Debate on the Address

HC Deb 06 November 1984 vol 67 cc9-96

[FIRST DAY]

Mr. Speaker

Before I call those Members who are to propose and second the motion on the Loyal Address, it may be for the convenience of the House if I set out the subjects that are suggested for the various days' debates. Today will be a general debate; tomorrow, Wednesday 7 November, the subjects will be local government and transport; on Thursday 8 November — health, social security and education; Friday 9 November — foreign affairs and overseas development; Monday 12 November—industry and employment; Tuesday 13 November—the economy.

2.49 pm

Sir Paul Bryan (Boothferry)

I beg to move, That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

The Boothferry constituency has only recently been born. My constituents are therefore a little surprised and very honoured indeed that so early in its life their Member of Parliament has been chosen to move the Loyal Address. As for their Member, however long one has served in the House this privilege remains one of the most coveted and, as I am discovering, one of the most awesome in our proceedings. I am in turn equally honoured.

Because of its recent birth and less than descriptive name it may be that one or two—or even three or four—hon. Members do not know where Boothferry is: or what it is. For their benefit I should explain that the constituency starts in typical East Riding country, in an area apparently picked at the whim of the Boundary Commission, where there are pleasant villages with such homely names as Wetwang and Bugthorpe. It then runs some 50 miles southwards over the Yorkshire wolds, the Vale of York, over the Ouse, taking in the town and port of Goole, and then across the Isle of Axholme, past Epworth, the birthplace of John Wesley, and then to such villages as Haxey, whose postal address is Doncaster. So one can perhaps see why the Boundary Commission resorted to a neutral name borrowed from an old bridge over the river Ouse.

I had very little industry in my old constituency, Howden. Now, with the addition of Goole, I have a lot. I welcome this, because for many years I worked in industry in the West Riding of Yorkshire. I learnt my first lessons in politics there when I fought Sowerby three times in three years; and lost Sowerby three times in three years to Douglas Houghton. Since then the Conservative cause in Sowerby has been championed by a man of greater weight than me, and he has made it into a safe Conservative seat. He is now my Whip, so the lesson goes on.

Boothferry is a microcosm of Britain. We have everything there. In Goole we have industry, a shipyard, docks and a threatened railway service. The closing of the steelworks in next-door Scunthorpe has increased unemployment, which now stands at 18 per cent. in Goole. We have high technology with such firms as Croda. We have small firms springing up in the trading estates at Goole and others waiting to set up in those estates if Goole continues to be an assisted area.

In Howden we have the phenomenon called Hygena Ltd., which in eight brief years has emerged as the largest manufacturer of kitchen equipment in England, employing 760 people and still expanding. Beyond those industries there are some of the best managed farms in the country—large estates such as Garrowby, which has bred a Foreign Secretary, Lord Halifax, and a Derby winner, Shirley Heights. We have many prosperous arable farms, as well as dairy farmers worried about their milk quota. The East Riding has the largest concentration of pig producers in England.

Taking into account that representative variety of industries and interests, I judge that a Queen's Speech which is good for Boothferry is good for Britain. The most serious and intractable problem in Britain, as in Boothferry, is unemployment. That is more than recognised in the Queen's Speech. The message of the Queen's Speech is that the Government will do all within their means to reduce unemployment. They will try to produce conditions under which real jobs can be created. They will provide training for young people so that they can take up job vacancies when they occur. They will provide money for assisted areas. It is up to people's enterprise to sell goods and services at lower prices than our competitors and so make work for the jobless.

The town of Goole has got that message clearly. Blessed with the M62 and good docks, even in these difficult times it is attracting new industries. After gallant efforts by British Shipbuilders to save the dockyard, the shipyard had to close last November. The situation then seemed hopeless. Nevertheless, the shipyard has now reopened. Cochranes of Selby has bought it, and from the talks that I have had with the management there I am sure that before long many of the skilled workers who used to work in the shipyard will be back at work again.

So much for creating jobs. But jobs have to be kept as well. A certain amount of our unemployment is due to our throwing away jobs. I asked the managing director of Chex Products in Goole, a new high technology firm, why he had set up in Goole. He said, "We have always been able to get our stuff out of Goole docks." Many other ports have lost jobs because shipowners and shippers cannot afford to let ships lie idle while management and dockers sort out their differences. That is not so at Goole. There the labour relations remain good and the port goes from strength to strength, as indeed does the small port of Howdendyke not far away.

Those people are self-reliant and do not turn to the Government for much, but they do think that an unemployment rate of 18 per cent. justifies its remaining an assisted area and they appeal to the Secretary of State for Transport to save their railway line. Goole is fighting unemployment with enterprise and ingenuity.

I turn now to Hong Kong, the supreme example of enterprise and ingenuity which, rightly, features in the Queen's Speech. I was in Peking two years ago when the Prime Minister started the negotiations on Hong Kong. I was in Hong Kong in September to hear the Governor announce the signing of the draft agreement between China and Her Majesty's Government. The agreement pleased the people of Hong Kong. This has been confirmed by the welcome given to it in the recent debate in the Legislative Council in Hong Kong.

The detailed nature of the agreement was a tremendous victory for my right hon. and learned Friend the Foreign Secretary, for the Governor and for the brilliant negotiating team. It is the comprehensiveness of the document, showing a deep understanding of the unique situation of Hong Kong, that has given confidence.

The agreement is unprecedented in that it does not come into force for 13 years. Confidence will rise or fall during that time in direct relation to the conduct of the signatory powers. China, on its side, has to draft a basic law which clearly and faithfully represents the agreement. Britain, in turn, has to show its evident and steadfast commitment to Hong Kong right up to 1997.

Some of my constituents, particularly the boys of Pocklington school, of which I am a governor, would not forgive me if I did not at least bring to the notice of the House the connection with Boothberry of one of the greatest parliamentarians of all time — William Wilberforce. At the age of 12, after the death of his father, he was placed in the care of the endowed school at Pocklington. He is reported to have neglected his studies; that could not of course happen at the present Pocklington school. He was also alleged to have been somewhat idle at Cambridge university, and in his later and more serious days he could not look back without unfeigned remorse on the opportunities he had then neglected. I am not sure that I look back on the opportunities that I neglected at Cambridge in quite such tragic terms, but then I had less talent to squander.

A speech like this is too short to do justice to the career of that great man, but memories of his achievements and his standing in history came back to us 15 months ago at the service in Westminster to commemorate the 150th anniversary of his death. It is relevant to the first motion that you put to us, Mr. Speaker, to remind the House that one of William Wilberforce's less known feats, unequalled by any hon. Member in the Chamber, occurred in the election of 1784, when somehow he won two constituencies—Hull and Yorkshire. Wisely, he chose the latter.

When I go back to my constituency on a Friday, I often find that we have spent the previous days, and sometimes nights, discussing here issues that are, to say the least, not uppermost in the minds of my constituents. We are in danger of getting immersed in our own preoccupations; so it matters for Parliament's reputation that the gap between our priorities and those of our constituents does not get too wide. We should beware of that during the coming year as we hammer out legislation on the many important items in the Queen's Speech.

I suggest that, whatever we choose to talk about here, our constituents will be increasingly preoccupied with two special worries—unemployment and violence in all its ugly forms. They see on television the Brighton outrage, the scenes from the coalfields and their fellow countrymen running riot in Spanish resorts and on foreign football grounds. To them, violence and vandalism are no longer what other people suffer. They are suffered by our constituents in their own towns and villages. Twenty years ago, one would have said that it could not happen in this country. Of course, no Queen's Speech can prescribe a simple cure. Nevertheless, as the House presumes to provide political leadership, our constituents look to us, never mind to which party we belong, to unite in our efforts to stamp out this plague.

3.3 pm

Mr. Richard Needham (Wiltshire, North)

I second the motion.

My hon. Friend the Member for Boothferry (Sir P. Bryan) has spoken with feeling about the future of Hong Kong, and I am sure that the House knows how much he has done not only for Hong Kong but for relations between Britain and China. I hope that my hon. Friend will not mind if I point out that when he was born the lease still had 85 years to run. Although I am sure that he is extremely well known in his own constituency, he is probably almost as well known by now in the streets of Hong Kong, or at least in the New Territories.

For the past week I have been scratching my head as to why I should have been asked to second the Gracious Speech. After all, as has been pointed out, I am the only disfranchised Irish earl on these Back Benchers. When I heard the Gracious Speech — particularly the bit proposing legislation for the better protection of the environment—it became clear to me that I had been chosen as a spokesman for one endangered species. Three members of my family have occupied these Benches. They all represented that beautiful part of the United Kingdom—South Down. Unfortunately, there is no evidence that they ever occupied the columns of Hansard. They did not, as Brian Johnston might have put it, much trouble the scorers. That may have been because their sixth sense told them that the current right hon. Member for South Down (Mr. Powell) would make up for their long pregnant pauses with his own loquacity.

We all know that the invitation to second the Gracious Speech comes from the Prime Minister on the advice of the Patronage Secretary. Neither he nor my right hon. Friend the Member for Chingford (Mr. Tebbit), the Secretary of State for Trade and Industry, can be in their seats today. I, as much as anyone, welcome their recovery. I look forward, as does the whole House, to seeing the Patronage Secretary back in his place in the not too distant future, with that deceptive smile, which we rebellious Back Benchers know means "Watch it". I am also sure that none of us can even contemplate what they have been through. We know only that we want them back here where they belong.—[Hon Members: "Hear, hear."]

I am also conscious that I speak today from among the junior ranks of Back Benchers. In such circumstances, many of us feel like nervous amateurs compared with the professionalism of Front Benchers. However, we can comfort ourselves with the knowledge that the ark was built by amateurs, but professionals built the Titanic.

I came into the House with several friends who at that point became honourable—

Mr. Robin Corbett (Birmingham, Erdington)

Where are they now?

Mr. Needham

I was just about to tell the House.

Most of those colleagues have gone up in the world and done well for themselves, despite a helping hand from me. All of them—let me practise a little Christian charity, which the whole House will know is 18 carat—deserve the buckles on their coats. Nowadays I know a Parliamentary Secretary in almost every Department, so I can at least put a face to the people who sign the letters to my constituents.

My constituency was happily called Chippenham until the Boundary Commission romantically renamed it Wiltshire, North. Many Opposition Members, who I am glad to say are hon. Friends outside this Chamber, tell me how lucky I must be to have such an Arcadia full of grazing heifers and Tory voters—[Laughter.] If only they were right. I am afraid Lloyd George seems to have known all too many fathers in my constituency. Pavement politics are not unknown in my constituency. More to the point, I look at the size of the Labour vote with as much consternation as the Leader of the Opposition. I should like to wish him luck. That is, better luck for me.

My constituency has an almost perfect balance between towns and villages, industry and agriculture. I only wish that Harris of Calne had been as successful in resisting the Danes as King Alfred was at Malmesbury 1,000 years earlier.

The major concern in my constituency, as in other constituencies, is unemployment. I welcome what the Government have done up to now in the sphere of training. Would that it had been done somewhat earlier. After all, the numbers who would be looking for work in the 1980s were well known in the 1970s. The Government have recognised the unemployment problems in the appointment of my noble Friend Lord Young. That is an indication of the seriousness with which the Government view the problem. I hope that he will be as successful in his new job as he was as chairman of the Manpower Services Commission.

I draw briefly to the attention of the House two aspects of unemployment. In the 20 to 24 age range is a group of chronic unemployed who have been out of work for three years. Their numbers have increased eightfold in the past five years and now number nearly 60,000. The figure looks set to grow to 100,000 over the next few years. The seeds of their fate were sown more than 10 years ago when a golden opportunity was missed to install a proper system of training. The Government have now seized the opportunity to reconstruct our lamentably inadequate training system. There is now real hope for youngsters leaving school.

What of those who are too old to benefit, who were 16 when the Conservative Government introduced the youth training scheme? What of them, now 20 or 24? They have no foothold on the training ladder. They have no skill with which to find a job. They are specifically and specially at risk. They are not just out of work for a few months or a few years; they are drifting through life in a sea of despair with their heads barely above water. Surely a lifeline for them, so that they can put a foot on the training ladder, should be part of any enterprising package.

The second aspect is that 750,000 people are working over the official pension age. The numbers appear to be creeping up again. I do not suggest in present company, especially on the day of the American presidential election, that we should have compulsory retirement, but why is that more people here work over retirement age than in Belgium, Holland, Germany or Italy? I hope that we can find ways of removing unnecessary hindrances for those who want to retire and so allow greater opportunity for youngsters seeking work.

In the last year I have been Parliamentary Private Secretary to my right hon. Friend the Member for Waveney (Mr. Prior). For a good few years before that he had been a friend of mine. I learnt not only to respect his balance and "bottom", but to be grateful to him. After all, he gave me the opportunity to know the country of my ancestry rather better than my ancestors knew it. My right hon. Friend also taught me the need for politicians to be as good listeners as they are talkers and, when the going gets rough, to mix courage and determination with compassion and compromise.

Three-and-a-half weeks ago the British people saw how their Government behaved when members and their wives were bombed. They were rightly proud of what they saw. A few days later they heard the reactions in the House of Commons. They heard the right hon. Member for Manchester, Gorton (Mr. Kaufman) say that the gap between one side of the House and the other was as a hair's breadth compared with the chasm between terrorism and democracy. They were rightly proud of what they heard. In a few moments the debate on the Queen's Speech resumes along familiar lines. It is through this House, via the ballot box, that the government of Britain is conducted. Neither violence from outside, bomb or bullet will alter that. We know that, the British people know that, and every one of us will fight to the last to ensure that it stays that way.

3.15 pm

Mr. Neil Kinnock (Islwyn)

I warmly compliment both the hon. Member for Boothferry (Sir P. Bryan) and the hon. Member for Wiltshire, North (Mr. Needham) on their speeches. I sympathise with them in what they described as a challenging event because 10 years ago I had to do exactly the same. On that occasion—[AN HON. MEMBER: "Look where it got you."] If hon. Members thought that proposing or seconding the Loyal Address would get them to the Dispatch Box, there would be fewer volunteers.

I was assisted on that occasion by some helpful advice—which I understand is still being given out—from the Chief Whip's office. I have retained that guide and comforter, which showed me how best to approach seconding the Loyal Address. I suspect that both hon. Members who spoke today have that same document in their possession. It is there to help—in the phrase of the hon. Member for Wiltshire, North—nervous amateurs. I must tell the hon. Gentleman that it was not those who built the Titanic that were at fault but the captain who would not change course.

The House should know that the document advises that speeches should be short—no longer than 12 minutes. I give both hon. Members 10 out of 10 for that. It states: This means careful timing beforehand. It advises: Be non-controversial but not solemn—the occasional light touch is much appreciated…It is customary to begin by mentioning one's own constituency in a couple of happy phrases. Of the greatest interest to the House is the advice Great care should be taken of the Speech because of its secrecy. Perhaps somebody should have told the newspapers 10 days ago that the speech was supposed to be a secret. Somebody should have told Mr. Brian Curtois who, as I shaved this morning, gave me an excellent resumé, of exactly what would be in the Queen's Speech.

I know that I speak for the whole House in saying that we enjoyed the speeches of both hon. Members. The hon. Member for Boothferry is well known and well respected and is a senior Member of the House. Perhaps his most distinctive quality, apart from his charm and great calmness, is his bravery. That has been manifested not only by his distinguished record as a soldier, who received two of the highest awards for gallantry that can be given by this country, but by his stinging and sustained attacks on the Government for the way in which they have priced so many overseas and Commonwealth students out of higher education. I endorse his views on that matter.

Perhaps the best testimony to the hon. Gentleman's boldness was his decision to stand against the right hon. Member for Taunton (Mr. du Cann) and contest the chairmanship of the 1922 Committee and—valour of valour, as we would expect from a real warrior— his decision to become the campaign manager for Viscount Whitelaw in the 1975 Tory party leadership election. That was a very brave act.

I admire the hon. Gentleman's courage and steadfastness, and among his steadfast characteristics is his commitment to the cause of the people and interests of Hong Kong. Indeed, he mentioned that interest during his welcome speech. His commitment to the colony, which is the only Chinese takeaway that does not carry VAT these days, is well known in the House.

I have a warm spot for the hon. Member for Boothferry. It was he who initiated me into one of the great mysteries of the House early in 1971 when he was Minister of State, Department of Employment, and I was merely a fierce fledgling. He approached me and complimented me on a speech. I was entirely bewildered—a Tory coming up and complimenting me on my speech! [HON. MEMBERS: "It will not happen again".] I trust not. It was in a bewildered state that I went to one of my favourite gurus, who is now known to the House as Viscount Tonypandy. I met him at his headquarters, the Welsh table in the Tea Room, which is just down the corridor. I told him of my experience and the former Speaker said, drawing on his cigar which he used to smoke in those days and sipping his coffee, "Paul Bryan? A very tidy fellow, Paul Bryan. When he compliments you he means it; lots of them don't, you know."

I am sure that the compliment of the hon. Member for Boothferry in 1971 was as genuine as mine is today.

The hon. Member for Wiltshire, North (Mr. Needham) and I met some years ago on an "Any Questions" programme, when we had the exquisitely embarrassing experience of agreeing about a great many things. That is always a difficulty when one appears on that programme. I thought of him then as a young man on his way up. The hon. Gentleman is two months older than myself and he already had an earldom and declined to use the title. I thought to myself, "Kinnock, what are you doing wrong, or what did your great-great-grandfather do wrong?"

A few years have passed since we appeared on that "Any Questions" programme, and the House has come to know the hon. Gentleman better. We note his criticism of the Government and we hear his humour, and we have heard some fine examples this afternoon. We can read his humour as well as hear it, in his book entitled "Honourable Member". One part of his book is directed to why men and women seek political fortune in the Conservative party. He tells us that some do so through altruism and some through excitement. He continues: there are those who for one reason or another end up there"— "there" being the House— This category includes a fair proportion of ordinary folk who allow their names to go forward after a stint in local government and perhaps a drink too many in the local Constitutional Club, only to discover to their horror that their homely platitudes to the local Selection Committee have won their votes as well as their hearts. The hon. Gentleman will not win our votes today but he has gone a long way towards winning our hearts.

This man, the hon. Member for Wiltshire, North, is more than just a critic, a humorist and a wet of a wit; he is a man of wisdom. Four years ago he wrote that if demands to end secondary picketing, to impose mandatory strike ballots and to stop supplementary benefit to striking families were put into effect, not only would the law be back before 1850 rather than 1906 but one of the fundamental democratic rights of the British people, the right to withdraw one's labour, would have been rendered virtually unusable. The law would be flouted on a massive scale and its enforceability would become even more impossible. After reading that, I have only one thing to say to the Prime Minister through you, Mr. Speaker, and that is, "Give the man from Wiltshire a job."

A major advantage of the Gracious Speech is that it presents the agenda for Parliament, an early warning system and a declaration of purpose by Government—all essential to our vigilant democracy. Most particularly about its advantages, I agree with Sir Winston Churchill who, in addressing the House as Prime Minister in 1944, said: I have always rejoiced that the Debate on the general aspects of the Address…is the time when a Member who has got no friends and has got no group can get up and speak about anything in the world".—[Official Report, 29 November 1944; Vol. 406, c. 25.] It was true in 1944; it is true now. The next days of debate provide an opportunity for a Member who has got no friends and no group, so we will be hearing from the Chancellor of the Exchequer. [HON. MEMBERS: "Smile."] The Chancellor of the Exchequer is not smiling—no wonder he is called "Melancholy Blaby". I am sure that during the next few days we shall be hearing from the right hon. Gentleman and the Prime Minister. [Interruption.] Come on, louder.

We have listened many times to the Prime Minister. We listened to her at her annual party conference on a day when she showed immense personal courage and calm. I do not think that anyone would want to take that from the right hon. Lady. We have listened in all kinds of circumstances to her speaking both inside and outside the House. The conviction grows — not just among Opposition Members or in the House in general, not just among foes and critics, but among people who would be friends and allies of the Prime Minister—that she does not mean what she says when she talks about her concern for unemployment.

It is a terrible indictment of the Prime Minister that no one now believes that she is serious or sincere in her attitude to unemployment. We know that she is not serious, because this year's concern, as it is mentioned in the Queen's Speech, is exactly the same as last year's. We see a stale and terrible sameness in this year's Queen's Speech. We look at the document and say, "We have been here before and it does not work." We know that because, in the 17 months between the last Queen's Speech—the last undertaking to increase economic prosperity and reduce unemployment—and this year's undertaking to do the same, unemployment has increased by 133,000, mortgage payments have increased by 25 per cent., inflation has increased by 27 per cent., industrial production has fallen by 0.8 per cent. and the taxation of personal incomes has risen by 8.5 per cent. in total. That is what has been happening to our country in the gap between one undertaking and the next.

The right hon. Lady used to say, as she said when she first addressed the House as Prime Minister in 1979, that under the Labour Government the full magnitude of our decline has been concealed by North sea oil."—[Official Report, 15 May 1979; Vol. 967, c. 76.] That was at a time when the total revenue obtained in three years by the Labour Government from North sea oil revenue was £881 million — less than one month's revenue received by this Government from North sea oil. That is why, five years and £42 billion of North sea oil revenue later, I say with more force and more truth than the Prime Minister could ever muster in 1979: the full magnitude of our decline has been masked by North sea oil—decline like the £400 billion in output that would have occurred if production had stayed on the same level as 1979, decline like the 2 million jobs lost, including 1.7 million manufacturing jobs lost in those five years, and decline like the £35 billion fall in total investment since 1979.

I ask the right hon. Lady—I hope that she will give me an answer—how long does she think she can go on depriving and depressing our economy like this and still hope for resilient and significant economic growth? What does she think will happen when the North sea oil revenues start to decline? Does she know what will happen? Does she care? I do, not just because it will occur in my lifetime and that of hon. Members here today but most particularly because it could leave my children and all the children of their generation with the disadvantages of a shrunken economy and a reduced manufacturing base—a country that has stopped being a great trader because of the decline built in by the right hon. Lady in the past five years.

The Queen's Speech this year is a dismal confession of the Government's failure. The Government are saying, here and elsewhere, that they have brought inflation down, but that still has not brought recovery, as they promised. They say that they dare not reflate because they think that that is evil. They say, "We are stuck, pinned, fastened and paralysed between our fixations about inflation and our dogma about reflation". That is the position that the Government are in and that is why the Chancellor of the Exchequer is so frequently and correctly described as being in a state of inertia. He is trapped between the promises that the Government made and the needs that he knows exist at present. I feel sorry for him. He is treading water. He is stuck in the middle while the Prime Minister is supposed to be walking on the water.

It is a difficult position for the right hon. Gentleman, and everyone is fed up with it. Is it just the youngsters and their parents? No, it is more than that. People of all kinds of politics, ages and social class are fed up with it. It is not just the unions that are fed up. In its recent conference, the CBI has demonstated — as anyone who has close acquaintance and frequent discussions with managers knows—that it is fed up with the way in which matters are being conducted.

The Government believe that a reduction in pay and benefits would make a difference to employment totals. That is what the Chancellor said last week. The CBI has said that that is not true. A tiny percentage of those who declare on those questions say, that it would make any difference. The CBI says that firms are encountering shortages of skilled workers in the midst of this high unemployment. The CBI reaffirms the need—contrary to what the Chancellor and many members of the Government say—for a sound manufacturing base. The CBI wants increased public expenditure and infrastructure and construction improvements. It wants education and training for everyone up to the age of 18. In all those areas, and more, Government policy contradicts, frustrates and inhibits workers and managers who want to get recovery going. There is nothing in the Queen's Speech for jobs, for fresh investment for expanding trade or to boost training. All we have are the platitudes of concern——

Mr. Albert McQuarrie (Banff and Buchan)

Nonsense.

Mr. Kinnock

Yes, we have a great deal of nonsense as well—backed by the promises of more cuts in health, housing and the urban aid programme in a week's time. On top of that, we have the Chancellor's assertion that there must be a cut in real wages. It always ends up there. They cannot kick the habit of for ever recommending courses of action to everyone else that they would refuse to accept for themselves.

The Government always abuse "Get on your bike", "Work part time", "Obey the rules", "Wait in line", " Take a cut in wages". The immortal words of Woodie Guthrie come back — [HON. MEMBERS: "Who?"] They are ignoramuses as well— Just do as I say. Don't do as I do. When you hear me call for sacrifice, I'm only talking about you. That is the Tory party's motto in every generation. That is not just their attitude towards the British people; it is their attitude everywhere.

With the dreadful evidence of Ethiopia before their eyes, the British people have never been more aware of the horrors of famine; they have never shown greater generosity and open-heatedness than they are snowing now. Every Member of the House should be rightly proud of the attitude being adopted by the British people.

Against that background, the Gracious Speech speaks of maintaining the Government's "substantial aid programme". The people of this country who are giving so open-heartedly should be told that they are governed by a Government who claim to be maintaining a substantial aid programme but who have cut aid by 14 per cent. in real terms since 1979, which means that in real terms they are giving £160 million less to the starving than in 1979. That is a huge loss in money, but an even greater loss in jobs. [HON. MEMBERS: "Get on with it!"] If Conservative Members do not believe that our commitment to the starving is important they are at odds not just with the British people but with their own party's supposed commitment.

Last weekend the Prime Minister and I visited India in tragic circumstances. Even in that short time we saw the awful oppression of poverty and in that split second of history I think that we were both bound to agree with the view of Mahatma Gandhi that poverty is the greatest violence. The Government have not done, are not doing and will not do their moral and economic duty to the poor of the world any more than to those in need in this country. Everywhere their policy is to dispossess, to deprive and to divide. That has been their attitude, among other things, to the coal dispute—a matter which is of great concern to the whole country but which was suspiciously absent from the Gracious Speech.

What is the Prime Minister's response to the statements from the British Association of Colliery Management? It has clearly stated that management at all levels…especially at very senior levels has lost confidence in the office of the chief executive. The Prime Minister cannot ignore or evade the issue. The chief executive was very much her own appointee. In style and in substance he has acted according to her terms and has been a faithful executor of her ideology, her policy and her will. What is her judgment of that faithful servant now? I believe that we know what it is, not from the Prime Minister's words but from her lack of words. When I asked her about this last Tuesday, her silence was deafening. We need a clearer, more precise statement. She has the opportunity to make that statement today.

Is the Prime Minister's appointee as chairman of the National Coal Board still in favour? Is her confidence in him now exhausted or merely uneconomic? We need to know the Prime Minister's attitude to matters of such great concern to the country. [HON. MEMBERS: "What about your confidence in Scargill?"] I am talking about the Prime Minister's own appointee. I know how embarrassed Conservative Members are at the Government's conduct of these affairs. I appeal to the Prime Minister to use her powers of intervention, to understand the cost of the dispute and the need fully to restore negotiating procedures for the future of the collieries and an end to the strike.

I hope that the Prime Minister will not be deaf to these appeals as she is deaf to so many others. I want her to adopt a course of production and reconciliation not just in the coal mining industry but in other areas. Let her adopt that attitude, instead, for instance, of seeking to abolish the GLC and the metropolitan councils, which will decrease local accountability, increase centralisation and weaken essential services without saving the ratepayers of this country any money at all.

Before the Government descend further into folly, will they consider the variety of solutions offered? Whatever the values of strict Government control, quangos, a single selected authority, joint boards and privatisation, they cannot be described as bringing control nearer to the people. The transfer of GLC functions to the boroughs, allegedly to give the electorate more direct control, is a deception, according to Mr. Robert Mitchell. He is the Conservative GLC member for Wanstead and Woodford, which is the constituency of the Secretary of State for the Environment. He is about to waste some of the best hours of his political life in perpetrating that deception in the Bill to abolish the GLC and metropolitan county councils. Like much Tory local government strategy, the abolition plans are nothing more than prejudice made policy.

The Government have hit local government, and therefore services and our people, from every angle. They hit people through their abolition plans, their plans to withdraw the right to vote, in every area where people need the sustenance of public services. They are hitting local services, education, industrial development and the construction industry. The Government are slowing and stopping the engines of recovery. The public expenditure plans for next year will hit even harder.

The Government, who are given to quoting the policies of John Maynard Keynes, operate policies of withdrawal, slow-down, suppression of demand and regression in the economy. John Maynard Keynes said: It is often said by wiseacres that we cannot spend more than we earn. That is…exceedingly misleading if it is applied to the community as a whole. For the community as a whole, it would be much truer to say that we cannot earn more than we spend…output and employment cannot increase, unless the first stimulant comes from the side of increased spending, though in this context I include, of course…capital expenditure on housing and the like. To borrow a phrase from the Prime Minister, that is vintage Keynes. As the Prime Minister points out, Keynes wants higher efficiency, productivity and all the other great and good things that we all want, but he also understands that investment and consumption must be expanded to produce them. Instead of selectively drawing a phrase or two from the 1944 White Paper on employment policy, I recommend to the Prime Minister almost anything else that John Maynard Keynes wrote. It will utterly confound her misinformation of the country, her misuse of his name and philosophy, and her present promotion of him.

Keynes advised a course of increased production, investment and consumption. In 1944, the tool of policy and objective of the Government was employment. In 1984, the tool of policy and objective of the Government is unemployment. That is the difference between 1944 and 1984. From the town hall to the third world, and every point between them, the Government know no other way but to deprive, depress and divide. The country wants to be confident. Our people want to walk tall, but the Government are forcing millions to crouch. Through the Queen's Speech, the Government are giving our people less chance, less choice, less hope, fewer jobs, and less voice in their own destinies. The Government do not serve the country, they do not deserve to serve the country and our people do not deserve this Government.

3.44 pm

The Prime Minister (Mrs. Margaret Thatcher)

My first and pleasant duty is to join the Leader of the Opposition in congratulating my hon. Friends who moved and seconded the Loyal Address. My hon. Friend the Member for Boothferry (Sir P. Bryan) speaks from the vantage point of someone who has been a member of the House for nearly 30 years. He was Parliamentary Private Secretary to Sir Walter Monckton in about 1956, and he became Minister of State, Department of Employment, so we listened with special interest to what he said about the problems of his constituency. I noticed that he said that the port of Goole had a good present and future because it had proven reliability, something which many other companies could learn. We are indebted to him for his constructive work, as chairman of the House of Commons Parliamentary Group, in helping forward the historic agreement on Hong Kong, which is being considered in Hong Kong and which I hope will shortly come before the House. My hon. Friend played a constructive role in what is an extremely important agreement.

I noted what my hon. Friend said about Wilberforce from the school in his constituency. There is outside my room a sculpture of Wilberforce, but No. 10 Downing street also boasts a Wilberforce: it is a cat in black and white, which has equal disdain for both, but which is very good at the job which it is there to do.

I also thank the seconder of the Loyal Address, my hon. Friend the Member for Wiltshire, North (Mr. Needham), who tackled his task in his usual spirited fashion. Indeed, one never knew what was about to come next. I listened carefully to what he said about the ark. I remind him that the ark was built to keep its inhabitants dry. They went in dry and they came out dry, and I hope that the ark has great relevance to those who occupy the Government Front Bench. It was those who sailed on the Titanic who got wet. However, the light touch of my hon. Friend conceals, as we saw later in his speech, his serious study and his deep-felt views about unemployment. I remember being with him in his constituency in a company that he mentioned, and I join him in hoping that my right hon. Friend the Patronage Secretary and my right hon. Friend the Member for Chingford (Mr. Tebbit) will soon return to the House. I also join in his tribute to my right hon. Friend the Member for Waveney (Mr. Prior), which used to be called Lowestoft, for the work that he did in Northern Ireland. I thank and congratulate both my hon. Friends on the way in which they moved and seconded the Loyal Address.

The Leader of the Opposition had some words to say about several issues. He spoke about my right hon. Friend the Chancellor of the Exchequer. May I tell the right hon. Gentleman that I have some good news for him—at any rate, it is good news to the Government. While the right hon. Gentleman was speaking, Barclays bank decided to cut by half a percentage point, from 10.5 per cent., the basic bank rate. That is a great tribute to my right hon. Friend for the firmness with which he has controlled the money supply. The money supply figures were published at 2.30 this afternoon, and the cut in interest rates came shortly thereafter.

The Leader of the Opposition also made some points about personal taxation. I remind him that had the rates of the Labour Government remained in force we should now be paying £3.5 billion more in income tax than we are. I also remind him that had we chosen to retain the national insurance surcharge at the level where the Labour Government left it, and applied that money to cuts in income tax, the personal rates would be much below what they are now. He left us with this terrible tax on jobs—the national insurance surcharge—and it was we who took it off.

The right hon. Gentleman made some comments about Keynes. As far as I could make out, he was saying that if we all spend more than we have we shall be very rich. That was always a stupid sentiment. I remind him that the famous White Paper thought to be written by Keynes pointed out that the policies proposed in this Paper affect the balancing of the Budget in a particular year, they certainly do not contemplate any departure from the principle that the Budget must be balanced over a longer period".

The right hon. Gentleman made the classic mistake of taking the deficit part without the surplus part in any particular year.

The right hon. Gentleman asked me about Mr. MacGregor. Let me make it perfectly clear that I have every confidence in Mr. MacGregor. Had some of the coal miners in the north-east taken up the contracts which Mr. MacGregor won—in other words, had they chosen to take those jobs—1,000 Durham miners would have had jobs thanks to Mr. MacGregor which they would not otherwise have had. I wonder whether the right hon. Gentleman has the same confidence in Mr. Scargill. I understand that the right hon. Gentleman will not take part in the NUM rallies, and I can understand why.

As the right hon. Gentleman pointed out, coal is not especially referred to in the Gracious Speech. He will be aware that it contains mainly the legislative part of the Government's programme. However, energy policy is regularly debated in the House, and I therefore begin with some comments about the coal industry.

We meet today in the shadow of the longest industrial dispute for many years, and the House will expect me to begin by saying something about it. Since the last debate at the end of July there have been more than 100 further hours of negotiations between the NUM and the NCB, mostly under the auspices of ACAS. There have also been discussions between the NCB and NACODS, which clarified some important points and ended in an agreement acceptable to both sides. The NUM leaders have, however, repeatedly made it clear that they have not budged an inch from their original position that no pit should ever close except on grounds of exhaustion or safety.

In the debate on 31 July the Opposition urged the NCB to return to the colliery review procedure. The very next day the chairman of the NCB, Mr. MacGregor, made it clear in an official statement that the NCB had never departed from it.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Not true.

The Prime Minister

The Cortonwood proposals were made and the NUM was asked to attend a meeting. It did not do so. It did not go to that meeting although the other two unions in the industry were prepared to do so, and the hon. Gentleman knows it.

I remind the House that the colliery review procedure always envisaged the closure of uneconomic pits. In a circular in 1973 issued by the then general secretary of the NUM, Mr. Lawrence Daly, endorsing the procedure and explaining it to NUM branches, he stated: While the purpose of these meetings"— the colliery review meetings— is to improve results and secure the maximum efficiency and optimum future for the industry and those who work in it, it was recognised that some pits would have to close, either through exhaustion or because of heavy losses or changing markets". That was recognised right from the beginning of the colliery review procedure, and that was pointed out to the Select Committee on Energy in 1982.

Of course, it is the duty of the NCB, backed by the Government, to cushion the effects of such closures, to give hope to the communities in which they occur, and for the first time ever the NCB, under Mr. MacGregor, has said that any miner wishing to remain a miner will be able to do so. That is Mr. MacGregor's guarantee.

For those who wish to leave the industry, the Government have supported the NCB in providing the most generous early retirement terms ever. We have backed the Coal Board in setting up an enterprise company charged with encouraging new businesses in areas affected by pit closures, as was also done in the steel industry where the redundancies were more concentrated. In the case of steel, BSC (Industry) has helped to create 20,000 new jobs with 16,000 more already in the pipeline. I hope that the new NCB company can be just as successful, although in a smaller way, because the redundancies in any area are far fewer.

Preserving steelworks with virtually no demand for their products, or pits that are becoming exhausted or running at a heavy loss, provides neither hope nor prospects for young people. It is far better to put money into the NCB enterprise company, which is what we are doing, and far better that we encourage inward investment, as my right hon. Friends the Secretaries of State for Wales and Scotland are constantly doing, with the result that large amounts of inward investment have been attracted.

The issue at the heart of this dispute is the right and duty of the NCB to manage in a way that secures the efficient development of the coal mining industry. That right and duty was recognised in the original nationalisation Act of 1946, as well as in "Plan for Coal" in 1974 and the tripartite agreements by which it was accepted, and the Coal Industry Acts of 1965 and 1977, both of which were passed by Labour Governments.

A settlement which preserves the NCB's right to manage and which meets the unions' reasonable concerns can be reached. The success of the negotiations between the NCB and NACODS proves it. Let me remind the House that as part of that settlement the NCB not only resolved a number of matters specific to NACODS, but addressed issues central to the dispute. Indeed, the NCB undertook, first, to reconsider its 6 March proposals, in the light of the changed circumstances of both supply and demand in the market for coal. Secondly, it undertook that the five pits about which the unions were particularly concerned would remain open, to be considered in common with all other pits under the colliery review procedure. Thirdly, it undertook to enhance the review procedure to include an independent review body to whose advice full weight would be given by the NCB.

I believe that the agreement between the NCB and NACODS is fair and reasonable. I do not believe that the NCB has room for any further movement. Even after 35 weeks of this strike, the leadership of the NUM has a choice: it can continue to manipulate the loyalties and exploit the fears of those who are one strike, knowing, as it does, the hardship and suffering that it is inflicting on their families; it can continue to wreak yet further damage on the coal industry to add to the £500 million in lost wages, the 20 lost faces, and the thousands of lost customers; or it can continue to refuse to budge an inch from its impossible demands. However, if it does those things it must know the suffering that it is inflicting, and it must know also that the NCB cannot and will not yield. The Leader of the Opposition talks about human feeling and suffering, but I ask him to think about the suffering which the NUM is inflicting on many of the striking miners and their families.

Instead of that, the NUM can accept the offer that lies on the table. It represents the best investment programme ever, the best ever guarantee of employment, the best ever early retirement terms and the best ever pay. I believe that scores of thousands of miners, in addition to the one third of miners who are now at work, are longing to accept this offer. This week alone, so far more than 1,200 miners have returned to work despite the violence and intimidation and despite the efforts to intensify the strike.

If the leaders of the National Union of Mineworkers, without consulting their membership and rejecting their desire for a ballot, persist in refusing this deal the House is entitled to ask whether they want to end this strike—or do they seek to prolong it for reasons which have little if anything to do with jobs and pay but have everything to do with an extra-parliamentary challenge to the House and to this Government? Why have they chosen to seek assistance from the Libyan Government, who used their embassy for murder on the streets of London? The Leader of the Opposition was right to condemn this sinister alliance, and what he said will be endorsed by all right-minded people.

There is no industrial reason why this strike should go on for one day longer. For the sake of the mining industry, for the sake of the mining communities and for the sake of every miner and his family, I say end it now.

This strike, pursued by the NUM in the name of jobs, is in fact destroying jobs. If customers cannot rely on a secure supply of coal, they will not burn it. They will turn to other fuel. But the Labour party has supported this strike no matter what the cost, no matter what the damage and no matter how many jobs are lost. By their words, the Opposition denounce unemployment. So do we. By their deeds, they help to create it. They forfeit any right to lecture the Government on the creation of jobs.

The Gracious Speech reaffirms that the Government remains deeply concerned about unemployment and will continue policies designed to achieve better opportunities for employment. We would all like to return——

Dr. David Owen (Plymouth, Devonport)

The Prime Minister quoted from the 1944 Coalition White Paper on unemployment. It is her responsibility to tell the House whether she accepts, as that Government did, the primary aim of maintaining a high and stable level of employment. Is that the policy of this Government? If the right hon. Lady agreed that it was, she would carry a great deal more support in some of the other areas of the Government's economic policy.

The Prime Minister

We would all like to return, as I was about to say, to a low level of unemployment. The first paragraph of that White Paper says that the Government should accept as one of their primary aims … the maintenance of a high and stable level of employment after the war … For employment cannot be created by Act of Parliament or by Government action alone … the success of the policy outlined in this Paper will ultimately depend on the understanding and support of the community as a whole—and especially on the efforts of employers and workers in industry; for without a rising standard of industrial efficiency we cannot achieve a high level of employment combined with a rising standard of living.

That White Paper accepted that a partnership was required if one was to defeat the problem of unemployment. It set out many factors which have been totally ignored. Had they been accepted it would have been easier to keep jobs, easier to be competitive and easier to create jobs in the future. As I said at my own party conference, I accept most parts of this Paper—pretty nearly all of it except those aspects which over time have changed.

We would all like to return to a low level of unemployment.

Mr. Jack Ashley (Stoke-on-Trent, South)

Will the right hon. Lady give way?

The Prime Minister

In the debate last week the Leader of the Opposition gave us his miracle cure.

Mr. Ashley

rose——

The Prime Minister

I hope that the right hon. Gentleman will allow me to continue. I have quite a long way to go, but I shall give way later to him.

In the debate last week the Leader of the Opposition gave us his miracle cure. It was increased public spending, not by taxation, but by increased borrowing. He argues that that will have the effect of increasing demand and public investment and so produce more jobs.

Let us examine those points one by one. In the mid-1950s and early 1960s, unemployment was only 1.5 per cent. That was a time when public expenditure as a share of national income was only about one third. Between the mid-1960s and the early 1980s unemployment rose to 12.5 per cent. and the share of public expenditure climbed to between 40 and 45 per cent. If higher public spending could solve unemployment, there would have been no problem for many years now. But it cannot, and it has not in any country. Those countries which have been most successful in maintaining employment — the United States and Japan — take a far lower proportion of national income in public expenditure than we do.

If we were to increase borrowing not only would we tend to increase interest rates, whereas they have gone down today—to increase them would be damaging in itself, especially to small business and construction—but we should be diverting into the public sector resources which are now going into private sector investment. Private sector investment has gone up in real terms by some 15 per cent. over the past year in manufacturing industries and by nearly 13 per cent. in service industries.

Mr. Kinnock

Rubbish.

The Prime Minister

Apparently the Leader of the Opposition does not believe the official statistics of staff in the Civil Service. I repeat that private sector investment has gone up by some 15 per cent. over the past year in manufacturing industries and by nearly 13 per cent. in service industries.

Mr. Ashley

rose——

Mr. Speaker

Order. The Prime Minister is not giving way. Unless she does so, the right hon. Gentleman cannot intervene.

The Prime Minister

I shall give way to the right hon. Gentleman in a moment, but first let me come to the end of this section of my speech.

The Leader of the Opposition said that he wanted a strong manufacturing base. So do I. I want a strong service industry base as well. But I was saying that private sector investment had gone up in real terms by 15 per cent. over the past year in manufacturing industries and by nearly 13 per cent. in service industries. Do we really want to take away that investment from the private sector to put it in the public sector? Do we really want to lose the jobs that that investment provides? Those who put forward this recipe conveniently forget the jobs that would be destroyed.

Mr. Ashley

Does the Prime Minister recognise that these excuses have never convinced the Opposition but that the new factor now is that they are not convincing her own supporters? They are now beginning to be vociferous in their complaints about the Government's policies. What action does the Prime Minister intend to take to meet the complaints of Conservative Members? I assure the right hon. Lady that they will not allow their political necks to be wrung in an election on this issue. They will wring her neck first.

The Prime Minister

Obviously I disagree with the right hon. Gentleman. I remind him that it was my arguments and policies to which President Mitterrand turned when his own Socialist ones did not work.

Mr. Kinnock

What about President Reagan?

The Prime Minister

I remind the right hon. Gentleman that the proportion of national income taken in public expenditure in the United States is very much lower than is taken in Great Britain.

As for the notion that we need to increase demand, the right hon. Gentleman knows that there is no shortage of demand in the country. Retail sales are up by 8 per cent. in value on this time last year, and total spending in the economy is also up by 8 per cent. in money terms. There is no shortage of demand. The trouble is that the supply is being met not from this country but by more competitive industries overseas in some spheres.

Labour's formula offers no solution. I suspect that the right hon. Gentleman knows this, for he tried —[Interruption.] The Opposition do not like to listen, especially to facts and figures. They regard debate as something with which they agree and not as something with which they disagree. When they disagree they try to stop it being heard.

I suspect that the right hon. Gentleman knows that his formula offers no solution, because he tried to make the formula more acceptable last week by calling for reflation of £2.3 billion compared with the much more astronomic figure at the general election of something like 10 times that amount. The British people did not believe him then and they do not believe him now.

If the medicine is no good in the first place, what is the point of just reducing the dose? However, there are ways to save jobs, to help to create jobs, and to have a higher level of employment, but they raise issues which the Opposition would prefer not to face. They represent choices which the Government have not shirked and will not shirk.

Now I shall take up the matter of pay in relation to output. Of course everyone would like more pay, but if we are to have German or American standards of pay we must have German and American standards of efficiency and output per person first. That is why I always refer to pay in relation to output. After years of prices and incomes policies people came to think that they had an automatic right to an increase in pay regardless of output, and the increase in pay went straight into inflation and not into extra output.

Indeed, unemployment is caused by paying ourselves more than the value of what we produce. So said a former Leader of the Labour party, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), in 1976. He said: We must ask ourselves unflinchingly what is the cause of high unemployment. Quite simply and unequivocally it is caused by paying ourselves more than the value of what we produce. There are no scapegoats. That is what a past Leader of the Labour party said. There are no scapegoats. This is as true in a mixed economy under a Labour Government as it is under capitalism or Communism. It is an absolute fact of life which no Government, be it left or right, can alter". The right hon. Member for Islwyn (Mr. Kinnock) knows that that was sound sense which a Government, be it Left or Right, had to operate.

If wages are too high in relation to what people will pay for goods, they will take their custom elsewhere and jobs will be lost. Time and again we have seen British firms priced out of the market—in cars, ships, motor bikes, washing machines and electronic goods. So there is a choice—of pay in relation to output. It is one which employees and management have to make. There are signs that in some industries, despite the yelping of the Opposition, the message is getting home. Yesterday there was some news that workers earning £170 a week at a furniture factory had voted for a 5 per cent. pay cut in an effort to create more jobs and to save some jobs of their fellow workers. Sense is coming on the shop floor if not in the Opposition.

For young people—the right hon. Gentleman, like me, would like more jobs for young people—lower pay also helps to win more jobs. For example, employers find that the young workers scheme has enabled them to take on more young people. Is it not better to take on three 17-year-olds, paying them £50 a week each, than two paid £75 a week each, with the other one still out of work? Is it not better to train people for a year under the youth training scheme at £26.50 a week than to leave them unskilled and unqualified with less chance of a job?

The results are encouraging. Unemployment among school leavers has fallen over the past year. A far larger proportion of those leaving youth training service schemes are finding jobs than under earlier schemes, but the sad truth is that some unions have blocked opportunities for training and employment for unemployed youngsters by demanding higher pay and more allowances. Faced with a choice, those unions chose higher unemployment rather than lower pay.

Mr. Stuart Bell (Middlesbrough)

Is the Prime Minister now telling the House, endorsing the statement of the Chancellor of the Exchequer, that she believes in a cut in wages?

The Prime Minister

The hon. Gentleman cannot have been listening. It is pay in relation to output that is the critical factor. Unit labour costs in Britain are still going up at a higher rate than in the United States and Japan. I am afraid that unless we get unit labour costs down it does not augur well for our industry. Pay in relation to output is the critical factor.

The pay factor alone is not enough. The hon. Gentleman will recall the words of the White Paper that I read out, that without a rising standard of industrial efficiency we cannot achieve a high level of employment". I use the term "greater efficiency" in all its many aspects. That means doing away with old labour practices, as has been done, for example, in the Tyne ship repair yards which have been privatised; working inconvenient hours if necessary; being the first to accept new technology and to exploit it to the full, not fighting its introduction and use every inch of the way; and constantly developing the products and services for the markets of tomorrow.

Of course, the major innovations of the past displaced existing products and the jobs of the workers who made them, but each in its own way opened up vast new opportunities and created many new jobs. The same will be true of the inventions and ideas of today, whether in manufacturing or in service industries.

Those things, by their very nature, cannot be done by the Government, but the actions of the Government could hinder the necessary development in the public sector by subsidising yesterday's industries at the expense of tomorrow's. The goods that we are interested in are those which have a relevance for tomorrow's world.

If the Government cannot do all those things, they can cut regulations, reduce controls, increase competition and diminish the financial overheads arising from rates and taxation. This year the increase in local authority rates has been the lowest for a decade, thanks to our legislation. The national insurance surcharge—the Labour party's tax on jobs—was finally abolished last month.

Yes, the route to more jobs does present unpalatable choices for the Opposition. The right hon. Gentleman's party backs every pay demand and every strike, no matter how unreasonable or how damaging. It now resists change, whether the transition from high to low cost pits, or the efficient use of new technology, and it belittles the opportunity presented by the service industries. His is the party which, to cap it all, would put up personal taxes on wealth creators and raise inflation and so nullify the advantage which our industries have so painfully won in the past five years.

We can return to a high level of employment only if we face the difficult choices that I have outlined. It also requires the unceasing pursuit of sound financial policies by the Government to bring inflation down and to limit public spending. It requires, too, a commitment to free enterprise which is wealth creating, rather than a commitment to the expansion of the public sector, which is wealth consuming.

As the Gracious Speech shows, we have therefore pursued a programme of returning state industry to the private sector, with vigour and determination. Eleven major companies and a number of other enterprises have so far been restored to private ownership. Shortly the public will receive a prospectus for British Telecom setting out the terms on which the largest ever transfer of a company from state control is being offered. This Session will carry forward the process of opening up the coach and bus industry to competition. We hope to see the return to the private sector of British Airways, a company which has responded magnificently to the spur of competition and to the prospects ahead.

Mr. Bell

The right hon. Lady is tired.

The Prime Minister

Very far from it. Please do not let the hon. Gentleman cherish any such hopes.

The Gracious Speech refers to a major Bill that we shall be brining forward very soon to abolish the six metropolitan councils and the Greater London council. We want local government to be closer to the people. For the metropolitan councils, that means that the metropolitan districts will be the local authorities and for London it means that the boroughs will be the local authorities.

I believe that even the Opposition are not seriously in favour of retaining the metropolitan councils, but to them the GLC is different, even though it accounts for only 11 per cent. of local government spending in London. Nevertheless, the GLC is spending £10 million of ratepayers' money — £7 million this year alone — on trying to persuade us of the value of its services—not, of course, housing, because most of that was transferred to the boroughs some years ago; not, of course, education, because a directly elected Inner London education authority and the outer boroughs will do that; not law and order, because the Metropolitan police do that; not the tubes and buses, because London Regional Transport does that; not ambulances, because the local health authorities do that; and not rubbish collection or libraries, because the boroughs do that work.

The GLC is spending £7 million this year on propaganda. That is more than the total government budget of the city of Oxford, which is £6.5 million, and of the city of Durham, which is £6 million. The GLC has become an intolerable burden on London's ratepayers. Its rate has risen by more than 100 per cent. in the last three years, but its spending days are nearly over. With Parliament's approval, it will come to an end on 31 March 1986.

The Gracious Speech sets out our approach to foreign affairs and defence. I begin by reporting to the House that, together with the Leader of the Opposition and the Leaders of other parties, I have just returned from Delhi where we mourned with the people of India at Mrs. Gandhi's funeral. History and friendship gave us a specially close feeling for India. We all wish the new Prime Minister well in the great task of reconciliation which will surely be needed in the days and months ahead.

We are very much aware that we open this Session of Parliament on the day of perhaps the most important election in the Western world. Once that election is over, many tasks that have inevitably been held up will be resumed—in particular, the lessening of tension between East and West.

The Gracious Speech speaks of our working continually for a "greater atmosphere of trust" between the two sides. That will be our aim. It is the reason why we shall in the coming months be welcoming two senior representatives of the Soviet Union to Britain.

Mr. Gorbachev has accepted the invitations of the chairman of the Select Committee on Foreign Affairs and of the British group of the Inter-Parliamentary Union to visit Britain in December. He will also be calling on members of the Government and the Opposition and other party leaders. Mr. Gromyko has also said that he hopes to visit London next year. My right hon. and learned Friend the Foreign Secretary and I look forward to seeing them both. We shall hope during their visits to take forward the search for ways to reduce the burden of armaments.

With our Western partners, we have made far-reaching but practical proposals in every arms control negotiation. At Stockholm, Vienna and Geneva, it is the West which has made the running. So far, the response from the Soviet Union, there and elsewhere, has been unforthcoming. The Soviet Union proposed talks on limiting weapons in space, but then refused to take yes for an answer.

When the Soviet Government find the political will to respond positively and to resume their empty chair at the nuclear negotiating table they will meet a ready response.

We want security at a lower level of weapons and at a lower cost — provided always that reductions are balanced and verifiable.

This Government will not put at risk our national security or peace by giving up our nuclear defences while our greatest potential enemy keeps its nuclear defences. We should remember that the possession of the nuclear deterrent has prevented not only nuclear war, but conventional war. At one time, that used to be common ground between the parties. Indeed, after the last war, in the 1940s, it was the Labour Government of Mr. Attlee who first provided Britain with nuclear weapons. In the 1960s and 1970s, Labour Governments under Lord Wilson and under the right hon. Member for Cardiff, South and Penarth maintained Polaris and later confirmed the decision to modernise it with Chevaline.

In 1976 the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said It is not and never has been my view that unilateral renunciation would promote peace in the world. — [Official Report, 19 May 1976; Vol. 911, c. 1389.] In 1981 the right hon. Member for Leeds, East Healey) said: The only real answer to the nuclear threat is multilateral disarmament and not unilateral gestures.

Over the past three or four decades, Labour, both in government and in opposition, affirmed again and again that nuclear weapons were crucial to the defence of the West and the preservation of peace. Well, what has changed? It is not the defence needs of the West, but the Labour party itself. Now, not content with getting rid of Britain's own nuclear deterrent, the Labour party is committed to the unconditional removal of all United States' nuclear weapons and nuclear bases from British soil and British waters. So, to our American allies, Labour would be saying, "We do not want your nuclear weapons on our soil, but we still expect you to help to defend our freedom."

The Opposition's policies would hand the Soviet Union a major military, political and propaganda advantage in return for nothing. They would greatly diminish the value and credibility of Britain's contribution to the Alliance, sabotage the close relationship between Britain and the United States and strike at the basis of the peace and security which NATO has brought Europe for the past 35 years.

Mr. Tam Dalyell (Linlithgow)

If our relationship with the American allies is so close, why did they vote against us on the Falklands in the United Nations?

The Prime Minister

I am talking about NATO. I make it clear that we believe in the NATO alliance, in honouring its policies and in staying loyal to our American allies. We are very grateful for the tremendous effort that they put into the defence of Europe.

As the Gracious Speech says, the Government consider their highest priority to be the "maintenance of national security" and we will uphold the strategy of NATO and honour our obligations to our principal ally. That is not true of the Opposition.

I believe that in the coming Session we shall have to face a matter that lies at the heart of parliamentary government. Many of the measures in the Gracious Speech will be keenly contested. No one can complain about that. The Opposition can and will criticise, oppose, amend or delay any Bill, but once that Bill has been passed through Parliament to become law, that law must be obeyed equally and by all.

Disagree as Governments and Oppositions will on policy, we were united on that constitutional convention. I fear that in recent months that convention has been under threat. As we saw only last month in Blackpool, there are some in the Labour party who hold the law and the courts to be nothing more than obstacles in the way of their political objectives. On Wednesday 3 October the Labour conference passed a resolution giving its official backing to lawbreakers. The resolution promised to support local councils forced to break the law as a result of the Tory Government's policies". Forced to break the law! In a democracy, where people can vote at least once every five years to change the law through the ballot box, no one is forced to break the law". That is not the language of those who believe in democracy, nor of those who believe in law.

The Gracious Speech, like its predecessors, depends upon that fundamental constitutional convention which, because of the attitude of some in the Labour party, is in danger of breaking down. This year let it be seen that those who deny the duty to uphold the rule of law, those who use violence for political ends, and those who deny the ascendancy of the ballot box and the supremacy of Parliament find no support in any part of this honourable House.

4.29 pm

Mr. David Steel (Tweeddale, Ettrick and Lauderdale)

I readily join the other party leaders in congratulating the mover and seconder of the Loyal Address. I have some sympathy for the hon. Member for Boothferry (Sir P. Bryan), the mover, in his complaint against the Boundary Commission. In my case, it managed to reduce the size of my constituency, yet still find a longer name for it than Roxburgh, Selkirk and Peebles. I thought that his truest remark was that, when he goes back to Boothferry, he finds that people are worried that we are spending time discussing issues that are "not uppermost" in their minds. If he found that worrying before, I suspect that he will find it even more worrying after reading the text of the Gracious Speech.

The seconder, the hon. Member for Wiltshire, North (Mr. Needham), described himself as junior, but he could have fooled me. I hope that we shall enjoy many more such contributions from him during this Parliament before Lloyd George's descendants duly get rid of him after all their efforts.

We have heard the shortest Gracious Speech for years. I suspect that that is because it does not address itself to either of the two major problems confronting our nation: the chronic level of unemployment, and the increasingly divided nature of our society. Indeed, the Gracious Speech is so thin that the Government must be suffering from the political equivalent of anorexia nervosa. There is no sign of the Government having any confidence in the direction that they are taking.

An even stranger feature of the Gracious Speech is that a textual analysis shows an extraordinary habit throughout of placing unexceptional phrases at the beginning of sentences or paragraphs, leaving the trail of disaster to the end. I shall give three examples. On the first page, the Speech says: My Government will continue fully to discharge their obligations to the people of the Falkland Islands, while seeking more normal relations between this country and Argentina. Nothing more than "more normal relations" when we are still in a state of war with Argentina?

On the second page, the Gracious Speech states: While noting that the numbers of people in work are steadily rising, my Government remains deeply concerned about unemployment. Further on it states: Firm control of public spending will be maintained. But, of course, later in that paragraph the Government are searching for policies that will "sustain rising living standards".

I begin to think that if the Prime Minister had been asked to describe in one sentence the tragedy of the Titanic, she would have said, "While the band played brilliantly in the ballroom, unfortunately the ship sank." That is the tone of the whole speech. If she had been captain of the Titanic when it struck the iceberg, she and her first mate, the Chancellor of the Exchequer, would have tried to calm the passengers by assuring them that the ship had stopped only to take on ice.

The whole tone of the Gracious Speech is one of suffocating complacency and irrelevance. The legislation on the GLC and the metropolitan counties will certainly occupy a great deal of the time of this House and the other place. It is a sign of this Government's genius that in five years in office they have succeeded in elevating two obscure regional Left-wing figures, Ken Livingstone and Arthur Scargill, into national folk figures, loved or hated depending on one's views. That legislation, which will occupy so much of our time, is a total distraction from the real problems that face the country, and which should face the Government.

There is nothing in the Gracious Speech to give hope that the Government are making a first attempt to tackle unemployment via a programme of badly needed public investment in our infrastructure. A few moments ago, my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) interrupted the Prime Minister to ask her whether she was committed to the statement in the 1944 White Paper that progress could be achieved only by a high and stable level of employment". The right hon. Lady dodged that question, and instead quoted another passage from the White Paper, saying that it could not be achieved "by Government action alone". But no one has ever said that it could. We are saying that it certainly cannot be achieved without Government action, and that is the criticism that is increasingly coming from all quarters.

I invite the Prime Minister to pause and reflect on the stark contrast between the tone of both her speeches and those of the Chancellor of the Exchequer and that of the speeches made yesterday at the CBI conference. There is the world of reality. There speaker after speaker made speeches contrary to the prevailing wisdom at Nos. 10 and 11 Downing street. One speaker said: Government is not convinced that manufacturing matters". Another said: Don't let skilled building workers rot in dole queues". Yet another said: Cuts in personal taxation will not regenerate industry". Those are the experienced voices of this country's industrial life. In yesterday's debate at the CBI conference, only one speaker was brave enough to repeat the sort of nostrums in the Gracious Speech, and he was greeted with groans.

We on these Benches have repeatedly advocated the need for a controlled and costed stimulus to economic recovery from the Government. We have also said that it is not a low wage strategy that the Government need in order to get industry to recover, but an incomes strategy which relates pay to increased productivity. The Government should take the matter in hand and encourage the development of co-operatives to play a greater part in our industrial strategy. They should encourage employee shareholding and the distribution of profits as a greater part of the wage packet.

As long as the Government conduct an industrial society in which the only interest of the average working man is the size of the wage packet at the end of the week, they cannot be surprised if that sole interest is sometimes pushed to ridiculous lengths. There should be a basic change in the Government's attitude. They cannot bludgeon people into change. They need to be persuaded. Through taxation policies and legislation, the Government should give the lead.

There is nothing in the Gracious Speech to give hope to our young people in International Youth Year. I have drawn attention before to the fact that two competitor Governments in the European Community—France and Germany—who hold conflicting political views, have engaged in deliberate policies of ensuring that all school leavers, all teenagers between the ages of 16 and 19 have the choice of continuing in education in school, of a place on a training course or of a job. That has been the German Government's policy for some years, and it is also the declared policy of the new Prime Minister of France. We are light years away from that commitment, never mind its achievement. Instead, in parallel with rising youth unemployment there is a rising crime wave. I am convinced that there is a direct link between the two. Indeed, everyone seems to be convinced except the Prime Minister. When Prince Charles made that observation, the Prime Minister said that his words were anodyne. But it is an extraordinary state of affairs when members of the royal family seem to be more in tune with the reality of what is happening to our young people than members of the Government.

The sad and horrendous problem of growing drug trafficking, with its effect upon the young, flows from that. Hon. Members should try to unite to examine the issue and to devise policies to counteract that threat. But as long as there is mass idleness among the young, we cannot be surprised that the drug menace grows.

Let us see what the Gracious Speech says about education. There is a vague sentence about a commitment to raise standards. How can the Government say that when this year 22,000 qualified school leavers have been denied places in higher education simply because of the cuts? That is not raising standards. When I looked for something specific on education, I found the scheme for allowing parents of children in public sector education to reject caning. It is a scheme that is so unworkable that it has been denounced by every teaching authority, and could have been dreamed up only by the Secretary of State for Education and Science. Indeed, it is so unworkable that parents who want their children to be caned will have to send them to private sector schools. The next Conservative manifesto will probably promise that flogging will be tax-deductible.

Where the Queen's Speech is specific it is disastrous. Legislation for buses is proposed. We supported the changes to increase competition on bus routes just as we supported the provision which allows people to buy or rent telephone equipment outside the British Telecom monopoly. The trouble is that the Government do not know where to stop.

The White Paper is regarded by local authorities of all political colours in all the rural areas as potentially disastrous. Chaos will be caused. An end will come to a system which has operated over many years under which the profitable routes subsidise the unprofitable. Where will the money come from to support the unprofitable services? It cannot come from the rates, because such spending is being cut by the Government. It cannot come from the fare payers, because, if fares go up, services will be withdrawn. It cannot come from a free-for-all among bus companies, because they will want to take over only the profitable routes.

I warn the Government that their proposals will meet with resistance not only from their own Back Benchers but from another place which in the past has taken an interest in safeguarding services in rural areas.

Turning to foreign affairs, I wish that the Government would recognise the fundamental change that has taken place in Argentina since the tragic conflict. A new democratic Government now rule. Four times in the last 20 years, twice to military regimes, Governments of both major parties in Britain have publicly acknowledged their willingness to cede the Falkland Islands' sovereignty to Argentina.

Today Britain has a vague policy, arid the Government's intention is not clear. About 200,000 people of British descent live in Argentina—the largest British-descended population outside the Commonwealth — and 17,000 of them are United Kingdom citizens. That is 10 times the population of the Falkland Islands.

Of course we should look after the Falkland Islanders' interests, but their long-term interests will be served only through a realistic arrangement with their mainland neighbours. It is dishonest for the Government to pretend that they can give independence to lands which are not capable of independence. That was the practical theory behind the Hong Kong agreement. The Government knew tha once the New Territories lease came to an end, the rest of the colony could not sustain itself independently. I give credit to the Government for the negotiations They secured the best interests of nearly 5 million people in Hong Kong.

Surely it is time for us to act sensibly towards the new democratic Government in Argentina. Vice-President Martinez, whom I met a few weeks ago in Latin America, made it clear that they are sensitive to the need to allow time to heal the wounds between our two countries. Our quarrel was with the military regime, not the Argentine people. At a time when public spending is being squeezed, it is ridiculous that our people should have to spend £700 million in the current year because we are not prepared to have proper conversations to achieve an internationally guaranteed political settlement for the future of the islands.

The Prime Minister was right to refer to the miners' strike, although there is nothing about it in the Queen's Speech. The right hon. Lady must now rue the day that she appointed Mr. Ian MacGregor. I dwell on the matter not as a personal criticism of Mr. MacGregor, but because some of us said at the time that the new president of the National Union of Mineworkers was hellbent on picking a political quarrel with the Government. That was common knowledge. The Prime Minister must accept responsibility for what has happened since.

In the last few weeks the incompetent has been in pursuit of the intransigent. That has been the characteristic of the series of negotiations. The National Coal Board has made two major concessions. It has withdrawn the five-pit closure programme and accepted the need for an independent review body. Mr. Scargill has shown no corresponding sign of give.

In such a situation one would normally expect an elected Government to be able to look to other trade union leaders for assistance. Unfortunately, the truth is that this Government so soured relations with the trade union movement over the GCHQ affair that they have not been able to ask sensible trade union leaders to bring pressure to bear on the leader of the NUM. That is a tragedy of the Government's own making. Let not the Government pretend that they can get away with responsibility for this disastrous dispute. It is disastrous for our economy and for the fabric of society in many mining areas.

In the meantime, Mr. Scargill is to be seen shuffling millions of pounds of his union's funds around the Isle of Man and Ireland while his members' families suffer. He is as big a financial baron as any company chairman in the land.

At Cyn Heidre colliery in South Wales, workers have started to go back, only to find that the NUM has decided to withdraw safety cover thereby putting 5,000 jobs permanently at risk. That knocks a hole in Mr. Scargill's claim that the dispute is about securing jobs. Such activity can only be damaging to jobs.

The strike is political. The Government have watched a series of own goals from their own side, from the closure of Cortonwood to the treatment of Messrs Eaton and Kirk. The story is not a happy one. I hope that we can look to a brighter future.

At one time the Government could have expected the Labour party to help in such a dispute, but that is no longer possible. Leadership by the right hon. Member for Islwyn (Mr. Kinnock) is not by clear direction, but by previous engagements.

I am not surprised that the Government continue to try to prop up the Labour party as the main or official Opposition. They believe it better to preserve for the Labour party all the trappings and privileges of official Opposition, knowing that they pose no threat. After all, in medieval courts licensed jesters were allowed to criticise the king because they posed no threat to the monarch's power. Others would be beheaded for their criticism.

The cosy arrangements in the House against which we protested this afternoon and against which we shall continue to protest are part and parcel of the effort to ensure that a weak Labour party is seen or perceived outside to be the only Opposition in the House. It is not. We on the alliance Benches increasingly represent the mass of popular opinion which rejects class divided politics and a divided society. We represent those who are worried about a Government who are prepared to use their power for the meretricious purposes of Zola Budd and her friends, but not for those who are less well off and whose families are divided as a result of their legislation.

The Government have a uniquely appalling record. They have caused record unemployment, record lows in the value of sterling and record balance of payments deficits. Literally, they are bad for the country. The programme announced today does nothing to remedy that. Sooner or later the Government must face an acceptable alternative. The Labour party cannot provide it, but we will.

4.48 pm

Sir Anthony Meyer (Clwyd, North-West)

I warmly welcome a number of proposals in the Gracious Speech. Although it is not the most important, I particularly welcome the provision for holiday voting, for which I have pressed for many years. The content of the Gracious Speech, and the tone of the Prime Minister's speech in reply to the most elegant performance so far by the Leader of the Opposition, show clearly that the Government intend to hold their course through the choppy waters ahead. They can do so secure in the knowledge that their strength in the House is unassailable and that every reliable indicator of public opinion shows that their support in the country is holding up amazingly well.

The course upon which the Government are so unshakeably set steers well away from consensus in British politics. If that means an end to the leftward ratchet by which successive Conservative Government contented themselves with slowing down the march towards Socialism, I welcome it.

The consensus also means that certain shared principles underlie the usual party conflict, and I wish to say a few words about that in the light of the perils that threaten our system of parliamentary democracy, both from without and within.

My hon. Friend the Member for Wiltshire, North (Mr. Needham), in his entertaining speech, referred to the remarks of the right hon. Member for Manchester, Gorton (Mr. Kaufman). I join him in paying tribute to what I thought to be one of the most eloquent, wise and courageous definitions of the parameters of our parliamentary democracy. The right hon. Gentleman said: From the perspective of democracy the differences between the two sides of this House are as wide and as deep as a great gulf. From the perspective of terrorism they are an imperceptible crack in the rock of democracy. Earlier, he said: the only way we get rid of a Government in Britain is by the ballot box."—[Official Report, 22 October 1984; Vol. 65, c. 441–2.]

It is my contention that the crack is even narrower and less clear-cut than it sometimes appears. It is true that there is a substantial difference between the parties on economic policy, and especially on policies for reducing unemployment, but even that difference is not all that it appears. Many Conservative Members, like the CBI, want the Government to embark upon a much more ambitious programme of public works as a means of creating jobs, even if that means forgoing cuts in personal taxation. Many of us believe that cuts in personal taxation have a disproportionate effect in attracting imports from overseas.

Conversely, many Opposition Members, in their heart of hearts, really do not want those in work to have to make too many sacrifices to finance jobs for those out of work. In a distasteful but perceptive article in The Standard recently, Brian Walden wrote of the new breed of Tory supporters as the upwardly mobile working classes who do not want their taxes expended upon those who resent their little successes. I believe, and deeply regret, that the main political parties—however much they may differ on some issues—are all too often at one in pandering to those rather nasty sentiments. In that, they are all too largely supported by the trade unions.

There is one other respect where the gap between the parties is much smaller than publicly appears, and that is on Mr. Scargill's now collapsing political strike. The Labour party, through a mixture of cowardice and misplaced loyalty, has allowed itself to be dragged in chains behind Mr. Scargill's chariot. It knows, although it dare not say so, that its only chance of escape is for the National Coal Board to block the road along which the chariot is travelling and for the strike to collapse, as it is beginning to do and as it would have done many months ago had anyone other than Mr. MacGregor been at the head of the NCB.

I know that that may be unfair, as I have the greatest admiration for Mr. MacGregor and his qualities. However, what matters are not his qualities but his reputation. The appointment of Mr. MacGregor provided Mr. Scargill with the pretext that he wanted to launch a plausible political strike. The strike will collapse, with or without Mr. MacGregor, leaving the NUM in a terrible state of disarray.

I ask the Government to remember that those miners who have so bravely continued to work during the dispute, who have been damned by the leadership of the NUM, and who deserve so well of this party and this Government, still regard themselves as loyal members of their union. For them, it is still their union. I hope that the Government, in their hour of deserved triumph—which I believe will come quite soon—will not forget that.

I wish to conclude with some wise words from a much derided Tory Prime Minister, Stanley Baldwin, when he was facing industrial unrest as bitter as that which faces us today. He said: If there are those who want to fight the class war, we will take up the challenge and we will beat them by the hardness of our heads and the largeness of our hearts. The Government, if not the NCB, have shown an admirably hard head throughout the dispute. I hope that they will very soon be ready to show the largeness of their heart.

4.56 pm

Mr. James Molyneaux (Lagan Valley)

I am glad that the Prime Minister is still in the Chamber, as I wish to leave one thought with her. She may not be aware that, when the PLO fled to Libya, Colonel Gaddafi, to finance its upkeep, decreed that every Libyan worker should be awarded a pay decrease of 10 per cent. I wonder whether the right hon. Lady expects the National Union of Mineworkers to bring back a similar proposal from Libya.

I am glad that the Prime Minister stressed the importance of obedience to the law and respect for it. I do not think I am being partisan in saying that. I would put it more firmly than the right hon. Lady, and say that I hope that all hon. Members feel that we have an obligation to obey the law. Although it is true that no citizen can be compelled, or should be expected, to make a defective law work, every citizen has an obligation to obey the law.

I welcome the passage in the Queen's Speech that states: The security forces will continue to receive my Government's full support. During my first speech in the House in 1971, I warned that we were then seeing the first demonstration of urban guerrila warfare in western Europe. I fully understood why some poured scorn on my remarks. They believed that Northern Ireland terrorism was about bad housing, unemployment, social deprivation and the restriction of local government franchise to ratepayers. After all, that had been the practice in the greater and larger island of Great Britain until recent times. Opinion in England seems to be moving back in that direction, which may not be a bad thing.

In 1971, "reform" was the "in" word. People said that, if the alleged grievances were removed, the terrorists would become good citizens. Unfortunately, the opposite proved to be the case. Terrorists have been encouraged by what were thought to be concessions, and what were seen by them to be concessions so that, as each objective was attained, another was produced. If today certain constitutional parties are in electoral difficulties, it is because the IRA has been able to claim that its long-term objectives are shared by those constitutional parties and that its methods of murder and bloodshed are likely to produce the muscle for all those in constitutional patties or in no party who share its objectives.

Perhaps it is only in recent weeks that the true nature of Irish terrorism has become revealed. It can now be seen that the terrorists are not democrats who are in a hurry. They have nothing in common with democracy and their use of the word "democracy" smacks of the hypocrisy that we sense when we hear about "people's democracies" east of the iron curtain. We know that the leaders of those "democracies" have managed to acquire status and the seats of power only because they have suppressed every vestige of democracy in the unfortunate countries over which they rule. That will come as no surprise to those who have been aware of all manner of unsavoury connections between the IRA and Marxist regimes, not to mention its links with instruments of anarchy as such as the PLO, the Red Brigades and the Baader Meinhof group.

The recent tragic happenings in Brighton and elsewhere show that all these organisations take the view that, if they do not like the verdict of the ballot box, they will be prepared to annihilate those in authority who have been given that authority by the ballot box. I think that we should all be encouraged by the statement in the Gracious Speech that Her Majesty's Government will make vigorous efforts to combat international terrorism. It is about time that we saw the activities of the IRA and other such organisations in that context. We have a right to expect other friendly nations to co-operate in that endeavour with Her Majesty's Government and to do so as a matter of duty and honour. There should be no strings attached to that co-operation.

Another passage in the Gracious Speech refers to the Government's intention to promote legislation to prevent personation at elections in Northern Ireland. My colleagues and I have been giving much thought to the matter, and we have made certain suggestions. We recognise that it is not easy to find foolproof remedies and we are prepared to accept that safeguards may be necessary, but it should be recognised that they may be necessary in various areas throughout the United Kingdom. It is not so long ago that we were provided with illustrations of personation having taken place on a significant scale on the island of Great Britain. It is in those areas as well as in Northern Ireland that the franchise has been abused in recent elections.

It is the acceptance and provision of safeguards against abuse which strengthens the claim of Northern Ireland electors to retain exactly the same franchise, the same opportunity to vote and the same voting rights as their fellow citizens in the rest of the United Kingdom. It would be intolerable if the principle of uniformity of franchise were withdrawn because of an exaggerated idea of the scale, impact and effect of personation in various parts of the United Kingdom. My colleagues and I do not accept the claim that personation has grown in Northern Ireland to a level at which public confidence is in danger. I doubt whether personation has materially affected the outcome of elections to this place, to the Northern Ireland Assembly or to local councils in Northern Ireland.

We do not accept that the electoral rise of Sinn Fein is something new of which we should be terrified. I refer to the voting figures for the 1921 election for the first Parliament of Northern Ireland. The proportional representation system was used in that election and Sinn Fein candidates received 104,000 votes, 20 per cent. of the total votes cast. The 1982 election for the Northern Ireland Assembly used the same system for PR and Sinn Fein received only 64,000 votes. Its vote fell from 20 per cent. to well under 11 per cent. It is important that we bear these facts in mind.

In this short contribution to the debate, I have dealt with two major matters that bear on Northern Ireland. There will be occasions to debate and consider many other issues affecting Northern Ireland, but the two to which I have referred are interlocked. Terrorism will be encouraged if the Government are seen to be treating Northern Ireland differently under the franchise, which is the foundation of democracy. My party has placed on record its recognition of its responsibility to persuade the minority in Northern Ireland that Ulster is its province as well. If the Government proceed to implement the policies which are outlined in the Gracious Speech and do so along the lines which I have suggested, they will do much to convince the people of Northern Ireland, Protestant and Catholic alike, that the United Kingdom is theirs as well.

5.7 pm

Mr. Christopher Murphy (Welwyn Hatfield)

I welcome the Government's determination, as set out in the Gracious Speech, to pursue the policies on which they were elected, but I sound a note of dissapointment that more emphasis has not been placed on conservation and development, although I recognise that protection of the environment is mentioned.

During recent years we have come to recognise more fully the essential problems of urban decay and rural erosion, and the instigation of land-use surveys has focused the human eye on the scale of the difficulties. In the inner cities are areas akin to the astronomers's black hole—a vast nothingness into which public money has been poured only to vanish almost without trace. At the same time, like the theory of the ever-expanding universe, there has been a continuing outward movement of the town and suburbia. The clear message of such focusing is that development must be telescoped — in the sense of closing, not opening, the instrument.

The green belt is a concept of immense value in ensuring the protection of the still rural areas that are under pressure from urban sprawl. It is my intention to do all that I can to protect it, especially on behalf of my constituents. I am strongly of the view that once land is established as part of the green belt, it should stay that way. In my constituency that means land around North Mimms between Hatfield and Potters Bar, around Welwyn and Wheathamstead, between Welwyn Garden City and Stevenage, in other parishes, such as Essendon, Ayot St. Lawrence, Ayot St. Peter, or on the outskirts of Hatfield or Welwyn Garden City. It means also that all residents will know where they stand. What is a green and pleasant land must never become a grey and unpleasant concrete swathe. It is right that the bulldozer must be pensioned off in the inner city to end the havoc that it has wreaked. It is equally right that the concrete mixer should be allowed to set hard in the countryside to ensure its protection.

Mr. Denis Howell (Birmingham, Small Heath)

I am sure that the House is listening with great interest to the hon. Gentleman's remarks. It seems that there is a fundamental inconsistency and, indeed, conflict underlying them. I represent an inner-city constituency and I know, contrary to what the hon. Gentleman says, that the urban aid programme is essential in modernising neighbourhoods and areas to prevent further decay. Public money is needed for that purpose. That is the only way in which we can stop the urban spread into green belt areas. I understand the hon. Gentleman's argument about that and I have sympathy with it. However, he cannot say that we should not develop and should not have bulldozers in inner cities, but that no building should take place in the green belt. There is a great inconsistency in his argument.

Mr. Murphy

I do not see an inconsistency, because I believe that this Government have turned their mind to this problem. They have recognised the need for organisations such as the Urban Development Corporation. We must recognise that if the burden of taxation is taken from private enterprise, private enterprise is thereby encouraged to develop those inner city areas which public money failed to deal with previously.

Conservation and development are vital to developers and housing associations which wish to use waste land in inner cities, to farmers and landowners who wish to combine productive efficiency with landscape beauty, to conservationists who cherish listed buildings, archaeological sites, water resources and wild life habitats, and to ordinary men and women who, together with their families, want to own their own plot of home land and to care for it responsibly—indeed, to everyone who wishes to safeguard the essential nature of Britain.

As one who represents two new towns, I believe that the people who live there are also especially conscious of the value of the green belt. It is for these reasons that I believe that the Gracious Speech might more loudly have echoed such views, but I look to the references on the better protection of the environment for the necessary action.

5.11 pm

Mr. Gerald Bermingham (St. Helens, South)

As I represent a constituency in which more than 8,000 people are out of work, I listened with considerable sadness to a number of the speeches made this afternoon. Little is said in the Gracious Speech about the needs of areas such as mine to attract new industry if any of those out of work are to have any hope for the future.

The Gracious Speech referred to a Bill, which no doubt will occupy much of the time of the House, for the abolition of the GLC and metropolitan counties. My constituency is in a metropolitan county. I sought to intervene during the Prime Minister's speech to ask a simple question: does the Government's logic extend equally to the shire counties and to the metropolitan areas? If Merseyside county council—the county was formerly part of Lancashire—is to be abolished, why not split Lancashire, Surrey, Sussex, or any of the other shire counties that are riddled with non-existent social services under the administration of Tory authorities?

One may be honest and say that Layfield was right a long time ago and that we should go for single unitary authorities across the whole of the land. If I remember correctly, it was the Conservative party, not the Labour party, which introduced the 1972 legislation, which operated from 1974, to create the metropolitan counties. Back in the days of Layfield, it was never convenient to go for single unitary authorities, because it was thought that Socialists might thereby control areas of the shire counties. Much of the argument that was heard this afternoon about who runs services applies equally to the county councils.

I am an honest man, and I wait with amused interest to see how the Government will logically justify the Bill to abolish the metropolitan counties without touching the shire counties. It may be that, because I have served on a metropolitan district council, I understand what the matter is all about. The Government should say, "We do not like the GLC because we do not like who runs it. We do not like the metropolitan counties because we do not like who runs them. They are run by Socialists with Socialist principles." At least it would be honest if the Government said that. History will note what happens to local government. If one starts down the road of having different systems because councils might be controlled by a different party, one is setting a dangerous precedent.

Listening to the Gracious Speech and the Prime Minister's comments on it—perhaps they set a marker on the road for the future—I thought that none of those arguments and none of that time will do much to help the 8,000 unemployed in my constituency. They will do nothing to attract industry to St. Helens. They will do nothing to help the glass industry which is St. Helens' primary industry. They will certainly do nothing to help the other major industry—coal mining. None of that time and none of those arguments—the arguments will be interesting—will do a single thing to give a job to one of my 8,000 constituents who are out of work or to help the basic industries of St. Helens. That is where the Gracious Speech is so lamentably lacking.

The Government talk about caring. They keep telling us that they care about this problem, but they do nothing. The Government compare themselves with the Americans and say that the Americans have a low wage economy. They do not say that the Americans invest in their economy. During the past five years, billions of pounds have flown from our economy to deprived countries such as the Cayman Islands, Barbados and other tax havens. A total of £35 billion has fled and not been invested in our economy.

It is all very well for the Chancellor of the Exchequer to talk about us being overpaid. Industry is under-invested. If we get investment, the skill and manpower in the north of England will provide the products that will beat the world. Investment is needed, but the Gracious Speech is silent on investment. The Gracious Speech is silent on all the things that really matter—jobs, the need to refurbish housing stock and the parts of this land where the infrastructure needs to be replaced. It has become a standard joke among those who are interested in roads and sewers that a double-decker bus each week falls into our sewerage system, simply because the sewerage system is collapsing and needs refurbishing. What do the Government propose? What does the Gracious Speech say about that? Nothing. The Gracious Speech pretends that it seeks to solve the problems of our land. It does not even begin to touch them. It does not touch the lives of the more than 3 million, going on 4 million, officially registered unemployed or the real unemployed who number nearer 5 million. The Gracious Speech does nothing to give them any hope, and that is its tragedy.

In case the House thinks that I always look upon the woeful side, I should point out that there were a couple of points in the Gracious Speech that were pleasing to the eye. I greatly welcome the item on the international aspects of child abduction and the custody of children. That matter is close to the heart of one of my constituents. Her daughter, Leila, who is aged about 13, is thought to be in Saudi Arabia. My constituent's former husband left Turkey when the child went out to visit him. There are no international laws by which her mother can seek to reclaim that child. My constituent is not rich enough to afford a lawyer in Saudi Arabia. Leila, who has lived most of her life in St. Helens, has spent the last 15 months in Saudi Arabia. The Saudi authorities tell us that the embassy has done all that it can. Only today I received a further letter from the Under-Secretary of State for Foreign and Commonwealth Affairs telling me that the child seems to have disappeared from Jeddah and may be in South Yemen.

We need laws that will enable us to enforce our custody orders in other countries. We need an international arrangement and agreement, so that children brought up in one country cannot be hijacked by a parent and taken to another part of the world into perhaps alien cultures. One is not being disrespectful towards those cultures, but one cannot take a child from one cultural background into another overnight and expect the child's best interests to be served, because in all custody matters surely the child's interests should be paramount. I therefore welcome that aspect of the Gracious Speech. I hope that the legislation will come speedily before the House and that it will command all-party support.

There are two further small points in the Gracious Speech that I welcome. The first is the independent prosecution system. I hope that it will command the overall support of the House. I notice, however, that the Government have tagged on to that point a short sentence which says that the Attorney-General will be able to refer Crown Court sentences for the opinion of the Court of Appeal. I had thought that the independent prosecution system might receive all-party support. It should not have tagged on to it a provision that is rather like doing away with juries because the cases are too complicated. It is something that flies in the face of our historical system. We have always had appalling sentencing and judges who pass sentences that are too severe or far too lenient. That has been a fact of life and a fact of the system. There are other ways of changing it, but if we give the prosecution the right of appeal, we shall open the sentencing system and begin to go down the road which we so often find in other countries where even acquittals are appealed to another court in the hope that there might finally be a conviction. Indeed, when there is a conviction, one can appeal up the chain in the hope of obtaining the type of tough-nut sentence which will prove satisfactory to the state. One should always remember that in the criminal courts it is the state that has all the resources. The defence rarely, if ever, has resources equal to those of the state. One therefore loads the balance once again towards the state.

I warn the Government that I and, I am sure, many other lawyers in the House will view with grave suspicion any attempt to create an appellate system against judicial sentence. I note that the Minister is shaking his head. That perhaps shows that that is not what the Government will do. If that proves to be the case, I shall be very relieved, as will many other lawyers, but the way that the matter is framed in the Gracious Speech gives rise to that suspicion.

My last point is about the insolvency Bill. Many practitioners welcome the insolvency Bill because current insolvency laws have been—if I may put it gently—abused. In our insolvency laws no account has been taken of the social audit, the rights of people who work in companies which have been subject to receivership or liquidation orders or the needs of the area where the liquidation occurs. We have had a classic example of that recently with the Acrow liquidation. Many of us are worried about foreign companies rather than management being allowed to buy. The managers and people who know the industry are the best people to refurbish and recreate the industry where there has been financial collapse.

I hope that that Bill will come soon to the Floor of the House, because it is known that there has been a great deal of malpractice in the liquidation world. There have been receiverships where assets have been sold at knockdown prices and where banks have moved in and ensured that they had their money back and the receiver's costs while other creditors were left, like Nero, fiddling while Rome burnt. They do not have a chance. There have been cases where the receivership always seems to turn up in the same hands—it is almost as if there were a "ring" involved—and people who were directors of a company one day became directors of another company the next day because the first had gone bankrupt. Suddenly the same job is being done by another company, and, funnily enough, the second company buys from the receiver of the first company the machinery of the old factory at scrap value, and the machinery then carries on producing in the new factory. The creditors are once again the sufferers of what clearly was a knockdown sale.

Rumour has it that the insolvency legislation is weak in its drafting. None of us has seen the terms, but the professions are riddled with the leaks. The Government do not have a good record for keeping their secrets. Therefore, one fears that the rumours that one has been hearing are true.

I serve notice on the Government that many of us who are professionals will take apart a weak insolvency Bill, if only for one reason. Unless the recommendations of the Cork committee, some of which were weak and did not go to the heart of the matter, are implemented, the Bill will not be worth the paper that it is written on. Therefore, it will be the duty of every Member of the House who understands the subject to rewrite it. We must stop the practices that have been occurring in insolvency law. We must seek to protect creditors and jobs when companies crash for reasons which are often external to that section of the business.

We must ensure that there is an element of social responsibility in liquidations. Everyone has fought shy of that in this country in the past, but it is not fought shy of in parts of the continent or the Americas. There is no reason why a liquidation should mean the break-up and destruction of the life of everyone involved. The object should be to rescue rather than to dispense.

As I said, there are one or two small parts of the Gracious Speech which are worth looking at. I regret, however, that the Gracious Speech is like the curate's egg — as he so rightly put it, "bad in parts", which of course meant that it was all bad.

Regrettably, the Government seem once again to have their priorities wrong. We should look to the priorities of people rather than those of the City and the institutions.

5.27 pm

Mr. Patrick McNair-Wilson (New Forest)

I welcome the Gracious Speech for its realism. Today is also polling day in the United States, and the Gracious Speech and its references to our economy must be seen against the background of the world in which we may be living during the next Session of Parliament when, I hope, the American Administration will start to adopt the policy outlined on page 3 of the Gracious Speech, where it says that the Government will continue to pursue policies founded on sound money". That policy has not been conspicuous in the American Administration over the past few years.

I am worried that after the presidential election, when the Administration begin to tackle their budget deficit—which they should instead of living in the cloud cuckoo world in which sadly so much of their economy is now founded — we may find that the repercussions will spread across the Atlantic to us and to Europe. Therefore, it is essential that we have a Gracious Speech which is not a catalogue of give-away benefits, but which faces the fact that we may have a difficult economic climate in which to operate towards the end of next year.

Mr. Nicholas Winterton (Macclesfield)

Does my hon. Friend accept that his criticism of the Reagan Administration is somewhat unjust, bearing in mind that the growth in that country is approximately three times that of the United Kingdom and that its record of creating jobs has been outstanding? Is it not true in business that one needs to borrow to expand and that as long as one can see oneself paying for the borrowing, borrowing is not harmful?

Mr. NcNair-Wilson

No, it is not—provided that one can see oneself paying for the borrowing. As we know to our cost, however, having witnessed the financial management of Britain by the Labour party, it has taken the present Administration all their time to pay back those debts. That being so, I am not convinced that my hon. Friend's attractive policy of borrowing one's way out of trouble is likely to solve the problems underlying our economy.

I was also glad to find in the Gracious Speech the commitment to work for a more flexible and competitive economy. However much one may be committed to the success of a substantial manufacturing base in Britain, one must recognise that we now produce less liquid steel than Mexico and that many of the great industries on which our history was founded are now in decline or very much smaller than they were when I first came to the House 20 years ago.

We must recognise that change is inevitable, go along with that change and make the best that we possibly can of it. Therefore, I believe that my right hon. Friend the Prime Minister was absolutely correct to point out that the problems facing the British economy today are not due to lack of demand. The demand is there, but we are unable to satisfy it with the right products at the right prices for customers in this country. In those circumstances, it is important not to shy away, looking for easy ways of borrowing one's way out of problems and manufacturing jobs that are not really necessary if we are to make ourselves competitive.

It is also important, however, that we should carry the people of this country with us. I am not convinced that the policies which have produced the record low rate of inflation and the present realism in industry have permeated right through to the grass roots. There are two ways of looking at every problem. The optimist looks at his glass and says that it is half full, while the pessimist says that it is half empty. We must define more accurately the prize to be attracted by the price to be paid. I hope that the Government will take account of that aspect. If people are asked to make sacrifices it is essential that they know the end to which those sacrifices are required. The alternative is to create the grievances which unite the moderate and the militant, a good example of that being the current mining dispute.

If we are to make ourselves more flexible and competitive, we must recognise that we have within our grasp resources which we can use efficiently and over which we have total control. I wish to deal with just one of those resources—energy. This country is uniquely fortunate in having the four-fuel economy in abundance. If some of our competitors who seem to do so well in British markets had those advantages they would probably be cleaning up the market throughout the world. The Government must pay far greater attention to that aspect than in the past.

I wish to concentrate on one form of energy — electricity. I declare an interest, in that for many years I have had a business association with a company in Sheffield which uses a great deal of electricity. That company uses between £4 million and £5 million worth of electricity annually and is thus extremely interested in the price level. An almost identical plant producing an identical product with similar machines on the other side of the Channel has an electricity cost advantage of nearly 30 per cent. Clearly, there must be a great temptation to invest further money in areas where such advantages exist.

I appreciate that one of the problems in giving substantial help to substantial users is that the original statute insists that the CEGB and the Electricity Council have an even-handed policy towards all consumers, which means that any concessions must be on a basis other than that of continuous supply. For a process operation, however, an interruptible basis is both dangerous and damaging. I hope, therefore, that Ministers concerned with these matters will try to ensure that really large users such as the steel industry are given a completely different deal from that of other electricity users. If the steel industry, for example, can show that it is able to compete more effectively with continental and other producers there will be a ripple effect. There will be a domino effect throughout industry, leading to all kinds of additional benefits.

In considering electricity, we must also consider how it is generated. Everyone thought that 80 per cent. of electricity was generated at coal-fired power stations, but that has changed somewhat as a result of the current dispute. It has, however, become crystal clear that burning coal is cheaper than burning oil. I am absolutely convinced, therefore, that despite its present difficulties the coal-mining industry can enjoy a very bright future. The Government have poured massive investment into that industry. Sadly, however, despite that investment and despite the deal offered to the National Union of Mineworkers, we have been unable to persuade fie bulk of those in the industry that we are on their side. I blame that on the failure of the National Coal Board to get the message across and on certain members of the NUM who have deliberately tried to lead their members up the garden path and, by a mixture of grievance and great violence, have managed to persuade them to threaten not just their own jobs but the jobs of many other people in industry.

Closures are nothing new to the coal industry. They go on all the time. I have always found it hard to understand the logic of persuading miners to go on extracting a product from geologically faulted seams, perhaps crawling about in 3 in of water to produce a product which is totally uncommercial when they have brought it to the surface. The answer must surely be to close, where we can, pits which are in that condition so that we can move to the stand-up mining that is now beginning to develop.

The Labour party perhaps knows more about closures than any other party in Britain. The Labour Government's Coal Industry Act of 1965 set as the criterion for closure any pit that could not cover its running expenses.

Mr. Lofthouse

Does the hon. Gentleman agree that when the Labour Government, through the National Coal Board, were responsible for pit closures there were other jobs available to offer the men being made redundant?

Mr. McNair-Wilson

The hon. Gentleman and I have debated these matters for more than 20 years, and I entirely accept his point I was about to come to that aspect. The NCB's enterprise company, which has been set up rather in the same way as the British Steel Corporation's industry operation to find jobs for those displaced by closures, needs to be boosted substantially so that we can do in the pit closure areas what we have done in the steel plant closure areas.

I can say with a degree of certainty that Sir Charles Villiers, who now heads the British Steel Corporation industry group, has had great successes in towns such as Consett which revolved around the steel industry. I entirely support what has been said. I hope that the Government will recognise that if we are to modernise the coal industry we must provide, and be seen to provide, alternative employment for those who will be displaced.

Some years ago I worked in the Swansea valley. When mining stopped in the villages of Ystradgynlais and Ystalyfera, high-tech companies, such as Smiths' and smaller electronic businesses were introduced. As a result, it was possible to mitigate the problems caused by pit closures. If we are to carry the miners with us, by which I mean the country, because they are an integral part of our energy equation and our economy, we must make it clear that we are offering them both the Coal Board's package —a secure job for those who want it—and alternative investement in the areas where there are pit closures so that alternative jobs will exist.

We must recognise that there can be no winners at the end of the coal dispute. However long it goes on, and whatever happens, the two protagonists must recognise that the country, the industry and its consumers will all lose. The two totem poles which exist in the form of the March announcement and "Plan for Coal" are obstacles to finding a solution.

"Plan for Coal" was drawn up by Eric Varley immediately after the Arab oil price increase in 1973–74. It reflected the problems of the miners' strike and the serious earthquake in world economies caused by that oil upheaval. It refers to production targets of 200 million tonnes, but that is not the way forward for the industry. It has a bright future, but the "Plan for Coal", like Lord Robens, pins its faith on production figures. The coal industry as a future provided it supplies fuel at the right price. If it does that, industry will convert to it, power stations will continue to use it and the whole country will benefit from it.

The Gracious Speech is realistic and does not offer easy answers. If we read it with care and note that in such comments as a more flexible and competitive economy we are laying a blueprint for the future, we see that, whatever happens in the American election and economy, we can have a strong and prosperous economy.

5.43 pm

Mr. Roy Hughes (Newport, East)

The Gracious Speech is a disappointment because it does not attempt to tackle the central issue of unemployment. The Prime Minister quoted my Government remains deeply concerned about unemployment and will continue policies designed to achieve better opportunities from the Gracious Speech. For the unemployed those fine words do not butter many parsnips.

Only two weeks ago the Chancellor admitted that he could do little about unemployment. We live in an era with vast governmental bureaucratic paraphernalia, which is allied to modern computer technology. Although the Government have those resources at their command, we cannot even give the Chancellor marks for trying. He seems to have given up the fight.

By contrast, I recall the 1979 election, when the Government first came to power, and the famous Saatchi and Saatchi advertisement, "Labour isn't working". The Tory party manifesto promised that a Conservative Government's first job would be to rebuild the economy and to reunite a divided and disillusioned people. But five and half years later, there are more than 2 million more people on the dole. The strife and social divisions in society are almost at breaking point.

Some leading church figures publicly recognised that fact. In return they received a torrent of vulgar abuse from some Tory Members. That shows how low the Tory party has sunk. It seems that crude Poujadiste elements have taken over. Their approach is different from the "one nation" approach of Butler, Macmillan and the right hon. Member for Old Bexley and Sidcup (Mr. Health).

Investment is flowing swiftly out of the country —£47 billion since May 1979. That money should have been used to modernise and re-equip British industry. Many influential forecasters, including the Cambridge group, predict that unemployment will reach 4 million by 1990. That figure does not include the hidden unemployment, which the Government's modern version of statistics hides. The Chancellor seems to have given up. He said that he could do little about it. What an admission to make! His excuse is that wages are too high, yet we have the lowest labour costs of all major industrial countries except Spain. He is saying that the rich do not work because they are not rich enough, and the poor because they are not poor enough. Yet he is the man in charge of our economic destiny.

Cuts in wages can only mean cuts in demand in shops and factories, which in turn will put more people out of work. The economic thesis on which the Government's policies are based is absurd. No wonder a former Minister, the right hon. Member for Chesham and Amersham (Sir I. Gilmour) pointed out that the only achievement of Tory policies is to have produced real unemployment, not real jobs. What an indictment, especially from that source!

A week ago construction workers lobbied Parliament. The first thing that they pointed out was that 450,000 construction workers were unemployed at a time when there is a pressing need for better roads, schools, hospitals and housing. A few months ago the south Wales chief officers' group pointed out that, by the year 2,000, much of Welsh housing would be fit only for slum clearance. According to recent estimates, between 1979 and 1985 the proportion of housing expenditure as part of total public expenditure will have fallen by two thirds. The amount of money for new housing projects in Wales has been halved in a similar period.

Local authorities are no longer able to sustain even the modest housing programme of a few years ago. Waiting lists are escalating. As well as problems for young people and newly marrieds, the fact that we have an aging population means that much more specialist accommodation is now needed. All this is happening at a time when we are keeping construction workers on the dole.

The number of older houses in Wales is far higher than in other regions of the United Kingdom. The demand for home improvement grants has reached an unprecedented level, yet when I recently wrote to my local housing manager about a case, he told me: Our policy this year reflects the fact that the council has received over 7,000 grant applications since early 1982 and only has sufficient resources from the Welsh Office to approve about 1,000 of them each year". What is happening in Newport is also happening in many other parts of the country.

In south Wales terms, a housing drive makes sense. I believe that that is also the case throughout the country. We should be increasing the housing stock and modernising older properties.

Very few balance of payments problems are involved, as housing materials are largely home produced. However, in the Chancellor's last Budget, VAT on home improvements made matters much worse. In the last few days, there has been speculation in the media that the Chancellor intends to cut housing expenditure severely yet again. Apparently a tremendous battle is now going on in the Cabinet over this issue.

Other construction projects are crying out for attention, such as the electrification of the railway network in Wales on the Paddington to Swansea and Holyhead to Crewe routes. This again means work for the construction industry and would take people off the dole queue.

I have played a small part in drawing public attention to the need for a second crossing over the Severn. The success of the existig bridge, and the urgent repairs now required to it, have proved the need for a second crossing. Projects of this kind are good for infrastructure and make us better able to compete in world markets. Equally—this is central to my argument—they would put people back to work.

In his speech to the annual CBI conference on Monday the director general, Sir Terence Beckett, referred to the importance of manufacturing industry and pointed out that, had North sea oil resources been invested in our industry, Britain could have tanned the world. I wholeheartedly agree.

Instead, those revenues have largely been used to pay dole and other social security benefits. This squandering of such a precious resource is a scandal. The policies of the Prime minister and the Chancellor offer no light at the end of the tunnel, yet the British people are waiting for a lead. We have seen what they are capable of with the scandal of starvation in Ethiopa. I was inundated with letters and telephone calls about the issue, concern was uppermost and action was swift. I am sure that hon. Members throughout the country have had similar experiences.

In my own area, Gwent county council immediately wrote to the Prime Minister and donated £10,000. The mayor of Newport launched a public appeal to raise a further £10,000 for medical supplies. That sort of feeling exists throughout the country, if only it can be harnessed.

One day the British people will come to realise that, with appropriate policies, unemployment can be solved, but not by this Government's Friedmanite economics. Consequently, when the people realise the facts of the situation, I believe that this Government will be dispatched to the dustbin of history.

5.55 pm

Mr. David Knox (Staffordshire, Moorlands)

I hope that the hon. Member for Newport, East (Mr. Hughes) will not mind if I do not immediately comment on some of his points. I shall refer to unemployment in a moment, but first I thank you, Mr. Deputy Speaker, for calling me at this early stage in this new Session of Parliament.

The Gracious Speech outlines another heavy programme of legislative measures. It is now 14½ years since I was first elected to the House, and over this period I have seen a great deal of Government legislation come before it. Ministers have spelt out the advantages of their Bills and have explained how each and every one heralded a new dawn, yet looking at all the legislation which has passed through the House since 1970 I wonder whether the country would have been much worse off had most of it never seen the light of day.

Having said that, I warmly welcome the proposed changes in electoral law, insolvency law and occupational pension rights. I am very pleased about the introduction of the independent prosecuting service, although this may cause difficulties in its introduction. Against that, I do not extend a welcome to the proposals to abolish the GLC and the metropolitan counties. No doubt the House will concern itself with these matters over the next few months.

However important or unimportant the Government's legislative programme may be, I believe that the issue which will dominate the coming Session of Parliament — and perhaps the remainder of this Parliament — is unemployment. It is now well over 3 million and there is no sign of it falling. Indeed, it has recently risen and will probably continue to edge up. Whatever the arguments may be about how to deal with unemployment, it is now at a level that is socially intolerable and unacceptable.

As there is always a time lag between taking measures to deal with unemployment and these measures becoming effective, I believe that action is required now. In this context I welcome the restoration to respectability of the 1944 White Paper on employment, which contained the acceptance by the wartime Coalition Government that one of their primary aims and responsibilities should be the maintenance of a high and stable level of employment. This was subsequently accepted by all post-war Governments between 1945 and 1974 — Labour and Conservative alike—although I regret to say that it has not been accepted by the last Labour Government nor the present Conservative Government.

The foreword to the 1944 White Paper stated: A country will not suffer from mass unemployment so long as the total demand for its goods and services is maintained at a high level". It was precisely because the demand for goods and services was maintained at a high level between 1945 and 1974 that we had full employment during those years. It is precisely because the demand for goods and services has not been maintained at a high level since 1974 that we have had such high unemployment since then.

The argument that there is no shortage of demand because of the large quantity of goods imported or because of inadequate exports holds no water. Although the position is a little worse now, over the past five years enormous surpluses have been shown in our balance of payments. Any further increase in these surpluses, brought about either by lower imports or higher exports, would have led to action by other countries to right their balance of payments problems and reduce our surplus. The fact of the matter is that there has been no extra demand for Britain in recent years in foreign markets or from import saving.

Today, the British economy is operating at about 25 per cent. below capacity. More than 3 million men and women are out of work. A large number of people are engaged in schemes to alleviate unemployment which, if we are honest, we know are not really very productive or economically beneficial forms of activity. In addition. millions at work are under-employed, despite all the claims about higher productivity, and enormous capital assets are either not utilised or are under-utilised.

In such circumstances there is room for a substantial increase in output, and this will happen only if the Government return to the demand management policies which their predecessors pursued with such success between 1945 and 1974. There is no chance of returning to full employment unless the Government act to raise the level of demand steadily, though substantially, over the next few years.

If there was a war such as the first and second world wars, the Government would increase demand considerably because we would need the extra output to survive. Surely the case for increasing demand is equally strong today, when we need better infrastructure, better social and public services and higher living standards. Unless the Government act to increase demand, all that will happen will be that we shall jog along with unemployment falling a little for a while, and rising a little for a while, but always being at far too high a level. I do not believe that the British people will stand for this indefinitely.

At the last general election the electorate gave the Government the benefit of the doubt on this issue, as people did not believe that either of the other parties would do any better. However, at the next general election, if unemployment has not fallen and is not continuing to fall, the British people will conclude that the Government have had their chance and that the time has come to give one of the other parties a chance, even though they may not be convinced that the other parties can do any better.

Therefore, I hope that there will be a change in direction in economic policy during the next few months. We need both increased Government expenditure, particularly capital expenditure, and reduced taxation, to encourage increased private consumption. I do not believe that it would be sensible to reflate massively and immediately, but we should be aiming at a growth rate of 5 to 6 per cent. a year, generated by expansionist Government policies. Anything less would be inadequate.

There is a danger that if increased expenditure is pumped into the economy, all of it, or even a significant proportion of it, will go merely into wage and salary increases and provoke a further cost-inflationary spiral. While this is a possibility, the introduction of an incomes policy aimed at keeping wages and salary increases under control would make such a possibility much less likely. Of course, like all policies, incomes policies have weaknesses. They introduce a rigidity into the labour market that places a great strain on it. They can make the maintenance of differentials difficult. There is inherent in any incomes policy the possibility of confrontation between the Government and powerful trade unions, with all that that can mean, though, as the miners' strike has shown, that can happen without an incomes policy. There is also the danger of massive wage or salary increases when the policy comes to an end. However, that has always seemed to me to be an argument for maintaining the policy more or less indefinitely.

I concede that there are these and other weaknesses in any incomes policy, but I ask those who are strongly opposed to an incomes policy to accept, as readily as I accept the disadvantages of an incomes policy, the disadvantages of rejecting such a policy, the most substantial of which on the present evidence is that, to avoid rocketing income-cost inflation, the economy has to be substantially deflated below capacity, with consequent mass unemployment. If, as I believe, the evidence shows that the price of a return to a high level of employment is the introduction of an incomes policy, this seems a small price to pay. If, on the other hand, the price of not having an incomes policy is over 3 million out of work, that seems to me to be an unacceptably high price.

The present is a particularly appropriate and convenient time to introduce an incomes policy. In the past, incomes policies have usually been introduced at times of high economic activity and high income settlements, which have made their success more difficult. Now we have low economic activity and relatively low income settlements, so market pressures are not likely to work against any incomes policy that might be introduced.

On another matter, over the past few years there has beeen widespread discussion in this country and in western Europe about food surpluses in the European Community and about how to reduce these food surpluses by cutting output. I have never understood this argument. In a world where millions go to bed hungry every night, and where hundreds of thousands die as a result of famines, it has always seemed absurd to me to discuss cutting food output. This point has been reinforced in recent weeks by the situation in Ethiopia and I hope that public discussion about food surpluses in the Community will take a different course in the future as a result of that.

Far from cutting food production in the Community, we should be directing this surplus food-producing capacity in the Community to meet the needs of the millions starving throughout the world.

Mr. Nicholas Winterton

I am following my hon. Friend's argument closely and find myself in some agreement with him, but if he is proposing that we should increase food production, why did he vote in favour of milk quotas and not join the brave few who voted against them?

Mr. Knox

I did so because the National Farmers Union, which represents the farmers, asked us to do so, as my hon. Friend should remember. I was not—

Mr. Winterton

The farmers did not.

Mr. Knox

My hon. Friend is perfectly entitled to speak for the farmers of Macclesfield, but I shall speak for the farmers of Staffordshire moorlands. I had a large number of letters thanking me for voting for milk quotas.

When my hon. Friend intervened I was talking about directing the surplus food producing capacity of Europe to meet the needs of the millions starving throughout the world. I shall be told that, in the long term, this provides no solution to the problem and that what is needed is the export of agricultural know-how and capital, so that the peoples of the Third world can eventually produce their own requirements. However, as Keynes said: In the long run … we are all dead.

At least in the short and middle term the mobilisation of Europe's surplus food-producing capacity could save millions of lives. I believe that such a policy would be morally, economically and politically right. It could take its place as one of the great acts of history, such as the Marshall plan. Is not this an area where Britain should be giving a lead within the European Community?

6.10 pm

Mr. Stan Thorne (Preston)

I welcome some of the remarks of the hon. Member for Staffordshire, Moorlands (Mr. Knox). They show that there are at least some Government supporters who address their minds to the economic causes of unemployment and who are prepared to suggest ways in which we might remedy the situation.

I looked at the Gracious Speech for real proposals to reduce unemployment. There is none. There is nothing to assist the 18,428 unemployed in the Preston travel-to-work area, and to that figure there now have to be added the 477 who work at the royal ordnance factory at Chorley. Chorley, Leyland, Bamber Bridge and Preston make up the Preston travel-to-work area.

What does the Queen's Speech say about unemployment? It is far more realistic than the Chancellor of the Exchequer or the Prime Minister. It says: While noting that the numbers of people in work are steadily rising, my Government remains deeply concerned about unemployment and will continue policies designed to achieve better opportunities for employment and to help the unemployed obtain the training or work experience needed to fill them. What hollow words those prove to be when one looks at what is done by the Government. There is nothing to assist the 16.1 per cent. in the north-west region who are unemployed.

As for prices, there is nothing in the Queen's Speech that will help those living on low fixed incomes. Prices are a class question. Anyone who happens to be wealthy feels that prices are of little or no consequence. That may explain why there is no reference to prices in the Queen's Speech—or is it because there are major increases to come during next year?

Social security benefits interest only those who have to claim them. This Government represent a different class of people, so there is no uplift for those drawing supplementary benefit or mobility allowance. Regrettably, the Queen's Speech fails to reverse the £1 per week reduction in heating allowance for those on supplementary benefit in certain circumstances. It fails to propose immediate relief to families with children, who form the largest group amongst the poor. Hon. Members will be aware that 3.5 million children are being brought up on the margins of poverty. The Queen's Speech signals no action against that crime. Cuts in benefits are likely, although they are not mirrored in the speech.

A recent DHSS survey showed that more than half the children in unemployed families wore second-hand shoes. I know that the position is infinitely worse in Ethiopia, but clearly the wealthy nations, including our own, have no continuous plans to close the huge gulf between the rich and the poor nations. There is nothing in the Queen's Speech about that.

The Government's priorities for expenditure appear to be the rescue of Johnson Matthey Bankers, paying fat commissions to the City for privatisation fees and protecting investors in the City—or perhaps the buses White Paper, which proposes a free-for-all, is designed to help the needy in Britain.

What is needed, and what is omitted from the Queen's Speech, is an improved transport system and not the weakened system that will undoubtedly result from the Government's proposed Bill. I am sure that I am no exception in being able to produce printed responses to the buses White Paper. One lady says: If my buses were taken off I would have an hour each way's walk to work. What price democracy? I also pay rates. Why should people who would appear to have chauffeur driven cars deprive a substantial portion of the country of transport? Another says: It will create further unemployment amongst bus company employees, garage mechanics etc., and no concessionary tickets for pensioners.

There is no reference in the Queen's Speech to a major extension and electrification of our rail system, but it is long overdue. We also need public investment in real terms to enable local authorities in some areas to replace public service vehicles, which are looking a bit dilapidated these days. This would have a multiplier effect in the economy, so reducing unemployment.

There is nothing in the Gracious Speech that might give some hope to our youth. There are no money allowances to encourage continuing education after the age of 16. There are no realistic awards to young people pursuing further and higher education so that it does not inflict hardship. There is no promise of worthwhile employment that could give satisfaction to young people after initial training. There is no realisation of the need to provide for the situation that we shall face in the early 1990s when, if we are to avoid having 5 million or even 6 million unemployed, we shall be turning to a three or four-day week. Plans should be drawn up already, because that will mean three or four days' leisure. What preparations are the Government making? It is their direct responsibility, but there is nothing in the Queen's Speech about it.

There is nothing to suggest a halt to the Government's intransigence about the miners. The dispute has cost between £1,800 million and £2,000 million. It makes no economic sense, and in my view it is not intended to. The Government's attitude to the strike is more about economic exploitation than about economic loss. The Government wish to attack the worker's right to defend his economic interests and finally to render him impotent.

There is nothing in the Gracious Speech to suggest that sanity is now prevailing at the Department of the Environment. Instead, rate-capping is to continue, as is the drive to take over central control of local government expenditure whether it be from rate income or block grant. The drift towards greater centralisation has all the signs of totalitarianism. That, too, is not in any way alluded to in the Queen's Speech.

So what have we got? Is there to be more council house building? On the contrary. I suggest, as some newspapers are already doing, that we could face cuts in local authorities' housing programmes. What a tremendous travesty of justice that would be to many youngsters in the Preston area who still, in this day and age, live 'with children in multi-storey blocks of flats.

There is nothing in the Queen's Speech to suggest that the tax system will favour the lower income groups, although a word or two suggests further reforms. The wealthy remain the only section under a Conservative Government who benefit from the income tax policies that have been pursued. What does the phrase reform of the tax system in the Queen's Speech mean? In whose favour will it be made? We do not know. We can only go on the basis of experience—it is the poor who pay more.

The abolition of the GLC and the metropolitan county' councils has been dealt with by previous speakers. The decision to go ahead with those measures is purely and simply anti-democratic. Earlier speakers, the Prime Minister for one, referred to "our democracy". It is as well to remind ourselves sometimes of the words of Jean-Jacques Rousseau: Britain has a democracy every five years. Thereafter the attempts of the people to impress their will upon Governments are virtually non-existent.

Yes, build up privatisation: we shall have Second Reading debates and I hope to participate in them and to finish up on some of the Committees. Such measures are designed not to meet people's needs but to line the pockets of investors. Britain continues to have a concentration of capital in fewer and fewer hands. It is the Opposition's job to do what we can to prevent that.

6.22 pm

Mr. Tom Arnold (Hazel Grove)

Thank you, Mr. Speaker, for calling me so early in this Session. I want to address myself to some of the remarks made by the hon. Member for Preston (Mr. Thorne), with particular reference to the item in the Queen's Speech on local government. I apologise in advance if one or two of the things that I am going to say will have the smack of a late-night Adjournment debate, but I must perforce make some reference to circumstances in my constituency. It is those circumstances which lead me to believe that the Government are right to come forward with the commitment, which I welcome, that A Bill will be introduced to abolish the Greater London Council and the metropolitan county councils. I am delighted that my right hon. Friend the Prime Minister and the Cabinet have decided to proceed with that legislation in this Session because it is necessary and urgent.

During the past 10 years, the Greater Manchester council's record has been an unhappy one—indeed, an abysmal one. The Greater Manchester council has frequently acted in an unthinking, uncaring and bureaucratic manner. Therefore, it is no wonder that my hon. Friends from Greater Manchester are unanimous in thinking that it is high time that an unnecessary and expensive tier of local government was removed. In the words of my right hon. Friend the Prime Minister in her speech earlier: We want local government to be closer to the people.

It was somewhat ironic that, when my right hon. Friend made those remarks, Liberal Members roared with laughter. That was in sorry contrast to what Liberal politicians say locally about community politics and the need for democracy and accountability. But until recently the Stockport council was Conservative-controlled. When it was Conservative-controlled it passed a resolution saying that it was high time that the Greater Manchester council was abolished. Unfortunately, following the local government elections last spring, no one party in Stockport has overall control and the council has now passed a resolution that it opposes the Government.

Furthermore, the council has invited my hon. Friends the Members for Stockport (Mr. Flavell) and for Cheadle (Mr. Normanton) and myself to attend a meeting to debate the abolition issue with local councillors. I am sorry to have to tell the council that for me, and indeed for my hon. Friends—no doubt they will make their point of view known on another occasion—it is frankly too late. We are committed to the policy because our record as constituency Members of Parliament during several Parliaments now has served to show us that the Greater Manchester council simply has no place in our local affairs.

I want to cite briefly a matter that is causing vexation and difficulty in my constituency at the moment. A few weeks ago, the Greater Manchester council decided, without any consultation so far as I am able to ascertain, certainly not with the local district councillors and certainly not with the Stockport council, to put down some double yellow lines on the main Stockport road through the town of Romiley. It so happens that doing that will affect the livelihood of a large number of traders. Naturally, they are up in arms about a proposal about which they have not been consulted. I cite that example because it is all too typical of the way in which the Greater Manchester council has behaved over many years. Time and again we have found that overlapping jurisdiction, interference and bureaucracy have served to divorce the Greater Manchester council from the people whom it is meant to serve.

There have been occasions when the Greater Manchester council and the Stockport council found themselves at loggerheads over planning issues, to the point where it was extremely difficult to resolve such disputes without bringing in the Minister and his officials in London.

Therefore, I and my hon. Friends who take the view that the Government are right to go ahead with the legislation, do so not for any theoretical or ideological reasons, but simply because our experience as constituency Members of Parliament seeking to work in the area for the best interests of our constituents has led us to the view that the Greater Manchester council simply is not up to its task. It is for that reason that I want to make it clear today, on the first day of the debate on the Queen's Speech, how much I welcome the Government's commitment to go ahead with the legislation. When the time comes, the people of Stockport will see that it is in their best interests to support the legislation too.

6.27 pm

Mr. David Winnick (Walsall, North)

The real reason why the Greater London council and the metropolitan county councils are being abolished is simply political spite. It is not because they are incompetent or anything else. I doubt whether the hon. Member for Hazel Grove (Mr. Arnold) would dispute that if the GLC had been under Conservative control, if there had been no Labour majority and no Mr. Ken Livingstone, we would not see the proposed Bill in the Queen's Speech.

We saw today the Prime Minister at her hectoring worst. I only wish that some of the remarks of the hon. Member for Staffordshire, Moorlands (Mr. Knox) could have come from the mouth of the Prime Minister. Here is a Government who have been in office for over five years, under whom the country has seen mass unemployment, devastation and the misery which accompanies large-scale unemployment. But what did we hear from the right hon. Lady today—a denial of any responsibility. She blamed everyone but herself, saying that public expenditure was somehow all wrong. The only possible solution that she had was a simple one. It was the same one that we have heard from the Chancellor or read about when he has made speeches abroad—wage cuts. That is the new Tory line. If we do not have wage cuts, so the argument runs, we cannot reduce unemployment. Conservative Members know well that that is nonsense.

The Queen's Speech says that the Government remains deeply concerned about unemployment". That will not be much consolation to all the young people who cannot get a job and who, in some parts of the country, remain on the dole queue for years on end. What consolation will it be, either, for men in their 40s and 50s who, on the basis of present policies, may well conclude that they will never work again?

The Government pursue policies that increase unemployment. Does any Conservative Member believe that unemployment will be substantially lower by the time we debate next year's Queen's Speech? Is not it more likely that unemployment will be worse? Few Conservative Members can have any optimism that, by the end of this Parliament, whether it runs for four or five years, unemployment will be any better.

The west midlands has been much affected. It is well to remember than when the Government came to power, unemployment in that region was 5.1 per cent. Now it is 15.5 per cent. and far too many people remain unemployed for a long time. Figures from the Library show that in my constituency nearly half the unemployed have been out of work for more than a year.

The hon. Member for Moorlands was right to say that the real reason for unemployment is the lack of effective demand in the economy. That is why we face such a crisis.

We are frequently told by Ministers and Conservative Members that Labour Members have no monopoly of compassion about the misery of unemployment. We make no such claim, but we do say that it is not enough merely to include a few words in the Queen's Speech about concern over unemployment. The Government's concern is no use unless they take action to reduce unemployment. Concern alone is useless to the victims of the Government's policies.

It should not be forgotten that many of those who have been made unemployed have also been hurt once they are on the dole. At the beginning of 1982, the Government abolished the earnings-related benefit which had helped many unemployed people in their first six months out of work. A savings ceiling—originally £2,000 and now £3 ,000—was introduced for supplementary benefit. That is no incentive to people to save while they are at work, and the ceiling also includes redundancy payments. People in their mid-40s and early 50s who have saved £3,000 or £4,000—not much to Conservative Members, I should have thought—will not get a penny in supplementary benefit when their unemployment benefit is exhausted after one year.

The Queen's Speech refers to a reform of the tax system. We were told at the 1979 and 1983 elections that the Conservative Government would reduce taxation, but most people pay proportionally more in income tax and national insurance than they did when Labour was in office.

However, those with substantial wealth have benefited from the Government's policies. The most wealthy pay less tax, capital transfer tax has largely been undermined and not only do the wealthiest own substantial private wealth, but they ensure that when they die, that wealth remains in the family and does not go to the Treasury.

Mr. Bill Walker (Tayside, North)

Very good.

Mr. Winnick

Conservative Members are more interested in looking after the wealthy than they are in the overwhelming majority of people who are paying more in tax and national insurance. We know about the priorities of Conservative Members.

Inland Revenue figures show that 5 per cent. of the adult population continues to own 41 per cent. of private wealth, while about 50 per cent. of the population owns about 4 per cent. of the wealth.

Mr. Bill Walker

In my home, there are myself, my wife and my three daughters. I own virtually all the wealth. Consequently, almost all the wealth is owned by one fifth of the family. How does that affect the hon. Gentleman's statistics?

Mr. Winnick

If the hon. Gentleman wishes to declare his interest in wealth holding, I am the last person to object.

The figures that I quoted are from the Inland Revenue. The wealth concentrated in very few hands has hardly changed. Moreover, the people about whom I am talking are the very ones who have benefited from the measures taken by the Government.

I am very worried about reports that what is called the "star chamber" of Ministers is determined to slash a further £600 million from public expenditure on housing in 1985–86. Conservative Members would normally be interested in the views of the Building Employers Confederation. The president of the confederation wrote to the Prime Minister last week to say that a further reduction of £600 million on housing next year is equivalent to 18 per cent. of the total housing programme and could lead to around 75,000 job losses in construction and related industries. What is the use of expressing concern in the Queen's Speech if the Government intend to take action that will result in 75,000 job losses?

Shortly before the summer recess, I asked the Prime Minister about the fall in public expenditure on housing. The right hon. Lady told me: Public expenditure on housing in Great Britain fell by 52 per cent. between 1979–80 and 1983–84 in cost terms".—[Official Report, 30 July 1984; Vol. 65, c. 11.] In cash terms, the reduction was from £5,460 million to £3,203 million. What do such reductions mean in human terms? We know from our surgeries and postbags that an ever-increasing number of people simply cannot get housed. If they cannot afford a mortgage, they have to join the council housing queue and many, including young couples, will have to wait years before being offered any accommodation at all.

There has been a substantial reduction in the rented sector over the past four years. I do not wish this evening to argue about the sale of council houses, but surely it must be right that houses that are sold are subsequently replaced. The Government have not done that.

If the housing programme is to be slashed next year, not only will far fewer council dwellings be built—we are already at an all-time low—but people, such as some in my constituency, who live in pre-war dwellings and have been waiting for them to be modernised will have to wait even longer.

During the recess I attended a meeting in my constituency of tenants who live on the Rosehill estate in Willenhall. They were promised that modernisation would be undertaken in the near future, but no action has been taken because the council does not have the money, as a result of Government policy. If such further reductions as I have mentioned are to take place, the tenants on that estate will probably have to wait even longer before their properties are modernised.

The truth is that a formidable housing crisis in the country is building up. There will be the sort of housing shortage that the first report of the Select Committee on the Environment predicted when we on the Committee published our findings in 1980. Therefore, hon. Members should be extremely concerned about the situation and about the pressure that is being exerted on the Secretary of State and his colleagues to carry out that reduction of £600 million in the housing programme for 1985–86.

The Queen's Speech refers to the need for better relations with the Government of Ireland. Like all my colleagues, of course, I detest the sort of terrorism that occurred in Birghton. No one would expect any Labour Member to do otherwise. Of course such terrorism is always to be deplored. Indeed, I also bear in mind other tragedies such as the Brimingham pub bombing and other acts of terrorism both on the mainland and in Northern Ireland. However, I am convinced that there is a need for a dialogue between the British and Irish Governments in order to explore the findings of the New Ireland Forum report.

That report examines the position of Anglo-Irish relations over some 60 years, and the position in Northern Ireland in depth. Hon. Members should bear in mind that the participants in the New Ireland Forum represented more than 90 per cent. of nationalists in both parts of Ireland and who totally reject violence. If I was asked what would most undermine the Provisional IRA, I would say that it would be a measure undertaken by this country and the Government of Ireland that would lead to a solution for Northern Ireland that accepted the Irish presence and recognised that many of the mistakes made 60 years ago should be rectified.

I am not advocating troops out now, or that a united Ireland can come about tomorrow or the day after that. That is probably not possible, and it is certainly not going to come about through violence. In addition, there is no possibility of consent from the majority community in Northern Ireland. However, there are other solutions and possibilities which are outlined in the report. For example, there is a possibility of a confederal-federal arrangement between Northern Ireland and the Republic. The British Government should seriously consider such options.

The Queen's Speech must be a disappointment to this country. It offers no solution. As my hon. Friend the Member for Preston (Mr. Thorne) has said, the sooner this Government can be removed, the more opportunities there will be for the British people to start afresh with different policies.

6.43 pm

Mr. John Stokes (Halesowen and Stourbridge)

I often seem to speak after the hon. Member for Walsall, North (Mr. Winnick). However, as I disagreed with almost everything that he said, I shall not waste the time of the House in refuting his arguments. Instead, I shall address my remarks to the Gracious Speech, which I wholeheartedly welcome.

I welcome the theme of the Speech, which aims towards greater competition and more privatisation. That should reduce the burden which nationalised industries have laid on the nation and give the ordinary consumer better products and services, and more choice. However, I am sorry that in the Gracious Speech quite a number of Bills are forecast. That always seems to happen. The House will be put under strain because of the amount of legislation. Such legislation overloads the Civil Service and may sometimes reduce personal liberty. Tories, above all, should not try to regulate too much of the nation's life by legislation.

I shall give one example. The Bill about exemption from corporal punishment in schools is unwise and certainly undignified. I hope that the Bill to dismantle the councils will proceed swiftly and will not become bogged down in too much detail. The proposals were extremely popular 18 months ago, as we all knew during the last election, but they now seem to have gone rather sour and the Government must mount a giant public relations exercise to convince the public that what we are doing is both wise and sensible. Mr. Livingstone has had matters far too much his own way in the propaganda battle.

I welcome the attempts that will be made to ensure that City institutions conduct their affairs with absolute honesty. Fraud and dishonesty in any section of the City do immense damage to this country and, indeed, to the capitalist system as a whole.

We meet after the appalling outrages in Brighton and, more recently, in India. We thank God that our own Prime Minister was saved. Terrorism has become worldwide and all-embracing. Surely the Governments of the civilised world could do more to control that menace by concerted action. Law and order is unfortunately still a subject on which the Government disappoint some of their supporters. We are apparently no nearer to reintroducing the death penalty for terrorist murders or murders of policemen, although we know that a large majority of the people desire it. Violent crime continues to be horrific, with new horrors coming upon us almost daily. Some form of corporal punishment is also necessary to deter those evil people from committing detestable acts such as setting someone alight with petrol or cutting off his toes.

The coal strike continues. The question now is whether the Government can continue to hold the respect of ordinary people if violence on the picket line or intimidation of miners and their families, including incidents outside their homes, is allowed to continue. People are asking repeatedly, "Are the Government really governing? What are the Government doing? Why are the new laws not invoked to prohibit so much secondary picketing?" Today, it would seem that the Government are at last winning the contest, but it may take many weeks before the miners drift back to work in sufficiently large numbers to put an end to the strike. Therefore, action is expected now from the Government. They will lose credibility if they do not act.

People ask me, in the law-abiding part of the world in which my constituency lies, whether there is one law for the miners and one for everybody else. We all know that ordinary citizens would not be allowed to get away with what the miners are doing. The NCB has already made too many concessions and there should now be no more discussions with the NUM unless it guarantees to cease all acts of violence and intimidation.

Government supporters are disappointed that personal taxation has remained so high. Taxes can be reduced only if public expenditure is reduced. That usually means reducing the numbers employed in the Civil Service and in all the public authorities, local and national. Some progress has been made, but much more remains to be done, particularly about the gross overstaffing in the National Health Service.

The fall in inflation is welcome. The mainstay of Government policy is sound money in which we can all have confidence.

Unemployment remains stubbornly high. In spite of the extra expense that might be involved, we should introduce some form of national service for youth, both military and civilian, to direct and engage the energies of our young people aright. I have seen the marvellous job that the armed services are doing in that respect, but for some reason it goes largely unsung. Surely we can build upon that experience. Young people want an aim and object in life. Proper leadership in some form of useful activity can provide that. Even clearing the mess of wasteland in our industrial conurbations would be better than doing nothing on the dole.

Industry is still not happy, although the slight improvement continues. Industry in the west midlands is unhappy. I understand many of its problems, but we must remember that the Government cannot do everything for industry. I regret that industry is once again failing to train enough young people for the skilled jobs of the future. It is still weak in marketing and sales and it does not always attract the best men and women in the country. It is not containing wage rises sufficiently where productivity gains are not apparent. If this goes on it will quickly bring our recovery to a halt.

The Jaguar dispute is particularly depressing in view of all that we have heard about the improvement in that company. The same applies to the Austin Rover dispute. I know many of the men personally and I know how sensible they and their wives are. I appeal to them to go back to work and not to ruin the tremendous improvement in British Leyland.

The Government must pay maximum attention to the needs of manufacturing industry, as outlined at yesterday's CBI conference. We cannot be just a nation of retailers, art dealers, restaurateurs and public relations consultants. We must have a strong manufacturing base to make the wealth on which the service industries can expand and do well. There is much greater realism in industry, among all sections of the population and certainly on the shop floor, but as a country we have to be competitive and earn our way in the world.

The Government were brilliantly successful in Hong Kong, and some sucess in achieving a better financial settlement from the EEC. They have remained firm with Russia. Indeed, in NATO we are enormously respected for our commanders and our troops. The peace movements here and abroad seem to be on the wane. If President Reagan is re-elected, as seems likely, we must try to influence him and the United States Government to continue to try to come to some understanding with the Soviets over arms control.

We have heard some dismal speeches today from the Opposition Benches, but if we were to think of Britain in relation to all the other countries in the world we should not be quite so dismal. Despite the deadlock on disarmament and arms negotiations, the exceedingly worrying unemployment figures, the sickening rise in crime and terrorism, I still think that our country at large is in better heart than it has been for a long time. We know that we are on the right road to recovery, although the road may be longer than some of us had hoped.

We are fortunate to have a Prime Minister whose strength, single-mindedness and leadership are admired not only in Britain but throughout the world. I travel a lot, and I believe that Britain is more respected abroad today than it has been for many years, possibly since the war. We are taking the lead in bringing relief to famine-stricken Ethiopia. Who is doing most of the work there? The answer is, the RAF and its aeroplanes.

In spite of all our worries and problems, how lucky we are to live in this country, with the many blessings that we have. Our constitution—so gloriously displayed today—is the envy of many nations. We have our black spots, with the coal dispute and the troubles in Northern Ireland, but in the main we live peaceably and tolerably with one another. Let us count our blessings in this troubled and turbulent world. I hope that Opposition Members will remember that when they fulminate against the Government.

6.57 pm

Mr. Michael Hancock (Portsmouth, South)

I am the newest hon. Member, having faced the electorate most recently. During the election campaign many Front Bench spokesmen who were present to hear the Prime Minister's speech today came to Portsmouth to take pan in the election campaign. Much of what the Prime Minister said today was said repeatedly to the electors of Portsmouth.

The Conservative party based its campaign on six points which have been reiterated, not least by the Prime Minister, on several occasions. Mr. Rock, the Conservative candidate, referred to them in at least three of his many pieces of election material. First, he said that the Tories would do more for unemployment; secondly, that there would be more care for the Health Service and that it would be in safe hands; thirdly, that there would be a better chance for education; fourthly, that the Conservatives would do more to provide better homes and that more people would be able to own their own property; fifthly, that there would be a better deal for the elderly under a Tory Government; and, sixthly, that there would be no job losses at the defence establishments in the Portsmouth area. On all six claims the Conservative Government deceived the people of Portsmouth and reneged on promises made in the 1979 and 1983 elections.

More people in my constituency are unemployed than ever before, and opportunities for the young are non-existent. The programme for the unemployed is ineffective. Of the 59 months up to the publication of the last unemployment figures, 56 months showed an increase in unemployment. During the by-election campaign the Tories said that they would do more for the unemployed. What have they done? They have created a longer list of unemployed.

The Tories said that the Health Service was safe in their hands. Ministers told the people of Portsmouth that there would be no cuts in the Health Service. Today, in Portsmouth, hospitals are under threat of closure and the Health Service is less able to cope in the community and in the hospitals.

The Tories said that there would be a better chance for education. In the last three years half a dozen schools in my constituency have been closed or are threatened with closure. Sixth form education in the city has been reorganised against the wishes of the majority of teachers and a substantial number of parents. Once again, education has not been handled properly.

Many hon. Members have spoken of the housing problems in their constituencies. The housing list in my constituency is higher than it has been for the past five years. Many people are living in properties which, if they were in the private sector, would be condemned as owned by Rachman-type landlords ripping off tenants. Some people in my constituency are living in housing conditions that Conservative Members would condemn out of hand if the houses were in the private sector. The Conservative-controlled council in Portsmouth has the same complacent air as is so apparent in the Chamber from Conservative Members.

The Government promised a better deal for the elderly. I have been a city councillor in Portsmouth for the past 14 years, and during the past five years I have not held a weekly advice centre without elderly people coming to explain their problems. During a debate last week, the Leader of the Opposition spoke with great emotion when he gave a graphic description of the problems faced by his constituents. There has not been a single week when elderly people have not come to my advice centre with the most depressing tales of the real problems they face. The rise in pensions does not meet even their basic essentials for existence. Yet, time and again, approaches on their behalf are turned down out of hand. The elderly are condemned to a fast declining standard of living, and every one of us should be ashamed of that.

The Government also promised to maintain defence jobs. They said that none would be lost. Within three weeks of the election in Portsmouth, South, the MOD was telling the people of Portsmouth that it had not really meant that all jobs would be saved, only those of critical importance, and that a substantial number of jobs would have to go. Privatisation in defence establishments in and around Portsmouth will mean the loss of jobs for several thousand people during the next three or four years. On Monday I shall attend a meeting with the MOD and representatives of the trade unions operating within the dockyard establishments in Portsmouth to argue the case for retaining jobs.

The Queen's Speech should have offered hope to the people of Britain; it should have offered an opportunity to bring together the divided nation that the Government have created. When I entered politics 15 years ago, I believed that politicians cared about people and improving the environment. I have spent those 15 years trying to live up to those ideals. I regret that my impression of the Queen's Speech is that those are not the aims of the Government. They want to widen the differences between the communities in Britain. They will make the lot of those whom we claim to serve a damn sight worse today than it was yesterday.

As I looked along the Treasury Bench, I did not see any spark of enthusiasm or ideal on the faces of Ministers. There was no sign of any real willingness to get to grips with the problems — only that bungalow-brained mentality that prevents the Chancellor of the Exchequer from trying to get to grips with the problems mounting around him. He stays on a single level and gives no hope to those who need his help.

The Speech does not make proper provision for the educational needs not only of children at school but of those in need of retraining. The leader of the Liberal party referred to the passage in the Queen's Speech that stated: A Bill will be introduced to give parents of children educated at public expense the right to exempt them from corporal punishment. My Government will continue to develop policies to raise educational standards.

Conservative Members who have been shouting could not have been present for our debate a couple of Fridays ago when we discussed the future of further education. There is a lack of enthusiasm and real willingness to develop further education. There is nothing in the Speech that encourages me and my constituents to believe that they will have any salvation from what the Government intend for education.

There is nothing in the Speech about the reform of school government or of making better provision for the Open University. Hon. Members who attended the education lobbies in the House a couple of weeks ago heard graphic descriptions of the problems that will face the Open University during the next two years. Can the Government really claim to care about the problems? In one breath they say, "We want you to train more technicians, to retrain the community and to offer greater opportunities for the use of the entrepeneurial skills available in the community." At the same time, they deny the Open University and other further education establishments the resources to carry out that training properly.

That Government——

Mr. Nicholas Winterton

rose——

Mr. Hancock

I shall not give way. Conservative Members have had their say.

The Government must consider reform of the national insurance system and investment in the national infrastructure. There must be real investment to bring the new skills into reality.

The Government want to sell assets such as British Telecom. British Telecom set up a computer centre in my constituency in 1981 at a cost of £10 million, with planned expenditure in January and February next year of a further £5 million. What has happened? British Telecom last week announced to me and to the work force at the computer centre that it will close in 1986. Can that be good sense and good financial planning? Although £15 million has been expended on one computer centre, it is to be closed with the loss of 150 jobs.

If we must sell off assets such as British Telecom—and, it now appears, the National Bus Company—surely the money from that stripping of assets should be ploughed back into the community to provide retraining programmes, proper education and better health care.

The Queen's Speech is priced at 75p. Having read it, I believe it to be a rip-off not only in its cost, but of the people of Britain. If the Prime Minister and her colleagues genuinely believe that they have the medicine to solve our problems, I must tell them that the present dose that they are giving the country is not solving the problem, but is doing its best to kill us all and the very fabric of society that it should protect.

Are the Government determined to sit back and allow unemployment to escalate and the social consequences to overwhelm us? Are they offering us this Speech as their programme for the next 12 months of government? If they are, there is damned little chance of salvation for any of those whom we represent.

7.10 pm

Mr. Ivor Stanbrook (Orpington)

The Gracious Speech rightly refers to the concern which is felt by everyone about mass unemployment. The misery that is caused by massive unemployment is eating into the nation's moral fibre to a greater extent even than the debilitation of the welfare state. There have been many inquiries into and studies of the problem, and much consideration has been given on how to overcome it in the context of a free society of the sort that we enjoy, but we seem to be getting no nearer to solving the problem. Lord Beveridge did not anticipate long-term mass unemployment, and the proposals in his report do not cater for the problem.

It is proposed by some, including some of my hon. Friends, that we should make unemployment more endurable by introducing a higher rate of long-term benefit. I believe that that approach is misconceived and that we should concentrate on finding work, or at least activity, for those who become unemployed for structural industrial reasons.

The remedy advocated by my hon. Friend the Member for Norfolk, North (Mr. Howell) is to cut off unemployment benefit after six months and thereafter provide a guaranteed unskilled job at a fixed rate of pay. That appears to be a drastic remedy, but I believe that it lies in the right direction. I am sure that every hon. Member accepts that the average Briton does not want to be paid for doing nothing. We should provide a useful activity, and not a subsidy, so that an unemployed person can survive until he eventually obtains a normal job.

Work is essential for the self-respect of the average Briton and the Government should address themselves to the obligation of providing it. There are many jobs which could be done. we have only to look at our city streets and the derelict sites in our cities to see that there are opportunities for activity. We should say that unemployment pay will be conditional upon a willingness to work in any capacity to which the individual is directed. The Government should be addressing themselves to solving the problem in that way. They should believe no longer that the remedy for unemployment lies in unemployment pay and the supplementary benefits of the welfare state. We should seek to provide a role in society for those who are unable to obtain jobs in the normal way.

Mr. Richard Caborn (Sheffield, Central)

There seems to be a slight contradiction in the Government's policy. They intend to go through a rate-capping exercise which will remove from local authority activity many of the useful jobs that could be done in our localities. The policies set out in the Gracious Speech will increase unemployment. That will be one of the consequences of a static wage. Why have the Government chosen not to use the mechanism which is available to them? The Prime Minister talks about bringing democracy closer to the people, and the people are well aware of the needs of society. The hon. Gentleman is saying that there should be curtailment on the one hand and expansion on the other.

Mr. Stanbrook

I am grateful to the hon. Gentleman for the constructive way in which he framed his intervention. He seems to accept that the solution to unemployment lies in financial payments. He spoke of rate-capping as a means of limiting the public funds that are made available. I am suggesting that the Government should concentrate instead on providing work, and not money. If we are hooked on the idea of providing extra money for those who find themselves unemployed, we shall be forced down the road which ends in frustration. That is not the way to end unemployment. We should endeavour to provide work by many means other than public finance, especially in the form of unemployment benefit.

If we break away from the idea of public finance, we shall find ourselves on the road that will lead to the defeat of unemployment. This is a large subject and the hon. Gentleman has his opinions, as I have mine. I believe that the way in which the Government have tackled the problem has neglected the necessity of realising that the object is to provide work, activity or gainful employment. Activity should have priority over the way in which unemployment benefit is financed.

I welcome the statement in the Gracious Speech that the Government will encourage the constitutional parties in Northern Ireland to consider how powers can be restored to local administration on a basis acceptable to all sides of the community.

I have no doubt that those words were carefully chosen. A restoration to local administration of power must mean the reinstitution of local government. The result of a historical accident is that Northern Ireland does not have a full structure of local government. The only local government bodies which exist in Northern Ireland are the equivalent of parish councils in Great Britain, and they have only limited powers. If the Government are suggesting in the Gracious Speech that a form of democracy can be returned at a higher level than that which now exists, we may be making progress towards something which will be acceptable and which will serve properly all the people of Northern Ireland.

I have always contended that it is wrong to approach Northern Ireland as a problem in itself and as if there is no Great Britain dimension. We all say that the problems of Northern Ireland will be solved by the Northern. Ireland people in Northern Ireland. That is correct up to a point, if only the parties in Northern Ireland will agree to live and work together. If that happens we might solve the problem, but the parties will not be able to work together if we isolate them. If their problems, especially those of sectarian strife, are encapsulated in Northern Ireland and not diluted in a sea of tolerance of the United Kingdom, we shall not make progress. Constitutional development in Northern Ireland should be in the context of the United Kingdom as a whole. I have always believed that devolution to a local assembly in Northern Ireland is not the right approach. Integration on the basis of treating Northern Ireland as we treat Scotland and Wales, as regions of the United Kingdom, is the correct approach.

I hope that my interpretation of what is set out in the Gracious Speech on Northern Ireland is correct and that we shall be embarking on a policy of integration, starting with the restoration of local government at a higher level than that which now exists.

There is a reference in the Gracious Speech to the European Community. It is stated that the Government look forward to the future development of the European Community. That is fine, but we have been members of the European Community for over 10 years, the Community has been in existence for over 20 years, yet the idea of the European Community has not been given a fair chance to succeed. Even now obstacles to trade, to the movement of goods and to free methods of transport within the Community abound.

It is still not possible to take a lorry on to the continent without a permit. Permits are strictly limited. Manufacturers and other traders in the United Kingdom who wish to go across to Europe to sell their goods are baffled by forms and the need to comply with regulations. The French Government limit much of the trade that could pass between the United Kingdom and Europe simply by refusing to issue more than a limited number of permits for lorries and other vehicles. If that is the case after we have been a member state for 10 years, it is one of the gravest reasons for Britain not having enjoyed a share of the European Community's success.

Another obstacle in the way of British participation in and appreciation of the opportunities of the Common Market is demonstrated by the development of the European Assembly. Those who devised the idea of a European Parliament were keen for political progress to be made and were over-ambitious. As a result, they sought direct elections to that body sooner than many states would have accepted them, and sooner than was good for them.

We are represented in the Assembly by two Members of this Parliament. All the other United Kingdom representatives have no formal, and in most cases no personal, contact with hon. Members. That is a great mistake, and it has led to the isolation of the European Community and its parliamentary tier. It would have been better if we had insisted upon representation by the parties represented in this House.

Representatives would be elected to the Assembly every Session and would serve for a Session at a time. Each of us could have direct and practical experience of the European Community's problems. We would, therefore, be able to pray that experience in aid in all our discussions involving the Community.

Unfortunately — this is carried through into the privileges and protocol of the House and our provision for strangers and guests — there is a tendency to keep members of the European Assembly at arm's length and not to give them those rights to which they are entitled as fellow legislators for this country, albeit at a different level.

Hong Kong is something of a success story for the United Kingdom Government. The Prime Minister deserves great credit — as she does for the similiar success achieved in Rhodesia-Zimbabwe—for achieving an agreement with the Republic of China, but I am worried about the proposal for a special category of citizenship to replace British dependent territories citizenship in Hong Kong after the transfer of sovereignty. The Government appear to have overcome the problem of those who will not be wholehearted citizens of the Republic of China after 1997 by saying that there will be a residual category of citizenship. People in that category will not be entitled to British citizenship, and therefore to the right of abode in the United Kingdom, but will be entitled to British diplomatic and consular protection when outside Hong Kong and China.

That status will be almost unique, in that people will be entitled to British and Chinese diplomatic protection. In one case they will be claimed as full citizens of Britain, and in another they will be kept from Britain. In some respects, I believe that our British nationality law is not as definitive as it should be after the passage of the British Nationality Act 1981. When these proposals are framed in legislation, they will have to be subjected to close examination.

The Government have made faltering steps towards their objectives. They have an outstanding leader, but they have been buffeted by internal and external enemies whose strength has often been underestimated . The Government have displayed great courage in many respects. Their policies and personalities are much better than any available alternatives, and they certainly deserve our support.

7.25 pm

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

I am deeply grateful for the opportunity to speak on the first day of the debate on the Gracious Speech. Regrettably, the Speech is addressed to two nations.

In paragraph one on page 3 of the Gracious Speech the Government say that they remain deeply concerned about unemployment. The Government also tell us that they will continue their economic policies. Does anyone believe that a continuation of those economic policies will have a large effect on cutting unemployment? Does anyone on either side of the House really believe that? Certainly the youngsters referred to last Thursday in my local paper do not. The Pontefract and Castleford Express ran the headline "Jobless Young Losing Hope", and that is what is happening.

Serious economic and political problems arise in mining communities, such as mine. My constituency depends upon coal mining and other forms of traditional manufacturing. As we are all aware, that is not uncommon in the north. I stress the problems, feelings and frustrations in areas like the one I represent when people, especially the young, look to the future and wonder what it holds for them. How many can look forward to a secure job in a decent environment? Will our present economic policy at least start to solve the problem?

I do not apologise for once again drawing the attention of the House to the particular problems of my constituency and the Castleford travel-to-work area within it. In 1979, the unemployment rate was 6.5 per cent. Since then, it has steadily grown to its present level of 14 per cent. I am well aware that the constituencies of many hon. Members experience much higher unemployment rates. This is a great problem.

In October, in the small towns of Pontefract and Castleford, of 839 youths unemployed, 694 had not been employed since they left school. The 839 were chasing five vacancies in the jobcentres within the Castleford travel-to-work area. What hope have those youths? This year there has been a 50 per cent. increase in the number of children leaving school who are unable to obtain jobs compared with 1983. There has been an overall increase of 50 per cent. in unemployment in the five years since 1979. The trend is still rising, and that is where the major problems arise.

Before the miners' strike, it had been agreed through the normal procedures — not like the Cortonwood procedure—that two pits in my constituency would be closed, one fully and the other partially. That would have meant the loss of 1,000 jobs for the small towns of Castleford and Pontefract. During the strike there has been a tragic fire at the coal face in the Fryston colliery which employs 1,200 men, and that raises a question mark about the life of the colliery.

There are many great problems. The most tragic is that nearly half the registered unemployed are young people under the age of 24. That has been the position for three years. The figure would be considerably higher if those youngsters who are unable to find permanent jobs but who work on temporary Government schemes were included. What does the future hold for those young people who, through no fault of their own, have nothing to look forward to, and whose plight is all too common in many parts of the north today?

I mean no disrespect when I say to hon. Members who represent and live in southern constituencies that, while I fully accept that they are worried about trends in the country and unemployed people, unless they live among and represent them, they cannot appreciate the tragedy that is occurring every day.

The deep-rooted economic problems of the north stem from a dependence upon a narrow range of industries which are shedding jobs, particularly coal mining, glass and chemicals. Only last year the glass container industry, which has been a traditional industry in the area, has closed its major United Glass factory not because there was no demand for the goods, but because the company decided to move it south. The jobs were available, but they were taken from north to south.

We have had eight months of a tragic strike in the coal industry, but some day that strike must end. I accept that some pits will have to close. Just outside my constituency we are blessed with the massive Selby coalfield project, we are all pleased about that. The Selby complex is to mine 10 million tonnes of coal a year. Before the strike, the north Yorkshire, area with its 16,000 employees, was mining 10 million tonnes of coal. If 10 million tonnes is to be mined by 4,000 men at Selby, what will happen to the other 12,000 men? One can argue that it will be more efficient than it is now. That is probably so, but what will happen to the mining communities?

The area lacks a strong tradition of small manufacturing industry which might provide a firm foundation for the growth of new firms. The lack of new technology-based industry povides little hope for the growth of new employment opportunities to replace jobs lost in traditional industries.

Massive environmental dereliction resulting from the activities of the mining industry forms a major barrier to the attraction of new industry. How do the Government see the programme that they have outlined in the Queen's Speech—if it is a programme to attack unemployment—benefiting constituencies such as mine and the many similar areas to be found throughout large parts of the north, and in Scotland and Wales? Have they any definite proposals which will alleviate the distress and despair faced by so many of my constituents?

I have five points to put to the Government and Conservative Members. The first is on regional policy. I understand that later this month the Government will announce their new regional policy. I appreciate that they will not tell us what it is until the appropriate time. Can they assure us that they have taken the real needs of areas, such as the coalfields, fully into account when deciding that policy?

We have heard a great deal about NCB Enterprises Ltd. I welcome that. Such enterprises are essential if we are to attack the unemployment that will be created in the mining industries. I understand that only £5 million is to be put into the company. Without appearing churlish, I should like to point out that £40 million was set aside for a similar company set up by the British Steel Corporation—BSC Limited. Can the responsible Minister tell me how the company will operate and why such a seemingly paltry sum of £5 million is deemed sufficient to tackle the serious economic problems of the declining coalfield communities?

We are still no nearer to having a sensible energy policy. The Government seem determined to develop more nuclear-powered electricity generating stations to the detriment of the coal industry. We are all aware that before the strike 80 per cent. of the coal industry's output went to power stations. Have the Government thought about the consequences for coal mining areas if the market for coal is lost? Perhaps we could have a statement from whoever is responsible?

Have the Government made any attempt to persuade the European Community of the needs of the coalfield areas? My constituency, because it is not an assisted area—although it should be — is currently barred from receiving assistance from the European Community regional development fund. Will the Government suggest that the European Commission puts forward a programme for rejuvenating the older coalfields as they have for other non-assisted areas of west Yorkshire which are dependent upon textiles? I should like the Goverment to pursue that point.

On local government, it is the Government 's firm intention to abolish the Greater London council and the metropolitan councils. Many local authorities, including the West Yorkshire metropolitan county council and the Wakefield metropolitan district council, are pursuing successful economic development programmes and creating jobs at far less cost than Government schemes. The county council estimates that its investment programme creates 18 times as many jobs for the same amount of money as the Government's regional policy expenditure—£2,000 per job, compared with £35,000 per job. Surely the Government should reward such efficiency rather than try to abolish it. Those authorities have a major part to play.

The Government regard it as sufficient repeatedly to tell the House and the country that the rewards available for miners prepared to accept redundancy are far greater than any other industrial workers have ever received. No one can refute that, because it is a fact. The problem, however, is not the older generation of miners, who will be cushioned by redundancy payments, but the school leavers who would normally have followed their fathers into the pits. If we are not very careful, the problems created in the mining areas will not just be economic. If those young kids see no light at the end of the way and no possible future employment, they will look for a system that will give them employment—and their thoughts may well turn to a. system other than the democratic system that we all enjoy. That may seem like wild scaremongering, but the threat is there. In my view, if sticking rigidly to purely economic policies may create a situation in which anarchy and upset threaten the democratic system, it just is not worth it.

The Government must find a way of providing employment throughout the nation, especially for young people. Before pushing harder and harder to get their way and close much of the mining industry, if that is what they intend, they had better put something in its place. If they do not do that, an extremely serious situation will arise. Although the Government have told us nothing beyond the fact that they intend to continue the economic policy that has created unemployment throughout the nation, I hope that they will think again.

7.43 pm

Dr. Alan Glyn (Windsor and Maidenhead)

I pay tribute to the thoughtful speech of the hon. Member for Pontefract and Castleford (Mr. Lofthouse) and his recognition that Members from the south are as aware of the tragedy of unemployment as those from the north.

The Gracious Speech rightly begins by, and can perhaps be summed up as, stressing the preservation of peace and security and steady expansion. Happily, it begins by recognising the importance of peace negotiations between East and West. As my right hon. Friend the Prime Minister has said, we hope that the visits of two Soviet leaders to this country will help in that process. Let us never forget, however, that the negotiations must always be backed by our own strength and that of NATO as a whole so that any negotiations take place on an equal footing.

The Gracious Speech rightly emphasises the importance of our influence and defence interests outside as well as inside NATO and outside the NATO area. This is of great importance in that we are a maritime nation, and that was proved in the Falklands exercise.

I also welcome the reference to Portugal and Spain, although I recognise, as I am sure the whole House recognises, that admitting Spain to the EEC will involve considerable problems, especially in agriculture. Nevertheless, the presence of the Iberian peninsula in both NATO and the EEC will give the West an even stronger basis to ensure non-aggression from the East.

It has been suggested by the Opposition that the change in regime in Argentina may make it easier to proceed with negotiations on the Falklands, but I wish to add a note of caution. We must consider not just the present regime but any future regime. In all our deliberations, therefore, it is vital that the interests and sovereignty of the Falklands should be preserved. The same applies to Hong Kong. My hon. Friend the Member for Orpington (Mr. Stanbrook) referred to some of the difficulties regarding citizenship in the future of Hong Kong that we shall encounter when we come to deal with that matter.

We all approve of the Government's proposals for the GLC, but an immense amount of legislation will be required to cover all areas of its activity. For instance, appointments to various public bodies are made by the GLC and many other smaller matters will have to be considered when the legislation comes before the House.

The Gracious Speech stresses the importance of reducing inflation still further. My hon. Friend the Member for New Forest (Mr. McNair-Wilson), too, stressed the importance of sound money policy. At the same time, we must show our concern —indeed, we must do more than show concern—about the level of unemployment. Again, I was impressed by the comments of my hon. Friend the Member for Orpington. It is jobs, not money, that we need. There is a great deal of difference between giving people money and giving them jobs. I look to the Government to continue to seek to provide jobs rather than cash for those who wish to work but are unfortunate enough to be unemployed. I hope that small businesses, which are increasing as a result of Government encouragement, will play a significant part in solving the unemployment problem.

Taxation reform has been mentioned many times and appears once again in the Gracious Speech. I have always urged a shift from direct to indirect taxation because the latter is more economic and extremely difficult to avoid. Moreover, it is a tax on spending and not on saving. I hope that the Government will pursue that further.

The voting changes outlined in the Gracious Speech have been pressed many times by private Members and others and we shall all be glad to see them implemented.

On Northern Ireland, I listened carefully to the comments of my hon. Friend the Member for Orpington. After the abolition of Stormont, which I believe was a mistake, the Government must think carefully about giving the people of Northern Ireland some form of expression within their province rather than directly through this country. It would be advisable to introduce a form of revised Stormont.

The Government must face the problems of law and order and unemployment. Both are major issues and affect, not the Conservative party, the Liberal party or the Labour party, but the whole country. We must face those dangers, and I am sure that the Government will match up to that great challenge.

I listened with care to the speech of my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) about the benefits of living in this country. When one travels abroad and sees violence all over the world, one recognises those benefits. The measures laid down in the Gracious Speech will lead us on the right road to recovery and make us a better nation where the fear of external aggression is removed and living standards are improved.

I welcome the Gracious Speech. I am only afraid of the final sentence which states: Other measures will be laid before you. May I say to the Leader of the House that we do not want more legislation, but we want more discussion on major issues.

7.51 pm

Mr. Dennis Canavan (Falkirk, West)

The Queen's Speech represents yet another dose of the same old medicine. As I listened to the debate I wondered whether, if intelligent creatures from another planet came to the Palace of Westminster and listened to the Queen reading her speech, they would believe that they were visiting a country with almost 4 million unemployed and which is in the throes of the longest and most bitter strikes in any of its major industries. The Government's response to those problems is more of the same old medicine which has clearly failed, more confrontation and division, more of the economic policies which have caused unemployment and provoked the miners' strike, more cuts in public investment and more privatisation of public assets.

An examination of the Government's track record on selling off public property shows that practically no industry is exempt. Oil, gas, aerospace, shipbuilding, telecommunications, aspects of car manufacturing, forestry, housing and local government services have all been involved. The Government now have an insane proposal to extend privatisation to bus services, without a thought for the deterioration in transport services, especially in remote areas, or the detrimental effect on jobs in the bus manufacturing industry.

Some industries are left in my constituency, but much of the area has been deindustrialised because of the Government's policies. One remaining major industrial employer is Walter Alexander's, coach builders in Falkirk. Recently it declared a further 150 redundancies. When I met management and trade union representatives, there was virtual unanimity between them that Government policies were directly to blame for the problems. They believed that the policy of privatisation outlined in the Government's then White Paper would have an even more disastrous effect, and it was produced without an iota of consultation with the bus manufacturing industry.

I had hoped to have a meeting with the Secretary of State for Scotland, who was a signatory to the White Paper and who is responsible for transport in Scotland. I wrote to him and suggested that I meet him and the trade union representatives of the work force at Walter Alexander's to discuss the possible effects of the legislation before it was drafted. A junior minister—one of the other lackeys at the Scottish Office—wrote me a cheeky and curt reply to say that such a meeting was unnecessary. That was an insult to the work force, to the industry and to my hon. Friends and myself who requested the meeting. Scottish Office Ministers are incapable of defending their decisions, or those taken for them in Whitehall, either in Parliament or outside. That is why they refuse to meet elected representatives of such work forces to discuss employment prospects.

The hon. Member for Argyll and Bute (Mr. MacKay) is present on the Front Bench. I draw his attention to the fact that there is no reference to the National Health Service in the Queen's Speech. However, even the NHS is not exempt from the Government's privatisation mania. The hon. Gentleman recently sent a circular to all Scottish health boards telling them to put certain services out to tender. There is widespread protest about that. We must fight for meaningful jobs, and even more so for patient care. Where privatisation of the NHS has been tried, it has often led to inferior standards of hygiene and patient care.

Mr. Jim Craigen (Glasgow, Maryhill)

Does my hon. Friend agree that many of the health board members who share the Minister's political view regard the proposals as imprudent and impractical for the care of patients and the better running of hospital services?

Mr. Canavan

My hon. Friend is correct. That is why I urge all members of health boards, whatever their political persuasion—I suspect that many are Tory-party place men and women—to throw the Minister's circular in the bucket, where it belongs. They should defy it completely. That would not even involve the risk of breaking the law which many councillors may have to face, because the circular is not legally binding.

It is feared that if what the hon. Member for Argyll and Bute calls the ancillary parts of the NHS are privatised, that will be the thin end of the wedge and will eventually lead to the complete privatisation of the NHS. The NHS was set up 36 years ago on the principle of establishing a free and comprehensive service for all, irrespective of the ability to pay.

Similarly, there is a fear about the future of the National Coal Board. It was set up at about the same time as the NHS. Until recently it would have been almost unthinkable for a Government to consider denationalising the coal industry. Just as there was a consensus in favour of a free and comprehensive NHS, so there was a broad consensus in favour of the public ownership of an important industry such as the coal industry. Yet there is now a fear among many of those employed by the NCB that the very existence of that organisation may be at stake.

There may even be something sinister in the statement in the Queen's Speech that In order to promote efficiency and growth, my Government will continue their policies of exposing State-owned businesses to competition and, where appropriate, returning them to the private sector. There is a widespread and growing feeling that MacGregor was appointed as chairman of the NCB to preside over its ultimate privatisation — to close down what he calls "uneconomic pits" and to sell off the remaining profitable pits, thereby turning the clock back beyond the 1940s when the industry was taken into public ownership.

The Prime Minister had the gall to tell us that she has every confidence in Ian MacGregor. Imagine anyone having every confidence in a clown who turns up for serious negotiations with a plastic bag over his head! How can anybody have any confidence in a character such as that?

Mr. Norman Buchan (Paisley, South)

Would it not have been better for the negotiations had he kept the plastic bag over his head?

Mr. Canavan

My hon. Friend may have a valid point there. Even some people in high management positions within the NCB have no confidence at all in MacGregor and some of the others on the board. It is fairly obvious that heads must roll. When MacGregor's head rolls. perhaps we should put it back into the plastic bag and send it on a free transfer back to America. We shall be only too glad to get rid of him.

During the recess I attended many meetings and rallies with miners and visited strike centres in many parts of Scotland. Based on that experience, and having spoken to many miners and their families, I believe that their morale is now stronger than nine months ago when the strike began. Even if the strike continues through the hard winter months, the miners will survive and win. They deserve to win, because they are fighting for their jobs and their industry. Indeed, they are fighting for an industry which is the property of the nation.

The only part of the speech of the hon. Member for Windsor and Maidenhead (Dr. Glyn) with which I agreed was his assertion that people wanted jobs, not just money. He is absolutely correct. But what are MacGregor and the Prime Minister offering the miners? I am glad that the miners have not accepted Judas money. For far too long, when Members of Parliament and trade union leaders have tried to lead the fight against proposed redundancies, workers have been going in by the back door, accepting redundancy money and selling their jobs, which are also the jobs of the community.

It is about time that trend stopped. That is why I congratulate Arthur Scargill and the NUM on showing a lead to the entire Labour and trade union movement. That is why they deserve the wholehearted support of all Labour Members. I hope that even some reasonable Conservative Members will give their support.

Several hon. Members have referred to the legislative burden that might arise from the Queen's Speech. I have not counted the exact number of Bills proposed, but some hon. Members have said that the legislative burden may not be quite as heavy as it has been in recent years. In any event, I suspect that in this forthcoming Session our priorities and the parliamentary timetable will be increasingly dictated by events outside this House. My fear is that the majority of hon. Members will become increasingly out of touch with outside events and the people whom we were elected to represent. I suspect that that will be even truer in Scotland, where by no stretch of the imagination could this Government ever argue that they received a mandate, having clearly been rejected by more than 70 per cent. of the people at the last general election.

The basis and continuation of democracy rest very much on the principle that the people should express their consent to the laws and policies by which they are governed. If we really believe in the future of parliamentary democracy—I do, as do the Opposition—we should remember that it will not be enhanced by the continuing destruction of local democracy and the imposition of the divisive, provocative policies contained in this Queen's Speech.

8.7 pm

Sir Hugh Rossi (Hornsey and Wood Green)

Thank you, Mr. Deputy Speaker, for calling me so soon in this Parliament. I hope that hon. Members will forgive me if I do not follow them, but I wish to raise an entirely different aspect of the Queen's Speech.

The Gracious Speech states that the Government will continue to work for a settlement in Namibia, a solution to the Arab/Israel dispute and the restoration of the independence and non-aligned status of Afghanistan. The whole House will applaud that declaration as far as it goes because it displays a concern for troubled areas whose problems threaten the stability of the world and in which there has been much human suffering. I use the phrase "as far as it goes" because there is a glaring omission which I am certain will cause much grief, certainly among many of my constituents. There is no mention of Cyprus. There is no declaration that the Government will continue to work for a settlement in Cyprus, a solution to the GreekTurkish-Cypriot dispute and the restoration of an independent and sovereign republic of Cyprus.

Exactly 10 years ago, in the autumn of 1974, during the debate on the Gracious Speech of that year, I raised the tragedy that had suddenly befallen Cyprus. Many hon. Members will recall that in the summer of 1974 a coup d'etat was attempted against the Government of. Archbishop Makarios inspired by the military regime then ruling Greece. Apart from rescuing the archbishop, the British Government of the day did nothing, and our troops remained locked up in the sovereign bases. The Turkish Government therefore decided to go it alone, invaded Cyprus, thwarted the coup d'etat, but in the event remained in occupation of one third of the most fertile part of that island. Two hundred thousand people were driven from their homes into exile, some coming to my constituency where they still are today. I was highly critical of the British Government of the day. I considered that they had betrayed our obligations under the treaty of guarantee, in which we promised, jointly with Greece and Turkey, to uphold and protect the sovereignty, integrity and independence of the republic of Cyprus. Despite that, we remained supine, and as a result the island remains divided. My views were endorsed by a Select Committee over a year later.

Since then very little progress has been made. Indeed, with the passage of time, a solution seems to become more remote and the situation more rigid, and the attitudes of the communities have polarised. This time last year, the Turkish Cypriots issued a unilateral declaration of independence. Our Government immediately condemned this, and took a leading part in ensuring that the declaration was not recognised by the United Nations. We welcomed this forthright, energetic action by the Government. Subsequently, the United Nations has passed resolutions urging both sides to compromise. Two rounds of talks have broken down, and the divide between the leaders of the two communities remain deep and wide. The internal politics and difficulties of the two sides have not helped.

A third round of talks is due to start in New York on 26 November. For many observers, this is the last real opportunity for reaching a solution. The situation is desperate. Therefore, I hope that the absence of reference to Cyprus in the Gracious Speech does not mean that the Government's policy is not to do all that is possible to bring about a just settlement. I know that that is not the case, and I hope that Ministers will confirm this some time during the debate.

Only on Friday evening I received a deputation representing the entire spectrum of political opinion within Cyprus, and I receive countless letter, on this score. Their plea is for the British Government to use all their moral power and standing to try to ensure that a just settlement to the Cypus problem is reached, so that ordinary people can go back to their homeland and and see their relatives, whom they have not seen for 10 years.

Our obligations under the treaty of guarantee remain, and it is high time that we showed positively that we intend to live up to them.

8.12 pm

Mr. Eddie Loyden (Liverpool, Garston)

Some robust and partisan speeches have been made from the Conservative Benches. I do not argue about the right of Conservative Members to continue to speak in that way, because I intend to do the same.

The hon. Member for Boothferry (Sir P. Bryan) suggested that his constituancy was a microcosm of Britain today. That is why he and his right hon. and hon Friends fail to see the reality of the world outside. Labour Members have brought to the attention of the House the divisions that exist in our society, and the almost daily widening of those divisions.

Since 1979, the Government have waged a war against the workers on a wide range of matters. Each succeeding Gracious Speech has given no sign of there being anything in the mind of this Government that will begin to tackle the problems that lie at the heart of the crisis that we have faced since the end of the 1960s. The difficulties that we have been debating today did not emerge in the past five or six years. When the post-war boom was tapering off in the 1960s, there was a transformation in British parliamentary politics in the 1970s, again in a crisis, that ended the term of office of the then Tory Government.

The election in 1979 of this Government brought about a recognition that the consensus politics of the post-war period with the mixed economy and all that went with it had ended, and that concessionary capitalism was no longer in the business of conceding. I do not necessarily blame the Government, who are there to defend and protect the system under which we live, at the expense of the working people. So that they could stabilise, for however brief a period, the economy of capitalism,it was necessary for the Government not simply to restrain workers in terms of their pursuit of better living standards and conditions of work and wages but to claw back from the working class the advances made by progressive legislation over many years. We are talking not simply about the advances made in the past decade or two, but about the advances in living standards and rights over many years. Day by day, the right of the masses of the people are being eroded by the Government.

The two things are linked because the Government, so that they can proceed with a policy of reducing the living standards of the working class, have first to tackle the shield that protects and defends the working class—the trade unions. We have seen an attack on that shield since 1980 when legislation was introduced by the Government to weaken the trade union movement and therefore remove that shield.

As a result, we have seen the greatest example of industrial unrest that the country has witnessed since the general strike. As my hon. Friend the Member for Falkirk, West (Mr. Canavan) said, the miners' strike symbolises the ever-growing divisions and confrontations occurring in our society. The Government appear to be hellbent on pursuing that line regardless of the consequences.

As our debates on the Gracious Speech will show, there is nothing in that document that gives any hope of a solution to the central problem. Every speech so far, from whichever side of the House, has referred to the cancer of unemployment. I have some experience of unemployment. When I was not re-elected in 1979 I became unemployed and spent the next four years on the dole. So I can talk from first-hand experience about unemployment.

An area such as Merseyside is much more a microcosm of our divided society and of the reality of Britain under this Government. We have seen a long catalogue of closures and redundancies which have brought unemployment up to the level of 20 per cent. and more. In some parts of Merseyside it is not uncommon to find levels of 50 per cent., 60 per cent. and even 70 per cent.

People who have decided to defend their jobs have been made criminals by laws passed here in Parliament. Those Cammell Laird workers who occupied a rig were not fighting for better wages and conditions. They were fighting to retain jobs in an area devastated by the policies that this Government have been pursuing since 1979. In that sense, Birkenhead has worse employment records than even Liverpool, but it is mainly overshadowed by the attention given to Liverpool. Those men know that the shipyard represents the biggest potential employer in the area.

The ordinary man or woman in the street asks when the devastation of our industrial base and jobs will end. They want to know when someone will do something about it, and they respond in the only way that they see open to them. In the case of Cammell Laird, it was to take action to occupy a rig. Those men took that action to demonstrate that they were not prepared to see more jobs disappear. It must be remembered, too, that it is not just their jobs that they are fighting to protect; it is the jobs of their children and grandchildren. A job is not necessarily the property of the person who has it at the time. It is the property of succeeding generations of job seekers who will find in Thatcher's Britain hopelessness and despair facing them when they leave school and try to find work. Again there is nothing in the Gracious Speech to suggest that young people can look for even a glimmer of hope from the Government.

It may be that the miners' strike is the best example of the polarisation that we see taking place, and Government supporters should realise that it is a time bomb. Coming from their lush constituencies, they fail to recognise that the divided Britain that we are discussing has within it dramatic differences in living standards, hope, employment and industry. The north-east, parts of Lancashire, parts of Yorkshire, Scotland and Wales all face great difficulties and as a consequence face human misery because they are without hope.

I want to see the same sort of commitment to the ideas and ideologies upon which the Labour party was based. I want the Opposition to start fighting with the same sort of conviction as Government supporters fight for their class. I want to see the Labour party offering the people a real alternative and the beginning of a transformation in society which takes on board the problems facing women and young people in the community. I want to see the Labour party begin to tackle mass unemployment in a positive way. I want to see the problems of the National Health Service, education and hopelessness tackled with the vigour that Government supporters tackle the interests of their class.

I do not believe that any of this partition will end until we see an end of the present Government and the election of a Labour Government committed to policies which will begin that transformation and bring about a more just society. It will not happen if there is constant reliance on making the capitalist system work better than the capitalists themselves can make it work. We have seen examples of that in France. With good intentions, a Socialist Government came to power and tried to deal with the problems endemic to the capitalist system by retaining capitalism as the economic power centre. We have seen the failures following in its wake.

We have to be self-critical about some of the actions of past Labour Governments. We are in a crisis, and no one can see the end of it. Government supporters say that the crisis is worldwide. I agree with them, because the countries to which they refer have the same problem. They are all countries based on the capitalist economy. In that sense there is a common problem throughout the capitalist world.

Nothing in this Queen's Speech offers any hope. The only hope of any future for the country is an end to this Government and the election of a Labour Government committed to Socialist policies.

8.27 pm

Sir Frederic Bennett (Torbay)

I listened with considerable care to the hon. Member for Liverpool, Garston (Mr. Loyden). Although my own few remarks will be directed to a different part of the Queen's Speech, it is obvious to me that the hon. Gentleman spoke with great sincerity but not with great understanding if he really believes that it is class distinctions which are causing the economic and social problems facing any country, with whatever political shade of Government, which is moving from an industrial era into a technological one.

There were moments in the hon. Gentleman's speech when I wished that he had concentrated on that aspect, because I should have liked an opportunity to ask him, for instance, if he really thought that the present miners' strike was helping to create jobs rather than to destroy them. Can he really put his hand on his heart and say that the miners' tactics leading to the closure of mines which might otherwise have remained open are making a practical contribution to the solution of the problems about which he talked about and of which I have a considerable sympathetic understanding?

I wish that one day we could have a serious debate in the House, without these accusations of class and partisanship, about what we should all like to see done in the face of change in a world which is moving from an industrial era into a technological era, where in future one man or woman will be fully capable of doing the jobs which 13 or 14 people did before.

It so happens that my work as leader of British delegations to the assemblies of Western European Union and the Council of Europe has given me first-hand experience of what has occurred in France. I can assure the hon. Gentleman that the French have tried out nationalisation in wide areas, yet they are now having to follow economic and social policies such as ours. That is a fact. It has happened.

The hon. Gentleman could not have directed his mind to what is happening in China. I know China well and it went in, full-bloodedly, for the sort of policies which I am sure the hon. Gentleman would like. However, degree by degree it is abandoning those policies in favour of a return to individual enterprise.

One day in the House I should like to hear a debate free of accusations across the Benches; a debate on how to deal with the problems of moving from the past to a completely different future. That move will not be made by strikes or rhetoric. It will require completely new thinking, on our society, on working ages, and so on. It will not be achieved by counter— accusations and by claims that under a Labour Government 4 million unemployed will disappear within a short time. With respect, that is nonsense. I was tempted to comment on the hon. Gentleman's speech only because I recognise the apparent sincerity with which he spoke.

Normally, I would have hoped to catch your eye, Mr. Deputy Speaker, in the relevant debate on foreign affairs and defence, which is to take place later in the week. This is the first time for 20 years that I have sought to speak on the day of the Queen's Speech. However, as a result of other duties I cannot be here later in the week, so I want to spend a few minutes now on what is not a very controversial problem.

The second paragraph in the Queen's Speech says: My Government consider as their highest priority the maintenance of national security and the preservation of peace. They will accordingly continue to play an active part in the Atlantic Alliance. They will promote Western defence interests outside the NATO area. They will make vigorous efforts to combat international terrorism. Certain things have been happening in the past few months which have altered the international scene. In the past four or five years I have been a member of two international bodies. One of those is the Western European Union defence assembly, which had become largely moribund.

Public opinion in several European countries, including Britain, has subordinated defence and security considerations as the result of skilful propaganda, sometimes unconscious propaganda, suggesting that Europe is no more than a battlefield between the two super-powers. That view is found widely in Germany and is not limited to any one political party. People there ask why they should provide an advance battlefield for a war between the two super-powers. In Britain, people — I am not talking about pacifists as such—ask why we should be treated as the unsinkable aircraft carrier. So one finds shades of differing opinion in Europe.

We in western Europe have decided that we have again to convince the people of Europe that if they are to spend money and devote their lives to defending peace and security they will have to do so on the basis that it is their peace and security that they are defending and that they are not being treated merely as an advance battlefield between the two super-powers. That is against a political background of Governments in Europe of all different shades of opinion.

It was for that reason that in Rome, less than 10 days ago, the Secretaries of State for Foreign and Commonwealth Affairs and for Defence contributed to the Rome Declaration. In that, they recreated the old concept of NATO, long since nearly forgotten, that Atlantic defence was pre-eminent, but had to be composed of two pillars: one, North America—Canada and the United States — but equally, countries, political parties, men and women forming the European pillar of defence who did not think that they were merely a pawn between the two super-powers in preserving their security and lives by the methods they were adopting. Ten days ago I thought how remarkable it was that that idea had caught on so quickly. Our alliance is not one between a super-power and a number of smaller allied countries which it is tied to defend, but one in which Europe as such has an interest in its own self-defence.

I sat next to a prominent French Socialist politician at a dinner only a few days ago and I asked him why the French had not had to endure or experience the efforts of the CND lobby, the pacifists, the neutralists and the "better red than dead" brigade. He told me that it was because they had succeeded, as we in the rest of Europe had not, in convincing the French people that they should spend money and devote their lives to defending their own interests and that they were not merely part of a wider pattern.

The French have had none of our troubles. In France today even the Communist party, let alone the Socialist party, votes in favour of retaining not only strong defences but its own sovereign nuclear deterrent. That is not because the French intend to invade Russia, but because successive French Governments, including the present Socialist Government, have convinced their people that if they have to erect a deterrent defence it is to defend their interests and not simply as part of a wider pattern of a conflict between the two super-powers.

Again, I regret that I cannot make this speech during the relevant debate but I have to continue my limited work in the reincarnation of the European defence of Europe. I could be asked why it is that NATO cannot do this all on its own. It cannot for the reasons that I have just explained. Of course we have to keep NATO. NATO is essential, because there is simply no way that Western defence can be maintained without it. But within NATO we must also develop a concept of European self-defence.

It is interesting that two countries with Socialist Governments—Spain and Portugal—within a few hours of the Rome declaration being made, said that while they were within NATO they still wanted to join the newly revived Western European Union. They were not Right-wing, but they also wanted to develop the idea of rebuilding the traditional concept, now 25 years old, that NATO is composed of two pillars, not one dominant partner, although the one partner is, of course, dominant in its military capacity.

On the political side, Europe is starting to believe again that it has a duty to defend itself, irrespective of any other considerations. Norway is already knocking on the door and one or two other countries may wish to join the new WEU. I thought that the Americans would be depressed by these developments, but they are not. On the whole, they welcome the idea of Europe taking on a greater capacity to defend itself.

The Rome declaration ends: They will promote Western defence interests outside the NATO area. That is possible under the Brussels treaty, but not under the NATO treaty, which has strict geographical boundaries. It is interesting that seven countries of mixed political attitudes agreed that the defence of Europe cannot be viewed in isolation. What happens in the Gulf and in other places affects the lives and livelihoods of everyone in Europe.

References have been made to the European Parliament. I do not believe that that Parliament has a role to play, because it is not representative of or responsible to national parliaments. It is directly elected and has members from countries, such as Ireland, which, for their own good reasons, do not wish to become involved in the East-West strategy of defence and deterrence. I am not prepared to see British defence and security interests handed over to a body which is not responsible to my Parliament. I am sure that other hon. Members share that view.

I look forward to the growth of the idea that people should start to believe again in western Europe as such and recognise that in spending money on defence they are defending themselves and not merely serving the interests of one of the super-powers.

8.42 pm

Mr. Bill Michie (Sheffield, Heeley)

The hon. Member for Torbay (Sir F. Bennett) asked that we should not discuss class and partisan issues. It was strange that such a plea should be made by the supporter of a Government whose policies have had such an effect on ordinary, working-class people that they have spelt out to the nation what it means to be partisan and class conscious.

I am disappointed by the Queen's Speech, because it offers more of the same. For many areas of this country, the news is bad. There is no hope for the poor, the unemployed, school leavers and people waiting for operations.

It is a great pity that we have to continue with policies that are blind obeisance to an economic strategy that is proving a disaster for democracy and the sharing of economic wealth.

The people of Sheffield feel as though they are looked on as part of the Third world, to be used and discarded as necessary. I echo the views of the Bishop of Sheffield who spoke out recently about the Government's economic policies and their effects on his people. Churchmen are prompted to speak out when they see the devastation in many parts of the country.

The Bishop of Sheffield suggested that if the Queen had a home in the north and visited the area, that would help to solve the problem. I spoke at the weekend to people who are unemployed and some who are on strike, and they had no strong feelings about a royal visit, but they knew that such a visit would not solve any problems. Talk of royal visits and so on reinforces our feeling that we are part of what I call the London commonwealth: if the natives are restless, send the Queen on a visit and that will placate them. That will not work. It is no good patronising people or making noises about being worried about unemployment, while continuing to endorse policies that have created most of the misery being experienced in areas such as Sheffield, Derbyshire, Wales and Scotland. That approach will not work.

The Government cannot make their policies work by suppressing our democratic rights. The Queen's Speech refers to controlling the economy and public expenditure and abolishing the GLC and the metropolitan county councils. In effect, the Government say, "If a democratic body causes us problems, we shall remove it. If there are rumblings, we will suppress them and call it law and order."

The claim that local authorities are causing the problems is nothing less than a lie. The surveys on rates are clear. Industrialists have to pay more in rates on factories and warehouses in areas that are not being penalised than they do in the 18 rate-capped authorities. For example, the rates on 10,000 sq ft of warehouse in rate-capped Sheffield, with a rateable value of £1.08 per sq ft, would be £10,800 a year. In unpenalised areas, such as Reading and Enfield, with rateable values of £1.23 per sq ft, the rates are £12,300 a year. It is misleading to say that high rates are creating the mass exodus of industries from the north. The true reasons are the absence of investment, the fact that factories are not encouraged to remain in the north and the general malaise that has been deliberately created by the Government.

South Yorkshire county council has intervened to try to keep some of our people in decent jobs with good pay and trade union conditions. It has fought for years to maintain a policy of cheap bus fares, so that the unemployed and those on low pay get around, and a policy of free fares for old-age pensioners, so that they can visit their children and see other parts of the county. The county council has fought for those policies and the Government have condemned it to the dustbin. The council has committed no crime; it has merely carried out its policies and spoken on behalf of people in the area.

None of those policies will work. In the short term, they may appear to work. It may be possible to suppress people by throwing them out of work, to frighten them by taking away their trade union rights or to keep children on the dole for so long that they believe that that is where they should be for the rest of their lives, but sooner or later the tide will turn. More than one hon. Member has spelt out what the Government must do. If this country is to remain democratic, the answer is not to take away those safety valves of trade union and local government rights or to put the cap on the safety valves that have existed for many generations, but to listen to the people and their representatives. Law and order is one thing, but often people use that phrase to cover up the repression taking place in many parts of the country.

Our people have a right to work, to have a say, to vote and to fight for jobs not only for themselves but for their children's future. In her speech, the Prime Minister again misled the House by saying that there had been generous offers to the miners. It is said that, as with the steel industry, alternative employment will obviously be found. There are places in the north of England where 20,000 or 50,000 steel jobs have been lost, yet not one brick has been laid in an effort to replace them. Misleading statements will appear in the media and some people will say, "Well, if that is the case, fair enough." But it is not fair enough. We have already heard about MacGregor's promises. The steel industry is now nothing short of a desert. That is why the miners and Labour-controlled local authorities are making a stand. That stand is based not on sheer political cussedness, but on a belief in, and a willingness to defend, the democracy, freedom and rights of our people.

8.51 pm

Mr. Mike Woodcock (Ellesmere Port and Neston)

I am grateful to you, Mr. Deputy Speaker, for having called me to speak so early in the session and for giving me the opportunity briefly to review the Gracious Speech in the light of my constituency's needs.

As one would expect, some of the proposals in the Gracious Speech address problems in my constituency but others do not. Indeed, some of our problems cannot be dealt with by legislation. However, the Gracious Speech addresses itself well to five particular needs. Much has been said about the problem of unemployment. Like many other constituencies, mine suffers badly from unemployment. We have very high unemployment, particularly among the young, with 40 per cent. of our unemployed people being under 25 years of age. Therefore, I welcome the commitment in the Gracious Speech to achieving better job opportunities. But I also believe that the unemployed could do more and that that would be better than their remaining in the dole queues. However, I stress that concern for unemployment must be top of the Government's list of priorities.

Like the rest of the country, my constituency faces many problems of law and order. There is increased violence and lawlessness, and a decreasing respect for the forces of law and order. I therefore welcome the proposal to establish a national prosecution service which is independent of the police force, and the commitment to reject violence and terrorism in all its forms. Like many other constituencies, we have problems that stem from basic inefficiencies in our nationalised industries. Of course I welcome the proposal to expose those industries to greater competition and, where appropriate, to return them to the private sector. We also need greater mobility of labour as, fortunately, several high technology industries have recently moved into the north- west. For far too long occupational pension schemes have been unfair to contributors and have served to tie employee to employer unnecessarily. I therefore greatly welcome the proposals concerning the portability of pensions, which will give members of occupational schemes a fairer deal and increase job mobility.

We also have problems with the protection of the environment. We have a large disused oil refinery which is a scar on the landscape. It was a victim of the world recession and it now lies derelict and unused. At the same time, significant threats to our green belt land stem from inappropriate planning proposals by the county council. It is nonsense that derelict industrial land should remain uncleared because of a lack of finance while people continue to rape what is left of our open countryside. I therefore welcome the commitment to legislate for the protection of the environment.

I welcome all those commitments in the Gracious Speech as they address themselves to real problems in my constituency and the country. But there are some needs which were not touched on and which I should like the Government to meet. First, I regret that in the Gracious Speech there is no firm commitment to re-establishing a strong manufacturing base in this country. Many manufacturing industries have suffered badly from the recession. Some have suffered necessarily and even desirably, because it removed the dead wood, increased efficiency and threw down a challenge to management once again to manage. It made our industries more able to compete in world markets.

But the new jobs needed cannot come solely from the growth in our service industries. Service industries cannot in the end service themselves, and unless we arrest the decline in the manufacturing industries, we shall pay a heavy price in future years.

Many of my constituents rely heavily on the oil industry for their livelihood. That industry has suffered badly from the recession. It is an energy-based industry which, unlike coal, has learned the lessons of economic reality. It has brought us the windfall benefits of North sea oil, but they must not be used to camouflage the effect of our basic manufacturing industries running down. Instead, they must be used to give those industries the opportunity to modernise, re-equip and so create the new jobs we so desperately need.

I also regret that in the Gracious Speech there is no commitment to legislate on the increasing drug abuse problem which is apparent in many of our towns and cities. It is taking tragic toll among many of our young. However, although I regret the fact that those two items were missing from the Gracious Speech, I trust that they will figure largely in the Government's policies during this Session.

There are problems that cannot be addressed by legislation. Earlier I said that many of my constituents work in the oil industry. Many also work in the docks, and many more work in a major motor vehicle manufacturing plant. In all those industries there have been severe and damaging strikes during the past 12 months. They have damaged their prospects, their ability to compete in world markets and the opportunities to create the new jobs that we need. All those strikes were unnecessary, and they all stemmed from the unwillingness of some trade unionists to accept the basic principle that we cannot pay ourselves more than we earn.

Therefore, I welcome all the proposals in the Gracious Speech, but I call upon the Government to pay more attention to the needs of our manufacturing industries and to the drug abuse problems so apparent in our towns and cities. I call upon everyone who has a job not to destroy the opportunity for others to escape the miseries of the dole queue.

8.58 pm

Mr. David Young (Bolton, South-East)

Last evening I was nearing the end of a 23-hour flight from the Falklands, so I do not apologise. for referring to the Falklands issue. I shall not rehearse the causes of the war or the issues which arose from it. It is essential to consider the present and to look to the future. Every effort must be made, no matter how difficult the going, to establish more normal relations with Argentina. It is one thing to call for a policeman in an emergency; it is another to base one's whole life and economy on the existence of the policeman at the door. No matter how long the temporary provisions for maintaining the Falklands are necessary, we must never accept the present policy of Fortress Falklands as permanent.

The number of service men whom we now have to divert to that area is placing a great strain on our commitment to the north Atlantic treaty. The Government should take service morale more seriously. Service men have to serve 8,000 miles from Britain. The Government should not have chosen to rearrange the local overseas allowance at a time when local prices are increasing as a result of Government policies. That does little for the morale of soldiers and airmen who might have to spend four months on the top of Mount Kent in the freezing cold and 100 mph winds.

The Government should reassess the Falklands allowance because it is being used as a means by which the Government escape their obligations. Some men are on their second or third tour to the Falklands. A senior warrant officer told me that if he had to do another tour he would sooner resign from the forces than add to the pressures on his family. Others said much the same.

The Government should pay the Falklands allowance after a certain number of days. The allowance should automatically be paid during the existing or any subsequent tour cumulatively. I am thinking of air traffic controllers and others who have to return regularly.

Men working at the radar station on Mount Kent cannot be replaced by their female colleagues. Some groups of men are under particular pressure because they are required to leave their families at regular intervals.

I should like an assurance on the future of the bluey—the air letter that service personnel are permitted to send to their families free of charge. The Government have not made it clear that that facility is to be safeguarded. Anyone who talks to soldiers in the Falklands will recognise that their morale depends largely on the ease with which they can communicate with their families via the mail.

I should also like an assurance that soldiers who are injured will be allowed free phone calls to their families. The present position is not clear. The Government have an obligation not only to the forces, but to the British taxpayer.

There is a lack of facilities in the hospitals in my constituency because of Government cuts. One of my constituents has gangrene in one foot and no pulse in his legs, but the hospital does not have the X-ray facilities to carry out the necessary operation. The man is too weak to be moved to another hospital. The position was made known to a Minister, in my presence, by the consultant concerned. I am tired of my constituents suffering from Government cuts in the Health Service when money for the Falklands is sloshed around like water in a bucket.

I cite as an example the road that has been built between the airport and Stanley at a cost of more than £6 million. After only some months, it has deteriorated to a dust bowl. Yet, when I visited the Falklands two years ago, the road that had survived the war was in far better condition than the road built with the aid of Government funds. Every member of that delegation, including Conservative Members, will confirm that. I want to know how that chaos occurred. What disciplinary action is being taken against those responsible—whether the designers. those who ordered the road or the firm that carried out its construction? What will the Government do to remedy what is, until the new airport is built, the key line of communication—both military and civilian—between Stanley and the existing airport?

The Government have given little thanks to those who made possible the Falklands victory. Gibraltar, which was mentioned in the Gracious Speech, is to close its dockyard; and 470 of the workers in my constituency who work at the royal ordnance factory in Chorley have received redundancy notices. Many of us believe that that was caused less by lack of orders than by the Government's intention to privatise the ROFs and dispense with many loyal workers whose services are needed by the nation rather more than the profits that may be reaped by the potential buyers.

The future of the Falklands must include persuading its young people to remain there. Before the war, young men and women left the Falklands in droves. Surely it is not our intention simply to argue about a piece of land. It is more important to ensure that we create conditions that will allow the young people to remain in the Falklands. The existing Government policy does not help that. The Government have shied away from the keynote in the Shackleton speech, which asked for the redistribution of land. People want the land, but they want it at a price that they can afford. That is the only way in which we can give the coming generation a stake in the Falklands.

It is noticeable that in key development roles and managerial positions the expatriate takes precedence over the Falklander. Incidentally, he is employed at a higher rate of pay than the Falklander.

The Falklanders allege—and I ask for clarification from the Minister—that, either by directive or unwritten agreement, they are not considered for work on the new airport. I ask for clarification, whatever the reason. I want to know whether Falklanders are employed there and the number who are employed. One swallow does not make a summer, not even in the nature reserve of the Falklands. If we wish the Falklands to be reinstated, as it were, the islanders must be able to make a contribution. We must ensure that we do not halt the development because we owe more allegiance to absentee landlords, such as Coalite, than to those who inhabit the islands. I think that some clarification is necessary from the Government in view of the article that appeared in The Times just over a week ago.

The Falklanders, like ourselves, contribute to the Health Service. The drugs are drawn from the National Health Service, but, unlike us, they are not required to pay prescription charges. That is rather odd.

The House will be aware that about 250 men died in the Falklands conflict and that the Opposition have criticised many aspects of the Government's policy on the Falklands. I think that that criticism was right. It must be understood that those who died did not come exclusively from Conservative-controlled constituencies. Some of those killed came from Labour constituencies. They were our kith and kin. No party that is represented in this place has a monopoly of concern for those who died or were wounded or for their relations. It is our duty to ensure that their memorial is not one of nationalistic nostalgia. We should now be intent on creating a climate in which the Falklanders may determine their own future independent of external forces.

9.13 pm

Mr. Edward Leigh (Gainsborough and Horncastle)

I hope that the hon. Member for Bolton, South-East (Mr. Young) will forgive me if I do not take up his remarks on the Falklands, which he made at length, except to say that I welcome the commitment in the Gracious Speech to work towards more normal relations with Argentina. I shall direct myself first, and briefly, to the economy, and, secondly, to the Greater London council.

Naturally, I welcome the central commitment in the Gracious Speech to reduce inflation. A trading nation that competes in world markets demands no less than that.

In the debate on unemployment that took place last week—during which, unfortunately, I was not able to catch your eye, Mr. Speaker—it was said that a former Labour Prime Minister had commented that inflation was the mother and father of unemployment. That is true, but surely the godfather of unemployment is complacency.

In recent years unemployment has risen as high as 18 per cent. in my constituency. My right hon. and hon. Friends and I know that the Government are not complacent. The MSC schemes speak for that. However, politics is about avoiding appearing to be complacent as well as not being complacent. I hope that in the coming months we can learn a lesson following the re-election of President Reagan. I am speaking at 9.14 pm on 6 November and I assume that President Reagan is being reelected. He is being re-elected because inflation has been reduced in the United States, growth has increased and unemployment has declined. He has done that not by raising taxes. If anything, he has cut taxes. He has achieved that remarkable feat—remarkable in terms of modern economies—by allowing freedom to businesses to invest and to borrow.

President Reagan has freed the market. Within the constraints of the public sector borrowing requirement we could allow more freedom, especially in transport and housing investment. Hundreds of people in my constituency in West and East Lindsey are queueing for home improvement grants. They are denied the opportunity to receive those grants, but I think that they should be given that opportunity.

If I have one criticism of the Government's economic policy it is that the Government have not been sufficiently flexible in their treatment of capital spending. The real reason for President Reagan's remarkable success has been the way in which free enterprise has been freed of its shackles and services, hitherto performed by central and local government, have been devolved to the free market. That is why I turn to the proposal to abolish the GLC.

If we were talking about restoring many of those services to the democracy of the free market, I would be rather more enthusiastic about the abolition of the GLC. It is said that the metropolitan county councils have powers and no friends and the GLC has no power and plenty of friends. The Conservative group on the GLC, of which I was a member for four years, seems to have few friends in the House. I want to take the opportunity to put forward some of the views that that Conservative group has been advancing in recent months.

There are certain difficulties relating to the abolition of the GLC that have not yet been answered by the Government. One difficulty is accountability. I think that in a difficult world most hon. Members have one star to follow—democracy. It is said that democracy is being retained, but it is indirect democracy. Is it right that a borough councillor, elected to look after dustbins, should be allowed to sit on a joint board and determine policy on main roads in London? That will be the effect of the legislation. I do not think that indirectly elected joint boards can ever match a democratically and directly elected GLC. That is the central difficulty facing those who wish to abolish it.

It is also said that the GLC has been left with so few powers that it is not worth keeping it. That begs the question: why has the GLC been left with so few powers? Why was the ambulance service taken from the GLC in the early 1970s? Why was housing devolved to the boroughs? A number of powers are left to the GLC, and no one denies that. A number of important powers must be run on a London-wide basis, and 32 warring boroughs with differing ideologies, such as in Bromley and Hackney, cannot perforce join together to perform those functions. That difficulty is facing the Government. All those powers cannot be devolved to the boroughs. The real powers currently held by the GLC will be given to Marsham street, and I do not think that that is desirable.

I have my worries about the abolition of the GLC. It is right that someone should echo the policies put forward by Conservative members of the GLC. They are not extremist policies or exaggerated thoughts. The group is simply saying, "London government needs reforming. We need a new strategic authority, but it must be directly elected". Be that as it may, I believe that the issue of the GLC will not figure largely on the broad canvas of the Government's record over five or 10 years. What will figure largely will be the Prime Minister's courage and determination, the instilling of new attitudes of realism among trade union members, new confidence in the economy and the strengthening of our armed forces against external aggression. That is what is really important about what the Government are doing. I wholeheartedly support the Government and Ministers in what they hope to achieve.

9.19 pm

Mr. William O'Brien (Normanton)

If the hon. Member for Gainsborough and Horncastle (Mr. Leigh) and other Conservative Back Benchers are sincere in what they have said about the Queen's Speech, I do not see how the Government can survive in the coming Session, because many Conservative Members have talked about unemployment and how it affects their constituencies and how it brings hardship to their constituents. Those Conservative Members have appealed to the Government to ensure that something is done about unemployment.

The Queen's Speech does not give a great deal of encouragement to the unemployed. There is nothing for the unemployed school leavers and unemployed 40 and 50 year-olds in the policies outlined. The promise to continue existing policies will do nothing for those who are suffering hardship and despair at the thought of having to face a further term with this Government without the hope of a job.

Since the Government came into office in 1979 they have increased unemployment by 2 million. There are now over 3.25 million people registered as unemployed. Of those, 369,000 have been unemployed for more than three years; 700,000 for two years and over 1 million for a year or more. There are 1 million 18 to 24-year-olds for whom the Government have made no provision for training or employment. That is the future outlined in the Queen's Speech. People are fighting for their jobs. Many know that if they lose their current job they may never work again.

The fight that is taking place at present in the mining communities is in defence of jobs. Yesterday morning, one of my constituents who was a member of the NUM and who was on strike was fatally injured while trying to secure some coal for his family from an outcrop. He was trying to defend his job, and, at the same time, provide for his family. It is regrettable that that kind of price has to be paid. I hope that there will be a speedy settlement of the mining dispute.

When the pound dipped below $1.30, the Chancellor said that there was no crisis. We had to remind him then that there was a crisis — the anxiety of parents and hopelessness of children and families being split and scattered as they searched for work.

The Government should start to renovate our blighted and decaying inner cities, invest in an energy conservation programme or undertake a programme of transport renewal. They should start to renovate our old and potentially dangerous sewerage systems. They could use the £10 billion annual revenue from North sea oil to sponsor the production and development of industry. We have heard that statement from the Conservative Benches more than once today. The Government should be strengthening the stability, hard work and inventiveness of the nation, not wearing the country down with policies of constant slump. There is nothing in the Gracious Speech to promote any of those things which have been called for by Members on both sides.

On the proposal to abolish the metropolitan county councils, as a Member for a west Yorkshire constituency, I remind the Government of the Times editorial of 1 August, which stated: Last autumn's White Paper was one of Whitehall's shoddier products. A convincing case for abolition has yet to be made with intellectual rigour and sufficient fact … Ministers … seem to believe that in this matter assertion can be substituted for argument". The Government have failed to demonstrate that realistic and practical arrangements are being made to secure an effective transfer of functions and have laid the blame for that failure upon the metropolitan county councils for their alleged failure to co-operate.

I do not accept that argument. Indeed, the Secretary of State for the Environment himself stated in a letter on 31 July to the leaders of the six metropolitan county councils that the principle of abolition had not yet been settled. The metropolitan county councils are expected to co-operate in implementing a change which has not been considered, let alone approved, by the House. Moreover, they are expected to provide a smooth transfer of services to bodies which, even when they have been identified as the eventual recipients of those functions, are either not yet in existence or are not structured to receive those functions.

The metropolitan county councils are expected to cooperate in the transfer of functions in a climate in which the Local Government (Interim Provisions) Act and a variety of additional controls have added extra responsibilities and in which the councils still have a statutory obligation to deliver services. The metropolitan county councils, the district councils and the as yet unconstituted joint boards are expected to achieve an efficient handover of functions with an aggregate expenditure of more than 1.5 billion in a matter of months — a shorter time scale than that already needed to formulate proposals for the main abolition legislation. That is the background against which we must consider the recommendation in the Queen's Speech.

Civil servants are already on record as saying that in the transfer of the waste disposal function there are no real precedents to build on and therefore all parties are to some extent feeling their way". That was reported on page 1290 of the Municipal Journal of 17 August. We believe that that statement can be applied more generally. The responsibility is upon the Government, as the instigator of change, to demonstrate that arrangements are firmly under control. All the evidence suggests that they are not. In such a situation the claims made in the Queen's Speech about the introduction of legislation to abolish the metropolitan councils are premature. That part of the Queen's Speech should be reconsidered with a view to withdrawing it and ensuring that the situation is properly examined before any legislation is introduced.

9.29 pm

Mr. Nicholas Winterton (Macclesfield)

I am happy to follow the hon. Member for Normanton (Mr. O'Brien). I agree with him that the Government can help our economic recovery by embarking on a selective programme of capital expenditure. That would be especially helpful to the construction industry, where more than 400,000 people are unemployed. I estimate—I am supported by considerable evidence from eminent sources — that the Government would claw back by PAYE, national insurance, additional competitiveness and an improved infrastructure more than 65 per cent. of any expenditure undertaken. Therefore, I too request the Government to give attention to capital spending. I draw a distinct difference between capital and revenue spending, which unfortunately the Chancellor of the Exchequer fails to understand. I come from a background of smaller business, and I have spent about 14 years in the construction industry.

I welcome what is clearly a fairly modest Gracious Speech. All hon. Members will warmly welcome some of its proposals. The proposal for reform of the insolvency laws is especially welcome. Many hon. Members will have received correspondence from constituents, experts in that area or people who have been affected by insolvency and will know that the laws are out of date and require urgent reform.

As a member of the Select Committee on Social Services, I warmly welcome the Government's intention to introduce a Bill to improve occupational pension rights for people who leave schemes before pensionable age, and to ensure that people can obtain information about their schemes. The Select Committee recommended that in a report, and I am delighted that the Bill will be introduced.

I wish to talk mainly about employment, but first I wish to refer to the Government's intention to continue to work for a settlement in Namibia. It is a disputed territory, hitherto known as South West Africa, where many of us hope to see independence. However, we want independence by evolution, which will improve the standard of life of all the peoples of that country, and not independence imported by a one-off election of a Marxist dictatorship which would destroy the standard of life there and create the poverty and deprivation which, sadly, have often been the order of the day after independence has been granted to countries in Africa and elsewhere.

I hope that the Government will pay maximum attention to Namibia's internal political parties, whoever and whatever they may be. Many of them have risked their lives by returning to Namibia. It has 11 different ethnic groups, which speak 16 different languages, they all have different traditions and cultures, and Namibia is four times the size of the United Kingdom. I believe that Namibia can set the pace for further social and political development in South Africa itself.

Therefore, I hope that the United Kingdom, which so far has not supported the South West Africa People's Organisation as the sole and authentic voice there, will act as an honest broker and in a positive and constructive way seek to understand the problems there. In that way Namibia can be brought in due course to a peaceful independence, which will lead to further progress in South Africa. The Government have a great part to play in Africa, and I hope that they will play it with responsibility and with the knowledge of the internal parties of Namibia who wish to have peace.

The Gracious Speech states: my Government remains deeply concerned about unemployment and will continue policies designed to achieve better opportunities for employment.

I wish to refer specifically to the textile and clothing industry, about which I feel strongly. I have spoken in the House many times about this industry, and I shall continue to do so. On occasion I have voted against my own party because of my commitment to it.

Mr. Nicholas Budgen (Wolverhampton, South-West)

What about the dairy farmers?

Mr. Winterton

I am grateful to my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who has just come into the Chamber.

Mr. Budgen

I have been in for some time.

Mr. Winterton

I am grateful for that.

I feel fervently about this industry and those who work in it. They are loyal and skilled workers who have shown responsibility. It is just a pity that similar responsibility has not been shown by other workers, particularly those who are currently on strike in the coal industry. Those employed in the textile and clothing industry are not as highly paid, and do not work as short a week as the miners, nor have they ever been offered such generous redundancy and severance pay.

The textile industry is one of the largest manufacturing sectors in Britain, with sales in 1984 likely to exceed £7 billion, an added value of £2.5 billion, and 287,000 employees. If the clothing sector is taken into account, the industry employs 500,000 people. As many hon. Members know, it is highly concentrated in certain regions, and is particularly important to the north-west. I have the honour to represent the constituency of Macclesfield in that region. The industry is also important to west Yorkshire, the east midlands, Scotland and Northern Ireland and to many areas where unemployment is very high.

If the Government are sincere about wanting to do something about unemployment, and to pursue policies to achieve better opportunities for employment, I urge them to renew the multi-fibre arrangement, which is due for renewal and negotiation in July 1986. However, negotiations are already beginning.

Mr. Walter Harrison (Wakefield)

Will the hon. Gentleman vote for it?

Mr. Winterton

I shall most certainly vote for a renewal of the multi-fibre arrangement or any other such arrangement which brings about orderly marketing in clothing and textiles, not only in the United Kingdom but in Europe as well. I do not want to return to the period 1980–82 when output in the textile industry fell by 30 per cent. and 170,000 jobs were lost. That is virtually the total in the mining industry today, yet the textile industry did not strike. It did not do so for many reasons. It was aware of international competition and the problems that the country faced. The work force and the management worked together to try to ensure the survival of that industry, and I believe that they have done so.

I want an assurance that the Government will renegotiate a successor to the current multi-fibre arrangement. I know that the initial moves have already been made. There has been a GATT study, but so far the report has only been factual. I want an assurance from the Government that the textile and clothing industry is still a special case in world trade. I want them to recognise that, far from being over-protectionist, the multi-fibre arrangement has allowed EEC imports to continue growing even when the market for such goods within the EEC and the United Kingdom has been declining.

I want the Government to realise that, even taking account of the MFA, the EEC, including the United Kingdom, is far more open than other markets to imports from other countries producing textiles, such as iron curtain countries, the United States, and the developing countries. If the Government abandon the MFA, there will be complete chaos, which could be harmful to the world trading system and damaging to the less developed countries.

The MFA has been of great benefit to many countries, both developed and underdeveloped. It has ensured orderly marketing in textiles and clothing. If we are concerned about unemployment, we should pay attention to the textile and clothing industry, which makes a major contribution to our exports and which provides massive employment. No longer is this industry one that provides employment in the "dark Satanic mills" of Lancashire, Cheshire, Yorkshire, Northern Ireland, Scotland and Wales. It is a highly geared, modern industry that has made investments almost second to none in the United Kingdom. It has high technology computers and has made improvements in design. This industry deserves the Government's support.

I put a question to my hon. Friend the Minister, which I hope will be answered later in the debate on the Gracious Speech. Are the Government committed to a renewal of the MFA, to safeguard an industry that has made a great contribution to our country and will continue to do so if given the opportunity?

9.42 pm

Mr. Jim Craigen (Glasgow, Maryhill)

The hon. Member for Macclesfield (Mr. Winterton) is one of the few Conservative voices that speak for manufacturing interests, and I share his view that there is a great need for manufacturing industries to play a continuing role within the United Kingdom economy. Many of his ministerial friends feel that we should be blinded by high technology, to the exclusion of some of the traditional manufacturing industries.

Thursday's Cabinet meeting, when decisions will be taken on public expenditure, has a far greater significance than much of the legislative programme outlined in the Gracious Speech. No doubt the choice will be in favour of cutting taxation, in preference to a reduction in the number of unemployed. It remains to be seen just how the Government propose to introduce their suggested tax reform. I question whether it will do much to assist the low paid. The evidence from the two Chancellors that we have had under this Government shows that the Government's tax reforms have done little to assist those on low pay. They abolished the lower rate of income tax, much to the detriment of those at the lower end of the scale. We are told that the tax cuts will be made to fulfil a manifesto pledge, but there was no manifesto pledge about the doubling of unemployment and 3,300,000 people on the dole. I hope that the Government realise that they have a duty to tackle that problem seriously.

Several of my hon. Friends have spoken about the construction industry. There is no mention in the Gracious Speech of additional resources for new building, for specialised needs such as sheltered housing, or for repairs and modernisation. All of those could create employment and, to that extent, reduce public expenditure.

In the context of the unhappy situation in Cyprus, the hon. Member for Hornsey and Wood Green (Sir H. Rossi) spoke of an island divided. Britain is also becoming an island divided, because a lot depends on the part of the island in which a person happens to live whether he or she benefits from existing Government policies. It oftens seems to me that Ministers are more concerned with the mortgage interest rate than with the level of unemployment. That is what seems to matter most to them—no doubt because in the main they represent those parts of the country which benefit from the existing arrangements for open-ended tax relief, and at the same time it looks as though the Chancellor of the Exchequer will do another penny-pinching exercise on the housing benefits legislation.

In the Gracious Speech we see a reference to the introduction of a transport Bill and the deregulation of buses. I hope that some of our rural areas will wake up to the implications of the ending of cross-subsidisation which will have a major impact on the availability of bus services in many country areas, quite apart from the difficulties that will be created in some of our inner city areas and housing schemes where, although bus routes are not always profitable, they are socially necessary.

I am sorry that the Government have chosen to introduce a Bill which will include Scotland. I deprecate their approach in trying to wrap up Scottish legislation in United Kingdom Bills on matters where the time-honoured recognition of the differences in practice and administration have made Scottish Bills more appropriate.

The several Scottish legal measures which are to be introduced will be important to both personal and family life. In the main, though, the proposals in the Gracious Speech will do very little for Scotland in the face of rising unemployment and greater impoverishment in many families. The Government fail to recognise that it is impossible to divorce economic factors from their social implications. Greater recognition is needed of the gravity of social problems which arise because of the unfairness of the way in which unemployment is hitting parts of the country.

Time and time again today we have heard references to the 1944 White Paper on employment. But this Government have run up the white flag whenever they have contemplated combating unemployment. Ministers appear to be resiling from their responsibility to organise and manage the economy in such a way that we can start moving back to a higher level of employment.

In this context the Prime Minister spoke of tomorrow's world. Under this Government today's world is disturbing enough. The bleak offerings in the Gracious Speech offer precious little hope that tomorrow's world will be a pleasant prospect. It might be a pleasant prospect for those who are lucky enough to get on to "Mrs. Thatcher's ark". The Prime Minister made a subtle remark this afternoon which gave the impression that it is all right for those who are high and dry, such as her friends and some of the pigmy minds that she has surrounding her at present; but it is wise to remember what happened to the ones that did not get on to the ark. Unfortunately, that is the kind of situation that we have in Britain at present. It is more distressing for the great majority than it is for the select few who are being well looked after by this Government.

9.50 pm

Mr. Jonathan Sayeed (Bristol, East)

The summer recess is a useful time for hon. Members. Not only does it allow the Liberal and Social Democratic Members—who I note are not here tonight—to recover from those long nights which they made us endure. It also, much more importantly, allows hon. Members to travel abroad to see for themselves what is going on, to determine how that will affect us and to decide what we need to do.

I am grateful to the Commonwealth Parliamentary Association for assisting my travel to St. Helena. For those who are interested in that isolated island, the hon. Member for Wrexham (Dr. Marek) and I have produced a report with several recommendations which has been deposited in the Library. But I want to deal with another isolated place, because, by necessity, from St. Helena, we had to travel down to South Africa. That state is isolated, not by distance, but by its own unfair regime; a regime that is ostracised for what it has done and what it continues to do.

I follow my hon. Friend the Member for Macclesfield (Mr. Winterton) in talking about South Africa because I believe that the changes that are happening there should mean that the Government must encourage and hasten the constitutional changes. They will have to do so quickly, otherwise the opportunity will be lost.

The last time that I went to South Africa I was in the Royal Navy. It was 16 years ago, and since that time there have been many changes. Probably the most profound has been a fairly recent change — the acceptance of the urban black. There is also, and evidently, less petty apartheid, and on 3 September there was the inception of a new constitution. Many may suggest that that new constitution is a democratic mirage. Undoubtedly it had poor support—only 18 per cent. of the coloureds and 30 per cent. of the Indian population voted. Even more importantly, it is a mirage because it is incomplete. That is the most polite term that one could use. It ignores the majority of the population—the blacks. It is a mirage for another reason. Whatever it says, it continues to reinforce power in the hands of the white minority.

But even that constitution, providing that it is amended and added to, can provide the basis for a more equitable society which will provide greater opportunity for all. Despite amendment and addition, the constitution will be no more than an imperfect and medium-term solution, but it is better than what there was and it is better than what there is. Those in South Africa who expect an immediate move to one man, one vote in one Parliament delude themselves. They do so because the whites have the power. They have economic, military, police and parliamentary power. There is no price that many of them will not pay to retain that power.

There will be no change imposed by external aggression. South Africa is much more secure from that by virtue of its foreign policy accords with its northern neighbours. There will be no change through urban violence—a violence born of desperation and the denial of hope. The whites have the power to stop, or at least to contain, urban violence. Those who believe that there will be disinvestment by the West delude themselves. We have £9 billion of investment in South Africa, two-way trade of £9 billion per annum and 1 million Britons living in South Africa. We shall not cut off our nose to spite our face.

Mr. Nicholas Winterton

Does my hon. Friend accept that many sensible, rational and patriotic black South Africans do not want the West to disinvest in that country? Does he also accept that many of the problems in South Africa are not between whites and blacks, coloureds or Asians, but between the different tribal groupings of black and black and even Asians and blacks?

Mr. Sayeed

My hon. Friend has made two good points. I have spoken to people who are UDF members and whom I believe are still supporters of the African National Congress, and they do not want to see disinvestment, because they know that the people who will be hurt the most are those whom we need to assist the most.

The way forward is for our Government to encourage people to accept the facts, however unpalatable, and to encourage the South African Government also to accept the facts, including the fact that unless the Coloured and Asian Houses within the constitution are seen to achieve real change within one or two years, they will lose the little credibility that they have.

What must the white South African Government allow the new constitution to achieve? The first achievement must be the abolition of the Group Areas Act. Everyone expects the end of the Mixed Marriages Act in the near future, and I cannot see how it will be possible to sustain the Group Areas Act once the Mixed Marriages Act has been abolished.

Secondly, apartheid must be eradicated; that is beginning to happen. Thirdly, the pass laws must end. Those who say that that would cause a massive influx forget that the pass laws were suspended after Sharpeville and there was no large influx. Fourthly, we must see the end of the monstrous policy of detention without trial, with the freeing of those acknowledged leaders of the black, coloured and Asian communities who have forsworn violence. Fifthly, there needs to be more education for blacks. Finally, and most important, there must be a Black House within the constitution.

None of those actions would remove the white veto system provided by the new consensus system. That should reassure the whites who are frightened of black power and whose fear is reinforced by what has happened in Zimbabwe. However, it must be understood that these actions are the minimum necessary to persuade the majority of the population — blacks, Asians and coloureds—that South Africa is their country, or urban violence will continue to grow.

Inequality and discrimination exist throughout the world. In black Africa, they tend to be murderous and tribal. In South America, they tend to be murderous and dictatorial. In Russia, there is an oppressive police state. But only in South Africa are discrimination and oppression the law. It is a law based on colour and not worth. It is a monstrous denial of basic freedoms, but it will not be changed in one fell swoop. It needs to be changed one step at a time.

Those changes in the new constitution must take place if the constitution is to have any chance of succeeding. Accordingly, I urge them on the Government. This Government are very powerful when it comes to persuading South Africa, as we have massive trade links with that country. It is in the Government's interest to persuade the South Africans to produce a more decent and equitable society and to assist South Africa to join the international community once more. If it does not do these things and we continue to ask for one man, one vote in one Parliament we shall not get anything but violence. A new amended constitution offers an opportunity. The Government must grasp it.

Debate adjourned.—[Mr. Peter Lloyd.]

Debate to be resumed tomorrow.