HC Deb 31 July 1984 vol 65 cc233-317
Mr. Speaker

Before I call the Leader of the Opposition, may I tell the House that no fewer than 32 right hon. and hon. Members have sought to take part in the debate already, six of whom are Privy Councillors. I ask, please, for short contributions from both Front and Back Benches.

4.19 pm
Mr. Neil Kinnock (Islwyn)

I beg to move, That this House strongly condemns the economic, industrial and employment policies of Her Majesty's Government which seriously impede significant and continuous economic recovery, weaken our country's ability to resist the effects of financial and currency movements, subject our people to higher interest rates and extra cuts in public expenditure, retard industrial development, result in increasing unemployment and so worsen the insecurity, injustice and division which embitters social and industrial relations in Britain, as instanced by the current mining dispute and its consequent hardship; and calls upon Her Majesty's Government to adopt policies of expansion which will bring down the numbers and costs of unemployment, encourage the more efficient and productive use of the nation's resources, improve our international trading performance and diminish industrial strife. The motion draws attention to the shambles of the Government's employment, economic and industrial policies. It is nearly 13 months since the Government told us in the Queen's Speech that they would pursue policies to increase economic prosperity, reduce unemployment, reduce inflation further, control public expenditure firmly, maintain sound money and promote growth in output. For the people of Britain at large, the Government have failed in every one of those objectives. In failing, they have further eroded our productive economy, they have depressed standards of living and liberty for millions of our fellow citizens and they have caused divisions that are deeper and more bitter than any in our society in modern history. [Interruption.]

The Government's only response—apart from jeers to all that—is to re-adopt and reinforce the very policies of high interest rates, increased taxes, contraction and further cuts which pushed the economy into retreat in every area in 1979, 1980 and 1981. They continue with the very policies which caused massive unemployment and under-employment of both labour and capital. They persist with the very policies that so fundamentally weaken our energy-rich, talent-rich and capital-rich country as to make us unable to resist the effect of rises in United States interest rates. More importantly, in many ways, they have made us unable to stop outflows of funds, and, most important of all, they make it difficult for us to make proper provision for the care of the old or to offer dependable hope to the young. That is the condition of our country after five years of the right hon. Lady's premiership.

When those truths are told, the Prime Minister accuses us of talking Britain down. She says—she said it again a couple of weeks ago—that we believe that bad news for Britain is good news for Labour. She could not be more wrong or more objectionable. In my constituency and the constituencies of many of my right hon. and hon. Friends, the unemployment rate now is at or near, and in many cases above, 20 per cent. Among young people, it runs as high as 60 per cent.

We live in a constant state of anxiety as the receivers move in, as the factories close, as our bank managers tell us of a local overdraft economy and as villages and whole housing estates become Girolands. It is our people who bear the brunt of slump, who want recovery, and who would be glad to take recovery even from the right hon. Lady and her Government if there was any possibility of it. No amount of potential political profit or advantage for us can possibly make up for the huge economic and social deficit inflicted upon the country by the policies of Her Majesty's Government. We want recovery, production, investment and jobs, for it is the people whom we—and, I hope, right hon. Gentlemen and Ladies opposite —are in politics to represent who bear the effects of the Prime Minister's scorched-earth economics.

We are not looking for miracles. We are prepared to work to secure the country's recovery and to make the country productive. [Interruption.] I see that the word "work" causes panic on the Tory Benches. It is because we want to work effectively to rebuild the country that we want the revenues of North sea oil— £40,000 million since the right hon. Lady took office—to be kept in the country and invested to regenerate the British economy. It is because we want to work to reduce the rate of slump that we want to keep a share of the £10,000 million which has been leaving the country every year since the right hon. Lady came to office.

Mr. Tim Eggar (Enfield, North)


Mr. Kinnock

We want to put that money into training, building and modernising our country. That is why we shall work with employers and trade unions for co-operation in development. The Government have patently demonstrated that they cannot work construc-tively with either employers or trade unions.

Mr. Robert Jackson (Wantage)


Mr. Kinnock

That is why we further advocate policies of joint expansion with the Third world—we know that Third world debtors will not become Third world consumers — and with the industrial countries, because we know that if they were to use the policies of cuts and contractions that this Government operate those policies would do them no more good than they have done the people of this country.

When we spell out our policies—[HON. MEMBERS: "When?"]—to produce out of slump, to use investment and the resources of this country to put our people back to work, we are accused, as we were in The Times yesterday, of a continuing drift to the Left. President Reagan would be extremely surprised to hear that. Indeed, if he were not preoccupied with his presidential campaign he might take time off to sue The Times for defamation. Although our motivation and measures would differ from that of the United States President, our method for recovery—of expansionary budgets, of extending credit and of public expenditure—would differ only in the way in which we would insist that, systematically, it applied to our whole country. Conservative Members may be interested in that, because their constituencies, too, are not without the pain and difficulty of unemployment.

We want good news for Britain. We want recovery for Britain. We would welcome it—I repeat it to emphasise the point—even if it came from this Government. But it will not. The knowledge that regeneration and revival will not, and cannot, come from the policies of the right hon. Lady and her followers makes us loathe this Government for everything they are doing, everything they have done, and everything they stand for.

After five years of this Government, employment is 7 per cent. lower than it was in 1979. That is a loss of 2 million jobs, of which 1.6 million have been lost from manufacturing. In our country now, 1.2 million people have been unemployed for a year, 600,000 for two years and 350,000 for three years. [Laughter.]

Mr. David Winnick (Walsall, North)

The Tories laugh about it.

Mr. Kinnock

Yes, they laugh. The people recognise the contempt of the Conservative party for their desires and their needs.

In June 1983, in the middle of the election campaign, the Chancellor of the Exchequor said that he fully expected that unemployment would fall in the next year. Unemployment increased by 80,000 in that year and we have heard no excuse, no dependable reason and no apology from the Government for misleading the people.

After five years of this Government, and for the first time in British history, we are buying more manufactured goods from the rest of the world than we are selling. The manufactured trade gap of 1983 will, on present trends, exceed £3 billion in 1984. Even the jocular Members on the Tory Benches are stilled by that news, because they know that for a country that must continue to make its living by making and selling products to the rest of the world, such a manufactured trade deficit spells the beginnings of a terminal economic disease.

The Prime Minister repeatedly wants to tell us what occurred under the last Labour Government; she was at it again today. But whenever we remind the Conservative party of its disastrous record over the past five years, it does not want to listen; it does not want to know; it does not want the embarrassment. After that five years, twice as many people are now dependent on supplementary allowances as in 1979, and taxation under this Government is at an all-time record level. It will go on like that.

The Green Paper "The Next Ten Years: Public Expenditure and Taxation in the 1990s" said that if the public expenditure planning total were held flat in real terms to 1988–89, as in the medium-term financial strategy, the non-North sea oil tax burden would, on the assumptions used, be 3 per cent. higher as a proportion of GDP than it was in 1978–79. That is from a Government who came in on the promise that taxes "must and will" be cut. Taxes are now 12 per cent. above the 1979 level. In 1988, on the Government's own figure, taxes will still be 3 per cent. higher than in 1979—not 3 per cent. lower. All that is from a Government elected on solemn and repeated undertakings to cut taxes.

After five years, the decay inflicted on our country by the Government has crept into the marrow of our industrial infrastructure. Industrial energy use is 20 per cent. down. The mercantile fleet is 46 per cent. down and even the carriage of freight by rail is 13 per cent. down. Those are all symptoms of a country that is rotting away as a consequence of the Government's policies. But throughout those five years of crumble and monetarist obsession, in which employment, production and investment have always come at the bottom of the Government's agenda, we have had only constant excuses.

In 1979–80, the excuse was the inheritance. In 1980–81, it was an exchange rate that had been taken out of control by the bonus of North sea oil. In 1981–82, it was world recession. Since then, the excuse has been the new vitality of the United States' economy. The excuses have changed, but the Government's responses have not. On every occasion, and at all times, they remain constant. "It is not our fault", is the Government's constant, plaintive cry. The other constant is that, whenever the Government are faced with difficulty, crisis, pressure on the pound or overwhelming evidence of the decline of our industry and competitive strength, they inflict more of the disease as a cure. They always apply policies that worsen the condition, and they are doing that now.

Mr. Patrick Cormack (Staffordshire, South)


Mr. Kinnock

Yet the only real answer to the pull of the American economy is to create our own magnetic field of expansion. I know that Conservative Members are not in the least concerned with expansion. They cannot even see the lesson of the United States economy when it is staring them in the face — that the policies that the Opposition advocate have led to the rescue and recovery of the United States economy on a scale and at a pace that have given that country a new dawn of development.

The Government must know that the only answer to the perpetual rundown of our economy is to adopt those policies. The sooner it is done the better, but the Government's only answer is to weaken the economy further, to inflict higher interest rates, to push taxes up more and to make further cuts. But the Chancellor does not see it like that.

Mr. Cormack


Mr. Kinnock

He has moved from excuses to fantasy. [Interruption.] And talking of fantasy, I now give way to the hon. Member for Staffordshire, South (Mr. Cormack).

Mr. Cormack

I am most grateful to the right hon. Gentleman. If he is so keen to see the resurgence of British industry, why is he sitting on the sidelines, aiding and abetting the most disruptive strike in recent years?

Mr. Kinnock

The hon. Gentleman can accuse us of many things, but not of sitting on the sidelines. For the past nine weeks, the only person in the whole country who has been able to communicate simultaneously with both sides in the dispute, to promote talks, to try to reach a settlement, has been the Shadow Secretary of State for Energy, my right hon. Friend the Member for Salford, East (Mr. Orme).

It is the Government who have stood on the sidelines, and their abdication of responsibility is something for which they will never be forgiven. Their only contribution to what the hon. Gentleman rightly describes as a ruinous dispute has been further to inflame it, further to embitter it, further to prolong it, by their whole political attitude.

The Chancellor of the Exchequer, of course, has not had much to do with the dispute. He has been talking about the great experiment that the Government have been conducting with the British economy. It is an experiment that has inflicted dreadful woe on the people of this country. But it is not really an experiment, because it has no pragmatism, no science, about it. It was conducted always on the basis, "If at first you don't succeed, repeat the mistake—only at greater length."

The experiment that has preoccupied the Chancellor is turning out to be a disastrous folly. But of course he is not impressed by the evidence from the United States; he does not respond to the demands for expansion. He is happy to preside over an increase in interest rates, to push up income taxes, and to insist upon further cuts. He is happy to do all those things.

Three weeks ago, when lending rates went up — [Interruption.] Let me put it like this. I am glad that the Chancellor is aroused. As the Chancellor's predecessor, the present Foreign Secretary, said in his first Budget speech, what people are concerned about are the stoppages from their—[Interruption.]

Mr. Speaker

Order. I appeal to those on the Government Benches to let the Leader of the Opposition have his say.

Mr. Kinnock

As the Chancellor of the Exchequer's predecessor said, in his first Budget speech, what counts are the stoppages from people's pay packets. The Chancellor is happy to sit there and say that income taxes have not gone up. Of course they have, over the period of the Government, until people are paying on their incomes the highest tax burden that they have ever paid.

In addition, the Government have raised national insurance contributions by £3.2 billion. It is impossible for the Chancellor of the Exchequer to pretend that stoppages from the pay packet that are supposed to be totally unacceptable to the Tories in opposition are not higher now than they have ever been in the whole of British economic history.

The Chancellor said three weeks ago, when lending rates rose by 2.75 per cent. in a period of a few days, "Nothing has gone wrong." It was as if the extra £740 million of industrial costs, at annual rates, and the 25 per cent. increase in mortgage payments were part of some great, sophisticated, preordained, pre-planned event, instead of a disaster of immense proportions. They are a disaster for industry, and a disaster for households.

If the Chancellor thinks that nothing has gone wrong, he will be telling us next that the England Test performance was a fraternal gesture to the West Indies —all pre-planned and preordained. The Prime Minister might even believe that. Anybody who believes that the economy is in good shape, as she said a few weeks ago, will believe anything. But the unemployed do not believe the economy is in good shape; the people who ran the 13,000 businesses that were liquidated last year do not believe the economy is in good shape; the managers of Britain do not believe the economy is in good shape; the stock market does not believe the economy is in good shape; and international investors do not believe the economy is in good shape. As my hon. Friend says, the reason is the truth — that the economy is not in good shape.

As the disbelief multiplies and becomes more and more widespread, and as the right hon. Lady's claims that the economy is in good shape become more and more fantastic, so we hear from her every week a litany of explanations, the sort of incantation that she employs at Question Time. Everything, she says, is better than a year ago. That is what she says repeatedly. The Government, she says, have paid back half of Britain's international debt. How much is that? Four million pounds over four or five years. She has spent 10 times as much as that on the unemployment created by her policies.

When the right hon. Lady says that the growth rate in GDP compared with a year ago is 3 per cent., she does riot recognise that industrial output stopped rising at the end of 1983, when the special election boomlet that the Government arranged started to peter out. She did not say that manufacturing production went down 1 per cent. between last December and this May, and that that predated the effects of the miners' strike. The Financial Times said on 14 July that the figures showed a serious loss of momentum … This stagnation cannot be explained by the effects of the coal strike". So let there be no alibis from the Prime Minister, this afternoon or at any other time. Not only is her much-vaunted growth rate, which., over the five years of her premiership, is the lowest on record—on average 0.4 per cent. per annum—dying on its feet now; even the Government acknowledge that it will dip further next year.

That takes us to another set of the Prime Minister's favourite figures. She says that industrial output is up 3.5 per cent. on a year ago. She needs to update her figures: actually, it is down 0.5 per cent. on a year ago. That still makes it 7 per cent. below what it was in 1979. Worst of all, manufacturing output in 1984 is still 11 per cent. below what it was in 1979. No comparable economy has had to endure the depth or length of slump that has been inflicted on our economy by this Government.

The Prime Minister talked about investment. She says that investment is up 10 per cent. compared with a year ago. That is another little figure fiddle by the right hon. Lady. Investment has just now, in 1984, got back to the 1979 level and, worst of all, that does not apply to manufacturing investment, which is still 30 per cent. lower than in 1979. What a disaster for a country of makers and traders at any time. But in the middle of the technological revolution, at a time when the whole world economy is shifting on its axis, to run down our economy in this way, to run down its productive output, its manufacturing output, its manufacturing investment, and all the jobs, the training, the techniques and the skills that go with that, is nothing but a betrayal of the basic interests of this country.

But that is only part of the shambles. [Interruption.] Perhaps Conservative Members can explain it to their constituents. Perhaps they can tell them the truth. Perhaps they can say how, having promised to shrink the state, they reached the point of distending the state, not only by exerting central control on local government to an unprecedented extent and denying trade union rights, but by making more people dependent on incomes from the state than ever before.

The Government were going to stimulate enterprise. They have liquidated enterprise, and one of the chief liquidators is here in front of us. They were going to cut taxes. It has come to something when one of the gang of five, who earned his reputation as a rabble-rouser on the Back Benches but now receives the salary of Secretary of State for Trade and Industry, is so disturbed that he tries to play the same old tricks from his august position on the Front Bench. I shall say more about the right hon. Gentleman later. But he is one of those who were going to cut taxes, and who have vastly increased them. He is one of those who were going to put the "Great" back into Great Britain.

The Government have made this country a net importer of manufactured goods, taken the pound to its lowest level in history and cut into all the activities that make me proud to be British: medical and scientific research, health care, overseas aid and housing. No decent values and commitments, no moral and ethical obligations, have been allowed to stand in the way in the Government's pursuit of cuts. They have inflicted misery on millions of their fellow citizens. How dare they talk about putting the "Great" back into Great Britain when they are eradicating that prefix with every day that they stay in office.

But still the Government claim successes. "We have conquered inflation," they say; "we have raised productivity; we have succeeded in changing attitudes." Those claims are supposed to justify or explain away all the redundancy, bankruptcy and devastation of whole industries and whole areas of Great Britain in the past five years.

Control of inflation was the Government's greatest claim, and they never cease to remind us of the teeth-gritting resolution that it took to get the rate down to 5.1 per cent. But is it really like that? The OECD figures demonstrate conclusively that the rate of fall in the other six major manufacturing countries is almost exactly the same as ours. The lesson is sad but obvious: this country has done nothing more than participate in a general improvement in world inflation, and nothing in that fall is attributable to the actions of its Government.

Then there is productivity, which, the Prime Minister says, has gone up by 6 per cent. since this time last year. That is wonderful, but the truth is that it was achieved through a cut of 23 per cent. in the manufacturing labour force, and a cut of 11 per cent. in manufacturing production. Fewer people are producing fewer things. To claim success from that is like saying that one has cut a leg off to lose weight, and claiming that that is a success.

The improvements in inflation, then, are little more than reflected glory; the improvements in productivity are nothing more than fewer people making fewer things. So what of the change in attitudes which the searing and supposedly educative experience of the last five years of this Government are said to have produced? For about four years, attitudes did change. The huge and sudden increase in unemployment stunned the British people. It did not, as some people wrongly expected, inspire industrial uproar; it never does. Unemployment and the threat of unemployment do not radicalise their victims; they paralyse them. Insecurity intimidates. The fear of losing a job, or of not getting one, secures obedience.

The Government liked that. It suited the purpose of their economic policies, which depend on the disuse of labour. It allowed the application of a political philosophy which depends on social control. For them unemployment is, was and will be an essential discipline. They have depended on it for five years, and have even taunted those afflicted by it. The Prime Minister went to Wales and told people that they should travel to work as their fathers had, although—with unemployment rates in the midlands, in the south-east and everywhere else at record rates—she did not say where they were supposed to go.

We have heard the Secretary of State for Trade and Industry telling people to get on their bikes, and an Under-Secretary of some description talking about the begging bowl mentality of northerners. We have had Victorian sermons and pre-Churchillian homilies by the yard from the Prime Minister and the Cabinet. The Prime Minister has told the unemployed that she has no time for them, no interest in them and no policies for them.

For a time, all that actually worked. Workers watched dismissals being made. They worked short time. They accepted redundancies because they had been told that there was no alternative. There was a spirit of submission among the people of this country. But in a free country, policies that force free people into retreat eventually push them into reaction. In a free country, Governments can scare some of the people all of the time and they can scare all of the people some of the time, but they cannot scare all of the people all of the time. Eventually the policies that secure obedience provoke resistance, and that is exactly what is happening now.

I can say without sentimentality and even without passion—it is a simple matter of fact—that it is the feeling that enough is enough—[Interruption]—that has made 130,000 miners and their wives and families endure terrible hardship for the 21 weeks of the strike. It is the feeling among the people of the mining communities—and of the wider community — that they have taken enough from this Government which makes them stand up and fight. [Interruption.] The Prime Minister's unemployment policies have left them nowhere else to go.

Mr. Nicholas Lyell (Mid-Bedfordshire)


Mr. Speaker

Order. The right hon. Gentleman is clearly not giving way.

Mr. Kinnock

It is the Government's policies that have given people the feeling of hopelessness out of which their desire to resist has been forged. They refuse to see their communities eradicated. [Interruption.] That feeling should not be mocked by Conservative Members; it should be understood and responded to.

The fight is not a political fight. Only two very small groups in Britain believe that it is a political fight.

Mr. Lyell

Will the right hon. Gentleman give way?

Mr. Kinnock

One very small group of people not involved in the leadership of any trade union or in any democratic political party—the powerless simpletons of the ultra-Left — would like to make every strike political. But there is another small group of people who want to make this strike political — the powerful simpletons of the Right, as represented by the Prime Minister and her Cabinet colleagues.

Several Hon. Members


Mr. Kinnock

The Prime Minister has done all she can to make the strike political. [Interruption.] She has invested her own credibility in the conflict. She has interfered to attempt to isolate the miners. She commanded a political barrage by her Ministers 10 days ago. She is prepared to spend any sum and create any chaos in the pursuit of a political victory. Her excesses and her bungling have not only outraged the miners; they have even set off the money merchants. She does not understand the motivation, the instincts, the resistance which she has aroused by her approach to ruling in general and to her conduct in this strike in particular.

Mr. Churchill (Davyhulme)


Mr. Kinnock

Some of her party understand the right hon. Lady's lack of understanding. They recognise her extremism. They recognise her obsessions, or, as they put it, her absolutism. They want her to return to Conservative consensus. She replies, "My convictions are the consensus." Prime Ministers who are all consensus and no conviction are useless. Prime Ministers who are all conviction and no consensus are dangerous. Prime Ministers who think that their convictions, and only their convictions, are the consensus are absolutely lethal to their countries. Such is the Prime Minister.

Two weeks ago The Economist wrote: Wise Prime Ministers are careful not to flaunt the dictatorial powers granted to them by the British constitution. This Prime Minister is not wise. [Interruption.] If this Prime Minister permitted equals, they would tell her that she is not wise. But she does not have that good fortune. She has surrounded herself with fellow zealots and sycophants. [Interruption.] It is left to her enemies to tell her the truth: her enemies inside the Conservative party who are now rediscovering their officers' courage and telling her the truth, first in code and now with caustic directness. They tell her the truth. We tell her the truth too.

After five years, in the midst of this shambles which is so much her fault, the Prime Minister is not trusted. Her motives, her policies, her judgment, her obsessions, her fixations are not trusted. She is not trusted. She says she loves her country. For the sake of that country, she should go now.

Mr. Allan Rogers (Rhondda)

On a point of order, Mr. Speaker. Before the right hon. Lady starts, may we be assured that the public school punks on the Government Benches will be quiet?

Mr. Speaker

I hope that the whole House will be quiet.

4.59 pm
The Prime Minister (Mrs. Margaret Thatcher)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'congratulates Her Majesty's Government on the success of its economic policies in securing low inflation and rising output and employment; and calls upon it to maintain policies based on sound finance, individual freedom and encouraging enterprise as the only foundation for lasting growth in output and jobs.'. The debate arises upon an Opposition motion which calls into question the economic policy of the Government. It is, of course, wholly appropriate that we should debate these issues just before the long recess. After 13 months of the present Parliament, we are more than happy to take stock of the performance of both Government and Opposition. For the last 40 minutes we have listened to the rhetoric of the Leader of the Opposition. It was difficult to find a thread running through his speech. It was a speech that matched the motion but not the occasion.

As I listened, I concluded, not for the first time, that the right hon. Gentleman's compatriot, the late Nye Bevan, was wrong. The religion of Socialism is not the language of priorities: it is the priority of language. I listened to the right hon. Gentleman's words and statistics but I could not possibly discern any policy there. He wanted widespread expansion and a high deficit; nevertheless, he wanted low interest rates and he failed to observe that the United States has had a very strict monetary policy and a much smaller proportion of its national income devoted to public expenditure than this. He criticised the level of national insurance contributions but I do not hear him moving motions to reduce the amount of pensions.

The right hon. Gentleman had something to say about North sea oil but he failed to see that, if we are successful —as we are—in producing North sea oil, those who earn money from that industry will either buy more manufactured goods from abroad, leading to higher imports, or we shall, by their efforts, be able to export capital to repay the assets in future years. But the right hon. Gentleman is against both higher imports and the export of capital. His words, in short, were emotive, excessive and evasive.

As we debate these issues of economic policy, the interest of the House and of the country lies not in hyperbole but in realism. The right hon. Gentleman would do well to remember the words of the noble Lord Barnett in his book, "Inside the Treasury": The 1974–75 Labour Government had a difficult economic and financial task, rendered impossible by pledges foolishly made without any serious thought as to where the money would come from. You name it, we were pledged to increase It. Judging by the right hon. Gentleman's speech, the Opposition have learnt nothing.

As I expected, the right hon. Gentleman devoted much of his speech to unemployment. I shall have more to say about unemployment later. At the outset, I want to make one point. Unemployment will not be cured by the quick fix—by injections of public spending, each becoming less potent than the last. The result only will be record inflation.

On the Government side of the House we shall not peddle the easy solutions that do so much damage in the long run. We care enough about unemployment to do the difficult things that alone will achieve a lasting improvement in our capacity to create new jobs.

Nevertheless, the right hon. Gentleman still claims to be able to put Britain back to work by extra spending and extra borrowing. What credibility can he possibly have in criticising the present level of interest rates when his policies could result only in still higher interest rates? Those policies would end, as they did before, with the nation's finances in disarray and a Socialist Government going cap in hand to the IMF.

The right hon. Gentleman is aware of the consequences of what happened last time. He mentioned one of them. I shall just mention two: first, Britain's overseas debt was doubled during the lifetime of the Labour Government and, secondly, spending on the National Health Service was cut, in real terms, for the first time in 25 years. Yet he has the nerve to attack a Government who have paid. back half those debts and who have spent more, in real terms, on the National Health Service every year since they came to power.

At best, the right hon. Gentleman's economic thesis is inadequate; at worst it would destroy the jobs that we have and drive away those that we seek to gain. That was the spending programme that the right hon. Gentleman's party put to the electorate, which saw to it at the last general election that the Labour party recorded the lowest share of the popular vote in its history. By contrast, this Government have accepted the challenge of long-term economic reform.

I shall divide my remarks into three parts. I shall comment first on the framework of the Government's economic policy, then on unemployment and finally on the coal strike. The central objective of our economic policy has been to create in Britain the framework of a market economy, the type of responsive economy in which industry and commerce can flourish, not only to produce goods and provide jobs, but to generate the wealth upon which our public services depend. Our strategy demands sound money and lower inflation, both of which we have achieved. It welcomes technological change and ensures the freedom which comes from wider ownership of property.

The first requirement for a successful market economy is the defeat of inflation. It was Lenin's dictum that if one wished to destroy a nation one should first debauch its currency—and he spoke as a dedicated revolutionary, not as a prophetic monetarist. Our first aim, therefore, has been to defend our nation by defending the worth of its currency and to break for good the dangerous trend towards higher inflation.

Thanks to the prudent financial policies pursued by my right hon. Friend the Chancellor of the Exchequer and his predecessor, the prize of lower inflation has been won and we shall not put it in jeopardy now. Stable prices remain our eventual goal. [Interruption.] Stable prices are something that the right hon. Gentleman's party has never achieved, and never could. Our ability to protect ourselves against the tide of overseas interest rates depends upon sticking to these policies.

Countries such as Germany and Switzerland have long succeeded in keeping their interest rates well below American rates, but only because they first earned an international reputation for sound money and low inflation. The right hon. Gentleman chided us about interest rates. I remind him that during the lifetime of the Labour Government, United Kingdom interest rates were, on average, 4 per cent. higher than United States rates. That has changed. A few weeks ago, our short-term interest rates were nearly 3 per cent. lower than comparable United States rates. Damaging industrial strikes have temporarily robbed us of this advantage. We shall seek to regain it, but if we followed the right hon. Gentleman's prescription for more public spending, not only would interest rates rise sharply, but we would also lose the prospect of reducing direct taxation and leaving people more of their own earnings to spend and save as they choose.

Our task in reducing income tax is not easy. [Interruption.] Wait for it a little longer, as my right hon. Friend the Chancellor said in his Budget statement. [Interruption.] If hon. Gentlemen will listen, they may hear something to their advantage. As public expenditure has risen dramatically in the post-war period, so the taxation net has inevitably spread much wider. In 1936, only 3.5 million people paid income tax, and a married man did not begin to pay until he earned one and a half times average wages. Now, nearly 24 million people pay income tax, starting at less than half average wages, and if we followed the right hon. Gentleman's prescription, many more people would be paying much higher income tax.

We have made a start in reducing personal tax. Since 1979, the income tax threshold has risen by 16 per cent. in real terms, after falling under Labour. A modern market economy is just a matter of taxes—[Interruption.]—and incentives.

Mr. Speaker


The Prime Minister

Opposition Members dare not listen, Mr. Speaker. They can only shout, because they have no arguments. Do not worry, Mr. Speaker; I shall plough steadily on.

A modern market economy is also about competition, which puts the customer first and keeps the producer on his toes. What is produced needs to be sold; it will be sold only if other people are prepared to buy it. No amount of controls, restrictive practices, planning or monopoly can win Britain export orders; only being competitive can do that. This is the only policy that makes sense for a country which derives 30 per cent. of its national income from the world's market place. It is a matter of record that those who succeed best in the markets of today are those willing to adapt to change, producing new goods and services as new tastes develop.

In the past, mechanisation eventually created more jobs than it destroyed. The same will surely be true of today's innovations — the new electronics, the computer, the cable and the satellite. But for those whose jobs are lost the process of change can be painful. We must stand ready to mitigate the hardship for them and their communities by generous redundancy payments, by retraining and by helping to create new businesses. To cling to old industries, processes and working practices leads not to the security which people seek but to the decline which they fear.

Mr. Tam Dalyell (Linlithgow)

Can the Prime Minister be more precise, and say how her Government will create new businesses for my constituents at British Leyland in Bathgate, with the unemployment problems that they already face?

The Prime Minister

As the hon. Gentleman is aware, the Government can do certain things to help. We can keep down inflation, give incentives in personal taxation—I shall come to that shortly—and help with such matters as enterprise allowance, loan guarantees and the creation of small businesses. We can also reduce bureaucracy. Indeed, the Government are doing all those things. In the end, it will be for people to respond by being prepared to create and build up businesses for themselves. The right hon. Gentleman extolled the virtues of the United States, which has an enterprise culture, under which people are prepared to respond to the incentives that they are given.

I turn to the subject of ownership as part of the market economy. Although both sides of the House disagree about the importance of inflation, the reduction of income tax and the management of change, it is still the role of private property in society which divides us most sharply. Indeed, the Leader of the Opposition said: We cannot remove the evils of capitalism without taking its source of power, ownership". Ownership is indeed a source of power, which is precisely why more of it should be with the citizen, and less with the state.

If we look around the world, we see that those countries which deny private property rights also deny other human rights. We seek to redress the balance between the citizen and the state by restoring to private ownership industries that have lain under the pall of nationalisation. In the past year alone, Enterprise Oil, Scott Lithgow, Sealink, Wytch Farm, INMOS and Jaguar have passed in to the true ownership of the citizens and many of their employees have been the first to acquire a stake in them.

We are well on course for the denationalisation of British Telecom and British Airways in the coming year. Most fundamental of all, three quarters of a million families are buying their own council houses—a policy which the Labour party opposed the whole way —freeing themselves from the control of town halls. Indeed, owner-occupation is at an all-time record. Socialists oppose the widening of property ownership because it brings to every citizen a new independence and breaks down the old class divisions on which they thrive. We seek a country where every earner can be an owner — a country which is utterly repugnant to Socialism—so that capital and labour have a shared interest and class divisions are a thing of the past.

The right hon. Gentleman spewed out statistics. I will give a few of our very tangible achievements. We have sound money, lower income tax, competition and ownership. Those are long-term policies, but they have already brought real advances. Inflation this year and last is the lowest for 16 years. Output is higher than ever before. [Interruption.] It appears to be a laughing matter for Opposition Members. I thought that they had said that good news for Britain was good news for the Labour party, yet when one says that output is higher than ever before they do not seem to like the fact that it has been achieved by a Conservative Government. Productivity is at record levels. The real personal disposable income of our citizens is higher than at any time under Labour. Profits are up 40 per cent. over the past two years. Investment is up 10 per cent. on a year earlier.

We are providing a framework for an enterprising economy whose success can alone provide for the public services we need.

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


The Prime Minister

May I finish this passage in my speech?

Indeed, on health, education and social security our record stands comparison with that of any previous Government and it is better than that of previous Governments. Therefore, I say to the House that, far from the caricature of the economy drawn in the Opposition's motion and given in the right hon. Gentleman's speech, the deep-seated problems in our economy are at last being tackled and real advances have been made.

Mr. Campbell-Savours

How does the Prime Minister respond to the protests of her right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) who accused her of insensitivity to people in need and of inflexibility, and was supported by Conservatives in Portsmouth after the by-election who also accused the right hon. Lady of inflexibility? Are they all wrong, or could they possibly be right?

The Prime Minister

There are not half as many of those who believe that they are right as there are of those who voted the Government into power with the biggest majority in history. After that, the Conservative party won the European election. The latter people are very much more likely to he right in their judgment.

I am grateful to the hon. Gentleman for the timing of his intervention because I was about to reach the point in my speech which deals with unemployment. With unemployment as high as it is and still rising, creating jobs is the main challenge of our times. The success of the long-term policies of which I have already spoken is vital if we are to tackle the fundamental causes of unemployment rather than just its symptoms.

However, there are other steps. This year's Budget saw the abolition of the national insurance surcharge — something we promised to complete in this Parliament but achieved in the first Session — and it also saw the reconstruction of corporation tax. Taken together, those two measures will greatly reduce the bias in favour of machinery and against the employment of people — a bias introduced by the previous Labour Government. To stimulate the growth of new business in Britain, the Budget improved share option schemes and reduced direct taxation. We cannot yet compete with the United States in the tax incentives offered to industrial pathfinders, but we are getting closer.

The Government applaud those who can earn high incomes by building new enterprise and creating jobs for others. We want more of them here because they are assets to our country. The right hon. Gentleman's ill-disguised xenophobia to foreign investment and enterprise is not for us.

Mr. Michael McGuire (Makerfield)

Is it not true that every month since the Government came to power jobs have been lost? Will the right hon. Lady tell us when a balance will be reached so that the jobs lost in any month will equal those gained? That position has not yet been achieved after five years of her Government.

The Prime Minister

Unemployment has fluctuated. I accept the hon. Gentleman's — [Interruption.] — underlying assumption. Unemployment has risen and is continuing to rise—I said that a moment ago, but it has not risen every month. As I said, it is a great burden and tragedy. If the hon. Gentleman's Government knew the answer to unemployment, why did they allow it to increase to 1.5 million? They should have been able to reduce that figure substantially. I am sure that if right hon. and hon. Members knew the answer they would not have allowed unemployment to rise so high. They did not know it and many people in Europe face the same problem.

I wish to analyse some of the causes. Over a period of about 15 years, the economy of the United States—and, indeed, that of Japan—has been much more successful in creating new jobs than those in Europe. At the recent London summit we spent some time considering the reasons for that. The answers appear to lie, first, in the greater flexibility of their labour markets, in which wages and working practices adapt much more quickly to economic conditions. Secondly, they have a greater readiness to seize the opportunity of new technology. Thirdly, they have a greater willingness to move from older manufacturing industries into services; and, fourthly, a much larger part is played by small businesses in their economy.

Therefore, the Government have set out to improve the education and training of young people to equip them for the changing world that they will face. The youth training scheme — the best of its kind in Europe — provided 350,000 places last year and the enterprise allowance scheme is helping 1,000 of the unemployed a week to set up their own businesses.

The latest figures on unemployment have been deeply disappointing, but other indicators suggest a strengthening in the labour market. Vacancies are up for the fourth month running and the number of people in work has risen by 260,000 over the past year, with 330,000 extra jobs in service industries. I understood Opposition Members to say that they welcomed good news but they seem singularly reluctant to cheer this. That increase in the number of jobs is welcome to Conservative Members at any rate, but it comes at a time when the numbers in the working population are rising still faster.

During the past six years those leaving school have outnumbered those retiring from work by over a million and that trend will continue for the rest of the decade. [Interruption.] I hope that the hon. Member for Rother Valley (Mr. Barron) will not accuse any Government of being responsible for the demographic figures. It would be completely wrong to do so. Our task of creating sufficient jobs is made even harder by demographic factors. The employment figures belie the Opposition charges of a stagnant economy. Every month, 340,000 people leave the unemployment register. About 28,000 new service sector jobs are created and about 10,000 new businesses start up. Every quarter, it is estimated that self-employment increases by 17,000. Every year some 6 million people change jobs. The proportion of our people in work in this country is about the same as in Germany but higher than that in France, Belgium, Italy and the Netherlands.

The problems of unemployment are severe but they are not helped by the attempt of the Opposition to pretend that there is an easy answer which happens to have eluded most of the countries of western Europe and also eluded them in government. The claim of the Labour party to represent the interests of the unemployed is totally hollow. It is the party which opposes efforts to restructure industry to meet changing demands. It is the party which in opposition supports every wage claim, even when its effect is to price people out of work.

Ms. Clare Short (Birmingham, Ladywood)


The Prime Minister

The Labour party is the party which supports every strike, no matter what its pretext, no matter how damaging. But, above all, it is the Labour party's support for the striking miners against the working miners which totally destroys all credibility for its claim to represent the true interests of working people in this country.

It is a tragedy that this coal strike has occurred at a time when the coal industry had the brightest prospects for many years. The Government had shown their commitment to the industry by a massive investment programme far in excess of "Plan for Coal". New export orders were being won. Applications for conversion from oil to coal were running at record levels under this Government. Now, since the strike, eight coal faces have already been lost. I understand that the closure of faces as a result of this strike is equivalent to the capacity of about four pits and the NCB has said that faces at 25 more pits are at risk.

The NCB is having to buy coal from abroad to meet a major export order for America which could guarantee 1,000 jobs in Durham for 10 years. There are now more withdrawals than applications for coal conversion grants and the investment programme is being held up.

All of those things are bad both for the future of the coal industry and for miners who are on strike and their families. Not only have they lost about £3,000 per family on average but their jobs are being put at risk by the very leaders who claim to defend them. Perhaps that is why the leadership of the NUM, having failed on three previous occasions to gain the requisite majority by a ballot, resorted to a series of devices to call this strike without a national ballot.

The Leader of the Opposition remained silent on the question of a ballot until the NUM changed its rules to reduce the required majority. Then he told the House that a national ballot of the NUM was a clearer and closer prospect. That was on 12 April—the last time that we heard from him on the subject of a ballot. But on 14 July, he appeared at a NUM rally and said, "There is no alternative but to fight: all other roads are shut off." What happened to the ballot? [Interruption.] The Leader of the Opposition knows that this strike, started by manipulation of union rules, has been maintained by violence and intimidation—methods which are repugnant to the vast majority of miners. We have seen up to 10,000 so-called pickets massed to prevent other workers from going to work by fear or by violence. Such picketing is not just in clear contravention of the TUC guidelines, it breaches the instruction given in 1974 by the National Union of Mineworkers itself that the number of pickets should not exceed six in any local situation. I hope, therefore, that today when the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) winds up he will end Labour equivocation with a clear condemnation of mass picketing. That would at least be one ambiguity he could clear up.

Mr. Alexander Eadie (Midlothian)

The right hon. Lady must be aware that the National Union of Mineworkers' decision to hold a special delegate conference on Friday 10 August was a lifeline for her in the sense that she could assist in arranging negotiations before that conference met. Are we to take it that, while she is speaking today on behalf of the Government, the policy she is putting forward to this House and the country is that she will starve the miners' wives and families into submission? Will not the right hon. Lady agree that that policy is a political and social disaster for this country?

The Prime Minister

There are good jobs for those striking miners, and they know it. If anyone is stabbing them in the back it is not this Government. [Interruption.] I notice that no hon. Gentleman took advantage of an interjection to condemn mass picketing or to condemn the union for not holding a national ballot.

Those responsible for these tactics have failed in their objective to close down the steel industry, failed to prevent the movement of coal and failed to coerce working miners into joining the strike. For that we must thank not only the courage of those miners who have stayed at work and their families but the police, who have commanded widespread support and gratitude.

The millions of members of the working population who are subsidising miners' jobs to the tune of £130 per week are entitled to ask what this dispute is about. This dispute is not about pay, because the current offer will keep miners 25 per cent. above the industrial average compared with 18 per cent. under Labour. It is not about compulsory redundancies. There have been none, and there have already been well over 20,000 inquiries about voluntary redundancy — more than the number of redundancies the NCB are seeking. It is not about voluntary redundancy terms, because those are the most generous ever — £33,000 for a 49-year-old miner compared with £1,500 under Labour.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Bearing in mind that all the other pit closures in the past have been effected in accordance with the colliery review programme, will the Prime Minister tell the House why the decision was taken — and who took it — to close Cortonwood without a negotiation according to the colliery review programme?

Th Prime Minister

The hon. Gentleman is well aware of the pit closure procedure and of the processes it must go through. I am grateful to the hon. Gentleman for interrupting when he did because I am just coming to the subject of pit closures.

I have said what the dispute is not about. It is not about pay, compulsory redundancies or voluntary redundancy terms. After seven days and 35 hours of talks between the National Coal Board and the NUM, the only point at issue was the NUM demand that pits should remain open even when they are not beneficial to the industry. This is a new and totally unreasonable demand.

The tripartite report of the last Labour Government which endorsed the NCB "Plan for Coal" in 1974 said: Inevitably some pits will have to close as their useful economic reserves of coal are depleted". That report was signed, among others, by the then Secretary of State for Energy, Mr. Eric Varley, and by the hon. Member for Midlothian (Mr. Eadie).

The Labour Government not only accepted the principle that uneconomic capacity must be closed; they embodied it in legislation. Section 6 of the Coal Industry Act 1977, passed when the present right hon. Member for Chesterfield (Mr. Benn) was Secretary of State for Energy, provides that the Secretary of State may make to the National Coal Board such grants as in his opinion will further assist in the re-deployment of the manpower resources of the Board and the elimination of uneconomic colliery capacity.

Mr. Tony Benn (Chesterfield)


Mr. Michael Foot (Blaenau Gwent)


The Prime Minister

As I mentioned the right hon. Member for Chesterfield I must give way to him, but if he wishes I shall give way to the right hon. Member for Blaenau Gwent (Mr. Foot) first.

Mr. Foot

The right hon. Lady referred to "Plan for Coal". Will she now answer the question that she did not answer earlier: does she think that the "Plan for Coal" was properly carried out in the Cortonwood case?

The Prime Minister

Cortonwood will go through the normal procedures, and that has been said. The right hon. Gentleman is trying to distract attention from the fact that the closure of uneconomic pits was not only Labour policy, but that it was contained in their legislation. The Labour Government first put it in legislation in 1967, and they re-embodied it in legislation in the time of the right hon. Member for Chesterfield. Having mentioned the right hon. Gentleman, I give way to him.

Mr. Benn

I am grateful to the Prime Minister for delivering herself completely into our hands, because the National Union of Mineworkers was consulted every time there was a discussion about the future of a pit. As Secretary of State, I offered the NUM a veto on all pit closures, as the right hon. Lady will know very well. The Cortonwood case precipitated a national coal strike, as was intended, because the Prime Minster wanted to precipate it by breaking the essential element in the "Plan for Coal", which was agreement with the NUM on the future of the industry.

The Prime Minister

So the right hon. Gentleman absolutely agrees with the closure of uneconomic pits. [HON. MEMBERS: "Answer."]

Mr. Speaker

Order. It is no good hon. Members shouting "Answer" at the Prime Minister. She is seeking to do so.

The Prime Minister

The right hon. Gentleman has not argued that he is against the closure of uneconomic pits. He put it in legislation. [HON. MEMBERS: "Answer."'] I will, if right hon. and hon. Members will be quiet for a moment. The right hon. Gentleman has argued that it is all right to close uneconomic pits, provided the correct procedure is followed. [Interruption.] Of course he has. [Interruption.] That is precisely the essence of his argument. So he agrees with the closure of uneconomic pits, and he is trying to use Cortonwood as a way of saying that the procedure is not being followed. The National Coal Board has made it clear that the procedure will be followed at Cortonwood. If right hon. and hon. Members agree that they enshrined the policy of the closure of uneconomic pits in legislation and that all that is between us is procedure, the strike should soon end. [Interruption.]

Mr. Benn


The Prime Minister

Mr. Speaker—

Mr. Speaker

Order. I do not think that the Prime Minister is giving way.

The Prime Minister

I have more to say about the right hon. Gentleman, and at the end of it I shall gladly give way to him again, because no doubt he will wish to intervene at that point.

Of course, uneconomic capacity was closed under the previous Labour Government. Indeed, during the stewardship of the right hon. Member for Chesterfield 22 pits were closed — some of them uneconomic — and 17,000 men became redundant on terms that were not a patch on those available now. The right hon. Gentleman said in the House on 4 December 1978: I have never found the NUM in any way unreasonable where closures are necessary because of exhaustion or because pits are out of line in economic terms." — [Official Report, 4 December 1978; Vol. 959, c. 1015–16.]

Mr. Benn

The Prime Minister, with every comment, makes our case. Let the country understand that the reason why the NUM gave its support to "Plan for Coal" was that the future of the industry, including closures, was to be agreed with the NUM. There is now a coal strike because the Government were deliberately prepared — they prepared it years in advance—to break the agreement with the mineworkers that the industry would be developed in agreement with them. If the Prime Minister tonight told Mr. MacGregor that there was to be a settlement on the basis that all closures would be agreed with the NUM, the strike would end tonight.

The Prime Minister

I am not prepared to hand over the management of the National Coal Board in my time any more than the right hon. Gentleman was in his. If he reads his speech he will note that he said that if the NUM came to him he could pass on what it said to the National Coal Board. The NCB must be free to manage. The right hon. Gentleman quibbles about the procedure of those pits. He admits that it was his policy to close uneconomic pits. He admits that he repeated it in legislation. He cannot plead that he did not know what he was doing when he confirmed that—

Mr. Benn


Mr. Speaker

Order. It seems that the Prime Minister is not giving way.

The Prime Minister

I have twice given way to the right hon. Gentleman and have answered him. I assume that he will have a chance to catch your eye again, Mr. Speaker. Indeed, as I have still more to say about the right hon. Gentleman, no doubt he will have another chance to intervene.

Now, in its anxiety to follow the leadership of the NUM, the Labour party seems to have repudiated the policy of the right hon. Member for Chesterfield —[Interruption.] It has because it is for the closure of uneconomic pits.

The Opposition's new view now seems to comprise two elements: first, that pits must never be closed, regardless of cost, unless they are geologically exhausted and, secondly, that there should be more investment in old pits, presumably at the expense of new ones. Those are totally new views, different from the policy which the Opposition followed in practice.

The taxpayer is already spending £1.3 billion a year on the coal industry. That is more than the total of the salaries of doctors and dentists in NHS hospitals; it is the equivalent of 28p on petrol; it is equivalent to an increase of more than £2 a week in the retirement pension; and it is double the total amount spent on all four scientific research councils. Labour's new policy would mean that the subsidy would increase without limit — [Interruption.] It is the Government's policy to phase out subsidies to the nationalised industries. In line with this the Government hope that the coal industry will be able to operate without the need for assistance, apart from the social grants".—[Official Report, 27 November 1975; Vol. 901, c. 1062.] I hoped that I could agree with the right hon. Member for Chesterfield because those were his words and not mine.

Mr. Benn

I am grateful to the Prime Minister for again clarifying the difference between the two sides of the House. The difference that has emerged in her latest comment is that she believes that the coal is valuable while we believe it is the miners who are valuable. That is the difference between our approach to the future of the industry and her own.

The Prime Minister

The right hon. Gentleman runs away from it again. He put the closure of uneconomic pits into legislation. He operated that policy. He is now trying to change it.

We can improve our industrial performance only if an efficient coal industry can provide the cheap energy that workers in other industries need to stay competitive so that they can keep their jobs and win others. I would have thought it would be a matter of pride for the coal industry that it should make profits that could pay for schools and hospitals rather than losses which drain funds away from them. In the market economy, an efficient coal industry should help to finance the social services, not become one itself.

It is because we believe that the coal industry has a prosperous future based on efficient, new capacity that we are not prepared to write the blank cheque on the taxpayer which the NUM and the Labour party demand. The offer which the NCB has made to the miners is a fair and reasonable one. Indeed, as a former president of the TUC said at the weekend, it is the most generous that he could recall for any group of workers. In making that possible, the Government have carried out their proper role. I hope that, before too long, this message will get through, and that miners will return to build the prosperous future that awaits them, and that peace will return to the coalfields.

One reason why the strike has not ended before now is the aid and comfort given to the leadership of the NUM by the right hon. Gentleman and his friends. A branch colliery president was recently quoted by the Sunday Telegraph as saying of the Leader of the Opposition: He has let himself be used as a puppet by the people who believe in extra-parliamentary tactics, and he has fallen for it hook, line and sinker". The right hon. Gentleman leads a party which claims to support democracy but repudiates those miners who have voted democratically to remain at work and have done so in accordance with their union procedures. He leads a party which condemns violence in general but supports the mass picketing which inevitably ends in violence. He leads a party which has allied itself to the wreckers against the workers.

The forces to which the right hon. Gentleman has lent his voice and support have no more love for parliamentary democracy than for the jobs and homes of those who oppose them. Sooner or later, when he has ceased to be of value to their purpose, they will turn on him, just as surely as they have turned on the police, on the steel workers, and on working miners and their families.

There is only one word to describe the policy of the right hon. Gentleman when faced with threats, whether from home or abroad, and that word is appeasement. He will live to regret it. It is no policy for Britain.

5.50 pm
Mr. David Steel (Tweeddale, Ettrick and Lauderdale)

One of the advantages of the long speeches from the two other leaders is that people are inclined to go to tea at this stage of the proceedings, and I hope, at least, that I shall have a quieter hearing.

I want to start, Mr. Speaker, by obeying your injunction to be brief. Therefore, I shall make four basic criticisms of the Government and put forward four basic alternatives in a relatively short speech.

The Leader of the official Opposition opened the debate without referring specifically to the new wording of the motion he put before us. Last week it was announced that the debate would be on the shambles of Government policy. Somehow the word "shambles" has disappeared from the motion before us. No doubt that is on sensitive grounds because one leader's "shambles" could turn out to be a deputy leader's ambiguity. The truth is that those in policy glasshouses should not throw stones. I do not believe that we have heard anything from the Leader of the official Opposition today to give us confidence that the official Opposition have an alternative economic prospectus that would hang together.

The Prime Minister began her speech by setting out her economic objections rather as though she were an incoming Prime Minister. But it is only fair to remind her that she has been in office for five years and that the House should look at the record rather than her aspirations. I believe that the record shows a very bleak picture.

The first proposition that I put to the Prime Minister from these Benches is that we believe that the time has come to end the Government's obsession with control over the money supply as a target as the sole means of fighting inflation. That view now has wider currency, not just in the country, but inside the Conservative party. The right hon. Member for Cambridgeshire, South-East (Mr. Pym) said in his book: 'Monetarism' has encouraged a disproportionate emphasis on inflation, especially in the light of the world recession. He goes on to say: In different circumstances such an emphasis could have been appropriate, but in reality it has exacerbated other economic problems, which a broader and more flexible strategy could have encompassed without threatening the control of inflation. I believe that that is true, especially since—the Prime Minister made no reference to this — there is every prospect that inflation is rising again and that by the end of the year we may well see inflation of over 6 per cent., possibly even 7 per cent. Indeed, the mortgage rate just announced will contribute to that. Again, the Prime Minister made no reference to that in talking about increased home ownership and the council tenants who bought their houses and now find themselves saddled with the highest mortgage rates for five years.

Therefore, the country is entitled to ask the Prime Minister, at the end of five years of her period in office, whether the sacrifice was worth while for the lower rate of inflation. Is not the so-called recovery already over? What was the sacrifice for? When we look back to last year we find that the Government's figures show that in 1983 the country had a deficit in manufactured trading for the first time since the industrial revolution. If that does not signal a warning light to the country, I do not know what does.

At the same time, we have a declining industrial and manufacturing base. It may well be, as the Prime Minister said, that overall output is up, but output in what? We must all look forward, whatever our politics, to a real recovery in our economic situation, but how shall we achieve it when the manufacturing base has been so eroded over the last five years?

We also have the continued problem—I believe it is not just an economic but a social problem—of chronic and debilitating unemployment. The Prime Minister said very little about that this afternoon.

Finally—the Prime Minister did talk about this—at the end of five years of these policies we have a period of severe industrial strife and a picture of division in our society which, I believe, is unparalleled in post-war politics. None of those is an achievement to crow about. That is why I believe that a reversal of policy is now called for.

Therefore, I appeal to the Government to concentrate on different targets from that of money supply. For example, I appeal to the Government to concentrate on reducing interest rates. There is great disparity now between interest rates and inflation. That disparity must act as a strong disincentive to real investment in our country. The Government should then concentrate on getting the exchange rate right. I admit that that is more difficult.

Mr. Anthony Nelson (Chichester)

Will the right hon. Gentleman give way?

Mr. Steel

I will give way towards the end of my speech if hon. Members still wish to ask questions, but I hope that they will see it as a package.

On the exchange rate, I believe that the pound is still overvalued against the deutschmark and the franc, with the result that our continental neighbours have a competitive advantage over us, which is estimated at about 18 or 20 per cent. The Government must concentrate on that. I also believe that there is a case for cutting still further—this may surprise the Chancellor of the Exchequer even more —the employers' national insurance contribution.

Mr. Nicholas Budgen (Wolverhampton, South-West)


Mr. Steel

I said that I would give way later. I hope that hon. Members will be patient.

There is a case for cutting the employers' national insurance contribution still further. The Prime Minister said that anyone who asks for that is asking for a cut in pensions. I do not believe that. There has been an increase in the national insurance fund. The Government have been steadily paring away their own contributions to the fund. Therefore, I believe that, without endangering the level of pensions, there is room for, say, a further 10 per cent. cut in the employers' national insurance contribution. There is such great unemployment that it is time for a taxation policy that stops employers firing and starts them hiring. Therefore, I appeal, first, for changes in the fiscal and monetary sphere.

Secondly — this is not a new point because we debated it on the Consolidated Fund Bill only a few day's ago—the Government should accept that there should be an increase in the public sector borrowing requirement and a controlled programme of spending on capital investment. Again, we are not alone in saying that. The CBI report—"Fabric of the Nation"says much the same. We may not agree completely on the figures, but the approach is the same. Moreover, the report of the Treasury and Civil Service Select Committee condemns the low rate of prospective growth as unlikely to give any relief to unemployment. In fact, the report predicts that unemployment will increase if we continue on the Chancellor's present low growth targets.

Apart from those on our Benches, many wise counsellors also argue that there is room for the Government to increase the PSBR and to start capital investment, for which there are many candidates. The water authorities have been starved of the opportunity to create a national grid. The local authorities are waiting desperately to try to catch up with housing repairs, building roads and bridges, sewerage problems, and so on.

There is a basic political conflict between us and the Government. The Government are content to use our oil revenues to finance the dole queue, which surely must be the greatest waste of public expenditure, whereas we say that the financial stability provided by oil revenues should be used to invest in the future.

I shall give a household analogy. If someone increased his mortgage on the strength of the solidity of his house so as to make a house improvement, we would regard that as wise housekeeping. Why does the nation not do that? Why do we fritter away our resources from oil on financing a dole queue — the biggest expenditure on unemployment ever seen — instead of investing in our future? Moreover, I believe that, even on the Government's own yardstick, it is more cost-effective to stimulate the economy than, for example, to promise future tax cuts. The extra money would go not on cash spending on more important consumer goods, but on such things as the construction industry, which has been so badly hit during the past five years. Therefore, my second proposition to the Goverment is to allow for a modest public spending programme to help pull us on to economic recovery.

My third proposition is even simpler for the Government to achieve. They should abandon their obsession with privatisation. The more one travels around the country and meets those working in the great public enterprises, the more apparent is the growing hostility to the programme of privatisation as a political doctrine. Last week, one of my hon. Friends said that it was true that privatisation had become the clause four of the Conservative party, which resembles a household selling off the family silver to pay the debt collector and saying, "See by how much we have increased our revenue."

I believe that this policy of privatisation is in part dictated by the Government's obsession with keeping down the PSBR because it brings in money and helps to alter the figures. The staff and, indeed, the management of British Telecom, British Airways, the British Airports Authority and British Shipbuilders—in the latter case, the chairman himself — all argue against the Government's policy. What sense does it make for the Government to call on the public sector to be efficient and to be profitable and then, if it fails, to castigate it for being a useless drag on the nation? If these industries succeed, they—or bits of them—are sold off.

Mr. Tony Marlow (Northampton, North)

Has the right hon. Gentleman had the opportunity to speak to the management and work force of Jaguar about privatisation?

Mr. Steel

Yes; indeed, I have. Not only have I had the opportunity to speak to them, but I visited the Jaguar plant a few weeks ago. Because it is a self-contained part of the British Leyland complex, one finds that there is great enthusiasm over what it has achieved, and even greater enthusiasm in looking forward to participation in the share offers that are being made. However, one does not find this in the rest of British Leyland. If one hives off the profitable part—whether it be the warship building sector of British Shipbuilders or the profitable Jaguar section of British Leyland—what one leaves behind is less profitable in the public interest and more dispirited as a result. I do not think that it makes sense to hive off even certain small parts of an industry.

Mr. Budgen

Will the right hon. Gentleman give way?

Mr. Steel

I shall not give way to a whole series of hon. Members. I have given way to one hon. Member. Let us see how we get on, and I may give way a little later. I promised to be brief, and I like to stick to my word.

One hears the Opposition promising, no sooner than the ink on each Act is dry, to renationalise with, or without, compensation. This country, unlike any of our industrial competitors, has spent a great deal of time over the last 30 years shifting whole parts of our industry backwards and forwards across the frontiers of the public and private sectors. It is a useless exercise. British Steel is the most outstanding example, because it has been moved so often. None of our Western industrial competitors, none of our fellow democracies, suffers such a political handicap. I believe that what we are seeing is dogma at work, not practical financial considerations. My third proposition, therefore, is that the Government should abandon privatisation.

Mr. Budgen

The right hon. Gentleman in his earliest passage said that he thought that the pound was too high against two other currencies, and he seemed to indicate that it might be technicaly possible to devalue it against two currencies, but against no other currencies. Could he explain how that is done?

Mr. Steel

I did not suggest that at all. The hon. Gentleman will know perfectly well, because he has attended many debates on this subject, that we support membership of the European monetary system, and we have argued that case from the beginning. I did not intend to stray on to that path in this short debate.

Mr. Nelson


Mr. Steel

I shall not give way.

My fourth and last point is that there needs to be a major improvement in the climate of industrial relations in this country. This is the strongest criticism that I would make of the Government.

Those who listened to the "Today" programme on 20 July, the morning after the settlement of the docks dispute, heard the Secretary of State for Transport say: This is good news for the country and good news for reasonableness and everyone affected. I should like to pay tribute to the negotiators, the Union, the Employer and ACAS for reaching this sensible agreement. On the evening of 19 July, the Prime Minister told the 1922 Committee, according to a newspaper report, That her Government had fought the enemy without in the Falklands conflict and now had to fight an enemy within … and she declared that the docks and pit strikers posed as great a threat to democracy as General Galtieri, the deposed Argentine leader. They were a scar on the face of the community. We cannot have it both ways. I say to the Prime Minister that if one is pursuing the Falklands analogy, she is a one-woman heat-seeking missile. When there is conflict, she will bring more, and that is the record of her Government. We knew — it is no good the Prime Minister railing against Mr. Scargill—when Mr. Scargill was elected president that he was politically motivated. That comes as no surprise to any of us. We knew that he was not a democrat. We knew that he wanted to bring down the Government by extraparliamentary means. So why, in the face of that, did the Prime Minister appoint Mr. MacGregor to the chairmanship of the National Coal Board? I am not being wise after the event. I criticised that appointment in the House at the time. If one wants to slim down the coal industry and one has painfully to say to miners, "You have to leave your jobs," the best person to do it is not someone over pension age brought in from outside the industry who has no long-term future in it. The key is to appoint someone from within, who is known and who has the confidence of the industry. That was a provocative appointment. It was followed by mistakes, about which the Prime Minister has given no answer, in particular, in the Cortonwood case. Procedures which have long been approved and followed under successive Governments were not followed.

It is no good the Prime Minister asking the Leader of the Opposition to denounce the lack of a ballot in the NUM, or Mr. Scargill. I believe that one of the fatal flaws in our parliamentary system is that, so long as one side of the House of Commons is financed by the trade unions, there will never be independence of judgment about their actions. That is no reflection on the right hon. Gentleman. It is a position which he inherited and which is endemic in the Labour party, just as the Tory party is in the pockets of those who contribute large sums from private industry. It is another defect in our political system that none of our industrial competitors has to tolerate.

The Government could have tackled the position in the coal industry differently. First, it was wrong for them to sit back and watch the coal board produce a so-called national target of closures. When the Prime Minister talks about the success of pit closures under the previous regime, she should remember that they were done not on the basis of a national list or target, but pit by pit, by agreement and local negotiation. Moreover, I believe that the Government should declare their confidence in the future of the coal industry by, for example, calling off the Sizewell inquiry. We are aware that there is overproduction of energy in this country. No one will believe pious talk about the future of the coal mines while there are plans for building unwanted nuclear power stations.

Thirdly, I believe that the Government should have followed the good example set by the British Steel Corporation, by producing a scheme for alternative industrial investment for those mining areas hard hit by closures. It is not enough to talk about the size of the redundancy payments. Of course, they are generous; but recognition of the social impact on those areas threatened by closure is required.

We should face up to what the strike is doing to our country. The latest financial estimate I have seen is that it is costing £240 million a month. I do not know whether the Minister who is to reply can comment on that figure. It is a serious strain on the country's resources. It is dividing the country. The Prime Minister should recognise that many people in the mining areas, which I have visited, are not supporters of Mr. Scargill— they are positive opponents. None the less, they support the miners. The tactical mistake that the Government have made is to take on the miners as a whole instead of trying to divide the vast majority of them from Mr. Scargill and his cohorts.

Mr. Campbell-Savours

Do not fall off that fence.

Mr. Steel

I assure the hon. Gentleman that I have talked to people in that position in the mining industry, and I have no doubt that what I say is correct.

The reason that I dwell on industrial relations—this is a key point—is that I believe that the Government will never succeed in combining forward economic activity—reflation—with control over inflation unless they get industrial relations right and achieve the kind of climate in which it is possible to introduce an incomes strategy. Without that, inflation will run riot. With good will, it should be possible for the Government to negotiate no-strike agreements in the public sector in return for independent pay reviews.

In the private sector it should be possible greatly to expand the role of profit sharing and participation in profits well beyond what the Prime Minister referred to in this year's Budget debate, which was merely a scheme for top management, not for the work force. We should base future income increases more on sharing the fruits of increased profitability and production. I believe that our present political system fuels industrial discord, and industrial discord unfortunately fuels the present political system.

What is required is impossible for this Government to achieve. We require a spirit of national unity and a feeling that we are all facing economic difficulties together. I am afraid that that attitude will not be possible with a Government headed by a Prime Minister described by the Wessex area Conservatives as intractable, domineering, uncaring and strident.

6.10 pm
Sir William van Straubenzee (Wokingham)

The leader of the Liberal party ended his speech with a reference to my right hon. Friend the Prime Minister. This enables me to say simply that at any rate on the Government Benches and, I suspect, widely across the country the speech that we heard from her will be remembered many years after any speech from the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and will be recorded as a splendid summary of the first year of the second Parliament of a Tory Government. I thank my right hon. Friend for that inspiration and for her leadership over that year.

I do not propose to take up in detail any of the remarks of the leader of the Liberal party, but I found a certain superficial attraction in the central theory that he put forward on his economic policies. However, I genuinely do not believe that they get at the root cause of the difficulty. They get at it superficially, but they do not get at the root cause. This Government are attempting consciously — and they will be remembered for it gratefully—to get at the root causes of so many of our economic difficulties over the years.

For those who were here 10 years ago, that part of today's debate which has referred to the current dispute in the coal industry has a ring about it that suggests that we have been here before. In accordance with the traditions of the House, I gave notice to the right hon. Member for Salford, East (Mr. Orme), who is greatly liked in all parts of the House, that I intended to make the personal reference of recalling his pant in those days late in 1973 and early in 1974 and his constantly reiterated phrase, "Settle with the miners." Those of us who were here at the time will remember that and, although I do not question the right hon. Gentleman's sincerity in attempting to get the two sides together, we cannot accept that he is neutral in this regard.

In 1974, the incoming Government compounded the violence that we saw on the streets during that coal mining dispute. Admittedly, we in the Conservative party made our mistakes. We forgot, for example, that it is not possible to confine a general election campaign to one issue. I hope that we shall never forget that again. I detect no sign in any part of the Tory party to suggest that we should return to the electorate on this issue, for the electorate expect the duly elected Government to deal with this dispute firmly. But if anyone in any part of the Tory party advocates this course, the lesson of 1974 is hideously before us.

The real irony is that the right hon. Member for Salford, East and other distinguished Labour Ministers who then went to serve in Northern Ireland—and in the right hon. Gentleman's case served with distinction and personal courage—were themselves overtaken by the same sort of violence which those on the other side of the water observed had succeeded over here in Great Britain. If I feel deeply about the outcome of the events subsequent to the election of 1974, it is because in a modest and small way I took my part in the painstaking building in Northern Ireland of what we in this country would call a coalition Government. I still believe that the overthrow of that experiment by violence was one of the great tragedies of that tortured Province. It would never have happened if there had been continuing Government. I make no personal criticism whatever of the Ministers responsible.

If we are to talk about resolution, I must say to my right hon. Friend the Prime Minister and to members of the Cabinet that the Conservative Back Benchers are very determined indeed to remain resolute in this dispute. I have a personal account to settle, not with the miners, but with the miners' leadership. I intend to do my modest part from the Back Benches, in support and encouragement of the Government, to see the matter through.

There is an analogy, because even Ministers in a Labour Government made preparations in Northern Ireland. We all recall what happened there subsequently. They beat the second attempt to overthrow authority in Northern Ireland.

It is clear that contingency plans have been made by the Government to deal with the strike. I applaud that action. I regard it as a matter of great distinction for the Government to have looked ahead to make contingency plans for an inevitable confrontation in one form or another.

I have lived through times of intimidation on the housing estates of Belfast and elsewhere, but I would never have expected that in 1984 the same violence would creep into parts of Great Britain. It is a new and unpleasant feature of industrial dispute. Few things have so affronted and outraged the majority of reasonable people of all political persuasions. Furthermore, violence is contagious.

All of us welcomed, although a few may have been against, the ending of the dock strike. It was brought about partly by the threat of exasperated truck drivers to smash up the port of Dover. I am glad at the outcome and collapse of the strike. But when I hear of such intimidation as the method of ending that strike, I can see how far the contagion of violence has crept into other parts of our industrial life. Those who fail to condemn violence, wherever it is found, in this type of industrial dispute do more than they know to encourage the creeping cancer of violence in our industrial world.

My message to the Government is that they must hold firm and support the National Coal Board, in its managerial responsibilities. No trade union has been willing to support the leadership of the NCB effectively. Sixty-five thousand NCB workers are at work. That is a significant feature of the dispute.

The leader of the Liberal party referred to the economic state of the nation. Although my comments will be without the right hon. Gentleman's authority, for those of us who represent southern constituencies there are welcome signs of an economic upturn. In some parts of the so-called Silicon Valley, which is partly in my constituency and on which much of the nation's future depends, there are shortages of skilled labour. I am acutely conscious that there is a problem of difference between what we broadly call the north and the south. However, I can see hon. Friends who represent western constituencies whose pockets of difficulty belie the general application of that proposition.

There are welcome signs of improvement in the economy that are based on the Government's notable success in controlling inflation and on this year's incentive Budget. However, I disagree fundamentally with the leader of the Liberal party who wants to stop the trend of returning industry to the private sector. I hope that the Government will not listen to any part of that argument. Against it, I should point out that the distinguished chairman of British Airways, Lord King of Wartnaby, has won the hearts and minds of his work force, which is a notable achievement in terms of modern managerial skills.

Like other hon. Members, I have many British Airways employees in my constituency. I have never before seen so many personally expressed and genuine outpourings of feeling on paper. Such expressions of feeling are far removed from the sort of stereotype campaign about privatisation that we are all familiar with. If that great enterprise is privatised—as I hope and think it will be—I hope that Ministers will think extremely carefully before shearing from it some of the routes that it at present flies. I want BA's launch to be really successful.

If words are important in our business, as they are, and if the Leader of the Opposition's words about violence are important, as I think they are, the words of Conservative Members, including Back Benchers, must also be important. Despite the provocation of recent events, we must not fall into the trap of using extreme language or of failing to differentiate between the rank and file of the mining community and its leadership. Phrases such as "the dross of our society" when applied to men and women who have fallen on difficult or hard times or who are physically or mentally handicapped must not be heard to come from us and have no part in our philosophy.

Running through our Tory philosophy is a clear stream of liberal thinking—although not "liberal" with a capital "L"—and it has been an important part of it for many years. I have been a Member of Parliament for almost 25 years, and if I was asked as a Back-Bench Member which social benefit had done most of help my constituents, I would single out the constant attendance allowance. It has been of immeasurable benefit and support to innumerable families coping with illness and disability at home. Its author was the then Secretary of State for Social Services, the present Secretary of State for Education and Science. Even the most partial observer could hardly call him a wet.

That philosophy goes right across the Tory party and is part of its thinking in its contribution to the welfare of the people. However, we must make it clear at all times that the wealth must first be earned before it can be distributed to help those in difficulties, which is what we all desire. It is good to take stock at the end of the first year of this second Parliament. What I have heard this afternoon has greatly encouraged me about the year ahead.

6.25 pm
Mr. Michael Foot (Blaenau Gwent)

I had hoped that the Prime Minister would have stayed a little longer to hear our debate, particularly because of the exchanges that we had before, but she has not. I shall address my remarks to what the right hon. Lady said at the end of her speech because, conceivably, we may be able to use this debate for the beneficent purpose of trying to ensure that we escape from this serious industrial crisis. I say that partly because I represent a mining constituency.

No one can doubt that the burden of the strike is a grievous one, or that the proper course is to seek an honourable settlement to this dispute. That, I am sure, is the desire of all my right hon. and hon. Friends. We believe—I do, as one who has followed the matter with considerable care from the beginning — that an honourable settlement has always been available, but the Government, and the Prime Minister in particular, have refused to accept it. I propose to illustrate that fact.

Before the dispute ever came to a strike, before 6 March, before the coal board announced its proposals, breaking "Plan for Coal" and its other agreements associated with that plan, others had warned about the danger of a national strike. Arthur Scargill, who is not usually accused of hiding his eloquence under a bushel, made it clear. Time and again, he warned that there was a scheme afoot in the coal board, backed by some sections of the Government, to go ahead with a plan for closures beyond anything that had been conceived under "Plan for Coal". Time and again Mr. Scargill said it and people heard him. Many people disbelieved him because they did not believe that the Government would be prepared to break "Plan for Coal", which had operated successfully before, but still Arthur Scargill went on saying it.

Ministers who are supposed to deal with such problems —the Prime Minister is first and foremost among them —should stop for a moment and ask themselves why it is that in the great mining communities, for the most part —this is not universal—people will believe what Arthur Scargill and those on the executive of the NUM are saying and will disbelieve all the things that are said by Mr. MacGregor, with the whole weight of the press, the Government and the Prime Minister behind him. Why is it that people believe what is said to them by Mr. Scargill and the NUM? Part of the reason—

Mr. Michael Howard (Folkestone and Hythe)

Will the right hon. Gentleman give way?

Mr. Foot

No, I shall not give way. I intend to speak only briefly, and I should much rather be interrupted by some of the Ministers who are responsible for this problem.

Before the strike ever occurred, it should have been understood, and it should have been understood at the Department of Employment above all, because every week, every day, there is a list of possible dangerous industrial situations. On that list, before 6 March, there must have figured the position in the mining industry. There must have been people in the Department of Employment—I know this from my experience there—who were telling the Government that they should look at this problem to see how a strike could be avoided. When I was there, we used to take some interest in such problems.

Perhaps the Department of Employment has been told by the Prime Minister that it must abandon that part of its proceedings and must not give its mind to trying to see how disputes can be avoided before they start, which is the best time to avoid them. It is not as if there were any mystery about it. In a special debate in November, initiated by my hon. Friend the Member for Wentworth (Mr. Hardy), my hon. Friends from Yorkshire, particularly those with mining constituencies, gave warnings to the Government. But, of course, the Government brushed them aside and did not care.

I now come to Cortonwood, on which the right hon. Lady gave such ambiguous and shaky answers today. She often comes to the House fully equipped with wonderful quotations supplied to her by Conservative Central Office. It is a shame and a scandal that she came to the House today improperly briefed on the subject of Cottonwood. One possible explanation is that of my right hon. Friend the Member for Chesterfield (Mr. Benn) — that the Government did what they did at Cottonwood on purpose. The other explanation—I am not sure which is the most offensive—is that it was all done by accident. Whether it was done on purpose by the Government and the coal board or whether it was done by accident, either way it was a case of criminal negligence.

When I read the story of what had happened at Cortonwood, I could not believe it because of our experience in Wales on the closure of pits. When we had anxieties about possible pit closures in Wales in the days when we were following "Plan for Coal", when we were abiding by its word and spirit, my right hon. Friend the Member for Chesterfield dispatched my hon. Friend the Member for Midlothian (Mr. Eadie) for talks. All the closures under my right hon. Friend the Member for Chesterfield and myself were carried out according to the procedure set out in "Plan for Coal". For the right hon. Lady to come to the House today unaware of that shows that she is quite unfit to deal with this critical industrial situation.

Anyone who understood how "Plan for Coal" operated, anyone who understood the forms of co-operation and consultation that had to take place if a pit closure were to be accepted, knew that something had gone shamefully wrong at Cortonwood. But even after Cottonwood there were opportunities for the coal board and the Government to put the matter right. Why did they not?

My hon. Friend the Member for Wentworth, who has Cortonwood in his constituency, initiated a debate in the House a few days ago, on 23 July. I hope that that has been put into the Prime Minister's brief. My hon. Friend described how, when the catastrophic closure of Cortonwood occurred, he went there immediately to try to ease the situation. He knew how furious the feeling would be. He held a meeting there during which he pleaded with the miners. He told them that they had a good case which could be carried to the House of Commons, to the Government and to the country. But he asked them to refrain from any actions that could be described as violent or that might injure their case. All that was done by my hon. Friend, and the miners followed his advice. There was no resort to violence by the miners of Cortonwood.

The first apparent criminal action was to distribute some leaflets. When the miners distributed the leaflets, some police came along and said that they could not be distributed in some of the places. That was all put on the record by my hon. Friend during the debate in the House a short while ago. But then, week by week, the tension and the violence mounted.

Who took the action that caused that tension and violence in the first place? One has to look at the aggressor. Everybody knows my hon. Friend the Member for Wentworth. He is no extremist. He is not somebody to be denounced by extraordinary language. He has the highest reputation in the House. What terms did he get out of the Government? He sent letter after letter to the Home Secretary complaining about the operation of the police. He did not get any answers. No attempt was made to deal with the situation. That is the case that he put to the House a few days ago — an overwhelming case, not only against the Government who had caused the Cortonwood catastrophe, but against the Government who did not know how to use the police in such a situation. [Interruption.] If a Minister wishes to intervene I shall give way, but I shall not give way to a Back-Bench Member.

Although those at Cortonwood are doing everything in their power to present their case peacefully, the police are reacting. My hon. Friend the Member for Wentworth did not blame the police, and nor do I. However, in many cases the police have taken measures which are beyond anything known in industrial disputes in this country in modern times.

The Government had a further chance to settle the dispute before it reached this highly dangerous state. They could have done something in the weeks after they discovered, as they should have done, what a grievous mistake they had made at Cortonwood. They could have gone to the coal board to discover how such a criminal folly had ever been perpetrated. They did not do that. Time and again, when my right hon. Friends the Members for Islwyn (Mr. Kinnock), for Salford,East (Mr. Orme) and for Cardiff, South and Penarth (Mr. Callaghan), who had a different proposal for mediation, raised the matter in the House, the Government rejected or sabotaged their proposals. Even when meetings were being prepared to take place between the coal board and the NUM, the night before, there were outbursts from such people as the hon. Member for Wokingham (Sir W. van Straubenzee). The hon. Member should have been a little less pious and should have denounced the sort of language used by the Prime Minister, unless he does not think that words have an effect in these matters. When the Prime Minister talked about the miners and their leaders as the enemy within and compared them with a Fascist dictator, it was an insult to the whole mining community.

Mr. Peter Bottomley (Eltham)


Mr. Foot

I shall give way only to a Minister.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen)

Since when has the right hon. Gentleman been so elitist that he will not give way to a Back-Bench Member?

Mr. Foot

It is not a question of being elitist.

Mr. Bottomley

Will the right hon. Gentleman give way?

Mr. Foot

I am trying to make Ministers answerable for their actions. The Leader of the House should have been able to persuade his Prime Minister to stay for the debate. On many occasions there could have been mediation, but the Government blocked every possibility.

Every possibility was encouraged by my hon. Friend the Member for Wentworth, but was sabotaged by the Government and thereby denied.

Opposition Members will continue to pursue every possible fresh opportunity for negotiations, because eventually the dispute must be settled by negotiations. We want it to be settled by negotiations, not by violence.

Mr. Howard


Mr. Foot

I shall give way only to Ministers. In my constituency a great many miners are deeply worried about the dispute and are not involved in acts of violence, although there have been acts of violence against them.

The Leader of the House should show the Prime Minister the report by John Pilger in today's Daily Mirror of the mood in the mining village of Murton in Durham, which is similar to that in many other mining communities. The Government, because they do not understand these matters, fail to realise that it is a question of miners fighting not only for their jobs, but also for their communities. They realise that, if they allow their communities to be destroyed, they will never be rebuilt.

Anyone who denies that that is the mood in most of the mining communities in Britain does not understand the position. Mr. Pilger visited the community some time ago, but his report in today's newspaper puts the matter in proper perspective:. It seems trite to say people here loathe violence, but they do, if only because physical danger is in their working lives every day. And when one of them is crushed the effects run through families and ripple along whole streets. These are patient and modest people, but such has been their desperation about their future that they have sent men and women to face riot shields and batons for the first time in their lives, and they have returned in disbelief at the para-military tactics of those they once knew as bobbies. That is an account of one village. I could give the details of incidents where my constituents have picketed, as they have the right to do in a free country, and were arrested by the police. Their treatment at the hands of the police in those instances—

Mr. Marlow

They were bullying.

Mr. Foot

The hon. Gentleman says that they were bullying. My constituents were charged with assaulting policemen, but when the case came before the court one of them—who was accused of being a bully by the hon. Member for Northampton, North (Mr. Marlow)—was acquitted by the court. He is about to bring an action for wrongful arrest against the police. That is the proper way to deal with it.

If the Government imagine for a moment that they can settle this dispute by the methods that they are using, they are making their biggest mistake ever. If they believe that they can intimidate the miners and the mining communities that have backed them, it will be a big mistake. The only way to settle the dispute is by mediation, discussion, and negotiation — peaceful means. That is what the Opposition stand for, and that is what we want to happen.

6.42 pm
Mr. Julian Amery (Brighton, Pavilion)

I am sorry that the right hon. Member for Blaenau Gwent (Mr. Foot) should be followed by a mere Back-Bench Member, since he was not prepared to give way to some of my hon. Friends. I hope, however, that he will not take it amiss if I say that his speech would have come much better from the Leader of the Opposition. The right hon. Gentleman, who has long experience of Parliament, knows how to try to bury a weak case in a mass of detail. It would have been far better if his successor had spoken in those terms rather than in the terms that he did. Opposition Members may draw their own deductions as to whether the replacement of one leader by another has been to their advantage.

The Leader of the Opposition embarked on a defence of a motion that censures not only the British Government but every Government in western Europe, whether under Conservative or Socialist leadership, because all are pursuing what one might call the policies of Thatcherism in one form or another. It is a little difficult to believe that they can all be wrong, because many of them, especially the Governments of France, Spain and Portugal, started from much the same premise as would have the Leader of the Opposition.

It was fascinating to note that the right hon. Member for Islwyn (Mr. Kinnock) seems to have been converted to what one might call Reagonomics. He believed that much could be said for deficit financing on the American model. Perhaps he had not thought out the implications of that. Deficit financing has worked in the United States for three reasons. First, the unions have not pressed for increased wages corresponding to the new growth. Secondly, interest rate hve been extremely high. Thirdly, a great deal of money goes to the United States because its relatively tough defence policy gives potential investors a sense of security.

I do not want to quarrel with the Leader of the Opposition in saying that the position is serious — of course it is. The Swiss national bank has actually raised its bank rate from 3.5 per cent. to just over 4 per cent. so it must be serious. However, the general consensus in Europe and the United States is that we are well on the way to recovery. Understandably, the right hon. Gentleman said that he did not wish to put forward his alternative policy, and as Leader of the Opposition there is no reason why he should do so at this stage.

But the litmus test of the policies of the official Opposition, the alliance and ourselves is to be seen in our attitudes to the coal strike. The Leader of the Opposition has come out in full support of Mr. Scargill and the strike. His speech at Durham set the final seal on that. I thought that it was very brave of him because I would wager anything that not one of the 60,000 miners still working will cast their vote for the Labour party while the right hon. Gentleman is its leader, and nor will many of those intimidated from returning to work.

The right hon. Gentleman said that the strike was not a political strike. I am convinced that it is, but I do not want to develop that argument because it has been developed by many of my right hon. and hon. Friends and many newspapers. In so far as it is not a political strike, it is of great interest to consider what it is. It is basically a conservationist strike. Mr. Scargill and his friends are not really interested in the pay, conditions or future of the industry; they want to preserve certain existing communities that are no longer economically viable. It is rather like the common agricultural policy, and the attitude of the French and German farmers who want to keep their farms going although they are not economically productive. I do not know what has happened to the party that intended to reform Britain in the white heat of the technological revolution. It is the most reactionary, most conservative movement imaginable.

There was a time when public opinion would have been on the side of the miners, but not today. Many people, including the leader of the Liberal party, have criticised Mr. MacGregor. A most interesting aspect has been the attitude of the steel workers. If they had had it in for Mr. MacGregor, the coal strike was their chance of revenge —but not a bit of it. They have made it plain in both public and private statements that the steel industry is now a going concern, and they want to keep it that way.

The same is true of the collapse of the dockers' strike. The dockers' hearts were not in it. They had little sense of solidarity with the miners. Opposition Members should take a good look at what happened with the lorry drivers. If it ever came to a free-for-all, and I pray that it never will, the Opposition should bear in mind that the forces of the Right could be a damn sight tougher than the forces of the Left. They should remember that it is this Government who stand between them and those whom they seek to represent, and what could be a very much tougher position than that which exists today.

There have been vast changes in our society. Twenty years ago we were coming to the end of the 13 years of Tory rule. That was a golden period because all our competitors in the world, except for the United States, were flat on their backs for they had not recovered from the war. We were able to sell anything that we made in Britain to Europe, Japan or anywhere else. The fact that it was a golden period was not particularly because of the Conservative Government but because it was easy for employers and employees to strike a sensible bargain and to come together without being especially efficient.

But in the past 20 years we have faced enormous competition from all the countries that were ravaged in the second world war as well as from the United States. There has also been tremendous technological change. Having spent 18 years of my life representing a constituency in the north of England, I regret the drift to the south that is taking place. In a sense it is almost an insoluble problem. Liverpool rose to its greatness because of the slave trade. That is hardly a business we could start up again. It then became the emporium for the empire and that was followed by the Commonwealth trade, which is no longer of the first importance. The drift to the south continues and it is not easy to see how it will be overcome.

When the Leader of the Opposition spoke about unemployment he rather gave the game away. He told us that 1.2 million had been unemployed for more than one year. That suggests that about 2 million—perhaps rather fewer allowing for retirement and death—became reemployed within 12 months. If that is so, quite a number of new jobs must be coming into being, or many old jobs must be being vacated because of retirement and death.

The spectrum of society has moved away from the old polarisation of working class and middle class. A great mass of the working class has become middle class. The embourgeoisement has moved a long way away and with it has been a move from collective thinking to individual thinking.

I share the nostalgia which is still felt on Conservative Benches by those who served in the years when consensus was still operating. We regret that that consensus no longer exists. It was a happy state of affairs when we had it. It was happy in the older days when there was still a certain paternalism; when employers and landowners felt a responsibility and received in return a certain deference. All that has gone. There is no deference in the country nowadays, unless, perhaps, in East Anglia.

We have a new world and the centre of gravity has moved — I hate the expressions "left" and "right" —substantially to the right, which explains the existence of the Social Democratic party. The official Opposition had better take account of that.

It is clear to my right hon. and hon. Friends that Mr. Scargill must be defeated in his endeavour, and seen to be defeated. That brings me to the attitude of the alliance to the coal industry. The right hon. Member for Plymouth, Devonport (Dr. Owen) has spoken out admirably; and in spite of all the differences that I had with him in the past over Rhodesia, I salute his stand on the coal dispute, as I did over the Falklands. The right hon. Gentleman seems to realise that the pulse of the country is against what is happening in the coal dispute.

The leader of the Liberal party has preferred, like the Levite in the parable, to pass by on the other side. I have always thought that the Levite must have been a liberal. I think that I know exactly what went on in his mind. He came down the road to Jericho and saw the robbers plundering the merchant's caravan. He said to himself, "Of course, this is very wrong. The robbers should not be doing it". Then he thought, "But who knows, perhaps the robbers were the children of one-parent families. Perhaps the merchant had been a bad employer or had not handed over his wallet fast enough," so he went on his way and thought it better and safer not to interfere. His is a regrettable position.

The official Opposition have been moving steadily to the Left. If an older man may be allowed to reminisce, I remember asking Hugh Gaitskell when he was Leader of the Opposition, "Who will be the new members of your Cabinet?" He thought for a moment and said, "Wyatt, Donnelly and Jenkins." Where are the shows of yesteryear? Now we have the right hon. and hon. Members whom I regarded as very Left-wing—the right hon. Members for Lewisham, Deptford (Mr. Silkin) and for Manchester, Gorton (Mr. Kaufman) and the hon. Member for Knowsley, North (Mr. Kilroy-Silk). The tumbrils are waiting at the door of the prison for them. They seem now to be Right-wing deviationists, but who would have thought that a little while ago? Only the right hon. Member for Leeds, East (Mr. Healey) survives, like the Abbè Sieyés of the French revolution—a triumph of intellect over integrity.

I do not know whether the Trades Union Congress in September or the Labour party conference will be for the Labour movement what the September massacres were for the Girondists and other left-of-centre members of the French revolution. I cannot tell the future, but I can assure my right hon. Friend the Prime Minister that, as matters stand today, there is no alternative policy to hers and no alternative leader.

6.57 pm
Mr. Sean Hughes (Knowsley, South

In view of the forecasts of the right hon. Member for Brighton, Pavilion (Mr. Amery), I preface my remarks by saying that I am one hon. Member who represents Knowsley for whom the tumbrils are not waiting. If my constituents had listened this afternoon to the speeches of the Prime Minister and some of her right hon. and hon. Friends, they would have wondered whether they and the Prime Minister inhabit the same world. No reference was made in her speech to a problem which is exacerbated at this time of every year in constituencies such as mine—the appalling problem of youth unemployment.

I am not one of those who believe that it is the business of Government to interfere in every breathing moment of an individual's life. I equally believe that it is within the compass of the Government's responsibilities to ensure that young people do not see themselves written off even before they start. The Government seem to look on their national duties as coldly as an accountant looks at a ledger. The Government are failing to take account of the social cost of widespread youth unemployment. About 40 per cent. of all the registered unemployed in Britain are under 25. Almost one third of that number have been unemployed for more than a year. In June this year, there were 95,000 unemployed school leavers. As a percentage of total unemployed, the under-25s now comprise more than 39 per cent., compared with more than 37 per cent. last year and more than 35 per cent. in 1979.

The Prime Minister and other Government Front Benchers do not seem to appreciate that national averages are meaningless in a country with deep regional disparities. In the north-west, in 1983–84, there were 117,836 16-year-old school leavers. Forty per cent. of them went back to school for further education, while the other 60 per cent. joined what is euphemistically called the labour market. Of the latter total, 32 per cent. found jobs, while the other 68 per cent. were unemployed or on YTS. The figures for 17-year-old school leavers are comparable.

My hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) and I represent a borough which, in the past three years, has seen 80 per cent., 85 per cent. and now 80 per cent. of school-leavers without permanent employment. I hope that the Government will consider the long-term effect of obscene figures of that sort, because the effects permeate many aspects of life, and society will one day have to pay a heavy cost for them.

Youth unemployment is destroying any educational ethos in an area such as mine. It is sapping the morale of parents, pupils and teachers alike. I happen to hold the old-fashioned view that learning is important in itself, but I am realistic enough to know that an element in a pupil's motivation is that hard work at school will be rewarded by gainful employment, and nothing could be further from the truth today.

Unemployment in an upstairs maisonette on a sprawling concrete estate is even more debilitating than any intellectual concept that we in this House might have of unemployment as a state. The appalling paradox is that, in areas of high youth unemployment, the pressure is on the pupil to leave school early and to truant. The fact that people are not deterred by leaving school to go on to the dole queue is further evidence of collapsing morale.

Since areas of high youth unemployment will also, more often than not, be areas of high adult unemployment and general deprivation, so there is pressure on the pupil to leave school at the earliest opportunity. Even the pittance that we pay young unemployed people is seen as preferable to staying on at school and getting nothing in monetary terms when there will be nothing in job terms at the end of the extra stay.

Last month, a survey by the National Confederation of Parent-Teachers' Associations estimated that about 200,000 16-year-olds who were qualified for further education left school in 1983 because they could not afford to stay on. The confederation believes that the real figure is probably double that. That is a criminal waste of human talent, which is our greatest single resource.

There is a further consideration that we should ponder. Many of the unemployed youths will, if they have not done so already, soon be raising families, and those parents may never know what it is like to go to work each day. When their children reach school age, the first possible routine in the parents' lives will be having to get the child to school at 9 o'clock. That has enormous implications for truancy and so on in the future, and above all for the general development of the next generation.

There are even more sinister effects of widespread youth unemployment, as has been demonstrated by the frightening increase in drug dependency and drug abuse in areas such as Merseyside. Notification of drug addiction on Merseyside formed only about 1.2 per cent. of the United Kingdom total in 1982. Last year it was 6.9 per cent. The United Kingdom total is of course numerically much higher. In April of this year, on BBC Radio Merseyside, it was reported that 50 per cent. of young people on Merseyside between 14 and 25 had become regular users of heroin. No causal relationship has been established between drug abuse and unemployment because no research has been done on the subject, but I believe that most people accept that unemployment is clearly a factor in leading many youngsters to become involved in drug abuse.

Alarming evidence of a potential growth in racism has been found in research carried out at the department of pyschology at Birmingham university. This does not mean that the young unemployed are becoming more politicised. Indeed, the opposite seems to be the case. As Paul Willis wrote in New Society on 29 March, the young unemployed certainly don't take part in formal political action. The young without jobs are an amorphous and embarrassing problem for both left and right. The Birmingham survey shows a steady growth in feelings of pessimism and hopelessness and in the conviction that living conditions have deteriorated to a point not just beyond the control of the young people themselves but beyond the control of this House. That naturally leads to cynicism and disillusion with the system and is exaggerated by those who tramp the country saying that nothing can be done and that there is no alternative. Fearful for their own future, therefore the young in that survey often responded to their plight by seeking simple, nationalist and authoritarian solutions. History teaches that in a society based on fear, civilised values are at risk.

I do not wish to be accused of sensationalism or of encouraging that which I seek to prevent, but we must recognise the problems being stored up for the future if unemployment continues at the present level. We are creating unemployment ghettos in which many of the values applauded in this House are disappearing because the grim reality of everyday life in those areas is that the crushing tedium of unemployment leads young people to do something — anything — to relieve their boredom. They will have little interest in, let alone respect for, a society which patently has no use for them.

It is not a group, a class or a mass with which we have to come to terms. We must consider what we are doing to individual human beings who are being destroyed by unemployment. I do not believe that this Government or any Government have the right to sacrifice a generation in pursuit of economic ends. Democracy must be concerned primarily with means. The responsibility for the current massive unemployment lies fairly and squarely on the shoulders of the Government, but we have seen nothing yet to suggest that they are taking the problem seriously and treating it as a priority.

7.8 pm

Mr. Peter Lilley (St. Albans)

Today was billed as the Opposition's big day. In view of the sparse attendance on the Opposition Benches—[Hon. Members: "What about your side?"] It is the Opposition's day. In those circumstances, it is ironic to recall the dictum of Benjamin Disraeli: No Government can be long secure without a formidable Opposition.

Mr. Campbell-Savours

Is that a coded message?

Mr. Lilley

Is that a formidable Opposition? In the course of my first year in the House, I have come to like, admire and respect many Opposition Members, but even in my friendliest, most talented moments, I have never thought that collectively they amounted to an intellectually formidable Opposition. Indeed, anyone who regarded the Opposition motion or their speeches today as intellectually formidable would no doubt find Enid Blyton much too taxing. I do not crow about this, because those of us who take Benjamin Disraeli's dictum seriously are worried when there is no formidable Opposition facing us.

But why did Disraeli enunciate this rather paradoxical view—why do a Government need a strong Opposition? I think that it is because he recognised that sensible government requires a choice between alternatives. In Parliament, we need to be able to compare and contrast the policies enunciated and argued vigorously by the Opposition—such as we have not had today—with the policies of the Government. If that were done, I have no doubt that the Government would be able to demonstrate that their policies are clearly superior to the policies of the Opposition, and it would be possible to show that we are tackling the problems that have so long been neglected. I cannot show that our policies are superior to those of the Opposition if the Opposition fail to demonstrate them. No alternative has been on offer today from the Opposition. The Opposition's motion has offered us a destination with much of which we can agree, but no route to that destination has been mapped out.

The Labour party used to offer an alternative, of course. It was called Socialism, but that word does not appear on the Order Paper. It did not appear in the speech of the Leader of the Opposition today. I have looked as best I can through the speeches that the Leader of the Opposition has made in the House over the last year. It is a word that is conspicuous by its absence. Socialism appears to have been abandoned, not because it has been intellectually discredited, which it has, not because it has been tainted by tyrrany internationally, 'which it has, but simply because it has been demonstrated to be electorally unsaleable in this country, which it is, and we know why.

If one studies the magisterial works of David Butler on electoral change in this country, one finds that, even among the supporters who routinely vote for the Opposition, only a minority now believe in the essential doctrines of Socialism, only a minority favour more nationalisation and state control, only a minority favour increased welfare spending and taxation, and only a minority are in favour of increased links between the trade unions and the governing political party.

The reaction of the Opposition to this discovery that their dogma, their doctrine, is no longer saleable in the country has been twofold. On the one hand, there is the reaction of the right hon. Member for Islwyn (Mr. Kinnock), the Leader of the Opposition, which is simply to disguise the fact that it is the doctrine of the Labour party. On the other hand, there is the reaction of those who, recognising that it is not electorally saleable, drift towards the pursuit of revolutionary and semi-revolutionary dogmas—"If we can't persuade the people of the country to vote for Socialism we will force it upon them by extra-parliamentary and revolutionary action." The more that that attitude becomes predominant in the Labour party, the less chance the Labour party ever has of securing an electoral mandate. The process is cumulative, and, in my opinion, it has reached the stage where the Labour party is intellectually and politically moribund. Earlier today, a Conservative Member described the Labour party as dead. I confess that my reaction was the same as Dorothy Parker's when she was told that Calvin Coolidge had just died. "How could they tell?", she asked. How can we tell of a party that has been so long moribund that no life flickers within it?

If we are to seek some opposition to the Government's policies, we must look elsewhere. If we look to the alliance, we look in vain.

Mr. Marlow

My hon. Friend has been making an interesting speech about the demise of the Labour party. He has been looking at the Labour party's philosophy. Is it not true to say that since the Leader of Her Majesty's Opposition has now found himself to be Arthur Scargill's puppet, neatly tucked into his pocket, instead of following the course of Socialism, the Labour party is more inclined to become addicted to the philosophy of Fascism?

Mr. Lilley

As I understand it, I am not allowed to use that word in the Chamber, but I agree with my hon. Friend.

If we look to the alliance as a source of Opposition policies, coherently argued as an alternative to this Government, we find none. Its amendment contains only a jumble of incompatible objectives. It wants interest rates to be lowered at the same time as borrowing is increased; it seeks Government intervention to create more realistic exchange rates, but surely there is no greater contradiction because all that Government intervention will ever do is produce a rate which is out of line with the market and reality; it seeks lower national insurance contributions but higher social security benefits financed by them. The alliance is so intellectually still that it remains bankrupt.

Until recently, the alliance offered a choice midway between the Labour party and the Conservative party. It found that a choice between something that is halfway to ghastly and completely unacceptable to the electorate is not an election-winning recipe. It moved position, and, led by the right hon. Member for Plymouth, Devonport (Dr. Owen), offered a new recipe. It was to be similar to the Conservative party but distinguished from it by being tough but tender. That is a distinction without a difference.

I count myself as a Thatcherite of the first water. I was probably a Thatcherite before my leader. I find inspiration in the doctrines of Adam Smith, who would always subordinate his thinking to that of Samuel Johnson, who said that the test of a civilised Government was their provision for the poor.

I do not believe that there is a Conservative Member who does not accept that we have, through the pursuit of market economics, to ensure generous provision for the poor, the needy, the sick, the aged and the unemployed. Finding that there is no distinction, the right hon. Gentleman, pursuing his erratic political course, instead of trying to out-Gilmour Gilmour is trying to out-Tebbit Tebbit. The right hon. Gentleman has taken up a position somewhat to the right of my right hon. Friend the Secretary of State for Trade and Industry and is insisting that the Government bankrupt the National Union of Mineworkers by provoking the nationalised industries into taking legal action against it.

I believe that laws were placed on the statute book for the benefit of private individuals procuring their own livelihood; they were not put there for Government to pursue political action. I believe such a policy is discreditable. It is no basis for the formation of a coherent alternative Government to take up a position in the political spectrum somewhat to the right of my right hon. Friend.

I point out again the fundamental weakness which embarrasses Opposition Members. They have failed their supporters, themselves, the House and the nation, because they have not attempted to provide any alternative to the Government's policy.

7.19 pm
Mr. Tony Benn (Chesterfield)

It is strange that we should have had this debate so far without any one considering what is likely to be the outcome in the coalfields. I want to turn the attention of the House for a moment, if I may, to the fact that there is no evidence, despite the Prime Minister's speeches about the overtime ban, now going back to last November, and her more strident speeches in the House, and all that has been said on television and by Cabinet Ministers, of any shift by the miners towards accepting pit closures.

Let us be clear that, whatever the merits or demerits of the speeches of individual hon. Members, the House is going away for a three-month recess after a three-month overtime ban and five-month strike in the certain knowledge that even if there were a settlement about the time that we returned—and I remind the House that between now and then the Trades Union Congress will have thrown its full weight behind the miners —[Interruption.] Hon. Members should not mistake the General Council for the TUC. Congress policy is to support any union whose funds are sequestrated by legal action, as is that of the Labour party conference. Even if the strike were settled at about the time the new Parliament opened, anyone who has kept in contact with people who know the industry knows that there will not be any coal produced for about eight weeks after the return to work.

Mr. Lofthouse

Longer than that.

Mr. Benn

In some faces, longer than that. It depends.

With the recess ahead of us, the House is having a debate with an exchange of opinions and argument apparently without realising that it may be January at the earliest before coal is produced. That is what we should have been discussing weeks ago, and today's debate should have been mainly on this matter.

There was a moment when the Prime Minister was speaking when I thought that she genuinely did not understand why there had been a strike. With the help of her researchers she had come to the House prepared with some statements made by me, as Secretary of State, and she produced them as her final trump cards in the debate.

As I tried to point out in my exchange with the right hon. Lady, the reality is that the difference between our policy and this Government's policy related not to the amount of redundancy pay or to the amount of investment in industry or even to whether there were closures but to the fact that under us it was all done jointly. [Interruption.] The House doubts me. I saw a former chairman of the National Coal Board, Sir Derek Ezra, in the Stranger's Gallery. When his term as chairman of the board expired, I consulted the National Union of Mineworkers before reappointing him.

Mr. Howard

Will the right hon. Gentleman give way?

Mr. Benn

No, I am not giving way. I am anxious to leave as much time as possible for other hon. Members to contribute to the debate.

If the Prime Minister did not know why the strike occurred and thought that it was just that Arthur Scargill wanted to bring British democracy to an end by keeping open 20 pits, it is worth using this, the last debate that we shall have until November, to explore the real issues.

The difference between the two sides of the House is quite fundamental. Is it about whether the Government are right to manage by prerogative and appoint the most authoritarian manager in the western world to do it, or are those who work in the industry entitled to be brought into the central— not the marginal — discussions about the future of the industry? "Plan for Coal" was not just a piece of paper from the old management being topped up with more money by the new management. It was a wholly different concept, accepted by both Governments over a long period—that the NUM was an equal partner with the NCB in the investment, the planning and the closure policy.

Mr. Howard


Mr. Benn

No, I am not giving way. I hope that the hon. and learned Gentleman will be called, and he is more likely to be called if I stick to developing what the real issue is. The real issue is whether the NUM, representing the miners through their annual conference, is entitled to be an equal partner in the running of the mining industry.

If the Prime Minister really believes—I thought that this was the Prime Minister's suggestion — that for political reasons Arthur Scargill would agree to close any number of pits if Labour was in power but would not agree to close a single one because the Tories were there, it may be that her nightmares about him are explicable. But do not let her try to deceive the people that that is why there is a strike. Anyone who has talked to the leaders of the NUM knows that even they were surprised by the reaction of miners at Cortonwood. Anyone who knew the Yorkshire miners better than I did was rather surprised at the strength of the reaction from that colliery. The miners had been told that the pit had five more years of working. Miners had even been moved to Cortonwood, but they were suddenly thrown on the scrap heap. My hon. Friend the Member for Wentworth (Mr. Hardy) has spoken strongly about that.

I will go further. When we were discussing the tripartite basis of "Plan for Coal", we had a planning agreement. Each year, the coal board and the NUM sorted things out. The NUM then negotiated properly with the coal board about the implementation of the plan. The Energy Commission was set up with representatives of the gas and electricity industries, and users of energy. A transcript of "Hansard" of those discussions was published so that people could study the debates between the fuel industries, the management and unions. All that has stopped. All is secretive and quiet.

The miners are being told, so to speak, by the appointment of Mr. MacGregor that they, too, are to suffer some of the 100,000 job losses that he has imposed upon the steel industry. If the steelworkers had fought as hard as the miners, the Government would never have got away with the destruction of the steel industry. When the recovery comes, as everybody knows, the steel to provide that recovery will be imported. It will be paid for by oil, which is running out.

The other question over "Plan for Coal" was whether it was about expansion or contraction. One can produce any number of figures about financial input or redundancies. In reality, we were planning for 200 million tonnes, but Mr. MacGregor wanted to go below 100 million tonnes. That is the difference between the Government's policy and that of the Labour Government, even though some closures were agreed under Labour.

We knew that the oil would not last for ever, at the present rate of depletion. It is being used to fund massive imports of goods that we could make ourselves. There is huge over-production of North sea oil to fund the Government's so-called recovery. We knew that the coal would be needed. We cannot have coal without miners. Miners are more valuable than coal seams, because there are many coal seams to be found, and a skilled mining force must be retained to work them.

My hon. Friend the Member for Midlothian (Mr. Eadie), with whom I worked for many years, made it clear that coal is important for conversion into oil, gas, chemicals and feedingstuffs. I must say to the Government, in the spirit of exploring these issues, that when the history comes to be written, the Government will be seen to have betrayed two major British natural assets —coal, and the miners who dig it out.

Although I am no supporter of the common agricultural policy, because it is a very wasteful way to deal with agriculture in Europe, I accept that food, like coal, is a commodity in which we should seek self-sufficiency. We do not know what will happen. The old agricultural deficiency payments system was run by Tom Williams, who was the Minister of Agriculture when I was first elected to the House in 1950. The scheme was an open subsidy to British farmers, to allow them to bring down their costs closer to the world price of food. That policy was right, just as subsidies for coal are right. We cannot cost every little item. After all, everyone knows that the cost of sending a letter to an outlying area in Scotland costs much more than sending a letter to London; but we do not pay different charges. We would be reversing the wisdom of Rowland Hill if we were to go back on that principle.

I turn now to the role of Mr. Arthur Scargill, who has been attacked by the Prime Minister as some kind of Galtieri. I was present at the Durham miners gala in 1980, with my right hon. Friend the Member for Cardiff. South and Penarth (Mr. Callaghan), the former Labour Prime Minister. On that occasion, my right hon. Friend, Arthur Scargill, Joe Gormley and myself were the four speakers. Arthur Scargill made a speech that I have heard him make many times since, warning the NUM that the Government had a hit list of collieries.

Joe Gormley attacked him. He is now in the other place, but he attacked Arthur Scargill for being irresponsible. I do not think that my colleague, the former Prime Minister, was very pleased about it either. But the miners are now following Arthur Scargill, because for four years he warned them that the Cortonwood crisis would come. Hon. Members should not think that it is possible to get 150,000 miners out on strike by using the sort of mafia thuggery that the Cabinet refers to when it comments on the NUM.

The miners are following Arthur Scargill because he warned them, he explained, campaigned and prepared for the moment when this Government—

Mr. Marlow


Mr. Benn

I shall not give way.

Mr. Marlow

Will the right hon. Gentleman give way?

Mr. Benn

No, I shall not give way.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The hon. Member for Northampton, North (Mr. Marlow) must contain himself. He knows that the right hon. Gentleman is not giving way.

Mr. Benn

Even from its own point of view, the Cabinet should understand why Arthur Scargill is respected. The fact is that he has been telling the miners for years that this is exactly what the Government would do to them. If, by any chance, Arthur Scargill died or something happened to him, it would not make the slightest difference to the NUM or to the support that it is receiving. It is hyping it up a bit and rather incredible to say that western democracy would be threatened if we had another 20,000 miners next year.

The Government will find it very difficult to get the miners to return to work. Indeed, they will find it much more difficult than they realise. The miners have suffered far more hardship than anyone in the media or in the House has been prepared to make plain, other than in one of those occasional Lady Bountiful articles about "the poor miners." But single miners have had no income whatever since the strike began. The Government carried out a statutory fraud saying that they were "deemed" to have had strike pay. When we reacquire the privatised assets we shall "deem" them to have been compensated.

For the first time, the law has been used to pretend that people have had money when, in reality, they have not. Married couples with two children are now receiving £11 a week, and have been for 21 weeks. It is impossible to live on that. The DHSS was set up to ensure that there was a minimum below which no one fell, but it is now the supervisor of statutory starvation, because the amount of money that such married miners receive is £37 to £38 below the minimum that the Government have laid down as necessary to maintain life.

Mr. Phillip Oppenheim (Amber Valley)


Mr. Benn

I shall not give way, as I wish to make my case.

If a miner obtains a loan, it is regarded as income, and is deducted from that £11. Hon. Members should not be surprised if miners to whom that is done go to the pit where the police are massed and if they are angry.

Mr. Oppenheim


Mr. Benn

I shall not give way. I apologise to hon. Members for not giving way, but I want to be brief. Before the House adjourns I am determined to put some facts on the record.

One of those facts is that, from the beginning of the strike, miners have voluntarily been distributing concessionary coal. The NCB has now stopped that. It has said that, if they want to distribute concessionary coal, they must come back and work at full rates. Miners will distribute concessionary coal from love and devotion, but they will not be forced by the NCB to join those drifting back to work. Thus, the NCB is using the old, the sick and the mining pensioners to bring pressure to bear.

The police do not allow peaceful picketing. The idea that six people are allowed to go and talk at gates is false. The police are arresting on an arbitrary basis. I can give an example, and I have been given permission to mention the name Janet Cunningham. She lives in Chesterfield and goes out every day with the soup. She was arrested, taken to prison, photographed, kept overnight, asked who paid her to go, who organised it, who was in the car and where her husband worked, and then released without charge. She told me that she was terrified by that experience.

I do not wish to name them, but I have had magistrates come to my surgery—a thing that has never happened in my life. They express anxiety because the magistrates' clerk has the bail conditions stapled to a duplicated form before the case even comes up. Those bail conditions deny civil rights to miners who have been convicted of nothing. The matter goes beyond that. A man called Bob Hawkins, a young man from Chesterfield, applied for a job in the area health authority. He was asked at the interview what he thought about the miners' strike. That was the NHS interrogating him, presumably because it was not prepared to appoint somebody who was sympathetic to the miners.

If the Cabinet does not understand what is motivating the miners now, they will find that six months from now we shall have the same speech from the Prime Minister about uneconomic pits. She was once the shadow energy spokesman. Therefore, she knows as well as I do the meaning of economic and uneconomic. That meaning is as flexible as a yo-yo. If the pound drops to one to the dollar, pits that were uneconomic will become economic. The same thing happens if there is a Gulf war.

When the Prime Minister was in the Cabinet of the right hon. Member for Old Bexley and Sidcup (Mr. Heath), it ordered coal from Australia because it was cheaper. When it arrived, the pound had fallen, so the coal was sold at a loss to Electricité de France by Sir Arthur Hawkins of the CEGB. It had been ordered by the right hon. Member for Old Bexley and Sidcup to beat the miners but, by the time it arrived, it was more expensive than the coal produced in the pits that the right hon. Lady, even at that time, had been demanding should be closed. I have studied the speeches of the right hon. Lady when she was shadow energy spokesman. She wanted more and more closures even then.

Parliament is now going away for its holidays and the reality of what is happening will flood back. The young miners of today are the finest generation of miners that there has ever been. The support from their women is on a scale that nobody would have anticipated—and I do not mean that they are behind the "old man" in a Victorian way. The organisation, the effort, the amount that they put in, the distribution of food and food parcels and of money is extraordinary. We shall never know how many millions have been raised, because it is done without bureaucracy by the groups who have raised and then distributed it. They have learned self-reliance—the very thing that the Prime Minister has said she stands for. She will never beat the mining communities. I say this, having had the honour to work with the mining industry throughout most of my political life.

The strike could be settled tomorrow on the basis that I explained in my intervention to the Prime Minister—the withdrawal of the closure programme and a pledge that all closures in the mining industry will be done by agreement. We know that in some cases that agreement will be easy—for example, where there is exhaustion, a geological fault or a roof collapse. There have never been problems with such cases. However, the coal board will then have to discuss with the NUM those cases that it has tried to dress up as uneconomic pits. The reality is that, unless we carry the miners with us, we shall never dig the coal that is our great resource. That is why an agreed programme is so different from an unagreed one.

If this dispute is not settled now, the miners' demands will be a little higher. Somebody from Derbyshire rang me up today and said, "Did you notice, Tony, that the Sun journalists who have gone back to work have demanded £750 from Rupert Murdoch to pay them for what they lost when they were on strike?" If that is good enough for Fleet street, it is good enough for the miners. There will be a demand for earlier retirement. There will be a demand for the shorter working week. [AN HON. MEMBER: "Who pays?"] The cost of closing the pits is greater than the cost of keeping them open. The cost of importing the fuels is greater than the cost of the least economic pits. The cost of the strike is as much as the Falklands war.

"Who is paying?" is a question that we could throw back at the Prime Minister. But what is important, before the House goes into recess and this platform disappears until 22 October, is that the public should know why there is a strike and who was responsible for breaking the age-old principle, certainly since public ownership, of agreed measures, and to know that, if the Government were to accept that closures should be agreed with the miners, the strike would end tonight. If that penetrates into the public domain from this debate, at least it will have been worthwhile. But whether it does or not, the Prime Minister will never bully, shout, harass or intimidate the miners back to work.

7.40 pm
Mr. Cranley Onslow (Woking)

At 4 o'clock this morning I was not too sure that I was looking forward to this debate, but I am glad that we are having it for a variety of reasons. Perhaps the least was to be reminded by the right hon. Member for Blaenau Gwent (Mr. Foot), the former leader of the Labour party, that he is still as much of an artful dodger in debate as he ever was and that his tunnel vision is still as much of a handicap as ever and to be reminded by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the Liberal party, that his return from his long political retreat finds him still with no new ideas or political mainspring to make his party tick again.

The principal reason is because of the marvellous speech by my right hon. Friend the Prime Minister and the spectacular demolition job that she performed on the titular leader of the Labour party who sits on the Opposition Front Bench and spends his time reading out-of-date reference books, and on the leader-in-waiting, the right hon. Member for Chesterfield (Mr. Benn), whom she smashed to smithereens. But, of course, when the right hon. Gentleman is smashed to smithereens he is just like Tom, the cartoon cat. He can be sawn up, rolled over by a steamroller, chewed up by the dog, and in two frames he comes back as good as ever with his eyes still rotating at twice the speed of light. We have had one of those speeches this evening, and it does not surprise me a bit.

It is right that we should have a discussion on Britain's economic health before we go into recess. I do not want to make a long speech and I shall follow the precedent set by the Labour party of not giving way, even to Ministers.

First, let me return to the Leader of the Opposition and his poor performance. I pass over the strain in his voice and the faults in his logic, but I do not find it easy to pass without remark the fact that he found precious little to say about his own motion. He treated the House to no real analysis of the causes of our economic problems. He said nothing about the problems ahead of us—in particular, the growing problem of the common agricultural policy and the strain that that is placing upon Britain's resources and those of Europe as a whole. I speak as someone who represents taxpayers and consumers, and their voice should be heard as loudly in this Chamber as the voice of the farmers.

I make no particular complaint about the failure of the right hon. Gentleman to say nothing at all about the progress of the Socialist experiment in France, which ought to make us think twice about any prescripts which he brings forward about a Socialist experiment in Britain, and I do not complain about the absence of definition of his own terms. He said nothing about what he means by the efficient use of the nation's resources.

I suppose that the right hon. Gentleman is one of those who believe that any expenditure becomes profitable merely by being described as investment, in which case it is churlish to complain about some of his other failings. But I cannot see how his reference in his motion to the efficient use of resources can be squared with his apparent total and unquestioning commitment to the perpetuation of uneconomic policies in the mining industry. When he says, "We want to work," I am bound to ask him about the miners who want to work. Where has his support for their ballot gone? Why did his support for their right to raise their voices evaporate so suddenly? I expect we shall hear that from the master of ambiguity who will close for the Opposition, so we had better leave it to him.

My prime objection to the right hon. Gentleman's deployment of his case was when he said that the dispute was not a political fight. Has he never read a word of what Mr. Scargill has said on the subject? In June 1983 Mr. Scargill was quoted in Socialist Action as saying: In order to resist this government's policies we will undoubtedly need to take extra-parliamentary action that includes the possibility of political strikes. Has the Leader of the Opposition totally failed to observe what Mr. Arthur Scargill said at the NUM conference last year? He said: A fight back against this government's policies will inevitably take place outside rather than inside Parliament. That is all of a piece with the remarks of the right hon. Member for Chesterfield. I am not particularly persuaded by his attempts to paint the picture that suits him best for us to see. He confirmed how assiduous Mr. Scargill has been for many years in going round the country and forecasting to the miners the conditions which he thought would justify his getting a strike. He has always been determined to have his strike. It is a political strike. It is a challenge to democracy and to the law that embodies democratic decision, which is why Mr. Scargill has been working to get his strike.

Mr. Scargill—he is always flattered to be mentioned, so perhaps I must flatter him a little more—embodies those challenges. He embodies the challenge to democracy and the law. He does not care for the democratic process. He volunteers that information willingly. He regards himself as above the law.

As we go into the recess, we must recognise that the nation cannot surrender to such a man. He is the true butcher of the miners' interests. He is prepared to urge miners and others on the picket lines to unlawful activities, violence, intimidation and conduct which shames them as fellow countrymen of ours. He does not care about the costs that he inflicts on them in the process. When we see those costs, it should give us no pleasure to realise that they are causing suffering. Equally, the nation's resolve must not be weakened.

Our task this evening is to pin the responsibility where it belongs—on the miners' leadership, Mr. Scargill and his Communist friends and associates. We must endorse our support for the police in their determination to uphold the law. We look to the courts to ensure the swift and impartial administration of justice. Finally, we must make it clear that in this fight, sooner or later the majority must prevail. For the country's sake, let it be sooner.

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

The debate not only relates to the economy, but to the motion on the Order Paper and the amendment tabled in the name of the Prime Minister. The amendment refers to the maintenance of policies based on sound finance, individual freedom and encouraging enterprise. I shall examine the practical application of those so-called objectives.

I take as my example the promotion of trade with Oman and its implications for individual freedom. First, I shall clarify some misconceptions currently prevalent in the media. Last weekend's reports that the Liberals were obstructing business by forcing Divisions as part of a campaign on Select Committee appointments are a load of old hogwash. It was Labour Members who obstructed business last week. We did it because of the cover-up that is taking place on Oman, and its implications for individual freedom. The Liberals took advantage of Labour's delaying tactics, moved in like cuckoos and claimed the credit.

Secondly, I have not taken leave of my senses, as has been suggested. I simply believe that the issue of Britain's extraordinary relationship with Oman encapsulates in its every form a corruption of our internationally recognised national commitment to fair play and the encouragement of enterprise.

This corruption of our values involves a combination of establishment interests, including defence, commercial, diplomatic and political interests. The defence interest takes us to the powerful British general appointed with the explicit sanction of the Prime Minister following her visit to Oman in 1982. General Sir Timothy Creasey's decisions are rubber-stamped by an Omani Defence Minister under an arrangement which gives British military personnel almost complete control over the running of Oman. According to a parliamentary reply, the British presence in Oman includes 12 Royal Navy officers, 39 RAF officers, three civil defence staff and several other personnel. The excesses of that group were recently the subject of an in-depth investigation by the Daily Mail. Under the headline, "Soldiers of Disgrace", the article referred to officers out of control, fingers in the till, drunkenness, fraud, black market arms sales and the expulsion of British officers back to the United Kingdom.

Mr. Richard Alexander (Newark)

On a point of order, Mr. Deputy Speaker. Could we have a debate on the economy, not one on Oman?

Mr. Deputy Speaker

I am listening carefully to the hon. Member for Workington (Mr. Campbell-Savours), who must relate his remarks to the Government's economic, employment and industrial policies.

Mr. Campbell-Savours

I gave an undertaking to the Chair that I would not take too much time, and any intervention must delay me—

Mr. Deputy Speaker


Mr. Campbell-Savours

Any intervention from hon. Members—

Mr. Deputy Speaker

Order. The hon. Gentleman should be replying to the Chair, not to interventions by hon. Members.

Mr. Campbell-Savours

I apologise, Mr. Deputy Speaker. I am examining the encouragement of enterprise in the form of trade with Oman through construction and defence contracts, and the implications for individual freedom as outlined in the amendment in the name of the Prime Minister.

It is even said that Sir Timothy Creasey imprisoned an Omani who subsequently had to be released when he was found to be innocent of the embezzlement for which he had been charged. What will Britain do about that?

The commercial interest takes the form of several construction companies, including Costains, Taylor Woodrow and Cementation, which have formed a cartel. They are willing to become involved in whatever bribery is necessary to secure contracts. Mark Thatcher was hired to help to win the university contract. As Cementation director, Jamil Amyuni, admitted: We employed him because he is the Prime Minister's son, and why the bloody hell shouldn't we? Let us consider the case of Taylor Woodrow and its actions following the death in suspicious circumstances of Mr. Arthur Angel in a bullet-ridden car in Oman. His wife was told, "Shut up, if you want a £60,000 trust fund set up for your children."

It is a disgrace that pressure is being exerted on families by commercial interests that are seeking contracts in Oman. I hope that Taylor Woodrow will come clean after this debate.

The diplomatic interest takes the form of the Foreign Office desperately trying to cover up the excesses of commercial and defence interests. The Foreign Office seized up when the spotlight was turned on Cementation's activities earlier this year. The Foreign Office, in conjunction with the Omani embassy, managed the official diplomatic silence on the Prime Minister's and her son's activities, and especially the protests of British diplomats during the 1981 visit. The Foreign Office is now orchestrating the deception about Robin Edgar Walsh; and further cover-ups will follow in relation to Arthur Angel, Ron Thompson, Nigel Walton and Major Hickey. I want Parliament to know who appointed Major Hickey and why he left Oman. The shameful truth is that the Foreign Office brief is to defend the Sultan of Oman. It must stop.

The most insidious interest is political and is organised from Downing street. The latter organised a complete cover-up of the Prime Minister's activities in Oman on behalf of her family earlier this year. The Prime Minister knew that her son stood to gain a small fortune. She also knew that payment would be made into a deficit bank account for which her husband was perceived by the hank as a guarantor. When the Select Committee on Members' Interests was asked to investigate, Downing street worked hard and successfully to block inquiries. To cap it all, when "World In Action" set out to expose the relationship between Cementation, Trafalgar House and its contributions to the Tory party in return for a peerage for Victor Matthews, Downing street squeezed members of the Independent Broadcasting Authority to delete material. What a sordid trade-off. So much for individual freedom and the encouragement of individual enterprise embodied in the Prime Minister's amendment.

A combination of all those interests and the encouragement of enterprise is exposed in the case of Mr. Robin Walsh. Mr. Walsh, in his imprisonment and subsequent death, was a casualty of the incestuous relationship between Britain and Oman. I believe that he may have been innocent. Walsh was an official in the Defence Ministry tender office. We know that on leave to the United Kingdom he expressed concern on a number of occasions about the corruption in Oman, especially about the encouragement of trading relations with Britain.

It was following a routine audit of his section that the deficiency was found. The shortfall was reported to the Omani Deputy Minister for Security and Defence. He issued a verbal instruction for deductions to be made from Walsh's salary, and for Walsh to be deported home. However, at that point General Sir Timothy Creasey intervened to countermand the order and, by-passing Omani Ministers, he ordered a British Army officer to arrest Walsh. There was no warrant and no trial. According to parliamentary replies, the case was conducted under authorised Omani procedures.

The British embassy was informed of his arrest on 6 July. There were allegations that he was beaten during his detention, which the Government deny. But should the Government be believed? The same Government on 12 July said that British prisoners received no special treatment during Ramadan. When they found out that that meant denial of food and water, on 19 July they changed their position, saying that he was not denied food and water during daylight hours.

We know from witnesses that Walsh was required to stand in the burning heat. He was imprisoned in a small cell—a hot box. He was punished, and was drinking water in desperation from a latrine. He received no medical examination either before or during his detention, yet he repeatedly drew attention to his heart condition. He was so badly mistreated that throughout the night of 6 July he cried out repeatedly for help. He subsequently died on 8 July. There then began an elaborate cover-up, which has continued ever since.

Parliamentary replies show that the British embassy in Muscat entered Walsh's death on the consular register of deaths on 16 July and the body was then flown home. The cover-up then took on an even more sinister form as the Home Secretary personally signed an exemption certificate exempting the body from medical certification—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. The hon. Gentleman is going into detail about a real personal case. He must relate what he is saying to the motion and the amendment before the House.

Mr. Campbell-Savours

I am endeavouring to do so with every word. I considered the matter at great length before the debate. I am referring to individual freedom in the pursuit of the encouragement of enterprise. That is what the Robin Walsh affair is all about.

The Home Secretary personally signed an exemption certificate exempting the body from medical certification on the basis that the death was from natural causes. I have the document, signed by the Home Secretary, exempting that body from medical certification even though he died in that prison in Oman in those conditions. There was no examination for signs of brutality. The remains of Mr. Walsh were cleared, shipped to Manchester and cremated before questions could be asked. What is so remarkable is that when I began to ask my questions, and said that the Coroners Act 1887 required that where a person died in prison a full inquest should take place, the Home Secretary replied that he did not know that Walsh had died in prison.

What does that mean? The embassy was informed within hours of Walsh's death in prison. It was recorded by the Foreign Office on 16 July. Yet the public are expected to believe that when the Home Secretary signed the order on 25 July he did not know that Walsh had died in prison. If he did not, he was fooled and conned by the Foreign Office, which only adds to the conspiracy.

The whole affair has been disgracefully handled, with the Government hiding behind the family solicitors. A part of the family is angered, as are many within the Omani expatriate community, many of whom have written to me. The cover-up is an outrage, but it may be only one of many. On 5 July the Government admitted that there had been 13 deaths from so-called natural causes, two from drowning and five from accident. Why should we believe that these deaths are any different from that of Mr. Walsh? The Angels, the Thompsons and the Waltons all want more information. All these people are casualties in the perpetuation of an extraordinary and incestuous relation-ship between Britain and Oman, the objective of which is the so-called encouragement of enterprise.

Is that what we want? Is this relationship not based on the surrender of all values British? I want a full-scale Royal Commission or tribunal of inquiry into the defence, commercial, diplomatic and political relationships that exist between Oman and the United Kingdom. Such an inquiry is vital for the future name of Great Britain in foreign affairs. The cupboard must be opened and cleaned out on this issue, otherwise our country will remain discredited.

8.1 pm

Mr. Anthony Nelson (Chichester)

The hon. Member for Workington (Mr. Campbell-Savours) brought an interesting diversion to the debate. I hope that he will forgive me if I do not take up in detail the issue that he raised. I have not followed the Walsh case as closely as he has, but I was somewhat concerned by the issues raised in the press. Of course, how true they are, I do not know. I consider the United Kingdom's relationship with Oman to be extremely important. I have a high regard for Oman, which is one of our greatest allies. The sultan, with his enlightened leadership, has done a great deal to bring his country out of the middle ages. He is a welcome friend of Britain, and that should not go unsaid in the House.

I turn to what I understand to be the main theme of the debate—the Opposition's motion. It is a classic example of the Labour party's dogma and irresponsibility. It seems that it has learnt no lessons from history. It comes a bit thick from the Leader of the Opposition and the right hon. Member for Chesterfield (Mr. Benn) that they are now preaching the wisdom of their political ideology when they had five years in government and the opportunity to put it into effect. The very policies that they now espouse took the United Kingdom with its begging bowl to the International Monetary Fund. Those policies caused inflation to double, and more, and stripped away the real value of our currency and people's savings over a short period. At the same time, they increased substantially the level of unemployment.

The terms of the motion are a catalogue of muddled thinking and untruths. There are calls for more efficient use of the nation's resources, yet at the same time the Opposition want to tax and borrow more of those resources for less efficient public expenditure than the activities in which the private sector can engage. There is an opportunity cost in who spends the money, and there is no crock of gold available to finance the expansive Socialist policies that the Opposition have in mind.

The motion calls for an improvement in Britain's trading performance. That is something that we would all welcome. However, the Leader of the Opposition advocates those same restrictive labour practices that have made us uncompetitive and dogged our performance for so many years.

The motion blames the Government for the mining dispute, without a word of reprimand to those who daily intimidate decent working families and incite industrial anarchy for their own political ends.

We heard a great exposition from the right hon. Member for Chesterfield in defence of his period as Secretary of State for Energy. Unfortunately, we heard not a word of compassion for those who are intimidated daily. We heard no suggestion that the miners should have an opportunity, through a ballot, to express their own views on the issue. There was no categorical answer to the question put by my right hon. Friend the Prime Minister about the absence of a veto for the National Union of Mineworkers over the legislative ability of the Secretary of State to recommend and to insist in the last resort, through the National Coal Board, that certain mines should be closed. Both speeches were cynical, doctrinaire and irrelevant to the main challenges facing the United Kingdom.

One of the most persuasive speeches from the Opposition Benches came from the hon. Member for Knowsley, South (Mr. Hughes). Although our political views may differ, his analysis and recognition of the serious problems faced by young unemployed people and the particular problems of drug addiction in the Liverpool area were sincere and compelling. By the very description by Members of Parliament of those problems attitudes are changed and sympathy and compassion, and even perhaps switches in political policy, are achieved. Those achievements are certainly not made by the invective and hyperbole employed by the Leader of the Opposition.

We may regard the Leader of the Opposition as a man of some invective. The right hon. Gentleman's speech took the top prize for effrontery from a man who wants to run the country but cannot even run his own party. Having taken time off from the interminable wrangles of the Labour party, the right hon. Gentleman has come to the House to tell my right hon. Friend the Prime Minister why the policies that brought this country to ruin between 1974 and 1979 are now the magic ingredients of success in the 1980s. The right hon. Gentleman stands condemned by his complicity in those policies. Let him be in no doubt that the electorate will not vote for a return to the discredited policies of those years. If the right hon. Gentleman sticks with those policies, that will be the surest guarantee that he will be a one-term leader of the Labour party. The right hon. Gentleman would do well to challenge the Conservative Government on their own ground rather than on a retread of economic and industrial failure.

The amendment in the name of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), supported in the uneasy alliance by his right hon. Friend the Member for Plymouth, Devonport (Dr. Owen), is little better than the Labour party motion in that it advocates lower interest rates, yet calls for increased public sector borrowing, which will have exactly the opposite effect.

The right hon. Member for Tweeddale, Ettrick and Lauderdale said that he wanted to put forward an alternative set of policies, one of the main aspects of which was greater emphasis on the need to bring down interest rates. We all agree with that aim. That is one of my principal objectives. The right hon. Gentleman said, "Let public sector borrowing and the money supply rip." He gave us no information, however, about the weapons at his disposal that he would employ to reduce the level of interest rates.

The only consistent and clear commitment by the right hon. Member for Tweeddale, Ettrick and Lauderdale was to an incomes policy. That is the sort of policy —whether statutory or voluntary—which in the past has proved to be discredited and a failure. Over a period that policy has the effect only of narrowing differentials in pay. It differentially affects various sectors of the economy. It is not credible to pretend that the alliance can deliver lower interest rates and other economic goodies while at the same time saying, "We do not have to worry about the money supply targets or the level of public borrowing." Every party, when it comes to government, must observe those strictures.

The right hon. Member for Leeds, East (Mr. Healey) was arguably one of our most monetarist Chancellors of the Exchequer. In his five years of Budgets, year after year —

Mr. Roy Hattersley (Birmingham, Sparkbrook)

indicated dissent.

Mr. Nelson

Yes. In every single Budget—the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) should know better than to shake his head—the right hon. Member for Leeds, East set stringent targets — in many years they were not met— for the money supply. Much to the displeasure of his right hon. and hon. Friends, as Chancellor in a Labour Government he recognised that it was essential and indispensable to have a degree of monetary control. This Government are doing no more than carrying on the same discipline, but they are having a great deal more success in achieving it.

The alliance amendment is delphic on the question of exchange rates. It does not specify a particular rate, only a "realistic" one. Does the right hon. Member for Tweeddale, Ettrick and Lauderdale seriously contend that, by letting public borrowing and the money supply rip, we shall have any prospect of lowering interest rates and "reinvigorating"—I put it in alliance terms—the private sector? As usual, the Liberal party wants it both ways. It wants to ignore the financial facts of life and to promise all things to all men without coming clean on how to pay for them.

I pay tribute to the consistency and success of the Government's economic and industrial policies, but in doing so I do not wish to be purely sycophantic. Three areas need more emphasis and should be drawn to the attention of my right hon. Friends. First, there is the need to give greater priority to the reduction in the absolute and real level of interest rates; secondly, we must retain uppermost in our minds the need to improve consistently the levels of productivity; and, thirdly, we must not forget our obligations as a Conservative Government to care for those least able to provide for themselves.

The level of real interest rates is not only too high; it is historically high. Given the average rate of return on capital employed for numerous years, it is clear that the majority of companies will have to earn very considerable returns on capital, especially if they are debt-financed, to justify expansion investment and, indeed, their existing levels of debt in some cases. Sadly, for many of the most highly geared and labour-intensive companies, the rates of return remain the lowest.

There is a panoply of aid measures, and they are all valuable to industry. Many of them were instigated by the Government. Ministers in the Department of Trade and Industry have done a splendid job—especially my right hon. Friend the Member for Mole Valley (Mr. Baker)—in increasing the aid programme for innovation to about £369 million. That is a 25 per cent. real increase over the period of office of the Government in financial support for innovation. While I welcome that assistance, the most productive help that we can give directly to small, medium and large companies is to work for lower interest rates. Although that means continued restraint in the level of the public sector borrowing requirement — as set out consistently by my right hon. Friend the Chancellor of the Exchequer in his Budget statement and previously—it also means that we have to try to ensure that confidence in the style and consistency of government is maintained.

In the last resort, while one may wish to point to empirical factors which determine our interest rates and the exchange rate of our currency, and while one may wish to analyse the relationship between the United States economy and our own, one of the reasons why the United States has been the recipient of such an enormous inflow of funds—and, incidentally, has been able to finance a considerable proportion of its PSBR through such inflows—has been the strength and consistency of its economic and defence policies. Therefore, I believe that consistency is a virtue in its own right, and I urge my right hon. Friends to stick to their guns in that respect.

With regard to productivity, over the past five years the Government have rightly and courageously been prepared to grasp the nettle which successive Governments in post-war years have not been prepared to grasp — the fundamental reorganisation of major industries, particularly public sector industries.

When I entered this House nearly 10 years ago, I was a supporter and admirer of the steel investment programme, and I still substantially believe in it. But many of the best hopes of that programme — it was a bipartisan policy of the early 1970s—were not fulfilled, and it would be foolish not to adjust with the experience of time.

The reality is that in the steel industry, the shipbuilding industry, the car industry and, to a lesser extent, the aerospace industry, enormous amounts of labour have had to be shed and enormous technological changes have taken place. Nobody underestimates—I certainly do not—the personal tragic consequences in terms of unemployment and community impact of some of the changes, but those changes had to and still have to take place if we are to be better able to take advantage of opportunities in the future.

In achieving higher productivity, I believe that the framework and the policies set out by my right hon. Friend the Chancellor in his Budget speech are exemplary. I hope that we shall be able to hold him to them in years to come, more than has been the case with the medium-term financial strategy and more than previous Governments have managed to hold to their best hopes. We must work for those objectives. My right hon. Friend may be sure of widespread support from Conservative Back Benchers if he is consistent in fulfilling the objectives set out in his Budget speech.

Finally, my right hon. Friend the Prime Minister was right to remind the House of the Government's outstanding record in assisting those most in need and increasing the amount of public expenditure devoted to them. Sadly, however, much of that expenditure is disguised in social workers' salaries and the costs of bureaucracy, so that less than one would like filters through to help those in the greatest need.

I wish to deal with the section of the needy population most evident in my constituency profile—the elderly. Although the number of pensioners will be the same at the turn of the century, the number of people over 85 will have increased by about 40 per cent. As the very elderly consume proportionately much more of the Health Service resources, it is not good enough merely to react to the problem when it occurs. We must prepare for it now. In their housing policy for sheltered accommodation and in their social and community policies, but, sadly, not so much as I should have liked in their health policy, the Government are recognising the needs of the elderly and the importance of planning for the future, but I believe that much more should be done to plan for the increased number of people over 80 at the turn of the century. In particular, I hope that much will come out of the initiatives mooted for the pensions fund, recently announced by my right hon. Friend the Secretary of State for Social Services. Again, this highlights the importance of sticking to economic policies which will hold down and reduce still further the rate of inflation, which in the past has acted as an unsanctioned tax, transferring wealth from one sector of community to another, all too often taking away, through erosion of their savings, from those least able to help themselves and giving to the less needy.

For all those reasons, we must stick to the policies set out in the Budget and reiterated by my right hon. Friend the Prime Minister today. However, I urge the Government not to lose sight of the need to provide more adequately for the obligations that we all share towards the elderly in our community in years to come.

8.17 pm
Mr. J. Enoch Powell (South Down)

The hon. Member for Chichester (Mr. Nelson) laid great stress on consistency. Consistency is indeed a virtue when based on correct perception and understanding. It is a good thing that we managed—if only just—to get this debate in before the recess. The public out of doors would have had great difficulty in understanding how the House could go into recess without debating the dispute in the mining industry in its national and economic context.

The public out of doors are, I believe, appalled at what they have witnessed in the past 21 weeks and are witnessing still. They are appalled, I believe, not so much by the duration of the strike, the severe losses, both private and public, that it is inflicting or even the scenes of violence so frequently presented to the viewing public as by the absurdity and futility of the dispute.

Whatever else may be said about miners, they are not fools. Because men spend their working lives engaged in the mining industry, they are not thereby dunces; and the miners understand very well the economics and the technology of their industry. They probably understand it better than most other people. After all, for generations not only their livelihood but their personal safety has been deeply involved with the technology and with the economics of coal mining. They are, therefore, the last people who need to be lectured as to the imperative necessity of the modernisation of the coal industry. They understand well enough that the future of that industry lies in the exploitation of seams that can be mined by the most modern, cost-effective and labour-saving methods. They know this very well, and nothing is gained by bombarding them with statistics of the hundreds of millions of pounds of public money that have been invested in the industry.

Nor do I believe that that knowledge is confined to one sector of the miners. I believe that the necessary future, economic and technical, for the coal mining industry in the country is as well understood by the miners in the Yorkshire coalfield as it is by the miners in the Nottinghamshire coalfield. Both of them understand very well what is at stake. They both understand very well that the future of themselves, of their families, and of those who will belong to the industry after them is bound up with the progressive modernisation of coalmining in this country.

There is another characteristic of the miners which may not be so unquestioningly accepted: they are by and large no less patriotic and no less law-abiding than their fellow citizens. It may be that, if one said this out of doors, one would be confronted with the taunt, "Yes, but what about Arthur Scargill? Listen to what he says, listen to his professions of an intention to pull down parliamentary democracy by the use of industrial power."

I am reminded, by the relationship of Arthur Scargill with the National Union of Mineworkers, of what George Bernard Shaw once said about Keir Hardie. He said that the British working man does not at all resemble Keir Hardie. Indeed, said he, the Duke of Devonshire resembles the British working man much more than Keir Hardie does; but the point about Keir Hardie is that he is of such a shape as to be an effective projectile for the British working man to throw at his opponents.

The mass of the miners in the National Union of Mineworkers are in this strike under the leadership of Arthur Scargill—our fellow politician— because they regard him as a useful projectile for throwing at their opponents; but that does not alter the fact that they are as deeply involved in the national interest and in the interest of the economy as anyone else. It also does not alter the fact that they know that trade unionism and its benefits are dependent upon observance of law, being, indeed, themselves the creation of a system of law. The National Union of Mineworkers has traditionally been marked among unions generally by its almost pedantic desire to be in line with the law, by its observance of the law and by the accuracy with which it has sought that the law should be interpreted.

Thus we are confronted with this paradox: we have 100,000 men and more who, with their families, are subjecting themselves to loss and hardship in order to destroy and to damage what they know to be their own interests, and to act apparently against the principles by which they are themselves actuated. That is what I called earlier the absurdity of this conflict. I do not believe it can be accounted for otherwise than by there having been a colossal failure of leadership. By "a colossal failure of leadership" I mean leadership on the part of management. One could never have got men into that position if they were properly, wisely, sympathetically and knowledge-ably led. That is what has been failing. That has been the colossal failure.

Mr. Dalyell

Who chose the chairman of the National Coal Board; who chose the management?

Mr. Powell

I am sure that is a question that will be in many minds. I agree with the Government in their determination, as far as possible, to keep Government and management of industry separate, not to blur political with managerial discretion and responsibility. Nevertheless, there comes a point—and that point has been reached and passed long ago in the course of the mining dispute — when the responsibility of government itself is involved, involved in a failure of leadership such as has brought us to this pass in the mining industry.

The leader of the Liberal party, whom we have not had the pleasure of seeing since he delivered his speech what seems now many hours ago, is not a great admirer, so he tells us, of the political system in this country. I do not think that he entirely approves either of this House or of the way in which it is composed. For myself, I have an almost obsessive faith in the power and value of debate in this House. That faith has been reinforced by what happened in the course of the debate this afternoon.

It was not a debate which perhaps had opened in a very promising way. There was indeed a moment when it seemed we might come to the end of the two opening speeches without any great thought or new enlightenment being cast upon the national scene. In fact, things did not turn out that way, thanks to three right hon. Members. One was the right hon. Member for Blaenau Gwent (Mr. Foot). The second was the right hon. Member for Chesterfield (Mr. Benn). The third right hon. Member who made the thing which happened possible was the Prime Minister, by the courtesy and perception that enabled her to conduct with those two right hon. Gentlemen a dialogue the effect of which was to illuminate the whole scene as if by a display of sheet lightning. It exposed what the dispute was not about; and it exposed how the dispute had, in fact, come about. It exposed the same point as I have been making from another direction: that the dispute was not about the modernisation of the coal industry, nor about the self-evident necessity for its operations to be economic. We may quibble about whether we understand that word; but the right hon. Member for Chesterfield, the National Union of Mineworkers, and everybody else understand the meaning of the word quite well and in roughly the same sense.

What came out with the clarity of an explosion was that it was a crucial failure of management in the industry that set this train of events on foot. This debate will have done good if it has brought home to the Government that the responsibility of management in that industry has, belatedly but irrevocably and undeniably, come home to rest with themselves. If the Prime Minister will study tomorrow what passed between her and the two right hon. Gentlemen I think that she will see the point at which, and possibly the cause for which, the fatal wrong course was entered upon months ago. If the right hon. Lady perceives that, I believe that she will act upon her perception; for I believe that the candour and sincerity on her part which brought sense out of this debate is the same candour and sincerity by which she is guided in her conduct of her Administration.

8.30 pm
Sir John Osborn (Sheffield, Hallam)

The debate is primarily about industry, employment and the economy, and I am grateful to the right hon. Member for South Down (Mr. Powell) and my hon. Friend the Member for Chichester (Mr. Nelson) for getting us back to the subjects under discussion.

The motion condemns the Conservative Government for their shortcomings in extricating the country from the morass after that winter of discontent in 1979 that they inherited from what I am convinced historians will describe as three destructive Governments—the Attlee Government, the Wilson Government and the Wilson-Callaghan Government.

The right hon. Members for Blaenau Gwent (Mr. Foot) and for Chesterfield (Mr. Benn) brought into question what happened at Cortonwood, and that is a good example of the disaster of that first Labour Government when coal was nationalised. The disaster that followed was that the structure of management broke down because perhaps too much power was given to a trade union. That has been my impression when I have visited pits near Sheffield.

Western society faces many challenges on the economic front, and Britain must not run away from the fact that it, too, faces those challenges. But the achievement of my right hon. Friend the Prime Minister is that inflation has come down to reasonable levels. In the years 1982 and 1983 it ran at about 4.6 per cent., the lowest for 16 years and below the average in the European Economic Community.

What has disturbed me, especially in an industrial city such as Sheffield, is that thrift has not paid. Only now are people realising the value of becoming part of the property-owning democracy. This is a tremendous change, and I think that the trend will continue for the remainder of the decade.

The trouble was that British society in a way had lost its pride, especially in my city. The spendthrift had been soo easily able to live off the thrifty. At last there is a pause. However, in a city such as Sheffield too many people do not pay their share of the rates and too many depend on the seed corn of Socialism, including its cheap bus fares, at someone else's expense. That is why half the housing stock is municipally owned—we have 96,000 council houses—and why council house sales have been resisted.

Among those engaged in the steel and coal industries there has been a resurgence of the property-owning democracy, and the miners have been at the forefront of that change. They were buying their own houses and improving them. They had cars, washing machines and refrigerators on hire purchase. They were having good holidays. The coal strike has hit those miners very hard.

In the part of Yorkshire that I know I have met miner after miner who had no wish to strike. The right hon. Member for South Down came to Worksop, and I remember him addressing a meeting there. Miners in the area wanted to stay at work., but the bully boys and the flying pickets stopped a vote by a show of hands and those miners have had to come out on strike and now try to live on a pittance.

Who is to blame? Scargill and the bully boys. It is the actions of the NUM's leadership that have caused hardship.

When I first entered the House of Commons I had had recent experience of managing a steel foundry company in a mining area of south Yorkshire. I was always staggered by the way that Labour hon. Members from Sheffield—some of whom are in the other place and some of whom have now died—stressed the two sides of industry. That is why I welcomed the concept of the employee share ownership. I have been the joint chairman of an all party co-ownership group. That is why I am rather baffled by the line taken today by the Liberal leader, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel).

The concept of "we" and "us" has caused division in our society. I hoped that we might have overcome it. I am unable to understand how the miners could stand by when tens of millions of pounds of damage has been done to the mines by flooding and caved-in roofs, thereby writing off equipment at the coal face. The miners will not be able to go back to work without wincing at what has happened at their expense, at a time of record losses by the coal board of £800 million or more, financed by the taxpayer, which may be a £1.3 billion loss when grants are thrown in.

Sheffield steel has fundamentally collapsed in the past five years, which was partly due to the nationalisation of steel as well as to the strike that caused so much damage five years ago. Mr. Bill Sirs now realises that the work lost during the strike has never come back.

It has been pointed out in the House that electric arc high-frequency steel melting, which is a feature of Sheffield's steelworks, depends on electricity which is largely produced by coal-fired power stations. The statement by the Secretary of State for Trade and Industry that coal would increase in price will alarm Sheffield and many other steel centres, in view of the strike.

I shall deal with the economic situation in more general terms. I am a draftsman of the Economic Affairs Committee of the Council of Europe, which is considering the economic scene in western Europe. I have just returned from a visit to the United States with the Western European Union's Science, Technolgy and Aerospace Questions Committee. We considered high technology, the shuttle programme and space stations.

I first saw the shuttle programme in 1975, and I viewed a follow-up presentation in 1979. I was amazed at the tough industrial discipline exercised by the National Aeronautics and Space Administration. Perhaps my right hon. Friend the Prime Minister knows that President Reagan would like to see NASA sharing the space station programme with western European suppliers, so that companies in this country would be involved in that high technology.

I should like Opposition Members to imagine the scene as I saw it. When I was in the United States with the Committee, with some British Members of Parliament, Germany was just recovering from a strike over the 35-hour week. The docks strike was at its height in Britain, and the coal strike was continuing.

The most important feature of NASA's management programme is that suppliers must undertake to deliver on time, so that the whole programme can be fitted in, and this means continuity on the shop floor. Earlier this month, I was unable to speak from a strong base in the hope of projecting Britain into the 1990s, when we should be in a position to supply the programme. I confess that, since 1951 when I followed up a productivity scheme visit, I have been impressed by the extent to which the shop floor workers in the United States get stuck in and want to get the job done, perhaps with more horse power at their elbow than is normal in this country and other European countries. I am impressed now, by the fact that President Reagan, as The Economist puts it, sees the American boom lasting until the election, with 7.5 per cent. growth over the last two quarters.

The OECD has reported on many issues involving western European countries and the United States of America. The hon. Member for Knowsley, South (Mr. Hughes) spoke about the high level of unemployment, including youth unemployment, in Liverpool. In western Europe and the Council of Europe countries, 19 million people are unemployed. I have advocated job splitting, job sharing, early retirement and a shorter week.

I should be most grateful if my right hon. Friend the Chancellor of the Exchequer would give his view of a Samuel Brittan article that reflects a view that I have held for several months. It is entitled Home Truths on Union Power". It deals with the fact that strong union power denies society the flexibility that it needs. The strike in the coal industry is perhaps an example of that. The article states: The reason why there are 3 million registered unemployed in Britain is similar to the reason why there are 3 million unemployed in Italy and more than 2 million in both Germany and France. That is the effect of union monopoly power in the labour market in pricing workers out of jobs. Later, in an article entitled A closer look at Pay and Jobs", Samuel Brittan states: But employers who pay wages which price workers out of jobs are not confined to the public sector. In The Economist, an article entitled "How to Get Jobs" deals with the difference between the United States of America and Britain. That perhaps involves another facet of union power that we should face up to.

Developing as well as developed countries have too high a level of public expenditure. The big spenders are the social services, health and local government. To too great an extent public expenditure involves services provided by the state, where the client expects the state to pay for it. The person working is paid by the state for his work. When I went to a hospital in Geneva the other day with a parliamentary committee, I was impressed by the fact that the doctors wanted the patients to know what the bill was for the services that they received. Such challenges face all western countries, and must be faced by this country too.

I think that the right hon. Member for Chesterfield (Mr. Benn) highlighted the anguish felt by Labour councillors on south Yorkshire county council and Sheffield city council. The police committee has caused considerable concern in south Yorkshire and I thank my right hon. and learned Friend the Home Secretary for his support. But Labour councillors in south Yorkshire and Sheffield have decided that they can go on spending sprees provided that someone else pays the bill. That "someone else" is either the taxpayer or the ratepayer. But the ratepayers have had enough. When Parliament re-assembles I fear that my right hon. Friend the Secretary of State for the Environment will find both county council and city council defiant and destructive.

The Leader of the Opposition stands condemned. It is clear from the debate that he condones a coal strike which is being held without a ballot. He and and his supporters will also condone the defiance of Sheffield and south Yorkshire towards measures that are designed to reduce the burden of public expenditure on the taxpayer. I condemn the Leader of the Opposition because his actions are in strange contrast to his words today about the level of taxation. He criticised a Conservative Government for increasing taxation. But taxes increase in order to meet heavy public expenditure. The right hon. Gentleman continues to condone such expenditure, and the country should know that.

8.44 pm
Mr. Geoffrey Lofthouse (Pontefract and Castleford)

I am delighted that the Prime Minister is present, and I hope that she will listen to what I have to say. I shall present a picture from someone who has lived with this strike for all of the 22 weeks of its life, and who has lived with the mining industry since he was born.

Over the past few weeks, I have listened to speeches from Conservative Members, and I have always thought that they do not understand the miners' problems—I say that with the greatest respect. However, the right hon. Member for South Down (Mr. Powell) has proved me wrong, certainly in his case. I have heard many speeches over the past few weeks, and in the one that the right hon. Gentleman made tonight he really put his finger on the major point. Of that there is no doubt.

The miners, certainly in west Yorkshire, an area about which I can speak with some authority, are more rigid now on the strike than they were in the early days. In the early days I knew men in west yorkshire—personal friends—who were not very optimistic about being on strike. As time went on, I still thought that the strike might well collapse in a few weeks. However, that is no longer the position. The men are dug in and I can tell the House why. They believe that the Prime Minister and the Government have created this strike for political, dogmatic purposes. After 18 to 19 weeks, the overtime ban was beginning to bite, although there were still large stocks of coal at the power stations and pits. As the right hon. Member for South Down has told us, miners are not fools. My right hon. Friends and I have asked questions about the Cortonwood decision, but we have not been given the right answer.

I spent my life in the pits, for many years as a trade union official and for many years as a member of the management team. For a long time I was responsible for the manpower requirements in the north Yorkshire area. At that time, my job was to see that the pits in the area were staffed. In particular, going back a few years, we were staffing the then new Kellingley colliery, then the pride of our area. My job was to transfer men from the areas where pits were closing. My firm instructions, both before "Plan for Coal" and after, were to work within the colliery review programme and to negotiate with the union before any decision was taken about the closure of a pit.

As far as I am aware, such a policy continued right up to the Cortonwood decision. We have never yet had an explanation, and nor have the miners, as to why that decision was taken without due consultation with the miners. The miners believe that it was because the NCB and the Government thought that if the overtime ban carried on through the spring and the summer, and the miners went out on strike in the winter, the Prime Minister might find herself in the same circumstances as the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath)

I shall deal with the criticism, from the Conservative Benches, about ballots. I am a democrat and I believe in ballots. It is now a fact of life that there will not be a ballot, so let us be realistic. Conservative Members smile and laugh, but if anybody really believes that anybody, be it Arthur Scargill or the Almighty himself, can keep 130,000 miners out on strike against their will, he does not understand the situation. The same applies to the 60,000 Nottingham miners. If anybody thinks that they can he forced to stay away from work against their will, he is wrong. They cannot. When people think that they are right nobody can lead them the wrong way, so do not think that Arthur Scargill can mesmerise the miners into doing what they are told. That is not the case at all.

Mr. George Walden (Buckingham)

I am listening carefully to the hon. Gentleman. What he has just said seems to be a reason for having a ballot.

Mr. Lofthouse

Whatever the argument for or against a ballot we now have the situation after about 20 weeks that there will not be one. We may as well be realistic.

Great play has been made on the word "beneficial". The miners do not trust the word because they believe that it can be used to close what the Government and the coal board believe to be uneconomic pits but which they do not believe are uneconomic pits. In my managerial day s in the NCB it would have been the simplest thing for me to do to make a pit uneconomic. I could have done it within a month. The men know that.

The men do not trust Mr. MacGregor. The Prime Minister will recollect that in the early days, when the rumours of the pending appointment of Mr. MacGregor were floating about, I was privileged to have the first question at Prime Minister's Question time on the Tuesday after The Observer had blown that that might happen. I warned the Prime Minister on that day what would happen if MacGregor were appointed to the mining industry.

That is sufficient about what the miners believe and what will happen. It is a matter now of what we do. This state of affairs cannot go on for ever. Whether it is after two months, six months or 12 months, somewhere down the line there must be an end to it. There must be an honourable end for all sides. Nobody, whether the Government, the coal board, the NUM or anybody with any blood in his veins, cares to lose face. The mining industry cannot be destroyed. Do not think that the miners are enjoying it. Does anybody realise what it will he like when the men return to work when the pits have not been worked for five or six months? Does anybody realise the conditions that the men will be working under? They will be deplorable. The miners will not enjoy it.

I say seriously to the Prime Minister tonight that in high office that she has the privilege to hold she has an obligation to Britain, whatever the likes or dislikes of any individuals, and an obligation to the mining industry, the mining communities and the miners' families, to intervene. The right hon. Lady can that do without anybody saying that the miners won a great victory and that the Prime Minister is down or that the Prime Minister won a great victory and the miners are down. That gets nobody anywhere. The Prime Minister now has an obligation to intervene in this tragic dispute and to put an end to it. Only the Prime Minister can do it and she cart do it with an honourable, sensible settlement based on a sensible long-term view rather than on a short-term view based on market fluctuation. I appeal to the Prime Minister on behalf of the miners of Britain, whom I was born among, lived among, and have represented and loved all my life, to intervene in the dispute and put a stop to it.

8.54 pm
Mr. William Cash (Stafford)

I shall be brief as time marches on.

Since 1945 our economy, in common with that of many other countries, has undergone deep-seated change. What the Labour Government thought was desirable in the years immediately following the second world war has proved to be increasingly irrelevant to the requirements of running a country in the latter part of the 20th century. One need look only at the current policies of the Socialist Governments of President Mitterrand in France and of Prime Minister Gonzalez in Spain to appreciate that there is a new realism about what can and should be done to stabilise and develop the economy of a country in times of deep recession, high interest rates, rapid technological change and the inevitable loss of jobs.

Since 1979 the Government have pursued policies which have given the British people real hope for the future. There have been difficulties, and no doubt there will be more. However, until this Government took office, we were suffering from the fatal combination of massive inflation, public debt and intolerable levels of borrowing abroad.

Opposition Members are as far as ever from realising that without the measures that have been taken since 1979 our economy would be on the rocks. It is depressing that, unlike their Socialist colleagues abroad, they continue to advocate the policies to which they have clung since 1945. They nearly bankrupted us five years ago, and they have twice been decisively rejected by the electorate since then.

The Labour party claims that it would produce more jobs, but its spending programme and policy for borrowing abroad would force up inflation and cause unemployment. Its policy on import controls would induce a trade war. Because we depend heavily on imports for up to one third of what we produce, we would suffer irreparable damage from such a war. If that were combined with our withdrawal from the European Community, it would produce an economic catastrophe.

But for the politically motivated coal strike, our economy would be in better shape than it has been for decades. Arthur Scargill knew that we were winning the battle for real jobs and that our economic measures were working. However, he has determined, for spurious reasons, to do all he can to prevent the national recovery which is now on course. He will fail, but in doing so he will have seriously damaged the prospects for miners, their families, and countless other trade unionists. It is a tragic position, brought about by the abuse of power. He could have called a ballot, but he did not dare to do so.

The coal industry has a great future, but uneconomic pits cannot be kept open. The Guardian, on 27 July, stated: Whatever the other dimensions to this dispute, it would have been a rash government indeed that did not ask some basic questions about such a large increase in subsidy to an industry where the average wage is 14 per cent. above the national figure. In reality, the miners are asking to be treated as an exceptional case and are using their industrial muscle to inflict substantial losses on the economy.

Mr. Dalyell

Do the hon. Gentleman and the Prime Minister recognise that, as one who represents the huge Polkemmet colliery, which supplies Ravenscraig, I have found one factor about miners' families which is entirely new? The women are entirely and determinedly behind the miners. Unless we recognise that fact, we shall not have a clear understanding of the dispute.

Mr. Cash

For this year alone the estimated loss to the economy is about £1.65 billion. The miners' blackmail cannot be allowed to succeed when so many of the lower paid need more of our national resources. The strike is not only damaging to the economy, but selfish and unreasonable. We will not and must not give in.

The motion suggests that the Government's economic, industrial and employment policies have caused the strike. Such breathtaking hypocrisy is beyond belief. There is not a shred of justification for the motion, which should be decisively rejected.

8.59 pm
Mr. Roy Hattersley (Birmingham, Sparkbrook)

I have no doubt that I shall carry Conservative Members with me on my first contention, which is that today the Prime Minister made a speech that is worth closer examination. I urge careful thought on four specific passages from the 40-minute speech with which she entertained us, each demonstrating the inadequacy of her policy and the incompetence of her Administration.

The Prime Minister said, believe it or not, that the Government have created an economy in which industry and commerce flourish. Industry and commerce flourished so successfully last year that there were 13,400 bankruptcies—a record number of liquidations in the United Kingdom. The Prime Minister then warned politicians in general about easily-given foolish pledges. That was a rather cruel warning from the party leader who took office on the promise of tax cuts, but who has increased the national annual tax bill by £22.5 billion. Thirdly, she said that the Government will reduce the bias in favour of machinery. What a slogan with which to enter the era of new technology. It seems that the fantasy is no longer Queen Victoria; now it is King Lud.

The most notable part of the Prime Minister's 40-minute speech was her description of unemployment under this Goverment. She described it as "a considerable burden"; she said that it was "severe"; and, in the end, she said that it was high and still rising. But for all the bogus sympathy, there was not a single word about what the Government proposed to do about it. If, for the first time in 20 years, I may quote my mother in the House, "A little help is worth a great deal of pity."

However, we had no help from the Prime Minister in terms of the unemployed or of unemployment, and we did not get it because the Government care neither about unemployment nor for the unemployed. Much of today's unemployment has been created intentionally by Government policies. A definition of economic recovery that does not include a reduction in unemployment should not be an acceptable definition in a civilised society. As the Government have no intention of reducing unemployment, there can be no recovery within the meaning of the word.

During her speech the Prime Minister made at least one thing clear: she is not prepared to consider, or even to contemplate, the possibility that during all these years she just might have been wrong. The reduction in the inflation rate—the one area of economic improvement that was bought at a terrible price—is trumpeted as the personal achievement of the Prime Minister. But the many failures are all someone else's responsibility. Under this Government manufacturing output is 9 per cent. lower than it was when they came to power in 1979; manufacturing investment is 30 per cent. lower than it was in 1979; and the manufacturing trade of the United Kingdom is in deficit for the first time since the industrial revolution. When the Chancellor of the Exchequer replies, will he tell the House whether that is an act of God or whether it is the responsibility of the Government who include a Chancellor of the Exchequer, who, in his franker moments, openly writes off manufacturing industry?

I ask a second question; who, if not the Government, is responsible for the massive increase in taxation? The Conservative party came to power on a promise to reduce the annual tax bill. Under the Government, the annual tax bill has risen by £22.5 billion in real terms over the tax bill that they inherited. It is the greatest electoral fraud of the century. The question is who does the Prime Minister believe is responsible for that increase? Is it an act of God or is it a direct result of Conservative party policies?

Thirdly, who does the Prime Minister, her nominees, her spokesmen and the Chancellor of the Exchequer hold responsible for the increase of more than 2 million in the total number of unemployed? Who is responsible for the new tragedy of long-term unemployment, something virtually unknown during previous Governments, but now at a record level of 1.2 million? The Prime Minister's response to all such questions is always to blame someone else.

This afternoon the Prime Minister, in demeaning terms for one who holds her high office, seemed to be fighting again the general election campaign of 1979. If she continues during the next four years as she did today, she will lead the Conservative party into the next election on the inspiring slogan, "Don't blame me."

In particular, the right hon. Lady does not want to be blamed for the increase in interest rates. One Conservative Member almost brought himself to concede that real interest rates—described by the Government as the key to economic success—are now higher than at any time during the lifetime of any previous Government. Real interest rates stand at a record level. Right hon. and hon. Members who doubt that should look at Hansard of 26 July 1984, when a specific question was addressed to the Treasury. It could not bring itself to give the answer that I have just given, so it referred hon. Members to the Bank of England Quarterly Bulletin for December last year, which said that real interest rates are higher than they have ever been in the history of the British economy.

Who is to blame for that? From time to time, the right hon. Lady blames President Reagan and American economic policy which, when the Prime Minister is not with President Reagan, she so despises. That economic policy has produced in the United States 5 million more jobs and an annual growth rate of 8 per cent., while in Britain there is an additional 2 million unemployed and national output has remained virtually static for five years.

Why does the Prime Minister, with her abysmal record on output, growth and employment, sneer at success? Why has the President of the United States done so much better than the Prime Minister of the United Kingdom? I offer the right hon. Lady not my explanation but that of Mr. Samuel Brittan, a journalist who last week, rather incredibly quoting from "Jerusalem", said that he would not cease from mortal strife until there was a certainty of no Labour Government after the next election. If Mr. Brittan is a prejudiced source, he is not prejudiced in favour of the Labour party.

What did Mr. Brittan say about the Government's success in America? Writing in the Financial Times last September, he said: The Reagan Administration has adopted a large part of the British Labour Party's alternative economic strategy … It has taken the advice of the Labour Shadow Chancellor and not been afraid to borrow. Having, in Mr. Brittan's words, taken the advice of the Labour party, and not being afraid of borrowing, the President of the United States has created 5 million new jobs and a growth rate of 8 per cent. per annum. It is a record that the Prime Minister should envy. Yet all she does, when she is not in the presence of the President, is complain that the American deficit and American interest rates have done major damage to the British economy.

Mr. Lilley


Mr. Hattersley

If the hon. Gentleman is rising in his place and waving to ask me to allow him to intervene, and drowning, I shall give way to him.

Mr. Lilley

Will the right hon. Gentleman continue to quote Mr. Brittan's article, which sets out the reason why, in his opinion, the American economy has been so successful in generating jobs? Mr. Brittan believes that the United States economy has been successful because its work force is not so highly unionised as ours, because it has a flexible and free labour market and because it has allowed wage rates to set themselves in the market place. Would the right hon. Gentleman recommend the introduction of those conditions to the British economy?

Mr. Hattersley

That was not within Mr. Brittan's definition of the American's success. I do not think that the hon. Gentleman has produced a true description of the American economy. It is certainly not true of the conditions in many specific industries where growth has come about. To think that the miners of the United States negotiate for their wages and conditions with less determination than the miners of the United Kingdom is to misunderstand the industrial structure of America.

Mr. Michael Forsyth (Stirling)


Mr. Budgen


Mr. Hattersley

No, I shall not give way. I wish to deal with the Prime Minister's complaint about the President of the United States. It has been said that his deficit and his interest rates have blown the British economy off course. If the Prime Minister really believes that the economic policy of the United States is damaging the United Kingdom, why did she not use the London economic summit as a serious economic forum rather than as part of the Conservative party's European election campaign? I doubt whether the Chancellor of the Exchequer will answer that question so I shall answer it for him. the answer is that it was in the Conservative party's interest to use the summit as a demonstration of a number of world leaders coming together and of the power that their parties represented. When the Prime Minister has to choose between the national interest and her party's interest, she always puts party interest first.

It is because the right hon. Lady behaves as a party leader and not as Prime Minister that we have had the further loss of confidence in Britain that the prolonged coal dispute has caused. The coal dispute is now a strike which the Government boast they wall not attempt to end. The dispute is a strike which the Government boast will continue for months and months, without the slightest concern for the economic health of the country or for the suffering that it causes. Anyone who heard the Secretary of State for Trade and Industry on Sunday on "The World at One" could conclude only that his specific and overt intention was to cause difficulties, resentment and provocation that would make it more difficult for an honourably negotiated settlement to come about. He said that the Government could let the strike continue indefinitely, that there was no hurry for them and that the end might come after Christmas. That is not the language of a sensible Government who want to bring a dispute to an end. A sensible Government would pay some heed to the price that the country is paying for the coal dispute.

I shall answer one of the questions that the Prime Minister put to me. When she did so, she gave the impression that she thought that it would be difficult to answer. The right hon. Lady asked about a ballot of the members of the National Union of Mineworkers, and I have always believed that there should have been a ballot. I said that publicly within 24 hours of the issue being raised. I have said that every week for the past 21 weeks, as has my right hon. Friend the Leader of the Opposition. Let me ask the right hon. Lady a question. Let us assume that I am right and that there should have been a ballot. How can the absence of a ballot justify her acting towards the dispute in a way which is deeply damaging to the national interest? Why does the absence of a ballot enable her to behave like a bully at a dog fight who watches the damage that is done and enjoys it? I will answer that question too. The absence of a ballot enables the right hon. Lady to take that approach because it provides a party advantage that will attract vote after vote from Conservative Members when the House divides.

Let us assume—the newspapers tell us about this—that closing the 10 per cent. least economic pits would save, at most, £300 million. By the time the August bank holiday comes, we shall have spent five years' savings simply financing the dispute. That cannot be right in the light of the damage that the dispute is causing, not only to the economy but to the national fabric and cohesion of our society, which the Opposition want to preserve. That price, which is approaching £1.2 billion, is the price that we are paying for the Prime Minister's vanity. It is the price that we are paying for her obsessive need to posture as the Boadicea of the southern suburbs. [Interruption.] I am not sure whether the Prime Minister is governed by the normal rules of order or whether she can continually shout at me without rising.

The most extraordinary part of the Prime Minister's speech was the fact that she did not begin to understand the significance of Cortonwood during the entire dispute. The right hon. Member for South Down (Mr. Powell) described that significance to the right hon. Lady in the most clear and academic terms. My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) described it in terms that were simple, clear and moving because of their integrity. What should come out of the debate is greater understanding by the Prime Minister that at the heart of this dispute is the determination of the right hon. Lady and the National Coal Board to ride roughshod over a group of men who, rightly, are not prepared to be treated in that way. Of course, the average miner will be reasonable about the economic prospects of coal, cuts, and closures. However, to gain the co-operation that was obtained during the lifetime of the Government in which I had the privilege to serve, the NCB must talk to the miners, take the miners into its confidence and develop with them a common policy. If the Prime Minister will not accept that action, I fear that we are in for a desperately long dispute, for which she will be largely responsible.

I have talked of the price that we are paying for the Prime Minister's vanity, but let me add another item to the price. Because of the mining dispute, fuel imports are up by 37 per cent., oil imports are up by 44 per cent. and oil exports have fallen by 8 per cent. Apart from its disastrous immediate effect on our balance of payments, that change in the export and import of oil has had a more long-term disadvantageous effect on the economy. It has given our creditors and our competitors a glimpse of what the economy will be like when the oil begins to run out.

For five years, we have lived on oil revenues — a bonus that no other Government have ever enjoyed. That bonus should have been used to reinvest in British industry, but it has been squandered. Much of the bonus has been used simply to meet the cost of the extra unemployment that the Government have caused. Annual oil revenues are barely half the annual costs of unemployment benefit now that the real figure of the unemployed is approaching 4 million. Oil has been used to subsidise the dole rather than to create jobs.

We have no idea how we shall survive when the oil bonus runs out. Nine weeks ago, the Prime Minister was asked that question by Sir Robin Day. She told him that she has a secret formula for seeing us through after the oil was exhausted. The money invested in foreign factories, in other people's jobs, production and exports was going to come back to Britain in the form of interest payments. In fact, the Government's plan is to make us the remittance man of western Europe while posturing as an imperial power. Let me demonstrate—I regret to say that this is directly relevant to this debate—what the result of the conceit of posturing as an imperial power has brought about for the country and the Government. In 1979, the Government came to power promising public expenditure cuts. We warned that such a policy would damage and perhaps destroy essential public services. I confess that we had no idea that the Government would be able to achieve the unique result that they have managed to bring about. We have had damage to the public services and the destruction of some of the public services, but we have not had any of the public expenditure cuts.

Public expenditure, as a proportion of gross national product—the Prime Minister's own criterion—was 40.5 per cent. when she came to power. It is now 43 per cent. All that has happened is that public expenditure has been switched from the socially desirable projects which create jobs either to the subsidy of the growing army of the unemployed or to various items which can only be described as politically vainglorious.

This year we shall spend an additional £684 million in the Falkland Islands. Secret expenditure cuts are now being carried out in each spending Department. When that exercise is completed, and they are gradually leaked out, bit by bit — so that the Government can avoid the indignity of taking the honest course and coming to the House with a new public expenditure package — and when the moratorium on council house building and improvement is finally announced, I hope that the Chancellor of the Exchequer will have the courage to say that it has happened because the Prime Minister regards an airfield in the south Atlantic as more important than houses and homes for our people. That piece of absurd expenditure is only one of the subsidiary reasons for the chaos that we were determined to debate before the Session was concluded.

The real reason for the chaos can be easily described. The Government really do believe that there is a certain and automatic cure for our economic problems. They really believe that holding down the money supply and the public sector borrowing requirement will, if that policy is continued with determination and courage, produce a sovereign cure.

Mr. Gerald Malone (Aberdeen, South)

Will the right hon. Member concede that that was exactly the policy of the last Labour Government? Is he trying to say to the House that he would now pursue something different? If he is saying that, will he at long last tell us what that is?

Mr. Hattersley

I blame myself, Mr. Speaker. I should have known, from the hon. Gentleman's record, that giving way to him is a waste of the time of this House.

Nobody has ever suggested that a proper concern for the monetary aggregates is not an essential part of economic policy. [Hon. Members: "Ah".] With respect, much of the debate this afternoon, or early this evening, when Conservative Members were engaged elsewhere, was concerned with our saying that when we were in power we did pay attention to the monetary aggregates. Our complaint is that this Government believe that that and that alone is what matters.

The hon. Member for Aberdeen South (Mr. Malone) asks what we would do. I understand very well the Government's obsessive determination to talk about anything except their own record. [Interruption]. The Conservative party and those newspapers which speak for it will have to get it into their collective heads that for the next year or two we shall be talking about the failure of the Conservative party.

Mr. Jackson

I believe that the right hon. Gentleman is trying to be constructive. In a notable speech to the EETPU last year, he advocated a return to incomes policy. Does he intend to put the same view to the TUC in September?

Mr. Hattersley

Of course. I am not sure that I shall do it so well as I did on television on Sunday afternoon but I do not think that even the experience of All Souls could sustain the claim that I am keeping my view on incomes policy secret. My view on incomes policy is well known and unchanged. Today, however, I intend to talk about the Government's economic failure due to their peculiar belief that the application of a mystical formula will make everything come out right in the end.

The Government fail to meet their own targets so significantly and chronically that the targets have to be changed from time to time. The Chancellor can then say that although they did not make it with M3 they are sure to make it with M0. But even if the Government meet their own targets there is no possibility of economic redemption from the idea that the economy will prosper if the monetary aggregates are held at such a level that the slump is constantly deepened and the recession made worse week by week, month by month and year by year. The Government pursue that policy with reckless folly. They start by holding down the PSBR and the money supply by cutting productive and job-creating public expenditure. That causes higher unemployment, and more public expenditure is required to pay the bills that unemployment brings. The PSBR is then in jeopardy again and the Chancellor has to start on another round of public expenditure cuts in his manic determination to get back on course what cannot be got back on course. The most depressing feature of the cycle is the fact that at every turn the slump is intensified and the depression deepened, more bankruptcies are created and investment is further imperilled. Above all, it adds to the deplorably growing total of unemployment.

The level of unemployment created by the Government is the greatest indictment of their economic policies and their political morality. The level of unemployment in this country is an economic disaster and a human tragedy, but I wager that we shall not hear a word of hope from the Chancellor about a reduction in unemployment between now and the next general election. I do not ask for a specific figure. He will say, of course, that it is not Government practice to make forecasts about future levels. It has, however, been the practice of previous, honourable Governments to say what they believe the trend will be. I therefore ask the Chancellor this question. Does he believe that on polling day 1987 or 1988 unemployment will be higher than it is today, lower than it is today or about the same as it is today? As he well knows, every forecast, even up to the little crisis of a fortnight ago, has suggested that unemployment will rise and rise so long as we have a Government with those policies and that degree of callous incompetence. It is that callous incompetence against which we intend to turn the nation and which, above all other things, we condemn today.

9.29 pm
The Chancellor of the Exchequer (Mr. Nigel Lawson)

Nothing could have illustrated better the intellectual and policy bankruptcy of the Opposition than the speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). Not only was he unable to say anything whatsoever about his party's policy; he even seemed uncertain about whether public expenditure under this Government had been cut or increased.

The right hon. Gentleman was asked a simple question by my right hon. Friend the Prime Minister, and he has failed in half an hour to answer it. [Interruption.] He was asked by my right hon. Friend the Prime Minister to condemn the mass picketing that has been going on in the coal mining areas of the country and that inevitably leads to violence. Does he want to take this opportunity to condemn the mass picketing? I will gladly give way to him if he does. However, I note that he does not, the House will notice that he does not, and the country will notice that he does not.

As the right hon. Member for South Down (Mr. Powell) observed, the debate has been dominated— indeed, I think his words were brought to life—by the miners' strike. However, I must disagree with him when he alleged, as he did—and he quoted from George Bernard Shaw talking about Keir Hardie—that the miners were using Mr. Scargill rather than Mr. Scargill using the miners. That is not so. It is certainly the case that, when Mr. Scargill was elected as president of the National Union of Mineworkers—I was Secretary of State for Energy at the time, and was taking a close interest in these matters — the miners were indeed using him. They did not believe in what he stood for, but they believed that he was a projectile that they could use, because they knew that they had the last word under their constitution, they knew that they had the ballot, and they could say no to him when he put a proposition to them with which they disagreed. That was why they were prepared to have him in that capacity. On three occasions, that is precisely what occurred. On three occasions, he sought their authority in a ballot to go out for strike action, and on each of those occasions they turned him down. But he has circumvented that rule in the miners' rule book, and many of them find now that, instead of their using him, he is using them.

That is why there is this unprecedented split within the National Union of Mineworkers between those who are striking and those who are working in Nottinghamshire, Leicestershire, south Derbyshire, Staffordshire and Lancashire. The right hon. Member for South Down, says that the miners are intelligent people, and, indeed, they are, but he is very wrong if he ascribes that intelligence uniquely to those miners who are on strike and not to those who are at work.

Although the miners' strike has dominated this dispute —[Interruption.]—this debate, which at times has had the nature of a dispute, but, of course, it is a debate conducted according to the rules of order, which you always ensure abide in all our debates, Mr. Speaker—a number of other concerns have featured prominently, in particular, as the right hon. Member for Sparkbrook and other hon. Members made clear, the high and still rising level of unemployment. He was right to raise that issue, and I have no complaint about that. The right hon. Gentleman also raised the question of the currently excessive level of interest rates, and I shall have something to say about both those matters. I shall give the House the facts. It is even more important to be aware of the facts of the fundamental state of the British economy, because that is the context in which our present discontents have to be seen, and that is what at the end of the day will determine their outcome.

Inflation at 5 per cent. is the lowest since the 1960s and there is no sign of any resurgence. Output is the highest ever and is still rising. Growth last year, at over 3 per cent., according to the latest revised figures, was greater than in any year under the previous Labour Government, and inflation was lower than in any year under the previous Labour Government.

The right hon. Gentleman showed a particular interest in manufacturing. Productivity in manufacturing —[Interruption.] The Opposition do not like it—for so long one of our Achilles' heels as a nation, has risen by an unprecedented 6 per cent. a year over the past three years and now stands 13 per cent. above the pre-recession Peak.

Mr. Hattersley

Does the Chancellor understand that the only reason why productivity has gone up in manufacturing is that he has driven so many companies into bankruptcy? Saying that it is an improvement is like saying that if the last five English batsmen did not go into bat the other five would have a better average; but the total is much smaller.

Mr. Lawson

The total output of the economy is larger than it has ever been before. That disposes of the right hon. Gentleman's argument.

The CBI has forecast investment in manufacturing to rise by 12 per cent. this year and a further 7 per cent. next year. We have heard something about bankruptcies and, indeed, there have been bankruptcies, but company profits have increased by no less than 40 per cent. over the past two years and are still rising fast. The share of industrial and commercial company profits, as a proportion of total domestic income, is now the highest since the figures were first compiled in the 1960s.

Mr. Allan Rogers

What about jobs?

Mr. Lawson

I shall come to jobs. Even leaving aside the North sea, the return on capital employed by British industry is the highest for a decade. Thanks to the sharp rise in productivity, labour costs per unit of output over the economy as a whole have been rising at 3 per cent. a year over the past two years—the smallest increase since the 1960s.

Mr. Bryan Gould (Dagenham)

How do those figures compare with those of our major foreign competitors?

Mr. Lawson

They are worse than for Germany, Japan and the United States because wages have been going up too high. [Interruption.] I shall come to that point later and I am glad that the hon. Member for Dagenham (Mr. Gould) will support me in looking for lower wage increases. Even those figures are far better than anything achieved in any year under the previous Labour Government.

The right hon. Member for Sparkbrook mentioned the balance of payments. The balance of payments current account is in surplus for the fifth year in succession, the first time that that has happened since the war.

The number of people in work has risen by more than 250,000 in the year to last March. I expected a cheer for that. I thought that the Opposition were interested in jobs. The economy is now well into the fourth year of a non-inflationary recovery and is more soundly based than we have known for a generation. That has not happened by accident; it happened for two reasons. The first is that British industry, faced with the worst recession since the 1930s, rose to the challenge in a way that its detractors never thought possible. The much talked of regeneration of British industry is at long last taking place, not as a result of Government direction and central planning but because of the efforts of industry itself.

The second reason for the fundamental improvement in the health and prospects of the British economy is the policies which have been steadfastly pursued by the Government ever since we took office in 1979. The resolute maintenance of financial discipline through a steady reduction in Government borrowing and a strict curb on monetary growth, coupled with the scrapping of a plethora of restrictions and controls on business, industry and markets, has been the policy which we have pursued, and this has been the cause of the recovery.

To claim, as the right hon. Member for Sparkbrook has, that the recovery that we are now enjoying is not a recovery at all because of the level of unemployment is sheer sophistry. The level of unemployment is a most serious problem in its own right and it demands the attention and the efforts of us all.

Mr. Jack Straw (Blackburn)

The right hon. Gentleman said that we were now in the fourth year of the recovery, which in that case started in 1980. Is his definition of "recovery" one in which unemployment rises in each year?

Mr. Lawson

The recovery started in April 1981. The hon. Gentleman cannot count.

We owe the unemployed something better than easy slogans. We owe the unemployed an understanding of the cause of the problem so that we can point the way to its cure. The right hon. Member for Islwyn (Mr. Kinnock) and the right hon. Member for Sparkbrook spoke of the success of the United States in generating new jobs and reducing unemployment. There is no doubt that it is an impressive performance, but it has nothing to do with the United States budget deficit, as Mr. Mondale at least recognises. In his acceptance speech in San Francisco the other day Mr. Mondale promised that if elected he would reduce the United States budget deficit by two-thirds. I understand that the right hon. Member for Sparkbrook was in San Francisco. Perhaps he would now like to repudiate the Democratic party candidate.

Mr. Hattersley

I would.

Mr. Lawson

Apparently he would, so he does not believe that the budget deficit created jobs. Then that is clear.

The success of the American economy in generating jobs goes back well before the recent bout of fiscal laxity —accompanied, incidentally, by strict monetary control. I do not know whether the Opposition support that. Over the past 10 years, whereas the total number of people at work in western Europe has fallen, in the United States the number of people in work has risen by 15 million. The reasons for this sharp difference are not hard to see. They lie in the greater freedom and dynamism of the American business environment, the lower burden of public expenditure and taxation, the absence of Luddite trade unionism, the much greater flexibility of working practices, the much greater freedom from job destroying regulations and controls and the attitudes that this framework both expresses and engenders, including not least the acceptance on all sides of the political divide of the capitalist market system. That is the secret of their success in creating jobs.

It is the policy of Her Majesty's Government to re-create in Britain that framework and that climate, which derived from a British tradition in the first place.

There is another and equally powerful reason why unemployment has been falling in the United States while it continues to grow in western Europe. Over the past 10 years, while the workers of western Europe have seen their real earnings rise substantially—and that has been true in this country, too—real hourly earnings in the United States have actually fallen by 6 per cent.

There is a clear and unequivocal link between lower costs, especially lower wage costs, and more jobs. Let me take just one example. In June last year the employers and the unions in our electrical contracting industry agreed to cut the rate of pay for a 16-year-old apprentice by one third. The direct result has been that the number of apprenticeships in the electrical contracting industry has trebled, from 850 in 1982–83 to 2,650 this year.

More generally, a couple of years ago my predecessor—

Mr. Budgen

Does not my right hon. Friend agree that the same process could be achieved if the wages councils were abolished?

Mr. Lawson

My hon. Friend must appreciate that the issue goes far wider than that. It affects the economy generally, not just those industries to which the wages councils apply.

More generally, a couple of years ago my predecessor produced a paper for NEDC that suggested that each 1 per cent. reduction in the level of earnings below what it otherwise might be would reduce unemployment by some 50,000.

On that basis, if earnings in the past two years had merely kept pace with prices instead of growing 3 per cent. a year ahead of prices, unemployment in Britain, instead of rising in the past year, would have fallen.

I say this to the right hon. Member for Sparkbrook: will he openly campaign for smaller pay rises to secure more jobs? Will he say that? If so, well and good. If not, his protestations about the level of unemployment are exposed as a hollow sham.

In the shorter term, the outlook for the economy this year—

Mr. Gould


Mr. Lawson

I have already given way more often than the right hon. Member for Sparkbrook.

In the shorter term, the outlook for the economy this year has inevitably been affected by the miners' strike and the recent rise in interest rates. It has been affected, but not much. Coal output in normal terms accounts for some 1½ per cent. of total national output. As it is running well below that figure it is unlikely that the rate of growth this year will quite reach the 3 per cent. that was envisaged at the time of the Budget. The counterpart of that is that growth in 1985 is likely to be higher than would otherwise have occurred.

As for inflation, I expect no resurgence this year, although, given next month's increase in the mortgage rate of 4½ per cent., the forecast made at the time of the Budget for the end of this year may not be reached until next year. But the inflationary trend remains firmly downward. Our commitment to the objective of stable prices is neither diminished nor deferred.

Moreover, there has been much ill-informed speculation, especially by the right hon. Member for Sparkbrook today, about the public expenditure costs of the miners' strike. The biggest single chunk of that is the cost of burning large quantities of oil in the power stations so as to eke out for a very long time the massive coal stockpile at power stations for the benefit of electricity consumers, for whom security of supply is paramount.

All told, the miner's strike has probably added, net, some £300 million to £350 million to public expenditure so far this year. Although that is nothing like the figures quoted by the right hon. Gentleman, it is a substantial sum. It should be seen in perspective. It amounts to roughly one quarter of 1 per cent. of total public expenditure.

Unlike most items of public expenditure, it is of a strictly temporary nature. Moreover, it has to be seen against subsidies from the taxpayer to the National Coal Board of well over £1 billion last year before the strike, as a result of losses incurred by uneconomic pits. And so, even in narrow financial terms, it represents a worthwhile investment for the nation. That is before taking into account—[Interruption.]—the wider issues at stake in the dispute.

Mr. Allan Rogers

Did I understand the Chancellor to say that the miners' strike was a better investment for the nation?

Mr. Lawson

I said that securing the closure of uneconomic pits was for the good of the nation. [AN HON. MEMBER: "At a price."] But that price was not of our making.

Finally, I can reassure the House that, taking full account of the public expenditure costs of the miners' strike, I see no reason to alter the forecast I made at the time of the Budget of a public sector borrowing requirement for the current year of some £7¼ billion.

Mr. Dick Douglas (Dunfermline, West)


Mr. Lawson

Uncertainty towards—[Interruption.]

Mr. Douglas


Mr. Speaker

Order. It is no good the hon. Gentleman getting up and shouting. The Chancellor of the Exchequer is not giving way.

Mr. Lawson

I have given way considerably more than the right hon. Member for Sparkbrook did.

Uncertainty caused by the coal strike was, of course, one of the factors—

Mr. David Winnick (Walsall, North)

On a point of order, Mr. Speaker. The Chancellor has denied what we clearly heard him say. Will you ensure that what he said is not corrected or amended?

Mr. Speaker

The Official Report records all that hon. Members say in the House.

Mr. Lawson

I certainly did not say that the strike was a good investment—[HON. MEMBERS: "He did".] What I did—[Interruption].

Mr. Speaker


Mr. Lawson

What I said was that it was worthwhile for the coal board and for the nation to have the right to close the uneconomic pits—

Mr. Campbell-Savours

On a point of order, Mr. Speaker. Will you give us an assurance from the Chair that what the Minister said will be exactly reported in the Official Report? The right hon. Gentleman was heard, and he is now trying to change the Official Report.

Mr. Speaker

I did not hear the Chancellor of the Exchequer say that he was seeking to do that.

Miss Betty Boothroyd (West Bromwich, West)

We did.

Mr. Lawson


Mr. Allan Rogers

Further to that point of order, Mr. Speaker. As a relatively new Member of Parliament, I should like to know what the procedure is. The Chancellor made the clear statement that the miners' strike was a better investment for his Government. He is now suggesting that he did not say that. Am I to understand that all that the Chancellor has said tonight will go in the record? Is that the procedure?

Mr. Speaker

The House knows that the Official Report faithfully records what is said in the House.

Mr. Lawson

I turn to the issue of interest rates.

Mr. Douglas


Mr. Lawson

I shall not give way. Points of order have already been raised.

We had, unprecedentedly, succeeded in getting United Kingdom interest rates about 3 per cent. below comparable American rates. But a combination of the coal strike, the news of the—as we now know shortlived—dock strike, fears of still higher American interest rates, weakness in the oil market, and an absurdly exaggerated reaction to a single month's poor money supply figures led to massive upward market pressure on interest rates which, at the time, it was impossible to resist without creating dangerous doubts about the Government's central anti-inflationary strategy.

But it is a characteristic of financial markets that they have a tendency to overshoot, and that is what has now occurred. The present level of interest rates is likely to prove higher than is required to secure monetary growth within the target ranges. It follows that interest rates should not remain at their present high level for very long. The House will note that I have emphasised, once again, the fact that it is monetary conditions, and not the exchange rate, that are of central relevance to interest rates. That has always been our policy, and it remains so. This is of particular importance at a time when the exchange markets are dominated by the aberrant behaviour of the dollar. In the five years or so since we first took office, the pound has depreciated against the dollar by some 36—[Interruption.]

Mr. Speaker

Order. We must allow the Chancellor to pursue his speech. [HON. MEMBERS: "Why?"] Order. Other hon. Members have been heard in relative silence, and we must do the same for the Chancellor.

Mr. Allan Rogers


Mr. Lawson

The hon. Gentleman will be able to read Hansard.

In the five years or so since we first took office, the pound has depreciated against the dollar by some 36 per cent. However, against the currencies of the European monetary system, it has, over the same period, appreciated by some 13 per cent. This does not mean that we are wholly indifferent to the exchange rate, but it means that—

Mr. Terry Lewis (Worsley)


Mr. Lawson

—we take it into account only when its behaviour suggests that the domestic monetary indicators are giving a false reading, and that is clearly not the case at the present time.

This is not the first Government to have been subjected to—

Mr. Terry Lewis


Mr. Speaker


Mr. Lawson

This is not the first Government who have been subjected to industrial strife, albeit on a limited scale, and turbulent financial markets. I doubt that we shall be the last so afflicted either. What distinguishes this Government from their predecessors is that neither of these emphemera has blown us off course, nor will it do so.

However, the miners strike has raised the gravest possible doubts over the Labour party's fitness to aspire ever again to govern Britain. This strike is led by a man who is avowedly committed to so-called class warfare, who has boasted that industrial action can bring down democratically elected Governments, a man who refuses even to acknowledge, let alone condemn, the violence perpetrated by his pickets. This is the man that the Leader of the Opposition greeted at Durham as a brother and as a comrade. The right hon. Gentleman knows that the notorious photograph of him clutching Mr. Scargill's hand is indelibly etched in the minds of the people of this country.

Some week ago, the Leader of the Opposition called for a ballot, in an uncharacteristically still, small voice. Today, on the subject of the ballot, he is silent altogether, his brave moment past. Does the right hon. Gentleman wish to intervene?

Mr. Kinnock

A great deal of the disturbance in the last 10 minutes has arisen from a statement made by the Chancellor, in the clear hearing of the House, that £300 million in extra oil expenditure was a worthwhile price to pay in the national interest. Is that the Government's attitude? Is that the attitude of the Chancellor and the Prime Minister? If it is, we shall know the kind of warfare that the Government have declared, at a fantastic cost that they are willing to meet to perpetrate political strife.

Mr. Lawson

Let the right hon. Gentleman use what influence he has to get the strike called off, and nobody will be better pleased than the Government. This strike is not of our making nor of our desiring, and the right hon. Gentleman knows that and it is hypocrisy to say anything else.

The right hon. Gentleman boasts that he leads from the front, but all he does is lead from the front of Mr. Scargill's sharply pointed stick. We are assured by the political commentators that we should not worry because, although the right hon. Gentleman cannot stand up to Mr. Scargill, at least he stands up bravely to the hon. Member for Liverpool, Walton (Mr. Heffer). Just look at his triumph over reselection, we are told. However, the right hon. Gentleman has provided a clear and incontrovertible right of appeal, but has given it not to the victim but to the executioner. He has given it at a price of complete capitulation to the unilateralist wing of his party.

The Labour party is not merely bereft of policies; it has leaders who are bereft of guts. I invite the House to reject the motion with the contempt that it deserves.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 184, Noes 353.

Division No. 467] [10 pm
Archer, Rt Hon Peter Bermingham, Gerald
Ashdown, Paddy Bidwell, Sydney
Ashley, Rt Hon Jack Blair, Anthony
Ashton, Joe Boothroyd, Miss Betty
Atkinson, N. (Tottenham) Boyes, Roland
Bagier, Gordon A. T. Brown, Hugh D. (Provan)
Barnett, Guy Brown, N. (N'c'tle-u-Tyne E)
Barron, Kevin Brown, R. (N'c'tle-u-Tyne N)
Beckett, Mrs Margaret Brown, Ron (E'burgh, Leith)
Beith, A. J. Caborn, Richard
Bell, Stuart Callaghan, Rt Hon J.
Benn, Tony Callaghan, Jim (Heyw'd & M)
Bennett, A. (Dent'n & Red'sh) Campbell, Ian
Campbell-Savours, Dale Lambie, David
Canavan, Dennis Lamond, James
Carter-Jones, Lewis Leadbitter, Ted
Cartwright, John Leighton, Ronald
Clark, Dr David (S Shields) Lewis, Terence (Worsley)
Clarke, Thomas Litherland, Robert
Clwyd, Mrs Ann Lloyd, Tony (Stretford)
Cocks, Rt Hon M. (Bristol S.) Lofthouse, Geoffrey
Cohen, Harry Loyden, Edward
Coleman, Donald McCartney, Hugh
Concannon, Rt Hon J. D. McDonald, Dr Oonagh
Conlan, Bernard McGuire, Michael
Cook, Frank (Stockton North) McKay, Allen (Penistone)
Corbyn, Jeremy Mackenzie, Rt Hon Gregor
Cowans, Harry McNamara, Kevin
Cox, Thomas (Tooting) McTaggart, Robert
Craigen, J. M. McWilliam, John
Crowther, Stan Madden, Max
Cunliffe, Lawrence Marshall, David (Shettleston)
Cunningham, Dr John Maynard, Miss Joan
Dalyell, Tam Meacher, Michael
Davies, Rt Hon Denzil (L'lli) Michie, William
Davies, Ronald (Caerphilly) Mikardo, Ian
Davis, Terry (B'ham, H'ge H'l) Millan, Rt Hon Bruce
Deakins, Eric Miller, Dr M. S. (E Kilbride)
Dewar, Donald Mitchell, Austin (G't Grimsby)
Dixon, Donald Morris, Rt Hon A. (W'shawe)
Dobson, Frank Morris, Rt Hon J. (Aberavon)
Dormand, Jack Nellist, David
Douglas, Dick Oakes, Rt Hon Gordon
Dubs, Alfred O'Brien, William
Dunwoody, Hon Mrs G. Orme, Rt Hon Stanley
Eadie, Alex Park, George
Eastham, Ken Patchett, Terry
Edwards, Bob (W'h'mpt'n SE) Pavitt, Laurie
Evans, John (St. Helens N) Pendry, Tom
Ewing, Harry Penhaligon, David
Fatchett, Derek Pike, Peter
Field, Frank (Birkenhead) Powell, Raymond (Ogmore)
Fields, T. (L'pool Broad Gn) Prescott, John
Fisher, Mark Redmond, M.
Foot, Rt Hon Michael Rees, Rt Hon M. (Leeds S)
Forrester, John Richardson, Ms Jo
Foster, Derek Roberts, Allan (Bootle)
Foulkes, George Roberts, Ernest (Hackney N)
Fraser, J. (Norwood) Robinson, G. (Coventry NW)
Freeson, Rt Hon Reginald Rogers, Allan
Garrett, W. E. Rooker, J. W.
George, Bruce Ross, Ernest (Dundee W)
Gilbert, Rt Hon Dr John Rowlands, Ted
Godman, Dr Norman Ryman, John
Golding, John Sheerman, Barry
Gould, Bryan Sheldon, Rt Hon R.
Gourlay, Harry Shore, Rt Hon Peter
Hamilton, W. W. (Central Fife) Short, Ms Clare (Ladywood)
Hancock, Mr. Michael Silkin, Rt Hon J.
Hardy, Peter Skinner, Dennis
Harman, Ms Harriet Smith, C.(Isl'ton S & F'bury)
Harrison, Rt Hon Walter Snape, Peter
Hart, Rt Hon Dame Judith Soley, Clive
Hattersley, Rt Hon Roy Spearing, Nigel
Healey, Rt Hon Denis Steel, Rt Hon David
Heffer, Eric S. Straw, Jack
Hogg, N. (C'nauld & Kilsyth) Thomas, Dafydd (Merioneth)
Holland, Stuart (Vauxhall) Thomas, Dr R. (Carmarthen)
Howell, Rt Hon D. (S'heath) Thompson, J. (Wansbeck)
Hughes, Dr. Mark (Durham) Thorne, Stan (Preston)
Hughes, Robert (Aberdeen N) Tinn, James
Hughes, Roy (Newport East) Torney, Tom
Hughes, Sean (Knowsley S) Wainwright, R.
Janner, Hon Greville Wallace, James
Jenkins, Rt Hon Roy (Hillh'd) Wardell, Gareth (Gower)
Jones, Barry (Alyn & Deeside) Wareing, Robert
Kaufman, Rt Hon Gerald Weetch, Ken
Kennedy, Charles Welsh, Michael
Kilroy-Silk, Robert White, James
Kinnock, Rt Hon Neil Wigley, Dafydd
Kirkwood, Archy Winnick, David
Woodall, Alec Tellers for the Ayes:
Young, David (Bolton SE) Mr. James Hamilton and
Mr. Robin Corbett.
Adley, Robert Douglas-Hamilton, Lord J.
Aitken, Jonathan Dover, Den
Alexander, Richard du Cann, Rt Hon Edward
Alison, Rt Hon Michael Durant, Tony
Amery, Rt Hon Julian Dykes, Hugh
Amess, David Edwards, Rt Hon N. (P'broke)
Ancram, Michael Eggar, Tim
Ashby, David Emery, Sir Peter
Aspinwall, Jack Eyre, Sir Reginald
Atkins, Rt Hon Sir H. Fallon, Michael
Atkins, Robert (South Ribble) Farr, Sir John
Atkinson, David (B'm'th E) Favell, Anthony
Baker, Rt Hon K. (Mole Vall'y) Fenner, Mrs Peggy
Baker, Nicholas (N Dorset) Finsberg, Sir Geoffrey
Baldry, Tony Fletcher, Alexander
Banks, Robert (Harrogate) Fookes, Miss Janet
Batiste, Spencer Forman, Nigel
Beggs, Roy Forsyth, Michael (Stirling)
Bendall, Vivian Forsythe, Clifford (S Antrim)
Benyon, William Forth, Eric
Berry, Sir Anthony Fowler, Rt Hon Norman
Best, Keith Fox, Marcus
Bevan, David Gilroy Franks, Cecil
Biffen, Rt Hon John Fraser, Peter (Angus East)
Biggs-Davison, Sir John Freeman, Roger
Blaker, Rt Hon Sir Peter Fry, Peter
Body, Richard Gale, Roger
Bonsor, Sir Nicholas Gardiner, George (Reigate)
Bottomley, Peter Gardner, Sir Edward (Fylde)
Bottomley, Mrs Virginia Gilmour, Rt Hon Sir Ian
Bowden, A. (Brighton K'to'n) Glyn, Dr Alan
Bowden, Gerald (Dulwich) Goodhart, Sir Philip
Boyson, Dr Rhodes Goodlad, Alastair
Braine, Sir Bernard Gorst, John
Brandon-Bravo, Martin Gow, Ian
Bright, Graham Gower, Sir Raymond
Brinton, Tim Grant, Sir Anthony
Brittan, Rt Hon Leon Greenway, Harry
Brooke, Hon Peter Gregory, Conal
Brown, M. (Brigg & Cl'thpes) Griffiths, E. (B'y St Edm'ds)
Browne, John Griffiths, Peter (Portsm'th N)
Bruinvels, Peter Grist, Ian
Bryan, Sir Paul Ground, Patrick
Buck, Sir Antony Grylls, Michael
Budgen, Nick Gummer, John Selwyn
Bulmer, Esmond Hamilton, Hon A. (Epsom)
Butcher, John Hamilton, Neil (Tatton)
Butterfill, John Hampson, Dr Keith
Carlisle, John (N Luton) Hanley, Jeremy
Carlisle, Kenneth (Lincoln) Hannam, John
Carttiss, Michael Harris, David
Cash, William Harvey, Robert
Chalker, Mrs Lynda Havers, Rt Hon Sir Michael
Channon, Rt Hon Paul Hawkins, Sir Paul (SW N'folk)
Chapman, Sydney Hawksley, Warren
Chope, Christopher Hayes, J.
Churchill, W. S. Hayhoe, Barney
Clark, Hon A. (Plym'th S'n) Heath, Rt Hon Edward
Clark, Dr Michael (Rochford) Heathcoat-Amory, David
Clark, Sir W. (Croydon S) Heddle, John
Clarke, Rt Hon K. (Rushcliffe) Henderson, Barry
Clegg, Sir Walter Heseltine, Rt Hon Michael
Cockeram, Eric Hickmet, Richard
Colvin, Michael Hicks, Robert
Conway, Derek Hill, James
Coombs, Simon Hind, Kenneth
Cope, John Hirst, Michael
Cormack, Patrick Hogg, Hon Douglas (Gr'th'm)
Cranborne, Viscount Holland, Sir Philip (Gedling)
Critchley, Julian Holt, Richard
Crouch, David Hooson, Tom
Currie, Mrs Edwina Hordern, Peter
Dickens, Geoffrey Howard, Michael
Dicks, Terry Howarth, Alan (Stratf'd-on-A)
Dorrell, Stephen Howarth, Gerald (Cannock)
Howell, Ralph (N Norfolk) Newton, Tony
Hubbard-Miles, Peter Nicholls, Patrick
Hunt, John (Ravensbourne) Nicholson, J.
Hunter, Andrew Normanton, Tom
Hurd, Rt Hon Douglas Norris, Steven
Irving, Charles Onslow, Cranley
Jackson, Robert Oppenheim, Phillip
Jenkin, Rt Hon Patrick Osborn, Sir John
Jessel, Toby Ottaway, Richard
Johnson Smith, Sir Geoffrey Page, Sir John (Harrow W)
Jones, Gwilym (Cardiff N) Page, Richard (Herts SW)
Jones, Robert (W Herts) Patten, John (Oxford)
Jopling, Rt Hon Michael Pattie, Geoffrey
Joseph, Rt Hon Sir Keith Pawsey, James
Kellett-Bowman, Mrs Elaine Peacock, Mrs Elizabeth
Kershaw, Sir Anthony Percival, Rt Hon Sir Ian
Key, Robert Pollock, Alexander
Kilfedder, James A. Porter, Barry
King, Roger (B'ham N'field) Powell, Rt Hon J. E. (S Down)
King, Rt Hon Tom Powell, William (Corby)
Knight, Gregory (Derby N) Powley, John
Knight, Mrs Jill (Edgbaston) Prentice, Rt Hon Reg
Knox, David Price, Sir David
Lamont, Norman Proctor, K. Harvey
Lang, Ian Pym, Rt Hon Francis
Latham, Michael Raffan, Keith
Lawler, Geoffrey Raison, Rt Hon Timothy
Lawrence, Ivan Rees, Rt Hon Peter (Dover)
Lawson, Rt Hon Nigel Renton, Tim
Lee, John (Pendle) Rhodes James, Robert
Leigh, Edward (Gainsbor'gh) Rhys Williams, Sir Brandon
Lennox-Boyd, Hon Mark Ridley, Rt Hon Nicholas
Lester, Jim Ridsdale, Sir Julian
Lewis, Sir Kenneth (Stamf'd) Rifkind, Malcolm
Lightbown, David Rippon, Rt Hon Geoffrey
Lilley, Peter Roberts, Wyn (Conwy)
Lloyd, Ian (Havant) Robinson, Mark (N'port W)
Lloyd, Peter, (Fareham) Roe, Mrs Marion
Lord, Michael Ross, Wm. (Londonderry)
Luce, Richard Rossi, Sir Hugh
Lyell, Nicholas Rost, Peter
McCrindle, Robert Rowe, Andrew
MacGregor, John Rumbold, Mrs Angela
MacKay, Andrew (Berkshire) Ryder, Richard
MacKay, John (Argyll & Bute) Sackville, Hon Thomas
Maclean, David John Sainsbury, Hon Timothy
McNair-Wilson, P. (New F'st) St. John-Stevas, Rt Hon N.
McQuarrie, Albert Sayeed, Jonathan
Madel, David Scott, Nicholas
Major, John Shaw, Giles (Pudsey)
Malins, Humfrey Shaw, Sir Michael (Scarb')
Malone, Gerald Shelton, William (Streatham)
Maples, John Shepherd, Colin (Hereford)
Marland, Paul Shepherd, Richard (Aldridge)
Marlow, Antony Shersby, Michael
Marshall, Michael (Arundel) Silvester, Fred
Mates, Michael Sims, Roger
Maude, Hon Francis Skeet, T. H. H.
Mawhinney, Dr Brian Smith, Sir Dudley (Warwick)
Maxwell-Hyslop, Robin Smith, Tim (Beaconsfield)
May hew, Sir Patrick Smyth, Rev W. M. (Belfast S)
Mellor, David Speller, Tony
Merchant, Piers Spencer, Derek
Meyer, Sir Anthony Spicer, Jim (W Dorset)
Miller, Hal (B'grove) Spicer, Michael (S Worcs)
Mills, Iain (Meriden) Squire, Robin
Mills, Sir Peter (West Devon) Stanbrook, Ivor
Miscampbell, Norman Steen, Anthony
Mitchell, David (NW Hants) Stern, Michael
Moate, Roger Stevens, Lewis (Nuneaton)
Molyneaux, Rt Hon James Stevens, Martin (Fulham)
Monro, Sir Hector Stewart, Allan (Eastwood)
Montgomery, Fergus Stewart, Andrew (Sherwood)
Moore, John Stewart, Ian (N Hertf'dshire)
Morrison, Hon P. (Chester) Stokes, John
Mudd, David Stradling Thomas, J.
Murphy, Christopher Sumberg, David
Needham, Richard Tapsell, Peter
Nelson, Anthony Taylor, John (Solihull)
Neubert, Michael Taylor, Teddy (S'end E)
Tebbit, Rt Hon Norman Waller, Gary
Temple-Morris, Peter Walters, Dennis
Thatcher, Rt Hon Mrs M. Ward, John
Thomas, Rt Hon Peter Wardle, C. (Bexhill)
Thompson, Donald (Calder V) Warren, Kenneth
Thompson, Patrick (N'ich N) Watson, John
Thorne, Neil (Ilford S) Watts, John
Thornton, Malcolm Wells, Bowen (Hertford)
Thurnham, Peter Wells, Sir John (Maidstone)
Townend, John (Bridlington) Wheeler, John
Townsend, Cyril D. (B'heath) Whitney, Raymond
Tracey, Richard Wiggin, Jerry
Trippier, David Wilkinson, John
Trotter, Neville Wolfson, Mark
Twinn, Dr Ian Wood, Timothy
van Straubenzee, Sir W. Woodcock, Michael
Vaughan, Sir Gerard Yeo, Tim
Viggers, Peter Young, Sir George (Acton)
Waddington, David Younger, Rt Hon George
Wakeham, Rt Hon John
Waldegrave, Hon William Tellers for the Noes:
Walden, George Mr. Robert Boscawen, and
Walker, Cecil (Belfast N) Mr. David Hunt.
Walker, Rt Hon P. (W'cester)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):

The House divided: Ayes 348, Noes 185.

Division Number 468] [10.14 pm
Adley, Robert Butcher, John
Aitken, Jonathan Butterfill, John
Alexander, Richard Carlisle, John (N Luton)
Alison, Rt Hon Michael Carlisle, Kenneth (Lincoln)
Amery, Rt Hon Julian Carttiss, Michael
Amess, David Cash, William
Ancram, Michael Chalker, Mrs Lynda
Ashby, David Channon, Rt Hon Paul
Aspinwall, Jack Chapman, Sydney
Atkins, Rt Hon Sir H. Chope, Christopher
Atkins, Robert (South Ribble) Churchill, W. S.
Atkinson, David (B'm'th E) Clark, Hon A. (Plym'th S'n)
Baker, Rt Hon K. (Mole Vall'y) Clark, Dr Michael (Rochford)
Baker, Nicholas (N Dorset) Clark, Sir W. (Croydon S)
Baldry, Tony Clarke, Rt Hon K. (Rushcliffe)
Batiste, Spencer Clegg, Sir Walter
Beggs, Roy Colvin, Michael
Bendall, Vivian Conway, Derek
Benyon, William Coombs, Simon
Berry, Sir Anthony Cope, John
Best, Keith Cormack, Patrick
Bevan, David Gilroy Cranborne, Viscount
Biffen, Rt Hon John Critchley, Julian
Biggs-Davison, Sir John Crouch, David
Blaker, Rt Hon Sir Peter Currie, Mrs Edwina
Body, Richard Dickens, Geoffrey
Bonsor, Sir Nicholas Dicks, Terry
Bottomley, Peter Dorrell, Stephen
Bottomley, Mrs Virginia Douglas-Hamilton, Lord J.
Bowden, A. (Brighton K'to'n) Dover, Den
Bowden, Gerald (Dulwich) du Cann, Rt Hon Edward
Boyson, Dr Rhodes Durant, Tony
Braine, Sir Bernard Dykes, Hugh
Brandon-Bravo, Martin Edwards, Rt Hon N. (P'broke)
Bright, Graham Eggar, Tim
Brinton, Tim Emery, Sir Peter
Brittan, Rt Hon Leon Eyre, Sir Reginald
Brooke, Hon Peter Fallon, Michael
Brown, M. (Brigg & Cl'thpes) Farr, Sir John
Browne, John Favell, Anthony
Bruinvels, Peter Fenner, Mrs Peggy
Bryan, Sir Paul Finsberg, Sir Geoffrey
Buck, Sir Antony Fletcher, Alexander
Budgen, Nick Fookes, Miss Janet
Bulmer, Esmond Forman, Nigel
Forsyth, Michael (Stirling) Heathcoat-Amory, David
Forsythe, Clifford (S Antrim) Heddle, John
Forth, Eric Henderson, Barry
Fowler, Rt Hon Norman Heseltine, Rt Hon Michael
Fox, Marcus Hickmet, Richard
Franks, Cecil Hicks, Robert
Fraser, Peter (Angus East) Hill, James
Freeman, Roger Hind, Kenneth
Fry, Peter Hirst, Michael
Gale, Roger Hogg, Hon Douglas (Gr'th'm)
Gardiner, George (Reigate) Holland, Sir Philip (Gedling)
Gardner, Sir Edward (Fylde) Holt, Richard
Gilmour, Rt Hon Sir Ian Hooson, Tom
Glyn, Dr Alan Hordern, Peter
Goodhart, Sir Philip Howard, Michael
Goodlad, Alastair Howarth, Alan (Stratf'd-on-A)
Gorst, John Howarth, Gerald (Cannock)
Gow, Ian Howell, Ralph (N Norfolk)
Gower, Sir Raymond Hubbard-Miles, Peter
Grant, Sir Anthony Hunt, John (Ravensbourne)
Greenway, Harry Hunter, Andrew
Gregory, Conal Hurd, Rt Hon Douglas
Griffiths, E. (B'y St Edm'ds) Irving, Charles
Griffiths, Peter (Portsm'th N) Jackson, Robert
Grist, Ian Jenkin, Rt Hon Patrick
Ground, Patrick Jessel, Toby
Grylls, Michael Johnson Smith, Sir Geoffrey
Gummer, John Selwyn Jones, Gwilym (Cardiff N)
Hamilton, Hon A. (Epsom) Jones, Robert (W Herts)
Hamilton, Neil (Tatton) Jopling, Rt Hon Michael
Hampson, Dr Keith Joseph, Rt Hon Sir Keith
Hanley, Jeremy Kellett-Bowman, Mrs Elaine
Hannam, John Kershaw, Sir Anthony
Harris, David Key, Robert
Harvey, Robert Kilfedder, James A.
Havers, Rt Hon Sir Michael King, Roger (B'ham N'field)
Hawkins, Sir Paul (SW N'folk) King, Rt Hon Tom
Hawksley, Warren Knight, Gregory (Derby N)
Hayes, J. Knight, Mrs Jill (Edgbaston)
Hayhoe, Barney Knox, David
Heath, Rt Hon Edward Lamont, Norman
Lang, Ian Merchant, Piers
Latham, Michael Meyer, Sir Anthony
Lawler, Geoffrey Miller, Hal (B'grove)
Lawrence, Ivan Mills, Iain (Meriden)
Lawson, Rt Hon Nigel Mills, Sir Peter (West Devon)
Lee, John (Pendle) Miscampbell, Norman
Leigh, Edward (Gainsbor'gh) Mitchell, David (NW Hants)
Lennox-Boyd, Hon Mark Moate, Roger
Lester, Jim Molyneaux, Rt Hon James
Lewis, Sir Kenneth (Stamf'd) Monro, Sir Hector
Lightbown, David Montgomery, Fergus
Lilley, Peter Moore, John
Lloyd, Ian (Havant) Morrison, Hon P. (Chester)
Lloyd, Peter, (Fareham) Mudd, David
Lord, Michael Murphy, Christopher
Luce, Richard Needham, Richard
Lyell, Nicholas Nelson, Anthony
McCrindle, Robert Neubert, Michael
MacGregor, John Newton, Tony
MacKay, Andrew (Berkshire) Nicholls, Patrick
MacKay, John (Argyll & Bute) Nicholson, J.
Maclean, David John Normanton, Tom
McNair-Wilson, P. (New F'st) Norris, Steven
McQuarrie, Albert Onslow, Cranley
Madel, David Oppenheim, Phillip
Major, John Osborn, Sir John
Malins, Humfrey Ottaway, Richard
Malone, Gerald Page, Sir John (Harrow W)
Maples, John Page, Richard (Herts SW)
Marland, Paul Patten, John (Oxford)
Marlow, Antony Pattie, Geoffrey
Marshall, Michael (Arundel) Pawsey, James
Mates, Michael Peacock, Mrs Elizabeth
Maude, Hon Francis Percival, Rt Hon Sir Ian
Mawhinney, Dr Brian Pollock, Alexander
Maxwell-Hyslop, Robin Porter, Barry
Mayhew, Sir Patrick Powell, William (Corby)
Mellor, David Powley, John
Prentice, Rt Hon Reg Stradling Thomas, J.
Price, Sir David Sumberg, David
Proctor, K. Harvey Tapsell, Peter
Pym, Rt Hon Francis Taylor, John (Solihull)
Raffan, Keith Taylor, Teddy (S'end E)
Raison, Rt Hon Timothy Tebbit, Rt Hon Norman
Rees, Rt Hon Peter (Dover) Temple-Morris, Peter
Ronton, Tim Thatcher, Rt Hon Mrs M.
Rhodes James, Robert Thomas, Rt Hon Peter
Rhys Williams, Sir Brandon Thompson, Donald (Calder V)
Ridley, Rt Hon Nicholas Thompson, Patrick (N'ich N)
Ridsdale, Sir Julian Thorne, Neil Ilford S)
Rifkind, Malcolm Thornton, Malcolm
Rippon, Rt Hon Geoffrey Thurnham, Peter
Roberts, Wyn (Conwy) Townsend, Cyril D. (B'heath)
Robinson, Mark (N'port W) Tracey, Richard
Roe, Mrs Marion Trippier, David
Ross, Wm. (Londonderry) Trotter, Neville
Rossi, Sir Hugh Twinn, Dr Ian
Rost, Peter van Straubenzee, Sir W.
Rowe, Andrew Vaughan, Sir Gerard
Rumbold, Mrs Angela Viggers, Peter
Ryder, Richard Waddington, David
Sackville, Hon Thomas Wakeham, Rt Hon John
Sainsbury, Hon Timothy Waldegrave, Hon William
St. John-Stevas, Rt Hon N. Walden, George
Sayeed, Jonathan Walker, Cecil (Belfast N)
Scott, Nicholas Walker, Rt Hon P. (Wcester)
Shaw, Giles (Pudsey) Waller, Gary
Shaw, Sir Michael (Scarb') Walters, Dennis
Shelton, William (Streatham) Ward, John
Shepherd, Colin (Hereford) Wardle, C. (Bexhill)
Shepherd, Richard (Aldridge) Warren, Kenneth
Shersby, Michael Watson, John
Silvester, Fred Watts, John
Sims, Roger Wells, Bowen (Hertford)
Skeet, T. H. H. Wells, Sir John (Maidstone)
Smith, Sir Dudley (Warwick) Wheeler, John
Smith, Tim (Beaconsfield) Whitney, Raymond
Smyth, Rev W. M. (Belfast S) Wiggin, Jerry
Speller, Tony Wilkinson, John
Spencer, Derek Wolfson, Mark
Spicer, Jim (W Dorset) Wood, Timothy
Spicer, Michael (S Worcs) Woodcock, Michael
Squire, Robin Yeo, Tim
Stanbrook, Ivor Young, Sir George (Acton)
Steen, Anthony Younger, Rt Hon George
Stern, Michael
Stevens, Lewis (Nuneaton) Tellers for the Ayes:
Stewart, Allan (Eastwood) Mr. Robert Boscawen
Stewart, Andrew (Sherwood) Mr. David Hunt
Stewart, Ian (N Hertf'dshire)
Stokes, John
Archer, Rt Hon Peter Campbell, Ian
Ashdown, Paddy Campbell-Savours, Dale
Ashley, Rt Hon Jack Canavan, Dennis
Ashton, Joe Carter-Jones, Lewis
Atkinson, N. (Tottenham) Cartwright, John
Bagier, Gordon A. T. Clark, Dr David (S Shields)
Barnett, Guy Clarke, Thomas
Barron, Kevin Clwyd, Mrs Ann
Beckett, Mrs Margaret Cocks, Rt Hon M. (Bristol S.)
Beith, A. J. Cohen, Harry
Bell, Stuart Coleman, Donald
Benn, Tony Concannon, Rt Hon J. D.
Bennett, A. (Dent'n & Red'sh) Conlan, Bernard
Bermingham, Gerald Corbett, Robin
Bidwell, Sydney Corbyn, Jeremy
Blair, Anthony Cowans, Harry
Boothroyd, Miss Betty Cox, Thomas (Tooting)
Boyes, Roland Craigen, J. M.
Brown, Hugh D. (Provan) Crowther, Stan
Brown, N. (N'c'tle-u-Tyne E) Cunliffe, Lawrence
Brown, R. (N'c'tle-u-Tyne N) Cunningham, Dr John
Brown, Ron (E'burgh, Leith) Dalyell, Tam
Caborn, Richard Davies, Rt Hon Denzil (L'lli)
Callaghan, Rt Hon J. Davies, Ronald (Caerphilly)
Callaghan, Jim (Heyw'd & M) Davis, Terry (B'ham, H'ge H'l)
Deakins, Eric McTaggart, Robert
Dewar, Donald McWilliam, John
Dobson, Frank Madden, Max
Dormand, Jack Marshall, David (Shettleston)
Douglas, Dick Maynard, Miss Joan
Dubs, Alfred Meacher, Michael
Dunwoody, Hon Mrs G. Michie, William
Eadie, Alex Mikardo, Ian
Eastham, Ken Millan, Rt Hon Bruce
Edwards, Bob (W'h'mpt'n SE) Miller, Dr M. S. (E Kilbride)
Evans, John (St. Helens N) Mitchell, Austin (G't Grimsby)
Ewing, Harry Morris, Rt Hon A. (W'shawe)
Fatchett, Derek Morris, Rt Hon J. (Aberavon)
Field, Frank (Birkenhead) Nellist, David
Fields, T. (L'pool Broad Gn) Oakes, Rt Hon Gordon
Fisher, Mark O'Brien, William
Foot, Rt Hon Michael Orme, Rt Hon Stanley
Forrester, John Park, George
Foster, Derek Patchett, Terry
Foulkes, George Pavitt, Laurie
Fraser, J. (Norwood) Pendry, Tom
Freeson, Rt Hon Reginald Penhaligon, David
Garrett, W. E. Pike, Peter
George, Bruce Powell, Raymond (Ogmore)
Gilbert, Rt Hon Dr John Prescott, John
Godman, Dr Norman Redmond, M.
Golding, John Rees, Rt Hon M. (Leeds S)
Gould, Bryan Richardson, Ms Jo
Gourlay, Harry Roberts, Allan (Bootle)
Hamilton, James (M'well N) Roberts, Ernest (Hackney N)
Hamilton, W. W. (Central Fife) Robinson, G. (Coventry NW)
Hancock, Mr. Michael Rogers, Allan
Hardy, Peter Rooker, J. W.
Harman, Ms Harriet Ross, Ernest (Dundee W)
Harrison, Rt Hon Walter Rowlands, Ted
Hart, Rt Hon Dame Judith Ryman, John
Hattersley, Rt Hon Roy Sheerman, Barry
Healey, Rt Hon Denis Sheldon, Rt Hon R.
Heffer, Eric S. Shore, Rt Hon Peter
Hogg, N. (C'nauld & Kilsyth) Short, Ms Clare (Ladywood)
Holland, Stuart (Vauxhall) Silkin, Rt Hon J.
Howell, Rt Hon D. (S'heath) Skinner, Dennis
Hughes, Dr. Mark (Durham) Smith, C.(Isl'ton S & F'bury)
Hughes, Robert (Aberdeen N) Snape, Peter
Hughes, Roy (Newport East) Soley, Clive
Hughes, Sean (Knowsley S) Spearing, Nigel
Hughes, Simon (Southwark) Steel, Rt Hon David
Janner, Hon Greville Straw, Jack
Jenkins, Rt Hon Roy (Hillh'd) Thomas, Dafydd (Merioneth)
Jones, Barry (Alyn & Deeside) Thomas, Dr R. (Carmarthen)
Kaufman, Rt Hon Gerald Thompson, J. (Wansbeck)
Kennedy, Charles Thorne, Stan (Preston)
Kilroy-Silk, Robert Tinn, James
Kinnock, Rt Hon Neil Torney, Tom
Kirkwood, Archy Wainwright, R.
Lambie, David Wallace, James
Lamond, James Wardell, Gareth (Gower)
Leadbitter, Ted Wareing, Robert
Leighton, Ronald Weetch, Ken
Lewis, Terence (Worsley) Welsh, Michael
Litherland, Robert White, James
Lloyd, Tony (Stretford) Wigley, Dafydd
Lofthouse, Geoffrey Winnick, David
Loyden, Edward Woodall, Alec
McCartney, Hugh Young, David (Bolton SE)
McDonald, Dr Oonagh
McGuire, Michael Tellers for the Noes:
Mackenzie, Rt Hon Gregor Mr. Don Dixon and
McNamara, Kevin Mr. Allen McKay.

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House congratulates Her Majesty's Government on the success of its economic policies in securing low inflation and rising output and employment; and calls upon it to maintain policies based on sound finance, individual freedom and encouraging enterprise as the only foundation for lasting growth in output and jobs.