Debate on the Address

HC Deb 22 June 1983 vol 44 cc42-137

[FIRST DAY]

Mr. Speaker

Before I call those hon. Members who are to propose and second the motion on the Loyal Address, it may be for the convenience of the House if I indicate the subjects that I understand are suggested for the various days' debates: Thursday 23 June— home affairs and local government; Friday 24 June— industry and privatisation; Monday 27 June — the attack on the welfare state; Tuesday 28 June — foreign affairs and defence; Wednesday 29 June — the economy and unemployment.

2.36 pm

Sir Peter Mills (Torridge and Devon, 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. As is traditional, I say immediately how honoured my constituency of Torridge and West Devon is to be associated with the privilege of moving this Loyal Address. There will be some surprised constituents, for this is the first time that any Member, or their latest Member, has moved the Loyal Address on the Queen's Speech. It reminds me of a remark made to me by a local farmer in Devon—[HON. MEMBERS: "Ooh, arr."]— after I was given the great honour of being knighted. I have known him for many years in the markets and when I was an ordinary farmer. He congratulated me, and I thanked him and said that it was a great honour for me, for my family and for the constituents who elected me to the House of Commons. He paused, and then said, looking me straight in the face, "Yes, but fancy you getting it." I suspect that many will say, "Fancy you being asked."

I am a very favoured Member, coming as I do from a county such as Devonshire. It is a land of cider, Devon pasties— Cornwall is not the only place that has pasties — Devon cream, Devon beef—

Mr. John Home Robertson (East Lothian)

Jeremy Thorpe.

Sir Peter Mills

— Torridge salmon, and with products such as Dartington glass and Appledore ships, to name but a few. It is a land of beauty, with Dartmoor and its wildness, Lydford Gorge, Clovelly and not forgetting as many sheep as constituents—(Interruption.] I hasten to add that they did not add to my majority. How fortunate I am, and I am grateful that I have been elected to this honourable House.

My majority was large, as was the Government's majority, but large majorities are matched by large responsibilities. Whatever the postion may be, there is no change in the underlying problems of the nation, and in Devon they remain today as they were before, so we bend to the tasks as set out in the Gracious Speech.

The Gracious Speech provides measures to assist with what is needed to deal with the changing situation in the world and at home. No one can deny that a resolution is taking place in production methods and in demands from the consumer, let alone the effect of rapid travel and communications. The Government have already made a remarkable effort and I congratulate my right hon. Friend the Prime Minister on what has been achieved.

The biggest problem today is to accept change and to know how to handle it. We are reluctant as a nation in this respect, yet we have to accept change. It was reported long ago that when Adam took Eve out of the garden he said, "This is the age of transition."

Cardinal Newman once said: To change is to live. To be perfect is to change often. If that is so— and I believe it is— we shall have to explain much more fully the reasons for the changes to an electorate that does not always understand or want to be moved from established ways. It is easier for us in this House to understand, but to explain things on the doorstep is an entirely different matter.

I welcome the fact that the Government will continue their full support for the Commonwealth, not forgetting little Hong Kong. I declare an interest in these matters as vice-chairman of the Commonwealth Parliamentary Association. The role of the Commonwealth is more important than ever in a changing world. Our recovery will depend to a major degree on its recovery. Support to the Commonwealth will cost money, but as a farmer I know that seed corn always costs money. A constant stream of Commonwealth Members come to our United Kingdom branch, and what they say emphasises the importance of us to them.

I am impressed by the fact that the Government will remain steadfast in their support of law and order— a subject that was brought up time and again in the election, and, in my constituency, more than any other subject. However, let us refute the argument that the Government are the only body with a role in these matters. We all know that the economic recession does not help. Legislation can be produced by this House till the cows come home, but until individuals are more concerned about disciplined lives, discipline in family life and discipline in schools, we shall not make very much progress.

I notice with satisfaction that the Government will pursue policies to sustain agriculture and the food industry. I welcome that determination, for the Government have a proud record in agriculture, but I must mention a matter of growing concern — even among farmers— over the problem of surpluses. We take into account the weather and its effect, possible shortages in one year, the fact that it is better to express surpluses in terms of weeks' supplies and the fact that good national housekeeping demands some reserves. But something has to be done— band done quickly— about the problem of surpluses, and to separate the social problems of small farmers in the rural scene from surplus agricultural production. It is a particular problem in parts of the European Community rather than in the United Kingdom.

It was a great privilege to have His Royal Highness the Prince of Wales working on a farm in my constituency recently — milking each morning and mucking out as well. I can recommend a visit to a farm in my constituency at any time to see the problems of British agriculture. I congratulate His Royal Highness on that initiative.

I make no apology for mentioning the words at the end of the Queen's Speech: I pray that the blessing of Almighty God may rest upon your counsels. We would be wise to take heed of the the words of Her Majesty. I do not believe that we can leave God out of the affairs of men. We have tended to do that for too long and we do so at our peril. Perhaps one of the reasons for our decline is our neglect of these matters, and forgetting our Christian heritage. It was 150 years ago that a famous Christian Member, William Wilberforce, was in this House, and we shall celebrate that anniversary in July. We ought to consider what he achieved with God's help. I speak to myself sincerely, as I do to this House, when I say that we need to acknowledge God in the affairs of our land and to ask God's blessing on our counsels in the coming Session.

I am grateful for the honour of replying to the Gracious Speech and for the way that this House has received what I have tried to say.

2.45 pm

Mr. Malcolm Thornton (Crosby)

It is a great honour and privilege for me to second the motion so ably and competently moved by my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills).

This is the first time that a Member for Crosby has had the privilege of either moving or seconding the Loyal Address. However, the greater honour is to my constituency and to the marvellous team of supporters who worked for me during the election campaign. In every sense it was a magnificent team victory, and I count myself very privileged to represent the marvellous people of Crosby.

It may have come to the notice of many hon. Members that there was a great amount of publicity attracted by my SDP opponent, often to the despair of all my supporters. However, all was not lost, because the balance was redressed by no less a publication than Private Eye, which referred to the Tories' heavyweight candidate. Whether that referred to my political stature or to my girth I must leave others to judge.

There are two sides to every election result. For the winner it is a personal triumph; for the loser it is often an personal tragedy. I should like to mention on this occasion my SDP opponent, Mrs. Shirley Williams. Having spectacularly won the seat of Crosby in the now famous, or perhaps infamous— it depends on one's point of view — by-election in 1981, it was remarkable that she was able to retain such a large personal vote. She was able to put a spotlight on Crosby which was good for political life in that area. When the result was announced, her disappointment was acute, and I should like to place firmly on record my admiration of the way in which she stood up to the severe and unfeeling provocation of the media, who were more interested in the miseries of defeat than in the policies of victory.

Also remembered in this House is my Conservative predecessor in Crosby, the late Sir Graham Page. I remember him as a loyal friend on Merseyside. Over a period of 28 years, many right hon. and hon. Members will remember him as a great House of Commons man, and with affection as a friend. Perhaps the best tribute I can pay him will be to serve the constituents of Crosby and this House as well as he did.

Crosby, the largest constituency on Merseyside, may be thought by many to be far removed from the city of Liverpool and its problems. Perhaps we present for some the acceptable face of Merseyside. However, our future is inextricably bound up with the success or failure of the whole Merseyside area.

No one who has lived and worked on Merseyside, as have, can possibly be unaware of the tragic effects of industrial decline, which, I am sad to say, has been accelerated by many self-inflicted wounds. Past bad industrial relations cost future investment and we are living with the resulting unemployment. Above all, Merseyside suffers from a less than enviable reputation. The statements of those who seek to wallow in the problems of Merseyside for their own political ends— statements which are often deliberately inflammatory— are guaranteed to make any would-be investor run a mile.

Televison programmes such as "The Boys from the Black Stuff or "Brookside" portray a caricature of Liverpool which is in danger of being accepted by the outside world as a permanent reality. No one owes Merseyside a living. Yes, the Government have the overall responsibility to create the right climate, but we on Merseyside have to show that our work force will reward investment with determination, hard work and success. Unless the decline of Liverpool is halted and reversed, surrounding areas such as Crosby will be dragged down as well.

Certainly, recent events in the political life of Liverpool can only add to the disquiet felt by many at the seeming inability of Merseyside to assist in the solution of its own problems. I therefore welcome the proposals in the Gracious Speech to reform local government in the metropolitan areas and to take action on rates. The high costs of local government are a persistent drain on our economy and a threat to our chances of recovery.

Businesses struggling to survive and facing fixed overheads beyond their control cannot afford the luxury of high-spending authorities. If a business goes under, the local community pays the price.

Mr. Eric S. Heifer (Liverpool, Walton)

The hon. Gentleman ran away from Liverpool.

Mr. Thornton

Until local councils learn the fundamental lesson that high rates threaten existing jobs and drive away new ones, our chances of attracting new investment will be severely hampered.

Mr. Heifer

United Biscuits never had a strike in its life.

Mr. Thornton

This time, we must get things right, by reforming not only the structure of local government, but the financial base.

Mr. Heifer

The hon. Gentleman is a disgrace to Liverpool.

Mr. Thornton

Britain has re-elected a progressive and radical Government who have a clear vision of the changes needed to take our country into the next century. That is why I welcome the intention to legislate for change to be built into our education system through innovations in the curriculum.

We need fundamentally to alter attitudes towards employment, increased leisure time arid the training for new jobs, some of which may not yet even be apparent. That must surely come from within our schools.

However, we must not slam shut the doors of education at 16. Education is for life and there must be opportunities for re-entry, perhaps on several occasions, to enable everyone to adapt to the new challenges in our society. I foresee an increasing need for retraining and the updating of skills. The idea of one job for life is no longer a reality for many of our fellow countrymen.

On this occasion in 1980, my hon. Friend the Member for Pendle (Mr. Lee) referred to a growing feeling of North versus South. He called it the Channel tilt. Those of us who represent northern constituencies— there are now many more Conservative Members representing such constituencies — must never allow that feeling to develop. There is a paramount need to dispel any notion that the Government are either unaware of that feeling or lack the determination to tackle the problems of change in the older industrial areas with all the means at their command.

Goethe said that divide and rule was a sound motto, but that unite and lead was a better one. We have a Government with the determination to unite the people of this country. We have given the lead and shown the way forward to a better and more secure future for us all.

2.56 pm

Mr. Michael Foot (Blaenau Gwent)

The normal custom after the motion has been proposed and seconded is that we congratulate those who have made the speeches. As on previous occasions, two types of interest are aroused by those speeches.

The first interest is the intrinsic merit of the speeches and the second is the choice of speakers decided by the Prime Minister, the Patronage Secretary or the Whips' Office— if the Prime Minister has now been reconciled to the existence of that office. I gather that she made a few critical remarks about it during the election campaign, but perhaps we can forget about them as quickly as we shall forget about some of her other election comments.

As a fellow Devonian, I congratulate the hon. Member for Torridge and Devon, West (Sir P. Mills) on every count. I must say to the hon. Member for Crosby (Mr. Thornton) that I do not have the same close connection with Merseyside, though I am proud to say that it was in Liverpool that I joined the Labour party quite a long time ago.

When distributing his criticisms, the hon. Member for Crosby should have omitted any criticism of Alan Bleasdale, because it is probable that what he has done for Liverpool will be remembered when what has been done by some others has been forgotten. That happened in the case of some other eminent people from Liverpool.— The Beatles— and I dare say that it will happen in the case of Alan Bleasdale as well.

As for the second interest that is aroused by the speeches, I suppose that we might assume that the reason why the Prime Minister chose the hon. Members for Torridge and Devon, West and for Crosby is that in these convulsive times their constituencies must be classed as marginals. It is on that basis that we were happy to hear what the hon. Members had to say.

I cannot, in offering these congratulations, add any to the Government on the nature of the Gracious Speech, because, when we consider the scale of the events, and the dangers, perils and miseries that great numbers of our countrymen face at this time, I cannot believe that the Gracious Speech comes anywhere near measuring up to that scale. It combines complacency and callousness on a scale that is scarcely describable when one looks at the facts, as I shall.

During the election campaign, Government spokesmen prided themselves on not making any promises about unemployment. The new Chancellor of the Exchequer said that he expected unemployment to start to fall this year, or next. The Prime Minister did not think that unemployment would go above 4 million. She said that with considerably less confidence than the new Foreign Secretary had when he told us two years ago that unemployment could not reach 3 million. However, we can be sure that the figures, and the human tragedies involved in the figures, will not stay the same or anything like. The likelihood is that things will go on getting worse.

Great parts of our economy are still under threat, and fresh redundancies are declared almost every day. Since the election, the Government have given us some hints of their intentions for the Civil Service, the armed forces, coal, the railways and steel. In all those industries more jobs are to go under the Government's plans. Then there are the plans for the Health Service, telecommunications and the local authority services. All those plans will result in some jobs disappearing. In the manufacturing sector the slide of British industry will continue and will not be halted. The impact of new technology in sectors such as distribution and finance will restrict growth in employment. Few of the personal services industries will survive in a declining economy such as ours will be and those industries will continue to decline as they have done for the past four years.

It is as a result of that picture that some forecasters expect another 1.5 million jobs to disappear in the next five years. To a country numbed into accepting the loss of one tenth of its jobs in the past five years, the loss of another 7 per cent. might not sound so catastrophic. After all, will there not still be 20 million people working? The Prime Minister may refer to the figure. She will no doubt be able to search out, with the assistance of the Secretary of State for Employment, at least one foreign country with a smaller proportion of its adult population working.

It is when we come to the details that the enormity of our situation emerges. In the past four years the young and old have been cut out of the labour force in huge numbers. If a man loses his job when he is over 50, he has little prospect of working again. That applies to many people. By 1988, on current policies, that threshold will be down to 45 or less. The chance of losing one's job will be far higher. Hitherto, employers have held on to their longest-serving workers until the last minute to minimise redundancy payments, and for other reasons, but the scope for doing that is already stretched to the limit. What will happen if we have another five years of decline such as that in the past four years?

For the young, the effect of these trends is to restrict the availability of jobs for school leavers. Fewer people change jobs because they cannot be sure that they will find new ones, so fewer openings will be created. At the moment, one fifth of the potential work force under 25 is unemployed or involved in schemes that the Prime Minister once specialised in describing as unreal jobs. By 1988 this will have doubled, and the majority of school leavers will start their adult life on the dole. It takes little imagination to estimate the social consequences for our country if this is allowed to develop.

The Victorians had to face these matters as well, and their approach or response was repression, the workhouse and the armed forces. Under the right hon. Lady's Government, there has been a considerable increase in the numbers seeking to emigrate from this country, but the doors are closing to that as well, so I suppose it is the other options that are to be applied in the years ahead.

The circumstances in our inner cities— and Liverpool is near the top of the list— are frightening and tragic. A majority of young people will be out of work and among black youth, unemployment will be the main feature of their lives. These areas will be deprived of their basic services as a result of spending cuts by central Government and the abolition of the metropolitan authorities. Already, we have seen a huge increase in crime, and riots in the streets. The next five years could bring back some other Victorian traditions as well. [HON. MEMBERS: "Oh!"] I know that hon. Members have sought to conceal these facts during the past few weeks, but these are the realities.

The way in which jobs are to be lost will have a profound effect on the role of women in our society. The number of part-time jobs for women has been largely maintained over the past five years because the elimination of some part-time work has been offset by some full-time posts being reduced to part-time ones. With the cutting back of the school meals service, the home help service and nursery provision, many of these jobs will go and with it goes any hope that women with children might have of working. That will carry millions of families back over the poverty threshold. Over the past four years this Government established a record for the way in which they forced people over that threshold, and if they continue with the same policies it looks as though the figures will increase still further.

The number of children dependent on means-tested supplementary benefit has doubled to 2 million over the past four years. In the picture that we are painting, that number could rise to 3 million. More than one child in five could be living in such poverty. Nothing in the Queen's Speech offers any prospect of that being changed. That is our first indictment of the Government. We intend to press the argument about mass unemployment and its consequences and repercussions in our society at every available opportunity. We sought to tell the country what would be the consequences if it turned its back on these matters, and we must now face those consequences.

My second theme is an associated one, which we pressed during the election and press again, and which is bound to dominate some of the discussions over the weeks ahead. The day after the election, I read an article in The Times, by its economic correspondent, which gave the paper's comments on the way in which the present Government have used — or misused — North sea oil supplies. That comment underlined or confirmed what we had been saying during the election campaign. It said: Mrs. Thatcher's government has been the first to enjoy the fruits of Britain's North Sea oil wealth. Without the £20,000 million of oil revenues flowing into Exchequer coffers over the past four years, money that simply was not there before, she might not be celebrating her landslide. Her economic programme would almost certainly have been unworkable and its cost unsupportable. During the mid-1970s, there was a major national debate, quite rightly, about how best to use the great boom and benefit of North sea oil. Should we use it to re-equip our industry, create better public services, to train and retrain people in new industries? In those far-off days, the Prime Minister was in no doubt as to which option she would choose. She said in 1978: I am determined to see that our new revenues from oil are used to open wide the door to personal opportunity and enterprise. However, nothing of the sort has happened. Since 1979, output in manufacturing industry has fallen by 17 per cent., investment in manufacturing industry has fallen by 40 per cent. and manufacturing productivity has risen by 1 per cent. per annum, which is well below the post-war trend. Clearly, we have not invested our North sea oil revenue in manufacturing industries and nor have we put the money in public investment.

In 1982, investment by central and local government was less than half the level in the 1970s, and public corporations are investing less than at any time since 1973. The record on housing in both the public and private sectors in the past four years is lamentable. These issues arise because in the Gracious Speech the Government are suggesting that all these policies are to continue.

The Government argue that old industries must die to make way for new ones. But new industries have fared no better over the past four years. Under the 1974–79 Labour Government, 700,000 jobs were created in our 10 fastest growing industries. In the past four years, just 22,000 jobs were created. Growth areas such as education, hotels and catering and motor repairs declined. Small firms died at a record rate. Britain lost ground in most areas of new technology.

The money has not gone into improving the country in any way that we have described. Instead, it has been directed to two purposes— sustaining the record increase in unemployment and sustaining investment overseas.

One of the most infantile episodes during the general election campaign was the exchange between the Prime Minister and Sir Robin Day, when the right hon. Lady sought to deny the real cost of unemployment. She tried to argue that the cost was represented only by the benefit paid to people. She tried to argue that the additional tax revenue that the Government would have received as a result of people working and spending money did not exist. Of course it exists, and it is part of the burden that the country has carried.

The Government have gambled our precious North sea money on a theory. The theory has failed. Most tragically of all, there is no sign that the Government have learnt the lesson. According to the Gracious Speech, they propose to misuse and gamble with that oil revenue in the same way as they have done over the past four years.

It may be objected that I have not yet taken full account of the so-called recovery, the great boom that the Government have prophesied. We have seen upturns disappear before now, as both the Foreign Secretary and the Home Secretary can testify. Each of them has prophesied upturns before. But we have just had a glimpse of yet another of the Government's famous upturns. There were glimmerings of hope at the beginning of the year, and I suppose that the hope was a little better founded then. With the upturn in the United States economy, the fall in the value of the pound and the burst of public spending, the Government seemed to be coming round to look at some of the remedies that had been suggested from other quarters. But it is not easy to have any confidence in the continuance of such an upturn. In a very short time we were plunging into massive deficit on our manufactured trade. Unemployment has continued to rise at 25,000 a month. There has been no change in that trend, and it is that trend that should stare the Government in the face, as it stares the country in the face.

For the first time in recorded history we as a nation imported more manufactured goods than we exported. Nothing in the longer term suggests that the sufferings of the past four years are likely to be justified. Nor is there any sign that the Government are likely to learn from their mistakes. The only element in the next four years is that our North sea oil will start to run out and, if we are very fortunate, that will force the Government, as nothing else has succeeded in doing, into altering the direction of their policy. If they do not, the consequences make even our present plight look comfortable by comparison.

Once the oil starts to run out, we shall on present policies be heading for giant deficits. Does anyone in the Government deny that? It is those giant deficits and the effect on the Government's revenue that present the other theme that was discussed during the election campaign and which is bound to dominate many of our debates over the coming months. We do not need any hidden manifestos to tell us the choices that the country and the Government will have to face in this respect.

Unfortunately, the Government have already shown that they are not prepared to fulfil the promises that they made to the pensioners, for example. The fall in the inflation rate should have had the benefit of ensuring that pensioners had some improvement in their position, but it looks as though the Government are determined to persist in the arrangements that they made, meaning a clawback in the real value of the pension. Even more wretched was the Prime Minister's comment during an interview since the election in which she declared that there could be no promise that the Government would carry through any attempt to sustain the real value of the money going to the unemployed.

The last Government cut unemployment benefit. We had a big fight in the House to try to restore the cuts that they made. but in her interview with the Daily Express the other day the Prime Minister announced that she could give no guarantee that the real value of unemployment pay could be sustained. Indeed, she almost looked forward to widening the gap between lower-paid workers and the unemployed and the benefit that they received Looking at the way in which the Government are proceeding to deal with these matters, in every respect the hidden manifestos that were discussed during the election campaign show the reality.

During the campaign, the future was forecast most clearly in the memorandum of the present Foreign Secretary and described by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) on 5 June. It drew the logical conclusions arising from the consequences of continued Tory policy. These showed that on current trends, and given current policies and plans for public spending, the Government could not pursue their financial plans without huge increases in taxes. That is one of the options proposed there, but the option that the Government should be seeking is to change the policies. If they do not, they will be forced back on to what the Prime Minister and others have recommended, which is cutting public spending.

To find the sums involved, the Government would have to cut public spending by about 10 per cent. We can accept their assurances that defence spending will continue to rise, and no doubt some others will. But that will mean only a further attack in other directions. Civil Service pensions are at risk. Child benefit is to be means-tested, according to some announcements. The school meals service will come under far more serious threat, while current policies of reducing staffing and resources will continue.

The National Health Service is also threatened. That was one of the other main arguments in the election. The Prime Minister sought to pretend that the Health Service was safe in her hands. But if it is to be protected, there has to be a considerable increase in resources diverted to it. We want to see that done right away, and we urge the Government to do so not only in the interests of protecting the people who are hit hardest under present arrangements, and not only to protect those who are suffering from the consequences of mass unemployment, but also to ensure that we can try to find a new escape from the other threat facing us, which is the continuance of mass unemployment, with all its consequences for our society.

During the whole debate on these matters the Government have tended to talk as though mass unemployment was some excrescence which did not feature in general economic policy. We take the opposite view. We believe that if we do not solve the problem of mass unemployment, none of the other domestic problems facing the nation can be solved. It is in that spirit that we shall contest the Government's programme and seek to guide them into entirely different courses.

I turn to another of the great themes of the Gracious Speech. Just as the Government show a deep and dangerous complacency about the unemployment crisis at home, so they show an even deeper and more dangerous complacency about the state of the nuclear arms race. The Government do not seem concerned about the perilous state of the arms negotiations at Geneva as they affect both so-called theatre weapons and strategic weapons. They seem content to back the United States negotiating position while continuing to press ahead with rearmament preparations of their own in respect both of Trident and of cruise missiles.

The Government do not seem worried about the threat to the non-proliferation treaty. There is no reference to the treaty in the Queen's Speech, although it is an essential requirement for preventing the world from sliding into a nuclear disaster, and although it is one of the few international treaties on this subject that has shown any chance of working.

The Government show not the slightest interest in— still less, any signs of response to— the widespread concern among neutral nations, non-aligned nations, and large majorities among the nations at the United Nations who do not share their complacency on this subject. The right hon. Lady's Government voted on a series of occasions at the United Nations against the proposals for a nuclear freeze and against proposals for a fresh attempt to secure comprehensive test bans. They voted against such proposals on every possible occasion before Christmas. Nevertheless, they try to claim in the Queen's Speech that they are giving support to the United Nations. I shall comment on a few of those events, some of which have occurred since the election.

During the election, President Reagan got through Congress his latest proposal for the so-called MX missile system. Such is the Orwellian state that we have reached, even before 1984, that he even managed to describe his proposition as a form of arms control. Of course, it is nothing of the kind.

The latest United States proposals for the START talks are characterised by the former United States negotiator of SALT II as follows: And because of greater Soviet dependence on ICBMs, the fatal flaw here, as with the United States position in the negotiations on the intermediate-range nuclear missiles, is that the Soviet Union is asked to scale way down in those areas where it has an edge, while the United States retains and increases its lead in other areas. There is no reason to think that the Soviet leaders will take these proposals seriously. That statement was made by one of those who engaged in the major negotiations about SALT II, and this House and the country should take account of it.

If we set aside all our fears, and fears that the Geneva discussions themselves may fail— although millions of people throughout the world may share them, apparently the Government do not— what about those areas where the British Government have a direct responsibility and in which they should have a special interest? I referred a moment ago to the dangers of proliferation of nuclear weapons, in which the Government have shown no interest. Indeed, if the Government persist in their policies on cruise and Trident, they will make it practically impossible to secure any fresh undertakings and agreements on the non-proliferation treaty or any advance in this respect. There was a good leading article in The Guardian at the beginning of this week on the subject, which said: There is no set of talks in which Britain negotiates about its own substantial rearmament programme. If Britain does not take the Non-Proliferation Treaty seriously, why should the Argentines or anybody else? The right hon. Lady and the Government will have to answer these matters.

I come more directly to the question of the new American missiles which, apparently, we are ready to see deployed here. In the Queen's Speech, the Government reaffirm their decision to go ahead. Apparently, we are ready to have the missiles deployed here if one set of Geneva talks fail. We in the Labour party are opposed to their deployment for two good reasons: They will intensify the arms race itself, and make future arms control well nigh impossible.

What is the Prime Minister's position on this most important matter? President Reagan has spoken politely on the subject. She had some exchanges with him on the matter at Williamsburg, and we are supposed to accept that as confirmation that we have control over these weapons when they are deployed in this country. However, that does not deal with the American constitutional position. I do not believe that that can be escaped. As it was not debated in the House before we departed, it is of absolute importance to have these matters made clear in the House of Commons now.

The President of the United States, as commander in chief, has the sole authority to authorise the firing of the United States nuclear warheads. He can delegate that authority, but only to those over whom he has legal control and from whom he can take back the authority, if he wishes. If he were to delegate his authority, or part of it, to a British Prime Minister, this would be, in the words of a senior constitutional authority in the United States an unconstitutional divestiture of his powers as Commander-in-Chief. Could the British acquire control if cruise warheads were either given or sold to a British Government? "No", says the same authority, because United States law … forbids the transfer of nuclear warheads to other governments. That authority goes on to say that it is true that the missiles, as distinct from the warheads, could be sold or transferred to a British Government providing that the procedures for obtaining congressional authorisation are observed. That was actually done when the old Thor missiles were deployed. A duality of control was established by a duality of ownership, but the Prime Minister has refused the duality of ownership, so the same situation does not apply. [Interruption.] I know that the Conservative party does not want to debate these matters in either the House of Commons or the country, but we are prepared and determined to do so because we believe that they involve matters of great significance to the country.

The same authority who negotiated the SALT II treaty, whom I quoted a few minutes ago, has also given his view on dual control. He said: If you mean that at a time of crisis you could be quite confident that American nuclear weapons could not be launched from your territory without your agreement, then I think you'd be deluding yourselves … no piece of paper, no matter how well intentioned, is going to make any real difference at a time of crisis— the country that physically controls the weapons is going to make the decision. That is the reality of the matter that has been mystified and fudged by the right hon. Lady and by a 11 those who have spoken for the Government on this matter both during the election and previously.

So we are faced with a nuclear arms race that is intensifying in many areas. The so-called super powers are caught in the unshakeable grip of their own insane logic, and a legion of other countries and peoples watch the process with increasing and legitimate alarm, conscious that they are in the presence of a quite new peril. That is the situation, yet the British Government show not a glimmer of imagination or sign of action to deal with it. We sought to shake complacency on these matters during the election. We shall continue to do so with every means at our disposal, because we believe that: the safety of our country and the peace of the world may depend upon it.

3.27 pm

The Prime Minister (Mrs. Margaret Thatcher)

I begin by joining the Leader of the Opposition in the traditional way and offering my warm congratulations to my hon. Friends the mover and seconder of the motion.

My hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) succeeded, in his warm and profound speech, in bringing to us something of the spirit of Devon, where his family and his farming roots lie. He served in two Government posts in the 1970s. First, he was Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, bringing to his work there the skills and insights of a practical farmer. Then he served in the Northern Ireland Office, where it was not only his knowledge of farming but his profound religious sympathies and sensitivities that enabled him to make a very special and well-remembered contribution in the Province. Since then, his broad spectrum of parliamentary duties and current offices, ranging from the vice-chairmanship of the Houses of Parliament Christian Fellowship, has turned him into almost a one-man institution in this House, widely respected and warmly regarded in every part of it. We are grateful to him for his speech.

I also pay tribute to the speech made by my hon. Friend the Member for Crosby (Mr. Thornton) for seconding the address. He is Merseyside born and bred, and his enthusiasm and understanding of that region and its people came through vividly in his speech. He has the unique distinction of having served for over 20 years as a senior Liverpool river pilot, a job which he left to enter the House in 1979. This time he contested Crosby, where, by some extremely skilful and effective navigation, he steered his electoral craft safely to port at Westminster. Like his great Conservative predecessor, the late Sir Graham Page, he will be based at this parliamentary port for man) years to come.

I listened carefully to the speech of the Leader of the Opposition. It seemed to me, on listening to him, that our procedures had scarcely been interrupted by an election, but I gently remind the right hon. Gentleman that he put out that message during the election and that the people totally and utterly rejected it. He spoke about unemployment, and indeed I shall do the same, but not one word that he said would have created one extra job that would have created any extra wealth in Britain. It is easy to speak about the tragedy of unemployment. We have to seek ways of alleviating it and creating genuine wealth and genuine jobs in Britain.

The right hon. Gentleman spoke about pensioners. I remind him that the pension now is at a higher real level than during the lifetime of the previous Labour Government, and that during a recession. He spoke also about the National Health Service. Again, I remind him that there are more doctors, nurses and patients treated in the NHS now than when he left office.

The right hon. Gentleman spoke about relations between East and West strictly on the basis of nuclear accountancy. I shall hope to put them in a much wider context than that. He spoke about a joint decision on the use of cruise missiles when they are deployed in Britain. Those matters were reviewed before the election and the answer was given in a full parliamentary reply. The President of the United States was asked whether Britain would have a veto on the deployment of those weapons and their firing, to which he replied "Yes". It goes deeper than that. No such decision would ever be made without it being made jointly. It is, in fact, deeper than a veto.

In this debate the House will want to do more than repeat the debates of the general election. The opening of a new Parliament is an occasion to look to the future. Two of the most serious challenges that we face are set out in the first sentence of that part of the Gracious Speech which deals with domestic policies. It says: My Government will pursue policies designed to increase economic prosperity and to reduce unemployment.

Mr. Dennis Skinner (Bolsover)

Is the Prime Minister aware that one of the reasons why she managed to get a majority is that her party had the powerful aid of the media and that that same media told the electorate that the Tory policy on mortgage rates was to keep them down? Many people know today that the Tory policy on mortgages has been shot to ruins. All the collaboration between her supporters and the people in the building societies has been proved to be false and has resulted in a massive increase of 1.25 per cent.today.

The Prime Minister

The media may take the voices across the air to the electorate, but it was the Leader of the Opposition's message that was rejected. I do not disguise my disappointment at the fact that mortgage rates have risen, especially as interest rates were reduced in the middle of April to 10 per cent. and, since the election, the base rate has been reduced to 9. 5 per cent., only 0. 5 per cent. above what it was when the present mortgage rate was fixed. Therefore, of course I am disappointed that the mortgage rate has been increased by 1. 25 per cent. Nevertheless, we understand the reasons that have led to that. The demand for mortgages is so great that the building societies must obtain more savings to meet that demand, which has arisen because Tory Governments give greater opportunities for home ownership than Labour Governments ever have.

I return to the main concern of this House and the people outside. Unemployment is a symptom, the most painful symptom, of the fundamental problems which Britain has long faced. It is the result of failure to compete, of pay well above anything justified by output, of restrictive practices and of past inflation. On top of those problems, we, like other countries, have suffered from the deepest world recession since the war.

When the Government took office four years ago, we made it clear that the problems of decades could not be solved in the lifetime of one Parliament. We addressed ourselves to those fundamental problems, and by the end of our first term we had brought inflation down to its lowest level since 1968. As figures published in the few days since the election show, production has risen and productivity has reached new record levels. Retail sales are rising and the underlying increase in average earnings is lower than at any time since 1969. We have achieved that without resort to wage or price controls, which, at best, have a limited life and only store up trouble for the future.

We have also to consider our performance against that of our competitors. Even at 3. 7 per cent., our inflation is higher than in Germany, the Netherlands and Japan. Therefore, we must follow policies that will reduce inflation still further. The underlying increase in average earnings is still too high in relation to what we produce and the performance of our competitors. We cannot weaken our efforts if industry and commerce are to compete with the rest of the world and gain prosperity and jobs in Britain. We shall gain prosperity and jobs in Britain only if we can compete with the rest of the world.

The increase in imports of manufactured goods, to which the right hon. Gentleman referred, sounds the same warning. There is plenty of demand in Britain and it is up to British industry to produce the right goods to meet it. We cannot afford to relax in the belief that the end of an economic cycle will automatically bring recovery. It cannot and it never did. Moreover, we reject the view held by Labour Members that Governments can ordain a sustainable growth in activity in the economy, whether by massive expansion of public borrowing or by printing money.

The Government have an important, indeed a vital, role. It is to create the conditions and framework which encourage recovery and growth to take place, and which, if sustained, will lead to the generation of new jobs. How fast that will happen will depend both on world conditions and on how well people identify and seize the new opportunities.

We shall pursue our strategy for recovery and jobs, first, by helping business to cut costs. We can do that through following sound financial policies which keep inflation down and help to keep interest rates down. We can and are doing it through reducing taxation on business and we hope during the present Parliament finally to abolish Labour's pernicious tax on jobs, the national insurance surcharge. The Opposition talk a lot about unemployment, but they did not hesitate to put a tax on jobs, which made the position worse. We have taken off £ 2 billion of tax and put the money back into the private sector.

We can help to cut costs in business by limiting the increase in local authority rates. Rates are now the biggest tax borne by industry. In a major city I recently visited, one third of the city's firms were seeking to move out in order to avoid a rate burden which for some of them approached £ 2,000 per employee. Early in the new year we shall introduce a Bill to control the rates set by certain high-spending authorities. We shall seek reserve powers to limit rate increases for all authorities, should it prove necessary. That legislation will be very welcome, not only to domestic ratepayers, but to industry and commerce alike.

Some of the reforms that I have just mentioned already apply to Scotland. My right hon. Friend the Secretary of State for Scotland will present separately the valuation and rating reforms that he proposes for Scotland.

We shall also bring forward proposals to abolish the Greater London council and the metropolitan county councils, which have been shown to be a wasteful and unnecessary tier of government.

Mr. Harry Ewing (Falkirk, East)

In view of the Prime Minister's determination to take from the local authorities the very important powers that they have had through the years, can she explain to the House what the purpose of local authorities will be after she has assumed dictatorial powers over them?

The Prime Minister

It is the responsibility of the Chancellor of the Exchequer to try to determine the overall level of public expenditure and the proportion of national income that is taken by public authorities and taken out of the pocket of the people. In recent years the expenditure of local authorities has increased enormously. There used to be certain customs and conventions which governed the relationship between local and national Government. In recent years, those conventions have totally broken down. That is why we are taking powers to limit the increases in rates, and that view has been overwhelmingly endorsed by the electorate.

Cutting costs in all those ways is the first element in our strategy for jobs. Secondly, we can use the tax system as a positive instrument to encourage the creation and the expansion of small businesses, and as an incentive to efficient management. The Finance Bill that we introduced before the election went in that direction, as indeed did previous ones. We shall introduce another Bill immediately to further this work and to restore the tax reliefs which, before the election, the Opposition deliberately withheld from nearly 1 million people.

Mr. Richard Wainwright (Colne Valley)

Earlier in her speech the Prime Minister explained the building societies' decision today in terms of the great increase in the demand for mortgages. That being so, will she now tell the House whether she intends to persist with the three months' old decision—taken in very different conditions —to raise the threshold for mortgage tax interest relief and thus increase the demand for mortgages?

The Prime Minister

Had the right hon. Gentleman listened to what I had said, he would have heard that we are to reintroduce that Bill. If he refers to the debates that governed the limitation of mortgage tax relief at the time, he will be amazed that the level has not been raised already. He will also know that in the big cities of the south-east about one third of new mortgages are for more than £25,000. The failure to have extra tax relief is a great burden on young married people. I note that the hon. Gentleman wishes to retain that burden. We do not.

The third element in our strategy is to continue our substantial support of new technology. In moving the Address, my hon. Friend spoke of the need to adapt to change. We must adapt to change if we are to succeed in the modern world. To those who are fearful of industrial and commercial change, we point out that the real threat posed by the new technology is that our competitors may use it and we shall not.

That is one of the biggest challenges that we face. Japan is ever quick to adapt new processes and to adopt new techniques. Her unemployment rate of 2.5 per cent. is the envy of many, and yet a smaller proportion of her work force is engaged in manufacturing than ours— 25 per cent., against 27 per cent. — and that proportion, like ours, has declined.

New technology will flourish only in conditions of competition. We have already ended the monopoly in telecommunications and we shall reintroduce the Bill to denationalise British Telecom. With all the support that we are giving to encourage new technology, to launch new products and to bring about new research by the universities, the Government and industry in combination, we are pointing the way for Britain to be in the forefront of new technology and one of the leaders of technological advance. Our traditions point that way and our skills lead that way. Our policies are taking us that way, and must do so if we are to get the jobs and the new products of the future.

The fourth element in our strategy for jobs and for recovery is the use of extensive systems of training. Without adaptable and highly skilled people, our economy cannot achieve its full potential. British industry clearly accepts this analysis and our chosen method of improving training for young people. We need 460,000 places for the new youth training scheme —the most advanced ever seen in the country. I am glad to tell the House that 415,000 places have already been identified.

Fifthly, we shall take forward our programme of trade union reform. All too often we hear trade union leaders defend overmanning and inefficient working practices as if they were defending their members' jobs. The truth is that by holding down productivity and preventing the introduction of the more efficient working practices which our competitors take for granted the trade unions are destroying the very jobs which they claim to defend.

It is because trade unions are such powerful agencies for good or harm, for creating new jobs or destroying existing jobs, that we are convinced of the need to ensure that that power is used democratically and responsibly. That was the theme running through our 1980 and 1982 Employment Acts, by which we curbed the abuse of arbitrary power in the closed shop by providing for shop floor ballots, and on the picket line by making secondary picketing unlawful. Those measures have enjoyed the support not only of the British people as a whole, but of a large majority of trade unionists.

We shall now move forward along the lines set out in our 1982 Green Paper, "Democracy in Trade Unions", to ensure that the ballot box, not the bully boy, shall prevail.

Mr. Skinner

What about the CBI?

The Prime Minister

It is fully in support of what we are doing.

We shall give union members the right to hold secret ballots for the election of governing bodies of trade unions and to decide periodically by ballot whether their unions should have party political funds. We shall also curb the legal immunity of unions if they call strikes without securing the prior approval of those concerned through a fair and secret ballot.

That is our strategy for jobs and for recovery. I shall go through the five points again. It is a strategy by which Government can help to cut the costs of business, in which the Government use taxation as an incentive to enterprise and efficient management, in which we have extensive programmes for supporting new technology, in which we have extensive training programmes and in which we embark on trade union reform. It is a strategy which tackles the fundamental problems.

Neither those measures nor any Government measures can guarantee a recovery or the creation of the new jobs that we need. They help to provide opportunity, but that opportunity can be grasped only if our industries—work force and management alike—have the will, the vitality and the flair to produce the products and services that will sell. That is the nature of the essential partnership between the Government and the industry. I believe that there is now a much wider understanding of the link between the prosperity of our people and the performance of our industry and commerce.

The Leader of the Opposition spoke of the welfare state. Let us be clear that there is no conflict between more competitive and profitable business and the range of social provision and care that we all wish to see. Indeed, competitive and profitable business is the essential condition for the care and provision that we all wish to see.

Mr. Sidney Bidwell (Ealing, Southall)

Does the right hon. Lady expect to achieve a revolutionary advance in productive technique without the co-operation of the trade union movement, and to what extent does she expect to consult the trade union movement and the general council of the TUC?

The Prime Minister

The TUC and the trade unions are always consulted, and were on the Green Paper that we introduced. They will again be consulted. Much of the legislation this time will give ordinary trade union members a bigger say in the life, work and decisions of their trade unions. It will be strange, but not surprising, if that is severely opposed by Labour Members.

I was speaking about the welfare state and the need, in order to finance it, to have a thriving and flourishing private sector that is competitive and makes profits. That need can be shown by looking at a number of figures. To increase the retirement pension by £1 week, we need £350 million of extra revenue; to build a new 300-bed hospital and run and staff it for three years, we need nearly £50 million of extra revenue; to reduce the basic rate in income tax by 1p, raise tax thresholds by 5 per cent., or increase child benefit by £2 a week, calls for an extra £1,000 million every year for each of those things. That is the challenge we face. The welfare provision that we all want can be provided only through industrial and commercial success.

We have protected, and shall continue to protect, the social services. The absurd scares put about during the general election served only to give us the chance to spell out our magnificent record in the social services, maintained through the fiercest world recession for 40 years.

Mr. Jack Straw (Blackburn)

In view of that magnificent record, does the Prime Minister guarantee to uprate unemployment benefit in line with prices?

The Prime Minister

No, nor did I give that guarantee during the election, as the hon. Gentleman knows full well. That point was made during an earlier speech.

Our approach goes further than protecting the weak. We aim to give the British people the opportunity to aspire to, and achieve greater personal responsibility and the pride of ownership.

Mr. Laurie Pavitt (Brent, South)

rose—

The Prime Minister

I must get on. That people should be able to own their own homes is at the heart of our philosophy. The link between liberty and property ownership goes deep in our history. That is why we are proud that during our first term one million more families became home owners, giving them a stake not only in the present but in the future, and 500,000 of those families were council tenants. We gave those council tenants the right to buy their homes, in the face of ruthless and prolonged opposition. We shall continue to pursue that great social reform. We shall extend to the many the chances and choices that were previously reserved for the few. The Bill introduced in the last Parliament will shortly be brought forward again.

The domestic programme outlined in the Gracious Speech is substantial. On the international scene, we begin this Parliament at a time when the major industrialised countries are seeing clear signs of recovery and when there is growing confidence in the prospects for that recovery. One of the limiting factors on the rate at which it can take place will be the problems in which a number of the developing countries find themselves because of debt. International debt remains disconcertingly high. Nevertheless, over the past 12 months the international financial community has acted with speed and skill in handling individual cases. There will be difficult, even critical, times ahead, but, with the growing recovery, interest rates well below peak, and the more prudent policies pursued by both the debtor countries and the lending institutions, the prospect is better than 12 months ago. Britain has contributed to that improvement, and other countries cite the British example as the one to follow. We speak with new authority and so are better able to pursue our aims and defend our interests.

Freedom and justice are our most priceless possessions. We value them for ourselves and aspire to them for others, because the cause of freedom and justice knows no national boundaries. The more widely freedom and the rule of law become established in the rest of the world—

Mr. Skinner

What about the freedom of local authorities and trade unions?

The Prime Minister

I am trying to give freedom to individual union members to have more of a say and to give justice to people. The more widely freedom and the rule of law become established in the rest of the world, the more secure they are at home. We shall defend them always, but we cannot defend them alone. We need allies. We shall continue to support and strengthen those alliances and partnerships that work for freedom.

The North Atlantic Treaty Organisation, which for so long has kept the peace in Europe, is the surest guarantee of that peace for the future. The European Community, founded on the desire to end war in Europe for ever, is now a vital area of democracy and stability which, in an uncertain world, we seek to preserve and extend. At the same time, we cherish our relationship with the United States, that great citadel of liberty and justice, which over the years has shown unparalleled generosity to the peoples of Europe and the wider world and is the mainstay of the defence of the West. Our values, way of life and security depend on these alliances and partnerships.

Mr. A. J. Beith (Berwick-upon-Tweed)

rose—

The Prime Minister

I shall give way if the hon. Gentleman wishes to intervene on this point.

Mr. Beith

If the right hon. Lady believes, as I do, the words that she has just uttered, why does she believe that circumstances might arise in which she might have to launch a nuclear war because the Americans had refused to do so?

The Prime Minister

The hon. Gentleman has completely misunderstood. We keep an independent nuclear deterrent as a last resort. It is there to deter, so that at no time should this country ever be threatened by anyone who has nuclear weapons, and if we did not have them the only alternative would be surrender or capitulation. That is not a course of action that we would take.

Our values, our way of life and security depend on those three alliances and partnerships. They have met and surmounted challenges before and will meet fresh challenges in the coming years, for the West is confronted by a power that has failed to solve its own internal problems and seeks escape from these in ever-increasing military expenditure and display.

There was a time when countries of the developing world criticised what they regarded as Western imperialism and looked to Moscow for aid and support, but the world has changed. They have seen the new imperialism at work in eastern Europe, Afghanistan and Cambodia. They have learnt the lesson that it is the West that supports the rights of people freely to choose their own way of life, their Governments and their policies, and that the Soviet Union is the new imperialist. The West, too, has shown the route to economic prosperity and has provided economic aid to help the poor of the world.

This a time for the Western democracies to recover the confidence that some were in danger of losing and to redouble their efforts to defend and spread the values that have been tested by time and that offer incomparably more to mankind than the bankrupt ideology of Soviet Communism.

This Government will stand firmly together not only with its partners in NATO but with its partners in the European Community. The debate about British membership is over, once and for all. Now we shall turn our energies to developing the Community, so that it can better serve the interests of all its nenbers and further those interests in the outside world.

That process was launched at Stuttgart last weekend. The public message from the European Council was that the discussion was dominated by budget natters, and in part it was. We were determined to secure a reasonable British rebate this year. But there was a wider significance — a process of fundamental reform has now been launched.

First, the Community has agreed a programme for firm decisions on its future financing, including—and this is vital for us — a fairer distribution of the burden. Secondly, we are now to examine in detail measures to curb the relentless growth in expenditure, especially on the common agricultural policy. My hon. Friend the Member for Torridge and Devon, West spoke about that when he spoke about surpluses. Thirdly, we are not prepared simply to agree that the Community's resources should be increased. Just to deluge a problem with money is not a solution, but a substitute for a solution. So those who want more noney will have to prove their case and show that the present resources are being spent effectively.

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

Will the Prime Minister give an assurance that she will not increase Britain's VAT contribution to the Community during this Parliament?

The Prime Minister

Had the hon. Gentleman been listening, he would have heard me say that those who want more money in Europe will have to prove their case and show that the present resources are being spent effectively. We will consider the case, but we remain to be convinced. As was intimated in the communiqué, which has been placed in the Library, we could not possibly consider an increase in own resources—VAT mentioned by the hon. Gentleman is only one method—unless there is a fairer distribution of the burden and strict control, not only of agriculture expenditure, but of other policies in the Community. I have made it clear that we will consider the case, but we are not committed in any way.

We now have a golden opportunity to devise a more reasonable and equitable basis for the Community's finances so that the problems that have bedevilled it in the past do not recur. There is now a real prospect of an effective, outward-looking organisation of European states, well designed to bring about a more prosperous future for its people and to carry its benefits to a wider world. We have worked for that opportunity for four years and we shall make the most of it now that it has arrived.

All the achievements that we seek, both at home and abroad, will be at risk unless we and our allies maintain adequate defences. We threaten no one, we do not seek superiority, but we must be strong enough to deter. This Government will do all in their power to ensure that, together with our allies, we have and retain that strength.

We would like to maintain our security at a lower level of arms and expenditure, but it is no good disarming in the vague hope that the Warsaw Pact will follow our example. History shows that one-sided gestures are at best futile, and at worst dangerous. The British people have seen through the arguments for one-sided disarmament. They have rejected proposals that would have weakened this country's defences and those of our allies. The right course is multilateral disarmament.

We shall examine every proposal from the Soviet Union with an open mind, but an open mind does not mean a simple mind. We shall examine every proposal rigorously and test it against our clear criteria. It must improve, not worsen, the balance of forces. It must preserve, not prejudice, our way of life. Arms control agreements must be properly balanced and strictly verifiable.

Meanwhile, the West has tabled a whole series of disarmament proposals. If they are accepted by the Soviet Union, the world will be a better place. There are proposals, and it is for the Soviet Union to accept them. If they are accepted, the world will be rid of the threat of chemical warfare—the Soviet Union has vast superiority in that area—and those horrible weapons will have been banned and destroyed; a complete class of nuclear weapons—the intermediate land-based missiles—will be eliminated; holdings of strategic nuclear missiles will be halved and warheads reduced by at least one-third; arid the conventional armed forces in central Europe will he reduced by hundreds of thousands of soldiers and airmen, so that equality exists between the two sides.

That would only be the beginning. The mistrust and fear on both sides would diminish. We could go on to agree further balanced and verifiable reductions in the armaments of both sides. The prize is great, but we cannot hope to achieve even a small part of it unless we maintain our guard. We will work for peace while we defend our freedom.

I have spoken about the main themes of the Gracious Speech. It shows a continuing purpose with its four predecessors and with those which, I am confident, will be presented to this House for many years to come. We are engaged upon a deliberate and sustained endeavour — to harness change to our advantage, to liberate the inventive genius of our people and to uphold the law and defend freedom and justice. We have dared to address Britain's basic problems. We have dared to persevere. We are proud to have received the endorsement of the British people.

4.7 pm

Mr. David Steel (Tweeddale, Ettrick and Lauderdale)

I join the Prime Minister and the Leader of the Opposition in extending congratulations to the mover and seconder of the Loyal Address—the hon. Members for Torridge and Devon, West (Sir P. Mills) and for Crosby (Mr. Thornton). It will not have escaped their attention that I visited both their constituencies during my recent coach tour of Britain. I am only sorry that I was unsuccessful in persuading their electorate not to send them to the House. However, as they are here, I am sure that their constituents will appreciate the way in which they moved and seconded the Loyal Address.

I listened with care to the Prime Minister to determine whether there was any repetition of the phrases that we heard so often from her and other leading Conservative Members during the election campaign, about the recession bottoming out and recovery being just around the corner. Those phrases were noticeably lacking from the Prime Minister's speech today. There was a great contrast between the optimistic phrases of the election campaign and the phrases about perseverance and a long slog that we heard a few moments ago.

At the beginning of a new Parliament it is fair to look back on what the Government have achieved during the past four years. Unemployment has risen by 2 million; the production of wealth—on which the Conservative party prides itself—has dropped by 4 per cent.; manufacturing output has dropped by 19 per cent. and, most serious of all, investment in manufacturing industry has dropped by 36 per cent. Industry is now at least 20 per cent. less competitive than it was before the Conservative Party took office in 1979.

The changes that the Government have made in our society have led to the number of families caught in the poverty trap doubling since 1979. The poor are paying more tax while the rich pay less. It is against that general background that we must judge the offerings in the Queen's Speech. Sadly, we are left with a number of irrelevant economic measures, mainly about privatisation, in pursuit of party doctrine, rather than measures of relevance to our country. Why, for example, when we are concerned to deal with the problems of the nationalised industries, do not the Government use the public sector to engage in a major advance in industrial partnership? It would be far more constuctive than meddling around with the frontiers between the public and private sector in a way which will not change the nature of our economy.

The most serious issue that will face the Government is the one that faced them during the whole of the last Parliament—the growing tide of unemployment. Since the election, massive redundancies in Liverpool, Tyneside and Grimsby have been announced. When the Government talk about the cost of doing something about unemployment, as though that is an argument, it is high time that they stopped to think about the cost of doing nothing about unemployment.

Before the war there was a governor of the Bank of England who argued that it was too expensive to introduce the kind of programme of public works for which there was a demand because the cost of a labourer's hire was about £400 a year and the cost of unemployment benefit was lOs a week. The discrepancy between the two was large but, as we found during the recent election campaign, the discrepancy between the cost of putting people to work and the cost of keeping them out of work is nothing like the ratio of before the war. The sum of £17 billion, which I believe — I agree with the relevant House of Lords Select Committee on this — is the accurate figure for the cost of benefits and the loss of revenue today, represents the greatest waste ever of public expenditure.

I believe that we were right during the election campaign to put forward a carefully costed and modest programme designed to take 1 million people out of the dole queue in two years. If the Government were to re-examine their priorities they would surely agree that it would be more efficient and cost-effective for the country to engage in that than to allow the cost of unemployment to continue.

I am not talking just of the financial cost. A report published during the election campaign, which I was surprised did not receive more attention, showed that there had been a marked increase in the number of prescriptions for anti-depressant drugs in areas of high unemployment during the past four years, and that there had been a decrease in the number of such prescriptions in parts of the country where unemployment was not a factor. There must be a clear correlation between the stress in families in those areas and the levels of unemployment.

The same is true of crime. The Government, with some justification, are proud of the increased manning in the police service and the improved conditions of the police. However, in spite of that achievement, serious crimes recorded last year went above 3 million for the first time. Violent crime has soared by 38 per cent. There are now more than 8,000 serious crimes recorded every day. In other words, there is one crime every 10 seconds.

The Government cannot respond to that by simply resurrecting the Police and Criminal Evidence Bill with its assault on civil liberties. They must look again at their social and economic priorities and the deep-seated causes of this increase in crime.

I now turn briefly to the references in the Gracious Speech to foreign and defence matters.

Sir Julian Ridsdale (Harwich)

Does not the right hon. Gentleman agree with the view widely held in the country, that there should be deterrent against crime?

Mr. Steel

While there is a level of undetected crime, it does not matter what other deterrent is produced. The certainty of being caught is the greatest deterrent to crime and we must concentrate on that. In fairness, the Government have concentrated on it. If one believes that the crime wave can be countered by the introduction of more draconian punishments, one fails to understand what is happening in certain parts of the country. Rootless people, particularly the young, are filled with despair at being left on the scrap heap of society and are turning to crime because it is the only way in which they can get money, interest and excitement. I deplore it, but if the Government do not learn the lesson of the statistics of the coincidence of crime with the areas of high unemployment and turn instead to hanging and flogging, I believe that they are fundamentally on the wrong track. I disagree with the hon. Gentleman.

The first sentence in the Gracious Speech about the Falkland Islands states that the Government will continue fully to discharge their obligations to the people of the Falkland Islands. I believe that now that we have moved some distance from the events of last year, it is time for the House to turn to the future of the Falkland Islands, and to listen to the reports of our Select Committees. I believe that our obligations to the people of those islands lie in ensuring that they can live in genuine security, built not by force but through political settlement. Whether that is achieved through the Organisation of American States or through the United Nations, it must at some time be approached.

The former Foreign Secretary suggested during the election campaign that at some time, perhaps not yet, it meant involving Argentina in discussion through one of these international organisations so that real security can be brought to the people of the Falkland Islands without ruining their way of life, at great expense to the British taxpayer, through the fortress Falklands policy. I hope that that sentence is not meant to be a blank cheque for hundreds of millions of pounds to be spent without any attempt to secure genuine international political settlement.

Mr. Tam Dalyell (Linlithgow)

Will the right hon. Gentleman confirm that at a public meeting in St. Boswells on Saturday 28 May at 9 pm he said to his constituents that he would favour an inquiry into the circumstances of the sinking of the Belgrano? Does he not think it extremely odd that the right hon. Lady the Prime Minister did not check with her then Foreign Secretary the right hon. Member for Cambridgeshire, South-East (Mr. Pym), on the state of the peace discussions in the United States before she gave orders to Northwood to sink that ship?

Mr. Steel

I plead guilty to the charge as averred in the hon. Gentleman's opening remarks. I said that at that election meeting and I believe it. However, I believe that the inquiry is far better pursued by our Select Committees than by any other elaborate machinery. I do not agree with the charges that the hon. Gentleman has been making against the Prime Minister on this matter, nor do I see why we should wait 30 years to know the fut. circumstances of that episode. That is why I believe that the Select Committees should pursue the matter. The hon. Gentleman must forgive me if I do not elaborate on that.

The Gracious Speech talks about modernising the existing independent nuclear deterrent with the Trident programme. It is the first time that I can recall that phrase being used. It is a matter of presentation. We should be clear that the Government are not proposing the modernisation of an existing system but a major escalation in nuclear weaponry through the Trident missile programme. The inconsistency that my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) mentioned a moment ago is there. The right hon. Lady postulates a possible future position in which our NATO allies failed to come to our aid and we would require some independent deterrent power because we could not rely upon them, although we cannot apparently be allowed a dual key system for the cruise missile and can trust the judgment of any future American President on the use of the cruise missile here. That seems to be a major inconsistency.

The Trident missile programme is more expensive than any cruise dual key mechanism. I do not believe that it is right that we should proceed with the Trident missile programme, or that it would be right, in the words of the Gracious Speech, for the Government to say that the numbers of cruise missiles finally deployed will depend upon the outcome of the Geneva talks. It is essential that when the Geneva talks have finished, Parliament should have an opportunity to debate and decide whether any cruise missiles should be deployed here.

I believe that the British Government's proper role is to maintain pressure on the Geneva talks with a view to ensuring their success. That is why I disagreed with the Labour party's programme during the election, because it would have removed any pressure on the Russians to reach agreement. I disagree also with the Prime Minister who, apparently, is happy to confront our European allies in summit meetings but not President Reagan. The Administration in Washington are divided on the approach to the Geneva talks. The British Government's job is to maintain maximum pressure upon the United States Administration to bring these talks to a successful conclusion.

This House should not be committed to cruise missiles unless we are satisfied that a major Russian threat has prevented those talks from coming to a conclusion. Last Sunday's Observer contained this report by its defence correspondent, Ian Mather: The British and French nuclear deterrents have emerged as the major obstacle to agreement on intermediate-range nuclear weapons in Europe. In the four weeks since the negotiations resumed in Geneva, the Russians have hardened their insistence on having these weapons included in the European nuclear balance. In a minute to the chief United States negotiator … the Russian delegation has stated that not only are they now seeking `compensation' in nuclear weapons to offset British and French systems, but also an entitlement to extra SS-20s in the event of increases in the `quantity and quality' of British and French nuclear weapons. Therefore the Trident programme is inextricably linked with the possible success of the talks in Geneva. This Government have embarked on the wrong course, not only in refusing to put Polaris into the negotiations but in threatening a major escalation ourselves. In this coming Session of Parliament these major issues—the Trident programme and the deployment of cruise — must be matters to which the House returns.

I found extraordinary the Prime Minister's reference to something —I forget the subject with which she was dealing — being "overwhelmingly endorsed" by the people. It is doubtful whether the Government can claim any true mandate in the real sense of the word. They have been returned to office with less popular support than they had in 1979 and with the lowest support of any Conservative Government since that headed by Mr. Bonar Law 60 years ago.

Now that we in the alliance parties have secured a quarter of the popular vote, we are at least entitled—I am sorry that the Leader of the House is not in his place because he will reply to the whole debate at the end of four days — to greater consideration in the House than traditionally has been the case. If the Prime Minister turns a deaf ear and a blind eye to electoral reform, as I know she does, for this place, let her consider what she is doing to local government. Surely the right answer to the political threat which she sees from certain local authorities is not to stifle the freedom of local democracy but rather to enlarge it by introducing proportional representation for local government elections. That would prevent minorities from getting hold of local authorities and engaging in unacceptable economic policies.

We should consider also the European Assembly. The British Government alone stand out in the Council of Ministers against a proportional system of elections for the European Assembly. There is no Government involved there; it is merely a consultative assembly. Why should we export the distortions of our electoral system into an international assembly in the way we do?

Mr. Tony Marlow (Northampton, North)

Will the right hon. Gentleman give way?

Mr. Steel

I will not give way at this stage because I am addressing my remarks to the Prime Minister.

One must ask what position the Government will be in in Scotland in this Parliament. They are in a small minority, not just of votes but of seats as well. There are no proposals in the Gracious Speech for devolution or further discussion, for which the great majority of people in Scotland voted in the general election.

Moreover, the Prime Minister may recall the speech she made on 23 March 1977 in which she criticised the previous Government and talked about the right of a supposed mandate based on 38 per cent. of the votes cast, or 29 per cent. of the electorate. The objection she then had in principle is not altered by the fact that the present Government have 42 per cent. of the votes instead of 38 per cent. The point she made about a mandate is as valid today as it was then.

Mr. Marlow

rose—

Mr. Steel

I will not give way on this point.

I read with interest what the Leader of the Opposition said to the Boundary Commission: Our first concern as a party with the Boundary Review was that it should reflect fairly in the seats the balance of votes between the parties at a general election and should give us fair representation.

Mr. Marlow

rose—

Hon. Members

Sit down.

Mr. Steel

That is what the Leader of the Opposition said then, but his party has since lost over 100 deposits in the general election. I suggest that he looks again at what he said to the Boundary Commission and re-examines his conscience in the matter of resisting electoral reform. Electoral reform is not just a matter of fairness between parties, although fairness should not be lightly dismissed, as it sometimes is on the Benches opposite.

The real argument for electoral reform — it was emphasised at the general election—is that the political map of the country is swamped by blue in the south and red the further north one goes, and we are truly creating a far more divided society than we have seen on any previous occasion in British post-war politics.

I remind the Prime Minister what her distinguished predecessor, Mr. Disraeli, said about two nations: Two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws. The real threat to our society is that that is happening again in our country. Only a change in the electoral system will relieve us of it.

Looking at the present Government's characteristics, the words "humility and magnanimity" do not readily spring to mind. They would do well to embrace those characteristics and be a little more modest in their claims, particularly when they look at the slice of the electorate they represent. The danger to the country is that this "do nothing" Government have become a "learn nothing" Government. Unless they change course, I see nothing but a very rough ride ahead for the nation in the next four years.

4.26 pm

Mr. James Molyneaux (Lagan Valley)

The Conservative party manifesto recognises, in the section dealing with Northern Ireland, the courage and commitment of the security forces, and those sentiments we would all applaud. The men and women of the Royal Ulster Constabulary, the Ulster Defence Regiment, the Army, Navy and Air Force have shown a degree of patience, humanity and restraint which will never be equalled by the defence and security services of any other nation, past or present.

For about 14 years they have demonstrated that they can be trusted to act lawfully and on their own initiative, which is most important, and perhaps the time has come to reward them by allowing them that freedom of action which we know—and they know—is essential if what the manifesto calls "increasing success" is to be maintained. My party has welcomed the larger role played by the Royal Ulster Constabulary and the Ulster Defence Regiment in defence of their part of the United Kingdom and their taking over much of the Army's responsibilities, except those which are part of the external defence of the realm.

The second paragraph of the Northern Ireland section of the Conservative manifesto is a puzzle and contradiction. It reads: the people of Northern Ireland will continue to be offered a framework for participation in local democracy". That represents a retreat from the 1979 position, set out in the Gracious Speech at the opening of the last Parliament, which contained the promise to give to the people of Northern Ireland more control over their own affairs". Four years later, the Government have backtracked on that promise. There is no more talk of control at that level.

For the next five years we shall continue to be offered —"offered" is the word—a framework for participation. When, a year ago, that framework was being erected in this House, we on this Bench— and, to their credit, many Tory Members—warned that we were designing not a framework but a straitjacket; and so it has proved to be. The worst fears have been confirmed and the Government can only promise that they will "continue to offer" a scheme which they know, and we know, cannot, and will not, work.

I have no doubt that a year ago a handful of hon. Members felt in a vague way that if representatives of the majority and minority could be brought together in an elected body, some good might just possibly come of it. The representatives of the majority took the places in the Assembly to which they were elected, but the representatives of the minority did not. They have treated the Assembly, the Secretary of State, Her Majesty's Government and the House with contempt. They have gone further—they have set up a rival forum in Dublin.

There is no possibility of the Assembly working as the Northern Ireland Act 1982 intended it to work. The Act requires that there shall be widespread support throughout the community. That requirement is echoed in the Gracious Speech. This has been said by the leader of the Liberal party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel). The Government, headed by the Prime Minister, are based on 42 per cent. of the vote cast. In Northern Ireland, my party obtained 34 per cent. of the votes cast at the polls. Perhaps we are on a par. Admittedly, we are 8 per cent. behind, but we are on a par at least in that neither of us can claim to have widespread support throughout the community for any action that we may take. I shall not go on to support the plea by the leader of the Liberal party for proportional representation because, having seen the chaos that it has created in Northern Ireland and the difficulties that it has caused in administration, I would not wish to impose that system on anyone.

Mr. Tom Arnold (Hazel Grove)

in order to make things easier, would the hon. Gentleman support the setting up of a Select Committee on Northern Ireland?

Mr. Molyneaux

That would require the Government to clarify their thinking. We should not plunge a Select Committee, any other Committee, or any consultative body into further deliberations until the Government have come clean on their own intentions. I hope that the hon. Gentleman will permit me to state how that can be done.

The requirement for cross-community consent is the death knell for progress in the Assembly, because its retention encourages republicans to continue their boycott secure in the knowledge that their absence, and their absence alone, will block all progress on he devolution of powers to the Assembly. Therefore, we have the right to ask what the Government's intentions are, and whether they were sincere in late 1979, when the right hon. Member for Spelthorne (Mr. Atkins) called his conference, and again in November 1981 when the present Secretary of State took certain initiatives. They declared that, notwithstanding the pre-1979 position of the Conservative party and its conviction at the time, devolution should not be attempted because—this was the conclusion of the shadow Cabinet over which the Prime Minister presided and of which the present Secretary of State was a member—power-sharing was incompatible with democracy. Those words were used by the present Secretary of State for Northern Ireland.

If the Government have not been conning the people of Northern Ireland over the past four years, how do they now propose to restore real devolved government? What is the precise interpretation of cross-community consent in the community? That phrase will give hon. Members food for thought. It is not just cross-community consent obtained within the Assembly and from the elected representatives of the people in the Assembly. It goes wider than that. It is cross-community consent within the community in Northern Ireland. All that must be clarified before we can take even the limited step suggested by the hon. Gentleman. We hope that we shall have an answer soon.

We are anxious to assist the Government. We hope to take steps to have the legislation amended and we hope that we shall have the support of right hon. and hon. Members who only a year ago shrugged their shoulders and reluctantly voted for the 1982 Act, convinced even then that it would not work. We hope, too, that we shall have the support of parties and individual Members who voted, or in some cases did not vote at all, on the basis that the experiment was worth trying.

Now that the experiment has failed, I am confident that support for our efforts will be forthcoming. I base that confidence on the knowledge that the House of Commons, with all its faults, does not like being made to look foolish. Indeed, it cannot afford to look foolish. However, the House will be exposed to ridicule for as long as it condones what one might call the beads and bangles approach of the Secretary of State and as long as it retains unamended on the statute book an Act that holds no prospect of advance.

The future of the Sssembly cannot be used as an excuse for the failure to recognise a truly hideous deficiency in local government. Speculation about hypothetical solutions provides no justification for withholding from the people of Northern Ireland real local government. Its absence permits bureaucracy to run wild, and its restoration would do much to remedy the grievances of citizens who showed in the general election campaign, particularly in Northern Ireland, that they were far more concerned about effective local services than about advisory and scrutiny committees that are listened to only when their views are agreeable to Whitehall Ministers.

In the 1979 manifesto the Conservative party recognised the need for real local government in Northern Ireland. Four wasted years have not removed that need. Now is the time for the new Conservative Government to keep their 1979 promise. It might be appropriate for them to do so in the context of their proposals for local government in the rest of the United Kingdom. At least they should now make a start on the scheme to which there could be no valid objection, and which would in no way prejudice progress with a transformed Assembly plan. I have said that there could be no valid objection. I do not doubt that there will be phoney objections. Attempts will be made to convince the House and the Government that there will be sectarian discrimination. I shall give one illustration. In what possible way could Protestants and Catholics disagree about whether road A as opposed to road B should be resurfaced within the current expenditure programme of the Department of the Environment in Northern Ireland?

Whatever the fate of the 1982 Act and its offspring, the Northern Ireland Assembly, the House must set its face against the continuance of direct rule. We all remember the system of colonial rule being imposed in 1972 as a temporary expedient. Now it is in its eleventh year. As hon. Members know, it involves the Government of Northern Ireland by Order in Council and ministerial decree instead of by Bill. I do not need to explain to this most democratic of all assemblies and parliaments the disadvantages of autocratic government by Ministers and civil servants.

There is a much more sinister aspect of direct rule. It requires to be renewed annually, again by Order in Council. The Secretary of State comes to Parliament in the month of June and asks the House for authority to govern Northern Ireland for another year. That implies, as it did for the right hon. Gentleman's predecessors, that it is for only one more year, but he knows quite well that he will be back the following June with an identical request. One might turn a blind eye to, and even participate in, that charade if the consequences were not so grave and, for some, so fatal. The yearly renewal of the Northern Ireland constitution, which means holding Ulster on a 12-month lease, transmits a special message to terrorists, which they interpret as an incentive to step up their campaign of murder. Not surprisingly, they derive much hope and encouragement from the belief that the Parliament of the United Kingdom is so uncertain of the future status of Ulster that it cannot bring itself to extend the lease beyond 365 days at a time. Incitement to terrorism is provided at another and higher level.

In recent days—I am sorry that the Prime Minister is not present but I understand the pressures on the right hon. Lady's time—there have been reports of a resumption of the regular meetings between the Prime Minister and the Prime Minister of the Irish Republic. The Gracious Speech refers to the desirability of maintaining good relations with foreign countries. No one is likely to oppose good relations with foreign Governments and foreign countries although it is difficult to justify the singling out of one nation for special treatment.

The Prime Minister appears to believe that expressions of friendly intent towards the Irish Republic mean just that and no more, but that is not how it appears in Dublin. Anglo-Irish summits are always surrounded by speculation of changes in the relationship and status of that part of the United Kingdom that borders on the Republic, so it is not surprising that Dublin politicians always regard such summits as opportunities for pressing their claim to what is, in effect, British sovereign territory. Such impressions are not dispelled by carefully worded communiqués even when, on occasion, those communiqués are drafted two weeks before the summit. The fact that the meeting takes place convinces Dublin that progress is being made towards unification.

If experienced politicians can be so deluded or can delude themselves so easily, what is the impact upon the terrorist organisations that share the same political objective as the Dublin Government? The signal is received and understood to mean that the common objective is attainable. When the code is cracked, the message confirms that Ulster may be handed over if the necessary muscle is supplied. Terrorist organisations are in the business of supplying force and muscle and they will try desperately to prove that it was their efforts that achieved the goal of Irish unity, if only to ensure that they have a dominant and all-important position in a new united Ireland.

My respectful word of advice and caution to the Prime Minister and to Her Majesty's Government is to have a care. Experience has proved that well-intentioned intiatives make the position worse, not better. My plea to the Prime Minister and the Government on behalf of those who have yet to die as a consequence of their deeds and words is to move with great caution, as they may be treading upon our graves.

4.43 pm

Dr. Alan Glyn (Windsor and Maidenhead)

I hope that the hon. Member for Lagan Valley (Mr. Molyneaux) will forgive me if I do not follow his path, although the House sympathises with him in his deep concern for Northern Ireland. I am sure that he will accept that.

I have just tabled a motion asking Members not to speak for more than a prescribed period, and I shall be as brief as possible.

The Gracious Speech includes all the points that were fought during the general election, especially the rejection by the electorate of unilateral disarmament in favour of multilateral disarmament. My right hon. Friend the Prime Minister went into this matter carefully. The Government are determined to have peace, but not at any price. It is essential that the independent nuclear deterrent is preserved, bearing in mind the outdating of Polaris. The House has often discussed the subject and has come to the conclusion that Trident is the only solution.

Balanced and verifiable measures are necessary. We all know that the power of the Warsaw Pact, with its conventional and nuclear weapons, far exceeds our own and that those weapons are intended not for defence but for aggression. The Government's desire is that any form of peace settlement should be balanced and verifiable. That means that both sides should have the opportunity of examining the other in detail, thereby ensuring that the treaties are not broken.

I was pleased that my right hon. Friend the Prime Minister mentioned the role of the United States. We must not forget that the role of the United States in Europe has proved most valuable and is of major significance in the support of our NATO alliance.

The issue of the European Community has been decided. The accession of Spain and Portugal is mentioned in the Gracious Speech and is welcomed. I am pleased that the Government are reaffirming their commitment to the people of Gibraltar and in the many negotiations that will take place their interests and desires must be considered. No accession should take place that could jeopardise their position.

The same is true of the Falkland Islands. As the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) said, a solution must be achieved, perhaps by some form of collaboration in the resources of the south Atlantic. That is not outside the realms of possibility.

The adaptation of this country to change is inevitable. I welcome the fact that the Gracious Speech encourages industry to be efficient and adaptable and to develop new technologies. Only by these and other methods can unemployment be reduced.

During the election campaign it became increasingly clear that trade union members want greater control of their own affairs. Election to office does not mean that the office should be occupied for life or control the block votes. The individual union members must have control of their own affairs and their leaders.

One of the practices that brought about a successful conclusion to the election was the opportunity afforded to people to purchase their own council houses, thereby becoming members of a property-owning democracy. The possession of a house makes a person feel secure and gives a stake in the welfare of the country. This issue was raised several times during the campaign.

Law and order was a topical matter during the election campaign. I agree with my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills), who proposed the motion, that law and order cannot be brought about just by the police force. There must be a restoration of dignity and responsibility to the community, with parental responsibility increased and discipline maintained in the schools. That is, fundamentally, where law and order begin.

The Gracious Speech refers to the National Health Service. The National Health Service must be pruned administratively, in favour of doctors and nurses. It is essential that there should be no rivalry between private and public medicine, but that they should work in partnership. I look forward to the possibility of legislation enabling the two sections of medicine, which have the same objective—the cure of patients—to work together and not against each other's interests.

Another matter that came out strongly during the general election campaign was the desire of parents to be able to choose their children's schools where possible. That must be right. If a school is bad there can be no justification for forcing parents to send their children there. Let it go out of business if it is bad. Let parents choose as far as possible the way in which their children are educated.

I end with a quotation from Lord Shawcross as he now is: We are the masters at the moment, and not only at the moment but for a very long time to come.'—[0fficial Report, 2 April 1946; Vol. 421, c. 1213.] My right hon. Friend the Prime Minister would agree with me that we are not the masters but the servants of the electorate, and that we must ensure that Britain is not only secure in its defences but secure in establishing a base from which we can increase the benefits to, and the standard of living of, all our people.

4.50 pm

Mr. Gregor MacKenzie (Glasgow, Rutherglen)

As I shall make a speech about Scotland, I hope that the hon. Member for Windsor and Maidenhead (Dr. Glyn) will forgive me if I do not follow his remarks.

May I tell the Under-Secretary of State for Scotland, who is on the Government Front Bench, that the people of Scotland will be as disappointed as I am by the fact that the Gracious Speech makes little reference to Scottish problems. We are given one and a half lines in the Gracious Speech, which to me — I am sure that it applies to those whom I am privileged to represent—is not good enough. It makes no reference, as the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) said, to the structure of government in Scotland.

Although while I was a Minister, and before I became a Minister, I believed in the need for a Scottish assembly, I am bound to say that my enthusiasm for the assembly was not as great as that of some of my right hon. and hon. Friends. However, the past four years have persuaded me that a democratically elected Scottish assembly would be a good thing. I have noticed that need in health, housing and education, but I have noticed it more than ever in local government and local government finance.

Only within the past few days the Secretary of State for Scotland has taken to himself the role of the local authorities, because he is now telling them what they must charge. The people of Glasgow have elected a Labour district council, but the council has been told by the Secretary of State what the rate poundage must be because he believes that it is excessive. If we had a democratically elected assembly in Scotland, the Secretary of State could not take unto himself powers that property reside with the democratically elected councillors.

The people of Scotland want an organisation of their own, and I believe that it should be an assembly. I recall that some years ago one of my colleagues, who was a teacher, asked his pupils to write an essay on Scottish government. One young girl, perhaps not the brightest, answered by saying, "The people of Scotland want something. They do not quite know what they want, but they want it." That may not be the cleverest answer, but it expressed that child's beliefs and those of some others. However, it is certain that the people of Scotland wish to have the Scottish dimension properly recognised by the Government and by the House of Commons.

I can speak only for myself, but perhaps others have had the same experience, about two issues that became crystal clear during the election. The first was that the meetings in Edinburgh of the Scottish Grand Committee were a load of malarkey—the elegant way of putting it is to say that they were cosmetic—because they did nothing to further the interests of Scottish people. The second thing that I noticed as I went round my constituency is that the people of Scotland are still violently anti-separatist. They want, as I do, the people of Scotland to play a vigorous role in an integrated United Kingdom. The derisory number of votes received by Scottish National party candidates who espouse the notion of a separate Scotland, is a clear demonstration that Scots wish to remain within this Parliament, but with the proper powers of an elected assembly.

I hope that my colleagues will agree with me that the people of Scotland are not stupid, and that they know that, assembly or no assembly, the task of providing jobs for Scottish people lies with the Government and with Parliament. They know that even if we had had the assembly that we wanted four years ago, it could not have dealt with our major concern in Scotland at present, which is unemployment. My constituents are as worried as anyone else about other issues, such as defence, education and foreign affairs, but time and again I have been questioned about unemployment. Not only are more of our people unemployed, but there are fewer jobs available in Scotland than in 1979 and before. Our people are very much poorer, and it is a sad reflection on the Government that in my constituency—the figure is higher in the constituencies of some of my right hon. and hon. Friends —about 20 per cent. of people and their dependants live on supplementary benefit. That is an affront to any country, so naturally, my constituents want some assurances about their future.

It is not an exaggeration to say that many Scottish people aged between 40 and 45 genuinely fear that if the Government continue on their present way they may never have a job again. The other group that worries me are the youngsters who have not had a job since they left school. I have young relatives and friends who have 0- levels, highers and university degrees and who have never had a full-time job. We are encouraging youngsters to sit 0-levels and highers and to take advantage of the benefits of higher education, but my daughter, who graduated last year from Glasgow university, has had only three weeks' work as a temporary cleaner of tables in a Glasgow restaurant. What was the good of my encouraging her to get a good education when that is all she can get at the end of the day? She is typical of the many youngsters who are becoming bitter and frustrated about their position and the Government's complacency.

I worry about the attitude of people in their twenties. They are beginning to say, "This has not just been caused by the Tory party, the Labour party or the Liberal party." They begin to think that the entire parliamentary system and democratic process has failed to provide them with the jobs that they want. Once that belief grows, the Prime Minister and her colleagues will have a great sin to answer for. They have been told for the past four years that the Government are concerned about this, that and the next thing, but above all about jobs. Yet as I listened to the Prime Minister's speech today I heard very little about positive measures to give encouragement about jobs to the people of Scotland. The people I represent do not understand unemployment, because they have been told for the past four years — I have heard the Under-Secretary of State say it—that as inflation came down their job prospects would increase. That has rot happened and is not happening today. Four million people on the dole is far too high a price to pay for the Government's doctrinaire theory.

I give an example. People are looking for homes, and others are hoping to have their homes modernised. With those needs, they do not understand why thousands of construction workers should remain unemployed. On one side there is a demand for homes and on the other side there is a demand for employment by construction workers. People cannot understand why the two cannot be matched.

People are even more confused when they are told how much it costs in benefit to keep the construction workers on the dole, and how much is being lost in taxation. People believe, as I do, that that is the economics of the madhouse. They cannot understand— neither can I—. how we are to attract new industry to Scotland and to the rest of the United Kingdom if the Prime Minister and her colleagues in the Government connive at the closing of our basic industries and basic services.

Steel plants are being closed and there are plans to close parts of the railways. How can we attract new industries to the more deprived parts of the United Kingdom when that is happening? We need to have assurances about those basic industries. I hope that the Under-Secretary of State will at some stage give specific assurances concerning Cardowan colliery and Ravenscraig steel works. There has been great vacillation and none of us is certain about what is to happen, despite the comments of the Secretary of State for Trade and Industry yesterday.

I hope that Ministers will take the opportunity to see the present chairman of the British Steel Corporation, who is now chairman-designate of the National Coal Board. I hope that they will remind him that the two industries, steel and coal, have to be seen as part of a wider industrial spectrum, and that they have an important part to play in the whole industrial programme. They might also tell him that during the election campaign in the west of Scotland, when our Tory opponents sought to cover their embarrassment about unemployment, they tried to get us to talk about various aspects of defence, knowing perfectly well that the people were mainly concerned about jobs. But in my area, the coal miners and the steel workers told them that they were far more scared of Ian MacGregor than of Yuri Andropov. That sums up the attitude of many people in Scotland.

If the Government continue with their present policies on employment there will be an increase in the bitterness of our young people and in the despair of our older people. It will put an argument into the hands of those who are hell bent on achieving some form of separation from the other parts of the United Kingdom—and that will be bad. There will have to be some drastic rethinking, because people have a right to work. People, not theories, ought to be the first priority of Governments. The Government must rethink their policies about employment and give some hope and assurance to the people of Scotland.

5.4 pm

Mr. Tim Rathbone (Lewes)

The right hon. Member for Glasgow, Rutherglen, (Mr. MacKenzie) has identified many of the problems facing Britain, but he has contributed to the disillusion among young people in looking at those problems, and in coming to grips with them, by leading them to believe that there is any easy answer to them.

It is not a question of the Government changing their course or changing their policies from those to which they set their hand at the beginning of the last Parliament, for which they have argued during the recent general election, and to which they have set their hand once again in the Queen's Speech. It will be a hard slog, and the young people will be part of that hard slog. We must, of course, appreciate the difficulties they face and ameliorate their problems wherever we can, but it will be to their detriment rather than to their benefit if we try to delude them that there is an easy way out.

Today, we are starting on what may well be described as a Parliament of opportunity. It is a time for change and a time for vision, after a very clear election victory, as was said so clearly by my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) in his excellent speech. It is a time to expand the coherence of argument of the election campaign to coherent political strategy for this Parliament. That is reflected by the Queen's Speech and by the speech of my right hon. Friend the Prime Minister this afternoon. In neither of them was there the complacency or the callousness suggested by the Leader of the Opposition.

More thought, more soul-searching and more imagination must be brought to bear on the greatest problem facing Britain, which is to get the economy moving again and to improve the occupation opportunities for everybody. I emphasise the word "occupation" because we should not become hung up on the word "employment" —paid-for occupation. It is when the economy starts to burgeon again that we can do some of the exciting things which have been discussed and which must continue to be discussed for the benefit of those not in paid occupation but who are making use of the increasing leisure time that is made available to them.

I should like to dwell briefly on two not very large but quite important matters. I plead with the Government to give greater attention to them and, if necessary, to reassess the legislative programme in order to accommodate them. I am sure that many of us in constituencies throughout Britain during the general election will have found electors and constituents frustrated in their desire to vote by being on holiday on polling day. Holidays now are almost always arranged a long time in advance, they are often paid for almost completely in advance, and they are therefore impossible to change if a general election is called during such holidays.

Another group of our constituents whom we were not able to meet during the election campaign are those who are temporarily resident abroad on business or in Government jobs within the European Community. Neither of those groups of British citizens have had the right to express their political choice in the election. They have not been able to share with us the duty and the democratic privilege of casting their vote.

The loss of that right is all the more peculiar because others in similar circumstances still have it. A business man who is away from his home, either elsewhere in Britain or abroad, can obtain a postal vote. Anyone in the armed forces can obtain a postal vote. Other countries in Europe have shown that they can make the necessary administrative arrangements for their citizens who are placed in similar circumstances. Why can we not do the same for our people? I raised the issue in the debate on the Queen's Speech nine months ago, and my right hon. and learned Friend the new Home Secretary accepted the desirability of such a change when, in another role in the Home Office, he replied to a parliamentary question of mine on 25 July 1979.

I plead with the Government to correct the electoral anomaly before the next round of national elections, which are those for the European Parliament less than a year from now. British citizens on holiday or living or working abroad deserve the democratic and constitutional right to vote and we must return the franchise to them.

My second point is another issue of political principle, related to the way in which our tax system can sometimes work to weaken the family rather than to strengthen it. Conservative Members and many in other parties have upheld the family as the core of our way of life and the single most important influence on the coherence of our community and the economic and social cohesion of our country.

In those circumstances, it is all the more peculiar that our tax system can run contrary to that belief and it is all the more important that when it does so it should be revised. I was sad to see no reference to such plans in the Queen's Speech references to tax changes.

The Government showed in the previous Parliament that they were aware of the need for study in this area and nearly two and a half years ago they published a Green Paper on the taxation of husband and wife. There has been much discussion of the subject since then, and it is a pity that the Queen's Speech includes no sign of action.

I shall not be tempted into the fascinating argument between the principle of taxation of all individuals regardless of condition and the requirements of allowing for the overall financial circumstances of a family when taxing husband and wife. However, I admit to a bias in favour of building the family as the basic unit for taxation and allowances because of what I believe to be the good sense of so treating the family and encouraging family life and because of the chance bias of ancestry, since the battle for family allowances was led in the House for many years by my kinswoman and predecessor Eleanor Rathbone, who was a Member more than 40 years ago.

The principle of tax allowances being transferable between husband and wife is generally accepted, even though the administrative costs of such a system could be considerable, as the Green Paper pointed out. I believe that such costs would be worthwhile when balanced against the Government's desire to recognise more emphatically the status and obligations of marriage and the need to protect and help wives who cannot or do not wish to go out to work.

The transferability of allowances is crucial to such reorganisation and support. Of course, there would be problems in protecting the pensions of old people, in the taxation of income from investments and savings and over the married man's allowance, but the choice is between a new system of transferable allowances and a substantial increase in child benefits.

I opt for the former course, because, although children are by far the largest group of dependants, they are not the only group, and special protection for pensioners, who usually do not have dependent children, is all-important.

Therefore, I repeat my plea to the Government for action on both those fronts. About a year ago, my right hon. Friend the new Chancellor of the Exchequer said in the first Patrick Hutber memorial lecture: It is always unwise to disregard the moral dimension in politics. And this perversion of morality has been peculiarly damaging to public life … it is wholly alien to the instincts of the people, and thus drives a further wedge between Government and governed. That is a quotation which the Government and all hon. Members should hold close to their hearts during this Parliament.

5.14 pm

Mr. David Winnick (Walsall, North)

I can well understand the feeling of victory on the Government Benches. Despite the economic decline of the past four years and the return of mass unemployment, the Government have been given a larger majority.

Of course, the split in the anti-Tory vote undoubtedly helped to produce the Government's majority, as did the feeling of a number of people that the Government needed more time for their policies to work and—this cannot be denied — the failure of the Labour party to persuade enough of the electorate that there was an alternative to mass unemployment.

The Government's line was that unemployment and the problems facing industry were due to overseas factors and the world recession. With the help of the media, Saatchi and Saatchi and the rest, the Government sold that line and many people, including Conservative voters, will suffer as a result.

During the election campaign, however, a draft report by the Select Committee on the Treasury and Civil Service, chaired by the right hon. Member for Taunton (Mr. du Cann), which must have been embarrassing for the Government, said that at least half the unemployment of the past few years has been caused by Government policies. We tried to get that message across during the election campaign.

It did not take the Prime Minister long after her victory to purge the dissident, as she no doubt privately describes the right hon. Member for Cambridgeshire, South-East (Mr. Pym). He lost his job as Foreign Secretary and one wonders how long the Secretaries of State for Northern Ireland and for Energy will last in their jobs. The Prime Minister has never liked critics in her ranks, certainly not around the Cabinet table. She seems to like the hero worship and hysteria of the faithful, the party rallies and conferences and the standing ovations which always remind me of Communist party congresses in the Soviet Union. The notorious rally at Wembley represented in many respects Thatcherite Toryism.

If the economy continues to decline and manufacturing industry continues to suffer as it has over the past few years, there is no doubt that unemployment will carry on rising. The Conservatives may find a far more unfavourable climate at the next election, when all the work of Saatchi and Saatchi may not be able to help them.

I have grave doubts about whether we shall be able to persuade the Government to take the necessary steps to improve this country's prospects. If manufacturing industry in the west midlands and elsewhere is to be able to recover and if more factories and plants are not to close, putting more people in the west midlands and the black country on the dole queues, we shall need a more competitive exchange rate and at least some protection against the high import penetration of British markets.

The west midlands has probably suffered more than any other region in the past four years. In my own local travel-to-work area, 18 per cent. of the work force are registered as unemployed. The regional rate is 15 or 16 per cent. Behind those statistics are the tragedies of so many people—youngsters, married couples and heads of households—who have to live on unemployment pay and supplementary benefit. Their chances of finding work—any work—are becoming increasingly remote. The fact that we did not succeed at the last election does not alter in any way our argument that there must be alternative policies for running the economy.

There can be no justification for a situation —certainly in my area and I am sure in many other parts of the country—in which once a person in his 50s or late 40s is made redundant, he will find, on the basis of existing policies, that he can never work again. That is throwing a human being on the scrap heap and saying to someone, "Give up hope. All you will live on is unemployment benefit and supplementary benefit, and the chance of getting a job will become increasingly difficult." The Labour party has a duty to speak and argue against such policies. The fact that the Tories now have such a large majority does not undermine the credibility of the argument that we are trying to get across here and in the country.

In this moment of jubilation on the Conservative Benches they should—my right hon. and hon. Friends understand the position well — understand the despair, bitterness and alienation felt by many young people, particulary in inner city areas. These are areas where, once one leaves school, one knows that the possibility of getting a job is almost nil. I stress the word "alienation". My right hon. Friend the Member for Glasgow, Rutherglen (Mr. Mackenzie) was right. Many of these young people, white and black, do not blame one political party. The difficulty is that they will come to blame the whole parliamentary system. They will become so alienated and bitter that they will not identify with our parliamentary and democratic process. In 1979 and 1980, before the disturbances, the Government were told that they were playing with fire in not taking action to change the conditions that I have described, and that they must provide work opportunities for these young people in inner city areas who face such terrible circumstances.

It is most unfortunate that the Prime Minister today confirmed what has been hinted in the general election campaign, that unemployment benefit will not necessarily be increased in line with inflation. The House will know that there was quite a struggle in the last Parliament over the 5 per cent. abatement. Unemployment benefit was to be taxed but that could not be done at once for administrative reasons, so 5 per cent. was taken off unemployment benefit. When unemployment benefit was duly subjected to income tax a year later, that 5 per cent. was not restored, and it will not be restored until November this year.

As a result of that 5 per cent. abatement, those who have been made redundant and are living on the most limited incomes have often been made subject to double taxation. I can see no possible justification at a time when we know that it is so difficult to find work, for saying what the Prime Minister did today — that unemployment benefit will not necessarily be increased in line with inflation. In a sense, it is putting the blame for unemployment on the victims of economic recession, and many of us would describe them as victims of the Government's economic policies. Why punish them? What have they done? If a person has worked for a number of years in one job, as is often the case in my constituency, and finds that he has been made redundant and cannot get another job, why should he be discriminated against to the extent that his unemployment benefit is not increased in line with inflation? Again, one has to emphasise that we are dealing with those on the most limited incomes.

Some Conservative Members seem to feel that the unemployed have only themselves to blame. If only they would go out and seek work, as was implied by the Secretary of State for Employment two years ago, they would find employment. However, things are not like that. My right hon. Friend the Member for Rutherglen described the position in Scotland. He knows only too well that the unemployed are not likely to find work there, the same is true in the west midlands and many other parts of the country. Therefore, the duty and responsibility of Labour Members is to expose the policies of the Government and the way in which the unemployed will be penalised and their limited living standards further undermined as a result of Government policy.

I am also concerned because pensioners are not likely to recieve a proper increase in November. As my right hon. Friend the Leader of the Opposition said, the formula has been calculated so that the increase that pensioners and other people receiving benefits will receive in November will not be in line with the then rate of inflation. The calculations were changed to fiddle the pension, and to ensure that retirement pensioners in particular do not receive the increase to which they are entitled.

We learned today that the mortgage interest rate has been increased by 1.25 per cent. I wonder what would have been the effect on the election result had the Building Societies Association recommended such an increase during the campaign. Are we really to believe that all this has come as a surprise to the building societies? Inevitably, the question will be raised—why now? Why not during the election campaign? Perhaps there was some pressure—who knows?—but the fact is that barely two weeks after the election results have been declared, a large number of people, the very sort of people that Conservative Members always talk about — owner-occupiers—will face a hefty increase as a result of the decision taken today by the Building Societies Association.

The Labour Party is in favour of owner-occupation. One of the lies in the recent election campaign was that somehow or the other the Labour Party was opposed to owner-occupation. However, it was the Labour Government in the late 1960s that introduced the option mortgage scheme, which made it easier for many people on limited incomes to become owner-occupiers. I do not know why the hon. Member for Ealing, North (Mr. Greenway) is shaking his head. What I have said is a fact.

What is more, also in the late 1960s, the Labour Goverment took action over leasehold reform, which resulted in many owner-occupiers having greater security and protection in their homes. Let the position be clear —my party favours, and always has favoured, owner-occupation and giving the greatest opportunity for people to become owner-occupiers.

There is reference in the Gracious Speech to extending the rights of public sector tenants to buy their own homes. One of the questions asked in the last Parliament—it was a reasonable question that has not been answered—is why, if it is right and almost a principle that council tenants should be able to buy their own homes, is this not extended to private tenants? The answer is the obvious one that it is not the job of the Tory Government to offend private landlords and property companies.

However, if one argues, as the Conservative Party has beeen arguing in the past four years for taking action on the lines that we know, of Acts of Parliament and the rest, to force local authorities to sell, then we shall keep returning to the rights of private tenants. It must be said that, whatever may be the arguments for and against selling rented accommodation, private tenants need greater protection than council tenants. Some are undoubtedly exploited by landlords, and many would welcome the opportunity to buy their rented accommodation. It could be said that they have a greater need than council tenants, but we know that no action to provide such rights to private tenants is likely to come from this Government.

It is interesting to note that there is no reference in the Gracious Speech to house building. Council house building is at its lowest since the 1920s. In my own borough in Walsall there have been no new contracts for council house building since 1979. It is such a unique sight to see council dwellings being built that perhaps such construction should be photographed. It is extremely rare to see council house building in any part of the country. There are many families desperately in need of accommodation who, even if the mortgage rate had not been raised today, would not be able to buy their own accommodation. The Government do not recognise that there remain a large number of people whose only hope of getting decent, adequate accommodation is to be rehoused by the local authority.

In the last Parliament, I was a member of the Select Committee on the Environment which said that on the basis of existing policies there was likely to be a shortfall of 350,000 dwellings of all kinds by the mid 1980s. As my right hon. Friend the Member for Rutherglen rightly said, many people now unemployed trained for work in the construction trades and could build and improve the accommodation which is required so desperately. If existing rented accommodation is to continue to be sold off and very little new council accommodation is to be built, we seem to be heading for a formidable housing crisis.

Many people come to see me at my surgeries over housing needs and others write explaining their position. As a result I contact the local authority. But at the end of the day the extent to which the local authority can assist depends on the amount of new accommodation that it can build.

I have referred to some of the problems confronting the country. The matters which Opposition Members are arguing about will remain important issues. Mass unemployment, industrial and economic decline, the housing crisis and the rest will not go away, despite the Tory victory on 9 June. The responsibility of Labour party members in and out of Parliament is to continue to argue our case and to persuade enough people that our policies are sane policies and to work and organise ourselves so that when the next general election comes we have a very different result—a Labour Government with a working majority in the House of Commons.

5.34 pm

Mr. William Benyon (Milton Keynes)

Historically, second terms of a Government are always fraught with great difficulty. When a second term is combined with a very large majority in the House, it is even more fraught with difficulty. In welcoming the Gracious Speech—or parts of it—I hope that the Government will take a leaf out of the book of the Midland bank and be a listening Government and not become remote and out of touch, as so often has happened in the past with a Government with a large majority.

I wish to make three brief points to Ministers. The first concerns unemployment. I take the point of the hon. Member for Walsall, North (Mr. Winnick) on this issue, but I must tell him that passion on the subject is not confined to the Opposition Benches. In 1979, when I was knocking on doors in that election, the overriding subject was prices. This time it was unemployment. If Her Majesty's Government do not show that they intend to resolve the unemployment problem fairly quickly, at the next election we shall face some very serious criticism. Unemployment really concerns people at the moment—and rightly so.

My earliest political memory was being dogged by the accusation that the Conservative party in the 1920s and 1930s left people to rot and did not really care about what went on. It was not true, of course. What Conservatives really said to themselves was, "We cannot do anything about it." It seems to me that there is a dangerous feeling abroad now that we as a Government cannot do anything about unemployment. It is not true.

Our first course of action must be to tackle the economy with unemployment in mind. We do not want a high pound. We want interest rates to come down, and that will affect the pound. Low interest rates, even though they mean accepting a modest rise in inflation, will provide a boost to investment and, more important, result in lower Government expenditure, which people tend to forget.

When I am told by my right hon. and hon. Friends on the Treasury Bench that we cannot raise our debt if we bring interest rates down in the face of international competition, I do not believe them. With all the fiscal arrangements at the beck and call of the Government, I do not believe that it is impossible to raise the sort of debt that we require at the moment.

More than anything else, I want to see the appointment of a co-ordinator who will try to bring together all the various Government Departments which are actively concerned in this problem. It is not only the Department of Employment and the Treasury: the Departments of Defence, Health and Social Security, Transport and the Environment all have an affect on what the Government do on the employment front and, of course, training comes into the equation as well.

That takes me on to Government expenditure. The purchasing power of the Government is very large. Curiously enough, only today I received a letter from a constituent who has failed to get a contract with the French health ministry because of the actions of the French Government to support their own industries and to ensure that such contracts go to French firms.

We in Britain are not nearly tough enough. I should like to see a selective approach to Government expenditure and purchasing so that it goes to the areas that really need it. Housing grants are a case in point. Why should there not be selective housing grants resulting in more being allocated to Liverpool than to, say, Surrey or Sussex?

Right hon. and hon. Members may not be aware that the Japanese Government have just given $2,000 million to industry to develop the next generation of computers. We have not approached that sort of Government assistance to the new industries that will produce the employment of the future. In my view we need a high-powered committee looking at the effect that technological change is having on employment and what can be done in the future to ensure that we meet that challenge. If we do not do this, we shall be condemned by those who have just elected us.

Another topic in the Gracious Speech concerns the proposal to limit rate rises in what are known as spendthrift local authorities and to abolish the metropolitan authorities. This is a typical example of what I call "manifestoism", where one or two party apparatchiks get together and produce an idea which finds its way into the manifesto. As far as I know, this proposal has not been discussed in any great detail in the party, but we are now lumbered with it.

In view of the line that I took in the last Parliament, it will come as no surprise to my right hon. and hon. Friends to hear that I shall oppose the Government's plan passionately. The logic of it is that if a Government decide what a local authority may do in raising its rate revenue, there is no longer any need for local authorities and we might as well have a prefect, or a commissioner, system instead.

I am all for leaving local electors to decide what they want their local councils to do. But if the Government are really so concerned about the effect that these high rating authorities have on industry and commerce, there are many other ways of approaching it. We could, for instance, go back to derating industry, which was the position many years ago. We could also tackle the fact that all rate rises are paid in full under supplementary benefit. One could perhaps pay only a proportion of them.

To take this stand on local authorities is in my view a move towards centralisation, and will be detrimental. In any case, if I may say so, it is an unwise course to follow, because I am certain that the House of Lords will not agree to it. We shall go through great agonies, as we went through on a number of other local authority and housing matters in the last Parliament, only to find that the House of Lords, which appears to be the true guardian of our liberties at present, throws it out. So I hope that my right hon. Friends will think again about this matter.

Finally, there is the question of law and order which, apart from unemployment, was what I heard about on the doorsteps more than anything else during the election. We shall have the ritual vote shortly on capital punishment. I do not know how it will go, but I suspect that the situation will not change. [HON. MEMBERS: "Hear, hear."] Certainly I do not intend to change my view on the subject. I have always been an abolitionist, and I see no reason to change my view. [HON. MEMBERS: "Hear, hear."] However, I say this, particularly to those hon. Gentlemen who are applauding from the Opposition Benches, that it is incumbent on those of us who take this view to produce an alternative, because the worry throughout the country about the increase in crimes of violence is considerable.

In the last Parliament, my hon. Friend the Member for Upminster (Sir N. Bonsor) and I moved an amendment to legislation going through the House to impose mandatory sentences on any person caught committing a felony involving a firearm. We stuck to that. If a person was convicted of a felony involving a firearm, we proposed that a minimum sentence should be imposed so that a person intending to commit the crime would hesitate before going for a weapon. We were shot down, particularly by the lawyers here. If we are not to have a change in the law on capital punishment, something else should be done. I hope that the Government will have another look at the matter. Up to now, judges have always reacted to public opinion, but this does not seem to be happening now. Rather than imposing tougher sentences for really bad crimes, the opposite seems to be happening. If we do not put the matter right, the effect will be considerable.

I wish the new Government well. I finish as I started by saying that I hope that they will listen, not to the raucous minorities in the country, but to the great mass of moderate opinion whose votes have produced the result that we now enjoy.

5.42 pm

Mr. Tam Dalyell (Linlithgow)

The subject of the Falklands was high up in the Queen's Speech, which said: My Government will continue fully to discharge their obligations to the people of the Falkland Islands. It was therefore with some curiosity that I noted that there was no mention of either the Falklands or, more particularly, their future in the Prime Minister's speech. It occurred to me that perhaps she did not wish to lay herself open to awkward questions that might be asked, particularly in the presence of the previous Foreign Secretary.

The purpose of my speech is to call for a public inquiry, chaired by a judge of the Court of Appeal, into the circumstances surrounding the sinking of the General Belgrano at 14.57 hours south Atlantic time on Sunday 2 May 1982. I hope that my party will see fit, after due consideration, to table an amendment to the Gracious Speech calling for an inquiry.

Such an inquiry was called for by 155 Members of the last Parliament who signed an early-day motion. During the general election that request was endorsed in a careful statement by my hon. Friend the Member for Islwyn (Mr. Kinnock). Indeed, it was endorsed, I thought, by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), speaking at St. Boswells in his constituency on Saturday 28 May, and my information is that many people with Liberal rosettes applauded the question that was put to him by a gentleman from Kelso suggesting such an inquiry. I shall not haggle about the matter. If the right hon. Gentleman, who is present, thinks that a Select Committee of the House of Commons is the proper method, that is his opinion.

May I point out, however, that Mrs. Shirley Williams, the SDP president, speaking at Alloa on 3 June, called for an independent inquiry into the sinking of the Belgrano and said: I feel that someone like Lord Scarman, a judge of the realm—someone of the most total probity—should hold this inquiry". Indeed, my right hon. Friend the Leader of the Opposition, in one of his campaign press conferences, assented to such a request.

So it is not unreasonable to suggest that the promise of a judicial inquiry should have been included in the Gracious Speech, when statements from the Scottish National party and Plaid Cymru add up to the fact that all the Opposition parties outside Northern Ireland are committed in one way or another to such an inquiry.

I shall borrow the headline over the leading article in The Aberdeen Press and Journal of Friday 3 June: we are dealing with one of those "issues that won't budge". As the leader writer put it: behind the lurid language and the struggle for political advantage lie doubts and uncertainties which have still to be effectively stilled. Long after the declaration of election results, arguments over matters involving patriotism and morality, rules of war and humanitarian principles, will go on. That is the judgment, not of a Labour paper, but of The Aberdeen Press and Journal.

I say to the Prime Minister, for she alone remains in ministerial situ, with the Secretary of State for Trade and Industry, the then chairman of the Conservative party, of all those who had anything to do with answering questions on the Belgrano, that in the absence of a detailed and convincing explanation, the topic of the Belgrano sinking will not go away. As a matter of courtesy, I am sending a copy of my speech to Sir John Nott, and I have dropped a note to the right hon. Member for Cambridgeshire, South-East (Mr. Pym) saying that I am speaking on the subject.

First, I want to comment on questions of fact, of which I have given notice to the right hon. Gentleman the Secretary of State for Defence. The four questions of fact of which I have given him notice are as follows. First, when did Her Majesty's Government first hear of the meeting in Buenos Aires of divisional and brigade generals on the afternoon of Saturday 1 May? I quote from the article of that remarkably accurate journalist, Arthur Gayshon, in The Observer of Sunday 19 June: Senior Argentine officials told The Observer on Friday of the pressures that had been building up on Galtieri throughout that Saturday. Between 15 and 20 divisional and brigade generals and field commanders met informally at the Campo de Majo military base outside Buenos Aires on the Saturday afternoon. With the General Llanail Reston, now Minister of the Interior, in the chair, the group discussed news from the Falklands, where British ships and Harrier jets were pounding the Argentine positions. The consensus that emerged, Argentine officials said, was that Argentine should negotiate and, at all costs, avoid all-out war. 'The general feeling was that until 1 May few members of the military hierarchy really believed that the British would mount a major assault,' one informant said". I ask: is that denied? Mr. Gayshon has gone to enormous lengths to check the accuracy of what is reported, and there are Members of this House, of whom the right hon. Member for Old Bexley and Sidcup (Mr. Heath) is one, who know that Mr. Gayshon is a heavyweight and most serious reporter of great experience.

The second question that I ask, arising from the report of 19 June in The Observer concerns the meeting of more senior officers that evening, Saturday 1 May: When the group ended their discussion a higher level session was arranged. Ten of Argentina's 12 divisional generals got together in the offices of Commander-in-Chef (Galtieri) of the Edficio Libertador in the Paseo Colon, Buenos Aires, at about 7 pm. Towards the end of their four-hour discussion the then President himself was invited in to hear their views. He was told that the Army itself was not prepared for all-out war, and that Argentina should seek to negotiate a settlement with Britain. When did the British know that?

Thirdly, when did Her Majesty's Government know of the message that was sent at 8.7 pm south Atlantic time on Saturday 1 May from the operational commander on board the carrier of the Venticinco de Mayo to all ships at sea, including the Belgrano and her escorts, to return to port?

Finally, and fourthly, when did Her Majesty's Government know of the order that was given out at 1.19 am on Sunday 2 May, confirming the original order from the operational commander on board the carrier?

Just as I asserted, correctly as it now turns out, that the captain of HMS Conqueror had been following the Belgrano for over 30 hours, so I believe the sources—some British, some American and some published in the International Defence Review, a serious American publication, by Dr. Juan Carlos Murguizur — which assure me that Chequers knew all about these events by 8 am on Sunday 2 May. I point out to those who have not heard the arguments before that the Nimrods had the A470 Marconi transceiver equipment and it would have been astonishing if those messages had not been intercepted. It was not difficult to decode them because many of those in the Argentine forces had had their training, somewhat recently, at Portsmouth and Chatham.

A balance must be struck between not disclosing intelligence reports and the need to clear the Prime Minister's name. That is a balance — I particularly welcome the presence of the Leader of the House—where judgment will have to be exercised. Normally, I am careful about suggesting that intelligence sources should be given away, but, as the Table Office is for ever saying now, it is a matter of history, and there are many serious people who wonder why the Prime Minister conducted herself as she did. Therefore, a balance must be struck between the need to protect intelligence sources and the need on this occasion to provide some of the evidence. For a Prime Minister sure of the justice of her cause, what possible objection can there be to an inquiry by a person of the calibre of Lord Devlin, Lord Scarman or some other judge of the Court of Appeal?

The orders to return to base were given by Rear Admiral Allara to the Belgrano at 20.07 hours on Saturday 1 May and confirmed at 1.19 hours by the high command. What is more, the orders were intercepted, like all the orders to the fleet, and decoded. That was known to the Prime Minister shortly after she woke up at Chequers on Sunday 2 May.

I assert in this House of Commons that for about 5 hours or more the British Prime Minister knew precisely what the orders were. After all, as is known to the House, the submarine was under the direct command of Northwood and the Prime Minister and not under that of the task force commander. That is why some of us argue that it was sinful of her—yes, an awful sin—to order the sinking of the Belgrano and the death of not only Argentine boys but, inevitably, our boys on Sheffield, Antelope, Atlantic Conveyor, Ardent and Coventry and at Goose Green.

In considering the case for an inquiry one must look carefully at the article by Andrew Wilson and Arthur Garshon in The Observer on Sunday 5 June at page 6. Here is set out a great deal of factual information, with which I should not take up the time of the House now. [HON. MEMBERS: "Hear, Hear."] I do not apologise for the length of my speech. I am trying to be as quick as possible but one must deploy a necessarily complicated case. A High Court judge and hon. Members should look at what has been written time and again by some of the most serious journalists in Britain.

The next issue relates to the descrepancies as to the time when HMS Conqueror detected the Belgrano. This is part of the trouble. First, on 4 and 5 May, Sir John Nott, as he now is, said that the Belgrano had been detected at around 8 o'clock on the Sunday evening. Mr. Ted Harrison, the BBC producer, in "The World at One" programme on this subject, reproduced the clip of Sir John Nott, telling the House that one of our submarines had detected the Belgrano and launched a torpedo.

Secondly, Sir John Fieldhouse, in his commander-in chief's report, said that the Belgrano was detected by the Conqueror on 2 May. Thirdly, paragraph 110 of the Government's White Paper talks, in the first sentence, of the Belgrano being detected on 2 May. Fourthly, the submarine commander, Commander Wreford Brown, DSO, writing on page 16 of Geoffrey Underwood's "Our Falklands War", foreword by Sir Jeremy Moore —presumably approved by the Ministry of Defence—said: We were asked to look for and find the General Belgrano group. It was reported to consist of a cruiser and escorts. We located her on our passive sonar, and sighted her visually early on the afternoon of May 1st. We took up position astern and followed the General Belgrano for over 30 hours. We reported that we were in contact with her. We remained several miles astern and deep below her. We had instructions to attack if she went inside the Total Exclusion Zone. Those are the exact words of the submarine commander.

Which of those statements is accurate and which is inaccurate? Do the Government say that the submarine commander is being untruthful? The question has already been put to the Ministry of Defence on 27 May 1983, when the New Statesman, under the byline of John Rentoul, asked the Ministry of Defence who was telling the truth. The Ministry of Defence replied that it could not go further than what had been said in Parliament. The New Statesman asked whether, as Commander Wreford Brown had not said anything in Parliament, he was mistaken. The Ministry of Defence replied that it was not saying that.

What is the explanation of the long gap between the sighting of the Belgrano and its sinking? I suggest that it is political, and not one of military threat as the Prime Minister would have us suppose. The gap cannot be explained away in terms of slow communications between Northwood and the submarine. On 30 January, in a remarkable interview on the "The World This Weekend", Sir Terence, now Lord, Lewin said: Communications with nuclear submarines are not continuous and 100 per cent. because this would restrict the nuclear submarines' operations. But on this occasion the communications worked very quickly. There were all sorts of reports in the press about communications with the submarines about the birth of sons or daughters to members of the crews. The communications were not difficult in any way. We have the word of Lord Lewin himself that that was so on that occasion.

In the light of that hard evidence from the horse's mouth—if that is an apt expression for the submarine commander in this context—I assert the validity of my own truthful claim to have been in contact with other members of the crew of HMS Conqueror, who told me that they had been following the Belgrano for many hours on 1 May, and of the statements to similar effect in the Sunday Times book and the Hastings and Jenkins book.

Why then did Sir John Nott mislead the House of Commons by saying that Conqueror detected the Belgrano at 8 pm on 2 May? As Lord Lewin has told us, there was no difficulty in communication. In certain circumstances in the heat of war, such an error could — by some stretch of the imagination—be excused. What is not excusable is the fact that, after the battle, in the light of Conqueror's logbook and doubtless many reports, the error as to the time of detecting the Belgrano was repeated in the commander-in-chief's report and in paragraph 110 of the White Paper.

A public inquiry should ask Sir John Fieldhouse why, in his commander-in-chief's report, he made a statement on a crucial matter that he must have known full well could be misleading. It is not difficult to alight on a motive for the inaccuracy in the White Paper. It was done to protect the Prime Minister from the obvious question: "Why, if Northwood knew about the Belgrano in the early afternoon of 1 May, was she not sunk there and then when she may conceivably have been more of a threat to our ships than she could be 24 hours later?"

I refer to the serious academic work of Dr. Paul Rogers, a scholar from the university of Bradford. Dr Rogers circulated a paper to a number of members of the Select Committee, as my hon. Friend the Member for Carrick, Cumnock and Doone Valley (Mr. Foulkes) will recollect. He is a serious man who gave impressive evidence to the Select Committee. Dr Rogers wrote: Of all the inconsistencies, the recently revealed information that the Conqueror could have attacked the Belgrano at any time in the previous 30 hours is probably the most significant. The British government has not been able to give any satisfactory reason for carrying out this attack in such circumstances and has resisted all demands for a commission of enquiry. The suspicion remains that the British government, or more precisely the War Cabinet, had decided on achieving a military solution to this conflict, even though support from major industrialised countries for economic sanctions existed and could have had formidable effects on Argentina. Thus they opted for sustained attacks on the Stanley base, in the guise of attempts to damage the runway, and they decided to attack an obsolete Argentine cruiser which presented no direct threat to the task force, at a time when peace negotiations via Peru were in progress. Dr Rogers concluded: Central to this whole course of events is the question:—why did the War Cabinet refrain from ordering the Conqueror to attack the Belgrano for over 30 hours and then give the order when the cruiser was on course for its home port and had been on that course for at least nine hours and possibly longer.

The Leader of the House has done me the courtesy of listening to my argument. Some of it may be new to him, because the Hastings and Jenkins book revealed that the Prime Minister did not call a meeting of her whole Cabinet to discuss the Falklands from 2 April to 5 May. For 33 days the Cabinet never discussed the matter. Surely I am entitled to be a bit personal about the Prime Minister in relation to this issue, when her conduct of the war was so very personal.

If the Government are so sure of the justifiable validity of their case, why do they not save themselves a great deal of trouble by making available to the Library of the House of Commons, or, failing that, to the Select Committee on Defence, the logbook of HMS Conqueror for 1 May and 2 May 1982? We would then know more about the course of the Belgrano before she was sunk. There is no reason, either, why the Prime Minister should not instruct the Ministry of Defence to make available the signals between Northwood and Conqueror over the same period. As my hon. Friends know, the submarine was under the direct control of Northwood and not of the task force commander.

If they will not comply with such a suggestion, a public inquiry should ask Ministers who requested that the Belgrano should be sunk outside the exclusion zone, changing the rules of engagement, and precisely why such a request was made.

From what he told the Scottish press corps on his return to Faslane on 4 or 5 July, it seems that it was not the submarine commander who asked for a change in the rules of engagement. Commander Christopher Wreford Brown made it clear that he was a first-time submarine commander. He told Eric MacKenzie of The Scotsman, The Aberdeen Press and Journal and other reputable journalists — having hoisted his Jelly Roger, very tastelessly, in view of the loss of life—that he had done it directly under instructions.

The next issue is about the Prime Minister's statement on Sir Robin Day's "Election Call" on 7 June, when she implied that the Belgrano was a threat to Hermes and Invincible. For the sake of greater accuracy, I have obtained a transcript from the BBC. Sir Robin said: No Mr. Stern, just hold on for a moment—we'll have to take you off the line. Mrs. Thatcher then said: accusations being made against me is not … otherwise Mr. Stern the accusation I would be facing was why did I do nothing and leave either the Hermes or the Invincible or other ships to be sunk. I am glad you are not making that accusation against me today because of the action which. when the ship was a danger and you heard what the Chief of Defence Staff said the other day that we actually took action in defence of our own ships and our own boys who were upon them. Sir Robin Day then said: There you are Mr. Stern. you had a long run there and we've come a long way from village schools. The Prime Minister's statement might have been more convincing if it bore some relation to the facts, but it does not. For nine hours or more, the Belgrano had been proceeding west-north-west on a 280 or 290-degree course away from the task force. Secondly, the escorts had the M38 Exocet, which had a maximum range of 20 miles. How did we know that? We had made part of the Exocets and the guidance system, so we knew exactly what their capability was. The range of the Exocet on the Hippolito Bouchard must have been well known to all and sundry.

Thirdly, Invincible and Hermes were kept well east of the Falklands. Indeed, Admiral Woodward earned the soubriquet "Burma Star Woodward". I do not criticise Sandy Woodward for that. I am sure that he was right to keep the carrier well east of the Falklands. I do not approve of the nickname "Burma Star". I mention it only to make the point that he rightly kept the carriers well out of range of the Argentine air force. The carriers were therefore at least 250, if not 300, miles away from the Belgrano and her escort, which were going in the opposite direction. What on earth did the Prime Minister mean when she made those statements on the threat to Hermes and Invincible on "Election Call"? That is a valid question which a public inquiry should be asking.

There are also the Prime Minister's doubts about Argentine sources. On 4 June The Daily Telegraph said: She turned down a suggestion that she should inspect the log of the submarine which fired the fatal torpedo in order finally to lay the matter to rest and rebuked some journalists for being 'very ready' to believe allegations by Argentinian Ministers, made 'undoubtedly mischievously'. The difficulty is that these facts do not come just from the Argentines. It might be relatively easy to dismiss them, but what about the facts that are now coming out of Peru, or the facts, printed in The Observer for all of us to see, of the opinions of Al Haig? Can this former NATO commander be quite so easily dismissed on some of the facts that he gives? The Prime Minister is becoming somewhat isolated in her version of events.

The next issue is the position of the dismissed Foreign Secretary. I gave the right hon. Gentleman notice that I would refer to him. He is the holder of the Military Cross. He knows how awful war is and shares the long-held Foreign Office view that fortress Falklands was simply not viable. I said this when the right hon. Gentleman was in office and am not just being polite now that he is out of office, but I think that the right hon. Member for Cambridgeshire, South-East sweated his guts out in the United States to reach some peaceful solution. His article in the Daily Mirror on 20 May was extremely illuminating, and Foreign Secretaries in the middle of an election do not always rush to write articles for the Daily Mirror. He said that the United States Secretary of State, Alexander Haig, outlined the Peruvian plan on 2 May, which was at best a promising basis for further work. He said that it was "not very different" from the package that the Argentines rejected two days before.

This ignores the fact that on the intervening day the task force launched an air attack on the Falklands which frightened the junta considerably. The fact that Galtieri and his junta were now eager for a settlement was known to the Peruvian president, Belaunde Terry, and to Haig. It is inconceivable that it was not also known to the right hon. Member for Cambridgeshire, South-East, who had a two-hour meeting with Haig that very morning.

On the afternoon of 2 May, Belaunde held a press conference to announce the imminent signing of a peace agreement between Britain and Argentina. He says that Haig had hinted that some of his contributions to the proposals had derived from conversations with the British Minister". Haig therefore spent much of the day with the right hon. Member for Cambridgeshire, South-East.

The Prime Minister says that the Peruvian proposals were only a sketchy outline. That contrasts with what Arias Stella is reported to have told The Observer in some detail. It also contrasts with what Haig was saying. Is the Prime Minister saying—this is a suitable question for a High Court judge to ask—that Arias Stella, who has no particular axe to grind as he is now out of office, and Haig are wrong? That is an important matter of fact.

I refer back to the interchange between Mr. Stern and the Prime Minister on "Election Call" two days before polling day. For the sake of greater accuracy, I shall read it out. STERN: Well I've got a copy here of a Reuter … report from the coming from you know Reuter report coming in saying that there is good chance of an agreement about four hours before she torpedoed the Belgrano— THATCHER: None at all. STERN: Did she honestly not know about that Reuter report? THATCHER: I have indicated that first the Peruvian proposals were only a sketchy outline, secondly, they did not reach London until after the attack on the Belgrano, thirdly. that we went on negotiating about Peruvian proposals and then we went on for another fortnight because it became clear that the Argentinians were more interested in negotiating through the United Nations and the negotiations moved to the United Nations and we carried on with those negotiations through Perez de Cuellar you may remember the many many pictures of Sir Anthony Parsons coming in and out of the United Nations. The Prime Minister continued with not very grammatical sentences that bordered on the gibberish.

Once loss of life on that scale had predictably taken place, in reality there was no chance of negotiations succeeding. Once blood had been spilt on that scale, in those circumstances meaningful negotiations became more difficult. In those circumstances, war moves from second to fifth gear. For the Prime Minister to say that some sort of negotiations on the Peru plan lasted for a fortnight is a point of little substance, because we have the picture of a Prime Minister determined not to be denied her fight. We are now landed with the long-term consequences in the Falkland situation of these low-intensity operations.

I was one of the very few hon. Members who took up the Prime Minister's offer to see any Member of Parliament. She courteously saw me on 21 April, but as I have said previously, I did not come away with the impression that she did not want a fight or to be denied her victory.

My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) is present, and as a member of the Franks committee he knows that I gave evidence to Lord Franks and his colleagues for an hour and 20 minutes. All these matters were ruled out, because as Lord Franks properly said, nothing after 2 April, even if used to reflect a state of mind, was relevant to himself or his committee. Therefore, this has in no way been overtaken by Franks. Franks came to a dead end on 2 April.

Mr. Merlyn Rees (Morley and Leeds, South)

indicated assent.

Mr. Dalyell

I am glad to have the assent of my right hon. Friend to that proposition.

The next issue at which a public inquiry should look is the information sent through to the British Government on 1 and 2 May. For 20 years I have known Arthur Gayshon, a man who had immediate access to Sir Harold Wilson as Prime Minister and to Dick Crossman as Secretary of State. He is a most serious, heavyweight journalist and author. Gayshon has made a number of statements, and I ask whether they were true. Those of us who know Arthur Gayshon know that he is a serious man and a stickler for accuracy. He reported Haig telling The Observer on 5 June: The Peruvian Plan was taken very seriously". Haig confirmed that Belaunde Terry had launched the peace initiative with his support, and added: Some difficult paragraphs remained to be settled. We did think we had a formulation that provided hope that a settlement could be reached. He referred to his communications with London. Therefore, why did the right hon. Member for Cambridgeshire, South-East write as he did in the Daily Mirror before the election, probably putting loyalty to the Prime Minister before truth? He might now consider putting truth before loyalty to a Prime Minister who has treated him pretty shabbily. The Peruvian Foreign Secretary of the time, Dr. Javier Arias Stella, has contradicted a statement by the right hon. Gentleman that the Peruvians had given no indication that a treaty had been drawn up. And Paul Foot asserts its existence in red leather. The House would usually prefer to believe a British Foreign Secretary, but I do not understand what motive Arias Stella would have for distorting the truth —whereas British Ministers have obvious motives.

I refer now to The Observer report of 12 June under the byline of Arthur Gayshon, which quotes Arias Stella as saying: I most thoroughly disagree that our seven-point peace proposal was at all vague or general or not ready to be put into effect at once. That is a clear contradiction of what the Prime Minister said. He continued: It was the result of very long negotiations, mainly with Haig whom we took to be speaking for Britain. We thought that we'd worked out a completely practical proposal which had a fair and balanced text completely consistent with Security Council Resolution 502 [which called for an Argentine withdrawal from the Falklands and negotiations on the dispute]. The article continued: Haig told The Observer nine days ago the plan was a simplified version of one that had been formulated during the period of his mediation efforts which ended on 30 April. He said that although some difficult paragraphs remained to be settled 'we did think we had a formulation that provided hope that a settlement could be reached.' Haig's statement broadly confirmed what Costa Mendez earlier had said to Desmond Rice, a former Royal Dutch Shell company manager. An inquiry is the proper place to ascertain whether the American Secretary of State, a former naval commander, is right or wrong. He and the British Prime Minister cannot both be right on these crucial matters. Another issue—

Mr. Nicholas Lyell (Mid-Bedfordshire)

On a point of order, Mr. Deputy Speaker, which has two aspects. First, does this speech, which calls for an inquiry, fall within the rules of order? We are debating the Queen's Speech, whose reference to the Falkland Islands was: My Government will continue fully to discharge their obligations to the people of the Falkland Islands. Secondly, as both Mr. Speaker, when called to the Chair, and his distinguished predecessor, Mr. Speaker Thomas, both made it clear that they desired reasonably short speeches, is the hon. Gentleman within the rules of order?

Mr. Harry Greenway (Ealing, North)

Further to that point of order, Mr. Deputy Speaker. The hon. Member for Linlithgow (Mr. Dalyell) has spoken under the umbrella of one short sentence in the Queen's Speech, although he has not addressed himself directly to it. He has been on his feet for longer than the Prime Minister, who had to handle the whole of the Queen's speech, and for longer than the Leader of the Opposition. Is it really courteous, as well as within the rules of the House, for him to continue with such an obviously long speech?

Mr. Deputy Speaker (Mr. Paul Dean)

I am grateful to both hon. Gentlemen for reminding the House about Mr. Speaker's appeal for brevity in speeches. However, the hon. Member for Linlithgow (Mr. Dalyell) is in order. The debate enables the House to discuss all aspects of Government policy.

Mr. Dalyell

Let us be clear about the issue—it is the conduct and veracity of the Head of Government. In my humble submission, there is no more important issue.

The next point relates to the work of the embassy in Peru, which also merits scrutiny. In The Observer of 12 June, the right hon. Member for South-East Cambridgeshire is reported as saying that if the Peruvians had prepared a treaty for signature on the evening of 2 May they certainly gave us no indication of this in Lima, or in London. The article continued: 'Not so,' said Arias Stella. 'President Belaunde had constant and direct phone contact with Haig and kept him fully informed. We knew that Pym was in Washington. We understood that their contact was so close that whatever Haig accepted was alright with Pym—and that Pym passed it on at once to London.' Arias Stella emphasised that Britain's Ambassador in Lima, Charles Wallace, was kept very fully informed at all times. Belaunde, additionally, went on television with an announcement that peace was imminent. The Ambassador said that the sinking of the Belgrano had `without doubt' also sunk the peace initiative. `I can give you no more graphic a confirmation of that than by repeating Costa Mendez's words next morning on 3 May. He rang to thank us for our help. He said at the meeting of the Argentine Military Committee at 1900 hours (Argentine time) in Buenos Aires on 2 May the agreement was already at the last stage with only two points of minor importance left, which would have been easy to solve on the spot, when an admiral burst in with the news that the Belgrano had been sunk.' It was Haig himself, Rice learnt in Buenos Aires, who passed word of the Belgrano's sinking to President Belaunde about two hours after the event. `Haig was very moved,' Belaunde later recalled. An inquiry should examine exactly what ambassador Charles Wallace was told in Lima, and what he passed to London. These matters are not idiosyncratic in any way. I shall spare the House the full text of the Pym letter to the Daily Mirror.

But why on earth did not the Prime Minister make some effort at least to consult her Foreign Secretary who was doing his job—[Interruption.] I must tell hon. Members who are becoming impatient that it is not simply a matter of history. It is very much to do with the present. President Bignone of Argentina gave a pledge on 14 June, which was reported in The Guardian the next day, that he would fight on. We cannot put the matter behind us.

An inquiry should also examine the question of the Burdwood Bank, and all that the Hou.se has been told about that. On 8 June, Mr. John Rentoul wrote in the New Statesman: Mrs. Thatcher's outburst continued: `Our submarine could have lost the Belgrano in those six hours.' As the Sunday Times admitted in an article this week attempting to exonerate Mrs. Thatcher, the officers of the nuclear submarine Conquerer—which had been shadowing the Belgrano for 30 hours—were so confident of their ability to stay on the Belgrano's tail that they have rejected what was at one stage the government's explanation for the attack: that the Belgrano could have been lost if it had made a dash for the Burdwood Bank shallows. Who is right — the officers of the Conqueror or the Prime Minister and her Ministers? They cannot all be right. It must be established who is correct. Extraordinary treatment has been handed out to the right hon. Member for Cambridgeshire, South-East.

I wish to quote a remarkable letter to The Times from Mr. Alan Brownjohn, who states: What is questionable is whether the Belgrano, outside the exclusion zone and sailing away from it, presented such a threat in the very short time—a matter of hours—during which Mr. Pym's consultations were coming to a head. The war cabinet seems not to have been concerned to wait upon the outcome of negotiations which — whatever their outcome—were extremely unlikely to last until the Belgrano actually became a threat. It is hard to reconcile, its decision to sink the Belgrano with Mr. Pym's statement in Washington on Saturday, May 1 (after air and sea attacks on the Falklands) that `No further military action is envisaged at the moment, except to keep the exclusion zone secure.' Whatever it might do later, the Belgrano was no danger to the exclusion zone during the vital hours in which the peace agreement might have been reached. Mr. Brownjohn added, later in his letter: But posterity would not rate highly either the peaceful intentions, or the foresight, of a war cabinet whose actions ruined the chance of Mr. Pym's negotiations succeeding before the progress of his efforts had been examined. That was in The Times on 31 May. He continues: But suppose further—and here the wider implications become frightening indeed — that on another occasion the situation was not that of a relatively small conflict (albeit one to be fought with dreadful new resources of weapons technology) starting in a remote southern ocean, but an impending full-scale nuclear war involving a small country whose nuclear arsenal rendered it a prime, wholly indefensible target. Suppose that the horror could only be averted by delicate negotiations far away, in the same or some other foreign capital. And that such negotiations were to be conducted by ministers and ambassadors who, for some reason, were not fully and swiftly in contact—and perhaps not in concert — with the intentions of a war cabinet in London. Sometimes the unimaginable becomes only too easy to imagine. It is not a matter only of what might be conceived as history. We are dealing with the conduct of the lady who has her paw on nuclear weapons. How people react in a crisis is a matter of interest to us all. I am not saying that too close a parallel can be drawn with Chappaquiddick, but why was Senator Ted Kennedy excluded from the White House? It was because he was thought to react in the wrong way at the wrong time.

There are deep issues about the relationship between the Prime Minister and her most senior colleagues. For the sake of greater accuracy I have the transcript of "Newsnight" of 2 June 1983. It was a discussion between Peter Snow and the former Foreign Secretary. Snow: So you largely endorsed the government's action that weekend? Mr. Pym, could I now come to the issue of this peace initiative. Were you consulted about the decision to torpedo the Belgrano before it happened? Pym: No, the war cabinet did it. I was in the United States at the time and I would have expected them to take that decision. If any one of us were absent obviously the war cabinet goes on. It has to take its decisions in the circumstances at the time. How can that be said with any degree of conviction? Had the Foreign Secretary been Secretary of State for the Environment at a housing conference in Stockholm, it would have been understandable that his say-so would not have been needed, but he was the Foreign Secretary, in the United States on the business on which crucial decisions were been taken. It is preposterous to suggest than. the Foreign Secretary should not have been consulted or: this issue of the Belgrano at the time.

Snow: Do you think it's right that you weren't consulted. Do you think you should have been? Pym: I think it's entirely right. And if anybody else was absent —I'm not sure whether all the rest of us all the time were present throughout, but when there was an absentee the war cabinet goes on. Perhaps it does, but it is curious that when one has sent a senior colleague to discuss this issue one does not ask about the state of the negotiations. He was not away on a jaunt or some irrelevant business. He was closeted with the American Secretary of State discussing these matters. It is a breakdown of Cabinet government to suggest that there was a valid reason why the Foreign Secretary should not have been consulted. It is another reason why we should have a full investigation by Lord Scarman, Lord Devlin or some such person.

Another issue is why, on his admission on 2 June, the Foreign Secretary was not consulted. We must return to The Times of 14 June and Mr. Brownjohn's letter. I read it because I have made the point at some length and I must persuade others that I am not pursuing a personal vendetta but raising a point of public interest. Mr. Brownjohn states: The communication to the Argentine Government of the general warning of April 23 cited by Professor Draper does not affect the argument about the precise relation between military decisions and political negotiations on May 2. The war cabinet had time on that Sunday in which to consult Mr. Francis Pym in Washington about the progress of his talks; though exactly how much time we shall not know until the accurate log of the course of the Conqueror is published. We know that they had lengthy discussions. But they did not consult Mr. Pym, as he himself made clear on Newsnight… Mr. Al Haig's original negotiations had failed only hours before, on Friday, April 30. What was the war cabinet sending Mr. Pym to Washington on May 1 for, if it was not to seek urgent means of averting all the horror and grief of a killing war, maintaining the closest touch with his hour-by-hour efforts? The wider question remains unanswered. In a different, nuclear crisis, the government of an indefensible target country would need to be in the most constant communication with its emissaries in foreign capitals if the logic and inexorable momentum of war were not to take over. In the case of the events of May 2, 1982, the British Government, as represented by Mrs. Thatcher and her war cabinet, was not in such communication. Mr. Brownjohn has succeeded where some of us have failed, in getting his letters published in The Times. The Times was good about publishing the letters from some of us. My score was nine out of 10 before the Falklands arose, but since then it has been one out of 12. Nevertheless, even The Times now comes to the conclusion that these points are worthy of being made.

We come to the interview with Mrs. Diana Gould.

Mr. Greenway

On a point of order, Mr. Speaker. My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) has raised the question of the length of the hon. Gentleman's speech, which is now within five minutes of one hour. He has spoken for longer than the Prime Minister and the Leader of the Opposition and much longer than any other Back Bencher. He has brought a glass of water with him from which to refresh himself. Is it in order to ask whether he or someone else will tell the House when the speech might end so that we can deal with important matters that concern our constituents? I am not saying that what the hon. Gentleman is discussing is unimportant but other hon. Members also have matters of importance to raise. I refer, Mr. Speaker, to your duty of protecting the rights of Back Benchers which, I believe, are being undermined by one of us.

Mr. Speaker

Order. The hon. Member for Linlithgow (Mr. Dalyell) has been speaking for nearly one hour. When he has sat down—I hope that it will not be too long before he does, as he has made a very long speech —I am sure that the House will think it right that I should take into account the length of his speech and call a balancing number of hon. Members from the other side.

Mr. Dalyell

I believe that there is only one other Opposition speaker. In deference, Mr. Speaker, to your clear wishes I shall cut what I would have said about the revealing interview between the Prime Minister and Mrs. Diana Gould at Bristol. Mrs. Gould had in front of her parliamentary questions that I had asked. It shows the value of the work that we do through parliamentary questions in the House.

The Guardian in its leader of 26 May pointed out that with all the efforts that some of us have made to put the Prime Minister on the spot and possibly extract the truth, no one has succeeded as well as this Cirencester housewife. I believe that reflects on the procedures of the House.

The issue cannot be covered properly even by parliamentary language because "lying" is not a parliamentary word. Therefore I am compelled to put the point by reading a letter from a Mr. Peter Garratt, of London Road, Brighton, which appeared in The Guardian on 7 June. His short letter, which put the point concisely, read: Not enough has been made of Mrs. Thatcher's interview on Nationwide. When a questioner asked her why the General Belgrano had been sunk while steaming away from the Falklands, she at first denied that this was true, saying the ship had not been steaming away from the islands. quite categorically. Next, the questioner quoted the exact course, just North of West, Astonishingly, the Prime Minister neither repeated nor withdrew her previous statement, nor challenged the questioner's description of the course. It seems to me incredible that any Prime Minister could be unaware of the best available facts. We therefore have to conclude that she deliberately lied in the hope of not being challenged. She was, however, caught out, and as far as I could see, has no answer either to the main charge of sinking the ship, its sailors, and the Peruvian peace plan without good reason. I put the point in the form of a quotation because "lying" is not a parliamentary word. I must also put it in terms of the serious aspect of misleading the House of Commons, and tell my right hon. Friend the Member for Morley and Leeds, South, who is not in his place, that various matters which were looked at by the Franks committee point in the same direction. How can the Prime Minister be exonerated, when she told the House on 26 October, c. 885, that the Falklands crisis had come out of the blue, something which she had said to George Gale, on Wednesday, 31 March, when, lo and behold, we find in Franks that she was saying in the first week of March, "We must have contingency plans," referring to military contingency plans?

In the words of Alistair Burnett, the right hon. Lady has "yomped it back to No 10". There is no word of St. Francis of Assisi now. There was another electoral victor, and he said that there could be no whitewash in the White House. The same applies to 10 Downing Street. It applied not least, among those who were triumphant at the polls, to Richard Nixon.

I must refer to a leading article in the New Statesman of 20 May entitled "A wholly justified obsession". I will spare the House the whole of the article and simply quote the conclusion: It seems that by that stage she wanted her war and was determined to get it. Those who died, the Falkland islanders and the British taxpayer will have paid her price". I do not apologise for taking an hour of the time of the House. If I have done nothing else, I hope I shall have persuaded serious hon. Members on both sides that only by a judicial inquiry under the chairmanship of someone of the calibre of Lord Scarman can these disturbing worries be quelled.

6.43 pm

Sir Julian Ridsdale (Harwich)

Having listened to the hon. Member for Linlithgow (Mr. Dalyell) for an hour, and having tried to be sympathetic, I must say that never have I heard such a lot of nonsense talked at such length and in a way that was insulting to the House and to many of my hon. Friends who wish to speak in the debate. I shall be brief, because many of them wish to take part, and make only three points.

I make the first point as a member of the North Atlantic assembly. My attention was drawn to die sentence: My Government … will play an active and constructive part in the North Atlantic Alliance". I welcome that, but, as a member of the North Atlantic assembly, and as one who looks at NATO, I have been thinking for some time that NATO has been looking too much inwardly and not sufficiently at its flanks, at Asia and Africa. It is important not to get mesmerised by talk about the nuclear side and about the disarmament talks. My thoughts go back to 1979, when I joined the North Atlantic assembly at Ottowa. At that time there was much talk about SALT I and II, but the Soviets then walked into Afghanistan.

Accordingly, my fears are that we talk too much about the nuclear side and do not concentrate on what is happening, and the weakness that exists, in southern Asia and Africa. We may find that the tactics of the Soviets, which we know in time of war, are to go for the soft points. It is important, therefore, as we discuss the Gracious Speech, to urge the Government not to be too mesmerised by the nuclear side, but to look at the flanks of NATO.

We remember what happened in the Falklands. We were concentrating on NATO and found suddenly that there was a surprise attack from the Argentine. Clearly, therefore, NATO is not enough. We must look further. I should like to expand on this point, but I.hope I have made it sufficiently strongly. As I said at the outset, I am anxious to be brief so that others may have a chance to speak.

My second point is about the sentence: My Government … will urge the need to preserve and strengthen an open world trading system". That is extremely important. However, if we are to do that, the present instability in the currencies of the world must be examined carefully. I am worried lest we are not moving quickly enough to a new Bretton Woods and are not doing the preparatory work to see that the exchange rates of the yen and mark and the deficit in the American economy are such that we cannot lower interest rates and get the stability in currencies that is vital if we are to see an expansion in world trade and help constructively with the unemployment problem that faces us and the world at large. Again, I should like to expand on that subject, but I shall leave it there.

Thirdly, I welcome the fact that something will be done about rating. As many hon. Members will be aware, I have pressed for action on this subject for a long time. I heard my hon. Friend the Member for Milton Keynes (Mr. Benyon) say that we had not studied the subject. His remarks made me think of the time when I addressed a combined finance and environment committee meeting of my party upstairs on the need to abolish the GLC and metropolitan districts.

I was worried at election time when I talked to small business men and shopkeepers in my constituency about the effects of a high rate. They were having to charge much more than was being charged, for example, in the market place, where rates are not paid. I am not saying that people in the market place should pay rates. I want to see the burden of national charges reduced and I hope that when the new Chancellor of the Exchequer talks about reducing taxation he is aware of the need to reduce the rate burden as well, particularly in relation to some national charges. I appreciate the large burden that the Exchequer already faces in terms of national charges, but unless something more imaginative — and we are proposing some imaginative steps—is done, the burden on small industry will be so enormous that we shall not be competitive in the world.

Those are the three points that I wished to make today. I shall expand on them in due course. At this stage I apologise to my hon. Friends for having taken even seven minutes of the time of the House to make those points.

6.48 pm

Mr. David Knox (Staffordshire, Moorlands)

I thank you, Mr. Speaker, for calling me so early in your Speakership. I hope that I shall continue to be so fortunate during the many years that I hope you will preside over the House. I should like to remedy an omission that was made earlier, I am sure inadvertently, by congratulating the Second Deputy Speaker on his appointment. He came to the Chair, and then left, and no one offered his congratulations. I know that I speak on behalf of the whole House when I say how delighted we are that he has taken this important position. I hope that my hon. Friend the Member for Harwich (Sir J. Ridsdale) will not mind if I do not follow his interesting points, although I intend to touch on one later.

In general, I welcome the contents of the Gracious Speech. From what I can see, most of the legislative proposals are left over from the last Session. There are not too many completely new measures. I welcome that strongly. I hope that means that there will not be too much legislation in this Parliament. There has been far too much legislation in recent years. The long-suffering public need a rest from over-zealous Governments and Parliaments.

The Government will be judged at the next election and by history not so much on their legislative measures as on their general political and economic strategy over the next few years. I shall concentrate on that strategy. The electorate have given much clearer signals than usual on issues in this election and have provided the Government with a much more solid basis for future action than they usually do in general elections.

Normally in general elections, certainly in most of the elections since 1945, the people have said either that they want the Government to carry on or that they want a change of Government. Normally, there are no specific and clear messages from the electorate about policies. In this election, however, the electorate expressed themselves with unusual clarity on three important issues. First, they made it clear that they wanted this country and our allies to have adequate defences and they decisively rejected unilateral nuclear disarmament. Secondly, they made it clear that they did not want this country to withdraw from the European Community. Thirdly, they rejected a highly planned siege economy, with further nationalisation, but they expressed deep concern about high unemployment, although they doubted whether any party would or could do much about it. Those clear-cut expressions of opinion by the electorate are deeply significant and provide a basis for the political and economic strategy of the Government in the years immediately ahead. I shall take them one by one.

I refer first to defence. The endorsement of the Government's defence policy was very powerful. That may not have pleased Mrs. Ruddock or Monsignor Kent, but they never did speak on behalf of the British people. I hope that they will now have the humility to accept the verdict of the people, although their recent utterances suggest otherwise. The electorate showed the world that the British people have the will to defend themselves and that they wanted nothing to do with one-sided nuclear disarmament. In particular, they provided a clear message to the Soviets and any other potential aggressors that, come what may, the British people would not succumb to the threats of others.

That has put the Government in an enormously powerful position, because they have a clear mandate to modernise our defences in whatever way may be necessary. However, it has also given the Government a great opportunity, because they can now negotiate arms reductions from a position of great domestic strength, for the Soviets and any other potential enemy know that any British disarmament initiatives come not from a position of weakness, not because of domestic pressure to disarm and to spend less on defence, but from a genuine desire to reduce the stockpiling of armaments and to make the world a safer place.

About 25 years ago, Mr. Harold Macmillan, from a similar position of strength, took the initiatives that eventually lead to the signing of the partial test ban treaty in 1963, which saved the atmosphere from pollution by nuclear tests. From a position of strength today, the Government can take initiatives in disarmament that have a chance of achieving real success, unlike the muddled proposals in the Labour party's election manifesto.

It will not be easy to obtain agreement on mutual balanced disarmament. There may be rebuffs on the way, as Mr. Macmillan found a quarter of a century ago. The intransigence of the Soviets may make agreement impossible, but the Prime Minister has a reputation for perseverence, and disarmament is surely an area in which the prizes for perseverence are incalculable.

The second issue on which the electorate expressed themselves clearly was the European Community. They made it clear that they wanted this country to remain in the Community. The argument about whether we should be in the Community is now over and the electorate will not look kindly on anyone who tries to revive it. The fact that that argument is over means that the Government can now turn their full attention to the development of the Community and play a more constructive part in the building and extension of the Community.

All too often in the past, Britain has appeared to be dragging her feet in Community affairs. All too often we have not appeared to be good Europeans. Now we can put that behind us. First, we can push much harder for an extension of co-operation in foreign policy, because it is through the European Community that British influence can most effectively be brought to bear on world affairs.

Secondly, we should now join the exchange rate mechanism of the European monetary system. That would be economically beneficial to this country and to the Community. Thirdly, we should take a lead in the development of a Community energy policy, the extension of Community regional policies, the removal of all barriers and hindrances to trade within the Community and the introduction of fairer trade within the Community. Those are some of the directions in which the Government should be moving to strengthen the Community and ensure that British membership becomes even more advantageous than it has been so far.

The third issue on which the electorate expressed themselves with clarity was the economy. They rejected the siege economy. They rejected nationalisation. However, they expressed deep concern about the level of unemployment. Because they did not believe that either Labour or the alliance could do much about it they gave the Government the benefit of the doubt this time—but only this time. As I do not believe that the public will react in the same way in four or five years' time, the Government must give the same priority in this Parliament to the problem of unemployment as they gave in the last Parliament to inflation.

There is no reason, given good sense at home, and in the wider world, why we cannot return to full employment. In a country and in a world where there are so many unmet demands, I should have thought that that was obvious. We enjoyed low unemployment between 1945 and 1974. We can do so again. It was not just coincidental that we had full employment in the 30 years after the war. That was also the case in other countries. It is not just coincidental that we have had high and rising unemployment in the past decade. We enjoyed full employment for a long period after the war because of the stability in the world economic order that resulted from the Bretton Woods conference in 1944. Since the breakdown of Bretton Woods in the early 1970s there has been chaos in the world economy. Not surprisingly, unemployment has risen here and elsewhere.

If we are to return to full employment, a more stable world economic order is an absolute prerequisite. I do not believe that it is possible to get a new Bretton Woods today or even tomorrow, but we can get greater economic stability in the world. That is why Williamsburg was so important. Of course the outcome was disappointing, but it was a step in the right direction. The Government, in conjunction with our friends in the European Community and in the United States, must follow it up. Joining the exchange rate mechanism of the EMS would be helpful to this country, as it would provide greater stability, but not complete stability, for 60 per cent. of our exports. The Government cannot on their own restore economic stability in the world, but they can play a part, especially as the Prime Minister is one of the most senior of world leaders.

A more stable world economic order is not the only essential for a return to full employment. Two other factors are required. There must be income restraint and an increase in aggregate demand. First, as to income restraint, it is true that wage and salary increases are more moderate than they were a few years ago. That is hardly surprising, with 3.5 million people out of work. There is no guarantee that income increases would not start galloping ahead once again if the economy were operating at a higher level of activity. The present position of low economic activity and low income settlements is surely the time to introduce an incomes policy, to ensure that a recovery in the economy will not be brought to a grinding halt because of excessive increases in incomes. Experience has shown that increasing economic activity is unlikely to be accompanied by income restraint. I should think that it would be sensible for the Government to act now in respect of incomes, in advance of any economic expansion.

Secondly, there must be an increase in aggregate demand. Even if the Government achieve greater economic stability and income restraint, the economy will not expand steadily on its own to the point where total effective demand and supply potential are equal and full employment is restored. The economy must be stimulated by the Government. The pump must be primed. I am not suggesting the irresponsible and reflationary package offered by the Labour party during the election campaign.

A cautious increase in aggregate demand is essential as a first step on the road back to full employment. This can best be achieved by a reduction in taxation and by the introduction of carefully selected labour-intensive investment projects. Both would increase the demand for labour, directly or indirectly, and would help to stabilise the level of unemployment and then to reduce it. It is not honest to pretend that unemployment can be dramatically brought down in a short period, but it is vital that steps should be taken immediately to begin to reduce it. Undoubtedly, it will be a long job. If a considerable reduction in unemployment has not taken place by the next election, I believe that the electorate will judge the Government harshly.

In the election, the Conservative party received 42.6 per cent. of the popular vote, the Labour party 27.6 per cent. and the alliance 25.4 per cent. Yet the Conservative party got 397 seats, the Labour party 209 seats and the alliance 23 seats. I am afraid that I cannot see how anyone can justify this position. The outcome of the general election in terms of seats was not fair by any standard. It is unfair that the Conservative party should get almost two thirds of the seats in the House on the basis of 42.6 per cent. of the votes cast. More unfair is the fact that the Labour party, with only 2.2 per cent. more of the popular vote than the alliance, should have 186 seats more.

If the electoral system is to be respected, it must be fairer than that. I hope that serious consideration will be given to a thorough investigation of the: electoral system. What was acceptable when there was a two-party system in this country is no longer acceptable now that there is a multiplicity of parties. I urge the Government to establish a Royal Commission or to convene a Speaker's Conference to examine the electoral system. This issue must be dealt with urgently, and failure to take such action could have disastrous consequences.

7.4 pm

Mr. John Home Robertson (East Lothian)

As a member of the Labour committee for electoral reform, I have some sympathy with the concluding remarks of the hon. Member for Staffordshire, Moorlands (Mr. Knox). We have all come to know and love him during the years as a Tory wet. I think that his speech contained one or two coded messages for the Government. However, the hon. Gentleman was selective in the electorate's decisions that he chose to cite. He made the mistake of believing the portrayal put forward by Conservative central office of the Labour party's defence policy. He said that the Labour party was talking about unilateral disarmament, when what it was talking about, and will continue to talk about, was a positive, definite and practical programme of unilateral nuclear disarmament. There is a world of difference between that and unilateral and total disarmament, which was the picture that some irresponsible Conservatives tried to portray during the election campaign.

Having read the Gracious Speech twice, I have to say that it is at best irrelevant to the needs of our constituents. Some of its proposals would be downright damaging to their needs. As the hon. Member for Moorlands said, the tragic irony of today's proceedings is that the Government's massive majority in the House has not been the result of a swing to the Conservative party at the polls. On the contrary, there was a swing against it. The electoral system has given this country a Conservative Government with a massive overall majority. I shall not during this debate discuss the electoral system, nor shall I dwell on the outcome of the splitting of the democratic Socialist vote by people who saw fit to betray the Labour party. However, I shall comment on the serious consequences of the election result, as portrayed in the Gracious Speech.

Anybody who has been travelling throughout the country in the past weeks must recognise that our industry, employment, social services and the whole fabric of our society are in an extremely serious condition. A crude example of the crisis facing the people in my constituency is that the Government's policies in recent years have left more than 4,000 people waiting for houses. Many young people who have just married cannot get houses because they are not being built at the rate that they ought to be. At the same time, there are in my constituency about 1,000 people who wish to be working in the building trade, but cannot get jobs. There is something obscene about a Government who sit back complacently when we have the materials and there are people with skills and abilities who are willing to fulfil the needs of our people by building houses and providing other services, and when there are people who desperately need houses and services The Government are doing nothing about it. They appear to prefer to keep building workers and others on the dole.

The British people have conclusively voted against that state of affairs, but one would not think so when looking at the composition of the House. The division of the Opposition into several parties virtually gave the Prime Minister a walkover at the election. The result, at a time of national economic crisis, is the spectacularly complacent and irrelevant Gracious Speech, which begins: My Government will pursue policies designed to increase economic prosperity and to reduce unemployment. How will they do that?

They will continue to maintain firm control of public expenditure". What hope does that give to the homeless, the unemployed building workers and other jobless people in my constituency? All that the Queen's Speech says for them is: The special employment measures will continue to assist those out of work. That is great—cheap, short-term, dead-end schemes that have more to do with massaging the unemployment figures than with job creation.

The Queen's Speech goes on to talk about more doctrinaire dismantling of public enterprises such as British Telecom, London Transport and the British Gas Corporation. To add insult to all that injury, the Government propose even more tax cuts for the very rich. That is the Queen's Speech which the Government have brought before the country, regardless of what the people voted for.

Scotland rates 20 words in the Queen's Speech, or rather less than two lines.

Mr. John Maxton (Glasgow, Cathcart)

Slightly less than Hong Kong.

Mr. Home Robertson

The Queen's Speech states: Measures relating to Scotland will include reforms to the rating system and the reform of the law relating to roads. We would all wish to reform the rating system in one way or another. The Secretary of State for Scotland has reformed the rating system considerably by imposing massive cuts in the rate support grant, which has forced massive increases in rate bills to ratepayers all over Scotland. I am fascinated by the reference to a reform of the law on roads. Perhaps we shall start driving on the right of the road in Scotland.

That is all that Scotland merits in the Queen's Speech, and it is fair to inquire what authority the Government have in Scotland. On the basis of the popular vote, the Government's mandate in the United Kingdom is rather shaky, but in Scotland we now have a Secretary of State who has the support of only 28 per cent. of the electorate, which is about one in four. The Secretary of State for Scotland is an extremely powerful man. He can supersede almost all other decision-makers in Scotland, even local authorities, and some of us have come across absurd examples of that. The Secretary of State wishes to fix the rates in some local government areas, and one famous case in my constituency occurred two years ago when the Secretary of State took it upon himself to call in to his office in Whitehall a decision on whether a village hall should be built in the little village of Elphinstone in East Lothian. What is the point of having local authorities if such a decision is to be taken by the Secretary of State for Scotland here in Whitehall?

I have been rash enough to say that the Government have no mandate in Scotland. That might be taken as a statement from a member of the extreme gang of four, as we were dubbed by The Scotsman. This gang of four has nothing to do with the alliance. It consists of myself and my hon. Friends the Members for Glasgow, Cathcart (Mr. Maxton), for Glasgow, Shettleston (Mr. Marshall), and for Carrick, Cumnock and Doon Valley (Mr. Foulkes). That last constituency name is a filibuster in itself, but we have the Boundary Commission to thank for it. It is not only the gang of four who have said that the Government have no mandate in Scotland; highly responsible people, such as my right hon. the Friend the Member for Glasgow, Govan (Mr. Milian), the shadow Secretary of State for Scotland, have also said it. The Government have no mandate to administer Scotland. They have only 21 seats out of a total of 72, and only 28 per cent. of the popular vote.

The Conservative party, from its position of acute weakness and embarrassment in Scotland, has now started to tell us that devolution is no longer an issue. That is very slick, but it is simply not true. Whether one likes it or not, we already have massive devolution in Scotland —executive and administrative devolution to the Secretary of State for Scotland. His powers are widespread and cover education, the Health Service, agriculture, fisheries, housing, energy, industry and local government among other things. We have an entire body of specific Scottish legislation. It is very nice for the Secretary of State for Scotland and his elected, and, more spectacularly, non-elected, Ministers to exercise all that power regardless of the will of the people of Scotland, but they have no mandate, and whether they like it or not they are exercising devolved powers.

If the Government were to be consistent in the theme of devolution being a bad thing, they would have to scrap the Scottish Office altogether and incorporate the Scottish departments, quangos and laws into the English system and statutes. That would be unthinkable and, among other matters, would cause a great row in the Scottish legal establishment in Edinburgh, which is predominantly Conservative. They are about the only people who support the Conservative party in Scotland nowadays. Any reasonable person must accept that it is at best unsatisfactory, and at worst intolerable, for so much executive power to be vested in one Minister who is not accountable to those whom he governs. Apart from the political case for the establishment of a democratically elected Scottish assembly to control those powers, there is an overwhelming rational case.

The Government have asserted that devolution is not an issue but that is simply not true. It is an issue, because Scotland has voted clearly and specifically for the establishment of a Scottish assembly on no less than four recent occasions — at the general election of October 1974, in the referendum in 1979, at the general election in 1979 and at the general election of 9 June 1983. In the latest election, 72 per cent. of the electorate voted for parties that are committed to various degrees of home rule for Scotland.

The election of a second Thatcher Government has created a constitutional crisis for Scotland. I, together with many of my hon. Friends and many others in Scotland and elsewhere, must fight long and hard in the coming months and years to settle that constitutional problem in accordance with the mandate given to us by the people of Scotland. Scotland has voted Labour, and it wants a Government who will get our people back to work and cater for the needs of the community. Scotland has voted consistently and overwhelmingly for some home rule within the United Kingdom. Sooner or later, that decision by the people of Scotland must be carried out.

7.16 pm

Mr. Patrick McNair-Wilson (New Forest)

Opposition Members have spent much of today criticising Government policies, as outlined in the Queen's Speech, without realising that they have no believable alternative to offer to the country. The general election made it crystal clear that the Labour Opposition in Britain today are completely bankrupt of ideas that the electorate regard as being likely to solve our problems. That is why the Conservative party had such a massive majority —[Interruption.] No doubt the hon. Gentleman will have an opportunity to speak in the debate. One of his hon. Friends, the hon. Member for Linlithgow (Mr. Dalyell), has just spoken for an hour, so perhaps I may be allowed to begin my remarks without interruption.

Many Opposition Members have referred to the problem of unemployment, which is uppermost in all our minds, but it would be wrong to delude the electorate into believing that there is a simple cure. The Labour Government could not cure it, which is one reason why their policies for curing it this time were not credible. Unemployment is a compound of several factors. The first is the world recession, the second is the increasing use of technology, and the third is that, in many cases, the trade unions have priced people out of jobs. When, after the 1979 Government were elected, there was a strike in the steel industry against a bankrupt British Steel Corporation, there could be only two clear results of such action—first, that we would lose customers and, secondly, that we would lose jobs. Both happened. If we were to stand in the way of increasing technology, for example, to take the robot welders out of the British Leyland Metro line and put individuals in with welding torches, we may increase employment, but we shall have an uncompetitive product.

Some hon. Members have talked about an alternative economic policy. There is certainly an alternative economic policy, and we had a taste of it during the Labour Government when we had to go crawling, cap in hand, to the International Monetary Fund because we had got ourselves into a position from which we could not extract ourselves.

I welcome the Gracious Speech because it sets out clearly the radical alternative to the failed and bankrupt policies that we have had under previous Socialist Governments. It is perfectly true, as hon. Members have suggested, that in all probability this will be a five-year Parliament, but I should like to caution my right hon. Friends by asking them to realise that, while five years may seem a long time, there is an urgent need for speed in implementing the various measures that have been outlined today. Although it is reasonable to see this Parliament lasting its full time, we all know only too well that Governments have far less freedom of operation than the time scale might suggest. Therefore, it is important to get on with the hard and difficult tasks as quickly as we can.

I want to deal with two aspects of the Gracious Speech that I consider to be of particular importance. The section of the speech referring to the home economy says: Continued attention will be paid to the development and application of new technology. A little further on it says: Legislation will be introduced to prepare for the introduction of private finance into nationalised industries". The further introduction of new technology is something that we not only cannot stop but should encourage. It will inevitably mean that the pattern of the working life of the average citizen between now and the end of the century will change dramatically. Therefore, the problems of employment will not be solved by looking to the old solutions. One can envisage ultimately a shorter working week, earlier retirement and a whole raft of different solutions. But, more important than any of these, if we are to get a really satisfactory working pattern, we must have thoroughly competitive and efficient industries. That need to restore competitiveness has been at the heart of the Gracious Speech.

I should like to look at one industry in particular; indeed, it is called one industry, but it is really two—the coal industry. I have always had a great affection for it, because it is one of the most important single industries in Britain. But, sadly, at the moment it is not one industry but two. One has a bright future, with good conditions and very reasonable long-term prospects for all those working in it. The other is an industry which, in a word, is worn out, with no real prospects for those who work in it, and from which it is almost impossible to extract a commercially viable product.

I do not believe that the future of the industry will be assured by trying to keep the worn-cut section of the business alive in a world where coal is plentiful and cheap, and where competition will inevitably be strong. We have the largest coal industry in Europe and one of the most mechanised in the world, but I do not believe that it is in the interests of those who are currently employed in it to pretend that by keeping open unworkable, geologically faulty pits, we are building a great future for them. To resort to strike action to try to prevent the real facts emerging will merely drive away customers and make the future of that industry even more uncertain.

One of the early possibilities for improved technology was the remotely-operated long-wall face. Perhaps it was somewhat over-ambitious at the time. We can all remember the Bevercotes experiment — the manless pit—but technology is developing all the time. It can be used at its best only in the new complexes such as Selby, where we can extract not only a commercial product but provide the right working conditions for the miners in the industry.

We should buy back the jobs from those miners who inevitably will be displaced, or find new jobs for those who wish to continue. Merely to pretend that nothing has happened and that we can defend jobs by never closing pits is the wrong policy for the industry and will merely lead to more and more competition from overseas. At present there is a subsidy in the coal industry equivalent to nearly £30 for every man, woman and child in Britain. We must try to get to a point where the industry can stand on its own feet, so that the second sentence that I read from the Gracious Speech can begin to apply, with the attraction of private capital to the industry. I believe that that is possible.

I remember speaking from the Opposition Front Bench in 1965 when we wound up the then Labour Government's Coal Industry Bill, which decimated the industry. That Bill faced many very hard facts but, unfortunately, its decisive nature was, over time, eroded by subsequent measures. Indeed, we have now become accustomed to passing through this House borrowing powers Bills of colossal proportions, almost on the basis that we can do nothing about the industry.

I take this opportunity to pay my personal tribute to the chairman of the National Coal Board, who will be retiring this summer, for the leadership and courage that he has shown in trying to get the industry on to a level keel where it can compete with the other coal industries of the world.

I am both encouraged and disturbed by what I see in the Gracious Speech about local government finance. There are suggestions about putting a lid, as it were, on the level of rate increases. Then, at the end of the paragraph dealing with local government, it says: Measures to improve the rating system will also be laid before you. It is my firm belief that the present means of financing local government is not only unfair but unworkable. It takes no account of the individual's ability to pay and is nothing more than a local property tax which has no ability to finance the services that we require local government to provide. For that reason, I believe we must have a sweeping reform—a complete reform.

We should take the bull by the horns and be prepared to see local government financed on the basis of an income tax so that everyone pays because everyone uses the services, rather than the present system, under which some pay but all use the services. Until we are prepared to grapple head-on with that problem, merely putting ceilings on the expenditure of individual local authorities is nothing more than tinkering with the problem. I hope that the remarks about the measures laid before us to improve the rating system will mean the abolition of the local property tax as we now know it. Anything less than that will be regarded by many in my constituency and elsewhere as a failure to face one of the great injustices in our taxation system. I wish to make it clear to the Under-Secretary of State for Energy that I, and I am sure many others, want to see some action in that respect.

The Gracious Speech represents a blueprint for fundamental change. If nothing else, the Government are a radical Conservative Government. They have a determined radical leader who has shown herself to be a whole person bigger than any of the other political leaders on the stage today.

We began in 1979 by introducing radical proposals, and the recent general election reaffirmed the desire for those proposals. It is up to the Government to press ahead as quickly as they can to make those changes and to ensure that those who voted Conservative are not disappointed.

7.30 pm

Mr. John Stokes (Halesowen and Stourbridge)

The hon. Member for East Lothian (Mr. Home Robertson) made some extraordinary remarks about our constitution. He said that because the Labour party has a majority in Scotland, the Government have no authority to rule there. As an Englishman representing an English seat, I gently remind the hon. Gentleman that the Labour party has not had a majority in England since the war and, on the hon. Gentleman's premise, Labour Governments had no authority to speak for England.

Mr. Home Robertson

Will the hon. Gentleman give way?

Mr. Stokes

No. I sat for an hour listening to the hon. Member for Linlithgow (Mr. Dalyell) and I shall speak for only 10 minutes.

I welcome the Gracious Speech and am glad that not too many Bills were foreshadowed in it. We need a period of good, steady government and not endless law-making, which tends to curtail the liberty of the subject and causes a rise in the number of civil servants.

I have listened for hours to Labour Members who do not yet seem to realise that their policies have been utterly rejected by the electorate. If Labour Members wish to receive a hearing from the British public, they must change their policies. The election gave the Government the largest majority since 1935.

Mr. Maxton

In England.

Mr. Stokes

No, throughout the United Kingdom.

My right hon. Friend the Leader of the House spoke admirably on Monday when he set the tone of the forthcoming period of government as continuity and consolidation. I am sure that there will be no extremism or extremist measures and I welcome the fact that all shades of opinion in the Conservative party are represented in the Government.

Much of our support in the election came from the skilled working man and his wife—people who some years ago were considered working class. Perhaps the Leader of the Opposition still thinks of them as working class, but they are taking on all the attributes of the middle class, such as buying their own home, owning one or even two cars, saving for a rainy day and wanting the highest standards of education for their children. We must never forget those people. Hundreds of thousands of them voted for us and we must cherish their hopes and aspirations.

One of my abiding impressions of canvassing in my constituency is the countless small, neat, trim gardens on new estates. They are all beautifully tended and show great pride in home ownership. We must not forget that in spite of our economic problems, most people are more prosperous than ever. Figures published in the newspapers yesterday prove that.

We must build on that prosperity, as well as devising all the help that we can for the unemployed, particularly the young unemployed whose training needs are being vigorously pursued by the Government.

Certain problems still bedevil the economic scene. Personal and corporate taxes are still far too high and must be reduced much faster in the next five years. That will inevitably mean cuts in public expenditure, but provided that the cuts are right, there is no reason why they cannot be made.

Mr. Maxton

Where?

Mr. Stokes

We could make a start on the overstaffing in the administration of many of our hospitals, universities and colleges. Those areas cry out for determined action.

Burdens on private manufacturing industry must be reduced and I welcome the Government's determination to curb excessive rate increases. Industry still faces a huge task in becoming competitive with its foreign rivals. It seems that the world slump is ending more rapidly than some of us had expected, but there are still dangers to world trade through the growth of protectionism and the dangers to the world banking system.

On the whole, the course looks set fair, but outside events have too often blown this country off course. We are particularly vulnerable because such a large proportion of our trade is represented by exports.

The steady fall in inflation has been one of the Government's greatest achievements. It has brought with it a sense of realism, especially in wage bargaining, which is most welcome. I hope that we shall see further cuts in interest rates, which are still far too high.

My constituency is largely industrial and most of my supporters work in factories, so I welcome the Government's intention to give greater freedom to trade unionists in the making of decisions that are vital to them and their families. Let us hope that the great trade union barons will soon become as harmless and respected as the barons in another place. Trade union leaders have much to answer for in holding back the recovery of British industry, although I realise that poor management has sometimes played its part.

The Prime Minister, in addition to her triumphs at home, has become a greatly respected world leader. She alone will be able to unravel the difficult EC budget problem. The nation realised during the election campaign that we must stay in the EC, despite the difficulties and problems, but people expect and hope that the Prime Minister will ensure that this country has a fair financial deal from our Community partners.

I welcome the Government's determination to maintain our nuclear and conventional defences at a realistic level. Never before in my lifetime has defence been such a crucial issue in a general election. The British people expect a Government to protect their lives and liberties, and doubts on that score were responsible for the Labour party putting up such a poor show.

Although we all hope and pray for disarmament, there is little sign that Soviet Russia has any intention of agreeing to balanced and verifiable disarmament. However, I hope that I am wrong.

At home, the public expect us to protect them from increasing crime, particularly violent crime. I am sure that the police must have more powers to interrogate and arrest and I look forward to another debate soon on capital punishment. Perhaps those of us who believe in it will win this time. I can think of nothing that would put a stop to armed robberies more quickly than the reintroduction of capital punishment. When the death penalty was in force one never heard of criminals carrying guns when they robbed banks.

I, along with many of my constituents and many other members of the public, hope that the introduction of corporal punishment will be reconsidered, at least for such categories as young thugs who terrorise old ladies. The public want such measures and I do nut believe that the House can go on resisting them for ever. I am certainly against holding a referendum on such matters.

In spite of the country's economic problems and the extremely high unemployment figures, I felt, as I got about during the last election campaign, that the nation as a whole is in better health than for a long time. There is still, unfortunately, too great a bias in our national life against manufacturing industry. Many of our bright young people do not even want to go into manufacturing industry, preferring a less demanding life as a teacher, an accountant, a banker or a civil servant. The Civil Service is still too large, as are all the nationalised industries, and their staff should be much more severely cut. This must be a priority for Government in the next five years.

To a large extent, people have recaptured faith in themselves and in their country. In spite of the long rigmarole, much of it boring and repetitive, and much unreliable, from the hon. Member for Linlithgow, the Falklands episode proved to the nation that we are sound at heart. We are too fond of denigrating ourselves when we have so much going for us. There is our incomparable history and civilisation, our equable climate, our natural wealth, the superb institutions that are the envy of other countries, our skill of brain and hand and also our tolerance and kindness, which stems from our Christian heritage. These are the people whom the Government must lead over the next five years. I am sure that they will not fail.

7.41 pm

Mr. Ron. Lewis (Carlisle)

I disagree with 98 per cent. of the speech made by the hon. Member for Halesowen and Stourbridge (Mr. Stokes) but I agree with his conclusion about our Christian heritage. He and I will be on the same wavelength on that.

I can understand the Conservative party sounding the praises of its leader on the victory that it has just attained, but I sound a note of caution about the praises that the Tory party is heaping on its leader. I believe that it was Sir Harold Wilson who said that a week was a long time in politics. Five years is a long time in politics, and although the Tories are full of vigour and enthusiasm, three years from now, when their fortunes are crumbling and the opinion polls are going against them, the same people who are praising the Prime Minister today will probably be the first to call for the election of a new leader of the Tory party. They should not crow too much.

I should not want to take away from the Prime Minister the part that she played in the election victory. However, the right hon. Lady went down in the estimation of a number of British citizens, both of no political allegiance and of allegiance to a party, when she was addressing a meeting of the Young Conservatives during the election and Mr. Kenny Everett made that unfortunate remark about my right hon. Friend the Leader of the Opposition going about with a stick.

I venture to suggest that if anybody in the Labour party had spoken about the Lord Chancellor walking about with two sticks we would have been hounded out of the Chamber and every newspaper would have condemned us. All that the Prime Minister could do, as I understand it, when Kenny Everett made his attack, was to put it down to a comedian taking the mickey. If the Prime Minister had been worthy of her sex and office she would have condemned Everett out of hand for his unkind remarks about my right hon. Friend.

As to the election, I feel that I am right to draw attention to the Conservative candidate who fought against me in Carlisle, and this is the sixth Tory candidate that I have fought over the past seven elections. If the Prime Minister is looking for someone to press the nuclear button, she has only to go to the Conservative candidate who fought the Carlisle constituency, because on the Sunday evening before the election, when all the candidates met the Christian Council of Churches, the Tory candidate, with all the ego and oratory at his command, made it clear that he would be only too willing to press that nuclear button. No wonder many churchmen called him a murderer.

I understand that the Conservative candidate who fought the Carlisle constitutency was a member of General Walker's private army, which was condemned by the right hon. and learned Member for Hexham (Mr. Rippon), and made no bones about it. He gloried in the fact that he was a member of this "army". It is rumoured that he has even flirted with other organisations that are well known. The Conservatives won the election, but now that they have won it I urge them to beware, especially when they have candidates such as the gentleman who fought me in Carlisle.

I have been looking at the Gracious Speech to see whether I can find a crumb of comfort for my constituents. I am afraid that I cannot find anything here. The last Conservative Government did away with the development area status that a Labour Government had brought in for my part of the country, and during the election a Minister came up and said, "I cannot offer any hope for Carlisle and its citizens until you have more people unemployed than you have at the moment."

We already have more people unemployed than at any other time in the history of Carlisle as a parliamentary constituency. Hundreds of children will be leaving school during the next month. There is not one iota of hope in the Gracious Speech for any of them. During the election campaign I spoke to men of 55 years of age and over, who have not a cat in hell's chance of getting a job again. There is no hope in the Gracious Speech for them. Now that the Government have won the election on all the promises that they made, the Minister who replies to the debate has a moral obligation to offer a crumb of comfort and hope to those in my constituency who are unemployed.

I know that it has been said that the Government will not spend much money, but a little ray of hope could be given to us in Carlisle if the Department of Health and Social Security were to sanction the next stage in the development of the hospital that is so urgently needed in Carlisle. If the Minister were to give us that hope by promising that the work would begin almost immediately, it would help absorb at least some of the unemployed building workers in my constituency and in its train might help to bring back a small measure of employment. But I say again that the Gracious Speech contains nothing for the people of Carlisle whom I have the pleasure to represent.

When we discussed the Serpell report just before the general election, I remember making the assertion that if we could be certain of one eventuality it was that we should have a new Transport Minister after the next general election. That prediction has come true. The right hon. Member for Guildford (Mr. Howell) was dismissed and, when making his speech trying to prop up Serpell, he knew that he was on his way out.

Speaking as a railwayman with the cloud of Serpell hanging over our heads, I say that the travelling public want to know, and railwaymen want to know, the Government's attitude towards Serpell. Will they implement the Serpell recommendations during this Parliament? Will they consult the trade union movement so that, instead of implementing Serpell, we can have a massive injection of cash to replace the rolling stock which has now become obsolete and to electrify our railway lines? That would help to resolve the unemployment problem and at the very least it would help to bring back prosperity to the railways and give the railwaymen new hope. I look to the Government to do that, but I am afraid that there will be no crumb of comfort. We shall all be disappointed.

7.53 pm

Mr. Harry Greenway (Ealing, North)

I shall not travel down the numerous paths trodden by the hon. Member for Carlisle (Mr. Lewis) other than perhaps the first of them, when he echoed the remarks of my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes), who said that if our society were more soundly based on the Christian message we would be on a more secure path of law and order and a good society. I should like to see that, because it is fundamental to all that we say and do.

Earlier in the debate, my hon. Friend the Member for Milton Keynes (Mr. Benyon) spoke about law and order. He was right to say that this had been a substantial issue during the election campaign. He added that in his constituency he had met it on the doorstep many times. I had the same experience. But I was concerned to hear my hon. Friend urge that people convicted of serious offences be given very long prison sentences. I go into prisons frequently as a visitor and out of personal interest, and I know how difficult it is to keep a man or woman in prison for a very long period—however good it looks on paper —unless light can be seen at the end of the tunnel that he or she may one day be released. Without it, an attitude builds up in prisoners that breeds some of the violence that we see in our prisons, and we must think twice before advocating or pushing such a policy.

The hon. Member for East Lothian (Mr. Home Robertson), who spoke at such length about the preponderance of Labour Members representing Scotland, was rightly brought to book by my hon. Friend the Member for Halesowen and Stourbridge who pointed out that we would rarely have a Labour Government were it not for Scotland—and I would add almost all of Wales — returning Labour Members of Parliament. That is how we have had Labour Governments foisted upon England, many of them with disastrous results.

Sir Anthony Meyer (Clwyd, North-West)

Labour representation in Wales has been falling steadily election by election. At the last election, Labour had only a bare majority of seats over all the other parties.

Mr. Greenway

I am happy to acknowledge that. However, historically I think that what I say is true.

Sir Anthony Meyer

Yes.

Mr. Greenway

I am grateful for my hon. Friend's agreement and I am glad that, thanks to his influence and that of others, Wales is coming to see the error of its past ways and to return a substantial number of Conservative Members. I congratulate my hon. Friend and all my other hon. Friends representing Welsh constituencies on being returned here.

We read in the Gracious Speech that other measures will be laid before the House, and I urge the Government to reform our election laws. Since we are so close to the election, perhaps I might mention one or two of the arguments which came across to me very forcibly on doorsteps at public meetings and everywhere else.

I estimate that about 3 per cent. of the electorate—probably 1 million people—did not get a vote in the recent general election because they were on holiday. This is tremendously upsetting to people. They know that they are entitled to vote. People have fought and died to obtain the right to vote. Yet, because people are on holiday, which is perfectly natural, particularly in the month of June, they have been disfranchised. I have been told again and again and I agree, that voting in the general election was one of the most vital decisions in people's lives. I hope that we shall have an early Bill to give holiday makers the right to vote by post or by proxy. It is essential. It is shameful that 1 million people did not have the right to vote.

Another complaint voiced to me during the election was that, if people are to have the right to vote by post, they must get in their applications to do so by a given date. People do not know the cut-off date for applications. It is very poorly advertised. I want everyone to have the right to vote, even if people are on holiday, and I want to see maintained the right to vote by proxy or by post. What is more, I want those rights emblazoned across the country as soon as an election is called, otherwise people are disfranchised. That is undemocratic, which is the last thing that this Government would wish to see.

In calling for a reform of our election laws, I must say that I feel that the deposit is much too low. It has stood at £150 for many years and it ought now to be increased to £1,000 or £1,500. At general elections we do not have the sort of abuse that we see at by-elections, but it was ridiculous to have 16 candidates standing in the Bermondsey by-election. With a number of that sort the process of democracy is made to look thoroughly farcical, which is not good for the House or for the country.

The present £150 deposit enables individuals to obtain cheap publicity for themselves or their businesses. They get tree post and a fair degree of media attention. That is also an abuse of the system, and I call upon the Government to prevent it in the future.

I welcome the Gracious Speech. As a London Member, I welcome especially the pledge to abolish the Greater London Council. I know from my experience of the GLC that there has been serious and costly duplication of powers that are already possessed by London boroughs. It has damaged employment and other factors in my constituency. For example, the fact that planning permission has to be sought from the GLC as well as from the borough of Ealing for many matters leads to huge delays. This Labour GLC has delayed some planning applications by up to two years, if not more. Jobs are at stake.

Moreover, the GLC insists on difficult and awkward factors in planning permissions. There is the case of the Hoover factory at Perivale in my constituency. As we know, the factory was tragically closed nearly two years ago, and the firm was anxious to sell the factory and the site, of which it owned the freehold. It gained planning permission from the London borough of Ealing to do so, but the GLC put on the planning permission that was granted a requirement that the site be used only for industrial purposes. That proved difficult. We could have 1,000 jobs there today, if the GLC had not been so tight. We could have office-type jobs, computer-type jobs, and so on. The only use that I would not want for the factory site is warehousing, because that would involve only a handful of jobs. However, we had the GLC imposition of industrial use on the site. In my opinion, it was an attempt to say to the people who had been displaced from their jobs, "We will get you identical jobs," in the crude Livingstone language that we have come to know. But for that, we should have jobs for the people who were so sadly displaced there. So in this respect alone it would be valuable to cut out the GLC.

Again, the GLC has substantial power over roads in greater London. Many roads are handled by the London boroughs, but they could handle all major roads. I assume that trunk roads would continue to be handled by the Government. This GLC is foisting on my constituency a bypass termination point at the White Hart roundabout in Northolt which the whole community totally rejects. The GLC Labour member for Ealing, North promised that it would not happen if he were elected in a Labour GLC. However, the GLC is still pressing ahead with the bypass termination point in a totally duplicitous manner and to the great distress of the local community. That community is better represented in the matter by t le Ealing borough council, which does not want the termination point at the White Hart roundabout and intends to help me and many others to oppose it at a public inquiry later this year.

Jobs have been lost in London by awkward GLC planning decisions, long delays in taking decisions, and as a result of the huge rate increases that we have had from the GLC. To have doubled rates across London before the end of its first year in office was a staggeringly wicked achievement by the present Labour GLC. It was the straw that broke the camel's back at Hoover. It has led to loss of jobs in shops, factories and elsewhere.

Moreover, it does not stop there. The people of London are outraged at the way in which the GLC is spending money. Thirty-five thousands pounds went to the Karl Marx centenary. Then there is a magazine called The Londoner which is full of anti-Conservative items, at a cost to all ratepayers, whether Conservative voters or not, of about £1.5 million a year. Then there are grants to homosexual organisations, lesbians, and others, at the same time as taking grants away from the scours, guides and uniformed organisations. The GLC has outraged the people of London, thereby adding to the pressure that already existed, because of the duplicating nature of the GLC, to get rid of that organisation, which I hope will happen at an early stage of this Parliament.

There is nothing that the GLC does that the London boroughs, separately, collectively or through some other mechanism, cannot handle and handle much better. In particular, I would mention London Transport. I was delighted to see in the Queen's Speech that a Bill is envisaged to reform the organisation of public transport in London". That will happily end the huge political interference with London Transport that there has been from the present masters at County hall. However, I urge the Government to ensure that in any Bill there is a strong element of integration between cars, underground and buses. Londoners really need that. It is also essential to have a low fares policy in London, and that the low fares for Londoners and people using London transport are not financed out of rates but out of general taxation. That is vital. The cost is so high that it is unfair to place it on London ratepayers. As London's transport is improved, I hope that abuses will be ended, including fraud, which I am told is costing about £50 million a year. It is not only a matter of people not paying their fares. I am told by Sir Horace Cutler that there is fiddling by the staff on a massive scale. It has been mentioned in the House before. I do not accuse the whole staff of London Transport of fiddling, but I know that some do. They let down their colleagues, and they let down the Londoner, because that loss of revenue to London Transport means that fares are much higher than is necessary. It is a serious matter for everyone.

High domestic and industrial rates in some London local authorities—notably Brent, next door to Ealing, where incidentally rates are twice as high as they are in the Conservative-controlled London borough of Ealing—are serious from the point of view of ratepayers and industry. I welcome the announcement in the Queen's Speech that a ceiling will be put on rate increases. There is no doubt that the elderly, the unemployed and the disabled are particularly damaged by high rates. They have to pay them by law, but they often gain little from the services that are provided from rates. The damage to industry and the fact that industry has no say in rates—it is a tax on industry without representation—is totally undemocratic. I hope that the Bill will do something about that, while of course totally preserving the democratic structure of local government.

The Government should pay close attention to the point at which to place the ceiling on rates. It must be at a point which allows local democracy to have its head in a reasonable way, but which does not allow it to abuse the ratepayer which, as I have shown, has been the case for the GLC ratepayers. I hope that a Bill on rates will tighten up the way in which money can be spent. If it is made thoroughly clear in legislation that the use of ratepayers' money for political purposes is against the law it will stop many of the abuses which cause much distress to my constituents, Londoners and people elsewhere in Britain with Labour councils.

I welcome the Government's announcement in the Queen's Speech that they will pursue policies for improving education standards and for widening parental choice and influence in schools. We are the only party that will continue to increase parental rights such as that to choose a school and a child's course within a school. School curricula will only improve if the Government do as is now envisaged and take into their hands the right to earmark small amounts of money to improve teacher training, in-service courses for teachers and teacher provision in particular areas of the curriculum. I should not like to see that area widen too much, but that would be a means of getting hold of the school curriculum by the scruff of its neck and modernising and strengthening it in areas where teacher supply is weak, such as in craft education, home economics, foreign languages and so on.

There is a chance now to get something done and to provide more teachers. To those areas that I have mentioned I add that of religious education which is inadequately staffed and taught at present. As I said at the beginning of my speech, in concert with the hon. Member for Carlisle, my hon. Friend the Member for Halesowen and Stourbridge and many others, the best way forward must be for Britain to have a society whose citizens behave in an honest and sound fashion based upon the principles that Christ taught us.

8.11 pm

Mr. John Maxton (Glasgow, Cathcart)

The last part of the speech of the hon. Member for Ealing, North (Mr. Greenway) was astonishing, coming as it did from a Conservative Member who supports a Government that have slashed education expenditure since 1979. The hon. Gentleman talked about teacher training colleges and the use that could be made of them to improve curricula. Before coming into the House, I worked at a college of education in Scotland which is no longer in existence. The opportunity for curricular development in that college and for in-service training for nearly 1 million people has completely disappeared. If that is the way in which it is hoped to improve education, I do not think much of it.

Mr. Greenway

The hon. Gentleman is being unfair. School rolls have fallen by 1 million in four years. School spending per pupil and the pupil-teacher ratio have never been higher. Those are the ways in which expenditure on education must be measured.

Mr. Maxton

That is exactly why the education system has suffered so much under this Government. To be honest, it suffered to some extent under the previous Labour Government as well. Secretaries of State for Education and Science and for Scotland have seen education in terms of pupil-teacher ratios and money spent per head. If there are more pupils at the top end of the secondary school in the fourth, fifth and, sixth years, as there have been in the past few years, and fewer pupils in the first and second years of primary schools where the expenditure per head of primary school pupils is much lower than at the top of the secondary school, inevitably, on average, there will be a higher expenditure per head than previously. There is not more being spent on education than previously. In fact, the Government have spent consistently less.

Mr. Greenway

That is not true.

Mr. Maxton

The hon. Gentleman should go into schools and see what is happening. He talks about parental choice. In my constituency, as the school rolls decline and as the money that they receive is cut, courses are cut. Where once three science subjects were offered —biology, chemistry and physics — because there is insufficient money, one has had to go. That is not an improvement in parental choice. It is a destruction of parental and pupil choice.

However, I agree with the hon. Gentleman on electoral reform. I only wish he had gone further. I found that many elderly people had been deprived of their votes because they were on holiday. June is the month when old folks' clubs tend to organise holidays. They make block bookings and the whole club goes away at the same time, and 30 or 40 elderly people at a time find that they have no vote. Many of them were very upset about it.

Equally, the registration of voters in the general election was not good enough. Far too many people who should have been on the register were not, especially in many of the socially deprived areas in my constituency. I believe that the middle-class, middle-aged ladies who are employed to do the register take one look at some of the closes in my constituency and say, "No way am I going to check that out. I'll do it from the last register." They do not bother to knock on doors. That is not good enough.

The real reform required is that we have to appreciate the fact that political parties exist in this country, and to recognise that it is political parties that fight elections. It is no longer enough to limit expenditure by the candidate in each constituency. We now have to look at the expenditure of political parties nationally as well as in each individual constituency. If we start doing that, as the Americans have done, the Conservative party will find itself in dire trouble at the next election and the one after that. The enormous sums that the Conservatives spend on their campaigns represent one of the reasons for their victory.

The difference in democracy is a very important question. The Government, with their large majority in the House, will have to take account of differences in the way in which democracy operates and the way in which democracy must be construed. First of all, there is the local government level. At the last two local elections, both held since 1979, the people of Strathclyde and Glasgow overwhelmingly rejected the Tory Government. In the general election on 9 June, the people of Glasgow and Strathclyde overwhelmingly rejected this Government again.

I may be one of the few Opposition Members who can say that absolutely straight. All the press pundits said that my seat would be taken by the Tories with a majority of 1,700. I won it with a majority of 4,200. Throughout their campaign, the Conservatives expected to win the seat. The press agreed with them. However, the Conservative party now holds not one seat in Glasgow. It came a dismal third in the one seat which it used to hold. In others, Conservative candidates came close to losing their deposits.

The people of Glasgow have rejected the Conservative party, yet the Conservative Government intend to continue with a policy of taking away from Glasgow £ 10 million of the money that it gets from rates. The Secretary of State for Scotland already has the power emended to England and Wales in the Gracious Speech, and he is insisting that Glasgow district council should cut its rates in order to give back to the average ratepayer rather less than £ 1 a week. But Glasgow district council will be unable to spend £ 10 million, as a result of which large numbers of jobs will disappear from Glasgow. Direct works departments and private building companies will be equally affected, because Conservative Members do not seem to appreciate the relationship between public expenditure and jobs in private enterprise.

If the Government say that they have a mandate to carry out their policies, they must appreciate that other organisations within our democratic system also have a mandate. The Glasgow district council was elected on an enormous mandate by the people of Glasgow to carry out local government there. Strathclyde regional council also received a massive mandate to carry out the wishes of the people of Strathclyde. The Government must recognise that there is more than one level of democracy in our society. There is local democracy and the Government must respect the wishes of local people. They cannot ride roughshod over them as they have already done in Scotland and, according to the Gracious Speech, now intend to do in England and Wales.

The people of Glasgow will again reject the Government if they carry out such policies. There will be an upsurge of feeling against the Government and, unfortunately but much more importantly, against local democracy. It will become more difficult to persuade people to stand as local government candidates. They will ask, "What is the purpose, when we increasingly have less and less power?"

The Conservative Government of 1979 were elected on a manifesto promise to return freedom to local government, but that has now been rejected. The people are becoming cynical. It is not just the people of Strathclyde and Glasgow who are becoming increasingly concerned at what is happening to democracy, because, as my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has said, the same is true of the people of Scotland.

Two things frightened me during the election campaign. The first was that in working class areas such as the large housing estate of Castlemilk, violence was threatened against the person of the Prime Minister. A man stopped me in the street and asked, "When will you get that woman up to Castlemilk?" I said, ''Surely you do not want her up here," and he replied, "Oh yes I do. I want to kick her." It was not a joke. Had it been, I would have laughed with him. But that sort of violence against the person of the Prime Minister was frightening. As a democrat I do not like it, and in no way am I saying that it is right, yet that is how many people in Scotland, particularly the unemployed and socially deprived, feel about the Government.

The second frightening thing has been the remarks that I have heard since the election. People in my Labour club and on the streets have told me, "The English have let us down. They have voted that lot in again. What are you going to do about it?" That worries me, because there is a growing feeling of frustration among the Scottish people who, year in, year out, have voted for a Labour Government.

My hon. Friend the Member for Linlithgow (Mr. Dalyell) may not agree, but in 1978 the majority of the Scottish people voted for a Scottish assembly. That should have led to the establishment of such an assembly. The people of Scotland are becoming increasingly frustrated because their electoral wishes do not count. Within this House, and within the United Kingdom, Scotland is given an entity of its own. I know that some of my colleagues will say that they did as well in the north, Wales and elsewhere, but Scotland is given a special entity within our constitution. That must be taken into account.

The House passes separate legislation for Scotland. When such legislation is being passed, it is wrong that the majority party in Scotland is defeated every time. The Scottish people are rightly looking for a Scottish assembly that will allow the affairs currently handled by the Secretary of State for Scotland to be undertaken by an elected Scottish assembly.

Under our system, once a month Scottish Members question the Secretary of State for Scotland about a whole range of subjects. That does not allow for sufficient democratic control over the Secretary of State. Ninety-five per cent. of civil servants who work for the Scottish Office work in Edinburgh, and not in London as is the case for most other Departments. We must have more democratic control. There was a time when many Conservative Members recognised that fact. My predecessor in my constituency, now the hon. Member for Southend, East (Mr. Taylor), who is now a violent opponent of devolution, in his 1974 election address said that he believed in the establishment of a Scottish assembly with tax-raising powers. Other Conservative Members, on both the Back Benches and the Front Bench, agreed with him.

If the Government really believe in a democratic system that does not allow the large majority to railroad the issues through, they must take account of mandates at local level, especially at the Scottish level where there is a separate Scottish entity. I urge the Government, for the sake of what could happen in Scotland, to think carefully about setting up a Scottish assembly rather than leaving it to the next Labour Government in 1988.

8.28 pm

Mr. Nicholas Lyell (Mid-Bedfordshire)

The hon. Member for Glasgow, Cathcart (Mr. Maxton) spoke about majorities and rejection. I hope that he will not take it too hard if I say that it was made clear in the election that the overwhelming majority of people rejected the Labour party and its policies. At the same time, the Conservative party won a great victory on the true issues of the economy, jobs and defence. It is a heartening fact that the Gracious Speech should so closely reflect those issues and that it should have at its heart the linchpin of our election platform, which was that this country should have a sound economy, based on careful control of spending and borrowing to keep down interest rates, which will be of crucial importance when there is pressure on the pound as the world economy picks up. That sound economy, coupled with restoration of our international competitiveness, will provide the only sound basis for the creation of new and secure jobs, both for the 85 per cent. of our population who are in work — that is as high a percentage of the population as in West Germany— and for those who suffer the deep hardships of unemployment and are unsuccessfully seeking work.

There is no shortage of overall demand, but there is a major problem in ensuring that British goods and services fulfil that demand both at home and abroad. The Government's prime objective is to raise that proportion, and I believe that it is succeeding. It was backed by the electorate because it is succeeding.

The election was won, secondly and equally importantly, on the issue of sound defence. I am delighted to see that the Gracious Speech mentions not just the maintenance of strong defence, conventional and nuclear, but also a clear determination to negotiate from strength for balanced and verifiable reductions in nuclear and conventional weapons. I believe that, with the lead that has now been given also by the United States, if we pursue the matter vigorously there is a genuine prospect of some success which will benefit the whole world.

The nation rejected the unbalanced policies of the Opposition parties generally, and the Labour party in particular. To those Opposition parties which complain about the system or seek to change the rules I point out that they succeeded neither in the south against the Conservatives nor in the north against the Labour party in persuading constituents to support their opinions. We should be careful before we go too quickly along an alternate road.

I speak for the first time on behalf of Mid-Bedfordshire, which I am proud to represent. It is proper that first I should pay tribute to my predecessor, Stephen Hastings, who will be remembered on both sides of the House for his warmth and clarity of vision. If there is one thing I seek as his inheritor, it is a double portion of his spirit in his courage in speaking out against what he believed was wrong and in favour of what he knew to be right.

Mid-Bedfordshire is a large constituency of wonderful variety. It covers about 500 square miles to the south of Bedford and takes in Kempston. It is well-known for its agriculture, horticulture and glasshouse areas. It is one of the heartlands of the British building industry. It has the London Brick Company which bases its success on the Bedfordshire clays which contain 85 per cent. of the natural fuel necessary to bake and create brick. There are other great companies, such as the Potton Timber company which is at the forefront of advanced house building providing a much higher standard of accommodation at a lower cost for so many people.

The constituency also has a great haulage tradition which is coupled with building. It has great defence and high technology industries of which Hunting Engineering must be the leader. All over the constituency, including the Stotfold and Arlesey areas, there are scores, if not hundreds, of independent small businesses of the kind that it is the Government's policy to sustain and which I believe was one of the reasons why we received such overwhelming endorsement in the election.

I shall deal with the constituency's special needs— first roads, a subject which sometimes bores hon. Members, but they have only to glance at the map to see why they are so important in Mid-Bedfordshire. The constituency lies between the MI and the Al. The east-west heavy lorry traffic crosses backwards and forwards from the M1 to the Al. The Ampthill-Maulden bypass is being constructed. It will be a blessing when it comes. But it will serve only to emphasise the need to continue that bypass away from towns so that Shefford, Clifton, Henlow, Stotfold and Arlesey can be spared the terrors and problems of having heavy lorries nose to tail even at the less busy times of the day.

The Government will, we are told in the Gracious Speech, pursue policies to sustain our agriculture, food and fishing industries. There is no more efficient industry than agriculture, but you, Mr. Deputy Speaker, will know from your agricultural experience that horticulture and the vegetable growers of Britain are having a hard time. There is no better soil than that of Bedfordshire and it will be one of the duties of the new Minister of Agriculture to make sure that we create policies which result in British vegetables being consumed in a higher proportion. We must overcome the unfairness which still persists, despite the efforts of the previous Minister of Agriculture, in the glasshouse industry, where average costs per acre are said to be, and I believe are, about £ 6,000 per annum per acre more than in Holland; and the Dutch are our principal competitors.

Many of my constituents depend on the housebuilding and general building industries. As the economy revives — and I am confident that it is reviving under the sound economic management of this Government— I hope that sufficient funding will be available for an increase in housebuilding. In particular there should be an increase in building for special needs for the elderly in the areas in which they live, and I am sure that will be echoed in all parts of the House. A civilised society should not pluck old people from their dwellings and place them in homes far from their families. The process of building small, bungalow-type dwellings for the elderly in the villages and towns where they have lived their lives should be encouraged apace.

Mr. Maxton

I find that astonishing coming from a Member of a Government who have cut home helps and who, by cutting old people's homes, have forced old people into hospitals. In Scotland, particularly in Glasgow, they have cut sheltered housing for the elderly.

Mr. Lyell

The hon. Gentleman was obviously not paying his usual attention. One cannot build anything until one has the money to pay for it. I presaged my remarks by saying that as the economy came round, and under sound economic management, there would be money to do what the Government whom he supported before he was elected to this House failed to do between 1974 and 1979.

I come to a few wider issues relating to the Gracious Speech and to the areas covered by the Secretary of State for Employment and the new Home Secretary, whom I welcome because that is an area of interest in which I have played a part, having sat, I think, on every major law and order measure since I was elected in 1979. Unemployment was a major subject during the election. Because the country recognises that the sound foundations on which we are building represent the only long-term solution, we have been re-elected.

Nevertheless, there are intermediate problems, which is why I strongly support the community programmme, which provides money to do sensible things that must be done in the community and makes use of those who are able to do them. However, the way we spend the money that is available— running into hundreds of millions of pounds— must be watched carefully, and I hope that my right hon. Friend will keep a close eye on the area manpower boards to see that, in our haste to do something to solve the problem, we do not approve schemes which are foolish, for we shall soon require the money which might otherwise be squandered on ill-advised schemes. I hope that we shall be able to get a sensible basis for the community programme and then broaden it.

I refer next to the youth training scheme. One would have to be a doctrinaire opponent in any part of the House not to welcome the Government's initiative. We must consolidate the measures that we have taken and make sure that the training scheme comes in in an effective manner and that the training content is sufficient in length and well up to standard in quality. If extra moneys are needed, I would take them from other places to ensure the high standard of that training scheme. It is important that the young people who undergo it should finish the year's training and work experience feeling that they have gained something that will help them in the future. There is every reason to think that they can. We must not penny-pinch in our efforts to ensure that it is achieved.

I am a tremendous supporter of the voluntary sector and voluntary effort. Bedfordshire has one of the most active and effective pre-school play group associations in the country, helping thousands of children up to the age of five. We must be careful in some areas of the voluntary sector not to degrade it by seeking to push it too fast to fill the gap of unemployment. In principle, I strongly support efforts to expand it, but I urge caution in practice or we shall build up an ersatz social service, with people in paid positions who are not committed to it. I say that as a warning. I do not wish to denigrate the many good people who are coming into it, but there is a danger that when one tries to enlarge something too quickly and not carefully enough, one can make mistakes.

I welcome my right hon. and learned Friend the new Home Secretary. I greatly respected his predecessor, but it is excellent to have a Home Secretary who is young and has still to further his career, which is already so successful. There are great problems. The Department is massive and needs a tough, vigorous and lively hand.

Prison overcrowding is a serious matter. We have started the largest prison building programme this century, but the problem of delays in bringing people to trial and prison overcrowding must be solved. Vie must consolidate the achievements of the Criminal Justice Act 1982. I sat on the Committee on that Bill. Those achievements are not understood by the country at large, when people make complaints and criticisms about law and order. The Criminal Justice Act gives to the courts the widest and most intelligent range of penalties that they have ever had, which are severe and enlightened as necessary. Sometimes one can achieve both at the same time. We should insist on a rigorous, effective and well-trained probation service, give it the proper tools, and merge it in with the duties of the local social services and with bodies— the names of which are always euphemisms— such as "community homes", "community homes with education" and so on, where young people are all too often locked up to little good effect. We should use that money more sensibly, having rigorous penalties and suing that people, particularly young people who have gone on to the wrong track, are steered firmly back by a committed, well-funded and well-directed probation service. In this way we shall make much more progress than through other more simplistic methods that some people suggest.

Civil defence gravely needs to be modernised. I hope that our large majority will help the doctrinaire opponents of civil defence to take a more enlightened view. Civil and home defence are about defence and nothing more. They are for humanitarian reasons. It is important that we find a way of involving a higher percentage of our population as a matter of course, and without militaristic notions, in the long-term defence of our country. Every other country in Europe achieves that. A home and civil defence obligation is standard in most other countries. I do not suggest that we should go beyond the voluntary system. My right hon. and learned Friend the Home Secretary should tackle that problem in earnest so that our overall defence posture, which was enhanced by the previous Government, will be further enhanced on a sound foundation.

I am glad to see that the Gracious Speech refers to family law reform. I hope that that will mean that there will be some changes in the divorce law so that a person's obligation, be he male or female — although women usually come in for the stick on this matter — is to support himself if possible. Grave injustices would result if deserted wives were not properly looked after when they have children or for some other reason are unable to earn. But the present imbalance should be corrected so that the earning capacity of a woman who has been divorced is taken more fully into account than it is today.

I endorse what my hon. Friends have been saying about the need for postal votes for holidaymakers. I was sure that all hon. Members would be convinced by the election campaign that to be unable to get a postal vote whilst on holiday is absolute nonsense. I hope that an opportunity will be found for electoral reform that will enable that nonsense to be corrected.

As to the rating system — I was pleased to see a catch-all provision to allow some further measures beyond those specifically mentioned in the Conservative party manifesto— I hope that a method will be found to help the widow or widower who is hard-pressed by rates when he or she continues to live in the house in which the children were brought up. Although hon. Members are aware that a great deal of local authority expenditure comes from the rate support grant— although we may argue about its size— this is an injustice that should be corrected. I believe that the country expects the House to do so.

The Government should be applauded — the hon. Member for Cathcart with his wide knowledge would applaud the Government— for expanding the National Health Service as much as they have done in difficult times. The hon. Member for Carlisle (Mr. Lewis) will have a better chance for his hospital as a result. But over-costly administration exists as to small details. The details of Government are often as important as the overall policies and this needs to be corrected.

One of my constituency's proudest sons is John Bunyan. In his younger days, he was said to have had an over-harsh puritan approach. But he mellowed and in Pilgrim's Progress, much of whose topography including the House Beautiful is to be found in mid-Bedfordshire, he produced a vision of the celestial city and man' s route towards it which was an inspiration for centuries after his death. I hope that I shall not be thought to have strayed too far in my analogy in saying that the return to sound foundations, sometimes thought harsh, which were the subject of this election, and which are embodied in the Gracious Speech, offers real hope to the country and shows the reason why the Conservative party was elected with such a majority. I believe that they will give the country an opportunity to pull itself in the long-term out of the slough into which it slipped in earlier years.

8.49 pm

Mr. Tom Cox (Tooting)

The Gracious Speech covers many issues, but I shall mention only three. It states that the Government intend to pursue policies designed to increase economic prosperity and to reduce unemployment. If that happens, it will be warmly welcomed in the part of south London that I represent, because it has many problems. There is a lack of industry, employment and leisure amenities. In April this year, the borough of Wandsworth had more than 15,000 people out of work, and at the local jobcentres there were only 315 vacancies. I have no doubt that the position has worsened since April. Among those 15,000 unemployed are people of all ages — young school leavers, those who left school two or three years ago and the middle-aged.

Although I have the greatest sympathy for youngsters who cannot find work, I am also deeply concerned about those, invariably men, in their late forties and early fifties who have never been out of work in their lives, but who, for whatever reason, have been made redundant. They still have commitments. Many will have bought their homes, and some may still be responsible for youngsters at school. However much effort they put in to finding employment, it simply is not there.

When one meets those people one can see the real despair with which they live. I have listened to many of the speeches in the House today from Conservative Members, who all talk about the great revival that is due to come. We heard about that many times in the previous Parliament. If that revival comes soon and starts to show the fruits of success, the people in my area will be thankful.

The inner cities suffer from all the deprivations. I speak as a London Member, but I am sure that my remarks apply equally to other parts of Britain. Unless we start to see some hope in the inner cities, we run the real risk of civil unrest the like of which has never been seen. It is easy enough for hon. Members who are not over-familiar with London to travel to all parts of London, and I suggest that they do so. They should talk especially to the youngsters, and they will soon hear, and I hope begin to understand, the real bitterness felt by youngsters about the lack of job opportunities. Our large cities need employment and amenities. If there are no amenities where the unemployed can pass the endless hours of leisure, it creates problems for individuals and for their families. The choice is simple — we either face up to the needs of the city or we pay the price of continuing neglect.

My constituency houses Wandsworth prison, and we occasionally discuss prisons in the House. Unfortunately, whatever comments and suggestions are made by hon. Members on each side of the House— this is not a party issue; many Conservative Members are committed to penal reform— very little is ever done.

When I hear that the Government are planning to build new prisons, I have to say that it is meaningless in terms of tackling the real problems within our penal institutions. However many more prisons are built, no one can doubt that we have the judges and magistrates to fill them as quickly as they possibly can. Although I think the previous Home Secretary was committed to penal reform, I do not believe that he ever gave it the priority that it should have had.

We need to reduce the numbers of people in our prisons and improve the facilities. In visiting penal establishments, one soon becomes aware of the lack of work opportunities. Men are locked up in their cells hour after hour and day after day. There is a grave lack of educational facilities. Any prison governor will agree that it is because of the good behaviour of the vast majority of people serving sentences in our prisons that there are not more disturbances taking place within them.

In the last few weeks there have been disorders on the Isle of Wight and in Wormwood Scrubs. The new Home Secretary comes to his position having served in the Home Office at the start of the previous Conservative Government, so he cannot be unaware of the problems that exist in our prisons. He must tackle at once the task of overcoming those problems. If he does not work closely with the governors and with the Prison Officers' Association, he will build up troubles for himself such as we have never witnessed in Britain before.

I am concerned about improving the conditions and amenities of prisoners but it is also time that the Home Office showed far greater concern for prison officers and their families. There is much that I could say on that subject but I will make only one or two comments. When I meet prison officers and their families, they complain bitterly about the delay in getting even the most basic repairs carried out in their accommodation. Little things such as that help to build up the bitterness that officers and their families often feel towards the Home Office. It must be remembered that they are doing one of the most difficult jobs that anyone could be called upon to do.

I hope that the Under-Secretary of State for the Environment, who is on the Government Front Bench, will make some note of my comments. I speak as a Member representing a prison constituency, so I have some idea of the scale of the problems involved. The Government must face them now before trouble overtakes them on a scale which as not been seen previously.

I should like now to mention a different subject— Cyprus. The ninth anniversary of the invasion of Cyprus by the Turkish army will be on 20 July. The Turkish army is still occupying the northern area of Cyprus.

Many thousands of Greek Cypriots who were forced out of their homes in the north of the island are still unable to return because of the presence of the Turkish army. I have often spoken in the House about the problems facing Cyprus. We tend to forget that it is a member of the Commonwealth and that Britain is one of the three guarantor powers of Cyprus. Turkey and Greece are the others. The Government have not taken an initiative to give a lead on the problems of Cyprus. Greek Cypriots point out to me the difference between the Prime Minister's actions over the Falkland Islands and the Government's lack of action over Cyprus.

The intercommunal talks have gone on for years, but no one now has any confidence in them. It is time for our Government to take a new initiative on the basis of the resolutions passed by the United Nations. It is time for the Government to stop standing on the sidelines saying, "We are concerned. We realise the problems, but let us see what progress is made in the intercommunal talks." The talks are making no progress and no one who knows anything about Cyprus has any confidence in those talks.

The President of Cyprus was due to make an official visit to this country on 17 May. His visit was postponed because of the general election. Will that invitation be reissued? There is an urgent need for the President and the Prime Minister to talk about initiatives that our Government can take.

This country faces many problems and there is certainly an abundance of them in my constituency. We heard the promises and commitments made by the Conservatives in the election campaign. Areas like mine throughout the country want to see action on the Government's promises to bring a return of employment and prosperity. We are watching and waiting for prosperity to reach us. If it does not, there will be the gravest civil unrest that we have seen in our history. Whatever our political views, none of us wants to see that. If we are to avoid it, we must have the constructive action that only the Government can take in areas that are crying out for help.

9.5 pm

Sir Anthony Meyer (Clwyd, North-West)

I shall refer to the matter raised by the hon. Member for Tooting (Mr. Cox) of inner city disorders, but I begin by expressing my pleasure at the fact that my hon. Friend the Member for Ealing, North (Mr. Greenway) and my hon. and learned Friend the Member for Mid-Bedforclshire (Mr. Lyell) raised the matter of holiday voting, which was mentioned to me many times during the election. I was particularly glad to see Labour Members nodding assent. Perhaps it means that this can now be a matter for an all-party approach. Some years ago I introduced a private Member's Bill to provide for holiday voting. I was speaking from the Opposition Benches, and my Bill was talked out by the then Labour Government. It would probably have been talked out by a Conservative Government at that time. However, the time is ripe for making this change, which is long overdue, particularly if we are to continue having elections in June, which is good for the suntan.

I speak for the first time as the Member for Clwyd, North-West. I pay a tribute to Geraint Morgan, who was the former Member for half the constituency that now forms Clwyd, North-West. He was well known throughout Wales for his deep knowledge of Welsh matters and his great legal experience.

The Government have won an overwhelming victory and have done so because the Labour party has ceased to be credible and the alliance has not yet become credible, and also because of the resolute leadership of my right hon. Friend the Prime Minister. The election showed, very obviously to me, that the scourge of unemployment is a major vote loser only if the electors believe that there is a better or quicker answer than the Government's chosen policy of containing inflation and forcing British industry and services to become competitive.

I am sure that hon. Members on both sides of the House must have been as startled as I was to canvass young unemployed voters with little prospect of real employment in the near future and find that they intended to vote Conservative. I deduce from that that in electoral terms the Government have five years in which to find an answer. There is no certainty that even after five years the Labour party will have recovered its credibility, or the alliance its. The alliance will win many by-elections and many seats in elections for the European Parliament, but that is not the same as winning a general election.

The Government have five years in electoral terms to find some answer, and perhaps longer, but they do not have anything like five years in social terms. Persistence of youth unemployment or youth under-employment is heating up an explosive mixture that may cause some nasty explosions in some of our big cities. It may even do so in some of our not-so-big cities, although we have tended to see this as purely a big city phenomenon. It may happen in smaller places as well.

These explosions will not cause the downfall of the Government, but for those who believe as passionately as I do that we depend upon one another, both within this country and beyond its frontiers, they are a portent that we are getting something wrong. We cannot hold out the prospect of real work to all those who want to work, but we must at the very least succeed in conveying the impression that we know where we are going and that there is real hope somewhere.

Technological change and the loss of British competitiveness in so many acitivities, despite the giant strides towards efficiency that have been made in the past four years, mean that the days of full industrial employment are gone for ever. That kind of full employment will never come back. To hang on to the tattered shreds of it, as the Government are doing in obliging the British Steel Corporation to retain steelmaking at Ravenscraig, is to make matters much worse, and not only in the very long run. Using taxpayers' money to keep jobs in badly sited steelworks, uneconomic pits or uncompetitive shipyards merely diminishes the ability of the efficient part of British industry to survive, by imposing heavier tax burdens on it.

I believe that we need to look carefully at the cost per job in these basic industries and to treat with some— though perhaps not with complete — scepticism the argument about the need on strategic grounds to maintain a large steelmaking capacity or a large coalmining capacity or a major shipbuilding industry. Defence requirements oblige us to maintain some capacity, but at the same time probably not at the level which is generally regarded as being axiomatic.

From this it follows that there will be many more job losses, not only in heavy industries, but probably throughout the whole range of manufacturing industry. Anyone who has visited even the most efficient factory in his constituency must have been struck by the extent to which it will still be possible to replace even the present reduced work force by robots.

What is to happen to all the people who have been working in these industries? Clearly there is room for a substantial expansion in services. As spokesman for a tourist area, I should like to see some of the money now being pumped into steel and shipbuilding going into tourism and leisure instead. It is possible to build a car, and soon it will be possible to build a ship, with robots, but a meal cannot be cooked or served by one, though it sometimes tastes like that in our motorway restaurants.

All this will be very acceptable to my right hon. and hon. Friends on the Treasury Bench, but I go much further, because I believe that there is scope for a very large expansion of employment in the public services, in health, teaching, social work and so on. I hope it will not be thought that I am against privatisation— far from it. I am strongly in favour of privatisation. I want to see, above all, a vast expansion of the facilities available to the public and an expansion of employment in those services, whether wholly or partly public or private.

Then there is the need to move a great deal faster and more systematically towards a shorter working day, a shorter working week and a shorter working life. This is a recipe for national bankruptcy, of course, while the unions retain their power to force wages steadily ever upwards. That is why I welcome so warmly the Government's policies for forcing the unions to behave like any other body subject to the law, including the law against monopolies.

But if we are to build a socially cohesive society in which each of us has a stake, there has to be a change of outlook among some members of my own party. We are moving towards a situation in which work will become a privilege and perhaps a fairly rare one. It seems to me unacceptable that those who are fortunate enough to have the satisfaction and the pride of full-time employment should be incited to resentment at having to contribute through the taxation of their earnings towards the payment of pensions that will enable people to retire early on a kind of decent standard of living that is common throughout the European Community.

I must say in parenthesis that I am far from happy about the idea of using the exceptionally low inflation figure which came up at the end of May as the basis for an uprating in the month of November. But whatever we do, increasing pensions to a decent level will be enormously expensive, and we need to provide much more resources for the education and training of those waiting to join the labour force.

We cannot afford to fall back on the increases in child benefit, which are the most effective way of averting poverty among families with small children, which is where poverty is most prevalent. I, for one, hope that we shall not renege on our modest contribution towards world development. If this Government are to be the Government of the whole nation, which is what I worked for during the last election, they must hold out real hope of specific attainable targets, not just for the fortunate and successful, but for all our people.

I comment briefly on the European Community. The election has settled the argument. There is now no need for Ministers to prove that a Conservative Government can be more beastly with our EC partners than any Labour Government have ever been. The question of membership has been settled. We stay in and we want it to work. If we want it to work, it has to evolve effective methods of reaching decisions. I do not believe that reaching every decision by going to and over the brink at every summit meeting amounts to an effective method of decision taking. Im my view, we probably have to accept the need for more co-operation in due course for a larger budget of own resources. Above all, we want more common policies within the EC, because many of these policies will confer far greater benefits on the United Kingdom than the sole existing working policy, the common agricultural policy.

I hope that the Government of my party will take a lead in an endeavour to make the EC more effective than it has been. At the time when we joined the Community, the phrase "the whole is greater than the sum of its parts" was very common. We seem to have lost sight of that phrase altogether.

9.15 pm

Mr. Tom Arnold (Hazel Grove)

I begin by congratulating you, Mr. Speaker, on your election, and by saying that it brought much pleasure to many people in this House. We are all looking forward to your stewardship.

Like my hon. Friends who have spoken before me, I have suffered a boundary change. I use the word "suffered" because the Hazel Grove constituency is now markedly different from what it was a few weeks ago. I want to say that I shall do my best to represent the interests of all the constituents who are coming into the Hazel Grove constituency for the first time, although I regret very much that the shortness of the election campaign has not so far enabled me to get to know them as well as I should have liked. I want to add my thanks to all the people of the two Bramhall wards in particular, which have now been moved into the new Cheadle constituency, and say how much I valued their support and how much I enjoyed the work that we have done together over the years.

Boundary changes for Members of Parliament are a significant factor in our lives. When I consider some of the remarks that were made by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) earlier this afternoon about the need for electoral reform and for a reformed House of Commons, repeating a theme that is common in all election campaigns of Liberal candidates, I cannot but reflect that it is not the kind of House of Commons that I would want and it does not represent the kind of campaign that I would support.

I should like my constituents to know that here and now on the opening day of this Parliament, because, like many other hon. Members, I have received a number of letters advocating electoral change, electoral reform, and the introduction of some system of proportional representation. This is not a new development. This is my third Parliament, and after every general election I have received such letters. It remains to be seen whether on this occasion I shall receive any more letters than I did on the last occasion.

However, I want my constituents to know exactly where I stand, because this argument will not go away. Many of the arguments that were advanced by the right hon. Gentleman earlier today, and that have been advanced by the right hon. Member for Plymouth, Devonport (Dr. Owen), will be repeated, and I think that they need to be dealt with. I am therefore delighted that the Queen's Speech does not contain any promise of electoral reform which involves proportional representation, and I look forward to representing Hazel Grove in this Parliament on the basis on which historically we have elected Members.

The idea that mechanical constitutional devices can of themselves produce political stability is not one that I accept. The right hon. Member for Devonport has repeatedly said of late, together with a number of his hon. Friends, that they believe that the economic decline of our country, the problems that we faced over the years, are all problems that can be helped, even when they cannot be solved, by bringing about a measure of electoral reform. I simply do not believe that it is that easy. Alas, I fear that all too often the arguments that we hear in favour of proportional representation are nothing more than the arguments of the disappointed. It is true that a general election is a test of opinion. Of course it is, but it is not an opinion poll. The purpose of a general election, as I have always understood it, is to elect a Government. That is what the people of our country did on 9 June, and I am glad that that is so, because I remember the example of February-March 1974. From my point of view as a candidate who worked as hard as all candidates do during general elections, but on that occasion was defeated, I am bound to say that the sight of the then Conservative Government engaging in negotiations with the Liberal party was not a pleasant one. Yet that is apparently the route which the Liberal and Social Democratic parties would like Britain to go down. When I think of what happened during the February-March negotiations, I cannot help but reflect that such a position would be repeated time and again were we to move towards a system of proportional representation.

In the Hazel Grove constituency, like hon. Members in all other constituencies, I campaigned for what I believe in. Why should the electorate have any faith in what I or any other hon. Member says if, in campaigning on particular policies, the candidate and the electorate know full well in advance that there probably will not be the slightest chance of his party forming a Government? After the election there will be a series of negotiations between party leaders in smoke-filled rooms to which the public will not in any way be a party and of which it cannot possibly know the result in advance. Such manoeuvring and bargaining is supposed to bring about stability. On the contrary, it could be a recipe for instability; a recipe not for strong but for weak government. Therefore, I am opposed to it.

It is often said that some of the systems which are in use on the continent could, without much difficulty, be adapted to the circumstances in Britain. Again, I do not believe that argument. Obviously, difficult matters of judgment are involved, but the direct relationship which exists between the individual Member and his constituency in our system is valuable and has given the House of Commons much of its unique character and spirit. Again, for those reasons, I oppose any move towards the introduction of a system of proportional representation.

It is important to make this argument today because there will be a concerted attempt by the Liberal and Social Democratic parties, as they made clear earlier this afternoon, to suggest to the country that the present Conservative Government are not a legitimate one. That is what is being said in the constituencies now as a result of the Conservative landslide. That argument must be hit on the head firmly. I regret that there is no Liberal Member present at the moment. This is an argument that I would like to see refuted during the months and years ahead.

I was not without some doubts during the election campaign about the result in the new Hazel Grove constituency. The Liberals did extremely well in the local government elections on 5 May on the revised boundaries. However, my supporters and I worked hard. We put forward our policies to the electorate and campaigned for the return of a majority Conservative Government with specific policies in mind. I was fortunate enough to be elected on that basis. I did not begrudge Lord Winstanley's election as Member for Hazel Grove when he defeated me in February 1974. The way in which we conduct our electoral campaigns is the best way for Britain and one which the majority, when it comes down to it; will continue to regard as legitimate. Provided that we put forward the arguments clearly and sensibly during the lifetime of this Parliament, we shall not find at the next general election, as the Liberal and Social Democratic parties maintain, that there will be a great surge of popularity for changing a system which has stood our country and the House of Commons in good stead for a long time.

I welcome the Queen's Speech because it sets out a programme, particularly in the opening paragraph, for the lifetime of this Parliament. There is a great deal of work to be done and I am comforted by the knowledge that the Government are supported by a majority of Members of Parliament who have campaigned on the Conservative party's election manifesto with a clear view about what it is that the Government intend to do. I am delighted that the Government have come to office on the basis of a firstpast-the-post electoral system and have not been cobbled together in some kind of post-election negotiation or manoeuvring which would be the almost inevitable result of a system of proportional representation.

9.25 pm

Mr. Derek Foster (Bishop Auckland)

I am delighted to follow the hon. Member for Hazel Grove (Mr. Arnold). He is a powerful advocate of the present electoral system. However, as it is clear to us all that there will be no move to electoral reform under this Government, there is no great point in taking up the arguments so ably developed by the hon. Gentleman.

I shall address myself to the substance— or, in the case of the north of England, the lack of substance— of the Gracious Speech. Some reference has already been made today to the existence of two nations. It is depressingly obvious to many of us who represent northern constituencies that people on each side of the great divide have very different views. It is clear to many of us who come from the north that the Queen's Speech offers no hope whatsoever for our constituents, particularly those who are unemployed. I speak for a constituency where the level of unemployment is 20 per cent., where the level of male unemployment is much higher still, and where there are estates on which one man in three is out of work. On some other estates the level of male unemployment is even higher.

It is difficult for hon. Members representing southern constituencies to understand what that means. They cannot appreciate the deprivation on those estates where one man in three cannot get a job, where the wives are unemployed too and, very often, the teenage sons and daughters. One school leaver in two cannot get a job at the moment, and four out of 10 of the unemployed are under the age of 25. That is a terrible waste of a generation.

I do not suppose that there is any disagreement among us about the dreadful nature of that waste. The great divide is about how we should deal with it. In the south-east of England, and perhaps in the whole of the south. there is still some confidence that the policies pursued by the Government during the past four years have some remote possibility of working. However, in the north of England there is hardly a soul who thinks that the policies put forward in the Gracious Speech offer any hope of increasing employment.

Some people may look to small businesses for some hope for the future. It is well known that there are fewer small businesses in the north than in any other part of the United Kingdom. It is well known, too, that there are fewer small businesses in the United Kingdom than in almost any other country in Europe. When one investigates the small business loan guarantee scheme, one discovers that only a very small proportion has been taken up in the north-east of England. When one considers all the superficially impressive schemes for small businesses which the Government have put on the statute book, one finds that take-up in the north of England is very low.

It is no good saying to us in the north of England that we must look to the growth in small businesses for a major impact on the unemployment problem. We do not believe that it will happen. Of course small businesses have a contribution to make, but they will not have a serious effect on the one man in three on some estates in my constituency who cannot find a job.

We are also told to look to the service sector. The Prime Minister reminded us this afternoon that a smaller percentage of people are engaged in manufacturing industry in Japan than in the United Kingdom. She omitted to remind us that 37 per cent. of the over-18s in Japan are going on to higher education and that only 12 to 14 per cent. of that age group are doing so here. She omitted to tell us that the Japanese are training 10 times more graduate engineers than we are. She omitted to remind us that while the Japanese are forging ahead in educating and training their already highly educated and trained population, we are cutting back on higher education. We have also cut back on training, notwithstanding the youth training scheme and all the hopes that the Government invest in that direction. We have severely cut back on apprenticeships and the conventional training that took place up to 1979.

There is some argument in support of a burgeoning service sector in this country. I should welcome that, but we should consider where that sector is most likely to grow. The north of England has a population of 3 million, but within 20 miles of the metropolis — the natural catchment area of London—there is a population of 20 million. As a result, the growth of the service sector will inevitably be drawn to the metropolis.

Some crumbs may spill over to some of the new towns within 60 or 80 miles of the metropolis, and some may even spill over to the metropolis of Scotland, but there will be very little indeed for the north of England. We may be invited to look to the service sector for a vast increase in jobs, but I do not believe that that will occur in the north of England.

We must, of course, welcome advanced technology and apply it as quickly as possible if we are to remain competitive. That much is obvious. But, once again, the north of England is not to the fore in the race for jobs in new technology. The belt linking London, Reading and Bristol seems to be the most natural home for all the Government agencies. In many cases, public expenditure has been the spur to jobs in new technology in that belt between London and Bristol. Nothing like that exists in the north of England. If we allow jobs in new technology to be dictated by the market, the regions of the north of England can have no hope of attracting their fair share, or more than their fair share, of such jobs if ever they are to match the prosperity that other regions enjoy. We cannot look to that avenue for jobs.

It is perfectly obvious to hon. Members representing the north-west, Merseyside, the north-east and the traditional areas of high unemployment that if we rely completely on market forces we abandon large sections of the country. Areas that traditionally depend on heavy and manufacturing industries will be completely abandoned. We can find no hope and no future in the Gracious Speech for our people. That is not at all appreciated by many hon. Members representing southern constituencies. Once again, our people will be left completely defenceless against ruthless and brutal economic and technological forces.

The Prime Minister says that we must make change work for us. That is a sensible stratagem to employ. The areas that I have described would dearly love to have change work for them, but our people resist change because they well know that for them it means losing their jobs, with no hope of obtaining others. Change for them means long-term unemployment and long-term poverty. The only way that they can retain their dignity and self-respect is to fight like tigers for existing jobs and to resist the change that the Prime Minister applauds.

If the Government give us no succour and no respite, and hold out no hope, how can they expect people to welcome the changes that they say are necessary and should be welcomed? That would be against human nature. If people were to welcome such change, they would be abandoning all those qualities of self-respect and self-reliance which the Prime Minister so often tells us we must encourage.

It is quite obvious to those who represent constituencies such as mine that we need a new economic and social order, that capitalism has nothing to offer to our constituencies and that the free market forces will always impose suffering and deprivation upon us. Those who represent inner-city areas know that only too well. We must look to a new, self-generating and self-sustaining community where people are no longer swept on one side as though they were of no consequence. We must make economic and technological forces work for the people, not against them. If they work for the people, the people will welcome and embrace change.

I wish to refer once more to Japan, as the Prime Minister referred to that country in her speech. If we had a lifelong employment philosophy in Britain, of course the British workers would embrace change and welcome technological developments. They would welcome them if, as in Japan, their employers could guarantee them a job. It would not have to be the same job, but one with a similar salary and protected conditions of service. We know that Japanese companies have as many growing sectors as declining sectors. It is therefore easy for Japanese companies to redeploy their work force from one sector to another. If we had such a humanitarian philosophy at the foundation of our economic system, the workers of Britain might embrace change.

The Government expect people to accept being swept to one side as though they were nothing. My constituents in Shildon have invested their lives in one industry—invested generations in it—but are being told that that commitment is of no significance. It is as though they held 5 per cent. shares in a company, which they sold tomorrow morning without a thought of what that involved. People have committed their lives; they have invested several generations in one industry. It is an insult to say that that is of no consequence. They must resist change until someone is prepared to recognise that commitment and invest in a marketing strategy that will use the workers' skills to produce the products in demand.

Of course no one expects industry to be sustained where markets have disappeared. We do not advocate that. We want entrepreneurs to believe in the workers and not simply to be in their businesses for a quick profit. We want them to recognise that other people are prepared to invest their lives in companies and industries. We want them to devote themselves to producing jobs for such people.

Let us have people who are committed to an area and who are prepared to devote their skills and talents not just to make a quick buck and pass on or to obtain a way of living that is so far beyond the imagination of the majority that it is an offence to the majority, but those who are prepared to invest in the people of an area and say, "We believe in you. We are going to work like tigers to produce jobs for you and all of us because we know that we can produce a united community in that way and a long-term future for you and your families." It will be no longer necessary for highly educated and trained young people to disappear from their home areas. That is not a recipe for social immobility. I do not advocate that. I advocate a system that would allow people to retain those fundamental values of family life and trust and belief in one another that the Prime Minister purports to advocate.

Many other issues arise from the Queen's Speech, but it is clear that there is no hope and no future for my constituents in it, which is dismally disappointing to those of us who represent northern constituencies.

9.41 pm

Sir Nicholas Bonsor (Upminster)

This is the first time I have had the opportunity to make a speech in the House as the representative of Upminster. It is therefore fitting that I should first pay tribute to my predecessor John Loveridge. It gives me the greatest pleasure to do so. I know that he was warmly liked and respected in the House and in the constituency. I have real reason to be grateful to him for the enormous assistance and guidance that he has given me since I took over the constituency a few weeks ago. I was lucky to obtain Upminster just in time for the election, and it will give me the greatest pleasure to represent it here.

Most hon. Members will know Upminster principally because it is at the end of the District line. It is the last station on the way out to Essex and it is an area in which people live who work outside the constituency. About two-thirds of the Upminster working population work outside the constituency, many of them in the city of London and the Ford works at Dagenham.

Upminster combines the London metropolis scene with the Essex countryside. Although I do not have as many farms in Upminster as I had in Nanteswich, I have a few, which makes me feel more at home than I should be in an entirely urban area.

I did not intend to intervene in this debate, because I have had the good fortune to draw the Adjournment debate. However, there are two subjects which I believe will be at the forefront of our political thought for the next five years or so—employment and the rising trend in crime. The latter will be the subject of my Adjournment debate, so I shall confine myself to employment.

The hon. Member for Bishop Auckland (Mr. Foster) made an impassioned and humane speech about the number of unemployed people, but he showed an incredible ignorance of the facts of economic life and appeared to think that the Government have it in their power to dictate and run every aspect of the economy and industry. We live in an internationally competitive world in which our products must be competitive for the home market and the export markets upon which we depend so heavily. It is therefore unrealistic to believe that we can continue to manufacture goods of the type for which there is no longer a demand in the world market or where we have to compete with people who produce such goods more cheaply.

Although the hon. Gentleman said that he had no intention of suggesting that we should continue with outmoded goods or manufacturing methods, that is not borne out by the attitude of the leadership of his party or the mining trade union leaders who insist so firmly that we should continue to try to mine the mined-out areas which no longer have adequate coal to enable them to be competitive or realistically priced. As the chairman of the National Coal Board said recently, that would be understandable—indeed, in many ways laudable—if the consequence of closing those pits was that those who worked in them would lose their livelihood. But in each case all those employed at those mines will be offered employment elsewhere under the NCB.

The hon. Member for Barnsley, West and Penistone (Mr. McKay), who is on the Opposition Front Bench, may laugh at that, but it is a fact, and deny it he dare not. The matter has been well publicised in the national press and in the statements of coal board leaders. I see that the hon. Gentleman is leaving the Front Bench for the Back Benches. I do not believe that he can challenge my statement that where pits are to be closed the men working in them will be offered alternative employment.

Mr. Allen McKay (Barnsley, West and Penistone)

I recall that a man named Schumacher had a brilliant idea for the coal board. He put collieries in categories A, B and C. The As were profitable, the Bs could be and the Cs would never be profitable. The understanding was that the men working in C collieries would go to Bs, which would then become profitable, which is what the hon. Gentleman is proclaiming. In the event, the men said no because the collieries to which it was proposed to send them were 240 miles away. When the hon. Gentleman talks about employment in the Coal Board he must bear that in mind. As I have been involved in the closure of 19 collieries for the NCB, I know what I am talking about.

Sir Nicholas Bonsor

I regret that the hon. Gentleman moved from the Front Bench to the Back Benches arid that I accidentally promoted him. He has illustrated that there is in the Labour party a blanket refusal to accept the economic facts of life. One cannot continue to run a pit from which the coal has expired. There comes a point when a decision must be taken before the coal has entirely disappeared, because at that point it becomes too expensive to run it.

I leave that topic and come to what I see as a small cloud on the horizon for the Government. I do not share the belief of my right hon. Friends that a return to profitability, competitiveness, a sound economy and low inflation, which they have magnificently achieved and which undoubtedly will continue in the coming years, will be adequate to maintain full employment. I am sorry to say that, but the fact is that because of changing technology, the large number of people in this country and the fact that manufacturing industry will no longer rely on the use of much manpower to run assembly lines but will go over to robotics and microcomputerised manufacturing programmes, it will not be possible, purely by relying on those forces, to obtain enough full-time jobs to solve the tragic problem of rising unemployment.

It is not the fault of this Government that the unemployment trend has continued. It has been going up since 1950 under Labour and Conservative Governments. It has not been the wish of any of those Governments that that rising trend should continue. It is an inevitable consequence of the changing pattern of life and changes in manufacturing, and that is only now becoming fully recognised and appreciated.

I shall not detain the House for long tonight, but I must put down a marker. I believe that there are a few areas where Government initiative could be taken but where it is not, so far as I am aware, currently planned. I shall simply list them now and hope that in the coming months and years I shall catch your eye, Mr. Speaker, and have an opportunity to expand on each and every one of them.

The first is the lowering of the retirement age. I disagree with the remarks of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer), in that I believe it essential that we lower it to 60. I appreciate the financial difficulties of doing that swiftly, but we should set in motion a programme by which that can be achieved over, say, 10 years.

Secondly, I hope that we shall look for ways in which part-time work can be brought into the acceptable scheme of things, so that people can do part-time work and have their wages topped up to acceptable levels by the state rather than lose their unemployment benefit. They would use their initiative and seek to use their time profitably and to the advantage of others. Coupled with that, there should be tax incentives for those who employ others to do construction work and so on on a private basis. That would help to bring out of the black economy and into the mainstream of our economic life the part-time work of which I speak.

We should extend the youth training scheme, both in length of time and in the efficacy of the way in which youths are trained so that we can take better advantage of that approach than has been possible so far. We should review the schools curriculum so that the children are trained to do jobs that will be available for them, and not wholly and purely on an academic basis. Finally, we must give greater incentives to the service sector, where jobs will be available. That should be all over the country, not just in the south-east. That is where the expansion of jobs is possible, whereas it will not be in the manufacturing industry.

I shall leave the House with the thought that if that is not done, and if no further initiatives are taken, the rising trend in unemployment will continue to wholly unacceptable levels. New initiatives must be taken to build upon the excellent base that the Government have achieved in the past four years.

9.51 pm

Mr. Eddie Loyden (Liverpool, Garston)

I feel inclined to begin my speech by saying, "As I was saying when I was so rudely interrupted." In 1979 I addressed the House on unemployment in Merseyside. I constantly brought to the attention of my right hon. and hon. Friends the situation that prevailed in Merseyside at that time. Virtually the whole of the local economy was beginning to fall asunder. At that time unemployment in Liverpool was 11 per cent. It is now over 20 per cent. I almost feel like saying, "Come back, Jim: all is forgiven." However, that is not the point. The hon. Member for Upminster (Sir N. Bonsor) made it clear that Victorian values and 1930 economics are very much in mind in the Conservative party.

I listened with interest to the comments by my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), who referred to the Scottish dimension of politics. I have a great deal of sympathy with and support his argument about Scotland, but I should tell him that not only in Scotland have the events to which he referred occurred recently. There is now not one Tory Member in Liverpool for the first time in over 100 years. That is a clear sign of the groundswell of opinion in our inner cities on matters such as unemployment, cuts in public expenditure, the closure of schools and the reduction in social services when poverty is rampant in those areas. A further hammerblow has been delivered on Merseyside in the past two weeks in that now 2,500 more jobs are in jeopardy. It is clear that the policies pursued by the Government have a direct effect on jobs in the area that I and other Merseyside Members represent.

Nothing in the Gracious Speech shows any turning point by the Government. In the past four years we have seen the devastation of industries on a large scale in almost all of the old industrial centres of the United Kingdom. Liverpool has been in the forefront along with Glasgow and other places in the north-east of feeling the brutal effects of the policies that are pursued by the Government. The hon. Member for Upminster did not state that there would be any change in the period ahead. The Prime Minister and the Conservative Government should be warned that 8.5 million people in this country voted for radical change.

Some of my hon. Friends at that time did a disservice to the Labour party's programme by not clearly stating the alternative case. The Labour party offered clear alternatives to the drastic and disastrous road that the Government have pursued since 1979. Had the position of the Labour party been put more clearly during the election, the response would have been far in excess of the 8 million-plus that voted for those policies.

In the period ahead it will become quite clear that in the areas that I and my hon. Friends represent there is growing anxiety that the position in those cities will not be controllable if the policies continue. I am not scaremongering. That position now prevails on Merseyside. A new generation of job seekers see no hope and no future while the Government remain in power. The price that the country will pay for ignoring the position that prevails in the industrial centres in the United Kingdom will mean that we will be facing massive problems that so far have not been foreseen by the people of those areas. The signs are that the unrest that prevails in those cities will reach a point similar to trying to cap a volcano if the Government proceed, as they intend to do, with the policies they are now pursuing.

I wish to remind hon. Members that in the last four years the position on Merseyside has gone from bad to worse. The Prime Minister and the Tory Government shall have no rest whatsoever from those on Merseyside, and in Glasgow and the north-east during this Parliament. We shall constantly stress the position in those areas.

The problem will be not of our seeking a confrontation with the Government, but of the Government seeking a confrontation with cities such as Glasgow, Liverpool and other old industrial centres. The mobilisation of the forces in those areas will surprise the Prime Minister. That will lead on to the sweeping out of the Government and the recognition that the alternative policies put forward by the Labour party will become the only acceptable alternative.

Debate adjourned.—[Mr. David Htint.]

Debate to be resumed tomorrow.