HC Deb 02 July 1987 vol 118 cc643-734
Mr. Speaker

Before I call the Opposition Front Bench spokesman, I must announce to the House that I have selected the amendment in the name of the Leader of the Opposition and that I have also selected for Division at the end of the debate the amendment in the name of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and his right hon. and hon. Friends.

Mr. D. E. Thomas (Meirionnydd Nant Conwy)

On a point of order, Mr. Speaker. You will recollect that we raised the question of the selection of amendments on the first day of the debate and again yesterday. What recourse do we now have as a minority group of six Members to try to ensure that the House has an opportunity to divide on our amendments?

Mr. Speaker

The hon. Gentleman knows that under Standing Order No. 32 I am authorised to select only one amendment in addition to the amendment moved at the beginning of the debate. Therefore, there will be no further opportunity of a separate Division on the amendment tabled by the hon. Gentleman. He can, of course, exercise his vote in any way that he wishes at the end of the debate, but I am afraid that I cannot help him further.

Mr. Alex Salmond (Banff and Buchan)

On a point of order, Mr. Speaker. Would it be in order to ask for a 15 minutes' adjournment to allow the Leader of the Opposition to make a drafting amendment to his amendment to include a passage on whether the Government have a mandate to legislate for Scotland and Wales as, clearly, the fact that he did not include such a passage was an oversight on his part?

Mr. Speaker

That would certainly not be in order.

I must tell the House again today that a very large number of right hon. and hon. Gentlemen, including a large number of maiden speakers, wish to be called if time allows. Therefore, I again appeal to hon. Members for brief contributions.

4.21 pm
Mr. Roy Hattersley (Birmingham, Sparkbrook)

I beg to move, at the end of the Question, to add : But humbly regret that the Gracious Speech consists of policies which, far from concentrating national resources on the areas of greatest need and greatest potential economic growth, will further widen the divisions within society and neglect the services and industries which should be developed and expanded. It is only right to warn intellectually fastidious new hon. Members of what they are likely to face as the afternoon wears on. In about 30 minutes' time, the Chancellor of the Exchequer will describe the state of the economy in language that makes St. John's revelation of the new Jerusalem sound like a confession of failure. I suppose that it is just possible that the Chancellor's normal style will be inhibited today by a sudden attack of integrity. However, assuming that, as usual, he is immune to that inconvenient virus, we know exactly what to expect. We shall be entertained by a series of carefully selected statistics, each one designed to give a false picture of the Government's records and the country's prospects.

At this task, the Prime Minister's record is even worse. She attempts to create the impression that her Government came to power bit by bit, assuming responsibility for various aspects of the economy at statistically convenient dates: manufacturing output, 1983; manufacturing investment, 1985; manufacturing productivity, 1979; economic growth, 1981; and public spending, 1982. All those figures with their relative and conflicting dates appear in one of the Prime Minister's speeches on one page of Hansard. The trick is never to reveal the Government's full eight-year record.

Among the statistics that the Chancellor will fail to quote as the afternoon proceeds are a number of indisputable facts. For example, we will not be told that since 1979 the British economy has expanded at the dismal annual average of 1.3 per cent. We will not be told that since 1979 capital investment in the British economy has increased by less than 1 per cent. a year. We will not be told that since 1979 there has been a fall in manufacturing output, which is still below the level at which the Government inherited it. We will not be told that since 1979 there has been a net reduction in manufacturing investment, which is still 25 per cent. below the level at which the Government inherited it or that since 1979 a surplus of £5 billion on manufactured trade has been converted into a forecast deficit of £8 billion.

That is an honest and accurate account of the record of a Government who have presided over all those failures, despite the fact that they have enjoyed the unique benefit of North sea oil production—a benefit that they have wholly squandered. Every penny of oil revenue—an average of £8 billion a year—has gone towards paying the cost of increased unemployment. Indeed, that sum does not now even cover the costs of benefits paid and taxes lost because of increases in unemployment since 1979. That money should have been used and could have been used to put Britain back to work; it was used to keep Britain unemployed.

In 25 minutes or so the Chancellor will tell us that, despite its record, the Conservative party won the general election. I doubt whether he will admit to all the ways in which that victory was brought about. The Spectator, which is not the natural vehicle for Socialist economic theory, this week described the position exactly: Mr. Lawson set the scene for the largest boom in private credit this country has ever seen. It is this boom which more than anything else has been responsible for the recent upturn in the economy, for the sense of well-being undoubtedly felt by the majority of voters … and for the Government's reelection. There can be no dispute about the existence of that credit boom. That credit boom is greater than the similar phenomena generated by Mr. Maudling in 1963 and Lord Barber 10 years later. The credit boom generated by Mr. Maudling was subsequently and continually derided by the school of economists to which the Chancellor subscribes.

We have to establish two facts about the credit boom here and now. First, a credit boom does not and cannot act directly on the most urgent and desperate need of the economy—the moral and economic obligation to reduce unemployment. Secondly, an increase in economic activity stimulated by the credit boom cannot be sustained and nor can the improvements in the standard of living that are its temporary products.

Mr. Michael Fallon (Darlington)

Will the right hon. Gentleman give way?

Mr. Hattersley

In a moment.

Sooner or later the Government will have to change course.

Mr. Fallon

Will the right hon. Gentleman give way?

Mr. Hattersley

When I have finished my point.

In the financial statement and Budget reports for this year, published on 17 March 1987, the Government were absolutely explicit: Private sector borrowing has been rising and is now over 10 per cent. of GDP. It has clearly contributed more than public borrowing to upward pressure on real interest rates". That was the Chancellor's opinion. By that frank admission, the Government conceded that private borrowing, and not public borrowing, was prejudicing the prospects of investment at a price that industry could afford. Yet the Government chose to prohibit and hold down public borrowing which finances investment in houses, roads, schools, hospitals and public services. At the same time they encourage private borrowing which finances the purchase of Japanese videos, German motor cars and Italian textiles.

Mr. Fallon

Will the right hon. Gentleman give way?

Mr. Hattersley

I have not forgotten the hon. Gentleman. I will give way if he will contain himself.

The Government knew that private borrowing was having a major adverse effect on the economy, yet they allowed it to go ahead because they knew that it would have an immediate effect on their election prospects.

Mr. Fallon

The right hon. Gentleman has just said that the boom in borrowing cannot be sustained. In every previous debate of this nature he has also said that an economic crisis is just around the corner. Why should we believe him now?

Mr. Hattersley

At the moment I am asking the hon. Gentleman to believe the Chancellor, because it was the Chancellor whom I was quoting. I know that that strains credibility almost to breaking point, but the hon. Gentleman ought to accept what the Chancellor says. Just for the clarity of the hon. Gentleman's mind, on which I know he prides himself, I shall read the quotation again. It states: Private sector borrowing has been rising and is now over 10 per cent. of GDP. It has clearly contributed more than public borrowing to upward pressure on real interest rates. If the hon. Gentleman wants to argue with that, he must argue with the Chancellor, not with me.

It is because of the Chancellor's judgment that I insist that, sooner or later, there will have to be some curbs on private spending, and on the evidence from Brussels we know what those curbs will be—higher VAT, increases in a tax that hits the lowest earners hardest and the highest earners least. There will be higher VAT on those goods and services that already attract VAT, and VAT will be imposed for the first time on those goods and services that have previously been exempted.

As the Leader of the House would not make it clear yesterday, it is important that the House clearly understands today Lord Cockfield's proposals for VAT—proposals that he suggests that the Commission of the EEC should make obligatory on Britain and all EEC countries.

Lord Cockfield proposes VAT of between 4 and 9 per cent. on items that are currently exempted—fuel, food, children's clothing and shoes, new building, books, periodicals and newspapers. He proposes changes in the standard rate from 15 per cent. to somewhere between 14 per cent. and 19 per cent. Knowing Lord Cockfield as I do, it is inconceivable to me that he made those proposals without receiving the Prime Minister's blessing — [Interruption.]

Mr. Tony Marlow (Northampton, North)


Mrs. Elaine Kellett-Bowman (Lancaster)


Mr. Hattersley

The Chancellor says that I cannot know Lord Cockfield. That requires me to offer the one piece of evidence to support my point of view. When I was in the Cabinet Lord Cockfield worked for me. He ran the prices policy and was a desperate devotee of Government intervention in prices. As soon as the Prime Minister came to power he was converted overnight to a passionate devotee of the free market. I believed that he would become Lord Cockfield of Bray, but as it is I have absolutely no doubt that he does not operate in Brussels without obtaining clearance from No. 10 Downing street.

Mr. Kellett-Bowman


Mr. Marlow


Mr. Hattersley

Yesterday the Prime Minister——

Mrs. Kellett-Bowman

On a point of order, Mr. Speaker. Is it in order for the right hon. Gentleman to impugn the honour of a Member of the other House when he knows perfectly well that that person has taken an oath not to be influenced by his national Government?

Mr. Speaker

I did not hear the right hon. Gentleman impugn the honour of a Member of the other House, and the hon. Lady should not try to seek to put a question through me.

Mr. Hattersley

I ought to make it clear that when I mentioned Bray I did not mean it as an invitation for the hon. Lady to address the House.

Yesterday the Prime Minister refused absolutely to answer a straight question on the subject of VAT. She did so because we know the true position. The Government want to increase VAT, they intend to increase VAT, but they hope to do so by hiding behind the EEC.

There is only one way in which the Chancellor can convince the House otherwise today, and that is by ending the equivocation displayed yesterday by the Prime Minister and giving a categoric assurance that at the EEC Finance Ministers meeting in July he will oppose all the Cockfield proposals. It is no good the Prime Minister parading her toughness to the EEC two days a year. If she can take the publicly aggressive line over the CAP that she took yesterday, why cannot she take a publicly aggressive line today over EEC proposals to increase VAT? The only possible answer is that she wants to do it. She welcomes the proposals and intends to do it.

The second criticism of and objection to the credit boom which the Government encouraged and promoted last year is that it did nothing to reduce unemployment.

Mr. Marlow


Mr. John Redwood (Wokingham)


Mr. Hattersley

Reducing unemployment was not—and on the evidence of the Gracious Speech and the statements that accompanied it is still not — a Government priority. Yet unemployment is the most corrosive and wasteful of all the forms of poverty. It damages whole families, disadvantages generation after generation and absorbs resources that could more profitably be used on production and expansion. After eight years of Conservative Government unemployment still stands at a level that is a disgrace to a civilised society. Indeed, it stands at a level which the Government themselves find so shaming that for three years Lord Young of Graffham has earned his ministerial salary for doing little more than massaging the unemployment figures. On the evidence of the Queen's Speech, little will change. The Government will continue their battle not against unemployment but against a truthful description of the unemployment figures.

I confess that this Government have shown themselves admirably flexible when official statistics demonstrate the failure of Government policies. They always make changes, but unfortunately not in the policies in the statistics. Be it prices, trade, job creation and, above all, employment and unemployment, each set of figures has from time to time been massaged.

Therefore, before we look to the future it is again necessary to remind the Chancellor of the record and the concealed facts. Since 1979, unemployment has increased by 1,812,000, even according to the Government's manipulated figures, and we are now supposed to rejoice that after 19 changes in the statistical record total unemployment stands at less than 3 million. Even if that was an honest figure it would be a disgrace. Even if it was the truth, it would be a truth of which the Prime Minister should be ashamed.

Then the Prime Minister has the nerve to talk, as she did last Thursday, about hidden unemployment under Labour. No Government in British history have hidden unemployment with the cynical determination that has been shown by her and her colleagues.

Mr. Marlow


Mr. Hattersley

I know that perception is not the hon. Gentleman's strong point, but I suspect that even he by now will have gathered that I shall not give way to him.

Yet on the evidence of the Queen's Speech, the Government propose to go on in very much the same way. The election campaign promises to cut unemployment have been abandoned. There is no mention in the Queen's Speech of reducing or reductions in unemployment. Instead we have an undertaking "further" to increase employment. The word "further" is itself a fraud. Since 1979, Great Britain has lost 1,422,000 jobs—more than the rest of the Common Market added together. Since 1979, 2 million jobs have been lost in British manufacturing industry. Even in the first half of this year jobs were still being lost at the rate of 9,000 a month. This Government's attitude to unemployment and the unemployed demonstrates more than their casual concern for the truth. It reveals the underlying principle of Government policies. This is a Government of some of the people masquerading as a Government of all of the people, for they ruthlessly write off those parts of Britain and those sections of society whose votes they cannot win.

That was the central characteristic of Tory policy between 1979 and 1987, and that will clearly be the central characteristic of Tory policy during the next five years, with one new public relations addition. That addition is the lip service that is now being paid to the problems of the inner cities. The most hopeful interpretation of this sudden and belated conversion is that the Government have learnt a lesson that we have tried to teach them day after day since they were elected.

But the problems of deprivation and under-privilege cannot be confined to the ghettos. If there is deprivation, homelessness, poverty and, above all, lack of hope in the inner cities, there can be no lasting peace or security in the prosperous suburbs.

In parts of my constituency adult male unemployment now stands at over 50 per cent. Young men leave school with no chance of employment for the next four or five years. Money that was once promised for house improvement and renovation has been withdraw by the Government. The black and Asian British suffer the indignities of the Nationality Act and immigration regulations. The Gracious Speech proposes to extend those indignities. It is a miracle that areas such as Sparkbrook have remained tranquil for so long.

I warn the Prime Minister that the inner cities will not accept a five-year public relations exercise that is intended only to convey the impression of Government activity and prime ministerial compassion. I tell her that the problems of the inner cities will be solved only by more Government resources being concentrated on them for new houses, schools, better homes and, above all, jobs. Those jobs will have to come from manufacturing industry. The new rich of the financial services industries will not drive their Porsches to inner-city wine bars. The inner cities need small manufacturing companies. Those companies will only move to grow in the inner cities if they are persuaded to do so by Government incentives that encourage them to employ local inner city labour.

Mr. Marlow

If they are not inhibited by Labour local authorities.

Mr. Hattersley

The hon. Member for Northampton, North (Mr. Marlow), who tried to intervene earlier, now shouts from the Government Benches. I will tell the hon. Gentleman a story. The leader of Birmingham city council, who is moderate by most normal people's standards and is Right-wing by a few people's standard—but not those of the hon. Member for Northampton, North—told the Secretary of State for the Environment that in Birmingham, where we have much dereliction to overcome and many inner-city problems to solve, he was prepared to work with the Government, and for municipal and private enterprise to work in co-operation if that was the best way of reducing unemployment and improving facilities. The Secretary of State said that there was not a hope. He said that the Government must operate an independent development agency and that they would not co-operate with the city council. If the hon. Member wants co-operation he should ask his right hon. Friend the Secretary of State, not me.

Councils all over the country have been waiting for years to develop their inner cities. They read Government public relations handouts about the Government proposing a blitz on the inner cities, but they know that we have had a Government blitz on the inner cities for the last eight years. That blitz has increased unemployment, closed down facilities, deteriorated the housing stock and caused half of the problems of the inner cities.

The inner cities are the most obvious and desperate example of divisions in our society. Those divisions have been intentionally widened.

Mr. Tim Smith (Beaconsfield)

Is the right hon. Gentleman's party revising its attitude to the private sector and wealth creation? Is not one of the problems that some Labour authorities are hostile to the private sector and have forced rates up, which will not attract job creation in the first instance?

Mr. Hattersley

A number of local authorities have increased rates to preserve services. Most have been forced to do so because of the reduction in Government grant. When the CBI, in one of its pre-electoral moods of honest objectivity, listed the problems of companies opening and expanding in inner cities, high rates did not appear. The hon. Gentleman is creating spectres and excuses for the Government's failure. If the hon. Gentleman looks at the example of Birmingham city council—which is presently ruled by the Labour party and which wants to co-operate with the Government—he will find that the Government and the Secretary of State for the Environment stand in the way of a proper partnership. We in the Labour party believe that that is wrong.

Mr. Andrew Faulds (Warley, East)

Is the Prime Minister's latter-day conversion to care and concern about those in the inner cities not somewhat suspect? Is it not strange that that concern has been shown not during the last eight years but only in the realisation of her self-imposed task of destroying Socialism?

Mr. Hattersley

I noticed the Prime Minister, in a moment of euphoria, mounting the stairs at 10 Downing street on election night and speaking about the inner cities. However, what she said was not about improving the inner cities: it was about getting the inner-city vote. The Prime Minister has no hope of doing that, and if in passing we get a little money for an area that needs it so desperately I shall regard her cynicism as being almost worth while.

The inner cities are the most desperate example of divisions in our society, but other divisions are being intentionally widened by the Government and their policy. During her speech last Thursday the Prime Minister, particularly when forced away from the platitudes of her prepared text, proved time after time that Government policy is designed—I use that word with care—to widen further divisions within our society. That is the inevitable outcome of their philosophy. They are the party of inequality and their support for that doctrine is repeated and reflected in the Gracious Speech.

It is typified by the Government's mindless obsession with privatisation. They have a passion to turn public utilities into private monopolies which, if British Gas and British Telecom are any guide, will be unconcerned with the interests of the small consumer. That vacuous privatisation mania was personified by the Secretary of State for Energy in his first interview after his appointment. He said that he knew nothing about the privatisation of the electricity industry but that he was passionately in favour of it. If the right hon. Member for Shropshire, North (Mr. Biffen) had shown such blind faith he would still be on the Front Bench.

The Government's belief in inequality is demonstrated in all their policies. The poll tax may reduce the burden of local government expenditure that is now carried by some prosperous ratepayers, but it will increase the burden on families at the bottom of the income scale. The reorganisation of secondary schools may enable a minority of self-confident and articulate parents to fashion their children's schools according to their own design, but it will create a two-tier education system in which the generality of children will attend schools that are believed to be, and may well become, second-best.

The most significant passage in the Prime Minister's speech last Thursday was an aside that she made before replying to my hon. Friend the Member for Falkirk, West (Mr. Canavan). She said: Yes, I shall give way to the hon. Gentleman, who comes from Scotland, which, after London and the south-east, has the second highest income per head of any part of the United Kingdom."—[Official Report, 25 June 1987; Vol. 118, c.54.] The second highest income per head in the United Kingdom after London and the south-east means the third highest income per head in the United Kingdom, but it is not the Prime Minister's usual misuse of statistics that is the most important part of that comment. Whether Scotland has the second, third or fourth highest income per head in the United Kingdom, the same point applies. That boast ignores the 350,000 Scottish men and women who are unemployed. It ignores the 318,000 Scottish families who are living below the poverty line. It ignores the 140,000 pensioners who have no independent income and who have been cheated by the Government.

Pensioner couples have been cheated out of £11 a week and single pensioners have been cheated out of £7 a week. They do not enjoy the third highest income in the United Kingdom. That criterion of success ignores the shortage of decent housing in Scottish cities, the waiting lists for beds in Scottish hospitals and the need for more resources in Scottish schools.

The Prime Minister devalues and disregards all those matters because she is contemptuous of public services and entirely remote from those who use them. On the other hand, Scotland—this is enormously to its credit—took a different view. Despite enjoying the third highest income per head in the United Kingdom it predominantly voted for the Labour party because, unlike the Prime Minister, it realised that income per head is only part of life.

It was in that belief, at the time of the Budget and throughout the general election campaign, that the Labour party urged the concentration of available resources on those areas of the economy most in need of real investment. We shall continue throughout this Parliament to advance the same argument.

I believed in March, I believe now and I repeat, that the revenue available to the Chancellor of the Exchequer in his Budget would have been better used to increase the pension and child benefit.

I shall put the position on the prospect of taxes exactly. The record shows that whenever the Chancellor played his "Will he, won't he?" games over income tax reductions, the Opposition always took the view that whenever he pretended to tantalise his weak-minded Back Benchers, when the time came taxes would be cut. Whatever the consequences, whatever the alternative use for resources and whatever the demands for investment in new jobs, improved services and higher benefits, when the time comes the Chancellor always makes the tax cuts with which he chooses to tease his colleagues. I make the same prediction today.

The tax cuts which the Chancellor promises will be on income tax alone. The Gracious Speech promises further reductions in taxation, but once again the word "further" is wholly without justification.

Apart from the very poor and the very rich, the total burden of taxation — income tax, VAT and national insurance contributions has—increased since 1979. The family with two adults on average earnings and two children paid 38.4 per cent. of its income in tax in 1978–79. This year, the same family will pay 41.2 per cent.

The Government certainly intend to reduce income tax, but I have no doubt that they will compensate for that reduction by extending VAT — [Interruption.] If the hon. Member for Darlington (Mr. Fallon) worries about my judgment, let him be assured that the Chancellor said that he saw the extension of the VAT base as an essential part of the Budget strategy and a necessary counterpart to a reduction in income tax.

That is the Chancellor's intention and strategy and that is what will happen in this Parliament. The switch in taxes to which the Government are committed is intended—again, I use my words with care — to move the tax burden away from the high paid and towards low-income families.

The Government's eight-year record is undeniable. The Government have consistently taken from the poor and given to the rich. I make it clear now that had we won the election, we would have sought to reverse that process. Our defeat a month ago cannot and will not change our commitment to a genuine and substantial redistribution of national resources.

I believe that it is possible to build a fair society without increasing the taxes — direct or indirect — paid by the majority of the working population. But we cannot accommodate I see no point in attempting to—those men and women who are opposed in principle to redistribution because they are emotionally and ideologically antagonistic to the notion of a more equal society.

The Labour party's future lies not in less equality but in a clearer identification of that philosophy. I want to make my position absolutely clear today. Until men and women on low incomes are provided with the resources which make it possible for them to exercise the choices of a free society, all the talk about freedom of choice will, for millions of British families, be a cruel joke. The real test of freedom is whether the freedoms which theoretically exist can be exercised in practice. That is the point and the philosophy which the Labour party will advocate in the next five years.

Were the Prime Minister to do us the courtesy of being here today, I do not believe that she would deny that the Queen's Speech is intentionally wholly ideological. Gone are the days when the Tory party simply did what seemed to be best from hour to hour, day to day and from month to month. Now, it consistently and consciously attempts to create a society in which the philosophers of the new liberalism believe. That society neglects public services and reduces public provision, at least when no election is in the offing.

We all noticed this week that after last year's boasts about increased public expenditure, the new Chief Secretary to the Treasury, with the election over and the votes counted, announced that he was about to descend on all the Departments which naively believe that the autumn statement represented a real change in Government philosophy. The autumn statement was a brief attempt to prove that the Conservative party cared about education and health. The election being over, the pretence was abandoned within days.

The Government's basic philosophy has not changed. That philosophy requires a reduction, and sometimes an extinction, of public services. The Government will continue to justify the damage that they do and the pain that they cause by calling it freedom.

The Government will argue that a free society is one in which those who can afford to pay the bill have the medical treatment of their choice, in the hospital of their choice and on the day of their choice. We argue that a free society is one which provides the same privilege for the largest possible number of men and women irrespective of their income. To provide that wider freedom——

Mr. Marlow

The doctor will be busy.

Mr. Hattersley

Does the hon. Gentleman wish to intervene?

Mr. Marlow

The right hon. Gentleman makes the point made by the leader of the Labour party during the election campaign when he said that everyone should have the doctor of his choice, when he chooses and where he chooses. The doctor will be very busy under such a Socialist system.

Mr. Hattersley

Since the hon. Gentleman believes that we can never meet the medical needs of all the people, he wants to meet the needs, however trivial, of those with the biggest bank balances. I wish that the Prime Minister had had the guts to say that during the election campaign rather than making excuses.

The argument about freedom and liberating more and more of our people, of giving them the chances and resources that they do not now possess, will be the dominant argument during the next five years. It will be made clear that by providing the resources for ordinary people we are the freedom party and the Queen's Speech opening the next Parliament will be delivered by a Labour Government.

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

There can be no doubting the significance of today's debate. Not only is it the House's first opportunity to debate the economy since a general election which delivered a resounding vote of confidence in the Government and their economic policy; it is also—or so we are led to believe—the last economic debate in which the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) will be leading for the Opposition.

We shall miss the right hon. Gentleman, and his crystal balls, but his colleagues may not, for the right hon. Gentleman has been made something of a scapegoat for his party's massive defeat. Last week at least two national newspapers reported that both the right hon. Gentleman's right hon. Friend the Leader of the Opposition and the general secretary of the Labour party blamed Labour's election defeat on the failure of the right hon. Member for Sparkbrook to present their taxation and economic policies effectively. It seems that this view was endorsed by the shadow Cabinet in its lengthy post-mortem last night. That is most unfair. It is true that I had to give the right hon. Gentleman a certain amount of assistance, but between us we were able to leave the electorate in no doubt that his economic policies would mean higher borrowing, higher inflation, and higher taxes for everyone.

There was no failure of presentation at all. The voters understood all this perfectly, and drew their own conclusions. The position was summed up admirably by the hon. Member for Dagenham (Mr. Gould), when he said on "Panorama" shortly after the Election: presentation is necessary … but no amount of slick presentation could work if we didn't have something sensible to say. And it's getting the sensible things to say that's been the difficulty. It is perceptive and sapient remarks of that kind that no doubt make the hon. Member for Dagenham hot favourite, according to the press, to succeed the right hon. Member for Sparkbrook as the chief economic spokesman for the Opposition.

I have no wish to refight the battles of the general election. They are concluded and we won them. Instead, today's debate gives us a chance to reflect on the lessons of our first eight years in government, on what has changed and why, and to look forward to the years ahead.

The success of the British economy is now beyond doubt. Business men and investors, at home and abroad, all recognise that the British economy is now sounder than at any time since the war. So, indeed, does the hon. Member for Oldham, West (Mr. Meacher), who, writing in The Guardian last week, attributed Labour's third defeat in a row chiefly to the sharp rise in living standards and steady economic growth that have occurred, according to him, since 1982—an economic assessment he somehow failed to make during the campaign itself; an oversight, no doubt.

It is, however, a measure of the transformation that we have achieved over the past eight years that the whole tone and tenor of the economic debate have changed. In 1979 the questions were whether accelerating inflation was inevitable and whether the country had become ungovernable. Runaway price increases, balance of payments crises, and an appalling strike record seemed to be endemic features of British life. We were the sick man of Europe, and many thought that the illness was terminal.

By 1983 we had demonstrated that the answer to both those questions was an emphatic no, and the questions themselves had changed. In 1983 the question was how soon would the recovery peter out, or inflation take off again. It was thought that one or the other, if not both, must surely occur.

By 1987 we had demonstrated, once more, that no such fate lay in store. The economic upswing that began a little over six years ago is today stronger than ever, while inflation remains low. Last week's figures showed a healthy rise in national output in the first three months of this year, to reach a level more than 4 per cent. higher than a year ago, with manufacturing and services contributing in equal measure, and exports up sharply, too.

So now, at the start of our third term in office, the question has changed yet again. No longer do people ask whether Britain can have sustained growth without rising inflation. We have that, and everybody knows it. The question now is what is it that has brought about the remarkable transformation of our economic performance; and what is it that has brought about an unprecedented six years of steady growth and low inflation, with no sign of a let-up?

It is a question that is being asked, not just in this country, but abroad as well, for despite the fact that last year's oil price collapse was a mixed blessing for us but an unalloyed gain for most of our industrial competitors, it is their growth forecasts that are being revised down at a time when our forecast is being revised up.

Mr. Dick Douglas (Dunfermline, West)

Is it the intention of the Chancellor to refer to the extremely precarious nature of the international economy and to the fact that the recent Organisation for Economic Co-operation and Development report No. 41 points very definitely to those international concerns that he ought to refer to and advise on?

Mr. Lawson

The hon. Gentleman has always been a little impetuous. If he waits, he will hear me deal with the world economy later in my remarks.

The answer to the question that I raised a moment ago about how we have achieved the transformation that we have brought about is clear. At the heart of our success has been a fundamental change of approach to economic policy. No longer do we rely on the failed nostrum that it is Governments who can stimulate faster growth by expanding budget deficits, and no longer do we attempt to tackle inflation by distorting controls on prices and incomes. Instead, we have used a firm monetary policy to control inflation, we have backed that up with a prudent fiscal policy that leaves room for the private sector to expand, and, just as important, we have reformed the supply side of the economy. We have liberated the private sector from unnecessary shackles that have held it back for far too long, we have restored incentives, and we have created the conditions in which enterprise can flourish—and it has.

Throughout most of the '60s and '70s Governments sought to stimulate growth by expansionary monetary and fiscal policies. It is by now all too evident that, far from stimulating growth, all that did was to stimulate inflation, and that any short-term increase in output was very soon reversed. At the same time, the onset of inflation led to a panoply of restrictions being imposed on the private sector. It is clear that this, too, was completely misdirected. So far from reducing inflation, the restrictions reduced output as firms found the environment too restrictive, and the uncertainties too great, for them to be able to plan ahead with confidence.

The Government have therefore completely changed that misdirected approach to economic policy, and the result is clear. Inflation is now around its lowest levels for nearly 20 years. At the same time, output has been rising strongly and steadily, year in, year out — with unemployment now falling more rapidly than at any time since records began.

We shall continue to pursue those policies in the new Parliament. For example, the Gracious Speech included proposals to reduce controls on private rented housing, so as to make it easier for people to move to jobs in a different part of the country. Alongside deregulation, we have also taken positive steps to improve the working of the economy. For example, the excessive rigidity of the pay system in this country has been a persistent problem. A wider spread of profit-related pay would make for greater flexibility, and to encourage this I shall be reintroducing my proposals for tax relief for profit-related pay in the Finance Bill to be published tomorrow.

Each of those supply side reforms is important in itself, but together they have contributed to a more fundamental change in British industry. Once again managers are able to manage, and are doing so successfully. Those who make profits — and, leaving aside North sea companies, profitability is at its highest level for more than a decade—are no longer treated as pariahs. In short, the spirit of enterprise is once again flourishing in this country, the land of its birth, and with it has come a spirit of optimism, a transformation of our national morale which cannot be measured in the official statistics but without which a talented people can never become a successful nation.

The task of revitalising our economic performance has involved a number of radical new policies. Two key examples are the privatisation programme and the reform of the trade unions. Both have been of central importance. The dismal performance of the nationalised industries had long been an albatross round the neck of taxpayers, businesses and consumers. And the damage done by the excessive power of trade unions — not just to the economy but to the social fabric as well—was evident for all to see.

Certainly, reforming those areas involved some tough decisions and the determination to push them through in the face of opposition, but the success of the policies is now clear, and the British people have yet again shown their support for them. The privatised companies are flourishing, recording higher profits, and providing a better service to their customers. Governments around the world are now following our example and injecting vigour into sluggish state-run industries by returning them to private ownership. Similarly, the success of our trade union reforms in improving industrial relations, notably by giving more say to individual trade union members, is now welcomed by all except the Bourbons of the Left.

The need for tough decisions does not arise only at the start of a Government's period of office. There is much more still to do if we are to consolidate and extend the changes that have taken place in the economy and society. The Gracious Speech set out our priorities, in particular more choice in housing for tenants and more choice for parents in the education of their children. In both those key areas we are again challenging long-held nostrums. And already the vested interests are marshalling their opposition. But just as we did not shrink from privatisation and reforming the trade unions, so we shall not be deflected from these further reforms in housing and education.

Mr. Malcolm Bruce (Gordon)

Nevertheless, will the Chancellor acknowledge that a major privatisation programme diverts funds within the City from new growth and new investment? What measures does he propose to introduce that will ensure that small businesses, especially outside London and the south-east, obtain access to venture capital on a greater scale than has been the case in the past few years?

Mr. Lawson

The venture capital industry, which was very small indeed — virtually non-existent — when we took office in 1979, is now higher, in proportion to our GDP, than the United States' venture capital industry is in relation to its GDP. The growth of the venture capital industry has been one of the Government's most remarkable success stories.

However, let me return to education. The need to improve standards of education in Britain is as essential to our economic success in the world of tomorrow as it is to the quality of life in this country. The universities, and higher education generally, have on the whole reacted well in recent years to the need to become more responsive to their industrial hinterland, and it is up to an increasingly profitable industry to take greater advantage of what is now on offer, particularly in research and development.

We have not seen a comparable improvement in our schools. That is essential. Indeed, as Mr. Corelli Barnett has devastatingly documented in his book "The Audit of War", it is long overdue. Inevitably, it will take time to put that right.

Mr. Tam Dalyell (Linlithgow)

How, then, does the right hon. Gentleman account for the cries of agony from serious organisations such as Save British Science and for the way in which many of our top scientists are leaving Britain?

Mr. Lawson

In fact, the latest study shows that the number of PhDs who are emigrating is very small, and much smaller than it was when the previous study was made in 1963.

There is a wider point here. Economic success cannot be achieved overnight. It depends on getting the right policies in place, and then sticking to them through thick and thin. One of the most significant aspects of the result of the general election was the way in which the electorate decisively rejected the blandishments of those parties which offered instant and painless solutions to problems—usually, but not inevitably, through the application of additional public spending. The unprecedentedly long period of continuity of policy that we have seen in Britain has brought about a maturity of judgment in the British people which the Opposition parties failed to comprehend.

The Government will therefore continue with their economic policies based, as they are, on sound money and free markets. In 1979 those policies involved radical departures from the accepted way of doing things and were greeted with scepticism by many at home and abroad. Now, the world is following our lead. There is now an international consensus on the importance of firm fiscal and monetary policies, backed by economic freedom and lower taxes, and privatisation is one of our most successful exports. These policies command the confidence of the world, and they crucially command the confidence of the British people.

Mr. Tom Clarke (Monklands, West)

The Chancellor referred to higher education and the universities, and he then went on to talk about the result of the general election. Does he agree that Labour won Aberdeen, South and his right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith) refused to join the Government because of the Government's appalling record on Aberdeen university? Will he take that point seriously?

Mr. Lawson

I am a little old-fashioned. I have the greatest respect for Aberdeen university, and, indeed, for Scottish education generally, but I must observe that both the ancient universities of Oxford and Cambridge returned Conservative Members.

The prospects before us are good, and the chief causes for concern lie not at home but abroad. I am now dealing with the international context, in which the hon. Member for Dunfermline, West (Mr. Douglas) was interested.

Mr. Dalyell

What about Oxford, East?

Mr. Lawson

I was referring to the other Oxford seat, which we won.

The chief causes for concern are, first, the threat of a slowdown in Germany, Japan and the United States; secondly, the risk of a slide into protectionism; and, thirdly, the continued difficulty of managing the international debt problem.

I singled out the risk of an international slowdown in my Budget speech this year. Since then, while the risk is still there, I have been encouraged by the increasing degree of practical co-operation among the leading finance Ministers. The agreement that we reached in Paris in February to stabilise exchange rates has been an undoubted success, despite widespread initial scepticism in both the markets and the press. What we have to do now is to ensure the full and speedy implementation of the policy commitments which backed it up. That means, in particular. reducing the budget deficit in the United States, and reducing and reforming taxation in Germany and Japan.

Meanwhile, we simply must not allow the world economy to be sidetracked into a retreat into protectionism. That would solve none of our problems, and aggravate many. There remains the problem of managing the huge debts that were accumulated by many developing countries in the 1970s, and here there have been a number of encouraging developments, all in the direction of greater realism.

First, the commercial banks have used the five years since the debt crisis broke to strengthen their balance sheets considerably. The recent move by the NatWest bank has been the most striking further development in this country. I welcome unequivocally the steps that the banks have taken. I hope too that they will open the way to developing more market solutions—for example, an improved secondary market in some of the debts that are owed to the banking system. But we have to recognise that that process will not meet the needs of the poorest and most heavily indebted countries of sub-Saharan Africa. There is simply no way these countries can ever service their debts in full, and most of their debts are due to Governments and official institutions, not to banks. That is why, for these countries, I put forward a three-point plan at the spring meetings of the International Monetary Fund this year.

First, I asked the creditor Governments to continue the process of converting old aid loans into grants. The United Kingdom has already done that on a substantial scale. I am glad to say that a number of others are now following suit.

Secondly, I urged the creditor Governments to agree to reschedule the debts of sub-Saharan African countries over longer periods than before, with grace periods for the repayment of capital. Since I put that forward. I am glad to report to the House that the so-called Paris club of creditor Governments has agreed four such reschedulings. I look forward to more.

Thirdly, and absolutely crucially, I argued that we have to consider reducing interest rates on official debt to well below market rates for those countries. That is the only way that we can permanently lighten the burden on the poorest countries, rather than just rearranging it. That costs money, but at the end of the day it amounts to little more than facing up to reality. I take considerable satisfaction in the fact that the idea was given a fair wind at the Venice summit last month, and is reflected in the communiqué from that summit. I look forward to progress before the end of the year.

Finally, we are now beginning to look at ways of applying similar principles to the arrangements made by the poorest countries with the IMF. Here, too, the Venice summit promised work in the spirit of the ideas that I canvassed in Washington in the spring. There is still some way to go, but, step by step, we are demonstrating that the political will is there.

The fact that Britain is once again able to look outwards, and play a leading part in discussions of world economic developments, is another measure of the transformation that we have achieved in this country. But that transformation goes beyond developments in the economy. It extends to more profound changes in the way society works.

Not only have businesses and managers been given the freedom to pursue their own destinies, in their own way, without interference from the Government, but ordinary people, too, in all walks of life have been given more choice in the way they live their lives. This is reflected in the spread of ownership in society. Some 2.5 million more families now own the homes they live in than was the case in 1979. One in five of the adult population now directly owns shares in British industry, very nearly as many as are members of affiliated trade unions. We are now taking further steps to encourage the spread of private pension provision, and tomorrow's Finance Bill will include our proposals for tax changes to this end.

The benefits of wider ownership go far beyond the fact that people will be better off as the price of their house appreciates and the value of their shares goes up. Much more important is the fact that it gives more people a direct stake in the economy and the society in which they live. Those who own their own home take pleasure in spending time and money in maintaining and improving it, so there is a benefit to them, to the housing stock, and to the wider community. They have something to pass on to their children, too, which is not only good in itself, but, will transform the attitudes of the next generation. Again., those who own shares have a keener interest in the performance of British industry and in what makes it successful. The connection is obviously most immediate for employees who have acquired shares in the firms they work for and who are in a position to help those firms to thrive. People who have made their own provision for old age can look forward to retirement with a new sense of independence, without being wholly dependent on the state for their future income.

This spread of ownership is helping to break down the barriers in our society between "them" and "us". For too long a class of tenants and workers appeared to be in direct conflict with a class of owners and shareholders. This mentality was a major cause of many of our past industrial relations difficulties, and it still lingers on long after its principal causes are behind us. It is time — and long overdue — that it came to an end. That is why the extension of choice, alongside the extension of ownership, is a key theme in our proposals for the new Parliament.

More freedom, wider ownership and a spirit of self-reliance are becoming, at long last, the distinguishing characteristics of our society. The Opposition tried, and failed, in the election campaign to twist this truth into the malicious slander that a self-reliant society is one based on greed and materialsm. They should pause to reflect, for example, that recorded giving to charity has doubled, in real terms, since 1979. The tax concessions that we have given have helped, but the heart of the matter is that this is scarcely the symptom of a society dominated by selfishness.

In their first eight years this Government have achieved many things that were once judged impossible. I have mentioned some of them—above all the strength of the economy, on which so much else, whether resources to assist the needy and deprived, or Britain's standing in the world, directly depends. Other achievements include privatisation, reform of the trade unions, and the spread of ownership. But so far from resting on our laurels, we are now embarking on a programme of further reform, containing measures every bit as radical as those that we have already taken. Both our achievements so far and our proposals for the future have won the unqualified endorsement of the British people. A key reason for that is that it is our policies and our proposals that are moving with the tide of ideas.

That great historical turning point, the Conservative victory of 1979, was more than just another swing of the political pendulum. It was brought about by the conviction of the British people that a completely different approach to government was needed. The post-war consensus had been based on the idea that government was the principal agent of economic advance and of social progress. By 1979 the failure of that approach was obvious to all. Not only had Governments failed to deliver what had been expected of them, but their all-pervading role had had a thoroughly debilitating effect on the energies and ambitions of the British people.

Our approach has been to concentrate on doing those jobs which only the Government can, and must do, and to release the spirit and talents of the British people. The significance of the election result is not only in the approval of what has been done so far, but lies equally in the outright rejection of those who sought to turn the clock back to the days when all problems were thought to be for the state to tackle and no room was left for individual initiative and self-help. So far from seeking to go back to those days, the British people in June 1987 voted for more freedom and for more choice. That is our agenda for the future.

5.24 pm
Dr. David Owen (Plymouth, Devonport)

It would be churlish of me not to congratulate the Chancellor of the Exchequer on recognising that oldest of political adages that the jingle in the pocket is probably the most important background to an election. He certainly provided that. I hope that he will not think it a backhanded compliment if I say that I think that he had more to do with the Conservative victory than did his right hon. Friend the Member for Chingford (Mr. Tebbit).

The issues that we face in the Queen's Speech are far more deep-seated than the contents of the legislative programme. In the legislative programme, the Government of course have the right to introduce most of the legislation, and that programme will be fairly crowded. However, behind the 1987 election there are some important lessons. It would be foolish for those of us in opposition not to recognise those lessons.

I did not recognise the economy from some of the more extravagant tributes that the Chancellor paid to it. Broadly speaking, tributes to the economy are better coming from others than from the Chancellor of the Exchequer. There is no doubt that the economy is now stronger in many important and significant areas than it has been for many years, and we can all rejoice at that. However, the Chancellor would be wise to pay more attention to the uncompetitive nature of much of British manufacturing industry when that is compared with the costs of some of our major industrial competitors, not least the Federal Republic of Germany and many other European Community countries. The Chancellor would also be wise to cast his mind forward to the looming balance of payments problems, and especially to the problems that will occur when North sea oil revenues begin to recede.

At this stage of the Parliament it would also be wise to consider the ingredients of the electoral successes in 1979, 1983 and 1987. I have no doubt that once again, as in 1983, so in 1987, the Government won the debate on the defence of this country hands down. I say that with no great joy. I hope that the lessons will be learnt and I look forward to the return to a bipartisanship on defence policy that was the hallmark of this country from 1940 to 1980 when the former Prime Minister, now Sir James Callaghan, left the leadership of the Labour party.

The Government won some of the arguments on economic policy but not all of them. The area in which the Government lost the election was wisely drawn to our attention by the right hon. Member for Aylesbury (Mr. Raison) in a very thoughtful speech. He said that he thought that the Government had won on points. Conservatives have to say that. However, he was really saying that the Government lost on points —[Interruption.] I suggest that hon. Members who missed the right hon. Gentleman's speech should read it. Beneath his speech they will see a quite penetrating criticism of some of the social policies.

The right hon. Member for Shropshire, North (Mr. Biffen) also made a fascinating and interesting speech in two important particulars. First, he drew attention to the problem that the House faces over the election result in Scotland. As democrats, that presents us with major problems. It is wholly appropriate for those of us speaking from the alliance Benches to draw attention to another fact. Not only was Scotland disfranchised, but 7 million people are substantially under-represented. Hon. Members should reflect on that fact in all fairness and justice. In almost all other European Community countries, under their system there would now be 63 SDP and 83 Liberal Members of Parliament.

It is no use our complaining. We must defeat the system that exists. It is perfectly clear to me that, unless we are able to learn the lessons of the three successive election defeats, there will be another Conservative victory in 1991. We intend to learn such lessons. Before Government Members cheer, let me say that we intend to learn such lessons, in particular in the most crucial linkage between social policy and the market economy. The market economy is here to stay—that is one of the other lessons of the last three elections—but the market economy as practised by the Conservatives is not here to stay in any sense at all. There is a growing recognition—indeed, one has to say that at least the Government recognise that there is a problem in inner cities—that what is on offer in terms of, as some purists might say, a pure, unadulterated market economy is insufficient to grapple with the social problems that are thrown up by our complex industrial society.

Over the next four years, the real test of the political parties—particularly for the Opposition—is whether we can outflank the Government in winning people's confidence in what I have called the social market economy. I shall draw attention to some aspects of it.

The right hon. Member for Shropshire, North, apart from mentioning Scotland, drew attention to education. That is the most crucial matter for the country. I say that as the father of three children who are going through the state education system. Nobody can deny that it is a hairy existence keeping one's children in the state education system that is operated under the ILEA. If I feel angry at what is happening, many more people must feel much more angry, but there are a number of things to learn. I do not quite share the right hon. Gentleman's enthusiasm for all aspects of the proposed education reforms, but I cannot praise him on the one hand and, on the other hand, not recognise that. if he believes that in such proposals there is the kernel of something as momentous as the Education Act 1944, I must at least look at such education proposals and take them seriously.

The Secretary of State for Education and Science is one of the more thoughtful right hon. Members. His record should allow him to create legislation that is as constructive as the Education Act 1944. If he wishes to achieve that goal, he will have to learn a few lessons about presentation and acceptability. It is not a wise idea to launch a proposal for a city technology college from the Tory party conference. That does not have the characteristic quality of ensuring that it will be accepted enthusiastically by the substantial portions of local education authorities which are not controlled by Conservatives. I do not make a narrow point; it is an important one. How one presents such education reforms will be crucial.

If the decision has been taken—I support it—to go for self-governing schools and to treat such schools as large enterprises with substantial budgets, they must have resources. That is one of the crucial points that the right hon. Member for Shropshire, North made. It is no use having big structural changes unless there is the oil to encourage such changes to ride over some difficulties, and that means more money. In blunt terms, we all know that it is difficult to achieve major social changes and social reforms if we operate in an atmosphere of tight finance. It is also difficult to operate against the local education authorities.

I have had some savage things to say about some of the conduct of the Left in local government. One of the tragedies of their behaviour is that they have tended to destroy the good in local government, and there is much good in local government. One of the things that I hope we shall be able to ram home to the Government is that, for centuries, local government has been one of the strengths of the British democratic system. If the Government want educational reforms, they must try to go with the grain of good local government. Of course they should make a change in local authority capital receipts. They are a sore, and a justified sore, for all good local authorities, but the matter is more important than that. There is a danger that the Government do not understand the positive merit of having another democratic source of power outside Westminster and Whitehall. It is a constitutional safeguard that, when power resides with the Government of the day in the House, power frequently resides in the council chambers of the country, in other hands, whether at this stage Labour or the alliance. Such countervailing balances have an important part in strengthening and deepening our democracy. An outright assault on local government will be resisted by both sides of the House.

It is probably too late for the Government to draw back from the poll tax, but all the indications from Scotland are that it will not only be resented but will throw up immense problems for the good running of local government and for the support and sustaining of effective local government. It would be helpful if the Government would think again about the poll tax.

There are other areas in which a partnership between local government and central Government is crucial, and in no way greater than in trying to revive inner cities. The Government have put forward some good ideas. I say without boasting that many of them have been openly advocated from these Benches for many years. It is not the first time that our ideas have been pinched, nor will it be the last.

I recommend that the Chancellor look again at industrial bonds and a way of getting greater leverage on finance from tax concessions. They have been effectively used in the United States in the rebuilding of inner city development. A public-private partnership is every bit as important as a local government-central Government partnership if the inner cities are to be rebuilt. Let us not have hostility to local authorities. Let us have more imagination from local authorities, and particularly from Labour authorities, in dealing with the public-private partnership.

Hon. Members should consider Glasgow—it is not a soft-centred, moderate, Labour-controlled council, yet it has understood the need to work a public-private partnership—and contrast the way in which the Labour Left in Glasgow has dealt with the public-private partnership and how the Labour Left in Liverpool has dealt with that partnership. It is as if the two cities were separated by an ocean, not by two nations.

Mr. Eddie Loyden (Liverpool, Garston)

Will the right hon. Gentleman give way?

Dr. Owen

I prefer not to; time is short.

Another important matter is the Health Service. There are probably few things closer to my heart than the effective running of the Health Service. It is totally true that we can basically go on spending money in an almost unlimited way and there will never be satisfaction, but the percentage of GDP that the country currently spends on the Health Service is inadequate when judged by any comparative standards all around the world. [Interruption.] It is inadequate. We can argue about how much needs to be done, but I suspect that the Health Service needs at least another 1 to 2 per cent. of GDP over the next 10 years before it can truly cope.

Within the Health Service—that vast enterprise, as I found to my enjoyment when I was Minister for Health for two and a half years — there is immense scope for greater efficiency. I recommend to the Chancellor of the Exchequer the alliance proposals for an internal market within the National Health Service. The proposals would give the right to the patient, if there is a waiting list in his health district, to go to another health district. Charging is done between health districts, and no cash is related to the patient. That patient, by his own choice, moving to another health district, puts a powerful financial incentive on his health district to put its house in order. It will not like having to pay out money to another health district.

This is also a good opportunity to deal with the frontier between the private and public health sectors. It makes no sense to prevent somebody who can be dealt with in a private hospital more cheaply than in another part of the NHS from having treatment. There is no reason why treatment cannot be contracted out if a patient can have his inguinal hernia dealt with in that way. Good for him. He does not pay—the health district pays. We all know what happens to a docker who waits nine months for an inguinal hernia operation. If he is lucky, he can be kept at work. If he is kept at work he will be on very much reduced pay, because he is not able to lift anything. It is a great mistake to think that large waiting lists are not an economic disadvantage to the country. They also cause great hardship.

This internal market concept for greater efficiency in the National Health Service does not breach any of the fundamental principles, which I would fight to the last to maintain, that care should be provided on the basis of health need, not on capacity to pay. However, that also puts much pressure on my profession, which is often the greatest single obstacle to efficient running of the Health Service and to greater efficiency in the management of large waiting lists. I recommend that proposal to the Chancellor of the Exchequer.

When the Chancellor is looking at the inner cities, I suggest that he would be wise to consider making a reduction in the national insurance contribution paid by the employer in areas of high unemployment or inner city deprivation. That is a powerful financial incentive to encourage jobs, which would not cost much. Again, that was an alliance proposal.

I should like to refer again to education, in the light of what I said about the internal market for the Health Service. In their education proposals, when they are asking for a self-governing school, with the freedom to free itself from local government bureaucracy and run itself, why do the Government not say that entry into that school will be on a non-selective basis, following the same selection criteria as those used by the local authority? [Interruption.] We shall probe that. We shall probe the Government's intentions. I might be joined in this by the right hon. Member for Shropshire, North, who talked about the collective tradition of the maintained sector of education.

If it is really greater choice without privilege, sign me up. I want that, but I do not want to see selection coming in through the back door. There is an aspect of the Prime Minister's presentation of the proposals that sees them as rescuing the grammar schools, so many of which she herself abolished. But the real question is: can one give choice in the inner-city areas for the parents who feel trapped in schools that are providing and have provided for many years an inadequate education system?

We in the Social Democratic party will look at those educational reforms with great care. It is not immediate, instant opposition. If we can be convinced that the proposals are not introducing selection by the back door, and that they are introducing choice and variety into the education system, all credit to them.

In a Maitland lecture to the Institution of Structural Engineers, I took the same view about the city technology colleges. The problem with them as they are currently presented is that, again, they have a selective intake. However, if that were done in partnership with the local authority and there was no selection, and the catchment area was much wider so that it did not scoop off people from the local sixth forms——

Mr. Patrick Thompson (Norwich, North)

Will the right hon. Gentleman give way?

Dr. Owen

I shall not give way. I should like to make my speech in my own way.

At present the catchment area is narrowly confined. If adaptations are made in the process of legislation, we shall be delighted. That brings us back to how this Parliament will be conducted. Will the Government conduct themselves as they did in the previous Parliament, when there was gross insensitivity and ill-feeling created by having a majority of 144?

I recognise that a considerable victory has been achieved. It is bigger than most people have estimated. I have always argued that the 1983 election result was phoney, that the Falklands factor gave the Conservatives a far bigger majority than was actually there. Their true majority was probably about 70 or 75. I thought that, because of that, in one go we could take that majority from the Conservatives in the 1987 election. Now that they have a majority of 101, I am hoist on my own petard. I admit that it is likely that this is in that sense a larger victory than in 1983—[Interruption.] I shall not ever join the Tory party. The Home Secretary is indulging in a blue joke when he says that I am going to join the Tory party. He will be in trouble with Mary Whitehouse if he goes on saying things like that. I shall keep probing the Government as a Social Democrat, and proud of it.

In searching for a mechanism to restore the authority of local government—I have already looked at how it is financed — we must make changes. The poll tax is wrong. The Government should re-read the Layfield report and re-examine the case for a local income tax. With the computerisation of the Inland Revenue, it provides a proper mechanism. The Government's fear is that they do not trust some of the extreme local authorities.

I can almost hear the instinctive groans as I come back to this matter — proportional representation in local government is a different argument from that for the House. I believe that it should come for the House, but let us look at proportional representation for local government on its merits and examine its committee structure. We should recognise this. If it were introduced at one stroke, the extremism would be ended. At one stroke the authority of local government would he restored. We would have a decentralised system of democratic government. I implore the Government to re-examine that issue. Otherwise — this is the hidden message in the Queen's Speech — the Government are embarking, not just on a confrontation with local government, but on the dismantling of local government. If one systematically takes away the powers of local government, what happens? Good people leave local government. Indeed, the Labour party is packing them all in here now.

Mr. Michael Latham (Rutland and Melton)

Not the good people.

Dr. Owen

Perhaps not the good people, but the Left. I have never called such people the loony Left, incidentally. I have always believed that they are highly intelligent, completely dedicated, people who know exactly what they are after and what they are doing. They have decided that it is better to be in the House than in local government. There was a time 50 years ago when people's reputations were made in local government. People did not look to go into Parliament. We need to restore once again the authority of local government. The key to it lies in proportional representation and local income tax.

Let the Government learn for the next four to four and a half years. They have the chance to make this country more prosperous than before. I do not deny that. They have a chance to consolidate. Perhaps there will be a fourth victory. I do not believe that they will achieve it, but they will have much more chance if they show a breadth of vision and a recognition of their role as being much wider than just a majority of 101. If the Government listen to arguments, we shall listen to their replies.

5.47 pm
Mr. Edward Heath (Old Bexley and Sidcup)

In congratulating my right hon. Friend the Prime Minister, her colleagues and our party on their success in the election, I believe that it would be grossly unfair of me not to pay full tribute to the contribution by the Leader of the Opposition and the leaders of the alliance in that process. Their contribution was in all ways remarkable. With regard to the alliance, there never was a credible political arrangement, and it becomes less so now.

As the right hon. Member for Plymouth, Devonport (Dr. Owen) said, the leader of the Labour party went back on the policy of his predecessors since Mr. Attlee of having nuclear defence for this country. Although it is often said that no election has been won or lost on defence, there is no doubt that it played a major part in people's reactions all over the country. Therefore, I hope that there can be a return to consensus in defence policies because it will be even more necessary in future than now, for this reason. We have moved close to the super-powers agreeing on the zero-zero option. If that procedure is carried out, the flexible response for nuclear weapons in the world is removed.

There are those who have always found it difficult to understand the apparent contradiction, that we keep weapons to deter, believing that those weapons will never be used, but it is a fact of life and it has proved successful for the past 40 years. In no way should it be abandoned. If, as the previous commander of NATO said, we move further towards the removal of all nuclear weapons, including those in the field, we shall have returned to the position in 1939, when our conventional forces could not match those of a major European power.

In an attempt by the Soviet Union to take even the smallest sector of Europe, the pressure put on the President of the United States not to use strategic nuclear weapons would be enormous. In fact, it would be irresistible. One can imagine the argument: "Well, it is only a small hit of Europe, a small sector, not really important. Are you prepared to take the risk of destroying so much just to defend those Europeans?" That is the real issue that arises out of the present negotiations. I have always strongly urged and worked for the reduction of nuclear and conventional weapons, and shall continue to do so, but to abandon them would be absolutely fatal.

My right hon. Friend the former Leader of the House, speaking with the wisdom that comes to those who have been relegated to the Back benches, said that the Government would be wise, after this great success, to remember the position of Scotland and Wales; and that it poses a problem for any Government—as it does and will. He did not venture a solution other than that the Procedure Committee should look at it. I do not believe that that Committee will do much good for the problem.

My right hon. Friend then said that there could be no question of looking at devolution again. On that he is absolutely wrong. It is commonly said that we must remain a united kingdom. However, the most successful country in Europe — West Germany — has devolution. We gave it to the West Germans and they have made a success of it. The parrot cry that we must just have a united kingdom bears no relationship to the reality of modern times.

I want to comment on what the Chancellor said. I thought that his peroration was important. He is encouraged by what has been done about the debt of the developing world. It has taken a long time to bring that issue home to international opinion — ever since the Brandt report of — 1980 and particularly to the commercial banks. How much more sensible it would have been if the commercial banks had negotiated long-term arrangements for these developing countries rather than being forced now to put aside large amounts, either because they are a write-off or about to be written off, thereby reducing their capacity to help our indigenous industries here.

It would have been much more sensible to reach a long-term arrangement with the developing countries, but I praise the Chancellor for extending still further the process of writing off the debts of the smaller developing countries, from which there is no hope of ever obtaining repayment. The fact remains that the flow in the past two years has been from developing countries into the developed world, and not vice versa as it has been since 1945. That cannot be justified morally, economically or politically. It remains to be dealt with if the world economy is to maintain even its present level of growth, which, overall, is now comparatively small.

In this debate it is only possible to put down markers to one or two items in the Queen's Speech, about which I hope debates will follow. I hope that my right hon. Friend the Leader of the House will bear in mind the need fully to debate some of those subjects.

Little has been said about Northern Ireland. The situation there has existed for 18 ghastly years. No one there who is younger than 30 knows anything other than terrorism and the present condition of Northern Ireland. My view is that the Anglo-Irish Agreement should be activated to a far greater extent. We should not in any way be inhibited by the views of the Ulster Unionists. Lord Attlee's statement — that if one walks out, one has always got to walk back — has been proved right. They walked out; now they have to come back. The Government can press on and use the agreement to the utmost degree to take further action to deal with terrorism in Northern Ireland.

I come now to crime in general. What has been done in the past eight years has failed. We have more crime than ever before and it is still increasing. Our prisons are more and more overcrowded, and crime is particularly a problem of the inner cities. I suggest that there should be an entirely fresh look at the problem of crime, its cause and how to deal with it. The eternal cry, "Send them to prison; send them to prison for longer terms; and for still longer terms," is doing nothing to reduce crime. We owe it to the community to take an entirely fresh look at that, as Rab Butler did when he was Home Secretary. That was many years ago, and it is time we did it again.

Unlike the right hon. Member for Devonport, I am encouraged by the fact that the proposals in the Queen's Speech are all couched in terms that the Government could change, if persuaded to do so. They do not commit themselves to the poll tax: the speech states that fresh arrangements will be made. That gives the Government every opportunity. They are being wise and careful in their every statement. I hope that they will take advantage of every opportunity of accepting advice that we can give them.

As well as taking heed of what has happened in Scotland and Wales, the Government will also be wise to take heed of the views of large numbers of people, including large numbers of our supporters up and down the country on, first, the issue of jobs; secondly, housing; thirdly, health; fourthly, education; and fifthly, the poll tax. I went over most of the country, from Scotland to Cornwall and across to east Kent, and I was able to talk to people unhindered. They told me what they thought. Our people are worried about all of those things, and they supported us despite them.

We have heard a great deal about health. I respect what the right hon. Member for Devonport said, but it is not always quite as simple as he has made out — even though he has great knowledge. The London teaching hospitals do take patients from outside. Guy's takes them from Lincolnshire, with the result that it cannot take my constituents, who are put on the waiting list. Why does Guy's take them from Lincolnshire? They take them because Lincolnshire will pay Guy's for taking its people, and my constituency cannot. That is not a better result from one of the alliance proposals. It points to what we all know must happen — a reform of the formula for allocating finances within the Health Service. That is vital, and everyone in London and the regional areas around it knows that well.

The abolition of the rating system originated, if I may go so far back into history, in the Conservative manifesto of October 1974, which said: within the normal lifetime of a Parliament we shall abolish the domestic rating system and replace it by taxes more broadly based and related to people's ability to pay. The characteristic of a poll tax is that it is not related to people's ability to pay, nor to the circumstances in different areas of the country. Those are two basic failings of the poll tax, quite apart from the administrative problems. The Secretary of State for the Environment last night said that he believed that it was right that tax should not be related to people's ability to pay. That is not a radical proposal; it is a reactionary, regressive proposal for the tax not be related to people's ability to pay.

The Secretary of State for the Environment dismissed the issue of the register lightly with a flick of the finger last night, but he agreed that the register for the poll tax will, of course, be related to the register for electors, because the register for electors is open to public inspection. Therefore, any register for the poll tax can be compared by any official with the register of electors.

Mr. Marlow

Why not?

Mr. Heath

I shall tell my hon. Friend : because that will persuade people not to put themselves on the register of electors. I have heard my hon. Friend say before that it is a jolly good thing that they are not on the register of electors. I cannot accept that point of view, and I do not believe that the party will, either. My hon. Friend the Member for Northampton, North (Mr. Marlow) is not even prepared to shake his head.

Those are the reasons why the poll tax is not acceptable. The Government would be wise to reconsider it in the light of the statement in the Queen's Speech. The 1974 manifesto statement pointed to a period — we thought then it was not far ahead — in which the whole of the Inland Revenue system would be computerised, and we could then work the two systems together. Thirteen years afterwards we must be close to the time when the systems can all be computerised and operated together. That is much the best way of dealing with what has been an intractable problem for a long time.

We have heard a great deal about education. I beseech the Secretary of State for Education and Science to consider long and carefully the sketchy outlines of the proposals which he has so far put forward. We have heard a great deal from various sources in the House about Mr. Butler's reform of 1944. Anybody who knows the history of that period knows that years were spent on formulating the Act with both sides of the House involved and with consultation with local authorities, teachers and — the right hon. Member for Durham, North (Mr. Radice) omitted to say this—with all the churches. They were all consulted and their views were used in formulating that Act.

None of that has been done on this occasion. It may be that we have now reached the stage where, because of a lack of response to our industrial demands, we must have a national curriculum. But let us not justify it on the basis of choice. It will give not greater choice but more limited choice. It will be fixed by the Secretary of State, and if a Labour Government come to power their Secretary of State will fix it, not ours. The domination of the Secretary of State for Education and Science is an important factor to consider. Hitherto we have always repudiated that.

Has the proposal to devolve more powers, particularly financial powers, to headmasters been examined? Is it thought to be copying the private sector? Probably 70 per cent. of my colleagues went to public schools; I did not have to undergo that. I went to a state infant school, a church primary school, a grammar school and then won a scholarship to Oxford, so I have never had that experience. Does a headmaster of a public school run the finances of the school? Of course not. His job is to run the school. Yet we are telling state school headmasters that they must do a job which public school headmasters would never dream of doing. I know because I have discussed it with them.

Dr. Owen

They have a bursar.

Mr. Heath

Yes, that is what some colleagues have said to me. We have 31,500 state schools. Are we to have 31,500 bursars? That would be the greatest growth interest of the century. Is that what the Chancellor of the Exchequer wants in order to increase his productivity figures? Not for a moment.

A headmaster will have to negotiate with the ladies who come in the morning to clean the school what their pay will be, when their holidays will be and all the other arrangements for them. This measure has not been thought through. That is not the job of a headmaster, and headmasters are not capable of doing it.

What does the option out amount to? We must cast our minds back to the two years which Sir Keith Joseph wasted on vouchers. Various Right-wing organisations said, "Give parents vouchers and they can choose their school." That was impractical nonsense from beginning to end. Indeed, Sir Keith admitted it in a kind letter to me, saying how it was impracticable, but how nice it would have been if it had been practicable. What was the real purpose? It was to give cash vouchers to parents who were already paying for their children at public schools. The vouchers would have been a financial contribution to the cost of sending children to those schools. We all knew that to be the purpose of it. That is why the Government tried to find a way to sell it to the public.

Then there is the argument of giving parents greater choice. In my constituency they have a choice of three schools. We know perfectly well that some schools are fashionable at one time and others at another time, and that parents cannot all get their children into the one school that happens to be fashionable at the time. Chislehurst and Sidcup grammar school is a fine school with a magnificent headmaster and parents want to send their children there, but places are limited. The Government say parents have a choice, but some of them cannot get their first choice. In Safeway we have a choice and whatever we choose we can buy; in education we cannot. Therefore, the comparison now being made in so many Right-wing quarters that education can be sold like goods in a supermarket is absolutely farcical.

Getting schools to opt out is an attempt to open a side door to vouchers. When they opt out, they are responsible directly to the Secretary of State for Education and Science. What influence will a school have over him? In some education authorities schools may have precious little influence over councillors, but they have some and they have Members of Parliament who can argue for them. These schools will have no influence over the Secretary of State or his Department, so when they do not receive the money they need, they will charge fees. That is what the Prime Minister has always had in mind. With that, fee-paying education will be extended and that is what I am strongly opposed to.

The right hon. Member for Devonport says that he is opposed to selection. We have various types of selection and I do not object to them providing they are properly carried out. However, I object to forcing parents to pay fees for their children's education.

Mr. Marlow

How does my right hon. Friend make that construction?

Mr. Heath

Please do not interrupt. It is just too much to have the hon. Gentleman interrupting. The answer is the simple argument that I have advanced—that when such schools want more money, of which they are deprived by the Department of Education and Science, headmasters will have no alternative but to say to the parents, "Now you will pay fees." That is how it will begin, then it will build up and then we shall be told that fees should be paid in all schools and throughout our education system. To compare this as a great development with what Rab Butler did would make that great man turn in his grave. It is no comparison.

A further worrying aspect is the attempt to make all parents pay for all extra-curricular activities. That is absolutely lamentable. To take as an example music. about which I know a certain amount. This country leads the world in music. That was due after the first world war to the BBC and the promenade concerts and after the second world war largely to the place of music in our education system. When I was president of the European Community youth orchestra, it had 126 members. In my last year after impartial auditions, 86 of them were British. Why? Because of the musical education at our schools, the teaching and the symphony orchestras in which our youth play. I have three symphony orchestras in Sidcup schools alone. Is all that to be wiped away just for a small pittance which the Chancellor will save? Is that why we want another penny off the rate of income tax? Is it to wipe out such culture, visits to foreign countries and so on from our schools?

I must warn the Chancellor and the Secretary of State that many of us feel passionately about these matters and we will not stand idly by and let that happen. That is why I urge that we should have lengthy debates on this. The Government must hear our real views.

Mr. Ian Gow (Eastbourne)

Will my right hon. Friend give way?

Mr. Heath

No, I am sorry.

I want to say one word about Europe. I greatly regret that the recent Heads of Government meeting was brought to the conclusion that it was. I believe it was unnecessary because they were prepared to opt for regulations at the December meeting. The way forward would have been to get on with it and for the regulations to be accepted or rejected in December, not to postpone the work of the Community for a further six months. It has been postponed for too long in the past eight years.

We have agreed the agriculture price review. The cost is said to be the reason why we are challenging the Community's budget, yet we have accepted it. Why? Because we believe it is right. What is more, our farmers have benefited more than anybody in the Community since we joined. We complain about the Community's surpluses, but our farmers are contributing enormously to them. The Government must explain what they will do for our hon. Members who represent agricultural seats whose constituents are producing masses more wheat, beef, other cereals and oil than they ever produced previously. We are continuing to produce surpluses and we must tackle the problem.

The Leader of the Opposition does not deal with the problem by saying that the surpluses must be wiped out. I pay tribute to Mr. Williams for what he did for agriculture in the first Labour Government after the war. He did an enormous amount to improve British agriculture and make it efficient. We went further by going into the Community. To wipe that out bears no relationship to our previous history.

We hear about the reform of the CAP. What is this reform? It has never been proposed by the Labour party or the alliance. What we mean by reform is the adjustment, the rearrangement, of the price ranges for commodities inside the common agricultural policy. As soon as we talk about reform of the common agricultural policy every one of our colleagues in the Community bristles. They all say that Britain wants to wipe away what was an essential part of the foundation of the Community. Until we understand that, we shall not get their full co-operation in making a free market in services and manufactures, which is what we want and which will benefit us.

We should now show constructive leadership in Europe and should not take any relish in saying that we held it up and that we stood alone. That is not a demonstration of strength; it is a demonstration of weakness and shows that we are not prepared to work with our colleagues in finding an answer to the problems. Our future lies in Europe and the challenge now is to Europe. Europe is not meeting it and one of the things that worries most of us is that budgetary control is just a back-door way of cutting back on scientific research in Europe. That is what is happening and it is the British who are obstructing such research and creating uncertainty in so many ventures.

If we are to succeed in the world and outdo the Japanese instead of going protectionist on them and getting the Americans to do likewise, we must have common science and research in Europe and must provide the budget for it. I urge the Government to do that. I have put down a few markers.

My right hon. Friend the Member for Shropshire, North (Mr. Biffen), who no doubt has now gone off to a meeting of the 1922 Committee, said that we are in for a lively Session. We are, and we can get the right results from that Session if the Chancellor and his colleagues will listen to the views of those who care deeply about these affairs and who want to see progress being made. But many of us are not prepared to go into a reactionary regressive policy of any kind.

6.11 pm
Mr. Doug Henderson (Newcastle upon Tyne, North)

I rise to make my first contribution, and I thank you, Mr. Speaker, for giving me the opportunity to do so on an issue which is of such great importance to my constituency. I know that in my first contribution my constituents would want me to pay tribute to my predecessor, Mr. Bob Brown, and I do so with real affection and respect.

Bob Brown was first elected to this House in 1966 and represented Newcastle, West until 1983. Between 1983 and 1987 he represented the new Newcastle upon Tyne, North constituency that I now represent. He was a highly popular representative and was held in the highest regard, not only in the city of Newcastle but throughout the northern region. He has had a lifetime of service to the community as a city councillor and alderman and served the nation as Under-Secretary of State for Transport from 1968 to 1970, as Under-Secretary of State for Social Services in 1974 and as Under-Secretary of State for Defence between 1974 and 1979.

As an Army Minister and an ex-sapper, Bob Brown was in a real sense fully equipped to supervise the training of recruits. I have it on good account that this pleased the recruits and surprised the non-commissioned officers. I am also told that the very idea that a Labour army Minister had handled an Enfield .303 had the Army chiefs of staff quaking in their flak jackets.

My constituency is in the north-west of the city and covers the older industrial communities of Newburn, Lemington and Westerhope and the post-war settlements of Denton, Chapel Park, Newbiggin Hall and Fawdon the villages north of the city, and the better-off areas which line the Great North road north of Gosforth.

The constituency was a proud workshop community. The people there extracted coal from the banks of the Tyne and served not only local industry but industry in the south. That workshop community manufactured engineering and glass products and exported them all over the world. It processed steel at Spencers to serve local industry and gave George Stephenson his first chance as a plugman in Throckley pit. The job might now be known as that carried out by a foreman. The community constructed the first railway line in Britain between Colodge and Kenton even before George Stephenson's time and in the post-war era it established new engineering and allied industries.

In his first speech in the House in 1966, Bob Brown spoke about the link between people's skills and economic well-being. He said: As surely as the prosperity of the nation was built on the skills of the industrial workers of the North following the Industrial Revolution, we are again in the position of being able greatly to enhance the national prospects with the contribution which we can offer in the years ahead." —[Official Report, 26 April 1966; Vol. 727, c. 587.] It must be obvious not only to Bob Brown but to all of his former constituents that such hopes have not materialised. In the 1980s people in my constituency and in the north as a whole have not been allowed to make that contribution. Between 1979 and 1986, 171,000 jobs have been lost in the north. Unemployment has doubled, one in five of the people in my constituency is out of work and in areas like the New Biggin Hall estate, with a population approaching 8,000, 44 per cent. of the men have no work.

Between 1979 and 1986, 140,000 jobs have been lost in manufacturing in the north. In my constituency 600 have been lost at Lemington Glass, 800 at Ever-Ready and 600 at Tress Engineering. After eight years of Conservative Government, my constituency now has a workless community in which young people have very little prospect of a real job and where everyone knows that there are people who are now in their late twenties who have never worked.

In that workless community 32-year-olds are told by the local employment office that they are too old ever to work again. It is no surprise that they feel alienated and outlawed by our society. Even in the more prosperous areas like Chapel Park and Gosforth people are terrified that their children will not get the opportunity to work in the locale. That despair is aggravated by growing poverty, deteriorating housing and a neglect of the areas blighted by urban dereliction.

People in my constituency and in the north of England are asking, "Can we take any comfort from the proposals in the Gracious Speech or from the idea that we should sell off schools, break up our water industry and dismantle local authority services?" Can they take any comfort from the prospect of paying higher rates through the poll tax? What comfort can people take from the inner-city proposals?

Previous Labour Governments recognised that the problems that afflict the inner city cannot be tackled without intervention by both central and local government. I freely concede to Conservative Members and to the Secretary of State for the Environment that the Government have now rightly acknowledged that that is the case. Such intervention is necessary, even if it runs counter to their economic theories, and they recognise that the free market can make no real impact on inner city problems.

The Government introduced a number of schemes designed to intervene and to assist the cities. They are the partnership scheme, the programme, areas in receipt of urban development grant, the task force and now the urban development corporations. Those schemes are fraudulent because they mask what is happening in our cities. They expose the hypocrisy of the Government's claim that they care and that they can do something.

The Government claim that their approach can create jobs and begin the process of regeneration in our inner cities, but an examination of what is happening in the cities and of what is happening in Tyneside shows how false this is. Newcastle district council lost £187 million in cumulative block grant between 1981–82 and 1986–87 at 1986 prices, yet it received only £112 million in partnership finance over the same period and calculated on the same basis. Because of the impact of rate capping, that has meant that £75 million for city services has been lost including the possibility of urban renewal.

In a report published this month, the Institution of Civil Engineers has estimated that a real job in the construction industry providing a real service to the community costs, in net terms, £12,870. That includes design costs, other overheads and profit. On that basis, the £75 million cut in real support has deprived the city of Newcastle of 1,000 jobs each year for the past five years. It has also meant the loss of the services and the potential redevelopment that could have been provided by those jobs. Parts of my constituency, such as Newburn and Lemington, are outside the designated partnership areas. They lose out doubly. Not only do they lose their share of the reduced block grant, but they do not qualify for any partnership money. We see the same picture in north and south Tyneside, which have lost £12 million and £5 million respectively in block grant over the same period.

What hope, then, can people have in Tyneside in the urban development corporations? Their projected funding, cumulatively over the next five years, is £52.4 million. That does not even compensate for the loss of block grant in Newcastle and north and south Tyneside. By 1989 or 1990, those areas will have fewer real resources to tackle the deep and severe problems that they face than they had in 1981–82, when the Government began their various partnership schemes.

The Secretary of State for the Environment wrote to me on 9 April confirming that Newcastle's application for derelict land grant to clear the Percy pit site in my constituency had been rejected. I wanted to ask the Secretary of State about that today, but as he is not here, I am prepared to ask the Chancellor of the Exchequer, who I know will be back later. In the light of the proposals in the Gracious Speech, will the Government let my constituents know whether they will now provide the funding to include Newburn in Lemington and the territory covered by the urban development corporation on Tyne and Wear? If not, are the Government prepared to provide additional funding to tackle the problem of the Percy pit site?

A telling view on the urban development corporations is expressed in Chartered Surveyors Weekly. It says that the idea that an urban development corporation should have undiluted power to flatten buildings and override unco-operative local authorities is clearly undemocratic, and that making plans in London to deal with the problems of Manchester, Leeds or wherever is misguided and ignores the clear lesson of the general election that people north of Birmingham see their problems differently from the Government. They should be given the resources to sort out those problems for themselves. That is solid advice from the real practitioners of urban renewal.

The people of the north are practical and down-to-earth people, who can distinguish false claim from reality. They know that, however special assistance is dressed up, if the net result is less available funding, less redevelopment will take place. The people of the north know that, if fewer resources are available, fewer jobs will be on offer to the 25,000 without work in the city of Newcastle. Like the Institution of Chartered Surveyors, they know that whatever misgivings they may have about their local authority, that council is more likely to understand local needs and respond to them. They know that, unless the manufacturing base of our city is rebuilt and we begin to attract and create new high-tech jobs, no amount of special assistance will tackle the real problems that our cities face. They know that everyone cannot work at the now famous Metro centre, because they know that some of us have actually got to make the things that we sell and consume. They know that it is sheer hypocrisy for the Government to claim that they can stimulate an enterprise culture when they give so little money to the northern development company set up by all parties in the north, and when they reject the establishment of a northern development agency.

The people of the north know that the Government have no record of support for them, and that only a sustained fight for jobs and for our cities by the whole northern community can hope to extract — however grudgingly — any assistance. The people of the north know in their hearts that they must permanently campaign and fight for real change in Government policy. I know that too, and I am with them 100 per cent., in the House and in the wider community.

6.25 pm
Mr. Robert G. Hughes (Harrow, West)

Thank you, Mr. Speaker, for calling me to make my maiden speech. First, may I congratulate the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) on his maiden speech, which was made with great passion. I hope that I shall be able to follow it with some thoughts of my own.

Let me make an observation about my past. In the general elections of 1979 and 1983 when I stood unsuccessfully as Conservative candidate in Stepney and Poplar and then in Southwark and Bermondsey, I wondered whether I should ever stand here to make my maiden speech. Therefore, as well as thanking you, Mr. Speaker, for calling me, I thank the electors of Harrow, West for allowing me to stand here.

Sir John Betjeman described part of my constituency as the serried avenues of Harrow's garden villages". I think that aptly describes a beautiful part of greater London. My eminent predecessor, Sir John Page, used a similar line in many speeches, describing Harrow, West as being truly the garden of England. Jack Page, as everyone knew him, represented Harrow, West for 27 years, having won the seat in a by-election in 1960 after the tragic death of his predecessor, and successfully defended it in seven elections. It is my firm belief that he will be missed here, as he will be in Harrow, West because of his generosity of spirit. He was generous to his colleagues and to me as his successor, and he was kind and thoughtful in his advice. He was generous in the help, advice and care that he gave to his constituents, and assiduous in his work for the Inter-Parliamentary Union, which became the centre of his political efforts in his last few years in the House.

Harrow, West represents the London suburbs at their best. It is Metroland as described by Sir John Betjeman, although I am not sure whether it is Metroland as described by Evelyn Waugh. The different parts of the constituency have their different characters. The village of Pinner—and it retains its village character, despite the developers and despite too many office blocks and supermarkets — is characterised by the annual Pinner fair, granted under royal charter by Henry III in 1336 and kept going bravely by the people of Pinner throughout the war. It is still a thriving and successful fair today.

Probably the most famous part of my constituency is Harrow on the Hill. At the top of the hill is the famous Harrow school, which has sent so many of its famous sons to this House; at the bottom is the much less famous Harrow college of technology where I was educated, if "educated" is the word. That too has a proud record. I do not include myself, but I do include the many successful designers and film makers who went there. Excellence in education in Harrow is not confined just to Harrow on the Hill. Harrow's maintained schools provide an education of proven excellence. I freely pay tribute to my political friends who run Harrow council for the excellent work that they have done to ensure that Harrow has the proven best examination results in the country. Even if one discounts the prevailing social pressures in the London borough of Harrow, they are still the best examination results in the country.

One reason for that success is that in 1977 Harrow council led the way in giving parents, headmasters and governing bodies a real voice and real power. It is a model of what can be achieved if we trust parents. Running through the opposition to the education proposals in the Gracious Speech is a lack of trust in parents who live in the inner cities. It is a very negative and a deeply insulting approach to those parents who care desperately about the future of their children and the education that they receive. However, they are powerless against the education authorities in the inner cities, particularly in inner London and in Brent, which is next door to my constituency. The proposals in the Gracious Speech will lead to those parents having the power to do something to help their children.

I welcome in particular the inner-city initiatives that are contained in the Gracious Speech, especially those that relate to housing. I wish to say a few words about housing, particularly about housing in greater London. The Opposition say that we have broken the old consensus on housing. That is true. I thoroughly welcome the fact that we have broken the consensus. The old consensus on housing—competition to see how many council houses could be built, how quickly and how cheaply, never mind the quality — has been dead for a long time in most people's eyes, apart from those of a few politicians. The reality is that mass solutions, or a mass approach to housing, does not work.

We have to conclude, sadly, that much of the money that was poured into housing in the 1950s and the 1960s has been badly spent and wasted. Consequently, bad housing has been provided. Tenants had no control over their future. They were powerless. They have been unable to help their sons and daughters to live in the same area. They have also been powerless to do anything about the terrible backlog of repairs, and it has led to pitifully unbalanced communities. Many of the young and the able have voted with their feet. They have moved out of the inner cities, even though all that they wanted to do was to stay near their families who had lived there for generations.

A new consensus has been created. Central to that consensus has been the sale of council houses and council flats, and it has changed permanently the face of housing for many families. I do not take the view that people's ability to own their own homes has reached saturation level. Many hundreds of thousands, if not millions, of people could be helped to own their own homes. I very much hope that the Government will provide them with that opportunity during the lifetime of this Parliament.

It is particularly important that the old council estate monopolies should be broken up. Many council estates provide bad housing. People are trapped in those estates and want to move out of them, or they want variety to be provided. Why should a council tenant not live next door to somebody who rents his home privately, or who owns his own home? That provides variety, and people then stop saying, "It is only a council estate." It is not only Conservative Members who say that; I have heard Opposition Members say it, too. We need to be proud of each part of our localities.

Part of the answer would be to use a large number of small solutions. Local authorities should free their land banks, recognise that young people want to buy their own homes, bring in private developers and the building societies and help council tenants to buy collectively their estates. We have no right to deny to people what most, if not all, hon. Members regard as proper for themselves: that they should have the opportunity to buy their own homes.

I ask the Government to consider three areas that should receive attention. The first is the private rented sector. That is the only way that mobility of labour can be achieved. It was a terrible own goal when we virtually got rid of the private rented sector. Of course there were problems. I read in the history books about the problems of Rachmanism, but I do not believe that this Government would do anything that would lead to the return of the terrible problems that faced powerless private tenants. Those people can be and must be protected by law.

Secondly, I had the privilege to serve on the Greater London council in the days when it was led by my good friend Sir Horace Cutler, also from Harrow, West, who pioneered homesteading. Why is it that in our inner cities, where so much use is made of bed-and-breakfast accommodation, there are so many empty council flats? Why is it that so many blocks of flats are boarded up and unused? Many young people would like to move into those flats and use their money, time, energy and drive to make them into wonderful places in which to live. That happened during the years of the Conservative-led Greater London council. The Government could give a lead now and ensure that that happened nationally. I am certain that those who have so restricted choice for the people who live in the inner cities will never provide them with choice, unless the Government make them do so.

Thirdly, we must seek a new role for local authorities. The main problem is that too often local authorities have regarded themselves as the only providers of housing, as the only people who can reach solutions. Their job is to ensure that each individual on their waiting list who wants a home receives the help that he needs. They must ensure that the land banks are used to build new housing. The local authorities cannot provide all the solutions themselves. A huge shift in perception by local authorities will be needed, but it can be done—if a lead is given by the Government.

A decent home is at the core of proper family life, but mass, quick, all-embracing solutions have had their day. They have failed the people of this country. The Government's great success over council house sales is only the start, if we are to create one nation in housing and one nation of well-housed people. That is what I look for and that is what I believe the Government will go a long way towards providing in this Parliament.

6.39 pm
Mr. James Molyneaux (Lagan Valley)

I pay a sincere tribute to the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) on his maiden speech, and I join my hon. Friends on this Bench in paying tribute to his predecessor, Bob Brown, who was a Defence Minister at a fairly critical time in the affairs of Northern Ireland. We were impressed by the case that the hon. Member made for the constituency that he has inherited and we wish him all the best as a Member of Parliament.

I congratulate also the hon. Member for Harrow, West (Mr. Hughes) on his speech. The picture that he presented was of a very different constituency, with a different social status and conditions, different levels of unemployment and so on. We can all share in his praise for his predecessor, Jack Page, and from what we have heard from the hon. Gentleman today we can be confident that he will prove to be a worthy successor.

I hope that there will be no irritation at the intervention of an Ulster Unionist Member in a debate on the use of national resources. I had intended to qualify that by saying that irritation would be felt by the right hon. Member for Old Bexley and Sidcup (Mr. Heath). He is the exception. He launched an unprovoked attack on the members of my party and, with the bitterness that he customarily displays towards the members of his own party, he finds it impossible to forget or forgive the ballot box rejection by the people of Northern Ireland of an even more ludicrous initiative that he brought forward — the Sunningdale agreement of 1974. But we all know what makes the right hon. Gentleman tick. We understand all about that, so we will not judge him too harshly.

On the first day of the debate on the Loyal Address the Prime Minister refuted claims that she had no mandate to govern Scotland and Wales. She declared: That is absurd. We are the United Kingdom, and I hope we shall remain a United Kingdom".—[Official Report, 25 June 1987; Vol. 118, c. 61.] I shall not challenge the right of the Prime Minister to govern all the component parts of the United Kingdom so long as she retains the confidence of this House, and this House alone. In fact, my party would go even further and say that she and her Government have the exclusive right, under the authority of the Crown, to govern the United Kingdom and all the parts thereof. If the Prime Minister's claim to the exclusive right to govern the United Kingdom is to be convincing, and if it is to be sustained, it must logically rule out the right of any foreign Government to assist or participate in governing any part of the United Kingdom.

The designers of the Anglo-Irish Agreement used to argue that there was no joint authority, that the ministerial conference merely considered and discussed matters. However, it is now clear that it does far more than that. It actually makes decisions. It is interesting that that is no longer denied, nor can it he denied, in the light of the disclosure of the then Minister of State, the hon. Member for Chelsea (Mr. Scott), who, on 10 August 1986, while Parliament was in recess, announced in a United Kingdom radio interview a list of matters that "have been agreed". Those were the words. They were not proposals that were to be considered; they were matters that had been decided and agreed. It was only on the following day, perhaps after he had received a gentle slap on the wrist, that he grudgingly conceded that Parliament had some role in the matter after all. It was not until some seven months later that Parliament was informed—not consulted—and the items agreed with the Irish Government while Parliament was in recess were slapped on the Table of the House in the form of Orders in Council.

In earlier debates I have tried to be more charitable than others towards the Prime Minister. I never asserted that she was allowed fully to comprehend what lay behind all the bland phrases of the Anglo-Irish Agreement. Had the agreement been drafted as a legal document, she, as a competent lawyer, would have been able to judge the significance of what she was signing. But, as we know, the Anglo-Irish Agreement was drafted in political language, which has the great beauty and benefit of enabling politicians to interpret its meaning to suit their own aspirations and preferences.

I suspect that the Prime Minister has learnt much from that experience, and my instinct is confirmed by an article by Richard Owen, writing from Brussels, in The Times today. He says: Mrs. Thatcher adamantly refused to be 'bounced'. Mr. Charles Haughey, the Irish Prime Minister—also on cool terms with Mrs. Thatcher—joined the attack, remarking that if she did not sign 'we will be here all night.' The article continues: Mrs. Thatcher, faced with this sudden pressure, angrily refused to cave in, and the summit headed downhill into a bad-tempered impasse. The right hon. Member for Old Bexley and Sidcup deplored that state of affairs. He was in favour of caving in and compromise, but, to her eternal credit, the Prime Minister flatly refused to have anything to do with it.

The heading of that article in The Times was rather striking. It reads, How Thatcher avoided being bounced. That heading comes two years after the right hon. Lady was bounced into signing the Anglo-Irish Agreement. I suppose that history will reveal who did the bouncing, but now, in an unassailable position, and confidently entering into her third term, the Prime Minister is clearly not going to be bounced again.

By way of light relief, I refer to a comical little passage in the article in The Times. Referring to the mood of bitterness in Brussels on Tuesday, Richard Owen records: Even Sir Geoffrey Howe, the Foreign Secretary, was said to be dismayed ('shaking with anger' was one observation). The cause of the Foreign Secretary's dismay is not made very clear. I wonder whether he was dismayed by the attitude of the 11, or by the Prime Minister's refusal to compromise, as the right hon. Member for Old Bexley and Sidcup would have liked her to do, but the fact remains that the Foreign Secretary shaking with anger must have been worth seeing. I suppose that if the right hon. Member for Leeds, East (Mr. Healey) had been in the Chamber he would have improved on an earlier joke and drawn an analogy with jellied mutton.

This is the day of the Chancellor of the Exchequer. On occasions, he has had the support of right hon. and hon. Members on this Bench, notably that of my friend and colleague the right hon. Enoch Powell, who fearlessly spoke up for what he judged to be right, be it popular or unpopular. His absence from the parliamentary scene is a cause of deep regret—a regret that is felt in all parts of the House, but most keenly by those who were privileged to work with him in good times and in bad times.

The Chancellor and his colleagues, with their trusteeship of our national resources, and those who assist them in the Treasury, rightly set great store by accountability. Before I came to Parliament I often led deputations to various spending Ministers. Invariably, their response was, "Yes. You have put a very good case for increased funds, but I shall have great difficulty getting it past the Treasury." That implies no criticism of Treasury Ministers—they are only doing their job—but it leads me to wonder why there is so little success in enlisting the support of Irish Prime Ministers in battles fought by the First Lord of the Treasury herself and the Chancellor and his Treasury colleagues against extravagance and waste of resources by the EEC. If Her Majesty's Government concede to Dublin Governments the right to interfere in the internal affairs of the United Kingdom in a manner for which there is no precedent or model anywhere in the Western world, why is the Prime Minister of the Irish Republic allowed to gang up with our opponents in Europe and, indeed, in the United Nations? Surely the present situation is nothing short of a scandal, and is not the claim to a "unique relationship" and talk about "the totality of relationships" something of a fraud?

Finally, I draw the attention of Treasury Ministers to another unnecessary drain on our national resources—the maintenance of the joint authority, or Dublin diktat, apparatus. First, there are the ludicrous arrangements for meetings of the joint chairmen in Northern Ireland. There is the winching down from helicopters of Dublin Ministers to the Stormont compound behind the barbed wire and the excessive use of police and Army personnel to ensure that our foreign governors are not exposed to any irritation or annoyance from those who bitterly resent their presence. Secondly, there is the round-the-clock protection of the bunker that houses the joint secretariat at Maryfield, in which the joint rule mechanism is sheltered and isolated from those whose destinies they shape.

Let me be so bold as to suggest that at the end of this final day of the debate on the Loyal Address the Chancellor, as guardian of the national financial resources, might send a minute to the Foreign Office, copied to the Northern Ireland Office, simply asking whether expenditure on this unwanted and unloved regime is really necessary.

6.52 pm
Mr. Terence Higgins (Worthing)

I am glad to congratulate the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) on his maiden speech. He spoke with feeling about his predecessor, Mr. Bob Brown, who was a good friend of many in the House, and with considerable passion about the problems of his constituency. The hon. Gentleman may have gone close to breaching the convention that maiden speeches should not be controversial, but perhaps that is because that convention is increasingly breached.

I particularly congratulate and welcome my hon. Friend the Member for Harrow, West (Mr. Hughes) who made an excellent maiden speech. He has arrived here the hard way, in view of the previous elections he has fought. Given the constituency that he represents, he spoke relevantly about education and with considerable expertise on the subject of housing. As a graduate of the Harrow college of technology he will undoubtedly bring to the House, on matters technological, expertise that perhaps is not as widespread on the Benches as it should be. My hon. Friend spoke with a convincing and cogent style, and I have no doubt that in the future we shall listen to him with great pleasure, as I am sure the entire House did this evening.

The subject of the debate is the allocation of resources. I congratulate the Chief Secretary to the Treasury, who has been on the Government Bench throughout much of the debate. He has an extremely difficult task ahead of him. Over time, the Government policy has changed from one of reducing public expenditure in real terms, to maintaining it in real terms, to simply reducing it as a percentage of GNP. Given the tremendous claims on public resources that are now before us, after the election and contained in the Gracious Speech, the Chief Secretary's task will not be easy. However, it is vitally important that we maintain control over public expenditure.

Within the total determined, the allocation between Departments is in many ways the real battleground. In that context, the changes made to our parliamentary procedures since 1979 have done something to redress the balance between the Executive and Parliament with the establishment of the Estimates Day procedure and the departmentally related Select Committees. Those innovations are helpful in assessing the priorities between different spending Departments, because the departmental Committees have the task of monitoring Departments and assessing what their claims on the Treasury ought to be.

I therefore hope that those Committees will be established with the least possible delay. In its first report in the 1984–85 Session, the Liaison Committee drew attention to the delay that occurred after the last general election. It pointed out that between 15 June 1983 and the time when the Committees were established, there was a considerable delay. In fact, those Committees were not set up until mid-December. The Liaison Committee believed that that delay was excessive, because for some six months the House was deprived of the valuable imput that those Committees can make. I therefore very much welcome the statement by the Leader of the House during business questions today that he intends to help in the establishment of those Committees at the earliest possible moment.

Of course I understand that there may be problems about appointment to those Committees, but I am glad that the Committee of Selection has already been established. It is clearly difficult to go ahead with such selection until we know what happens within the Labour party, but I understand that elections to the Shadow Cabinet will take place soon. It should therefore be possible to reach a decision on the composition of those Committees and get them into operation before the summer recess. It is important to do so, since otherwise the delay will be considerable and the Committees will be unable to work out their programmes and complete some of the important reports that were initiated in the last Parliament. I hope that every effort will he made to establish them as quickly as possible. Certainly as many as possible should he established before the recess. Any problem that may arise with the minor parties about composition ought not to delay that. No doubt difficult negotiations will take place, but it is important that they should be quick.

There is a clear case where the establishment of a Select Committee is necessary. I refer to the events of the last 48 hours. The Treasury and Civil Service Committee, which I had the honour of chairing in the last Parliament, produced a series of reports on the way in which the financial arrangements between this country and the European Community were developing. Those reports were not only helpful to the House but to the Government as well, because these matters are extremely complex and it is not possible to ascertain precisely what is going on by questioning across the Floor of the Chamber.

On this subject, perhaps above all, it is necessary for Select Committees to have the opportunity of cross-examining Ministers in depth to discover the exact position. In the last Parliament the report on the Fontainebleau agreement and a series of others highlighted the real problems that arise in relation to budgetary discipline. Yesterday the Prime Minister recognised that the arrangements that have been made were not sufficiently watertight to ensure that effective budgetary discipline was imposed.

Having said that, two aspects of what the Prime Minister said give considerable cause for concern. She seemed to be saying that she would contemplate a further increase in the EEC's resources if there were a guarantee of budgetary discipline. The House should recall that it was persuaded to agree to the increase in own resources from 1 per cent. of the VAT to 1.4 per cent. on the grounds that there would be effective budgetary discipline. It would be quite wrong to pay the price twice to achieve the same objective simply because the agreement was not watertight in the first place and was not made legally enforceable, as the Select Committee at the time said it ought to be. That is a very important aspect of the allocation of our resources.

No case has been made for any increase in agricultural support through the CAP. No such case has been put to us. This should be looked at carefully, and that is an important reason why these Committees should be established as soon as possible.

My right hon. Friend the Prime Minister has taken a sensible and realistic line on the EEC, but it is extremely difficult for her, with complete justification, to continue saying no meeting after meeting. The danger is that — this happened when the Fontainebleau agreement was set out—sooner or later the issue is fudged. Anything that the House can do to reinforce my right hon. Friend in sticking to her guns and ensuring a sensible outcome to the negotiations is of considerable importance.

I welcome the point that the Chancellor of the Exchequer made with regard to Third world debt. In the election campaign, those people who told church meetings and meetings of those who were concerned with Third world problems that the Conservative party did not care should have listened more carefully to what was being said before and during the election. Particularly, they should have listened this afternoon to the Chancellor's attitude to the Third world debt problem. The Treasury Committee reported in depth on this matter, not least with regard to the provision that should be made by commercial banks. That report was prescient in many ways, but it did not receive sufficient attention.

Therefore, I stress to the Chancellor of the Exchequer the importance of looking at some of the detailed arguments that we put forward, particularly with regard to the way in which, and the extent to which, the additional provisions that are taken by the commercial banks can be used against tax allowances. It seems that there is a random, arbitary way in which those provisions are allowed for tax and the scope of the allowances. I think that he will need to look at that matter.

Local government finance and expenditure accounts for about a quarter of total Government expenditure and is a matter of great importance. In the course of the election campaign I sought to spell out the community charge in considerable detail to my constituents. Subsequently, this matter has generated an increasing amount of controversy.

My view has long been that the rating system is incapable of reform. It is fundamentally flawed and I believe that we were right in previous elections to say that we would get rid of it. We are right to say that we shall get rid of it now. It is worth remembering that about half of the total of local government expenditure comes from the central Exchequer, and of the remainder about half—some 25 per cent.—comes from industry. The domestic rate covers about a quarter of total expenditure. One could argue that one should simply abolish the rating system and transfer the cost to the central Exchequer. It may be said that that is removing the basis of local democracy, but that has already been eroded to the extent of some 75 per cent., and many of the measures that have been necessary to prevent the profligate expenditure of some local authorities have eroded local government autonomy.

The main argument against that might be the amount of unemployment that it would create with regard to the valuation, collection and rebating of rates. But that is not the solution that the Government have come up with. They have come up with a proposal for a community charge, which is a sensible development.

The Leader of the Opposition, in opening the debate, stressed the importance of no taxation without representation. I think that the House would unanimously go along with that view. One must recognise that at a local level there are considerable dangers in representation without taxation. At the moment, many people are voting for policies and candidates that will involve vast increases in local expenditure, knowing full well that it will not cost them a penny. That is not sensible, it is a recipe for gross extravagance. We must recall that of the 35 million people who form the local electorate about 17 million do not pay rates.

Mr. Tony Benn (Chesterfield)

Is the right hon. Gentleman moving to the conclusion that we should reverse the expansion of the franchise which, for over 150 years, has been based on the right to vote regardless of one's financial position?

Mr. Higgins

The right hon. Gentleman knows perfectly well that I am not suggesting that. I am saying that it is unreasonable that a substantial number of people, not necessarily those who are poor but those who live in households with a large number of members, should pay nothing towards the cost of local garbage collection, street lighting or whatever. Why should they get those services free? It is perfectly sensible that they should not. I am not arguing for what the right hon. Gentleman suggested, but it is reasonable that those who make use of and place a burden on public services should make some contribution towards their cost. That would not involve paying the full amount because we are only talking about a quarter of the total expenditure.

I do not believe that a local income tax would improve accountability. The idea that power to impose income tax should be given to some of the local authorities that have been so profligate is not something that I would view with great equanimity.

It has been suggested that the community charge would be phased in over a period of three to 10 years. That is likely to be wasteful because there would be a vast duplication of the bureaucracy that is involved in collecting the tax. Therefore, it seems that the argument for phasing should be regarded with considerable suspicion. I believe that it would be right to make the change as straightforward as possible, having agreed on the arguments about it.

Two of the most central matters in the election campaign were local government finance and education. We should recognise that the cost of education, particularly teachers' salaries, is increasingly becoming a national matter. In the negotiations on teachers' salaries that has increasingly become so. It is an important component of local government expenditure and it accounts for about 25 per cent. of local government expenditure.

The transition from rates to a community charge will impose a burden on some people who previously have not paid rates and who will pay for services that previously they have been receiving free. If we are to ameliorate that transition there may be a case for transferring the cost from the local authorities to the central Exchequer. To that extent there may be an amelioration of what would otherwise be a difficult transitional period and it may result in a more sensible allocation of our resources.

The allocation of resources will become increasingly important in this new Parliament. The Treasury Committee, to which I have referred, has collected a lot of evidence from virtually all Departments on how they see their plans developing over the next 10 years. I hope that my right hon. Friend the Chief Secretary, in his immensely difficult task, will take account of that evidence. As yet the Committee has not had a chance to report on it, but I hope that my right hon. Friend will not necessarily assume that, as to the spending of individual Departments, it is right to make marginal adjustments and that the super-tanker in each Department floats onwards with little deviation.

At this stage of the Parliament we should make a fundamental review of the priorities that need to be reassessed. If a particular Department finds that it needs more or that it justifies an increase in the public expenditure that should not necessarily be met by a cut in the same Department. The problem is that matters have come to departmentalised and if there is to be an increase in the Department it must find a saving. That is not necessarily the right way to allocate resources.

I believe that, overall, the Queen's Speech contains a constructive programme which forms a firm basis for a third term of Conservative Government and which I believe will prove a success.

7.10 pm
Mr. John McFall (Dumbarton)

I appreciate the opportunity to deliver my maiden speech on the Loyal Address. I am privileged to stand here on behalf of the people of Dumbarton, where I was born and raised and in which I have lived all my life. The constituency has been well served by its representatives in this Chamber, not least by my predecessor, Ian Campbell, a most courteous and considerate man who was an excellent constituency Member for 17 years. My opinion of my predecessor is reinforced by contact with hon. Members.

In many ways the Dumbarton constituency forms a transitional zone between the essentially urban districts of industrial Clydeside and the Highland district of Argyll. Situated in the main communication arteries between the river Clyde and Loch Lomond, the constituency has a unique location as the gateway to the Highlands. It contains a wealth of different landscapes with features including mountains, moorlands, hills and fresh water lochs. Not least is the world renowned bonnie banks of Loch Lomond, which by itself is an incalculable asset for both constituents and visitors alike.

The town of Dumbarton was made a royal borough by Alexander II in 1222. Several other charters were granted to the borough by succeeding sovereigns and they were confirmed by a charter under James VI dated 13 December 1609. At about that time the town was much damaged by floods, so much so that application was made to this Parliament for a sum of money to enable magistrates to do something to prevent the town being entirely destroyed. Today it is on a similar venture that the people of Dumbarton have sent me to Parliament.

There is much to be done for a constituency which over the past seven or eight years has seen unemployment levels double and poverty levels treble—a constituency where the indices of socio-economic disparity between the three main conurbations prove to me that the north-south divide exists, as the hon. Member for Dorset, South (Mr. Bruce) reminded us earlier in the week in his maiden speech.

But in my area the divide is burnished in the mind. There is a daily reminder of the reality of life in an area which is increasingly neglected by national policies. It is a constituency where within a few miles of each other grotesque comparison can be made between Loch Lomond, one of nature's most beautiful spectacles, and the Trident submarines at the Clyde submarine base at Gairloch. This is a testimony to man's potential depravity and a witness to man's possible inhumanity to man. Over £10 million has been invested in the project, which is commonly referred to as a weapon of last resort. At the same time, there is nothing on offer to the 6,000 or so unemployed people in my area. These are the people of primary resort who are offered no hope of a job or a future by present Government policies.

I could become overawed by the history of this House by invoking the names of the many great people who have graced this Chamber and by dwelling on the life and death dramas conducted within these very walls. However, I shall not allow myself such indulgence. Today I am here to discern the relevance of the Queen's Speech for the constituents of Dumbarton.

I am reminded that the Conservative party claims to be the party of the family. What do the Government plan to do to support the family? What do they offer to the grandparents in Dumbarton who, as pensioners, are £11 a week worse off as a result of breaking the link between earnings and pensions in 1980? It was said by Government spokespersons at the time that it would not happen, but it is merely another example of the hidden agenda pursued since 1979.

What do the Government intend to do to support parents when the housing stock is deteriorating before their very eyes because of the cumulative withdrawal of £650 million from the housing revenue account in Scotland? What will they do to support the young persons who leave school and are faced with conscription to the YTS or else begin their journey into adulthood in abject poverty?

Will the Government undertake to finance and give sound support to the parents, teachers and pupils of our state schools instead of promulgating a "pay as you learn" philosophy as implied in the Gracious Speech? Will they support the family which has to pay the impending poll tax—a system rejected universally by all democracies and, even this week, by former Ministers such as the right hon. Member for Henley (Mr. Heseltine) and a former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath) who uttered these very sentiments this evening?

Whom does the poll tax benefit? It certainly does not benefit a substantial majority of my constituents. It will not even benefit the fledgling share-owning democracy. It will benefit Government supporters because they do not see their future as being tied up in the public services. To such individuals, state schools, National Health Service facilities and local authority provision such as social work and libraries are of secondary importance. To those people I say, "Go on a train, go to the local hospital, send your children to state schools, because then you will have a stake in the nation's public services."

The hidden message of the Gracious Speech is that the dismantling of the public services and the bludgeoning of collective provision are the measures which face us over the life of this Parliament. To people who do not rely on these services, private affluence is the only reality because they steadfastly refuse to recognise the public squalor which many people in Britain must now endure.

The debate on the use of national resources should signal that the time for pious statements has passed. Now is the time for action. A heavy burden lies on this legislative body to ensure that Government rhetoric about the family and about choice, freedom and people's needs is indeed translated into action.

7.19 pm
Mr. Nicholas Bennett (Pembroke)

I congratulate the hon. Member for Dumbarton (Mr. McFall) on his powerful and forceful maiden speech. I am sure that when we cross swords in future we shall have a lot to say. I also congratulate my hon. Friend the Member for Harrow, West (Mr. Hughes), whom I have known for very many years, on his very powerful and forceful speech. He spoke from the heart on issues about which he knows a lot.

As a Conservative, I am a strong believer in traditions, especially traditions that are useful and valuable I am especially grateful today for those traditions connected with maiden speeches. I am told that they should be relatively non-controversial and heard without interruption. As a former history teacher, I recall what happened to Benjamin Disraeli in 1837 when he did not follow that injunction and was forced to sit down. I hope that on this occasion I shall be heard in silence.

Mr. Nicholas Fairbairn (Perth and Kinross)

What did he say?

Mr. Bennett

My mentioning Disraeli is not a coded message meaning that I am on that wing of the party.

For all of us who are fresh from the hustings and by nature political animals, it is difficult to follow any injunction that tells us that we ought to be uncontroversial. However, I shall do my best to follow that practice, although it is especially difficult for a Member who represents Pembroke. The constituency has a long tradition of independent spirit. Both the last two Mernbeirs of Parliament, Nicholas Edwards, and Desmond Donnelly before him, showed considerable determination in defending constituency interests. That is a tradition that I intend to follow.

I am especially grateful for the opportunity to pay tribute to Nicholas Edwards. Although a member of the Cabinet and extremely busy right up until polling day, he gave me a great deal of personal help and showed me great personal kindness. Together with his wife, Ann, he lent me his home in Pembrokeshire throughout my time as the prospective parliamentary candidate. As a constituency Member, Nick was able to help many thousands of people through his constituency surgeries.

Nicholas Edwards quickly made his mark in the House with a maiden speech on the Health Service. His long concern on the subject bore fruit in the shape of the Withybush hospital in Haverfordwest. In 1982, as Secretary of State for Wales, he established the Pembrokeshire district health authority and I, in turn, as the new Member of Parliament for Pembroke, will be looking to my right hon. Friend the Secretary of State for Wales to bring that hospital's and that health authority's funding up to the figures that the Welsh Office says is necessary for them to operate at the right level.

Another powerful battle that Nick Edwards fought was over re-establishing an air base at Brawdy. It had been a naval base and had been closed down. He was able to re-establish it as an RAF base, which is how it now operates, together with a United States naval facility. We in Pembrokeshire look forward to that base continuing in operation for many years and playing a vital role in our national defence.

Nicholas was also greatly concerned to bring jobs to west Wales, and he recognised the need for a new road system. The considerable number of new roads in Pembrokeshire, including the Stepaside bypass and the Fishguard road, are permanent legacies to his work.

Nick was also the Secretary of State for Wales for eight years—the longest serving Secretary of State that Wales has had. He had considerable vision, and I believe that he served Wales very well. I hope that my right hon. Friend who has succeeded him will be able to follow on with the good work that Nicholas did. I am sure that it will not be long before we see Nicholas Edwards in another place taking part in parliamentary debates again.

It is also traditional to refer to the beauties of one's constituency. That is more difficult for some Members than for others. In my case it is an extremely easy task. Pembrokeshire will be very well known to many hon. Members as an area of outstanding natural beauty. Over half the area is in a national park. I recommend hon. Members who have not had a chance to visit the county to make an early visit and to stay on holiday there to help our hotel industry.

Although not born in the county, it did not take me long to appreciate the "Pembrokeshire experience". It is a unique part of the United Kingdom. Popularly known as "Little England beyond Wales", it is an area where the people are very proud to live. To this day there is considerable resentment that Pembrokeshire was abolished as a county in 1974 by my right hon. Friend who is the new Secretary of State. I hope that he will recognise the error of his ways and allow Pembrokeshire to secede from Dyfed and once again become a proud county.

Mr. Donald Dewar (Glasgow, Garscadden)

Take him there. Show him where it is.

Mr. Bennett

I intend to do that very quickly. I intend to take my right hon. Friend to Pembrokeshire shortly to see some of the problems that we have there.

The county is steeped in history. There are more than 20 castles in the constituency, and that is a reminder of the Norman settlements that there were in Pembrokeshire. Around Mathry in the north of the constituency one could believe that one was in France if one were to visit some of the villages there. There is a distinct air of Frenchness about some of the villages, even 900 years later.

In the south we have the holiday towns of Saundersfoot and Tenby. I hope, Mr. Deputy Speaker, that from time to time I shall catch your eye to speak on matters of tourism, which provides a major source of jobs for my constituents. Along the coast is the historic town of Pembroke, and adjacent to that is the town of Pembroke Dock. As one crosses over the Cleddau bridge one comes to Milford Haven, and in recent years that has been the centre of the Welsh oil industry. With the recession in that industry there has been considerable unemployment in the town and in Pembroke Dock. It will not surprise you, Mr. Deputy Speaker, if from time to time I try to catch your eye so that I might speak on jobs and enterprise, because I am concerned at the high levels of unemployment that we still have in west Wales.

As I said to the hon. Member for Glasgow, Garscadden (Mr. Dewar), my right hon. Friend will be getting a very early invitation to visit the county. The Minister of State, Ministry of Agriculture, Fisheries and Food visited the constituency on Tuesday to look at the fishing industry. I can tell Labour Members that we have had an increase in the trawler fleet in recent months and that we are very optimistic about a continuing increase in that industry.

There is a less glorious record in recent years in respect of the docks company in Milford Haven. I shall be watching with interest new plans that are to be announced tomorrow for the dock company in that area. Unless it is able very quickly to put its house in order. it may be necessary for the Government to intervene to make sure that that company is run properly. Haverfordwest is our county town and, with its market, is the centre of the farming industry in west Wales. Our main agricultural concerns are dairy farming, beef and the famous Pembrokeshire early potato. I am delighted that the first words that I was able to say in the House were in an intervention to my right hon. Friend the Minister of Agriculture, Fisheries and Food yesterday about the family farms in Pembrokeshire, many of which have had tragic bankruptcies in the last few months.

In the north of the constituency we have the holiday town of Solva and the city of St. David's which I believe to be the prettiest as well as the smallest city in Britain.

The Queen's Speech is always an opportunity for new Members—and for old Members, too—to say a few words about the issues that they believe ought to be tackled by the Government. I am delighted tonight to be able to say a few words about what I see as the role and purpose of the Government and how we should judge Government policies. What should be our vision of society? I shall judge my right hon. Friends on their policies as to whether they give individual citizens more freedom or less freedom. The freedom of the individual and of choice is the cornerstone for the continuing regeneration of our nation.

I spent my early years in what is now popularly called the "inner city". I saw, as a pupil at a comprehensive school, and later as a teacher and as a councillor in inner London, the effects of 40 years of municipal Socialism—a society in which people were given no choice, not even in the colour of the front door of their council house. Other effects were poor hospitals, poor public transport and a poor education system. No wonder that in the bus queues one used to hear people say: "Why don't they do something about it?" It never occurred to them that they might try to do something about it themselves. The local state did not give them the choice and, therefore, did not give them the responsibility. One cannot demand of people that they be responsible for what happens if one does not give them the choice in the first place.

As a schoolteacher in an inner London school in Bermondsey, I asked a parent why so few parents had turned up at a parents' evening. I was told: "We did not choose this school, did we?" That, at heart, is the crux of the problem that we face in the inner cities—giving back to our people in the inner cities the choice, the responsibility and the opportunity to grow, to own things and to look after their families without the continuing intervention and support of the state. Therefore, I shall judge Government policies on whether they help those people to be able to do that.

It is in those areas where there is substantial home ownership, share and pension ownership that one finds the lowest crime levels, the least vandalism and the greatest sense of real community and concern, because people have something that is theirs and that they can believe in, look after and protect. I want to see that extended to everybody who lives in the inner city.

In 1951 the Conservative slogan was "Set the people free". I believe very much in the innate common sense of our countrymen. I believe that we should continue to extend choice, to cut taxes and to get the Government's hands out of the pockets of the citizen. I support the measures in the Queen's Speech that give greater choice and freedom and that shift power to the consumer from the producer. I believe that the market system is the best way in which that can be done. Such a system is morally superior to Socialism and I look forward to playing a small part in the passing of those measures for the benefit of the nation and my constituents.

7.29 pm
Mr. Tony Benn (Chesterfield)

It is a great pleasure to congratulate the two maiden speakers who have just spoken. First, my hon. Friend the Member for Dumbarton (Mr. McFall) made a most passionate speech. I am glad that he broke the old tradition of being uncontroversial. Two things that he said will strike a responsive chord. The first was his point about the criminal waste of money on Trident when so many essential services are short of money. Millions of people in Britain would like the sort of choice about whether to pay for Trident or for the National Health Service. The second was my hon. Friend's point about the industrial conscription now introduced in the youth training scheme. I look forward to hearing my hon. Friend speak again.

The hon. Member for Pembroke (Mr. Bennett) made a model of a maiden speech. He paid a warm tribute to his predecessor, whom everyone in the House knew, and took us on a tourist's view of his constituency, which I hope will be reprinted in Hansard tomorrow when we debate tourism; and, except for a note of controversy when he mentioned Disraeli and then decoded his own message, I should have thought that he could quickly have been promoted to the Government Front Bench. Perhaps the Disraeli reference could be concealed again. He got very near to that at the end of his speech by referring to freedom, which reminded me of an old slogan that I heard in the 1945 election— F stands for freedom? What Britain brags about. If you can't afford your dinner, you are free to go without That is another view of his freedom which many Opposition Members would share.

I have found this the most political economics debate for many years, and I welcome it. We have begun to open up in the discussion, including in the speeches that we have just heard, some very real choices. For my part, I have long become utterly fed up with economics debates that were statistical, where people talked about efficiency, productivity and competitiveness or charged each other with being uncaring or incompetent.

I have never thought of the Prime Minister as being uncaring. She just does not care for the people whom I represent. I have never thought that she was incompetent. She is one of the most competent Prime Ministers, but competent in pursuing policies that I regard as destructive. Nor have I ever found much in the banana-skin theory of politics. I have read and re-read "Das Kapital" by Karl Marx and nowhere do I find a reference to banana skins as a factor in the decline of capitalism. When one gets down to the real questions that we have been discussing today, the House is at its best. I might add that I do not like extremist, hard Left, loony Left and so on.

Let us get down to what it is all about. Society is not about who is a better hand at dealing with the PSBR. I have no doubt that any hon. Member with an elementary capacity to cope with a calculator could try his hand at the PSBR, and we would all watch with anxiety. But it is not about that. What came out tonight was another stage towards realignment. Different opinions may be held on whether Devonport would join Bexley, Sidcup or Bexley, Sidcup would join Devonport. But there are more choices than have emerged from the speeches that we have heard. It is not just a matter of whether one is a monetarist or a supporter of Disraeli; whether one believes in caring and sharing and competence or in paternalism. [Interruption.] I hope that the House will listen to me as if I were a maiden speaker, because I shall be non-controversial, as is my wont. I want to put before the House another analysis which, although it may not find favour with Fleet street or the BBC, is a Socialist analysis of why we are in these difficulties.

My years of experience—I have been at it a long time—have convinced me, somewhat to my surprise, that neither the monetarists nor the wets, the carers nor the sharers, the more competent or the less competent are turning their minds to the real questions. If it is not a breach of some other rule of the House to mention serious matters, let me turn to that for a moment.

Every society ultimately reflects in its institutions and policies the basic principles upon which it is founded. Are we to be a jungle or a community? That is the basic question. When that has been settled, one can have any number of policies, White Papers, Green Papers, Neddies and Nickies, CBIs, or TUCs, but that is the basic question. Over the past few years, it has emerged that more people have come to see that. Are we about need or profit? Many things that are profitable are not needed and many things that are needed are not profitable. Until the House, in some economics debate, turns its mind to those questions, we shall not get far.

I look back over history because there are cycles that go beyond tomorrow's headlines, the next by-election or Budget. There are cycles going over centuries. When I heard the Queen's Speech I was interested to find out where it came from. It came, as I might have guessed, from my predecessor, a previous Member of Parliament for Bristol — Edmund Burke. The Government would espouse every word of what he said in 1795. He said: Labour is a commodity like every other, and rises or falls according to the demand. This is in the nature of things … labour is … a commodity, and, as such, an article of trade. If I am right in this notion, then labour must be subject to all the laws and principles of trade, and not to regulations foreign to them … The impossibility of the subsistence of a man who carries his labour to a market is totally beside the question … The only question is, What is it worth to the buyer? Yesterday, when the Today newspaper was bought and sold and the journalists were bought and sold like chattels, it took us straight back to Edmund Burke. Until we address our minds to whether that is what we want, we shall never make progress.

Burke also said: To provide for us in our necessities is not in the power of government. That is exactly what the Government say. Then he went on to say something else that the Government would be ill-advised to forget. He said that the rich are the pensioners of the poor, and are maintained by their superfluity. They are under an absolute, hereditary, and indefeasible dependence on those who labour and are miscalled the poor. If anyone thinks that Karl Marx invented arguments about class, they had better go back to Edmund Burke. Adam Smith and Edmund Burke both understood the heart of the Socialist analysis, which is that there is a difference of interest between those who create the wealth and those who own it.

If I go back to Burke for one side, I must also go back to find the origins of the "loony Left" councils, so much beloved by all the media correspondents and the leader of the Liberal party. The reality is — I do not say it to persuade the Conservative party, because I do not suppose that I will—that early on, when Burke's analysis became understood, working people said that they would not wait for a good king to act for them, for a better Prime Minister, for a caring and sharing leader, but would band together and do it themselves.

The origin of the idea of a collective society is that those who could not, out of their own resources—the poor of whom Burke spoke. who could not afford—who can?—be sure that they could pay for their own home, their own children's education, their own health, however ill they might be, and their own pension, decided to band themselves together and buy those services collectively through the ballot box. It is not Socialist rhetoric that is a threat to the Conservative party, any more than archbishops making sermons about brotherhood have ever threatened society, because society goes on. It is the fact that people do band themselves politically to buy collectively what they cannot afford personally that is the threat to the Government Front Bench. That is the real argument, and the trade unions were a part of it.

Again, to find a non-controversial example of what that really meant, I went to Birmingham under the Liberals. Let me cite quickly the headings of what happened after that lesson was learned — 1838: the municipal charter institutes an elected council in Birmingham; 1842: establishment of police force; 1850: first city asylum at Winson Green opened; 1861: public library started; 1867: art gallery opened; 1870: school board started; 1872: first medical officer of health appointed; 1875: city takes over the supply of gas; 1875: corporation street clearance begins; 1875: city fire brigade started; 1876: city takes over water supply; 1890: first municipal houses; 1898: city takes over supply of electricity; and so on, until in 1939 the municipal airport opened and I served there myself in the Royal Air Force some years later.

Anybody who thinks that that can be reversed when each of those developments gave more, not less, choice to the people of Birmingham must think again. Every development of municipal Socialism—what they used to call "gas and water Socialism"—widened choice so that, for example, people did not have to live in a slum without proper medical care.

To present the functions of the community expressed through the ballot box as a threat to liberty is a lie which will not, in my opinion, survive experience. The Government are now trying to reverse all those gains. The result is a widening gap. I do not believe in the north versus south gap. I believe that north versus south is a new way of dividing people. The truth is that there is hideous poverty in London, unemployment in the inner cities and great prosperity in parts of the north. For some reason the Duke of Devonshire owns Derbyshire. I have not gone into the history of that. However, let no one tell me that there is not great poverty everywhere. The dukes in Scotland own a lot of land. It is a matter of those who own the wealth being against those who create the wealth.

I was amazed to read today that the Prince of Wales had gone to east London and was appalled at what he saw. Yet that is within a mile or two of where he lives. Should we not sack the BBC for not broadcasting programmes to tell people what conditions are like in this city? The last people to speak out on these questions, well ahead of the Prince of Wales, were councillors in Liverpool and Lambeth and they were disqualified for fighting to correct those very evils that now offend the sensibilities of the heir to the throne.

I do not want to sound like Enoch Powell. but if the Government proceed in this way, they face an explosive situation. That point has been hinted at and it must be stated clearly. We cannot dismantle collective housing, state education, state health, we cannot destroy trade unionism—which was, after all, the collective strength against the employer — and undermine democracy without, at a certain point, finding people like those in South Africa and other parts of the world who will die for the right to vote and for that vote to be effective.

I have put it in strong language because we are often told that we are the mother of Parliaments and that we are marvellous. We are told that everyone has copied us since 1295. We sometimes forget that the struggle for democracy was bitter and bloody in many parts of the world. Indeed, it was a bitter struggle in this country and I refer, in particular, to the struggle of the suffragettes that happened a year or two before I was born. Women did not want the vote for fun. They wanted it as a political route to economic power. If we try to take that away, there will be serious problems.

The argument is not about paternalism from the top. Although I am not trying to convince the House, perhaps I may be allowed to allude to the Socialists' analysis of what happened after the first industrial revolution. Britain preserved its prosperity through huge imperialist expansion. We then began to decline, but returned to full employment during the last world war. There was a post-war boom which financed welfare capitalism. When we claim that consensus is over—as, of course, it is—it is the welfare capitalist option that is over.

I do not agree with the Prime Minister's analysis. She has taken the wrong course and is trying to return to Edmund Burke. However, we can never return to the policies so beloved of the right hon. Member for Plymouth, Devonport (Dr. Owen) and the right hon. Member for Old Bexley and Sidcup (Mr. Heath) because that option is not open. As a serious body, this House must consider the choices open to it.

I do not want to enter into a statistical argument with the Chancellor because he has more civil servants at his disposal than I. However, I confess that I detect a worsening world economic situation. The oil revenue which it was my privilege to look forward to as Energy Minister when it came ashore has all gone on dole money and is now declining. Manufacturing industry has been allowed to decline when we should have used some of the oil money to rebuild it. Privatisation gains are running out and the world recession is widely forecast. The world debt crisis is around the corner and there is little doubt that international financiers now want back the money that the Chancellor gave in his pre-election boom before they will restore full confidence in him. When those factors are added to what is inherently weak in our economy, there will be growing divisions and bitter struggles.

We must be prepared to discuss some of those fundamental questions about right and wrong rather than profit and loss. It is wrong to let old people die of hypothermia and close pits where miners are prepared to dig the coal at lower cost to keep them alive. It is wrong to buy nuclear weapons from the United States and deny people the treatment that they need for AIDS or other illnesses which could be provided for within the Health Service. We should return to other ideas from the 19th century. The 19th century was a story of an expanding franchise. That is why I cross-examined the right hon. Member for Worthing (Mr. Higgins), who referred to the link between payment and representation. That was a dangerous route for him to follow, although I know that he did not mean the full logic of his argument. What we need now is the extension of democratic control into economic and industrial areas which is the 20th century version of the expansion of the franchise in the 19th century.

We need the kind of self-management that would have at least given the journalists and printers on the Todaynewspaper the right to veto Murdoch's purchase of their paper. We hear so much about ballots, but there is never a ballot when an employer buys and sells employees like cattle at a market. Until we accept the idea of an industrial and economic franchise, there is no hope for tackling those problems.

We are not writing a Queen's Speech because there is not a Shadow Queen yet on the Opposition Benches. However, we must explain as best we can what is happening without personal abuse. We should support the people whom we were elected to represent. I believe that the proper answer to the poll tax is the common ownership of land — an old Liberal theory that goes back to the peasants' revolt. I also believe in giving the unions the right to defend their members and the restoration of democracy. Far from being some strange, new, threatening creature in the Labour party, I am one member of a large body of people identifying with a philosophy of society that goes back beyond Burke and perhaps goes back to a certain passage in the Bible where Cain was asked by the Lord what he had done to Abel and he replied: Am I my brother's keeper? Until that principle somehow finds its way into society —until it finds a moral place—we will not make much progress.

The argument that I have put forward imperfectly is one in which I profoundly believe. I should like to feel that it will be seen as an argument meriting respect, even if only because so many millions of people believe that argument here and abroad and it is such an ancient part of our tradition.

7.47 pm
Mr. Ray Whitney (Wycombe)

The right hon. Member for Chesterfield (Mr. Benn) has performed a service by setting out very clearly—possibly more clearly than he has ever done before— the differences between himself and the Labour party, the Socialists he represents and virtually the whole of the rest of the country. As he said, he holds those ancient views clearly. He took us through the 18th and 19th centuries, through Burke, Adam Smith and, above all, Marx. He took us through a view of society that is no longer valid. He should ask the million or so people who now own their own homes whether they believe in the principles of Marxism which the right hon. Gentleman so loves. He should ask the people who now enjoy the increased expenditure on the Health Service which has been generated by the economy that has been made strong by the free market principle whether they accept the Socialist view of society. The right hon. Gentleman has shown why we are clearly in a post-Socialist phase in Britain.

I want to share the praise that the right hon. Member for Chesterfield offered to my hon. Friends and Opposition Members who have contributed their maiden speeches in this debate. In particular I refer to the recent speech made by my hon. Friend the Member for Pembroke (Mr. Bennett). I entirely endorse the comments made by the right hon. Member for Chesterfield about the eloquence and efficiency of that speech. My hon. Friend the Member for Pembroke should not be nervous about showing his historical knowledge of Disraeli, whichever side of that particular debate the penny happens to fall. I endorse the tributes that were paid to our very good friend Nick Edwards. I pay tribute to the hon. Member for Dumbarton (Mr. McFall) and join him in his comments about the splendid character who preceded him, Mr. Ian Campbell, whose puckish twinkle was much loved by so many of us.

The Gracious Speech continues optimistically with the great work that the Conservative party and the country have achieved in setting Britain free and successfully revitalising the British economy and society. In particularly, we have brought back to the nation the sense of realism that it lost—the realistic understanding that the spending that we want, be it on the Health Service, education, research or social affairs generally, cannot be achieved until we create a healthy economy and that, in turn, a healthy economy depends on trade, commerce and industry, which produce goods and services for which other people are prepared to pay. They may sound like obvious truths, but to a large degree, they were forgotten for too long and are still not comprehended by Opposition Members. That is the reality that the Government and the country have grasped, as the results of the general election showed.

There is one reality about national resources that the Government have not yet grasped, and it relates to the concern that we should have about the provision of health care. We suffer from a national failing in resolutely refusing to look at the enormous problem of funding health care. The right hon. Member for Plymouth, Devonport (Dr. Owen) touched upon that matter, but, in fairly typical SDP-Liberal fashion, having tiptoed up to the problem, he failed to deal with it, and then tiptoed away.

The fog, myth, illusion and miasma that surround health care and the National Health Service, thick though they were and intensifying though they have been over 40 years, were thickened even more by the extraordinary campaign conducted by the Labour party during the three or four weeks of the general election campaign. Listening to the Leader of the Opposition speak no one would have believed that he was a member of a party—admittedly not a member of a Government; he does not have that experience — which ran the economy so badly that hospital building programmes were cut by one third, and in three years out of four, nurses suffered losses of pay in real terms. That is the record of the Labour party. The Labour party's contribution, as in many other matters, has been entirely negative. It has reinforced the lessons of the election campaign. It has also reinforced the point that one of the major weaknesses from which we suffer is that health care has become a political football. If we do nothing else during the next four or five years, we must ensure that that ceases. We must find a new system and a new organisation.

I congratulate my right hon. Friend the Secretary of State for Social Services on his appointment. We need a clear mind, together with intelligence and courage in tackling the problem. Certainly, throughout his political career, my right hon. Friend has demonstrated such qualities, and he will certainly need them in applying his capabilities to the issue. It is extremely difficult. I speak as someone who had a brief tenure in the DHSS. My right hon. Friend will not find it easy to obtain help from the insiders in the National Health Service. Too many of them have vested interests. Many who have the necessary knowledge have too many interests to protect and do not give Ministers or, indeed, the country the leadership and advice that they have a right to expect.

We continue with the myth that our National Health Service is the envy of the world. Sadly, it is a myth. If it were not a myth, our Health Service, or some of it, would have been copied by the rest of the world. It is copied by virtually no one because there are too many flaws in its structure.

It seems almost sacrilegious to say so, but it is time that we as a party recognised that fact. For example, Health Ministers may make the ultimate in political mistakes, in the sense that they have total responsibility in political terms. Whatever may happen in the hospital in Upper Puddlecombe is the responsibility of the Health Minister. But Ministers do not have actual day-to-day power. It is vested in about 200 health authorities, and hundreds of hospitals, consultants or professions in the Service. I do not say that that is a recipe for disaster, but it is one for serious trouble.

The Health Service must confront an even more serious problem. Many have recognised it. Indeed, there is Powell's law. I join in the tributes that have been paid to the former right hon. Member for South Down. After many years of extraordinary and uniquely distinguished service to politics and the House, his disappearance from the House is much to be regretted. After his tenure as Minister for Health more than 20 years ago, Enoch Powell identified the sort of problems about which I am speaking. He said that demand for "free" medical care quickly outgrows any possible provision for it. Of course, that was true 25 years ago, and it is also true today.

Many people talk about resources. The fact is that, year by year, since it was created, the NHS has quite rightly absorbed ever more of our national wealth. For example, in 1955, it used about 3.5 per cent. of our gross national product. When the right hon. Member for Devonport was Minister for Health, it probably absorbed just under 5 per cent. of our gross national product. Now, under the Conservative Government, the figure is about 6.2 per cent. That is a huge increase. But the faster we pedal, the further we seem to fall behind.

Recently, the Institute of Health Services Management joined the British Medical Association and the Royal College of Nursing to produce another document stating that we must keep spending on Health Services in line with the growth in national income, allowing for demographic change and special problems such as AIDS. The Institute of Health Services Management understands that since the Government have been in office we have achieved significantly more than that. When the Conservative Government came to office in 1979, 5.37 per cent. of our gross national product was spent on health. The figure is now about 6.2 per cent., so we have done significantly better. Of course, it is far from right. No one—least of all myself, having had the responsibilities that I enjoyed —would say that we are spending a lot. On that point, I certainly agree with the right hon. Gentleman.

The position will get worse. We have an aging problem. I do not deplore the fact. I rejoice in the fact that we are living longer. But if one goes, as I have, to dozens of hospitals, one will see that, in general ward after general ward—not geriatric wards—the average age of patients is about 70. One will find a few young men who have broken their legs on their motorbikes, but most patients are in their mid-70s or older, having their second hip replacements. That is splendid — it is an excellent development—but goodness me, it costs.

A further element in geometrically increasing costs is medical high technology, which may cost £1 million or whatever. Tomorrow, there will be something else. That cost is bound to increase at a geometric rate. The other factor that we cannot escape concerns the rising aspirations of our people. A slogan during the election campaign referred to a patient being treated where he likes, by whom he likes and all the rest of it. That is an impossible aspiration, as any serious person knows. People have genuine and new aspirations to health care. They may smoke 50 cigarettes and drink a bottle of whisky a day. If they are ill, it is wrong because someone has not paid enough in National Health Insurance contributions to get them right again. That is a social, medical and political factor. That is the problem.

A great deal has been done. I agree with what the right hon. Gentleman said. The administrative costs in our Health Service are extraordinarily low by international standards. All those concerned with the National Health Service should be proud of that. By any international criterion, we compare extremely well. There is not a quick fix or a quick solution in improving administration. In a service that employs 1 million people, and treats many millions of patients every year, mistakes are made. Everyone will know of something that can be improved in a certain hospital, but basically, by international standards, our administrative levels are extremely fine.

The Government's record is also excellent. What we have done with the Griffiths reforms in improving general management has already had significant results, which will work through in future. What we have done in competitive tendering has had a significant impact and will continue. What we have done in the sale of real estate, using the NHS estate more effectively, has also had an impact.

Those are all extremely laudable measures, but we are talking about only £400 million or £500 million a year at the most in generating new resources for health care. If we look at international levels, which is where the right hon. Member for Devonport wanted to take us and which is a fair comparison, a different story is told. We spend about 6 per cent. of our gross national product. More is spent by our Government than any other western Government, but I am now talking about national spending. As a nation, we spend 6 per cent. As a nation, the United States spends nearly 11 per cent. of a much higher gross national product. The average for most western nations is about 9 per cent.

If we moved to the western average, which we should and which is the right of our people, that would represent an increase of about 3 per cent. of our gross national product, not 1 per cent., as the right hon. Member for Devonport said. That is about £10 billion. In other words, we are talking about a requirement to increase health spending by 50 per cent., not by a few hundred million here or there through sound administrative improvements. No Government could contemplate that.

Therefore, we must look for a new or changed system. This is not a new point, but it has not been accepted by the nation before. In 1967, the British Medical Association — it must have been of a different complexion from the BMA now — set up an inquiry under Dr. Ivor Jones, which lasted for two years. It reported in April 1970. It proposed a system that I would commend as well worth studying by my right hon. Friend the Secretary of State for Social Services. A member of that committee was a rising young politician and barrister, who is currently the Foreign Secretary.

The committee suggested that important elements of health care— chronic care, invalid care and certain other things— should be taken out and dealt with nationally, and the rest should be dealt with on an insurance basis. That is one possibility. However, in terms of continuing to improve the health care of all our people, and ensuring the proper use of national resources, it is crucial that now, not in three years' time as we move into a pre-election period, the nation, the Government and the Conservative party face up to the dilemma that I have outlined. If we can achieve at least the recognition that there is a problem, that would be my first ambition. My second ambition would be to find a solution to the problem. We are a very long way from it now, but I hope very much that my right hon. Friends in the Government will understand that that is a problem that we must now address.

8.5 pm

Mr. Dennis Turner (Wolverhampton, South-East)

I felt a little diffident about speaking after the comment by the leader of the Social Democratic party, the right hon. Member for Plymouth, Devonport (Dr. Owen), about people coming from local government, but then I composed myself, on the basis that as I have come from local government I might have more contemporary experience to bring to the House on some of the major issues that are being debated today and have been raised during the debates on the Loyal Address over the past five days.

I sincerely thank hon. Members on both sides of the House, and all the workers in the House—the people who serve us our food, the Whips' Office, Mr. Speaker's Office, and the Fees Office, which I must not forget—for the warm welcome that I have received and for the courteous and helpful way in which I have been treated. Every hon. Member has helped me in settling into an awesome place. It is an experience that one has to live through to fully appreciate it. I say that in all humility. I am grateful for the help that has been shown to me.

I come to the House following a legend—the legend of Bob Edwards, who was a fine parliamentarian, and who devoted all his life to the interests of the people. If I can serve the people of my constituency one quarter as well as he did, I shall be very pleased.

Bob Edwards made a wider contribution than that, from the days when he sat with Trotsky as a young man, and with Mao Tse Tung. He fought in the Spanish civil war. All that is known to the House. He is such a modest man. He served through the years with such humility. It is a great privilege to follow him. To have had him as a mentor over the past 20 years has been of great value to me.

Bob represented a black country constituency. Many of my constituents expected me to use words such as yow, bay or thear, and wanted me to talk in good black country dialect. However, I shall not do so, only because I have respect and regard for the Hansardwriters. The dialect orginated from the language of Chaucer, but I understand the difficulties of writing down all that I have been saying in black country dialect, so I shall stick to the Queen's English as we debate the Queen's Speech.

Bob represented the black country towns of Bilston, Coseley and Sedgley. I now represent, as he did before his retirement, the constituency of Wolverhampton, South-East, which still takes in a large part of the black country. I am a black country man and proud of it. I come here with the spirit of the black country with all that has happened to us over the past few years, some of which has been debated in the past few days.

Many of my black country men would not comprehend what has been said in the speeches over the past few days, I think that they would have difficulty in identifying some of the things that have been said by the Government about the community in which we live in the black country today. Unemployment is 25 per cent. in my constituency. In Wolverhampton, 25,000 good men and women do not have the opportunity to make a useful contribution to society and cannot receive the rewards that would arise from that.

When we talk of unemployment, we must take into account the indignity that comes with it. Independence and freedom have been mentioned often in the past few days. The people whom I represent no longer have the freedom and independence given by the wage packet. A wage packet is important to them, and their dignity, standards and independence are based on that. So I must reconcile that freedom and independence with the difficulties and impoverishment in which many of our people have been placed by being out of work and finding it difficult to cope in present circumstances.

I wonder what I am supposed to say to the lady who came to see me and told me that she was existing on £39.50 a week. Although she received housing benefit, she had to pay for gas and electricity and keep herself on that amount of money. I reflect on that, and on the fact that there must be days in the week on which people, inside and outside the House, spend that much on one meal, yet that person and many thousands of others have to exist week by week on amounts such as that coming into their homes.

It is said that there is investment in housing, but in Wolverhampton we are starved of investment in housing. Year by year, since the Conservative Government came to power—my objective is not to make a political point—we have seen our capital programmes reduced to the extent that our ability to do what we want to in the inner areas has been taken away from us and we are not in a position to make a contribution.

Two thousand five hundred senior citizens and disabled people in Wolverhampton are seeking bungalows or purpose-built sheltered accommodation. We have not been in a position to build a bungalow for the past four or five years. We have estimated that it will take some of the people on that list who are 70 years old now until they are 120 to qualify for the bungalows or sheltered accommodation that they need, because of our lack of ability to provide it.

In Wolverhampton, 74 per cent. of the people are on housing benefit. Is that the freedom and independence that we are told about? What opportunities are afforded them to buy their own homes? Without any ideological hang-up, we— a Labour-controlled council—were selling houses in the 1960s and 1970s, and that is true of many authorities up and down the land. So the idea that tenants were somehow liberated purely by the advent of the Conservative Government is quite erroneous.

If we talk of health, 85 people have been turned away from our hospitals in the past three weeks—people who were seriously ill and could not be provided with a bed when they desperately needed one for emergency treatment. There has been a cut of £3.9 million in our district health authority funding since 1983 — which is not the increase about which we have heard. Recently, because of pressures of finance, we have cut back by 50 per cent. on the incontinence pads that our elderly and disabled people need to be able to live in some kind of decency and comfort. That has happened in the past month.

Will the education that we hear about be education that is uplifting for all, or occasional schools that will be identified and can be moved into the private sector? In the schools in Wolverhampton, there has been a reduction, year after year, in the capital programmes that are needed to improve those schools. There has been chaos in the legislation dealing with teachers, and we know that we cannot now give an education service to our children because of the turmoil that exists. Are we really intending to improve the lot of all our children in all our schools, or that of only a few? We shall see the test of that in the months ahead.

Across all these issues—and there are many more—the reality of people's lives in my community is different from what is portrayed in the speeches that we have had from Conservative Members. The Father of the House, the right hon. Member for Castle Point (Sir B. Braine) spoke a couple of days ago about the new licensing laws, but Omar Khayyam, that philosopher of old, would not have subscribed to his views on them: Ah love! could thou and I with Fate conspire To grasp this sorry Scheme of Things entire, Would we not shatter it to bits—and then Re-mould it nearer to the Heart's Desire! That is what we want in our community. We want fresh thinking and application from this House for the real needs of our people. If we do that, we will give people hope where it does not now exist. We can give people the opportunity to believe that they can grow and build.

In our lives, we have infinitesimal time to do what is necessary. Would it not be better now if, together, we were to start building something better, not only for some of the people, but for all of them? That would make a tremendous contribution to the people whom I represent.

8.17 pm
Mr. Matthew Carrington (Fulham)

As one new boy to another, I want to start by complimenting the hon. Member for Wolverhampton, South-East (Mr. Turner) on his excellent maiden speech, which was eloquent and passionately felt. It took me back, as well, because some years ago I worked for a year in one of the major factories in his constituency, and I recognised a lot of the problems from those times in what he said. He and I would differ on the solutions to those problems, but I recognise the honesty and eloquence of what he said.

It is with great humility that I rise to make my maiden speech, because Fulham has a tradition of sending to this House hon. Members who excel in their devotion to their constituency. The noble Lord Stewart, who represented Fulham for a great many years, was a man who was devoted to the constituency and a great servant of it, just as he continues to be a great servant of the country, as witness the views on defence that he expressed last year. He was followed by Martin Stevens, who spent more time looking after his constituency than, I suspect, did most hon. Members at that time. He was devoted to it and worked extremely hard for it and wore the title of Mr. Fulham with pride right until his untimely death last year. I can testify that he is well remembered and much loved in the constituency. I am sure that the House sorely misses his presence, too.

My predecessor, Nick Raynsford, was also a devoted constituency Member and, in the short time allotted to him, worked for the constituency in a way that was gratefully received by it.

I understand that it is right not to be controversial in a maiden speech, and I shall not be so, although, as my right hon. Friend the Member for Worthing (Mr. Higgins) said, that seems to be recognised more in the breach than in the observance these days. 1 do not want to be controversial, and hope that my remarks will not be taken as such. They certainly would not be taken as controversial if I made them in Fulham.

Fulham is an inner-city constituency and has many of the problems of inner-city constituencies. It is as well to remember that some inner-city constituencies, especially in London, are represented, not by Labour Members, but by Conservatives. Fulham is one of those. It has tasted Socialism and rejected it convincingly. Fulham has a long tradition of being a mixed area. All manner of people live there from those who are relatively well off to those who are not, and from those who have high levels of skill and training to those who have low levels. All types of people live in the same street and neighbourhood, and that is the great strength of Fulham. The strength of an inner-city area comes, not from its natural resources, but from the people who live there, and Fulham is no exception.

Fulham has a tremendous reputation for and tradition of small businesses which have existed there since it expanded westwards. It is often said that if one wants anything made or done the place to go is Fulham, particularly if one wants it done properly. We have small businesses to serve most of the needs which anybody could have. At present they are under serious threat, which is causing grave concern. Their ability to survive in Fulham is being threatened by the changes that are taking place in west London.

Many of the proposals in the Gracious Speech address the causes of that decline. As I have said, the great strength of an area such as Fulham is its people and the greatest strength of those people is their children and the education those children receive. For a long time educational standards have been declining and the attainment that children have achieved at school has not been at the level required for them to become the new employees of the businesses that already exist.

The Government's proposals on education provide a chance to remedy that. We have some excellent schools in Fulham which are greatly over-subscribed. They need the opportunity to expand and to get themselves out from under the dead hand of the ILEA. They need to be able to organise themselves, with parents and teachers participating, so that the best interests of the community and children are served. I am convinced that the proposals in the Gracious Speech will go a long way towards rectifying the problems in our local schools.

We have traditionally had a good youth training scheme in Fulham. Many children leave school without the skills they need to take on jobs and acquire training. One of our YTS workshops, run by Stan Marsh, is one of the best in London. He takes pre-school leavers and school leavers and trains them with the skills that they need to get jobs. He trains the children who have been failed by the education system to the extent that they leave school unable to read and write adequately. He teaches them to read and write and then finds them a job. A measure of his success is the number of children who leave his training and are placed in permanent jobs in the local community. Indeed, the need for the training that he provides is testified by the demand for his trainees in local businesses.

A major problem in Fulham — this is perhaps the most controversial element of my speech—has been the council, which has increased rates dramatically—by 49.6 per cent. this year. I am convinced that the proposals on the community charge in the Gracious Speech will meet many of the problems caused by the rate rise. One reason why the council increased the rates so high was that less than half the people who vote in the borough pay either the full rates or any rates. It must be wrong that an elected body can raise rates and spend that money when less than half the people who vote pay for the services that it provides. There must be a better system whereby those who pay for the services vote for those who spend the money that is contributed. The community charge goes a long way towards doing that. it does not go the whole way and stop spendthrift councils, but it stops councils being elected by people who have no responsibility for paying for the increase in services that they want.

The damage of the rate rise is clear. We have seen jobs lost and damage done to the elderly and less well off. We need a reform of the rating system. I am convinced that the community charge will provide at least the framework for that necessary reform and produce a fair local basis for taxation. We all recognise that there are many problems with it as it stands. Many difficulties must be ironed out and questions answered about how it will apply in detail. However, the principle is incontestable; people should pay in one form or another for the services for which they vote. The community charge will achieve that. It is the solution to many of the problems in our inner-city areas.

That is not the only problem. Although we have had a rate rise, we may face another rate rise and the community charge may also be raised to levels which are equally damaging to the community. I urge my right hon. and hon. friends on the Treasury Bench not to lose sight of the fact that any reform of the rating system must go hand in hand with proper control of council spending. Too often, councils spend money in a way which is not in the interests of the local community, but which is furthering wider, national, political ends which the council was not necessarily elected to serve.

We need a reform of local government to ensure that it is much more accountable to the people who elect it. The community charge goes a long way towards doing that, but it must go hand in hand with a reform to achieve local democracy and control which will provide a basis for the local accountability of councils. I believe that the Government will introduce this major reform.

The proposals on housing in the Gracious Speech are important for inner-city constituencies such as Fulham. One of the major areas of dereliction in Fulham is the privately rented sector and I am sure that my predecessor spoke eloquently about that in the House. Fulham has a high level of privately rented accommodation and it needs to be revitalised. My predecessor and I would differ considerably about how that should be done. The proposal in the Gracious Speech to revitalise the private rented sector is the right way forward and will bring back into the housing stock about 8,000 empty homes in the borough. Those homes are currently being wasted, largely because it is impossible to rent homes in the private sector on a just basis as between landlord and tenant.

I strongly support the inner city proposals contained in the Gracious Speech. They are the solution to many of the problems that I see in Fulham and I commend them to the House.

Several Hon. Members

rose ——

Mr. Deputy Speaker (Sir Paul Dean)

Order. I renew Mr. Speaker's appeal for brief contributions. Many hon. Members still wish to speak, including two who wish to make their maiden speeches, before the winding-up speeches which are expected to begin at 10 minutes past 9.

8.31 pm
Mr. Robert Sheldon (Ashton-under-Lyne)

My first duty is to congratulate my hon. Friend the Member for Woverhampton, South-East (Mr. Turner) and the hon. Member for Fulham (Mr. Carrington) on their maiden speeches. They were excellent speeches. They were lucid and eloquent and carried the controlled power of passion that is becoming one of the features of maiden speeches in this Parliament. They both have experience of inner cities.

My hon. Friend the Member for Wolverhampton, South-East spoke for his local council, which he supports, while the hon. Member for Fulham spoke against his council. They obviously have great affection for the areas that they represent, and it is quite right that they should have. Theirs were the authentic voices of local authorities, especially that of my hon. Friend. The Government will have to take that into account much more fully than they have done up to now.

Not only do my hon. Friend and the hon. Member for Fulham love their towns, but they work in them and see anything that goes wrong while they are going to and from their work, or to and from home. We must remember the words of John Banham, who was the chairman and director, the head, of the Audit Commission. He said that local authorities were more efficient than central Governments. That is true, because they have the close immediacy to see problems. They feel deeply about those problems and seek ways to put them right.

Select Committees were mentioned by the right hon. Member for Worthing (Mr. Higgins), and in that context I should like to make a personal plea to the Leader of the House. He should get the Public Accounts Committee set up as soon as possible, because there is a large backlog of work to be done. We are concerned about value for money, and that is the way to get it. If there are problems about the composition of Committees, the membership can subsequently be changed by a resolution of the House. I urge the Leader of the House to set the Committees up at the earliest possible date.

The Government have won three elections in a row. The question that we all have to ask ourselves is how this came about. I know that there are a number of subsidiary reasons, such as the state of the Labour party and the consumer boom. However, the main reason why the Government have been elected again and again is that they had the benefit of the oil from the North sea. That is what it is all about, and we should not fool ourselves.

The Chancellor of the Exchequer's predecessor had a balance of payments deficit of £8.8 billion, and this Government have had up to £7 billion surplus on the balance of payments. The Chancellor of the Exchequer is quite right to say that it is not revenue, but revenue does not matter that much. It can be raised by taxation, and although that is a bit awkward, it can be done. However, one cannot do much about the balance of payments.

Let us look at the problems that previous Chancellors have had. The 1945–50 Government were bedevilled with problems, and we had the retrenchment of Mr. Butler in 1955. The 1956 Suez adventure came to an end because of a balance of payments problem. In 1964, Maudling's dash for growth came to an end because of balance of payments problems. It was a deficit of only £300 million, and we are talking about a turn around as a result of North sea oil from a deficit of £8.8 billion to a surplus of £7 billion. That was a turn around of over £15 billion and suddenly, at a stroke, all the problems that bedevilled both Conservative and Labour Administrations for 40 years came to an end.

We must ask ourselves what we did with this astonishing stroke of fortune. We should not fool ourselves. The Government have not been so brilliantly led. It is not a case of a clever Government who did everything that was right that enabled the Conservatives to win election after election. It was this stroke of gigantic fortune. What did they do with this fortune? Did they carry out a fundamental reconstruction of our nation? Not at all; it went into consumption and overseas investment. Some people say that that is fine, that overseas investment will come back in due course with added interest. That is what people said in the years before the first world war and when we were sending vast sums of money to North America and to the rest of the world to expand industries and economies. That is when Germany, the United States and Japan were industrialising. We sent our money abroad, and manufacturing investment here declined.

How did we lose our lead in world manufacturing? We moved from being the supreme industrially based economy to an economy in which the rentiers and the City of London were accorded an over-dominant status that inflicted great damage on our nation. That was exemplified by the comments made by Sir Winston Churchill during his great days. Our supreme industrial economy, which had been admired by everyone from Disraeli downwards, bitterly declined.

Rarely in economic life or in any aspect of life is one accorded the chance of righting the wrongs inflicted by a previous generation. That chance came with devilish coincidence in the 1979 general election. The Conservatives could have done much then to right the wrongs, but what happened to the balance of payments benefit with which we could have changed so much? Our industrial competitors abroad have seen their industries advance, and although we had the oil surplus we were not as successful.

In a number of respects oil is no different from any other commodity. I know that the Chancellor of the Exchequer is not very happy about introducing any restraints on our exports of oil. He must understand that his enormous advantage lies in a high world price for oil. —[Interruption.] The Chancellor expresses his doubt. If Britain was a big wool producer like Australia, our interest would lie in a high world price for wool. If we were a coffee producer like Brazil, our interest would lie in a high world price for coffee. As I have said before, everybody knows that a potato farmer likes high prices for potatoes.

Why does the Chancellor not like a high price for oil? He can do something about oil prices. We know that we cannot be part of OPEC, but if we move in the direction in which our interests lie we could do something about it. If we were not so clever, we would be able to recognise our interests staring us in the force and rejoice in a high world price for oil. The advantage of a high world price is that some of the money could be used to finance some of the industrial expansion that I hope the Chancellor has in mind.

As the decline in North sea oil approaches, it will lead to greater need for our manufacturing industry. I regret that the capital allowances for investment are only 25 per cent. That is failing even to recompense those who have invested and who see the value of their assets depreciating. In many areas assets depreciate much faster than 25 per cent. Hon. Members will know that if one has a computer that cost £1,000, one could not sell it for £750. The selling price will be much less than that. If the allowance for depreciation is not accelerated, it should at least be in proportion to the actual rate of depreciation of the equipment.

We should have a tax incentive to invest, but we have a tax disincentive. The Chancellor of the Exchequer believes in tax incentives. He believes. in performance-related pay, share options and reductions in income tax. He understands and accepts the need for incentives. Why should there not be incentives for manufacturing industry? If it is so important for us, we must get it to invest more, and more must be expected from manufacturing in the future than in the past, first because we need it more.

It is not a distortion of the economy to give tax incentives for that purpose, but it is such a distortion to undertake, as the Chancellor is now doing, to provide tax incentives that serve no economic or social purpose— and here I believe that I am carrying the Chancellor with me. When I speak of distortion of the economy, I refer, as the Chancellor will know, to tax relief on mortgage interest and on pensions for the self-employed. About £5 billion was thrown away on mortgage interest relief, but the Chancellor needs money for inner cities and for schools. The Government say so, and the Chancellor must provide some of that money.

Surely the Chancellor can now ask for something from the Prime Minister, although we know that she has been against this. The Chancellor will not remain in his post for ever. His management of the economy, although I differ from him, won the election—there is no question about that. It was very well organised, and I pay tribute to the technical skill that brought about circumstances in which, over a long period, an election could have been called at any time without any particular economic problems. The Chancellor prepared the ground to enable the Prime Minister to call the election. No Chancellor of the Exchequer could do more for his Prime Minister.

Jock Bruce-Gardyne has commented that the right hon. Gentleman is not a great reforming Chancellor, but I think that he still has a chance to redeem himself. He wishes to be a reforming Chancellor—I detected that in many of his comments. If he does not want that, for what does he want to be remembered? Does he want to be remembered as one who embraced monetary nonsense, formulated it, implemented it and finally obliterated it? Does he want to be remembered as one who, to win one election, kept the show on the road — although I do not belittle that? Surely, if there is a time when the Chancellor can ask the Prime Minister for something, it is now. He should not ask for honours, but for something that will mark his record as a tax reformer, and that is how he would dearly wish to be remembered.

Surely the Chancellor has the right to ask for a reduction in taxes that distort the economy to no benefit. The particular problem about mortgage interest relief is that houses are too often regarded as investments rather than as homes. There is the enormous advantage of not having to pay schedule A tax or, in many cases, capital gains tax. Mortgage interest relief represents an enormous amount, and the poll tax will he a further addition to the incentive to treat a home as an investment. We know that the poll tax is nonsense, in this as in many other respects. Nearly every country has some form of property tax. Property is eminently taxable, and to remove it from that area of taxation cannot be very sensible. The Chancellor prides himself, with justification, on the improvements in inflation under his administration, but he must remember that inflation also applies to houses, although house inflation does not appear in the retail prices index.

Self-employed pension funds are not taxed on their income. That is such an extreme amount of assistance that clearly there is money there. If the Chancellor is serious —I believe that he is; the Government have said so, and the Prime Minister has made herself chairman of some important committees—about spending money, and if there is to be fundamental change, there must be some movement of money. It cannot just be diverted from one area to another. The Chancellor must know that, and if he does not, the Chief Secretary does. If the Chancellor is serious, and if he is to find the money that is needed for cities and for schools, he must at least start to end some of those abuses pretty quickly.

8.44 pm
Mr. Nicholas Fairbairn (Perth and Kinross)

It is a privilege to follow in debate the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who had a distinguished career at the Treasury. However, I must say that I misunderstood a good deal of what he said. First, he appeared to claim that the misfortunes of Socialist policy were entirely a matter of chance, and that the good fortunes of our economic policy were entirely a matter of good fortune. He then said of my right hon. Friend the Chancellor that it was his manipulation of good fortune that enabled us to deceive the electorate into wisely rejecting the policies of what he calls "distortion".

If the plea of the right hon. Member for Plymouth, Devonport (Dr. Owen) were answered, and we once again had a unified defence policy, I cannot imagine any other plank off which the Labour party could walk out into the deep ocean of sharks than to say that mortgage tax relief is a wicked distortion and should be abolished.

What has happened in this country is simple. It is the distortion of Socialism, the distortion of cellophane, the distortion of the English roses that Labour party members all had to wear—a fresh one every day. I was delighted that Buster Edwards, the train robber, had the intelligence to say, "I wish that my little flower cart was outside the Labour party headquarters."

I want to discuss a concept which I believe is important, and which underlines the Gracious Speech. It may be lost on some hon. Members that the Sovereign wears the badge of the most ancient order of England, while her consort wears the badge of the most ancient order of Scotland, the thistle. It is 500 years old, and that is being celebrated in Scotland tonight. We were made one nation not, I regret to say, by the kindness of the Scots to one another, but by their indiscipline, which in 1745 — I say this as a Jacobite Episcopalian—enabled General Wade, followed by the romance of Sir Walter Scott, to unite the nation. We are a united nation in Great Britain, but we are different in all the little parts of Scotland, of England, of Ireland and of Wales. It is false and wrong to say that any political party should try to claim that we are divided into nesting boxes. Socialism now says that it has triumphed in the smallest one left, and can eventually rule by a tax-raising assembly.

The shadow Secretary of State for Scotland, the hon. Member for Glasgow, Garscaden (Mr. Dewar), said that Scotland was a country crying out for change. But change to what? Are we asking to change to a nation that is more taxed than the rest of Britain? Let us take the difference between Gretna Green and Cumbria. For every £127 that the man in Gretna Green gets, the person over the border receives £80.

Are we prepared to change from a nation with one eleventh of the population of Great Britain which gets a third of the regional grant? Are we prepared to change from a nation in which the Locate in Scotland bureau has identified that 80 per cent. of inward investment from northern America into Europe wishes to come, provided that there is no change in our economic policies, and provided that we do not have some separatist fantasy tax-raising assembly?

The figures for Scotland show that the same number of people voted for the Conservatives as voted in the previous election. There was a loss of only 348 votes per constituency. There was tactical voting.

The concept was put forward that Scotland is deprived. The term "north-south divide" was previously applied to the Watford gap and above it. The media have now moved it to Hadrian's wall. I have the good fortune to live above the north-south divide. Yesterday I spent a great deal of my time in Northamptonshire, Leicestershire and Rutland. If any Scot imagines that that is a preferable way of life, he cannot comprehend Scotland's good fortune. Scotland has the majority of the new industries. The industrial revolution gave us coal and steel and the Irish potato famine gave us cheap labour. Then we suffered the misfortune of Socialism, which kept out-of-date industries in being long after they had become irrelevant.

Scotland is not in favour of Socialism. It is against the despair of Socialism. To what did Socialism appeal in this election, if it appealed to anything? It appealed to despair. Socialism even got hold of a little boy who needed a heart operation and said, "Isn't it awful?" [Interruption.] Yes, he has had his operation now, but how did he get it? He got it privately. He jumped the queue—just what the Leader of the Opposition accused my right hon. Friend the Prime Minister of doing. All Socialism is hypocrisy. It is an appeal to despair.

Socialists in Scotland cannot claim that the Conservatives do not have a mandate to govern. If we want to create another Irish problem, all that we need to do is to repeat it on the mainland. One can imagine the trauma and the anxiety and the divisions between Glasgow, Edinburgh, the Highlands and the Lowlands and the middle parts of Scotland. Let not those who have lived in Scotland for only a few generations preach to those who have lived there for much longer.

A Labour Scottish assembly would be determined to support every extravagant form of industrial dinosaur. The people of Great Britain voted in this Government by a huge majority. Socialists cannot explain that away, unless they object to democracy. The people of this country want prosperity, dignity, decent houses, decent schools and good hospitals. A Scottish assembly would divide the nation and cause the very conflicts that we cannot solve in Ireland.

I have more in common with most of those Opposition Members who are English than I have with the hon. Member for Glasgow, Cathcart (Mr. Maxton).

Mr. John Maxton (Glasgow, Cathcart)

That is the best compliment the hon. and learned Gentleman has ever paid me.

Mr. Fairbairn

Let us never forget that we are one nation. Of all parts of the kingdom, Scotland is probably the most cosmopolitan. It objects to the fact that the Prime Minister is from the south of England. It never objected to the right hon. Member for Blaenau Gwent (Mr. Foot), or to Mr. Callaghan, or to Lord Wilson of Rievaulx on the basis that they were English. It objects to the fact that the Prime Minister is English because she did something of which people ar either jealous or proud. I am thankful that the huge majority of people, and an increased number of people in my constituency, appreciate the excellence of the economic opportunities that she has provided for them.

I do not wish to hear that, having lost England, Socialists are now retreating to Scotland and that if they lose Scotland they will retreat to Glasgow, or elsewhere. Between Eyemouth and the Mull of Galloway there are 24,000 Socialist votes and between the Black Isle and Mull there are 34,000 Socialist votes.

Mr. Maxton

How many Tory votes are there in Glasgow?

Mr. Fairbairn

There are very many Tory votes in Glasgow. Socialism seeks to disfranchise the Scottish people and to hold them in its own horrible grip.

8.57 pm
Mr. Alun Michael (Cardiff, South and Penarth)

It is salutary for a new Member to have to respond in a non-controversial manner. I feel rather like the hors d'oeuvre when the diners are queueing for the main course.

I take great personal pleasure in paying tribute to my predecessor, James Callaghan. It is difficult to find anything new to say about a man who held three great offices of state and whose last role, in a parliamentary career that spanned more than 42 years, was to serve with distinction as the Father of the House, He will be remembered by my constituents as a superb constituency Member of Parliament. He never allowed the burden of high office to interfere with the task of representing individuals. He never failed to listen to the most mundane of problems, to attend party meetings each month and to seek to improve the quality of life of his constituents.

I have seen the respect in which Jim was held by so many ordinary people, spanning three generations, as I have worked and campaigned with him over recent years. I can only commend the help and encouragement that he has given me in preparing to take his place in this House as a model of continuity. If I fail to live up to his high standards of service to the constituency, it will not be for lack of his example or support.

The recent months have been marred by the illness of Lady Callaghan, and I know that many of my constituents will want me to pay tribute to her 42 years of service to the constituency and to express the hope that she will continue to make speedy progress towards full recovery.

During the debate on the Gracious Speech right hon. and hon. Members have referred to the conventions of this House to be observed by hon. Members making maiden speeches. To prove that perceptions change little over the years, I refer to the first words of the then James Callaghan as the new Member for what was then Cardiff, South. He said that listening during the first few days it seemed to him that a new tradition was growing up. He said: you get up and ask for indulgence, and then proceed to lay about you with all you have got, tormenting everybody on the other side, and hoping to get away with it. I hope I shall not trespass too deeply on the indulgence of Members on the other side of the House". —[Official Report, 20 August 1945; Vol. 413, c. 351.] His next word was "but".

In following another tradition of the House, that of referring to my constituency, I express a similar hope before coming to my "buts". During the past 15 years I have served parts of my constituency as a city councillor and worked with its young people in the community in other localities in my daily work. My constituency is a series of individual communities, each with its own distinctive character, following the coast of Cardiff and clustering around the docks area of the city. Those communities range from the older working class areas of the city with their sense of community and pride to the newest areas of private house building. My constituency includes the most cosmopolitan parts of the docks area of Cardiff and the seaside town of Penarth, with its reputation for prosperity as well as its rich variety of small communities. My constituency includes pre-war and new council estates and older private housing in desperate need of renovation. In short, it is a microcosm from which the Government could learn many lessons.

My constituency also includes the Cardiff docklands area which offers such tremendous opportunities for the future which in turn offer a challenge to the Government to demonstrate a trait that has been absent from a great deal of the rhetoric that I have heard in the past few days —the ability to co-operate.

Having listened with interest to the wise advice of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in echoing the points made by my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) and in support of the contentions made earlier by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), may I offer Cardiff as an example of the value of co-operation? The city is beautiful and warm-hearted —characteristics that can take the unsuspecting visitor by surprise. It is also a thriving city because of the success of redevelopment in the centre over the past 15 years.

That success has not been achieved overnight, nor has it been achieved by the course of calculated neglect known as "leaving everything to market forces". It came as a result of careful planning. It followed from public investment by responsible local councillors. It is based on a partnership between public enterprise and private enterprise in which commercial interest was balanced carefully by public interest and the interests of the citizens of Cardiff came first.

As someone who in recent years has been a properly accountable local representative, I am proud to have played a small part in that process and to be able to point to continuity over the years, despite the switches of political control within the local authorities from election to election. The model that I offer is enterprising local government, well rooted in its community, maintaining creative tension between commercial and community interests and co-operating with central Government initiatives. There are plenty of other examples. The way in which tourism has developed is based on similar public enterprise, with the city council taking the lead and then working in partnership with the private sector.

As the gateway to south Wales, Cardiff is important to the whole region and local authorities in neighbouring areas have taken similar initiatives in trying to restore the prosperity of their own economies. We have one of Britain's most successful enterprise agencies, established following initiatives by Labour councillors and based on firm foundations of close co-operation between local authorities, local businessmen and agencies of national Government.

It is difficult for one who comes from that background to comprehend the comments about local government made by Conservative Members, except as an expression of bigotry founded on political ideology rather than experience, and fuelled by the type of journalism that knows little and cares less about local communities and their future.

If Cardiff's recent history offers such positive lessons about co-operation — and it does—let me come to my two "buts". The redevelopment of Cardiff docklands has started with public investment by a Labour county council and a positive initiative from a Conservative Secretary of State. The development board recently established has started to benefit from the positive co-operation of the local authorities and, indeed, from the wider community—residents, business people, the enterprise agency. and so on.

The establishment of the board included reserve powers to ride roughshod over local interests. Let me state categorically that if those reserve powers have to be exercised, the board, its chairman and its members of staff will have failed in their duty.

The existence of such powers may be thought of as an incentive to co-operation, although Cardiff has demonstrated that it does not need that sort of outside stimulus. It has demonstrated its ability to resolve conflicts of interest from within rather than without. But the exercise of such powers would be a different matter.

I earnestly hope that the new board will live up to its early expressions of intent, and I also hope that the right hon. Member for Worcester (Mr. Walker), the Secretary of State for Wales, will in turn demonstrate the commitment to creating a "spirit of partnership" with local government, employers and the trade unions that he expressed in his speech to the Association of District Councils in Cardiff last week. If he and the board understand clearly that they must work at co-operation with the other parties — and not just demand co-operation by the other parties — we will have a foundation on which to build.

My second "but" relates to the face of Cardiff. I could give many examples, but on this occasion I choose only two. The first is unemployment. Despite all the success of our initiatives locally to bring jobs to Cardiff, despite the effectiveness of local government initiatives, and despite all the growth helped by the Cardiff and Vale enterprise, we see devastating unemployment laying waste our communities. The majorities by which new Members arrived in this House from south Wales demonstrate that people know where the blame lies and who will look after their interests.

Government unemployment statistics are so open to doubt that I turn to a more dependable source—how people described themselves in the local census last year. To put it bluntly, a person may not know whether or not he is a Government statistic, but if someone asks, "Are you unemployed?" that person sure as eggs knows the answer. In the Butetown estate—that cosmopolitan community which forms a residential island in a commercial sea and which borders right on to the docklands development—male unemployment has reached more than 50 per cent. On the Tremorfa estate, another well-established community on the borders of the docklands development area, the unemployment rate has gone up from 20 per cent. in 1981 to 34 per cent. in 1987. Unless these communities share in the prosperity that is coming to the city, we shall be building trouble, division, strife and despair for the future.

My second example is housing. After 14 years of representing local people, I resent the theorising and posturing on housing from the Government Benches. Conservative Members should visit Labour ward surgeries and they will learn the realities of families in desperately cramped conditions, of old people desperate for a little place near the shops and their children and of young couples being pushed to separation by the strain of living with in-laws. The Chancellor's speech today offered little choice of freedom for them and less hope of ownership than a trip to the moon.

Those are the realities behind the lengthening waiting lists and record homelessness. We do not want to neglect people in real need, and we do not want to level down our communities. We want these people to share in the minimum facilities of a decent home with a chance of a secure, peaceful and creative life. The ability and will to achieve this exists locally. We need matching determination from central Government, and that is what I seek on behalf of my constituents. That is why I extend a plea to the Secretary of State for Wales to give local government in Wales the money and the freedom to get on with the job that it can do so well — that of building homes and communities as well as offering co-operation in the task of economic recovery.

To the right hon. Gentleman I say, "Given the opportunity, ignore the extremists on your own Benches and concentrate instead on what has worked in the past and which can work for the future." That requires a positive spirit of co-operation to tackle the real problem of our people, which is the proper use of national resources by investing in the future.

9.8 pm

Mr. Peter Shore (Bethnal Green and Stepney)

I begin with two agreeable duties. The first is to congratulate the exceptionally large number of new hon. Members who have made their maiden speeches during the Queen's Speech debate. Today, a further seven have taken the plunge, and all have come to the surface in very good order. All have made excellent contributions and have paid tribute — which the House welcomes — to their predecessors, often in the most generous terms.

My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) gave us a vivid picture of his constituency. He eloquently described it as a workless community. My hon. Friend the Member for Dumbarton (Mr. McFall) used a memorable phrase when he described the Government's policy as, "the bludgeoning of collective provision" and referred to what is becoming an all-too common feature in our cities, "public squalor."

My hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) spoke eloquently and in the Queen's English, to use his phrase, about the needs of ordinary people in his constituency and, above all, the great privations that inadequate housing and investment are inflicting on them. It was good to hear from my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) that Cardiff is a city where there has been successful urban renewal. In many ways it offers a good model for the sort of partnership and co-operation that is essential between the public and private sectors if we are to succeed.

The hon. Member for Pembroke (Mr. Bennett) made an interesting speech and I had a feeling that he was in love with his constituency. He described it most graphically and almost invited the rest of us to go down there and visit him. The hon. Member for Fulham (Mr. Carrington), who rather disarmingly told us that he would follow the tradition of making a non-political maiden speech, defended the Government's most controversial policies with great vigour. I know that his intentions were entirely as he stated them. The hon. Member for Harrow, West (Mr. Hughes) made an interesting speech and highlighted an interesting change in the composition of the Conservative party. For the hon. Member to have been educated at the Harrow college of technology rather than Harrow school is an interesting insight into the processes of change that are affecting even the Conservative party.

I welcome the Leader of the House and wish him well in his new duties. It is a great and traumatic change from being head of the Trappist order in the Whips Office to the demands for instant articulation, which is the lot of the Leader of the House. His task is not made any easier because the right hon. Gentleman must follow in the steps of the former Leader who, by general agreement, was an outstanding Leader in this House. It was not only the wit of the right hon. Member for Shropshire, North (Mr. Biffen) but his independence of mind that won him the respect and affection of the House.

Mr. David Winnick (Walsall, North)

It also lost him his job.

Mr. Shore

It was almost certainly those qualities, particularly the latter, that lost him his job.

The Leader of the House has a difficult path to pursue. It will help the right hon. Gentleman if he remembers throughout his period of office, as I am sure he will, that he is not only a senior Minister of the Government but that he holds a special position in relation to the House. He must uphold its traditions, ensure that the Government's majority is not used oppressively and that the rights of the Opposition, the smaller parties and Back Benchers are respected.

I have a word of warning for the Prime Minister. She has won a famous victory, but she would do well to remember two points. First, she owes her great majority in this House not to massive, let alone growing, support for her policies in the country, but to the grievous and continuing divisions that are being created in the anti-Tory vote. No Conservative Prime Minister since the war has won a general election with so low a share of the popular vote—43 per cent.—as that that was obtained by the right hon. Lady in all three of her general election victories.

The great service and assistance that has been afforded to the Conservative party by those who deserted the Labour cause some six years ago will not continue. The results of the election on 11 June and the subsequent break-up of the alliance, before our eyes, have ended all pretence that the alliance was or could be a credible alternative. That event will radically change the prospects for and the outcome of the next election.

The Prime Minister might also remember that it was Lord Liverpool who last won three elections in a row. History has not been kind to him. He presided over one of the most oppressive and repressive regimes in British history. He faced massive unrest and unemployment in Britain. He met that by suspending habeus corpus and by imposing the infamous six Acts of 1819. His political obituary is worth recalling. Lord Liverpool was destitute of wide sympathies and of true political insight. His resignation of office was followed almost immediately by the complete and permanent reversal of his domestic policy. This is the fate that I believe awaits the right hon. Lady and her Government.

I gave one more preliminary point to make. I hope that this will he the last Queen's Speech recorded only by sound radio. It is more than time, as my right hon. Friend the leader of the Labour party said this afternoon, that the House of Commons emulated the established practice of the other place and agreed to allow in the television cameras.

In the last Parliament, we came very near to making the change. Only a last-minute change of mind, or a failure of nerve, by the Prime Minister, led to its rejection. I can well understand the Prime Minister's reluctance to be exposed at least twice a week to the nation's gaze. However, I hope that the wider interests of political democracy will prevail. The issue should be put to the House on a free vote at an early date.

I turn to the use—or misuse—of national resources and the failure to concentrate them on the areas of greatest need and potential economic growth. The Chancellor of the Exchequer made a typically complacent and self-congratulatory speech but uttered not a word about unemployment or our manufacturing industry. Yet the neglect of manufacturing industry still poses the greatest threat to our mid-term economic prosperity. It is not just a question of the effects of unemployment, appalling though those are, but of the ever-growing threat to our balance of payments as foreign manufactures continue to flood in.

In the last Parliament, our historic surplus in manufacturing trade disappeared. In 1985 our visible balance was in deficit to the tune of £3,000 million. In 1986, that deficit had grown to £5,400 million. The trend is all too clear. If it continues in this Parliament, as it did in the last two, we shall face the 1990s, as our oil exports decline, with an ever-widening balance of payments deficit.

Three factors are especially worrying. First, our trade imbalance is not confined to the older manufacturing industries. It is especially marked in the new industries, including the whole range of information technology. Secondly, today we are investing less than we were eight years ago. As the NEDC office pointed out in its paper reported in the newspapers today, we have not the capacity now to sustain even a modest 3.5 per cent. per annum growth in industrial output. If we cannot achieve that in manufacturing industry, we shall never catch up in the 1990s with the level of manufacturing output that the Government inherited in 1979.

Thirdly, in research and development, we are outstripped by our major competitors and, at the more fundamental research level, we are not carrying out. the basic research in physics and engineering that we need. Two days ago the Royal Society published its report on the migration of scientists and engineers from the United Kingdom. The Times summed up its main features as follows: Almost a quarter of the total fellowship of the Royal Society, widely regarded as the cream of British science, is now permanently living abroad. The report also draws attention to an internal brain drain in which talented science graduates are being tempted away from research into lucrative positions in commerce and the City. Professor Sir George Porter, the Nobel Prize winning president of the Royal Society, said yesterday: I cannot stress enough how serious the situation is. So many of our best people are going overseas.

Mr. Whitney

Will the right hon. Gentleman tell the House, if the country had inflicted on it the taxation policies of the right hon. Gentleman's party, what effect that would have on the brain drain?

Mr. Shore

There is no convincing evidence that the movement of people of this type from Britain to overseas universities and research institutes is governed by the levels of taxation in the United Kingdom. [Interruption.] I suggest that sceptical Conservative Members read the report because there the principal causes are enumerated as a result of the survey of the Royal Society's membership. By far the greatest factor is the lack of facilities and career opportunities. Those are the points that the society stressed, and I believe those to be true.

The Government's response is characteristically perverse. For years they have been cutting grants to research councils and to universities, with a minor relief announced just before the recent general election. Only yesterday the Chancellor of the Exchequer announced the downgrading of Neddy, both in terms of its staff and the frequency of its meetings.

I turn now to the second of the major threats, as I see it, that we face, and that is the slowdown in economic growth among the industrialised countries. The OECD's latest projections are for a 2.5 per cent. growth in 1987, and the same figure for 1988. This is well below the productive potential of the OECD countries. Therefore, we shall see a corresponding rise in unemployment. Just as bad, the slowdown in economic growth in the industrial countries will lead to a fall-off in demand for the raw materials and other products of the developing world. How, in those conditions—and the point was made very well by the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—the debt-laden Third world countries can continue to service their debts out of export earnings no one is able to see.

The dangers of major default, with all the implications that that would have for the western banking system, are greater now than they have been for the past five years. That is not just my judgment, but the judgment of people best qualified to give such an opinion. Those were the main items on the agenda at the summit of the Seven at Venice on 9 and 10 June. They deserved from the British Government much more than an election photo call visit by the Prime Minister and much more urgency than the Chancellor of the Exchequer showed in his speech today.

I turn now to the use of our resources to help, as our amendment puts it, the "areas of greatest need". The Prime Minister announced on the morrow of polling day that it was the inner cities that were now to be the main focus of Government policy. Heaven knows, they need to be. Ten years ago the last Labour Government made their priority the launching of a new inner-city policy involving the creation of the so-called partnership and programme authorities. Those areas were identified from objective indices of social and economic need. Those were the areas where cumulative disadvantage in terms of high unemployment, bad housing, environmental decay, population imbalances, single-parent families, unskilled labour, low education attainment and concentrations of New Commonwealth immigrants were to be found.

In the partnership areas, we identified the rotting cores of our great conurbations — inner Liverpool, inner Manchester Salford, inner Birmingham, inner Newcastle, Gateshead, and inner London — Lambeth, Islington, Hackney and the five dockland boroughs.

The Government have not disputed our judgment about those priority areas. Each of the conurbation areas has been accepted by them as an area of special need, and so have all the programme authorities as well. Because those were the areas of the greatest need, the Labour Government's policy was based upon targeting Government resources to assist them. Greater needs inevitably involve greater expenditure.

During the past eight years the Prime Minister has taken exactly the opposite view. Higher expenditure has been taken, not as evidence of need, but as evidence of gross extravagance and incompetence. They have been fined, abused and pilloried as a consequence. It is an astonishing fact that it is exactly those areas of greatest need—that point is not in dispute—that have had the most harsh reductions in rate support grant, with no fewer than 11 of those 14 local authorities rate-capped to make sure that they cannot meet the needs of their own people. It is here, too, in those 14 local authority partnership areas, that the Government have imposed the most catastrophic cuts in housing investment programmes. Let me illustrate what that means.

In the seven partnership areas to which I have referred, 14,000 new local authority homes were built on average in each year from 1975 to 1980. In the last five years, from 1982 to 1986, no more than 4,000 new homes were completed on average each year. Thus, in the las five years alone, these inner city areas have lost some 50,000 new homes which could have been provided if the Labour Government's rate of completions had been sustained. Is there any surprise that there should be a housing crisis in our inner cities today, and can there be any reasonable doubt about why the number of homeless people has doubled in the past eight years? It is no good the Government saying that the private sector completions have made good the loss; they have not.

Yesterday, the Prince of Wales visited my borough of Tower Hamlets and he was appalled by what he saw. In his words, the people of the area are working and living in conditions almost as bad as those on the Indian Sub-continent. It really is not acceptable. In Tower Hamlets alone, not a single new local authority home for rent has been completed in the past two years. Over 1,000 families are living in bed and breakfast accommodation and more than 10,000 urgent cases are on the housing waiting list.

There is something indecent, as well as unacceptable, in the fact that in that same borough, where some of the worst housing conditions in Britain prevail, homes in its dockland area, with a starting price of over £90,000, are freely available. Freely for whom? Not for my constituents, but for people who have the wealth and the savings that enable them to buy those new dockland houses. That, apparently, is what the Prime Minister means by freedom of choice. It is a bogus, spurious freedom of choice. So much for the past eight years.

What new initiatives are the Government now proposing for the inner cities? As the Prime Minister put it in a television interview on 12 June, the whole of the point about the housing and education was to bring increasing prosperity to some of those very people in inner cities who feel they are trapped and that is why I want to bring it forward as fast as possible. Does the right hon. Lady really think that permitting tenants on council estates to choose a different landlord will in itself lead to improvement in the conditions they face? Of course not. She must have in mind precisely the provision of extra funds for improvement and modernisation of those old estates—the very funds which she has denied the local councils through her cuts in housing investment programmes.

Again, does the Prime Minister really believe that by allowing the most favoured schools to opt out of the local education authorities she will be doing anything to improve the conditions of the great majority of schools in the local authority areas? Does the Prime Minister think that by allowing individual London boroughs to opt out she will do anything other than wreck the ILEA? If Wandsworth, Kensington and Chelsea and Westminster and the City pull out of the ILEA as they have clearly said that they will, they will take 21 per cent. of the school population with them and more than 60 per cent. of ILEA's funds.

Mr. Toby Jessel (Twickenham)

Will the right hon. Gentleman give way?

Mr. Shore

No, I will not give way.

Does the Prime Minister intend to restore money with increased grant aid to ILEA, or will she leave the rump authority with the impossible task of providing decent education for the most deprived boroughs in inner London?

Then we have the poll tax. The Prime Minister must be aware, as a result of exemplifications published by the Department of the Environment, that by fixing a standard business rate and confining local authority taxation to a nearly universal poll tax on adult citizens, the principal losers will once again be the most deprived inner city areas.

The awful truth that I believe that the debate on the Queen's Speech has gradually revealed about the Prime Minister's new initiatives in the inner city, is that they are not designed to assist. They are designed only to create small enclaves of prosperity and educational escape routes for small minorities while leaving the main areas of our inner cities to face increasing deprivation, vastly reduced community services, gross overcrowding, Dickensian slums, growing violence, vandalism, racial tension and increasing alienation and despair.

That is the nightmare emerging in that large part of Britain which so few Conservative Members are now able to represent. That is part of the divisiveness of the past eight years of Conservative Government. It will become even worse in future unless the House can, in the process of debate and discussion, and with the help of people outside the House, bring about some change of mind in the Government. That is what we will certainly seek to do. Tonight we will vote for our amendment to the Loyal Address.

9.32 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Wakeham)

I thank the right hon. Member for Bethnal Green and Stepney (Mr. Shore) for his kind words at the beginning of his speech. We have had an excellent debate. We have heard some excellent maiden speeches today, and they bring the total over the six days of this debate to 38. That compares with the 31 maiden speeches in the debate on the Loyal Address in 1983. I am sure that Laurie Pavitt would be pleased to know how many new Members have taken the advice that he gave to the new hon. Member for Brent, South (Mr. Boateng) to "get it over with".

We have heard maiden speeches from the Opposition Members for Newcastle upon Tyne, North (Mr. Henderson), for Dumbarton (Mr. McFall), for Wolverhampton, South-East (Mr. Turner) and for Cardiff, South and Penarth (Mr. Michael). All those hon. Members made excellent speeches. We heard maiden speeches from the Conservative Benches from my hon. Friends the Members for Harrow, West (Mr. Hughes), for Pembroke (Mr. Bennett) and for Fulham (Mr. Carrington). I am happy to join the right hon. Member for Bethnal Green and Stepney in congratulating all those Members who made maiden speeches today. I look forward to hearing all the maiden speakers taking part in our debates.

The hon. Member for Newcastle upon Tyne, North was anxious to take up a specific constituency point with my right hon. Friend the Secretary of State for the Environment. I have been in touch with my right hon. Friend and he will consider the hon. Gentleman's comments carefully and write to him. I am sure that all hon. Members who have spoken today made effective speeches. I recall my maiden speech 13 years ago. Afterwards, I was congratulated by Mr. Jeffrey Archer, who was then an hon. Member. He said to me, "At least it will read well." I say to all those hon. Members who made their maiden speeches and perhaps did not think that they did their best—although I am bound to say that I did not hear any of those—that at least Mr. Archer is an expert on the written word.

I join hon. and right hon. Members in congratulating those new Members who have come through their baptism of fire with such credit during the past week. One of the features of the class of '87 has been the number of them who have made reputations for themselves before coming to this place — in the European Parliament, in local government and in other activities. The House has a tradition, however, of forming its own judgments and of not necessarily accepting the evaluation of others. On their performances so far, the new Members stand to be judged favourably by the House, and we look forward to hearing more from them and from their colleagues.

In accordance with the best spirit of the House, maiden speakers consistently paid tribute to their predecessors. The hon. Member for Glasgow, Hillhead (Mr. Galloway) spoke for many of us when he commented so generously on his predecessor, Roy Jenkins, whose contribution both to the Government and to Parliament was outstanding. I join also the right hon. Member for Lagan Valley (Mr. Molyneaux) and the Member for North Down (Mr. Kilfedder) in their tributes to Enoch Powell, as a great parliamentarian, whose absence from this place will be keenly felt.

As well as giving us an opportunity to welcome new Members, the debate has afforded us the chance to welcome back some old friends and adversaries. In particular, I mention the hon. Members for Moray (Mrs. Ewing), for Eccles (Miss Lestor), for Norwich, South (Mr. Garrett) and for Dewsbury (Mrs. Taylor). All of them spoke most effectively in the debate.

The debate has also been the occasion for some notable speeches from more experienced Members. I was particularly struck by the thoughtful words of my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) when he spoke last Thursday about regional issues and the need to ensure that all parts of the country can participate in the success of our economic policies.

On Friday the right hon. Member for Leeds, East (Mr. Healey) made his final speech from the Front Bench with characteristic style. He spoke of moving to a higher perch from which to select a wider range of quarry. It is one of the great qualities of the right hon. Gentleman that, when he says that, his colleagues on his own Benches know that his sights will not be set solely on the Government.

My right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), in a forceful speech today, called for the fullest possible debate, and I have taken careful note of his call.

I congratulate also my hon. Friends the Members for Davyhulme (Mr. Churchill) and for Sherwood (Mr. Stewart) on the way in which they began the proceedings last Thursday. The good humour and the good sense with which they spoke was apparent. They are two distinguished representatives of industrial areas, and I pay tribute to them for their worthwhile contributions to our debate. Their reward has been swift. One of them has won the ballot for private Members' motions on 17 July, and the other was sixth in the ballot for private Members' Bills.

I am pleased also to have this opportunity to pay tribute to my predecessor, my right hon. Friend the Member for Shropshire, North (Mr. Biffen). As Leader of the House, he showed a deep understanding of the House and its moods, which was based on his experience as a Member for over 25 years. My right hon. Friend remains a "House of Commons man" in the best sense of the term, and I am pleased to have had the opportunity to work with him throughout the last Parliament in managing the Government's business. I cannot hope to equal his wit or eloquence—qualities which he demonstrated again in his speech on Tuesday—but I shall try to emulate his courtesy, patience and willingness to learn.

In my previous incarnation I was, as I am in my present role, concerned with business management, but I recognise that the Leader of the House is not simply the Patronage Secretary with a voice. Herbert Morrison, one of my predecessors, outlined five responsibilities that fall on the Leader of the House: to the Government; to individual Ministers concerned with business; to the Government's own supporters on the Back Benches; to the Opposition; and, as importantly, to the House as a whole. He believed that the Leader of the House must regard himself not only as a member of the Government, but as one of the principal guardians of the rights of the House of Commons as a whole. Like my predecessors, I shall try to discharge all those responsibilities as fully and as faithfully as I can.

The House may be beginning to feel, however, that I am taking the vocal aspects of my job too seriously. This is the third occasion on which I have been at the Dispatch Box in as many days. None the less, this is my first speech in the House for some years, because the life in the Whips' Office has precluded my speaking in the Chamber. Looking back, I find that my last speech in the Chamber was over four years ago on an Opposition amendment to the Finance Bill. On that occasion we had a relatively short debate, which was marked by some measures of agreement. At the end of it the Opposition spokesman, the right hon. and learned Member for Monklands, East (Mr. Smith) withdrew his amendment. I hope that it will prove a model for the debates in the future to which I shall contribute.

It is a tradition on these occasions for the Leader of the House to say a few words about House of Commons issues before going on to consider the legislative programme as outlined last week, and the specific theme of today's debate, the use of national resources. Certain issues, of course, arise not only at the beginning of a Parliament. I am aware that there is some interest in the early reestablishment of the Select Committees. That is a recognition of the way in which the Select Committees contributed to the work of the last Parliament, as was made clear by my right hon. Friend the Member for Worthing (Mr. Higgins). I should like to take this opportunity to pay tribute to him in his role as Chairman of the Liaison Committee during the last Parliament. He fulfilled that role with both effectiveness and distinction.

Mr. Dalyell

Might there not be a case for a Select Committee on the mechanics and implementation of any community charge? Does the Leader of the House not recognise that there are grave difficulties in collection? The matter has not been thought through and the House of Commons should have its say on the mechanics of the poll tax.

Mr. Wakeham

The information and the way in which we arrange Select Committees in the House is always the result of, first, discussion through the usual channels, and, secondly, the matter being brought before the House. The departmental Select Committees were set up so that the workings of individual Departments could be monitored by the House. I see no necessity to have an additional Select Committee to deal with an aspect of Government policy that will be much discussed in the House, and which can perfectly reasonably be discussed by the Select Committees already established for dealing with matters connected either with the Scottish Office or with the Department of the Environment.

Mr. David Alton (Liverpool, Mossley Hill)

My question is not so much about the establishment of new Select Committees, but I should like to press the Leader of the House further on the question that I asked him this afternoon. Is it the Government's intention in principle to re-establish a Scottish Select Committee?

Mr. Wakeham

I have no reason to think that we will not establish that, along with all the others, but I do not want to be firm about that until we have had proper discussions through the usual channels to see whether that is the general will of the House.

Mr. D. E. Thomas (Meirionnydd Nant Conwy)

Will the right hon. Gentleman now address himself to the democratic issue of whether the Select Committees of the territorial Departments—the Scottish and Welsh Offices —will represent the result of the election in both those countries, or whether they will reflect the balance of power in the House?

Mr. Wakeham

I find that a distorted view of the British constitution. This is a United Kingdom Parliament—a Parliament of the whole of the United Kingdom. The Select Committees are Committees of the House of Commons and should represent its views.

Mr. John David Taylor (Strangford)

I agree entirely with the Leader of the House that this is the Parliament of the United Kingdom. Will he therefore give Northern Ireland the same rights, privileges and responsibilities as Scotland and Wales?

Mr. Wakeham

I am delighted to see the hon. Members from Northern Ireland in their places, playing a full part in the House. Let us see how we go on from there.

I am sure the House will appreciate, however, that the re-establishment of these Committees can take a little time, not least because we wish to proceed on the basis of as much agreement as possible. Aside from the question of membership of the Committees, which itself can be the subject of much discussion, there are proposals for revised arrangements to consider. I have noted for example, the suggestion from my hon. Friend the Member for Harwich (Sir J. Ridsdale) with regard to the Foreign Affairs Committee.

I am also aware of the considerable interest that has been shown, not least by my predecessor, my right hon. Friend the Member for Shropshire, North, in the arrangements for the Scottish Affairs Committee and other aspects of Scottish and Welsh business which have been mentioned in some of the interventions. I also take note of the suggestions from the hon. Member for Glasgow, Garscadden (Mr. Dewar). These arrangements will, of course, be for discussion through the usual channels. However, I say now that I would be happy to see Members from the parties most concerned in these issues if they would find that helpful. I believe that, with an amount of tolerance and understanding on all parts, we can find a practical way through. I assure the whole House that we will use our best endeavours to find an early and generally satisfactory resolution to these questions.

Another matter requiring early resolution is Members' pay. As Members may recall, the resolution passed by the House in July 1983 provided a link between a Member's salary and a particular point on the Civil Service pay scale, but for that to take effect confirmation of the resolution was required within three months of a new Parliament. My intention is, therefore, to provide the House with an opportunity to express a view on this before we rise for the summer recess. Such matters have traditionally been for the House, rather than the Government, to determine, and I am pleased to have this chance to stress that we have no intention of departing from that tradition on this occasion.

On a similar subject, Members will be aware that not long before Parliament was dissolved we received a report from the Top Salaries Review Body on the secretarial, research and office equipment allowance. Its recommendations, of course, require consultation and discussion with Members on both sides of the House. I shall be setting those consultations in hand soon and will put proposals before the House in the light of them.

It is also clear that the House will wish to have a relatively early debate on the possibility of televising our proceedings. The right hon. Member for Bethnal Green and Stepney raised this subject and it was clear from business questions today that many hon. Gentlemen are interested in this matter. You, Mr. Speaker, in your speech last week showed some concern about the distorted impressions that could be given by the sound broadcast of selected extracts from proceedings. I also note that my right hon. Friend the Member for Brentford and Isleworth (Sir B. Hayhoe) hoped that we should have an early opportunity to consider and vote on the question of televising.

Early-clay motion 15, about the appointment of a Select Committee to consider and make recommendations on the implementation of an experiment in televising proceedings, has already attracted some distinguished signatories. This was, however, the approach which the House rejected by a majority of 12 when we debated the issue in November 1985. The House may recall also an early-day motion in the last Parliament, which attracted 90 signatories, for a different approach to the question of televising. That motion favoured televising Select Committee proceedings. In the light of these expressions of opinion I shall consider most carefully how to present the House with an opportunity for decision.

I should like at this point to say a few words about the role that Parliament can and should play in our affairs. During the election campaign, and indeed afterwards, we heard calls for extra-parliamentary activity from, among others, the hon. Members for Brent, East (Mr. Livingstone) and for Edinburgh, Leith (Mr. Brown). Naturally, it is entirely a matter for individual Members how they choose to carry out the responsibilities for which they have been elected, but I hope that the whole House will recognise that this Chamber has a unique function in the national debate. Without going quite as far as the right hon. Member for Chesterfield (Mr. Benn), when in the course of congratulating you, Mr. Speaker, on your re-election he called for more emergency debates, I can join him in stressing the need to discuss in this House matters that are of prime concern.

These issues naturally include the legislation contained in the Queen's Speech. So comprehensive and radical is its nature that it has entirely borne comparison with the programme of the 1945 Government. Some people criticised us—a little unfairly I think—after the 1983 election for not having a clear enough thought through strategy and for not having a bold programme. No one could make either of those charges today. One only has to look, for example, at our proposals on education, housing and trade union reform.

Mr. Allan Roberts (Bootle)

The Government claim that they want to provide more choice in housing and that people should be able to choose their landlords. Why are the Government not allowing tenants of private landlords to opt for councils to become their landlords? If the Government genuinely believe in freedom, they should let those people choose. If the Government believe in the right to buy, why are they not allowing the tenants of private landlords the right to buy?

Mr. Wakeham

That just shows how little the hon. Gentleman understands the problem. The problem in the private sector is to find any landlords prepared to let any property. The proposals in our manifesto will go a substantial way towards bringing about 500,000 dwellings into use which no landlord is at present prepared to let to any tenant and which are greatly needed to increase the opportunities for rented accommodation for many of our people.

My hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) urged us not to let our enthusiasm run away with us. I take note of what he said, and I am sure he will appreciate that, as a business manager, enthusiasm is only one of the feelings with which I approach this ambitious legislative programme.

Undoubtedly, the measure that has dominated the debate has been our proposal to abolish the present discredited rating system and replace it with a community charge. As a business manager, I hope that this level of interest will be reflected in the competition to go on the Standing Committee of the Bill.

I recognise that some of my hon. Friends may have misgivings about the detail of our proposals. There are two points that I should make here. In speaking about the community charge my right hon. Friend the Member for Henley (Mr. Heseltine) said that he would listen to the arguments that have led us to our proposals. I trust that hon. Members in all parts of the House will do so also. At the outset, however, I hope that we can all agree that the present system is in need of reform and that we should replace it with a fairer and more accountable system. Continuing with the present system is not an option. Rates charged on a revaluation of the present 1973 values do not bear thinking about.

The debate will not, of course, focus solely on the legislation that is brought forward. It will range much more widely than that, as this debate has already shown. In the course of today's debate and, indeed, over the last few weeks, Opposition Members have sought to persuade the public that the British economy is in terminal decline and that depression, deprivation and misery are the common lot. The public do not believe it. People know that the rate of inflation has slowed, not just because they read that the inflation rate has dropped from over 10 per cent. in 1979 to 4 per cent. today, but because they see it when they look at the prices in the shops.

People know that our manufacturing industry is much more productive, not just because the figures published by the international institutions show that the United Kingdom's productivity growth has outstripped that of every other major country during the 1980s, but because they see it in their own factories. People know that unemployment is on the way down, not just because the unemployment count has fallen for 11 months in a row—in the last month by a record amount—but because local newspapers are stuffed full of job advertisements.

Hon. Members should look at the forecast made earlier this week by the London Business School. There is the evidence of the latest CBI survey, which is based on how manufacturing companies see the future. The balance of firms expecting an increase in output is at record levels, and so is the balance of firms reporting above normal export order books. This is no flash in the pan. For many months the CBI surveys have produced a similarly positive picture. People overseas understand that perfectly well. The OECD and the IMF both forecast that the United Kingdom will grow faster in 1987 than any other industrial country.

The success of our privatisation programme has helped to bring about a dramatic change in the spread of ownership. The number of shareholders has roughly trebled under this Government and is currently about 8.5 million. Our aim of increasing the spread of ownership is reflected also in the proportion of householders who now own their own homes. It is 63 per cent., the highest ever level. We shall continue to pursue these policies, which have created our economic success. They provide the sound financial background against which we see unemployment falling. Since June 1986 it has gone down by 250,000. Though one would not know it if one listened to the Opposition, it is falling fastest in Wales, the north-west, the west midlands and the north. Since 1983 employment has grown in every region.

Our task is to ensure that all the country participates fully in our economic success. The key is to encourage enterprise, to improve skills, and to target resources carefully on the areas, such as inner cities, with the greatest problems. Urban development corporations have now begun in Tyne and Wear, Teesside, the Black Country and Trafford Park. These follow the Merseyside Development Corporation and the London Docklands Development Corporation. We heard earlier in the debate about their success.

In short, our philosophy is to set the people free, to establish the widest possible spread of property and ownership.

When we came into office in 1979 inflation was running riot. Hardest hit were the pensioners, whose savings collapsed, the skilled workers, who lost out in the wages scramble and the young couples, who longed for a home of their own. Britain was a laughing stock of the world for its strikes. Many key industries were outdated, overmanned and subsidised to keep phoney jobs going.

Mr. Derek Foster (Bishop Auckland)

rose in this place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the amendment be made:—

The House divided: Ayes 255, Noes 353.

Division No. 2] [10.00 pm
Allen, Graham Barnes, Mrs Rosie (Greenwich)
Alton, David Barron, Kevin
Anderson, Donald Battle, John
Archer, Rt Hon Peter Beckett, Margaret
Armstrong, Ms Hilary Beggs, Roy
Ashdown, Paddy Beith, A. J.
Ashley, Rt Hon Jack Bell, Stuart
Ashton, Joe Benn, Rt Hon Tony
Banks, Tony (Newham NW) Bennett, A. F. (D'nt'n & R'dish)
Barnes, Harry (Derbyshire NE) Bermingham, Gerald
Bidwell, Sydney Griffiths, Win (Bridgend)
Blair, Tony Grocott, Bruce
Blunkett, David Harman, Ms Harriet
Boateng, Paul Hattersley, Rt Hon Roy
Boothroyd, Miss Betty Haynes, Frank
Boyes, Roland Healey, Rt Hon Denis
Bradley, Keith Heffer, Eric S.
Bray, Dr Jeremy Henderson, Douglas
Brown, Gordon (D'mline E) Hogg, N. (C'nauld & Kilsyth)
Brown, Nicholas (Newcastle E) Holland, Stuart
Brown, Ron (Edinburgh Leith) Home Robertson, John
Bruce, Malcolm (Gordon) Hood, James
Buchan, Norman Howarth, George (Knowsley N)
Buckley, George Howell, Rt Hon D. (S'heath)
Caborn, Richard Howells, Geraint
Callaghan, Jim Hoyle, Doug
Campbell, Menzies (Fife NE) Hughes, John (Coventry NE)
Campbell, Ron (Blyth Valley) Hughes, Robert (Aberdeen N)
Campbell-Savours, D. N. Hughes, Sean (Knowsley S)
Canavan, Dennis Hughes, Simon (Southwark)
Carlile, Alex (Mont'g) Hume, John
Cartwright, John Illsley, Eric
Clark, Dr David (S Shields) Ingram, Adam
Clarke, Tom (Monklands W) Janner, Greville
Clay, Bob John, Brynmor
Clelland, David Jones, Barry (Alyn & Deeside)
Clwyd, Mrs Ann Jones, Ieuan (Ynys Môn)
Cohen, Harry Kaufman, Rt Hon Gerald
Coleman, Donald Kennedy, Charles
Cook, Frank (Stockton N) Kilfedder, James
Cook, Robin (Livingston) Kinnock, Rt Hon Neil
Corbett, Robin Kirkwood, Archy
Corbyn, Jeremy Lambie, David
Cousins, Jim Lamond, James
Crowther, Stan Leadbitter, Ted
Cryer, Bob Leighton, Ron
Cummings, J. Lestor, Miss Joan (Eccles)
Cunliffe, Lawrence Lewis, Terry
Cunningham, Dr John Litherland, Robert
Dalyell, Tam Livingstone, Ken
Darling, Alastair Livsey, Richard
Davies, Rt Hon Denzil (Lanelli) Lloyd, Tony (Stretford)
Davis, Terry (B'ham Hodge H'l) Lofthouse, Geoffrey
Dewar, Donald Loyden, Eddie
Dixon, Don McAllion, John
Dobson, Frank McAvoy, Tom
Doran, Frank McCartney, Ian
Douglas, Dick McCrea, Rev William
Dunnachie, James McCusker, Harold
Dunwoody, Hon Mrs Gwyneth Macdonald, Calum
Eastham, Ken McFall, John
Evans, John (St Helens N) McKelvey, William
Ewing, Mrs Margaret (Moray) McLeish, Henry
Fatchett, Derek Maclennan, Robert
Faulds, Andrew McNamara, Kevin
Fearn, Ronald McTaggart, Bob
Field, Frank (Birkenhead) McWilliam, John
Fields, Terry (L'pool B G'n) Madden, Max
Fisher, Mark Maginnis, Ken
Flannery, Martin Mahon, Mrs Alice
Flynn, Paul Mallon, Seamus
Foot, Rt Hon Michael Marek, Dr John
Forsythe, Clifford (Antrim S) Marshall, David (Shettleston)
Foster, Derek Marshall, Jim (Leicester S)
Foulkes, George Martin, Michael (Springburn)
Fraser, John Martlew, Eric
Fyfe, Mrs Maria Maxton, John
Galbraith, Samuel Meacher, Michael
Galloway, George Meale, Alan
Garrett, John (Norwich South) Michael, Alun
Garrett, Ted (Wallsend) Michie, Bill (Sheffield Heeley)
George, Bruce Michie, Mrs Ray (Arg'l & Bute)
Gilbert, Rt Hon Dr John Millan, Rt Hon Bruce
Godman, Dr Norman A. Molyneaux, Rt Hon James
Golding, Mrs Llin Moonie, Dr Lewis
Gordon, Ms Mildred Morgan, Rhodri
Gould, Bryan Morley, Elliott
Graham, Thomas Morris, Rt Hon A (W'shawe)
Grant Bernie (Tottenham) Morris, Rt Hon J (Aberavon)
Griffiths, Nigel (Edinburgh S) Mowlam, Mrs Marjorie
Mullin, Chris Smith, Andrew (Oxford E)
Murphy, Paul Smith, C. (Isl'ton & F'bury)
Nellist, Dave Smith, Rt Hon J. (Monk'ds E)
Oakes. Rt Hon Gordon Smyth, Rev Martin (Belfast S)
O'Brien, William Snape, Peter
O'Neill, Martin Soley, Clive
Orme, Rt Hon Stanley Spearing, Nigel
Owen, Rt Hon Dr David Steel, Rt Hon David
Paisley, Rev Ian Steinberg, Gerald
Parry, Robert Stott, Roger
Patchett, Terry Strang, Gavin
Pendry, Tom Straw, Jack
Pike, Peter Taylor, Mrs Ann (Dewsbury)
Powell, Ray (Ogmore) Taylor, Rt Hon J. D. (S'ford)
Prescott, John Taylor, Matthew (Truro)
Primarolo, Ms Dawn Thomas, Dafydd Elis
Quin, Miss Joyce Turner, Dennis
Radice, Giles Vaz, Keith
Randall, Stuart Walker, A. Cecil (Belfast N)
Redmond, Martin Wall, Pat
Rees, Rt Hon Merlyn Wallace, James
Reid, John Walley, Ms Joan
Richardson, Ms Jo Wardell, Gareth (Gower)
Roberts, Allan (Bootle) Wareing, Robert N.
Robertson, George Welsh, Andrew (Angus E)
Robinson, Geoffrey Welsh, Michael (Doncaster N)
Robinson, Peter (Belfast E) Wigley, Dafydd
Rogers, Allan Williams, Rt Hon A. J.
Rooker, Jeff Williams, Alan W. (Carm'then)
Ross, Ernie (Dundee W) Wilson, Brian
Ross, William (Londonderry E) Winnick, David
Rowlands, Ted Wise, Mrs Audrey
Ruddock, Ms Joan Worthington, Anthony
Salmond, Alex Wray, James
Sedgemore, Brian Young, David (Bolton SE)
Sheerman, Barry
Sheldon, Rt Hon Robert Tellers for the Ayes:
Shore, Rt Hon Peter Mr. Ron Davies and
Short, Clare Mr. Allen McKay.
Skinner, Dennis
Adley, Robert Braine, Rt Hon Sir Bernard
Aitken, Jonathan Brandon-Bravo, Martin
Alexander, Richard Brazier, Julian
Alison, Rt Hon Michael Bright, Graham
Allason, Rupert Brittan, Rt Hon Leon
Amery, Rt Hon Julian Brown, Michael (Brigg & Cl't's)
Amess, David Browne, John (Winchester)
Amos, Alan Bruce, Ian (Dorset South)
Arbuthnot, James Buchanan-Smith, Rt Hon Alick
Arnold, Jacques (Gravesham) Buck, Sir Antony
Arnold, Tom (Hazel Grove) Budgen, Nicholas
Ashby, David Burns, Simon
Aspinwall, Jack Burt, Alistair
Atkins, Robert Butcher, John
Atkinson, David Butler, Chris
Baker, Rt Hon K. (Mole Valley) Butterfill, John
Baker, Nicholas (Dorset N) Carlisle, John, (Luton N)
Baldry, Tony Carlisle, Kenneth (Lincoln)
Banks, Robert (Harrogate) Carrington, Matthew
Batiste, Spencer Carttiss, Michael
Bellingham, Henry Cash, William
Bendall, Vivian Chalker, Rt Hon Mrs Lynda
Bennett, Nicholas (Pembroke) Channon, Rt Hon Paul
Benyon, W. Chapman, Sydney
Bevan, David Gilroy Chope, Christopher
Biffen, Rt Hon John Churchill, Mr
Biggs-Davison, Sir John Clark, Hon Alan (Plym'th S'n)
Blackburn, Dr John G. Clark, Dr Michael (Rochford)
Blaker, Rt Hon Sir Peter Clark, Sir W. (Croydon S)
Body, Sir Richard Clarke, Rt Hon K. (Rushcliffe)
Bonsor, Sir Nicholas Colvin, Michael
Boswell, Tim Conway, Derek
Bottomley, Peter Coombs, Anthony (Wyre F'rest)
Bottomley, Mrs Virginia Coombs, Simon (Swindon)
Bowden, A (Brighton K'pto'n) Cope, John
Bowden, Gerald (Dulwich) Cormack, Patrick
Bowis, John Couchman, James
Boyson, Rt Hon Dr Sir Rhodes Cran, James
Critchley, Julian Howarth, G. (Cannock & B'wd)
Currie, Mrs Edwina Howell, Rt Hon David (G'dford)
Curry, David Howell, Ralph (North Norfolk)
Davies, Q. (Stamf'd & Spald'g) Hughes, Robert G. (Harrow W)
Davis, David (Boothferry) Hunt, David (Wirral W)
Day, Stephen Hunt, John (Ravensbourne)
Devlin, Tim Hunter, Andrew
Dickens, Geoffrey Hurd, Rt Hon Douglas
Dicks, Terry Irvine, Michael
Dorrell, Stephen Irving, Charles
Douglas-Hamilton, Lord James Jack, Michael
Dover, Den Jackson, Robert
Dunn, Bob Janman, Timothy
Durant, Tony Johnson Smith, Sir Geoffrey
Dykes, Hugh Jones, Gwilym (Cardiff N)
Eggar, Tim Jones, Robert B (Herts W)
Emery, Sir Peter Jopling, Rt Hon Michael
Evans, David (Welwyn Hatf'd) Kellett-Bowman, Mrs Elaine
Evennett, David Key, Robert
Fairbairn, Nicholas King, Roger (B'ham N'thfield)
Fallon, Michael King, Rt Hon Tom (Bridgwater)
Farr, Sir John Kirkhope, Timothy
Favell, Tony Knapman, Roger
Fenner, Dame Peggy Knight, Greg (Derby North)
Field, Barry (Isle of Wight) Knight, Dame Jill (Edgbaston)
Fookes, Miss Janet Knowles, Michael
Forman, Nigel Knox, David
Forsyth, Michael (Stirling) Lamont, Rt Hon Norman
Forth, Eric Lang, Ian
Fowler, Rt Hon Norman Latham, Michael
Fox, Sir Marcus Lawrence, Ivan
Franks, Cecil Lawson, Rt Hon Nigel
Freeman, Roger Lee, John (Pendle)
French, Douglas Leigh, Edward (Gainsbor'gh)
Fry, Peter Lennox-Boyd, Hon Mark
Gale, Roger Lester, Jim (Broxtowe)
Gardiner, George Lightbown, David
Gill, Christopher Lilley, Peter
Gilmour, Rt Hon Sir Ian Lloyd, Sir Ian (Havant)
Glyn, Dr Alan Lloyd, Peter (Fareham)
Goodhart, Sir Philip Lord, Michael
Goodson-Wickes, Dr Charles Lyell, Sir Nicholas
Gorman, Mrs Teresa McCrindle, Robert
Gorst, John Macfarlane, Neil
Gow, Ian MacGregor, John
Gower, Sir Raymond MacKay, Andrew (E Berkshire)
Grant, Sir Anthony (CambsSW) Maclean, David
Greenway, Harry (Ealing N) McLoughlin, Patrick
Greenway, John (Rydale) McNair-Wilson, M. (Newbury)
Gregory, Conal McNair-Wilson, P. (New Forest)
Griffiths, Sir Eldon (Bury St E') Madel, David
Griffiths, Peter (Portsmouth N) Major, Rt Hon John
Grist, Ian Malins, Humfrey
Ground, Patrick Mans, Keith
Grylls, Michael Maples, John
Gummer, Rt Hon John Selwyn Marlow, Tony
Hamilton, Hon A. (Epsom) Marshall, John (Hendon S)
Hamilton, Neil (Tatton) Marshall, Michael (Arundel)
Hampson, Dr Keith Martin, David (Portsmouth S)
Hanley, Jeremy Mates, Michael
Hannam, John Maude, Hon Francis
Hargreaves, A. (B'ham H'll Gr') Mawhinney, Dr Brian
Hargreaves, Ken (Hyndburn) Maxwell-Hyslop, Robin
Harris, David Mayhew, Rt Hon Sir Patrick
Haselhurst, Alan Mellor, David
Hawkins, Christopher Meyer, Sir Anthony
Hayes, Jerry Miller, Hal
Hayhoe, Rt Hon Sir Barney Mills, Iain
Hayward, Robert Miscampbell, Norman
Heath, Rt Hon Edward Mitchell, Andrew (Gedling)
Heddle, John Mitchell, David (Hants NW)
Heseltine, Rt Hon Michael Moate, Roger
Hicks, Mrs Maureen (Wolv' NE) Monro, Sir Hector
Higgins, Rt Hon Terence L. Montgomery, Sir Fergus
Hill, James Moore, Rt Hon John
Hind, Kenneth Morris, M (N'hampton S)
Holt, Richard Morrison, Hon C. (Devizes)
Hordern, Sir Peter Morrison, Hon P (Chester)
Howard, Michael Moss, Malcolm
Howarth, Alan (Strat'd-on-A) Moynihan, Hon C
Mudd, David Spicer, Michael (S Worcs)
Neale, Gerrard Squire, Robin
Needham, Richard Stanbrook, Ivor
Nelson, Anthony Steen, Anthony
Neubert, Michael Stern, Michael
Newton, Tony Stevens, Lewis
Nicholls, Patrick Stewart, Allan (Eastwood)
Nicholson, David (Taunton) Stewart, Andrew (Sherwood)
Nicholson, Miss E. (Devon W) Stewart, Ian (Hertfordshire N)
Onslow, Cranley Stradling Thomas, Sir John
Oppenheim, Phillip Sumberg, David
Page, Richard Summerson, Hugo
Paice, James Tapsell, Sir Peter
Parkinson, Rt Hon Cecil Taylor, Ian (Esher)
Patnick, Irvine Taylor, John M (Solihull)
Patten, Chris (Bath) Taylor, Teddy (S'end E)
Patten, John (Oxford W) Tebbit, Rt Hon Norman
Pattie, Rt Hon Sir Geoffrey Temple-Morris, Peter
Pawsey, James Thatcher, Rt Hon Margaret
Peacock, Mrs Elizabeth Thompson, D. (Calder Valley)
Porter, Barry (Wirral S) Thompson, Patrick (Norwich N)
Porter, David (Waveney) Thorne, Neil
Portillo, Michael Thornton, Malcolm
Powell, William (Corby) Thurnham, Peter
Price, Sir David Townend, John (Bridlington)
Raffan, Keith Townsend, Cyril D. (B'heath)
Raison, Rt Hon Timothy Tracey, Richard
Rathbone, Tim Tredinnick, David
Redwood, John Trippier, David
Renton, Tim Trotter, Neville
Rhodes James, Robert Twinn, Dr Ian
Rhys Williams, Sir Brandon Vaughan, Sir Gerard
Riddick, Graham Waddington, Rt Hon David
Ridley, Rt Hon Nicholas Wakeham, Rt Hon John
Ridsdale, Sir Julian Waldegrave, Hon William
Roberts, Wyn (Conwy) Walden, George
Roe, Mrs Marion Walker, Bill (T'side North)
Rossi, Sir Hugh Walker, Rt Hon P. (W'cester)
Rost, Peter Waller, Gary
Rowe, Andrew Walters, Dennis
Rumbold, Mrs Angela Ward, John
Ryder, Richard Wardle, C. (Bexhill)
Sackville, Hon Tom Warren, Kenneth
Sainsbury, Hon Tim Watts, John
Sayeed, Jonathan Wells, Bowen
Shaw, David (Dover) Wheeler, John
Shaw, Sir Giles (Pudsey) Whitney, Ray
Shaw, Sir Michael (Scarb') Widdecombe, Miss Ann
Shelton, William (Streatham) Wiggin, Jerry
Shephard, Mrs G. (Norfolk SW) Wilshire, David
Shepherd, Colin (Hereford) Winterton, Mrs Ann
Shepherd, Richard (Aldridge) Winterton, Nicholas
Shersby, Michael Wolfson, Mark
Sims, Roger Wood, Timothy
Skeet, Sir Trevor Woodcock, Mike
Smith, Sir Dudley (Warwick) Young, Sir George (Acton)
Smith, Tim (Beaconsfield)
Soames, Hon Nicholas Tellers for the Noes:
Speed, Keith Mr. Robert Boscawen and
Speller, Tony Mr. Tristan Garel-Jones.
Spicer, Jim (Dorset W)

Question accordingly negatived.

Amendment proposed, pursuant to Standing Order No. 32 (Calling of amendments at end of debate), at the end of the Question add: but humbly regret that the proposals set out in the Gracious Speech do not deal with the problems of a nation that is socially divided and politically over-centralised; believe that the Gracious Speech should have contained proposals for the regeneration of manufacturing industry through a partnership between central government, local government and private enterprise, for the promotion of worker participation in the management of their companies, for measures to devolve power to the Scottish and Welsh people through a directly elected Scottish parliament and a directly elected Welsh Senedd, and for membership of the exchange rate mechanism of the European Monetary System; regret that instead of enhancing the authority and accountability of local government through the introduction of proportional representation and a local income tax, the Gracious Speech contains proposals for an unfair and unworkable poll tax; and further regret that the proposals in the Gracious Speech will place excessive powers in the hands of the Secretary of State for Education and Science without increasing the resources available for education and training. — [Mr. Steel.]

Question put, That the amendent be made:—

The House divided: Ayes 26, Noes 351.

Division No. 3] [10.15 pm
Ashdown, Paddy Maclennan, Robert
Barnes, Mrs Rosie (Greenwich) Mallon, Seamus
Beith, A. J. Michie, Mrs Ray (Arg'l & Bute)
Bruce, Malcolm (Gordon) Owen, Rt Hon Dr David
Campbell, Menzies (Fife NE) Salmond, Alex
Carlile, Alex (Mont'g) Steel, Rt Hon David
Ewing, Mrs Margaret (Moray) Taylor, Matthew (Truro)
Fearn, Ronald Thomas, Dafydd Elis
Howells, Geraint Wallace, James
Hughes, Simon (Southwark) Welsh, Andrew (Angus E)
Hume, John Wigley, Dafydd
Jones, Ieuan (Ynys Môn)
Kennedy, Charles Tellers for the Ayes:
Kirkwood, Archy Mr. David Alton and
Livsey, Richard Mr. John Cartwright.
Adley, Robert Burt, Alistair
Aitken, Jonathan Butcher, John
Alexander, Richard Butler, Chris
Alison, Rt Hon Michael Butterfill, John
Allason, Rupert Carlisle, John, (Luton N)
Amess, David Carlisle, Kenneth (Lincoln)
Amos, Alan Carrington, Matthew
Arbuthnot, James Carttiss, Michael
Arnold, Jacques (Gravesham) Cash, William
Arnold, Tom (Hazel Grove) Chalker, Rt Hon Mrs Lynda
Ashby, David Channon, Rt Hon Paul
Aspinwall, Jack Chapman, Sydney
Atkins, Robert Chope, Christopher
Atkinson, David Churchill, Mr
Baker, Rt Hon K. (Mole Valley) Clark, Hon Alan (Plym'th S'n)
Baker, Nicholas (Dorset N) Clark, Dr Michael (Rochford)
Baldry, Tony Clark, Sir W. (Croydon S)
Banks, Robert (Harrogate) Clarke, Rt Hon K. (Rushcliffe)
Batiste, Spencer Colvin, Michael
Bellingham, Henry Conway, Derek
Bendall, Vivian Coombs, Anthony (Wyre F'rest)
Bennett, Nicholas (Pembroke) Coombs, Simon (Swindon)
Benyon, W. Cope, John
Bevan, David Gilroy Cormack, Patrick
Biffen, Rt Hon John Couchman, James
Biggs-Davison, Sir John Cran, James
Blackburn, Dr John G. Currie, Mrs Edwina
Blaker, Rt Hon Sir Peter Curry, David
Body, Sir Richard Davies, Q. (Stamf'd & Spald'g)
Bonsor, Sir Nicholas Davis, David (Boothferry)
Boswell, Tim Day, Stephen
Bottomley, Peter Devlin, Tim
Bottomley, Mrs Virginia Dickens, Geoffrey
Bowden, A (Brighton K'pto'n) Dicks, Terry
Bowden, Gerald (Dulwich) Dorrell, Stephen
Bowis, John Douglas-Hamilton, Lord James
Boyson, Rt Hon Dr Sir Rhodes Dover, Den
Braine, Rt Hon Sir Bernard Dunn, Bob
Brandon-Bravo, Martin Durant, Tony
Brazier, Julian Dykes, Hugh
Bright, Graham Eggar, Tim
Brittan, Rt Hon Leon Emery, Sir Peter
Brown, Michael (Brigg & Cl't's) Evans, David (Welwyn Hatf'd)
Browne, John (Winchester) Evennett, David
Bruce, Ian (Dorset South) Fairbairn, Nicholas
Buchanan-Smith, Rt Hon Alick Fallon, Michael
Buck, Sir Antony Farr, Sir John
Budgen, Nicholas Favell, Tony
Burns, Simon Fenner, Dame Peggy
Field, Barry (Isle of Wight) Knowles, Michael
Fookes, Miss Janet Knox, David
Forman, Nigel Lamont, Rt Hon Norman
Forsyth, Michael (Stirling) Lang, Ian
Forth, Eric Latham, Michael
Fowler, Rt Hon Norman Lawrence, Ivan
Fox, Sir Marcus Lawson, Rt Hon Nigel
Franks, Cecil Lee, John (Pendle)
Freeman, Roger Leigh, Edward (Gainsbor'gh)
French, Douglas Lennox-Boyd, Hon Mark
Fry, Peter Lester, Jim (Broxtowe)
Gale, Roger Lightbown, David
Gardiner, George Lilley, Peter
Gill, Christopher Lloyd, Sir Ian (Havant)
Gilmour, Rt Hon Sir Ian Lloyd, Peter (Fareham)
Glyn, Dr Alan Lord, Michael
Goodhart, Sir Philip Lyell, Sir Nicholas
Goodson-Wickes, Dr Charles McCrindle, Robert
Gorman, Mrs Teresa Macfarlane, Neil
Gorst, John MacGregor, John
Gow, Ian MacKay, Andrew (E Berkshire)
Gower, Sir Raymond Maclean, David
Grant, Sir Anthony (CambsSW) McLoughlin, Patrick
Greenway, Harry (Ealing N) McNair-Wilson, M. (Newbury)
Greenway, John (Rydale) McNair-Wilson, P. (New Forest)
Gregory, Conal Madel, David
Griffiths, Peter (Portsmouth N) Major, Rt Hon John
Grist, Ian Malins, Humfrey
Ground, Patrick Mans, Keith
Grylls, Michael Maples, John
Gummer, Rt Hon John Selwyn Marlow, Tony
Hamilton, Hon A. (Epsom) Marshall, John (Hendon S)
Hamilton, Neil (Tatton) Marshall, Michael (Arundel)
Hampson, Dr Keith Martin, David (Portsmouth S)
Hanley, Jeremy Mates, Michael
Hannam, John Maude, Hon Francis
Hargreaves, A. (B'ham H'll Gr') Mawhinney, Dr Brian
Hargreaves, Ken (Hyndburn) Maxwell-Hyslop, Robin
Harris, David Mayhew, Rt Hon Sir Patrick
Haselhurst, Alan Mellor, David
Hawkins, Christopher Meyer, Sir Anthony
Hayes, Jerry Miller, Hal
Hayhoe, Rt Hon Sir Barney Mills, Iain
Hayward, Robert Miscampbell, Norman
Heath, Rt Hon Edward Mitchell, Andrew (Gedling)
Heddle, John Mitchell, David (Hants NW)
Heseltine, Rt Hon Michael Moate, Roger
Hicks, Mrs Maureen (Wolv' NE) Monro, Sir Hector
Higgins, Rt Hon Terence L. Montgomery, Sir Fergus
Hill, James Moore, Rt Hon John
Hind, Kenneth Morris, M (N'hampton S)
Holt, Richard Morrison, Hon C. (Devizes)
Hordern, Sir Peter Morrison, Hon P (Chester)
Howard, Michael Moss, Malcolm
Howarth, Alan (Strat'd-on-A) Moynihan, Hon C.
Howarth, G. (Cannock & B'wd) Mudd, David
Howell, Rt Hon David (G'dford) Neale, Gerrard
Howell, Ralph (North Norfolk) Needham, Richard
Hughes, Robert G. (Harrow W) Nelson, Anthony
Hunt, David (Wirral W) Neubert, Michael
Hunt, John (Ravensbourne) Newton, Tony
Hunter, Andrew Nicholls, Patrick
Hurd, Rt Hon Douglas Nicholson, David (Taunton)
Irvine, Michael Nicholson, Miss E. (Devon W)
Irving, Charles Onslow, Cranley
Jack, Michael Oppenheim, Phillip
Jackson, Robert Page, Richard
Janman, Timothy Paice, James
Johnson Smith, Sir Geoffrey Parkinson, Rt Hon Cecil
Jones, Gwilym (Cardiff N) Patnick, Irvine
Jones, Robert B (Herts W) Patten, Chris (Bath)
Jopling, Rt Hon Michael Patten, John (Oxford W)
Kellett-Bowman, Mrs Elaine Pattie, Rt Hon Sir Geoffrey
Key, Robert Pawsey, James
King, Roger (B'ham N'thfield) Peacock, Mrs Elizabeth
King, Rt Hon Tom (Bridgwater) Porter, Barry (Wirral S)
Kirkhope, Timothy Porter, David (Waveney)
Knapman, Roger Portillo, Michael
Knight, Greg (Derby North) Powell, William (Corby)
Knight, Dame Jill (Edgbaston) Price, Sir David
Raffan, Keith Taylor, Ian (Esher)
Raison, Rt Hon Timothy Taylor, John M (Solihull)
Rathbone, Tim Taylor, Teddy (S'end E)
Redwood, John Tebbit, Rt Hon Norman
Renton, Tim Temple-Morris, Peter
Rhodes James, Robert Thatcher, Rt Hon Margaret
Rhys Williams, Sir Brandon Thompson, D. (Calder Valley)
Riddick, Graham Thompson, Patrick (Norwich N)
Ridley, Rt Hon Nicholas Thorne, Neil
Ridsdale, Sir Julian Thornton, Malcolm
Roberts, Wyn (Conwy) Thurnham, Peter
Roe, Mrs Marion Townend, John (Bridlington)
Rossi, Sir Hugh Townsend, Cyril D. (B'heath)
Rost, Peter Tracey, Richard
Rowe, Andrew Tredinnick, David
Rumbold, Mrs Angela Trippier, David
Ryder, Richard Trotter, Neville
Sackville, Hon Tom Twinn, Dr Ian
Sainsbury, Hon Tim Vaughan, Sir Gerard
Sayeed, Jonathan Waddington, Rt Hon David
Shaw, David (Dover) Wakeham, Rt Hon John
Shaw, Sir Giles (Pudsey) Waldegrave, Hon William
Shaw, Sir Michael (Scarb') Walden, George
Shelton, William (Streatham) Walker, Bill (T'side North)
Shephard, Mrs G. (Norfolk SW) Walker, Rt Hon P. (W'cester)
Shepherd, Colin (Hereford) Waller, Gary
Shepherd, Richard (Aldridge) Walters, Dennis
Shersby, Michael Ward, John
Sims, Roger Wardle, C. (Bexhill)
Skeet, Sir Trevor Warren, Kenneth
Smith, Sir Dudley (Warwick) Watts, John
Smith, Tim (Beaconsfield) Wells, Bowen
Soames, Hon Nicholas Wheeler, John
Speed, Keith Whitney, Ray
Speller, Tony Widdecombe, Miss Ann
Spicer, Jim (Dorset W) Wiggin, Jerry
Spicer, Michael (S Worcs) Wilshire, David
Squire, Robin Winterton, Mrs Ann
Stanbrook, Ivor Winterton, Nicholas
Steen, Anthony Wolfson, Mark
Stern, Michael Wood, Timothy
Stevens, Lewis Woodcock, Mike
Stewart, Allan (Eastwood) Yeo, Tim
Stewart, Andrew (Sherwood) Young, Sir George (Acton)
Stewart, Ian (Hertfordshire N)
Stradling, Thomas, Sir John Tellers for the Noes:
Sumberg, David Mr. Robert Boscawen and
Summerson, Hugo Mr. Tristan Garel-Jones.
Tapsell, Sir Peter

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 347, Noes 247.

Division No. 4] [10.25 pm
Adley, Robert Bevan, David Gilroy
Aitken, Jonathan Biffen, Rt Hon John
Alexander, Richard Biggs-Davison, Sir John
Alison, Rt Hon Michael Blackburn, Dr John G.
Allason, Rupert Blaker, Rt Hon Sir Peter
Amess, David Body, Sir Richard
Amos, Alan Bonsor, Sir Nicholas
Arbuthnot, James Boswell, Tim
Arnold, Jacques (Gravesham) Bottomley, Peter
Arnold, Tom (Hazel Grove) Bottomley, Mrs Virginia
Ashby, David Bowden, A (Brighton K'pto'n)
Aspinwall, Jack Bowden, Gerald (Dulwich)
Atkins, Robert Bowis, John
Atkinson, David Boyson, Rt Hon Dr Sir Rhodes
Baker, Rt Hon K. (Mole Valley) Braine, Rt Hon Sir Bernard
Baker, Nicholas (Dorset N) Brandon-Bravo, Martin
Baldry, Tony Brazier, Julian
Banks, Robert (Harrogate) Bright, Graham
Batiste, Spencer Brittan, Rt Hon Leon
Bellingham, Henry Brown, Michael (Brigg & Cl't's)
Bendall, Vivian Browne, John (Winchester)
Bennett, Nicholas (Pembroke) Bruce, Ian (Dorset South)
Benyon, W. Buchanan-Smith, Rt Hon Alick
Buck, Sir Antony Ground, Patrick
Budgen, Nicholas Grylls, Michael
Burns, Simon Gummer, Rt Hon John Selwyn
Burt, Alistair Hamilton, Hon A. (Epsom)
Butcher, John Hamilton, Neil (Tatton)
Butler, Chris Hampson, Dr Keith
Butterfill, John Hanley, Jeremy
Carlisle, John, (Luton N) Hannam, John
Carlisle, Kenneth (Lincoln) Hargreaves, A. (B'ham H'll Gr')
Carrington, Matthew Hargreaves, Ken (Hyndburn)
Carttiss, Michael Harris, David
Cash, William Haselhurst, Alan
Chalker, Rt Hon Mrs Lynda Hawkins, Christopher
Channon, Rt Hon Paul Hayes, Jerry
Chapman, Sydney Hayhoe, Rt Hon Sir Barney
Chope, Christopher Hayward, Robert
Churchill, Mr Heath, Rt Hon Edward
Clark, Hon Alan (Plym'th S'n) Heddle, John
Clark, Dr Michael (Rochford) Heseltine, Rt Hon Michael
Clark, Sir W. (Croydon S) Hicks, Mrs Maureen (Wolv' NE)
Clarke, Rt Hon K. (Rushcliffe) Higgins, Rt Hon Terence L.
Colvin, Michael Hill, James
Conway, Derek Hind, Kenneth
Coombs, Anthony (Wyre F'rest) Holt, Richard
Coombs, Simon (Swindon) Hordern, Sir Peter
Cope, John Howard, Michael
Cormack, Patrick Howarth, Alan (Strat'd-on-A)
Couchman, James Howarth, G. (Cannock & B'wd)
Cran, James Howell, Rt Hon David (G'dford)
Currie, Mrs Edwina Howell, Ralph (North Norfolk)
Curry, David Hughes, Robert G. (Harrow W)
Davies, Q. (Stamf'd & Spald'g) Hunt, David (Wirral W)
Davis, David (Boothferry) Hunt, John (Ravensbourne)
Day, Stephen Hunter, Andrew
Devlin, Tim Hurd, Rt Hon Douglas
Dickens, Geoffrey Irvine, Michael
Dicks, Terry Jack, Michael
Dorrell, Stephen Jackson, Robert
Douglas-Hamilton, Lord James Janman, Timothy
Dover, Den Johnson Smith, Sir Geoffrey
Dunn, Bob Jones, Gwilym (Cardiff N)
Durant, Tony Jones, Robert B (Herts W)
Dykes, Hugh Jopling, Rt Hon Michael
Eggar, Tim Kellett-Bowman, Mrs Elaine
Emery, Sir Peter Key, Robert
Evans, David (Welwyn Hatf'd) King, Roger (B'ham N'thfield)
Evennett, David King, Rt Hon Tom (Bridgwater)
Fairbairn, Nicholas Kirkhope, Timothy
Fallon, Michael Knapman, Roger
Farr, Sir John Knight, Greg (Derby North)
Favell, Tony Knight, Dame Jill (Edgbaston)
Fenner, Dame Peggy Knowles, Michael
Field, Barry (Isle of Wight) Knox, David
Fookes, Miss Janet Lamont, Rt Hon Norman
Forman, Nigel Lang, Ian
Forsyth, Michael (Stirling) Latham, Michael
Forth, Eric Lawrence, Ivan
Fowler, Rt Hon Norman Lawson, Rt Hon Nigel
Fox, Sir Marcus Lee, John (Pendle)
Franks, Cecil Leigh, Edward (Gainsbor'gh)
Freeman, Roger Lennox-Boyd, Hon Mark
French, Douglas Lester, Jim (Broxtowe)
Fry, Peter Lightbown, David
Gale, Roger Lilley, Peter
Gardiner, George Lloyd, Sir Ian (Havant)
Gill, Christopher Lloyd, Peter (Fareham)
Gilmour, Rt Hon Sir Ian Lord, Michael
Glyn, Dr Alan Lyell, Sir Nicholas
Goodhart, Sir Philip McCrindle, Robert
Goodson-Wickes, Dr Charles Macfarlane, Neil
Gorman, Mrs Teresa MacGregor, John
Gorst, John MacKay, Andrew (E Berkshire)
Gow, Ian Maclean, David
Gower, Sir Raymond McLoughlin, Patrick
Grant, Sir Anthony (CambsSW) McNair-Wilson, M. (Newbury)
Greenway, Harry (Ealing N) McNair-Wilson, P. (New Forest)
Greenway, John (Rydale) Madel, David
Gregory, Conal Major, Rt Hon John
Griffiths, Peter (Portsmouth N) Malins, Humfrey
Grist, Ian Mans, Keith
Maples, John Shephard, Mrs G. (Norfolk SW)
Marlow, Tony Shepherd, Colin (Hereford)
Marshall, John (Hendon S) Shepherd, Richard (Aldridge)
Marshall, Michael (Arundel) Shersby, Michael
Martin, David (Portsmouth S) Sims, Roger
Mates, Michael Skeet, Sir Trevor
Maude, Hon Francis Smith, Sir Dudley (Warwick)
Mawhinney, Dr Brian Smith, Tim (Beaconsfield)
Maxwell-Hyslop, Robin Soames, Hon Nicholas
Mayhew, Rt Hon Sir Patrick Speed, Keith
Mellor, David Speller, Tony
Meyer, Sir Anthony Spicer, Jim (Dorset W)
Miller, Hal Spicer, Michael (S Worcs)
Mills, Iain Squire, Robin
Miscampbell, Norman Stanbrook, Ivor
Mitchell, Andrew (Gedling) Steen, Anthony
Mitchell, David (Hants NW) Stern, Michael
Moate, Roger Stevens, Lewis
Montgomery, Sir Fergus Stewart, Allan (Eastwood)
Moore, Rt Hon John Stewart, Andrew (Sherwood)
Morris, M (N'hampton S) Stewart, Ian (Hertfordshire N)
Morrison, Hon C. (Devizes) Stradling, Thomas, Sir John
Morrison, Hon P (Chester) Sumberg, David
Moss, Malcolm Summerson, Hugo
Moynihan, Hon C. Tapsell, Sir Peter
Mudd, David Taylor, Ian (Esher)
Neale, Gerrard Taylor, John M (Solihull)
Needham, Richard Taylor, Teddy (S'end E)
Nelson, Anthony Tebbit, Rt Hon Norman
Neubert, Michael Temple-Morris, Peter
Newton, Tony Thatcher, Rt Hon Margaret
Nicholls, Patrick Thompson, D. (Calder Valley)
Nicholson, David (Taunton) Thompson, Patrick (Norwich N)
Nicholson, Miss E. (Devon W) Thorne, Neil
Onslow, Cranley Thornton, Malcolm
Oppenheim, Phillip Thurnham, Peter
Page, Richard Townend, John (Bridlington)
Paice, James Townsend, Cyril D. (B'heath)
Parkinson, Rt Hon Cecil Tracey, Richard
Patnick, Irvine Tredinnick, David
Patten, Chris (Bath) Trippier, David
Pattie, Rt Hon Sir Geoffrey Trotter, Neville
Pawsey, James Twinn, Dr Ian
Peacock, Mrs Elizabeth Vaughan, Sir Gerard
Porter, Barry (Wirral S) Waddington, Rt Hon David
Porter, David (Waveney) Wakeham, Rt Hon John
Portillo, Michael Waldegrave, Hon William
Powell, William (Corby) Walden, George
Price, Sir David Walker, Bill (T'side North)
Raffan, Keith Walker, Rt Hon P. (W'cester)
Raison, Rt Hon Timothy Waller, Gary
Rathbone, Tim Walters, Dennis
Redwood, John Ward, John
Renton, Tim Wardle, C. (Bexhill)
Rhodes James, Robert Warren, Kenneth
Rhys Williams, Sir Brandon Watts, John
Riddick, Graham Wells, Bowen
Ridley, Rt Hon Nicholas Wheeler, John
Ridsdale, Sir Julian Whitney, Ray
Roberts, Wyn (Conwy) Widdecombe, Miss Ann
Roe, Mrs Marion Wilshire, David
Rossi, Sir Hugh Winterton, Mrs Ann
Rost, Peter Winterton, Nicholas
Rowe, Andrew Wolfson, Mark
Rumbold, Mrs Angela Wood, Timothy
Ryder, Richard Woodcock, Mike
Sackville, Hon Tom Yeo, Tim
Sainsbury, Hon Tim Young, Sir George (Acton)
Sayeed, Jonathan
Shaw, David (Dover) Tellers for the Ayes:
Shaw, Sir Giles (Pudsey) Mr. Robert Boscawen and
Shaw, Sir Michael (Scarb') Mr. Tristan Garel-Jones.
Shelton, William (Streatham)
Allen, Graham Ashdown, Paddy
Alton, David Banks, Tony (Newham NW)
Anderson, Donald Barnes, Harry (Derbyshire NE)
Archer, Rt Hon Peter Barnes, Mrs Rosie (Greenwich)
Armstrong, Ms Hilary Barron, Kevin
Battle, John George, Bruce
Beckett, Margaret Gilbert, Rt Hon Dr John
Beggs, Roy Godman, Dr Norman A.
Beith, A. J. Golding, Mrs Llin
Bell, Stuart Gordon, Ms Mildred
Benn, Rt Hon Tony Gould, Bryan
Bennett, A. F. (D'nt'n & R'dish) Graham, Thomas
Bermingham, Gerald Grant Bernie (Tottenham)
Bidwell, Sydney Griffiths, Nigel (Edinburgh S)
Blair, Tony Griffiths, Win (Bridgend)
Blunkett, David Grocott, Bruce
Boateng, Paul Harman, Ms Harriet
Boothroyd, Miss Betty Hattersley, Rt Hon Roy
Boyes, Roland Healey, Rt Hon Denis
Bradley, Keith Heffer, Eric S.
Bray, Dr Jeremy Henderson, Douglas
Brown, Gordon (D'mline E) Hogg, N. (C'nauld & Kilsyth)
Brown, Nicholas (Newcastle E) Holland, Stuart
Brown, Ron (Edinburgh Leith) Home Robertson, John
Bruce, Malcolm (Gordon) Hood, James
Buchan, Norman Howarth, George (Knowsley N)
Buckley, George Howell, Rt Hon D. (S'heath)
Caborn, Richard Howells, Geraint
Callaghan, Jim Hoyle, Doug
Campbell, Menzies (Fife NE) Hughes, John (Coventry NE)
Campbell, Ron (Blyth Valley) Hughes, Robert (Aberdeen N)
Campbell-Savours, D. N. Hughes, Sean (Knowsley S)
Canavan, Dennis Hughes, Simon (Southwark)
Carlile, Alex (Mont'g) Illsley, Eric
Cartwright, John Ingram, Adam
Clark, Dr David (S Shields) Janner, Greville
Clarke, Tom (Monklands W) John, Brynmor
Clay, Bob Jones, Barry (Alyn & Deeside)
Clelland, David Jones, Ieuan (Ynys Môn)
Clwyd, Mrs Ann Kaufman, Rt Hon Gerald
Cohen, Harry Kennedy, Charles
Coleman, Donald Kilfedder, James
Cook, Frank (Stockton N) Kinnock, Rt Hon Neil
Cook, Robin (Livingston) Kirkwood, Archy
Corbett, Robin Lambie, David
Corbyn, Jeremy Lamond, James
Cousins, Jim Leadbitter, Ted
Crowther, Stan Leighton, Ron
Cryer, Bob Lestor, Miss Joan (Eccles)
Cummings, J. Lewis, Terry
Cunliffe, Lawrence Litherland, Robert
Cunningham, Dr John Livingstone, Ken
Dalyell, Tam Livsey, Richard
Darling, Alastair Lloyd, Tony (Stretford)
Davies, Rt Hon Denzil (Lanelli) Lofthouse, Geoffrey
Davies, Ron (Caerphilly) Loyden, Eddie
Davis, Terry (B'ham Hodge H'l) McAllion, John
Dewar, Donald McAvoy, Tom
Dixon, Don McCartney, Ian
Dobson, Frank McCrea, Rev William
Doran, Frank McCusker, Harold
Douglas, Dick Macdonald, Calum
Dunnachie, James McFall, John
Dunwoody, Hon Mrs Gwyneth McKelvey, William
Eastham, Ken McLeish, Henry
Evans, John (St Helens N) Maclennan, Robert
Ewing, Mrs Margaret (Moray) McNamara, Kevin
Fatchett, Derek McTaggart, Bob
Faulds, Andrew McWilliam, John
Fearn, Ronald Madden, Max
Field, Frank (Birkenhead) Maginnis, Ken
Fields, Terry (L'pool B G'n) Mahon, Mrs Alice
Fisher, Mark Marek, Dr John
Flannery, Martin Marshall, David (Shettleston)
Flynn, Paul Marshall, Jim (Leicester S)
Foot, Rt Hon Michael Martin, Michael (Springburn)
Forsythe, Clifford (Antrim S) Martlew, Eric
Foster, Derek Maxton, John
Foulkes, George Meacher, Michael
Fraser, John Meale, Alan
Fyfe, Mrs Maria Michael, Alun
Galbraith, Samuel Michie, Bill (Sheffield Heeley)
Galloway, George Michie, Mrs Ray (Arg'l & Bute)
Garrett, John (Norwich South) Millan, Rt Hon Bruce
Garrett, Ted (Wallsend) Molyneaux, Rt Hon James
Moonie, Dr Lewis Short, Clare
Morgan, Rhodri Skinner, Dennis
Morley, Elliott Smith, Andrew (Oxford E)
Morris, Rt Hon A (W'shawe) Smith, C. (Isl'ton & F'bury)
Morris, Rt Hon J (Aberavon) Smith, Rt Hon J. (Monk'ds E)
Mowlam, Mrs Marjorie Smyth, Rev Martin (Belfast S)
Mullin, Chris Snape, Peter
Murphy, Paul Soley, Clive
Nellist. Dave Spearing, Nigel
O'Brien, William Steel, Rt Hon David
O'Neill, Martin Steinberg, Gerald
Orme, Rt Hon Stanley Stott, Roger
Owen, Rt Hon Dr David Strang, Gavin
Paisley, Rev Ian Straw, Jack
Parry, Robert Taylor, Mrs Ann (Dewsbury)
Patchett, Terry Taylor, Rt Hon J. D. (S'ford)
Pendry, Tom Taylor, Matthew (Truro)
Pike, Peter Thomas, Dafydd Elis
Powell, Ray (Ogmore) Turner, Dennis
Prescott, John Vaz, Keith
Primarolo, Ms Dawn Walker, A. Cecil (Belfast N)
Quin, Miss Joyce Wall, Pat
Radice, Giles Wallace, James
Randall, Stuart Walley, Ms Joan
Redmond, Martin Wardell, Gareth (Gower)
Rees, Rt Hon Merlyn Wareing, Robert N.
Reid, John Welsh, Andrew (Angus E)
Richardson, Ms Jo Welsh, Michael (Doncaster N)
Robertson, George Wigley, Dafydd
Robinson, Geoffrey Williams, Rt Hon A. J.
Robinson, Peter (Belfast E) Wilson, Brian
Rooker, Jeff Winnick, David
Ross, Ernie (Dundee W) Wise, Mrs Audrey
Ross, William (Londonderry E) Worthington, Anthony
Rowlands, Ted Wray, James
Ruddock, Ms Joan Young, David (Bolton SE)
Salmond, Alex
Sedgemore, Brian Tellers for the Noes:
Sheerman, Barry Mr. Frank Haynes and
Sheldon, Rt Hon Robert Mr. Allen McKay.
Shore, Rt Hon Peter

Question accordingly agreed to.

Resolved, 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.

To be presented by Privy Councillors or Members of Her Majesty's Household.

  2. c734