic recession since the 1930s. There is also the evident need to reverse over 20 years of inefficiencies within our industry and economy and the steps proposed—

Mr. Campbell-Savours

On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Gentleman to come to the Chamber and to read a speech word for word?

Mr. Deputy Speaker

The normal custom, as every hon. Member knows, is that speeches may not be read, but copious notes may be referred to. I have not heard anything out of order from the hon. Member for Welwyn and Hatfield (Mr. Murphy).

Mr. Murphy

Thank you, Mr. Deputy Speaker. You are right in supposing that I am using copious notes. The steps proposed for further denationalisation are, therefore, to be welcomed.

Many other major democratic countries are now following policies which are almost identical to those carried out by this Government. The fact remains that despite the economic difficulties, no coherent alternatives to the Government's economic strategy has been presented by industry, unions, or other political parties. [Interruption.] If the hon. Member for Workington (Mr. Campbell-Savours) wants to intervene he is welcome, but the House would prefer him not to make comments from a sedentary position.

Although the economy, understandably, remains in the forefront of people's minds, the policies which the Government were elected to put into practice cover a far wider tract of political ground. Great opportunities have been provided for council house tenants, including many of my constituents, to purchase their own homes under the right-to-buy scheme, despite the efforts of the Labour-controlled council to frustrate that desire. Extending this right to cover leasehold properties will be of enormous benefit.

In education the overall pupil-teacher ratio has reached its best level ever, with my county being fortunate to have better than average figures. That will be beneficial to many local schools and their pupils. There is continuing regard for ensuring high standards which both parents and staff applaud.

More attention has been paid to law and order, with stiffer penalties and a strengthened police force. However, the support and authority of the family is still necessary. Social services have received continued Government finance with benefits such as pensions being kept up with the cost of living and increased National Health Service expenditure intended to assist both patients and staff as well has hospitals such as Queen Elizabeth II, Queen Victoria Memorial, Danesbury and Welfield. Such social policy successes are just a reminder of the Government's many actions in fulfilling the mandate given them by the electorate in 1979, which is echoed in the Gracious Speech.

I referred earlier to party conferences and the clues 'bat they give to desired Queen's Speeches. It is significant that Liberal and SDP Members still seem unable to strike mutually acceptable chords in many areas of political debate. I presume that for that reason no alliance theme to which we can refer for guidance has yet emerged. Nevertheless such muffling of any emergent strains is hardly likely to gain the ear of the British public who will, no doubt, recognise the deafening silence on policy for what it is.

Mr. McNally

Will the hon. Gentleman give way?

Mr. Murphy

I believe that the Queen's Speech, once again reflects the voice of the majority and their hopes and aspirations. For that reason I register my enthusiastic support for it.

8.58 pm

Mr. Bob Cryer (Keighley)

I shall make a relatively brief contribution because the Queen's Speech is a ragbag of tarted up old ideas. It provides no solution to the problems facing the country. My hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) demonstrated the difficulties people face as a result of this Government's policies. Later I shall describe how they have affected my constituency, as my hon. Friend described how they had so badly affected his constituency.

I shall deal, first, with a part of the Queen's Speech which describes an increase in expenditure. It is the only area involving increased expenditure by the Government. I am not referring to the National Health Service, education or housing. Thousands of people are still on Bradford's housing list. Almost 1,000 people in my constituency are on the housing list; yet 400,000 building workers are on the dole.

The Government are proposing to increase defence expenditure, although time and again it has been shown that the proposed expenditure of £10 billion on Trident in no way enhances our defence, but pushes the world towards the dreadful possibility of a nuclear holocaust. Despite that, the Prime Minister is determined to stick rigidly to her policy of improving Britain's ability to exterminate people, especially through the purchase of Trident.

In the Gracious Speech, the third paragraph begins: My Government will be concerned to encourage the economic development of the Falkland Islands. The updated Shackleton report talks of expenditure of £100 million on the Falkland Islands. Why cannot the same attitude be applied to the United Kingdom? Why cannot we revive our economy, which is as barren as the geography of the Falkland Islands? Yet, in order to sustain a symbol of the Prime Minister's determination, she and her Cabinet are pouring money into the Falkland Islands instead of seeking an agreement—which is inevitable—so that the land masses closest to the Falklands can provide the economic stimulus that the islands need. Such an agreement is being debated by the United Nations and is backed by America. The Government are proposing to spend what is, for the Falkland islanders, a massive sum in order to revitalise their economy. The Labour Party asks that that same attitude should be adopted towards the United Kingdom so that our economy may be revitalised and we can give some of the millions of people who have been put on the dole queue by the Government a hope of getting a job.

In the Gracious Speech, the Government reaffirmed their strong commitment to the EEC. They will continue to play a full part in its development. Recently, I read the statement published in 1973 by the Government of the right hon. Member for Sidcup (Mr. Heath) about our entry to the Common Market. Entry was going to mean a promised land, a Valhalla and a prosperous unit that we had to join in order to share in that prosperity. Clearly, that idea has not worked. The budgetary arrangement that was reached is not lasting and we are making a massive contribution to the EEC in relation to our staggering economy. Some power has shifted from Parliament and the Government to the EEC.

The Labour Party's policy is to withdraw from the EEC. To those who argue that we shall lose more jobs because we shall lose our market, I say that we have a massive balance of trade deficit with the EEC and that we are in a strong position to negotiate the export of our goods to the Common Market after we withdraw from the organisation. At the same time we shall have freed ourselves from the legislative and political shackles that membership of the Community means.

I refer to the comment in the Gracious Speech that aroused the ire of my hon. Friend the Member for Scotland Exchange when he said that the Prime Minister was being hypocritical: My Government are deeply aware of the anxieties and distress caused by unemployment. Their economic and other policies will be determined by the need to secure a sustainable growth in output, and thus a lasting reduction in the numbers out of work; this will require the achievement of a continuing fall in the rate of inflation.

That is not true for a start because the rate of inflation in the 1930s was nil, yet unemployment was large and constant. The Government have gone back to the 1930s in terms of unemployment.

It is not good enough for the Prime Minister and her Cabinet cronies to mouth empty words of concern about unemployment. They must do something about it; but, of course, they will not. Their actions give the lie to their words. The 3.5 million people in the dole queue and their friends and relatives are acutely aware, when the Prime Minister and her cronies talk in such terms, that it is totally false sympathy. The Government created the position.

Tory achievements in Keighley include an increase in unemployment between 1979 and September 1982 of 1,019 in textiles, 312 in machine tool engineering and 550 in mechanical engineering. That information was given to me in a written reply on 26 October. On the same day, we were told that the number of people of working age who claimed supplementary benefit from the Keighley local office between May 1979 and August 1982 increased from 900 to 3,200—an increase of 250 per cent. Those are Tory policies at work.

What have the Government done to help Keighley? According to the Gracious Speech, they are cutting public expenditure. They have already done that in Keighley, because they ended intermediate area status on 31 July. From information given by the Department of Industry, we know that between 1979 and 1982 intermediate area status with offers of regional assistance helped to provide and safeguard 622 new jobs. The Government, having caused the unemployment of more than 1,000 people in three industries and increased unemployment in that one travel-to-work area to nearly 4,000, have deliberately cut financial assistance which, from the figures of the Department of Industry, had helped to create and safeguard jobs. When Ministers come to the Dispatch Box and talk about their concern for the unemployed, it is not surprising that they are described as hypocritical.

Those who finance the Tory Party from year to year are experiencing a bonanza. The successful sections of our publicly owned industries are being sold. The Gracious Speech says: Measures will be brought forward to permit private investment in British Telecommunications, to establish a telecommunications regulatory body and to reform the Telegraph Acts, to encourage private undertakings to generate and supply electricity and to facilitate the introduction of private capital into British Shipbuilders. That is all part of a selling bonanza that, in retrospect, will be seen as a disgraceful episode in British history. The way in which Britoil is being sold denies the rights of British people to their own assets.

For the Secretary of State for Energy to come to the Dispatch Box, as he did a few days ago, and refer to providing shares for the small shareholders is "Alice in Wonderland" talk, because everybody knows that the unemployed, those on supplementary benefit and those with small savings will not be buying shares. If they are in middle age, the likelihood is that they may be unemployed or may be being made redundant, and they will be marshalling all their savings to meet that contingency.

Once again, as with Amersham International, it will be the big investors who will get the fat pickings from the assets which belong to the people of Britain and which should stay in their hands. When we have a Labour Government after the next general election we shall make sure that those assets go back to the hands of the people where they belong.

The way in which the Government have appeased their financial backers by giving them rich pickings from the assets of the people is a continuing disgrace. I know of the determination of members of British Telecom to oppose its privatisation. The rural areas would face a massive increase in charges, with the profitable areas being exploited for the private benefit of the shareholders and the directors of the private companies. The unique service which British Telecom offers in giving everybody, rural or urban dweller, decent services and facilities at a common price, would be wiped out. It has been heartening to see the demonstration by the people who work in British Telecom that they do not want anything to do with the Government selling off that public service to the backers of the Tory Party.

It is interesting that the Gracious Speech mentions that a Bill to protect personal information held on computers is to be introduced. That is something useful, although we shall have to look at the legislation before we are able to make a judgment on it. The legislation on freedom of information that the Government promised at one time would, had it been enacted, have limited freedom of information. It would have taken away rather than enhanced rights. Fortunately, that Bill was withdrawn as the result of some revelations about the security service, which would not have been possible had the legislation been passed, so the Government backed down.

As I have said, we shall have to make a judgment on the proposed legislation to protect personal information held on computers. For example, will it include the MI5 computers, or will the Government carry on with their own blocking of information? The public should be aware that the Government use means to stop elected representatives asking questions about things such as the telephone tapping, the bugging and the surveillance that are carried out by MI5, our security service, which is not accountable to the House. A secret committee of permanent secretaries supervises the security services, according to this week's issue of the New Statesman. Why cannot we have some accountability, or is our democracy so precarious, so weak and so ailing that it cannot stand up to some routine probe by representatives elected to what is fondly termed the Mother of Parliaments? I shall be very interested to see whether the records of citizens kept by the security services on their new £20 million computer are also subject to safeguards.

We have the secret police. There is always the danger of a secret organisation that is not accountable abusing its power. It is right and proper that in a democracy there should be some public accountability. Therefore, I hope that the Government, in conjunction with their commitment in the Queen's Speech to protect personal information held on computers, as a sign of their concern at the way in which such information can be abused, will allow some accountability to the House by removing the blocks on questions that they have continually imposed.

On the Consolidated Fund Bill I raised a question that was the subject of a television documentary on asbestos. I said that the Government were obsessed with their attacks on trade unions and were trying to wreathe them in legislation, yet more days every year in industry were lost through industrial injury than through strike action. However, the Government have not done anything about tightening up the legislation on industrial injury. It is nowhere in the Queen's Speech.

Are the Government aware of the position? If we had sprayed it on their eyeballs, we could not have made it clearer. A television programme about asbestos called "Alice—a fight for life" was widely seen. It caused the Health and Safety Commission hastily to convene a meeting to recommend that three of 41 recommendations that the Government had been sitting on since 1979 should be carried out. The Simpson committee reported in 1979. It made 41 recommendations. In July the Minister said that three would be implemented. What about the other 38? There has been no mention of that in the Queen's Speech or of improving the environment in which people work and which costs us so many lives and days lost through industrial injury each year. That gives the clue to the class nature of the Government.

Mr. Maxton

Apart from doing nothing about asbestosis and other industrial injuries, the Government are proposing changes in the Inland Revenue in the Bray report, which will make it more difficult for widows and widowers of those who die of the injuries to be compensated because the records of employers in the past will he done away with altogether, so will have disappeared.

Mr. Cryer

My hon. Friend is right.

The Queen's Speech also mentions continued restraint on public spending. There is no expansion in the number of inspectors from the Health and Safety Commission who check on the legislation. That is crucial for the millions of people who are still at work in spite of the Tory Government's policies. That will also affect the people who are not at work but who have been injured while at work. The continued restraints on public expenditure will also affect the provision of education, social services and supplementary benefit for the weakest members of society.

Those who have suffered industrial injury, single parent families and those in the dole queue bear the heaviest brunt of Tory policies. The example of asbestos that I have quoted shows that, while the Government are happy and determined to sell public assets to their friends, they are not as eager to protect people by means of legislation. The Government had those recommendations for three years.

It comes as no surprise to learn that Turner and Newall, one of the biggest asbestos companies in the country, has contributed £40,000 to Tory funds. That same company offered Alice, in her fight for life, £13,000 compensation. That was their priority—£40,000 to the Tories and £13,000 for a life. Alice had to drag her crippled body to the court to get decent compensation—£39,000 for a working woman's life. She had to go to the court because Turner and Newall's magnanimity extended to the Tory Party but not to her. That is the type of Government that we are fighting.

The Opposition must point out the nature of the Government to those who are not aware of it. They must be a small and diminishing minority. We must point out that Labour's policies are the alternative ones to get Britain back to work. We have an overriding commitment to reduce the number of unemployed to less than 1 million in five years. We are committed to getting rid of nuclear weapons as a step towards securing peace and a guarantee for our future existence on planet Earth. We are also committed to withdrawing from the Common Market so that we retain our powers of decision-making over our economic system in fact.

Those are the policies that we must constantly explain to the British people so that when an election comes they realise that the Labour Party is the only vehicle to produce an egalitarian, fair-minded and decent society.

9.21 pm

Mr. Harry Greenway (Ealing, North)

I cannot follow the hon. Member for Keighley (Mr. Cryer) down his many avenues of political diatribe. He is a master of diatribe. Nevertheless, he does himself an injustice. I know that he is a former teacher of great distinction. He will regret that he was not present to hear the excellent maiden speech of the hon. Member for Gower (Mr. Wardell).—another distinguished member of the teaching profession. It was a fine speech of clarity, straightforwardness and deep sincerity. All who heard it were deeply touched.

The hon. Member for Keighley made a wildly general reference to British Telecommunications as though it had no need to look to itself. The hon. Member for Stockport, South (Mr. McNally) spoke similarly. British Telecom needs to look to itself carefully. There are many manufacturing jobs in my constituency. Many business managers have had the utmost difficulty in getting their switchboards extended or adapted to meet the change in or growth of business. They have struggled for years with British Telecom to get what they need. Overseas orders worth millions of pounds and jobs have been lost.

I have examples of the struggle that my constituents have had. The hon. Member for Keighley should think about them when he makes such wild generalisations. Another case is an example of the gross way in which British Telecom behaves towards people's property. A constituent of mine who lives in a terraced house has a neighbour who recently had a telephone installed. The British Telecom engineers put the wire right across the middle of the wrong house. The owner, a nice, polite lady, asked for the wire to be removed. British Telecom asked "What does it have to do with you?" She rang the management and was told that she was talking nonsense, that they were sorry and that the wire would stay. Who do the people at British Telecom think they are? I had to write to the chairman of British Telecom to ask whether his staff were supposed to behave in that way before a proper apology was made to the injured party and the wire removed.

I could give more examples. That sort of thing will not do—it is substandard. I am not trying to argue with the hon. Member for Keighley. I was simply giving a further reason why British Telecom needs to look to its laurels in a big way and has needed to do so for many years. The Labour Government did nothing whatever about that.

Mr. Campbell-Savours

Will the hon. Gentleman give way?

Mr. Greenway

No, we are short of time. The hon. Member for Keighley (Mr. Cryer) said that he would be brief, but he then spoke for 25 minutes. I will give way later if there is time.

I have much sympathy with the comments of the hon. Member for Liverpool, Scotland Exchange (Mr. Parry) about the problems of industry. I had hoped that he would go on to deal with the way in which industry is suffering from rates, as others have mentioned in the debate. A disadvantage of which he must be aware—I am certainly well aware of it in my constituency—is that new businesses starting up outside enterprise zones, which may be quite near, do not have the benefit of having their rates paid for 10 years as those in the enterprise zones do. I wish to see that concession extended to new businesses everywhere. Otherwise, we shall not achieve the fair distribution of new business that we so badly need.

I visited Liverpool recently with the Select Committee on Education, Science and Arts. I paid a personal visit to St. Saviour's school in Toxteth and to the whole community. It must be said that it is substantially the incompetent government of that city by the Liberal Party that has helped to bring it to such a pass, and the Liberals must take their share of responsibility for that.

Much reference has been made to the report "The Church and the Bomb". That report was produced by a committee of seven, two of whom are not members of the Church of England and one of whom is a former vice-chairman of CND. In this context, I should add to what I said in Church questions a few days ago. As a member of the Church of England, I believe that in any document produced by any body to do with my church I am entitled to look for the mind of God in the matter. I am not interested in what bishops and clergymen regard as politically expedient. I am interested in hearing from them what the moral and spiritual arguments might be, and I believe that those arguments should be based on the mind of God as He reveals it and as people perceive its revalation. That we have not had. There has been no proper discussion by that group at that level. Nor have we found in any of the media comments any reference to God. The argument has been based wholly on political expediency. That is totally unsatisfactory and extremely disappointing and I look forward to the far more balanced debate that I believe will take place in the Church of England in the next few months.

The Liberal and SDP spokesmen called, interestingly, for industrial participation. They were not very specific about what they meant by that. If they are going further, to some centrally conceived system of industrial participation, we shall be in some difficulty as each firm is highly individual. I therefore warn them that they should look more deeply into the matter than they seem to have done so far. As the House will remember, the participation for which the Liberal Party is most famous was in sustaining the last Labour Government when they were at their very worst. That should not be forgotten.

For me, the centre of the Gracious Speech is the youth training scheme, because I believe that this initiative will give youth for the first time a chance of a very substantial and important kind. By next September every young person of 16-plus will be in work, in school, on a training scheme or in a college. I congratulate my right hon. Friend the Secretary of State for Employment on his forward planning for the scheme. It is deeply needed, and the money involved in it—£1,100 million—is no less than is due to many young people who are having to face, upon leaving school, a time of considerable disappointment at not getting work. To get a place on this training scheme will be beneficial to them and, beyond that, to the local and national community.

Many have applauded this scheme, and as the CBI and the TUC suggested that it should come into being, I hope that industry, unions and management, will support it strongly. Their co-operation and support will be of fundamental importance to the scheme's success.

What about the other side of the coin? What will be or could be the effect of the scheme on schools, particularly on sixth forms, and how much thought has been given to this? The National Confederation of Parent-Teacher Associations has recently reported that the number of pupils aged 16-plus returning to school in the sixth form rose by 64,000 in the year to last July. Of this, no fewer than 28,000 were unexpected. We need to define our position on this. Expensive provision needs to be made for those pupils if they leave. I wonder whether it is better to encourage them to stay on at school as long as the schools are adequately organised to take them rather than encourage them to leave.

The pressure should be on them to remain at school because they can flow on from the five years basic course at school to the sixth form where they will feel at home and comfortable. I am concerned that the guaranteed payment to 16-year-olds who go on a youth training scheme will be a disincentive to pupils to go back into sixth forms which could then be seriously decimated.

I am also concerned about the morale of staff in schools and the general effect on the schools. How will dedicated teachers who work long and hard hours helping pupils to help themselves up the long ladder of academic success feel if their bright and academically gifted pupils opt for the experience of youth training schemes because there is money before they have reached the top rank of the academic school ladder? I strongly urge my right hon. Friend the Secretary of State for Employment to collaborate closely with my right hon. Friend the Secretary of State for Education and Science on seeking ways of anticipating the effect of the scheme on schools. With an attractive work experience scheme with financial incentives schools may find it harder to hold their academic ethos, which is fundamental to all pupils in a school, including the younger ones, and to their social cohesion.

Every effort must be made to ensure that the training given in the scheme is of the best and that the trainee gets the most out of his spell with the scheme in terms of the acquisition of skills. This will make for a profitable future not only for the individual concerned but for the nation in the long term. The emphasis should be on training and not on employment on acquiring skills and not on earning money, although we hope that there will be jobs for those on the scheme when they finish their training.

Will industry be given large enough grants to enable it to make provision in the firms to enable pupils to have real training? Industry will rightly spend much time, manpower and imagination on the scheme. It will do itself and the nation a favour.

I pose a final and central question about the youth training scheme. I ask the Government—especially the Under-Secretary of State for Education and Science, who is sitting on the Front Bench—whether they feel that 16-plus is the right age for the introduction of the scheme. What about 17-plus, after pupils have spent a year in the sixth form? At the end of that time, they could have taken the new certificate in pre-vocational education, or followed a City and Guilds type course. At the end of a training scheme that began at the age of 17-plus, they would be more mature people and potentially valuable employees. They would have better opportunities to find jobs at 18-plus. It would not damage the introduction of the great scheme in September 1983, as it could apply as easily to pupils of 17-plus as to pupils of 16-plus. That is a valid point and worth consideration. I have discussed it with many headmasters, who have urged it upon me as I now urge it upon the Government.

When youngsters finish their youth training scheme, I hope that there will be greater provision of adult education than there is at present for those unfortunate enough not to find work. As has been said many times in the House, by myself and other hon. Members, the self-dignity that a course in adult education can give anyone, especially a youngster, is of central importance to his life and happiness, and that is what it is all about.

9.37 pm

Mr. Ken Eastham (Manchester, Blackley)

The hon. Member for Ealing, North (Mr. Greenway) appeared to be over-sensitive about nuclear weapons. The Conservative Party is becoming increasingly embarrassed and uncomfortable because public opinion on nuclear weapons is running against it. That opinion is greatly reinforced by the Churches, the people of the cloth and various organisations. I assure the Government that that protestation will continue. The sooner that people realise the stupidity of the massive waste of resources and the danger facing the nation from nuclear weapons, the better. We should spend that money on realistic matters, trying to help rather than destroy people. That would be better for mankind.

The Queen's Speech is usually a petty statement, but we can extract one or two conclusions from it and pass one or two observations on its content. It referred to the Falkland Islands and said the Government would encourage economic development there.

Mr. Nicholas Winterton

Quite right.

Mr. Eastham

The hon. Gentleman did not say "quite right" last February.

Mr. Winterton

Oh yes I did.

Mr. Eastham

Few Conservative Members were even aware of the Falklands at that time.

Mr. Winterton

The hon. Gentleman has chosen the wrong man in his remarks. For a number of years I have been an officer and member of the United Kingdom—Falkland Islands group. I urged the continuance of HMS "Endurance" in the South Atlantic—with the immediate past Prime Minister, the right hon. Member for Cardiff, South-East (Mr. Callaghan)—a few days before the invasion took place. During my 11 years in the House, I have urged the Government to support the Falkland Islands and encourage development in that important area.

Mr. Eastham

I am glad to have inspired those comments from the hon. Member for Macclesfield (Mr. Winterton). I only wish that there had been 300-odd voices on the Government Benches raised in his support. I attend this place regularly. I listen intently. When it came to support for the Falklanders, the voices were very muted. Instead, the Government took us into a conflict that cost £1,500 million and then said that we must try to do something about the Falklands. If something had been done before the Falklands campaign, it would have saved millions of pounds which could have been spent differently.

I cannot miss an opportunity to refer to unemployment. The Gracious Speech states that the Government are deeply aware of the anxieties and distress caused by unemployment. I should like to add words to those sentiments. There should be reference to "utter despair" and "absolute hopelessness". I have the feeling that the Government do not recognise that there are cities north of Watford and that they have problems. It is time that Ministers got off their backsides and examined the ravages caused by massive unemployment in the North-West and Manchester.

Time and again, there have been applications to Ministers for assisted area status to be reconsidered. No help has been forthcoming. Only last week a national newspaper ran a series of articles depicting the absolute despair in the inner areas of the city of Manchester and the lack of attention, sympathy and support from the Government. It is time that they took some positive action to assist—

Mr. Charles R. Morris (Manchester, Openshaw)

Is my hon. Friend aware of the comments of Mr. Clive Jeans, chairman-elect of the North-West area of the Confederation of British Industry, who was only last week quoted as saying that the North-West region is now in real danger of becoming an industrial wilderness, a graveyard"?

Mr. Eastham

I am grateful to my right hon. Friend. I have great sympathy for the comments to which he refers. More such comments are needed. Industrialists and bankers should be among those protesting to the Government for the rotten deal that they receive. Bankers are having a bad time up north compared with down south. Bankers and industrialists are not getting a fair deal in the apportionment of Government funds. There is need for a fresh look to be taken at the whole issue of jobs provision. It is no good expressing regret and saying that the problem will go away. It will not.

The Government are intent on continuing their policy of looting successful public organisations. Why have they not encouraged those with money to invest in other enterprises? Why has the money always to be spent on established industries that are successful? It would be sensible to provide new jobs by encouraging new companies. Why do the Government wish to buy those that are a success story? This will not provide more jobs. Experience shows that every time so called privatisation takes place, thousands of jobs disappear. Once again, we have a contradiction. The Government are desperately sorry about high unemployment, but they are to do nothing about it.

The Government say that they will continue restraint in public spending. While that policy continues one will find that local authorities, who are large contractors and offer contracts to private companies, will not be able to help the economy to provide more jobs. The Government are to continue their monetary and fiscal policies. It is about time that the Government had a fresh look at that, and decided that there has to be some movement.

The Government talk about youth training schemes, but they are not training schemes, they are occupational schemes designed to take people off the unemployment list. They realise that there are 3.3 million unemployed, but if those people are occupied the figure will be reduced. For three years the Government have been decimating education. The Opposition have suggested that young, talented people could continue with higher or sixth-form education, but the education Ministers have done nothing about that. It is strange, however, that they decide to give young people some kind of training scheme, but when one suggests some highly skilled technical training no money is forthcoming.

If the Government want to spend money positively, it will be sensible to ensure that the money is expended in the right areas, rather than just keeping young kids occupied and then telling them, "You are no longer unemployed." We have to spend money more positively to assist industry with high technology and innovations that we can sell abroad.

Continuing attacks on transport will once again mean higher fares. That in turn will mean a decrease in services which will mean a complete collapse in due course. There is no mention of the railways. If ever there was a service that could create more jobs, I am sure that the railways is it. A few days ago I was talking to one of the North-West region British Rail controllers. He said that some of the rolling stock on the North-West region local services is of the mid-1950s vintage. It is absolutely clapped out. That is the kind of project that we should spend money on to create jobs. He told me that some of the signalling systems in the North-West region date from before 1923.

If we talk about wanting to create jobs those are a few examples of the kind of positive, useful projects that industry would welcome and which would be to the nation's benefit. It is about time that we started to think about transport as a whole. The Government are obsessed with bus service subsidies which they say they will clobber. It is about time that they put their hands in their pockets and spent money to make matters better. It is an ideal time to improve transport. If the railway rolling stock were improved it would stop some of the lay-offs and the closing of the railway workshops which are taking place in the North-West at the moment.

Crocodile tears are shed by the Government when they talk about health and social services. There have been three years of constant attacks on health and social services. I wonder whether they are showing some kind of death-bed repentance and feeling that, with an election suddenly on the horizon, they had better give a few bob to the pensioners and stop closing hospitals because people are becoming enraged and indignant about it.

The Government are being found out. If the Government intend to do something now they should have done it during the past three years.

Mr. Nicholas Winterton

They have.

Mr. Eastham

Yes, they have. They have closed them down.

Mr. Winterton

Five per cent. increase in real terms.

Mr. Eastham

When the Government talk of increases in social services, they do not tell the public that there is a growing number of aged people. Consequently, this is placing a greater burden on the Health Service. The Health Service is not being improved at a rate of 5 per cent. The figure should be far more than 5 per cent. even to mark time with the quality and standard of service that was being provided by the previous Government.

For the nation's prospects to improve, we need more cash. The Government are obsessed with inflation, but people in the dole queues are not conscious of the Government's achieving a 2 per cent. reduction in inflation. They are concerned about jobs. The great obsession of industrialists, including CBI members, is not with inflation, and we have plenty of documentation to prove it. Their obsession is with the massively high interest rates that have been charged during the past three years and that have resulted in huge rip-offs and bonanzas for a few.

The Government are falling about like drunken men. They think that the Falkland Islands campaign is the solution and that the resulting smoke screen will kid the people during the next general election. As I say to my colleagues and to people in Manchester, I am confident that when the chips are down people will realise what the issues are. The biggest issue today is jobs. People want jobs. They are entitled to them. It is the duty of any Government to provide them. We in Britain need new thinking. We want new thinking, and we want a new Government.

9.52 pm

Mr. Graham Bright (Luton, East)

I support the motion for the Loyal Address, and I want especially to welcome the emphasis in the Gracious Speech that the Government place on dealing with the deep-rooted economic problems facing the country.

The Government's success in bringing down the rate of inflation in recent months is remarkable. It has been achieved by adhering to the strategy of controlling public expenditure and restraining the growth of the money supply. I pay special tribute to the courage with which my right hon. Friends have pursued this course and to their very good sense in resisting the many cosmetic devices suggested by the Opposition. The Government's determination to stick to the strategy now that success is in sight and to continue the fight against inflation will be appreciated not only by the House but by the whole country.

Our target now must be to ensure that the rate of inflation comes down still further and stays down permanently. That is essential if we are to secure a soundly-based growth in output and an increase in employment opportunities.

I do not think that we can realistically expect to return to the period in which very large firms, Government Departments, nationalised industries, local government and so on could provide the bulk of new jobs. The world recession has made large organisations much more capital intensive, and the introduction of modern technology, which is vital if we are to remain in the forefront of industrial innovation, requires more highly qualified personnel rather than mass labour forces. Neither the CBI nor the TUC can argue that this trend can be resisted.

Technology is advancing so rapidly that in no way can growth keep pace with it. Whilst we have technology racing ahead, that in itself obviously is reducing the number of people who can be employed.

The future opportunities for employment growth lie with small firms rather than large ones. Small firms are labour intensive rather than capital intensive. The Government have already introduced many measures to encourage new small businesses to start up and many measures to help existing firms to grow and find extra capital. That is already bearing tremendous fruit. For the first time this century, the number of small firms in the country is not only growing but growing in importance.

I hope that my right hon. Friends will bear in mind the need to reduce direct taxation still further and close the gap between income and capital gains tax in the measures that will implement the Gracious Speech. Many technical improvements can be brought about to help with capital gains tax and capital transfer tax. It is important, too, to try to give more help to the business start-up scheme. The shackles that the Inland Revenue placed on that scheme were ludicrous. It is time that the Inland Revenue learnt to trust small business men and did not treat them as rogues until proved otherwise. Moreover, we should look again during the coming year at the loan guarantee scheme. That has been a remarkable success, and I hope that it will be extended further.

Small companies have the tremendous qualities of initiative and enterprise. We have tried hard to encourage those companies. I am confident that we shall continue to do so, and that we shall be rewarded by their response. However, clearly they also have to respond to the changes that have occurred in the pattern of employment. The Government should investigate this aspect far more, perhaps through a strengthened small firms division at the Department of Industry. We should have more information about small firms and their problems, and give them more guidance on a properly researched basis.

We cannot expect the pattern of employment to continue as it has in the past. Soon we shall have to face the possibility of a shorter working week and people retiring earlier. We shall have to face the fact that a work force can expect to change and retrain perhaps two or three times in a lifetime. That, of course, is a problem for small businesses, which do not necessarily have the training facilities. People may have to consider—perhaps every five or seven years—having a year off for training, although I question whether our universities and polytechnics are properly equipped to prepare, educate and retrain that growing number of people, get them back into industry, and update them so that they are abreast of modern technology.

It is also important to use our education system to the advantage of industry. Results of research should be available to outside firms. We should encourage polytechnics, in particular, to link up with small businesses and help them to develop new projects and to help them with research. That would be valuable both to small businesses and to the education service.

The Government have given tremendous priority to defeating inflation. I have already commended them for that. They have also given tremendous priority to encouraging and helping small firms. I hope that in the coming year we shall pursue what we have done for small firms, and encourage them to take up the slack where larger firms are beginning, because of their investment in modern technology, to drop labour. If we are to provide more employment and get the economy moving, is is important to put even greater emphasis on small businesses. We have done it in the past, and I am convinced that that sector of the community will not let us down.

Debate adjourned.—[Mr. Garel-Jones.]

Debate to be resumed tomorrow.