HC Deb 28 November 1988 vol 142 cc438-530
Mr. Speaker

I have selected the amendment in the name of the Leader of the Opposition.

In view of the pressure to speak in this debate today, I will impose between 7 and 9 o'clock the 10-minute limit on speeches. I say to those hon. Members who are called before that time to bear in mind that their speeches should not greatly exceed the limit of 10 minutes so that as many hon. Members as possible may be called.

3.34 pm
Dr. John Cunningham (Copeland)

I beg to move, at the end of the Question, to add: But humbly regret that the Gracious Speech contains proposals to create private monopolies by the sale of the nation's water and electricity industries to foreign and British commercial organisations, thus damaging the interests of consumers, taxpayers, and the environment; regret the absence of a Bill to safeguard comprehensively the nation's environment and heritage, and further regret the inclusion of proposals to discriminate against council house tenants whilst ignoring the problems caused by record levels of mortgage rates and homelessness in urban and rural areas alike. In 1986 the Labour party adopted a radical and comprehensive policy document setting out its policies on the environment. That statement, although requiring updating in part, remains the most coherent statement of environment policy by any party in the House. It is a policy based on realism and experience, and sets out a bold strategy for Britain under a Labour Government. It is firmly based on our aims and values for a safer and cleaner environment nationally and internationally.

We welcome the challenge to political parties thrown down recently by the Worldwide Fund for Nature and other environmental groups, because the overwhelming majority of the issues that they cover are already part of our policy. I am confident that the rest will be covered by the existing policy review. We note that the Prime Minister has belatedly, after almost a decade in office, moved the environment to the top of her agenda. It has been at the top of ours for a considerable time. I suspect that, like us, the Prime Minister is aware that 81 per cent. of the British people believe that the Government should be doing more to protect the environment.

The Prime Minister, the Secretary of State for the Environment and I are all scientists. It is said that the beginning of wisdom is to look facts in the face and to call them by their right names. Therefore, there should be some opportunity for agreement. Has there really been a conversion on the road to the Royal Society? Has the Secretary of State suddenly and uncharacteristically been transformed from the 19th century market forces guru that he has so often boasted of being, when deregulating buses, for example, or when trying to end the interference of councils in the housing market, into something different? Has he suddenly become the interventionist people's Nick? I doubt it.

The problem for the Government is that their ideology is completely out of phase with the demands of ecology—the science of people and the environmnent. In order to be complementary to sound environmental practice, successful policies demand intervention on a consistent and wide-ranging front and in every facet of policy. They also demand planning and interference in the market in a way that can only be anathema to the Prime Minister and the Secretary of State.

We especially welcome the Prime Minister's speech at the Royal Society because it has focused attention on this need. In doing so it has moved the debate on to our political ground.

We believe, and history shows, that left to themselves market forces are environmentally damaging and destructive. The Government and the Secretary of State are in head-on collision with their own most cherished dogma that the market will provide a solution. However, our countryside, our heritage, the poor people of the world, the oceans and the atmosphere cannot take that gamble any longer—the risks are too great and the damage already too serious not to call a halt. I know that the Secretary of State, as a scientist, would agree that the market is not scientific.

It is also important to compare the recent rhetoric of the Prime Minister and the Secretary of State with their records. Many hon. Members would agree that the pressures on land, housing, social facilities and on the infrastructure in London and in the south of England have become intolerable. Many Conservative Back Benchers are deeply uneasy about the consequences of their Government's policies, and we share that unease. The grotesquely distorted developments of the north-south divide in Britain are a direct consequence of Government policies since 1979.

The devastation of industry and employment in Scotland, the north and the midlands has produced the equal and opposite reaction in the south. In reality, many Tories are now getting what they voted for, but they are discovering that it is not what they really want. In Berkshire, Dorset, Essex, Hampshire and elsewhere protests mount as development rolls over towns and villages. It is impossible, however, not to feel a little sorry for the current Secretary of State—[HON. MEMBERS: "Oh!"] Oh yes. He shares my view that all this is not really his fault and that it all began back in 1980 when the right hon. Member for Henley (Mr. Heseltine) opened the floodgates to developments in the south—Berkshire and elsewhere.

At that time the Conservative Government issued strategic planning guidance to sweep away obstacles to commercial enterprise in the south. That guidance reduced proposals from Tory Berkshire and Surrey county councils in particular to extend the green belt to protect their communities. Of course many people in the Tory party and many business people have taken their lead from that early guidance issued by the Tory Government.

Mr. Michael Heseltine (Henley)

rose—

Dr. Cunningham

I shall give way in a moment.

In Dorset, the Tory county council is now proposing a new town in its own green belt land in the parish of St. Leonards and St. Ives. Several Tory councillors are also landowners and developers in the area and the former planning officer of the east Dorset district council has gone into busines to advise developers seeking planning permission in the local authority area. Bewildered and disillusioned local people are entitled to ask what is going on because it is not what they voted for. I know that some Tory Members share their concern.

Mr. Robert Adley (Christchurch)

The hon. Gentleman has referred to an area in my constituency, and I regret that what he has said is true. There is widespread concern about what has been done and proposed by the Dorset county council. Does the hon. Gentleman share my hope that the Secretary of State will do to the county council's ideas what he has already done to a similar proposal by the Carroll Group—throw them out lock, stock and barrel?

Dr. Cunningham

Of course I share that view. I further hope, however, that the Secretary of State will, at long last, recognise that such unbalanced development in Britain is as bad for the people of the south as it is damaging for the people of the midlands, the north and Scotland. That is he failure at the heart of the Government's policies.

Mr. Heseltine

Will the hon. Gentleman confirm that what we did in 1979–80 was, if anything, to reduce the consequences of the planning assumptions that the last Labour Government put before the county councils? Can he give one example of a county in which we increased the number of houses over and above the assumptions of the outgoing Labour Government?

Dr. Cunningham

I remind the right hon. Gentleman that, when he was Secretary of State, he granted on appeal for almost 1 million sq. ft. of extra office space in Berkshire. Such commercial development inevitably brought in its train huge increases in demand for housing in the Thames valley and elsewhere. That is what the right hon. Gentleman did when he was Secretary of State, and the present Secretary of State wrote on 18 March to remind him of it. Whatever he might say about the previous Labour Government, the growth in pressure for development in Greater London and in counties surrounding London is a direct result of the Government's policies since 1979.

Mr. Heseltine

Will the hon. Gentleman give way?

Dr. Cunningham

No, I shall not give way. The Secretary of State agrees with that and wrote and told the right hon. Gentleman so, and he knows it.

The highly respected photographer, Mr. Norman Parkinson, recently expressed his fears about those policies in the Thames valley when he talked of it becoming "another synthetic community". How right he was. The dilemma was perhaps posed more graphically by my hon. Friend the Member for Norwich, South (Mr. Garrett) in an article entitled, Southern California—a suburb coming near you soon". The Secretary of State, as a scientist, recently wrote of the need to put "evidence before emotion" in the discussion of these issues. I am pleased to see that he recognises the need for that. I wish that he would put evidence before the House a little more often and practise what he preaches. Why does he not put before the House the evidence of his expenditure on housing action trusts which he has refused to do in answer to questions from my hon. Friend the Member for Halifax (Mrs. Mahon)? Why does he not put before the House the evidence that he is commissioning on the value of the assets of Britain's water industries before he sells them? If he believes in putting evidence before emotion, why cannot everyone, including taxpayers, know of that evidence before decisions are taken?

Unfortunately for the Secretary of State, although he does not practise what he preaches, many environmentalists and scientists have taken him at his word. For example, Mr. Hugh Fish, retiring chairman of the Natural Environment Research Council, said recently that, if the squeeze on funding is not halted, environmental research could suffer damage from which it would take years to recover. His successor, Professor John Knill, warned that

the council could no longer support some important environmental monitoring programmes. This year, the council is losing perhaps up to 160 jobs as a direct result of Government policy. The Department of the Environment's expenditure on environmental research has fallen in real terms from £40.6 million in 1979–80 to £28.8 million now, according to a written answer from the Under-Secretary of State for the Environment on 24 October this year.

The Ministry of Agriculture, Fisheries and Food has also announced wide-ranging cuts in research. At a time when eggs in Britain now come with a Government health warning because salmonella bacteria are endemic in chickens and eggs in this country, the research programme of the Food Research Institute at Bristol into microbial intestinal flora has been axed as a result of the Government's policies. Recently, on Radio 4's "Food Programme", Dr. Geoff Mead of that institute said: Unfortunately our work has recently fallen victim of the Government's cuts in food and agriculture. So the work will now cease … The industry needs all the help it can get in applying whatever control measures are available. Work in other important areas of public concern affecting pesticides, animal disease and pollution has also been cut. The secretary of the Agricultural and Food Research Council, Professor Stewart, has condemned the cuts, which he said would have a drastic effect on the biological science base of the UK. As recently as last Wednesday, the chairman of the Nature Conservancy Council, the inoffensive but effective Mr. William Wilkinson, said that the Government had cut the council's grant for next year by 5 per cent. He added: The question of money is probably the matter that gives me the greatest anxiety as to whether or not we can carry out what is required for the future. Since 1979, scientific research has been continually squeezed deliberately by the Government, with cuts affecting both research councils and universities. The cuts have been especially damaging to environmental monitoring programmes, including those directed to the atmosphere. Some, including the measurement of long-lived radionuclides in estuarine sediments, have been axed altogether. The Chancellor of the Exchequer's recent announcement of increased funding for science falls well short of the minimum sum recommended by the Government's own advisory board for the research councils. The Government's policy of stopping the funding of what they call near market research can lead only to further cuts in long-term scientific work. The evidence from the Government's budget is that Ministers continue to downgrade long-term environmental monitoring and research when they allocate resources.

Examination of the Government's performance in other environmental matters exposes the Tories' record on the environment, which is abysmal. Britain has the dirtiest beaches in Europe, with the Commission taking legal action against the Government in five of the worst cases. Nearly 11 million people are forced to drink water of a quality below that required by Community standards, including those in many areas of the country where there are excessive nitrate levels in water. Again, the Community is taking Britain to court in respect of six serious breaches. There is a total absence of any strategy for managing the rising quantities of toxic and hazardous chemical wastes. This was graphically illustrated by the recent Karin B fiasco. Furthermore, there is a complete absence of any strategy for managing nuclear wastes. The Radioactive Wastes Management Advisory Committee reported in July,

policy remains disappointingly confused or deficient. The Government's dilatory attitude towards tackling the problems of acid rain is well documented. Britain remains the largest emitter of sulphur dioxide in western Europe, with an increase of 200,000 tonnes last year. Between them the three power stations in the entrance to the Aire valley in Yorkshire—Ferrybridge, Eggborough, and Drax B—burn 20 million tonnes of coal a year, producing one fifth of the nation's electricity. They will be sending into the air annually about 800,000 tonnes of gases that can be converted into acid rain—600,000 tonnes of sulphur dioxide and 200,000 tonnes of nitrogen oxides. That is more than one sixth of the entire national outputs of Portugal, Norway, Switzerland and Ireland put together.

The Government have encouraged the import of hazardous and domestic wastes for purely financial gain while they have refused to consider the major implications for national land use and planning, the environment and public health. In addition, the Department of the Environment has just five inspectors to supervise more than 5,600 tips in England and Wales. That is simply not credible. Even responsible companies in the waste treatment industry are highly critical of the Government's policies.

The Government have also refused to meet their obligations under the convention on the international trade in endangered species. Again, the European Community has initiated legal proceedings. The Government still have a confused and lamentable response to the environmental consequences of the Chernobyl catastrophe. They also made a churlish, miserly and dishonest response to last year's unprecedented storm damage. The Tory-dominated Select Committee on Agriculture condemned that response in March. As a consequence of the Government's response, much of the woodland areas of southern England appear set to remain devastated for decades as a result of the Government's policy.

Britain remains the worst offender in dumping materials in the North sea, with untreated sewage sludge and waste materials predominating.

Mr. Edward Leigh (Gainsborough and Horncastle)

Will the hon. Gentleman give way?

Dr. Cunningham

In a moment.

Earlier this year, following an incident at the Lowermoor water treatment works, more than 20,000 people in the Camelford area were poisoned by their own domestic water supply. Of course, the regional water authority, thanks to the Government, now meets in secret and the press and public are excluded. There has been an internal inquiry into the biggest scandal involving the poisoning of people in this country in living memory. If the Secretary of State had any sense of duty and responsibility, he would set up a public inquiry into the matter now. However, he has consistently refused to do so.

Mr. Leigh

Is the hon. Gentleman satisfied with the level of investment by the water industry in sewage treatment over the past 20 years under Labour and Conservative Governments? If not, how would he re-order the priorities of a Labour Government to refresh those parts of the water authority which no Government has ever tackled?

Dr. Cunningham

Of course I am not satisfied. The hon. Gentleman must be aware that no Opposition Members are content with the status quo. However, we do not have to sell the nation's water assets to increase investment and improve pollution control; and we do not have to dun the consumers of water in the process either.

Nations bordering the North sea, our Community partners, the Nordic Council countries, Environment Select Committees of both Houses of Parliament and most recently the Royal Commission on environmental pollution are all strongly and persistently critical of the Government's policy failures. It is little wonder that the Government have been arraigned by the European Commission on more charges than all the other Community countries combined.

The Secretary of State argued last week that the nouveau riche were the best guardians of our heritage. Unfortunately for the Secretary of State, he was pre-empted by the nouveau riche Mr. Frank Bayada, who outbid conservationists to buy 34 acres of the New Forest in anticipation of the Secretary of State's thoughts. However, he ruined the policy promptly by taking a bulldozer to more than 500 ancient trees, felling the lot. In hours a 900-year-old habitat was wrecked, as was the Secretary of State's policy. The Sunday Telegraph says that our heritage is under the hammer. It is right: metaphorically and actually our heritage is being sold, and too often destroyed. People are dismayed at the proposed disposal of the Mappa Mundi and other church treasures. The British Coal sale of Thoresby hall in Nottinghamshire, against the views of English Heritage, is a disgrace, and I ask the Secretary of State to inquire into it.

Although the Government can find time in their programme for yet another Local Government Bill—there have been about 50 in 10 years—they can find no room for a Bill to safeguard more effectively our environment and heritage. That is a deplorable omission. If the Government had been considering those issues seriously they would have approached the Opposition months ago to seek out common ground, but they have not done so, and their recent flurry of speeches—caused, no doubt, by alarm at public opinion—is exposed as bogus.

The Government have given no serious long-term thought to these crucial issues. I emphasise that we, for our part, are willing to begin now to explore the opportunities to achieve some consensus on them. But there can be no compromise on Bills on housing, or on the selling off of the nation's electricity and water industries.

The next Local Government Bill will demonstrate the triumph of dogma over reason in Tory policy. The Government's new financial regime for local authority housing could mean the end of central Government's housing subsidy to local authorities, and will also prevent housing departments from subsidising their housing costs from the general rate fund. Rents will rise, and tenants who can afford to pay the full rent will be asked to subsidise their neighbours who are in receipt of housing benefit. The cost of housing benefit will be transferred from general taxation to the rates, while surpluses on council rent funds will be transferred to the general rate fund. Thus council tenants will be taxed twice, first, to support housing benefit and, secondly, to subsidise the poll tax.

The Government are guilty of inefficiency and incompetence on housing finance. One in 10 homeless families are in their present difficulties because of mortgage failures and repossessions. That is the fastest-growing cause of homelessness in the country. House price inflation has put housing out of the reach of many young people who cannot afford a home in the communities in which they were born and have grown up, particularly in the south.

Central Government housing subsidy has been reduced by no less than 80 per cent. since 1979. That has resulted in a shortage of affordable rented housing. Public sector housing starts have fallen from 73,000 in 1979–80 to 15,000 at the latest estimate. That has placed local authorities in an impossible position, and they are spending millions of pounds of ratepayers' money on bed-and-breakfast accommodation. Council waiting lists in some parts of the country have simply stopped operating sensibly. The number of people on waiting lists in England has almost doubled in the past five years, from 750,000 in 1983 to 1.29 million in 1987. Transfers are rare, and growing families are often cramped in flats or other accommodation unsuitable for their needs.

The system of mortgage interest tax relief favours owner-occupiers over tenants and helps wealthier owner-occupiers most of all. In 1979–80 it was worth £1,450 million, and local authority housing subsidies amounted to not quite twice that amount. By 1985–86 mortgage tax relief had risen to £4.75 billion, but local authority housing subsidy had almost stabilised. So much for Government targeting. Twenty-five per cent. of mortgage interest tax relief goes to those earning over £20,000 a year. Housing benefit cuts penalise poorer tenants, especially young people and pensioners. What kind of targeting is that? We need to reform housing finance, to make it fairer both within and between the rented and purchase sectors of the housing market and to ensure an adequate supply of affordable rented housing.

Under the present Government, mortgage rates have been higher for longer than under any previous Government. It is all going wrong for the Chancellor. His top-rate tax-cutting strategy has resulted in only the most wealthy being guaranteed any improvement in living standards. For millions of families the spring tax cuts have been cancelled out by the price rises and mortgage clawbacks of the autumn, and social security cuts make many worse off than ever. Low and middle-income families unable to afford private sector provision are seeing their quality of life suffering from underfunding of the public services. Cuts in real spending and investment in many services have been confirmed in the Autumn Statement, ensuring continued neglect well into the 1990s, and increasingly the British people regard that as unacceptable.

How is this for a quotation: The Government's 'panic hike' in minimum lending rate demonstrates the continuing collapse of its economic policies."? That was said about a Government who put interest rates up to their present levels. But it was said by the present Foreign Secretary in October 1976 after two years of Labour Government, in the middle of the worst world oil price hikes ever experienced. We have now reached those levels after 10 years of the present Government, and we are the only country in the western world that is self-sufficient in energy supplies. What have the Government to say about that now?

We also have serious misgivings about proposals to change the basis of funding under section 137 of the Local Government Act 1972. A change to per capita funding will in many cases have a profoundly adverse effect on councils' discretionary spending and on local schemes, whether in partnership with the private sector or with the highly valued voluntary organisations.

We are implacably opposed to proposals to sell off our nation's electricity and water assets, and to the possibility of control of such fundamental and strategic resources passing abroad. It is difficult to believe that any national Government would elevate the pig-headed pursuit of dogma to such levels.

In electricity supply we shall see the end of coherent, strategic planning of the industry. We face a nuclear power imposte on consumers. Private enterprise gets the assets; consumers get the bill to deal with decommissioning and nuclear waste—if the Government ever have a policy to deal with it, that is. Confusion reigns as the Secretary of State for Energy contradicts the Secretary of State for the Environment, and vice versa. Confusion reigns as the Government refuse to let the market decide, and insist on the building of nuclear power stations regardless of the economics and of the cost to the consumer.

Was it evidence or was it emotion that caused the Secretary of State's outburst about the need for a massive expansion in nuclear power to counteract the greenhouse effect? It certainly was not historical fact that guided him. He quoted the French. The French embarked on nuclear power expansion in the 1970s, but not to protect the environment. The French Minister of the time said to my right hon. Friend the Member for Chesterfield (Mr. Benn) and me when we queried public reaction to their policy, "When you are draining the swamp you do not consult the frogs." It was hardly environmental concerns that drove the French; it was because they recognised that they had no oil or gas and very little coal of their own.

It was not the fact of his own Government's track record on nuclear power that could have guided the Secretary of State. For all their boasting, the Government have begun but have not yet completed one nuclear power station in a decade. It was no analytical, scientific assessment, either. The presence of pollution in the world's atmosphere traps too much heat near the earth instead of allowing it to escape into space. According to the United Nations environment programme, only 50 per cent. of the 3 deg warming effect that is expected early in the next century will be caused by carbon dioxide, and only one third of the 50 per cent. is caused by fossil-fuelled power stations. That is an essential scientific fact that the Secretary of State does not seem to have grasped.

Let us suppose that the nuclear solution is imposed and that we replace two thirds of our fossil-fuelled power stations with nuclear power. The result will be a less than 12 per cent. reduction in the United Kingdom's total contribution to global warming, achieved by building about 30 nuclear reactors. If the Secretary of State had talked about a massive expansion of public transport, he would have been widely applauded because 25 per cent. of the carbon dioxide comes from vehicle emissions, and that figure is expected to increase by 50 per cent. before the end of the century.

The answer that the Secretary of State is grappling for is not a massive expansion of nuclear power, for which there is no place, but a major programme of energy conservation and intervention to reduce demand and to increase the energy efficiency of our homes, industries and public buildings. However, this Government have frittered away the major programme of energy conservation policies that they inherited precisely because they were interventionist.

The BBC says that the Secretary of State's "On The Record" interview was arranged to take place in his home to prevent a walk-out when he was confronted with the evidence of his own confusion. When confronted earlier by ITV over his inconsistency, emotion overcame evidence. The Secretary of State walked out of the studio in the middle of the interview. To obscure his confusion even further, the Secretary of State now attempts to present water privatisation as an environmental measure.

It is completely unnecessary to sell the nation's water assets to achieve the environmental improvements that the Government say are their objective. The proposals ensure that private enterprise will obtain huge and important environmentally sensitive assets while the taxpayer and water consumers are expected to foot the bill for cleaning up the appalling pollution that already exists.

The Secretary of State for the Environment has made no attempt to quantify the value of the assets to be sold, as recommended by the House of Commons Public Accounts Committee in its recent report, following the Royal Ordnance fiasco. A huge rip off of the taxpayer is being planned by the Secretary of State. Consumers will have no choice. The proposals contain no iota of competition. They will result in powerful private monopolies deciding their policies for our water supply in secret.

It was this Government who acted to exclude the press, the public and local authority representatives from the meetings of regional water authorities. They have a lot to answer for.

The Secretary of State says that water supply and sewage disposal will be subject to the disciplines of the private sector, but such disciplines as the private sector affords result from the market. There will be no market. Furthermore, there will be no competition and no choice over water supply or sewage disposal. How, therefore, can any disciplines apply? "Ah, yes," said the Secretary of State at his press conference last week, "I know that. Let them use Perrier." Thus spoke Nicholas Antoinette. Picture the scene. "It's time for granny's bath," mother says. "Come now, children. We can't afford a jacuzzi, but pass up the Perrier." It is a joke. It is preposterous. Water consumers will have no choice and no option. They will be at the mercy of massive private enterprise monopolies.

As with the electricity proposals, water privatisation will cost the consumer a great deal. This Government's inflationary dogma will be a burden on the whole economy.

In a speech to the Bow Group on 11 October 1988 the Secretary of State said that this Government were Taking the lead in getting the other Governments of the world to accept their responsibilities. Will he confirm that at a meeting of Environmental Ministers in Brussels this weekend the British Government blocked a proposal to introduce a new European Community directive to protect threatened flora, fauna and habitats? Is that encouraging other Governments to accept their responsibilities for the environment?

In the same speech on 11 October, the Secretary of State said: The Government does have first-class scientific advisers perhaps that should be, "did have first-class scientific advisers"— and we must enable everyone to share the information they give us. We spend a lot of taxpayers' money on research and advice and indeed we have the best advice. The taxpayer has every right to know the results. We look forward, therefore, to a green Bill encompassing the freedom of information proposals that are essential if those commitments are to be guaranteed.

We know that under this Prime Minister there is no such thing as society. If she and her Secretary of State remain in power for much longer, there will be little, if any, science, either. It is not just a question of their lack of commitment, their failure to face the evidence and put it before the emotion of their ideology. It is their failure to maintain, let alone improve upon, an already inadequate and fragmented framework of environmental legislation, protection and enforcement.

We are now asked to believe that this Government—red in market forces tooth and claw—have become ideologically colour blind and have taken on a green mantle. We do not need carbon dating to prove that it is a fake. Environmentalists do not believe them. Industry does not believe them. The Secretary of State's pollution inspectors do not believe them, either—that is why they have resigned. And we do not believe them.

4.18 pm
The Secretary of State for the Environment (Mr. Nicholas Ridley)

The Opposition amendment does not cover some of the main points that the hon. Gentleman has just made about planning policy and research. I shall deal quickly with the research figures and then move to the amendment itself.

The hon. Member for Copeland (Dr. Cunningham) may be interested to know that, contrary to the figures that he gave, the total of Government-funded research will increase from £825 million this year by a further £93 million next year. I do not know how on earth he can describe that as a cut. He may also like to know that within the increased budget for environmental research that is received by the Natural Environment Research Council the council may change its priorities within the increased total—which is what it has done. The hon. Gentleman seemed to ignore totally a Bill that is probably the biggest contribution to cleaning up the environment ever to he put before the House. I am referring to the Water Bill, which has been published.

The privatisation of water and electricity will achieve two vital objectives. First, it will open those industries to the private capital markets for the huge investments that will be needed in future in both industries—mainly to clear up the backlog of pollution, which resulted from the Labour Government's stewardship. Secondly, it will give the managements of those industries the incentive to increase efficiency, to innovate and to diversify for the benefit of their customers and the economy generally.

Much has been said recently about the three big French water companies that are buying some of our statutory water companies. Those three French water companies have been privately owned for a long time and they supply water in France and in many other countries with great efficiency as a result of being in the private sector. I want our English and Welsh water authorities and companies to be equally enterprising, efficient and profitable. I know that the Labour party does not want that. I look forward to the day when they operate efficiently and profitably, not only on their present territory, but perhaps in France, Europe and further afield still.

The hon. Member for Copeland scarcely mentioned the Water Bill. However, I happened to hear the interview that he gave on Radio Cumbria on Thursday night. No doubt he thought that as he was well away from Westminster and had left the House early on a Thursday evening he would be out of earshot. But I heard the broadcast. [Interruption.]

Mr. Speaker

Order.

Mr. Ridley

For the sake of greater accuracy, to use your phrase, Mr. Speaker, I obtained a transcript. I shall quote four sections of it to prove how extravagantly inaccurate the hon. Gentleman is. He said: There are huge gaps in the Bill which ensure that existing pollution will continue and that people who are the polluters will be able to drive a coach and horses through the provisions. So there are no real improvements and safeguards for the environment in this Bill. The truth is that the change in the structure of the water industry that will accompany privatisation will bring out the inherent weakness in the current arrangements, under which the poacher and the gamekeeper have been and are the same person, in the terms used by the Select Committee on the Environment. The water authorities, which are some of the greatest dischargers of polluting substances into rivers, have had also to fulfil the role of controlling pollution of those rivers. We shall change that unsatisfactory situation so that, for the first time, there will be a major national body with a single dedicated remit to tackle water pollution. It will have comprehensive powers to regulate all discharges into rivers, estuaries and the sea and to take action to forestall or remedy pollution.

I shall now quote from an article in the Financial Times of last Friday to show how wrong the hon. Member for Copeland was. [Interruption.] I hope that the House will listen.—[Interruption.]

Mr. Speaker

Order.

Mr. Ridley

The article said of the water authorities: they will be bound hand and foot by regulations specifying standards of quality and service, some from the European Community and others from ministerial directives. They will be subject to a pricing regime which will limit their return on investment, and allow the new Director of Water Regulation to examine in detail the prudence and efficiency of their capital expenditure. They will also be under the supervision of a separate 6,000-strong National Rivers Authority, charged with the general management of river basins. The hon. Gentleman was talking absolute rubbish, and he knows it.

I shall quote again from the Radio Cumbria interview. The hon. Gentleman said: Individuals or their local authorities or their health authorities will not be able to bring charges against people who actually supply water which is unfit for human consumption. The hon. Gentleman has not done his homework, because he has not read the Bill. It will make it a criminal offence, for the first time, for a water undertaker to supply piped water that is unfit for human consumption. Under the present law, that is not a criminal offence. That change is one of the many ways in which the Bill brings an improvement in safeguards for the consumer and the environment. The hon. Gentleman talked rubbish on that matter as well.

Dr. Cunningham

I am grateful for the fact that the Secretary of State has given way, if only to allow me to put on record my appreciation of the new doctrine that people go into radio broadcasts so that they will not be overheard.

Will the Secretary of State confirm that, under the new provisions, he and the Director of Public Prosecutions will determine whether actions are taken, and that members of the public, local authorities and even district health authorities will not be able to do so?

Mr. Ridley

The hon. Gentleman knows that he is mixing up two different types of prosecution. When we come to detailed consideration of the Bill I shall be able to put him right on that as well.

I want to continue to take the hon. Gentleman to task for his broadcast. He said of me: Why should we believe him when his own pollution inspectors have made it clear that they don't believe what Ministers are saying, and that's why they are resigning from his Department. The hon. Gentleman is not good at listening, but I hope that he will listen now.

Mr. Perriman and the Department have agreed that, because of speculation in the press—much of it misinformed—the reason for his resignation may be stated publicly. The reason was disagreement about some elements of the proposals for reorganising Her Majesty's inspectorate of pollution in the regions. Those proposals are still the subject of consultation with staff representatives. Under the proposals, specialist teams of inspectors in each region would be matched with a particular class of industry. Mr. Perriman originally supported that proposal, but later changed his mind in favour of teams of multi-purpose inspectors allocated on a geographical basis.

I am sad that Mr. Perriman feels it necessary to resign over this matter, and I am sad to see him go, but that actually is his reason for going. In no sense is his reason for going anything to do with disagreements over the Government's policies or about lack of resources for the inspectorate. Our first task since Her Majesty's inspectorate was formed in April 1987 was to fill vacancies. We have been successful. Vacancies have fallen from 66 then to 19 now—out of 200 posts. It remains our objective to provide Her Majesty's inspectorate with the resources that it needs to do the job we have given it.

Dr. Cunningham

That seemed a long, boring and convoluted way of agreeing that pollution inspectors are resigning because they have differences of opinion on policy with the Secretary of State.

Mr. Ridley

That is not so. The hon. Gentleman is wrong. He is talking rubbish once more. Indeed, he seldom talks anything but rubbish. As I have said, Mr. Perriman disagrees with his colleagues in the inspectorate about how best to organise the inspectorate regionally.

My final quotation from the hon. Member is this: The water authority managers are already talking about increases in costs to the consumer of between 50 and 80 per cent.—that's really a pretty clear signal to us that they are probably going to double in the short term and maybe in the longer term go up by two or three times. That is what the hon. Gentleman said in that famous interview.

Again, the hon. Gentleman's suggestion of doubling or trebling water charges is absolute rubbish. I have made it clear that, on the known programmes of environmental improvements so far—cleaner beaches, drinking water quality and improvement to sewage treatment works—the necessary investment might increase prices by between 7.5 and 12.5 per cent. in real terms by the end of the century. It could well be more if further environmental improvements are necessary.

Of course, there are other factors, such as the higher cost of private sector capital, and so on, but the greater efficiency that we expect will work the other way. The increase in charges will be nowhere near the extravagant predictions of the hon. Gentleman. Doubling water charges would produce an extra £3 billion per annum: trebling them would produce £6 billion per annum. Those figures compare with an investment next year of £1.3 billion. His figures are miles wide of the mark and were produced with the deliberate intention of misleading and misinforming. Once more, I say that he was talking absolute rubbish.

What we have to contend with is that, when in government, the Labour party cut investment in the water services by a third, and, within that investment, in sewage treatment works by half. In our debate a fortnight ago the hon. Member for Bootle (Mr. Roberts) eventually got it right and had to admit that the Labour Government "had not wanted to" cut investment. We now have a strange new doctrine: "The Labour party wants to increase public investment, but has to cut it; apparently, the Tories want to cut it, but actually increase it." On the hon. Gentleman's own admission, that is what is happening. In fact, we have increased investment to over £1.3 billion next year. Those damaging cuts under Labour are the main reasons for the defects that still exist in the water environment, and we do not need to be lectured by Labour Members about this matter.

There is an underlying truth in all this. It is that pollution control costs money. That is why Socialist economies, which are not as successful as market economies, do not make the necessary investments in pollution control. In a controlled economy the resources are just not available.

Mr. Jack Straw (Blackburn)

rose—

Mr. Ridley

No, the hon. Gentleman must wait. He can make his speech later if he catches your eye, Mr. Speaker. It is worth telling him why Labour cut investment in water and sewerage. The International Monetary Fund told the Labour Government that they had to do so. The IMF came in because Government spending was way out of control. That is why there will never be the resources to make the necessary investment in the water industry if it remains in the public sector.

We now have a healthy economy that can afford to clean up the environment. The two go hand in hand. A strong and growing economy requires a good environment in which to flourish. Equally, environmental protection and improvement need the benefits of growth and a strong economy to meet the costs. The costs are high—amounting to several billions of pounds for our current environmental initiatives.

Mr. Tony Banks (Newham, North-West)

Will the Secretary of State tell us why, after 10 years, Britain has the reputation of being the dirtiest nation in Europe? Could that have something to do with the raw sewage that the Secretary of State is delivering as his speech this afternoon?

Mr. Ridley

That is not true—[HON. MEMBERS: "Absolute rubbish."] The only thing that the Labour party seeks to do is to damage the reputation of this country by talking rubbish, as the hon. Member for Newham, North-West (Mr. Banks) was doing.

The polluter will have to pay for the increased investments. As a result of the successful agreement last week on motor car emissions, the motorist will have to pay a further £850 million annually. There will be increases in water charges to improve, first, the quality of beaches through the provision of long sea outfalls; secondly, quality water through the "Red List" controls over industrial discharges; and thirdly, sewage treatment works through the massive investment programme of upgrading.

To reduce SO2 and NOx emissions substantially—one of which is the cause of acid rain—there will have to be an increase in the price of electricity. However, I want to make it clear that the price increases will be due not to privatisation, but to the improvements to the environment for which the Labour party has rightly asked. Labour Members will not be able to say later that the price increases are due to privatisation—[HON. MEMBERS: "Absolute rubbish."] We will take no lectures from the Labour party.

I turn not to the other major issue of environmental clean-up. The House might be amused to remember a contribution on this subject from the hon. Member for Copeland. On the eve of the last election the Labour party said that it would ban fox hunting. However, the hon. Gentleman suddenly remembered his own constituency and said, "but not in national park areas." That is the level of consistency within the Labour party. That is the extent to whch the Labour party's views are based on science. That is the hon. Gentleman's commitment to the environment—[HON. MEMBERS: "Absolute rubbish."] It is absolute rubbish from the Labour party. I do not know why the hon. Gentleman left out areas of outstanding natural beauty.

The amendment refers to a mythical Bill which the hon. Member for Copeland would like to see enacted, to safeguard comprehensively the nation's environment and heritage". No such Bill is needed. We will be presenting the House with a Bill as soon as possible, and certainly during this Parliament, to do the things that are not yet quite ready for introduction. They cover two significant but specific topics.

The first is the introduction of an integrated system to control industrial pollution, which will put Her Majesty's inspectors of pollution on a proper statutory footing and introduce a cross-media system of control that takes account of the unity of the natural environment. The second is the reform of waste disposal law to increase waste disposal authorities' powers to regulate waste disposal, to place a statutory duty of care on the producers and holders of waste and to control imports of wastes and fly tipping. Substantial changes to the legal infrastructure are needed before those measures can be brought forward. It is also necessary to have consultations with the authorities concerned and to get it right. I repeat, however, that that Bill will be introduced when we are ready, arid during this Parliament. We do not need the mammoth declaratory Bill for which the Opposition are calling. We have a massive programme of environmental improvement which does not require legislation.

Mr. Allan Roberts (Bootle)

As the Secretary of State is so worried about the problems of toxic waste disposal, will he continue to allow large quantities of toxic waste to be imported? If the toxic waste on Karin B were repackaged, would he allow it into Britain?

Mr. Ridley

It may be right for it to come here because we have specialist facilities for dealing with such material. The arrangements are that if it is suggested that a consignment of toxic waste is to come to Britain, prior notification must be given, with a proper analysis of the contents. If the hon. Gentleman is an environmentalist, he might agree that it could be better for such toxic waste to be treated in plants capable of treating it properly than to have it dumped in the sea or in some underdeveloped country which does not have the necessary facilities.

I should like now to consider the important issues which do not require legislation. I shall take first the ozone layer and the damage caused to it by CFCs. It is one of the most serious problems that we face and the one to which we are devoting the highest priority. We took a leading part in the negotiations that led to the Montreal protocol last year. We have developed scientific understanding further, and we have taken the initiative by calling for a cut of 85 per cent. in CFCs worldwide as soon as possible and a speeding up of implementation of the Montreal protocol.

I announced last Wednesday that, next March, the Government will host an international ministerial conference on ozone depletion, with the objective of giving a further political impetus to more worldwide reductions in CFCs and to demonstrate practical reductions of at least 85 per cent. as soon as possible. I believe that it will have a substantial impact on helping developing countries, which could make or break the strategy to reduce the global use of ozone depleting chemicals, to come on board on this most vital of environmental subjects.

Mr. Allan Rogers (Rhondda)

I applaud the fact that the Government have taken the initiative by calling a meeting so that the Montreal protocol can be developed, but will the Government put their money where their mouth is and be prepared to help Third world countries and those, such as India and China, which have said that they want to ensure that every household has a refrigerator by the end of the century, which would mean an enormous expansion in the use of CFCs? Will the Government allow aid and technology transfers to those countries so that they can implement some of the objectives of the Montreal protocol?

Mr. Ridley

I am grateful to the hon. Gentleman, who has got the point about the conference. That is exactly what the conference will have to discuss. The point of the conference is to analyse the problems and the shortages of knowledge and funds so that we can get underdeveloped countries to accept the need to reduce CFCs in the light of solutions to their problems, which we can then develop. The hon. Gentleman is right. We shall be there to help them.

The hon. Member for Copeland referred to acid rain. We have undertaken to make a 60 per cent. reduction in SO2 emissions from existing large power stations by the year 2003, and a 30 per cent. reduction in NOx emissions. That will involve further substantial expenditure, over and above the Central Electricity Generating Board's present £1 billion power station clean-up programme.

Dr. Cunningham

Like my hon. Friend the Member for Rhondda (Mr. Rogers), I welcome what the Secretary of State said about CFCs. Why have the Government discontinued funding of the pressurised fluidised bed combustion system at Grimethorpe, which was initiated by the Labour Government? It shows the way ahead in coal technology. It would deal with emissions of SO2 and the oxides of nitrogen. Is it not shortsighted to allow that project to fold up?

Mr. Ridley

The hon. Gentleman knows that the problem of high sulphur emissions arises because we have such high sulphur coal. We need the new technology, but the research to which he refers does not seem to be yielding the technology that we need, at least not in terms of SO2.

Tighter vehicle emission standards which should halve emissions from cars have been brought in. Final agreement on a European Community package of measures was achieved by my noble Friend the Earl of Caithness in Brussels last week. The technology favoured by the Government for meeting the strict new Luxembourg standards is a lean-burn engine with an oxidation catalyst.

This delivers the lower emissions demanded and promises fuel economy improvements that will be important as we tackle the greenhouse effect and try to minimise CO2.

We believe that it is a superior option to the bolt-on approach of three-way catalytic converters, not least because of its robustness. Lean-burn engines reliably and permanently reduce emissions at source. Catalysts have to be expensively and regularly maintained. They can, and do, go wrong, and when that happens there is no reduction in emissions at all. Nor do they reduce CO2.

Earlier this month the United Kingdom signed the NOx protocol at Sofia. It commits us to halt the hitherto inexorable rise in NOx emissions, to apply the best available technologies which are economically feasible to abate NOx emissions from the major sources, and by 1996 to have adopted policies based on the scientifically evaluated "critical loads" which the environment can tolerate. Achieving international agreement to base policy on scientific knowledge is a major breakthrough. I am confident that the measures we are taking to reduce emissions for power stations and vehicles will result in a substantial decrease in United Kingdom NOx emissions.

Despite what the hon. Member for Copeland said, last year we achieved all our goals with regard to the North sea conference, and we can implement them without further legislation. I shall remind the House of what they are: an end to marine incineration by the end of 1994, the stopping of dumping of harmful industrial wastes into the North sea by the end of 1989 and a reduction in inputs of more damaging substances into rivers by 50 per cent. by 1995. All those measures are now being applied to all our seas.

The hon. Member for Copeland mentioned repairs to the housing stock. The English house condition survey, which is carried out every five years, provides the best indication of our progress towards securing better housing conditions. The 1986 survey is published today, and the results are encouraging. The report shows that the overall condition of the stock has improved since the previous survey in 1981. That reflects substantial private spending on the maintenance and renovation of the stock, which increased by 30 per cent. in real terms between 1981 and 1986. Public sector spending on improvement grants for private owners more than doubled, and spending on the renovation of council houses increased by 60 per cent. over the same period. The new policies that we are introducing will lead to even more rapid progress in the improvement of the housing stock.

Finally, the hon. Gentleman referred to mortgage interest. I have the building societies' press release here, which states that, far from there being a great increase in arrears and repossessions by building societies, In the first six months of 1988 building societies took possession of 2,100, or 19 per cent., fewer properties compared with the previous six month period … The number of building society loans in arrears for six months or over is also down. At the end of June 1988 the number of loans in arrears for six months or more was 2,000 lower than at the end of 1987 and around 4,000 lower than a year earlier. The decline in the number of possessions and arrears is consistent with the improvement in the performance of the economy in recent years and, in particular, the sharp fall in unemployment which began in the middle of 1986. Therefore, the hon. Gentleman's fears about mortgages are not so far borne out.

Mr. Allen McKay (Barnsley, West and Penistone)

Those figures come from building societies. Would the Secretary of State care to look at loans and repossessions by local authorities?

Mr. Ridley

I am happy to look at that, but I am quoting from the building societies, which are the main lenders.

Yesterday I heard the Leader of the Opposition on the radio, and for the sake of greater accuracy I obtained a copy of what he said. He said of the Chancellor of the Exchequer: He won't even think of the possibility of trying to control new requirements for borrowing. Not harming the current industrial borrowing, not harming the current consumer borrowing but actually gradually getting demand squeezed in this economy which, because of the explosion, it has to be, doing it in such a way as not to hit those people who borrowed in good faith either for current purchase of houses or for the financing of industrial development. If one can disentangle that, the right hon. Gentleman seems to be suggesting a system whereby interest rates will increase for new borrowing, but not for existing borrowing. That is what it means. If it does not mean that, perhaps the right hon. Gentleman can tell us what it does mean, because he suggested that as a great solution to our economic problems. As I am anxious about the mortgage scene, I should like to know what it means. [HON. MEMBERS: "Give way."] I am asking the right hon. Gentleman, but he is not prepared to rise. If he is not prepared to deny that that is what his statement means, I shall put it again. The Chancellor should control new borrowing in such a way as not to hit those people who borrowed in good faith either for current purchase of houses or for the financing of industrial development. What is the right hon. Gentleman going to do? He knows full well that we cannot increase interest rates for new borrowings only. He knows that that is rubbish. He is talking just as much rubbish as his hon. Friends on the Front Bench.

Improvements to housing, new housing, repairs to housing, and investment in water, sewerage and the environment, let alone all the other matters that command the interest and attention of this House, cost a great deal of money. Yet I believe that we can have both the necessary economic growth, without which the resources to pay for these improvements will not be possible, and the measures to clean up the environment. Most of what needs to be done does not require legislation, but where legislation is required, as in the Water Bill, we shall not hesitate to act. My commitment to safeguarding the environment and the heritage and to the future of the planet is no less real, because it is founded on careful research and science. Unlike the Labour Government, this party has made available in government the resources to deliver all those commitments.

4.55 pm
Mr. Denzil Davies (Llanelli)

If I had the command of the English language which the Secretary of State has, would describe his speech as absolute rubbish, but I do not need to comment on it because the face of the Patronage Secretary, which the Secretary of State could not see, told all. I noticed that he left the Chamber the moment that the right hon. Gentleman sat down. The Secretary of State spoke about the environment, but I intend to speak about a subject which used to be fairly close to the right hon. Gentleman's heart—the economy and trade. I understand that the Minister for Trade may reply to the debate.

There are about 25 paragraphs in the Gracious Speech, of which only two relate to the economy, which may present a more serious problem than the environment. After 10 years of Conservative party rule Britain has by far the worst inflation rate of all our major industrial competitors and it is getting worse. It will probably be 8 per cent. next year and who knows what it will be the following year. Our level of unemployment, despite recent falls, is still higher than that of many of our competitors. We have the highest level of real interest rates in the whole of the Western world and our balance of payments deficit is horrendous. Apart from the United States, whose deficits are also horrendous, we have the worst balance of payments deficit of all Western industrial countries. Practically all our competitors are either in considerable surplus or have small, manageable deficits. That is the position to which the Prime Minister's policies have brought our economy.

In 1979 the Government were elected on their main promise to defeat inflation—not just to control or reduce it, but to slay the dragon itself. Now, 10 years later, we read in the Gracious Speech on the subject of inflation the words: My Government will … bear down on inflation —a phrase of mandarin blandness which reflects the Government's uncertainty and lack of confidence in being able to do so.

I shall deal briefly, not with inflation, but with another indicator of the health of a country's economy and in particular of its productive capacity, which is the balance of payments. The Chancellor of the Exchequer has repeatedly told us that he is not worried about the balance of payments. The balance of payments, we are blandly told, always balances and that is that. But I think that privately the Chancellor does worry and if he does not, I am sure that his officials worry. If the Chancellor were able to announce a balance of payments surplus which was merely 10 per cent. of that achieved by the West Germans, he would put on his velvet suit and his gold medallion and dance in the streets.

Of course the balance of payments must balance. A balance has to balance. Every balance sheet has to balance. The Barlow Clowes balance sheet balanced, but it did not do the investors much good. The real question is not whether the balance of payments balances, but how it balances. Does it balance with a plus as it does in Germany and Japan, or does it balance with a minus as it does in Britain? Is it above the line, or below the line? As we all know, the Government, who pride themselves on their financial rectitude, balance with a minus—£15 billion below the line this year, probably another £15 billion below the line next year and who knows what will happen in the following year? All one can say with confidence is that it will be a minus, and substantially below the line.

The greatest deterioration in our trade balance has been with the rest of the EEC—our main trading partners and the countries with which we have more than 50 per cent. of our trade. That deterioration did not take place overnight, last month or the month before. It started just after 1981. In 1981 we had a current account surplus—that is a visible trade surplus—with the countries of the EEC of £973 million. By 1984, three years later, that surplus had become a deficit of £2.3 billion. By 1986, the deficit had grown to £8.8 billion. Last year, in 1987, the deficit was £13 billion. Perhaps the Minister of Trade and Industry can tell us what it will be this year and next year, because the Treasury will not. When questions are tabled asking the Treasury to forecast this year's and next year's visible trade deficit with the EEC, apparently it does not know or does not want to tell.

In 1981 the manufactures trade deficit was £3.4 billion and last year it was almost £11 billion—an increase of almost 350 per cent. That is a deficit not with countries such as Taiwan or South Korea or with countries which pay low wages or use sweated labour, but with countries with a higher standard of living, higher wages and better public and welfare services than we have in Britain. By and large, they are countries that have not followed the fashion of radical Right ideology that has been embraced by Britain and the United States during the past 10 years. All the countries in Europe that have not done so seem to have a surplus while Britain and the United States have a deficit. Perhaps that is a coincidence which we can debate on another occasion.

Do the Government really believe that their present policies of merely raising the interest rates will dent, let alone substantially reduce, that massive deficit with EEC countries, especially with 1992 approaching and all the other trade barriers within the EEC being brought down? I read all the sophisticated comments in the press about interest rates, but as far as I can see, by putting up interest rates the Chancellor makes the deficit worse, as the CBI pointed out today.

A German manufacturer is very fortunate in that he can borrow at about 5 per cent. A British manufacturer now has to pay at least 13 per cent. A small manufacturer here probably has to pay 15 or 16 per cent. while his German competitor has to pay 5 per cent. Of course, the 13 per cent. British interest rate puts up the value of the pound against the deutschmark. At lunchtime today there were 3.19 deutschmarks to the pound. Therefore, German imports become even cheaper, British exports become even more expensive and the trade gap worsens. The same consequences apply with most of the countries of the EEC, although on a smaller scale. After 10 years of the Government's policies Britain is ceasing to be a major producer country that can compete effectively with its EEC partners in a whole range of goods. I concede that during that 10-year period there has been some improvement in productivity in some industries. I believe that most of that improvement is the result of high unemployment. However, despite the improvement, there is not enough industry left in Britain and the skills are not available to enable us to compete on a large scale with our EEC partners.

The Chancellor says that it does not matter and that nobody will worry about the deficit so long as it can be financed. Wise men nod at that, go away and do not think about it, but how is it being financed? Some of it—I do not know how much as we cannot get the figures these days but perhaps about 20 per cent.—is being financed out of what used to be called direct investment from abroad through purchases of land, bricks and mortar and factories. At least such investment is fairly stable. The bricks and mortar, the factories and the land cannot leave overnight. When Nestle bought Rowntrees for about £2 billion, the Chancellor must have been delighted. He must have been dancing with joy because at that time—not very long ago—£2 billion in Swiss francs would have financed his deficit for about four months. Now it would finance his deficit for only one month, or perhaps even less than that, on the basis of last week's figures. The Chancellor now needs to sell practically every month to finance the deficit.

Just as internally the Government are selling off public assets to help finance and reduce their borrowing requirement—we heard today about the water and electricity industries—to finance their own public expenditure and bring down the percentage total of GDP, they are happy and delighted to sell British industry to overseas buyers to finance their external deficit.

Direct investments finance only a small part of the deficit. The rest is being financed by what used to be described as "hot money"—money that now can leave the country at the touch of a button. That money can go into stocks and shares, but no one is buying stocks and shares at the moment because of the lack of confidence in the Government's economic policies. In theory, it could be invested in Government stock, but there is not much of that around, because, as the Chancellor boasts at the Dispatch Box, the Government are repaying the national debt and are not issuing stock. It is curious that the yield on longer-term Government stock is less than what it would earn in the bank.

Why should a foreign investor buy medium-term gilts when he can get far more by putting the money on bank deposit? Of course, that is what is happening. The Chancellor does not worry about the deficit. He does not care about it, he just wants to finance it. Frankly, it is being financed by the hottest of hot money—that is, bank deposits. It is no wonder that at 3.30 pm last Friday the Chancellor rushed to put up interest rates to 13 per cent. If he had not, by this afternoon half those deposits would have left the country and sterling would have been under pressure.

The Chancellor is now a prisoner of external events which are completely outside his control. If, for example, the new American President were forced to put up American base rates by 2 per cent. to protect the dollar, the Chancellor would have to put up the British interest rates by 2 per cent. immediately because he would have to stop the flight of money out of London and into New York and so maintain the exchange rate differential. Paradoxically and ironically, if the dollar recovered, the Chancellor would have problems again as there would be a flight of money from London to New York and the pound would be under pressure.

What is to be done about the enormous balance of payments deficit, especially—this is the heart of the problem—the deficit with the rest of Western Europe? In the end the Government will be forced—it gives me no pleasure to say this—either by market forces or by a sense of economic reality, to try to negotiate Britain into full membership of the European monetary system. That would involve a substantial reduction in the value of the pound against the deutschmark and the realignment of other currencies in the EMS. The Chancellor wanted to do that at the beginning of the year. He, or his officials, spotted what was likely to happen, and tried gradually to bring down interest rates, and in doing so, to bring down the value of the pound against the deutschmark without anybody—perhaps not even those at No. 10—noticing that we were slowly slithering into the EMS.

As 1992 approaches, and further trade barriers come down, Britain's economy will, unfortunately, have to be submerged and pulled into the stronger economies of Western Europe. The Prime Minister will not like it—indeed, most of us in the House will not like it. However, if that comes about—as I believe it will—it will be as a result of the Government's mismanagement of the economy over the past 10 years and it will signal an ironic and ignominious end to what has been described as Thatcherism and to the Thatcherite economic revolution.

5.11 pm
Mr. Michael Heseltine (Henley)

I shall return to the speech made by my right hon. Friend the Secretary of State and the references that he made to water privatisation. I strongly support the inclusion of that proposal in the Gracious Speech. I say that as a former Secretary of State for the Environment who went through the annual expenditure round. Year after year, I saw the processes of attrition whereby the demand-led, index-linked, and consumption programmes of Government pre-empted ever larger claims on national resources. At the end of the day, when the spending departments are up against the wall and the Star Chamber meets, it is the capital programmes that go. The capital programmes went out under the previous Labour Government and in part, though not on the same scale, it was the capital programmes that suffered in the early years of this Government. The hon. Member for Copeland (Dr. Cunningham) referred to cuts in council house sales as if they started under this Government. However, we all know that they started in 1976 when the International Monetary Fund came in and precisely the same happened to the investment in the water industries.

The essential strength of my right hon. Friend's case is that he is separating the regulatory and unavoidable responsibilities of the Government from the management and provision of infrastructure, which can be handled by private sector endeavour. What will then happen—I hope that my right hon. Friend has given sufficient determination to this aspect of his policy—is that my noble Friend Lord Crickhowell will be in the driving seat to improve the standards because he will not be preoccupied with the public expenditure consequences of what he is trying to do.

The issue is simple. Do we want to move faster towards higher environmental standards in water provision and sewage disposal? I believe that the Government and my right hon. Friend the Secretary of State are right to say that we do and it cannot be denied that a major way of achieving that is to privatise the water industry and allow the Government to do what Government are unavoidably responsible for doing, which is to enhance the standards of environmental protection. In the last resort it is that by which the measure stands or fails. It is a measure for environmental protection and is to be welcomed in that context.

I understand the Labour party's resentment of the statements that we are making. However, in 1979 we inherited a programme of reduced capital expenditure. The Opposition did not see the consequences of the cuts that they were making. I say at once that they did not make the cuts of their own volition but were forced to do so by the random and reckless economic policies that they pursued. If we want to escape from that, the essential first step is to separate the regulatory processes from the investment processes. I strongly support that process and I hope that my noble Friend Lord Crickhowell will take the high environmental road available to him.

I want to make three points about the Government's environmental policies and get them in a context which is wider than national policy. First, without a doubt, the environment has now become a big responsibility of the Government and I believe that that responsibility will grow. Secondly, the little perceived but important commercial and entrepreneurial opportunities of rising environmental standards are already large and, if carefully administered, they can become dramatically more important to Britain. I am glad that my right hon. Friend the Minister of Trade and Industry is present to hear the debate.

Thirdly, because the responsibilities have become increasingly significant for the Government and because the commercial opportunities for enhanced environmental standards are so exciting, it would be less than surprising if there were not geo-political controversies on the horizon. I believe that in the environmental debate we will shortly see a re-run of the unilateral peace arguments of the 1960s and 1980s.

Let us have no repetition of the nonsense of Opposition Members when they suggest that it is not the duty or the wish of the Conservative party to achieve higher environmental standards. It is the responsibility of the Government to do that. There will always be somebody in an unfettered market place who pressures the standards at the lower end and thus destroys the environmental standards that it is the Government's responsibility to uphold. The only way in which that can be prevented is by environmental regulation by the Government. The Government, like all preceding Governments, have been deeply immersed in that process.

It is increasingly clear that environmental regulation is not sufficient, even in the hands of the largest and richest country, to achieve protection of the environment in the areas of world concern. It is relatively easy for Governments to agree about the rhetoric, the phrases arid the grand objectives, but it will be difficult for Governments with different backgrounds, attitudes arid practices and at different stages of development to accept the environmental standards that will add up to a global protection of the environment.

The Government are courageously and rightly setting out in a series of speeches their views about the broad issues. However, a growing number of people are advancing arguments against aspects of the Government's policies, attacking one place here and another place there. That is a perfectly legitimate feature of a democratic process and none should gainsay it. I hope that the Government will see the need to produce an omnibus response to their environmental policies. An environment White Paper would draw together the general objectives. It should set out the targets the Government have in mind, the agencies, most of which will be international, with which they see the targets being achieved and some idea a the cost and the pace at which all that could be made possible. It is of paramount importance to Conservative Members to be able to advance behind the Government's environmental case with the legitimate pride that comes with being able to show a coherent approach to the issue. I believe that an environment White Paper would be a significant contribution to the debate.

My second point concerns the commercial opportunities. It is easy for critics of the Government to see them as always interfering or involving themselves in some aspect of commercial activity and, indeed, to view the regulatory responsibilities of Government as being in some way the intrusions of over-anxious or energetic civil servants. That is one way to look at it.

There will be those in the commercial world—usually those enthusiastic about the lowest standards—who will use just such arguments. I very much hope that my right hon. Friend the Minister of Trade and Industry will perceive a quite different set of opportunities. I remind him—although he needs no reminding—of what happened when the Conservative party introduced health and safety at work legislation in the early 1970s. Some criticised us for intervening, but once we had made such a major step forward to improve the environment of the British people at work a whole range of industries emerged to meet the new standards that the Government had imposed by regulation.

It is quite apparent that this market place of a one nation state is not large enough to have a world impact on the standards of industry. If Europe, as a group of nation states, adopts one standard for each country, it will be the Americans and the Japanese who, through the protection of their market by regulatory processes, will set the world standards. If Britain, through the British Government operating in Europe, wants to influence the world market place and world standards, it must be done in concert with the European single market, which will come into existence in 1992. Our national market will be subsumed in that market place.

The responsibility of Government must be to be sure that, in Britain's self-interest, we seek to influence the standards of the European market place—not only because we want to impact upon the world environmental condition, but because if the British Government do that we shall make the best deal that we can for British industry, commerce and manufacturing interests. There is a fundamental interest in ensuring that within the cohesion of Europe we influence what is happening both for environmental purposes and to secure the job and investment opportunities that a properly regulated environmental process can achieve.

My third and final point is more controversial, but I do not hesitate to make it. Those of us who are veterans of the debate about the modernisation of NATO's intermediate nuclear systems in the early 1980s, which led to the deployment of cruise and Pershing 2s in Europe, were familiar with the many different groups arguing the unilateral cause. I would be the last to suggest that all those groups were supportive of or sympathetic to the Soviet cause, but a significant number of them were. The more that that link between Soviet interests and the unilateral cause became clear, the more discredited became the unilateral cause in this country.

It was something of a nostalgic trip down memory lane for me to read Mr. Shevardnadze's speech in September—incidentally, on the same day that an excellent speech on the same subject was made by the British Prime Minister—in which he referred—[Interruption.] The Prime Minister's speech was intellectually of a very high standard, so Opposition Members probably would not have understood it even if they could have read it. Mr. Shevardnadze's speech referred to green peace. However, he was referring not to the organisation that leads so many environmental protection causes, but to a link between the old concepts of nuclear disarmament and the environmental interests not only of enhanced standards in the Soviet Union, but of other Soviet interests. It is important that we in the western world understand the linkage that the Soviets now perceive in the new concept of green peace.

Mr. Allan Roberts

rose—

Mr. Heseltine

I shall not give way because I have been asked to be as brief as possible.

Mr. Roberts

rose—

Madam Deputy Speaker (Miss Betty Boothroyd)

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

Mr. Roberts

Well, the right hon. Gentleman intervened.

Madam Deputy Speaker

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

Mr. Heseltine

Mr. Gorbachev specifically wants to prevent West Germany accepting the modernisation of NATO's short-range weapons systems. He also wants western technology to help modernise his economy and thus enable it more effectively to carry the weight of the Soviet defence burden. No one should be surprised at the link in recent Soviet speeches of the nuclear defence issue with the imperative to clean up the environment.

In reality, there has been no reduction in Soviet defence expenditure and it possesses a wholly indefensible superiority of conventional weapons, as my right hon. and learned Friend the Foreign Secretary told the House last Friday. The Soviets will seek to persuade the West Germans to legitimise that conventional superiority by failing to modernise our short-range deterrent. They will argue that they want fewer nuclear weapons so that they can spend money thus released on environmental standards. They will suggest that if the West transfers technology to them, they will speed the process of environmental enhancement. I have no doubt that the Government will expose the military fallacy, while taking care not to concede for environmental purposes what the Soviets will too easily exploit for military purposes.

We all know that the Soviet Union, through its space programme and through the sophistication of its weapons systems, is perfectly capable of developing technological excellence if it suits its long-term objectives, but while it spends 15 per cent. of its gross domestic product on a defence programme it will starve its environmental and industrial base. When we, rightly anxious to clean the environment and preserve higher standards, approach those issues, it is of fundamental importance that we do not prejudice the defence interests of the western world by too easily allowing the Soviet Union to get away with maintaining a level of defence expenditure that starves it of the resources to improve its environment.

Environmental issues will have a profound effect on the arguments of the next decade. I strongly support the Government's policy of playing a proper role in that. It will be increasingly international in its approach. I very much hope that there will be a coherent statement, preferably a White Paper, dealing with those issues in order better to inform those of us who wish to support the Government's endeavour.

5.28 pm
Mr. Tom Pendry (Stalybridge and Hyde)

Before coming to the main thrust of my speech I wish to make a passing reference to one of the most blatantly ideological and dogmatic pieces of legislation that this Government have introduced—and for this Government that is saying a lot. I am, of course, referring to water privatisation. The Secretary of State was at his most ludicrous when he referred to that, as I am sure the whole House appreciated.

I represent a constituency in the north-west of England that is often referred to as the cradle of the industrial revolution. Much of its infrastructure was laid in the 19th century and is now crumbling. Inadequate but steady progress has been made during the last few years, despite the financial restrictions imposed by the Government, to improve the quality of water, to develop the environment and, crucially, to rehabilitate the infrastructure.

After privatisation, the income generated from water will almost certainly be creamed off into less essential areas. If other privatisation measures are anything to go by, the money will be spent on increased salaries, directors' dividends and the duplication of the National Rivers Authority. I am sure my hon. Friends will agree that the water industry needs investment, not ideology.

The water mains in my region are severely overloaded and outdated. About 600,000 homes are supplied through corroded lead pipes, and 40 per cent. of the main pipes suffer from unacceptable mineral deposits that reduce the standards of our water. Sewer collapses are the highest in the country and average two a day. There were more than 700 bad storm overflows last year, which carried raw sewage into the rivers—half of Britain's total. The problems need to be dealt with urgently, through investment, so that the region's water is at least up to 19th century standards by the time it reaches the 21st century. Public opinion shows that the majority of people oppose the Government on water privatisation. I hope that the Department of the Environment will carefully reconsider before introducing legislation.

I want to deal with one aspect of the Gracious Speech that affects millions of people. It is regrettable that my old sparring partner, the Minister with responsibility for sport, is not present. With the Minister for Water and Planning, he has the unenviable task of piloting through the water privatisation measure. But he has other interests, too. As the miniature for sport, as he is affectionately known these days, he is "irresponsible" for the idea of identity cards for football supporters. I feel slightly sorry for him, because he has the heavy hand, or, more accurately, the knee-jerk response, of No. 10 behind him, aided and abetted by the more irresponsible Ministers from Marsham street.

The very basis of the identity card scheme is faulty. The Government's thinking seems to be that identity cards must be used by supporters to enter grounds; that those guilty of hooliganism will have their cards removed; and that therefore, by definition, football games will end up by being attended only by peaceful supporters. The fundamental weakness of that approach is that the police rarely catch or successfully prosecute hooligans who commit acts of violence, mostly outside football grounds.

The proposed legislation will not help the police, and many senior police have clearly said so. The existing provisions for exclusion and attendance orders are more effective at keeping criminals away from matches than plastic identity cards can ever be.

The Minister contradicted himself yesterday when, in an interview, he said, "Exclusion orders worked." Later, he said that, as yet, there is no method to stop those excluded from one club from going to another". Exclusion orders could do precisely that if they were implemented effectively.

Last season, 6,147 supporters were arrested at matches, and only 1,089 had exclusion orders imposed upon them to keep them away from football. If exclusion orders are not the answer, why did the Government introduce them in the first place? Instead of the commonsense approach, the Government have hit upon a populist, tabloid-inspired approach to identity cards. With identity cards, the Government appear to be responding to the perceived problem. However, now that the population at large are being apprised of the true facts, the Government will find that they have miscalculated.

Those 6,147 arrests represented just 0.03 per cent. of the 18 million supporters who went to league games—that is, on average, fewer than three arrests per match. Put in the context of society as a whole—something that the Government have continuously failed to do with the measure—according to the Home Office's own figures, that figure is revealing when compared with the 3.7 per cent. of the adult population arrested in Britain in 1987. On the basis of the Minister's approach, the average citizen will be safer inside a football ground than outside it. It is a good job that the football authorities have not taken that view and over the past few years have taken real steps in line with the Popplewell report recommendations.

Mr. Carlisle (Luton, North)

Will the hon. Gentleman give way?

Mr. Pendry

Because of the time factor, I shall not give way.

Mr. Carlisle

Will the hon. Gentleman give way on this occasion?

Mr. Pendry

I shall not give way on this occasion.

Better segregation, closed-circuit television cameras, close co-operation between clubs, the police and the community and, let us face it, Government-inspired partial membership schemes have all but removed the old problem of violence within grounds. There are still pockets to be worked at, and we all accept that, but just eight of the 2,500 matches played last season suffered reportable incidents within the grounds—I repeat, within the grounds. Clearly, the Government are tackling the hooliganism problem by using a sledgehammer to crack a nut.

Mr. Carlisle

rose—

Mr. Pendry

I shall not give way. The hon. Gentleman knows that I shall not give way to him. I hope that he catches your eye, Madam Deputy Speaker, because I am sure that he has something useful to say, but I wish to adhere to the strictures from he Chair.

In terms of civil liberties for British citizens, Opposition Members and millions of genuine football supporters consider the scheme to be grossly offensive. Supporters get no benefit from it. Yesterday the Minister stated that ID cards were all for the privilege of being able to go to football. The remark is offensive to many football supporters. Until now, it has been a legitimate right for our people so to do.

However, more sinister in the report is the plan to feed into the scheme police computer files, not just of convicted criminals, but of people who are arrested, people who are suspected of foul play, and supporters who are ejected from grounds, for whatever reason.

Mr. Carlisle

rose—

Madam Deputy Speaker

Order. The hon. Member for Stalybridge and Hyde (Mr. Pendry) has made it abundantly clear on two occasions that he is not giving way.

Mr. Pendry

I have heard the hon. Member for Luton, North (Mr. Carlisle) so many times that I am sure he will not convince me on this occasion.

Football supporters are clearly being used as guinea pigs to test identity cards for all our citizens. If the Government really believe in identity cards, they should be bold enough to introduce them through legislation.

Mr. Carlisle

rose—

Mr. Pendry

My major objection, not only to the hon. Gentleman's interruptions, but to identity cards, is that they show how much the Government and the Minister with responsibility for sport are out of touch with football. Hon. Members should take just one corner of the capital city of London as an example. Three clubs—Spurs, Arsenal and Leyton Orient—lucidly show the reality of football in 1988. After consultation with the police, the Tottenham Hotspur club is actually removing fences, because they are no longer needed. Clearly, the police believe that Spurs' supporters behave themselves.

At Highbury, the cup replay between Arsenal and Liverpool graphically spelt out the problems that I am trying to illustrate. At 7.15 pm on 9 November, 25,000 supporters were in the ground. At 8 pm, with the kick-off already delayed, about 54,000 were inside, and 6,000 were locked out. The checking of 54,000 identity cards would have created utter chaos. The match would have had to kick off at midnight. The Minister will say that supporters should get to grounds earlier, but how can they do so for a mid-week game? That is the kind of nonsensical comment that we have come to expect from him. His best quote was in a recent article, when he said: Do you know that there are more people go fishing than go to football, and we have less trouble with fishing". That shows just how out of touch the Minister is to compare a solitary participatory sport with by far the biggest spectator sport in this country.

At Leyton Orient, the last of my examples, the problems are different. Like many small clubs, it will be driven to the wall by this scheme. It already has difficulty making ends meet. The estimated 56 per cent. fall off in support, according to a national opinion poll this weekend—which, incidentally, showed that twice as many genuine supporters oppose the scheme as support it—could shut down Leyton Orient once and for all. That is why clubs have pledged support for all hon. Members who oppose the planned legislation.

Identity cards for football supporters are opposed from every quarter. Many hon. Members stand alongside 91 of the 92 clubs which consider identity cards to be costly and irrelevant. The 92nd club—

Mr. Carlisle

Will the hon. Gentleman give way?

Mr. Pendry

No, I shall not give way.

Madam Deputy Speaker

Order. The hon. Gentleman has made it perfectly clear on more than one occasion that he is not prepared to give way. This is very time consuming.

Mr. Carlisle

On a point of order, Madam Deputy Speaker. The hon. Gentleman has referred—albeit in a roundabout way—to my constituency. Is it not the custom of the House that those hon. Members who have a constituency involvement should be allowed to make some sort of reply?

Madam Deputy Speaker

Order. It is entirely for the hon. Gentleman who has the Floor at the time to determine whether he will give way. The hon. Gentleman has made it clear that he is not doing so.

Mr. Pendry

The 92nd club, Luton Town, proves the point, despite the Minister's utterances. I shall now give way to the hon. Member for Luton, North (Mr. Carlisle).

Mr. Carlisle

I am grateful to the hon. Gentleman for his courtesy, albeit a little late. As he rightly said, the representatives of Luton Town are in favour of the scheme. He must accept that the situation at Luton Town is different from what it was two years ago when we introduced the membership scheme. He must also accept that millions of our people are worried about safety in their towns, let alone at their football grounds. Luton is now a safe place for young and old people, even when a football match is going on, and that is purely because of the membership only scheme. Is the hon. Gentleman concerned only with the interests of football clubs, or is he also concerned about people outside football clubs?

Mr. Pendry

If Luton Town wishes to pursue its present policy, it should be entitled to do so. No two clubs are the same, and there should be flexibility so that Luton Town can pursue its present policy, however mistaken we may think it is.

I shall now deal with why I think Luton Town is wrong. The Minister is always quoting Luton Town, and he has claimed that the club has saved £100,000 on police bills. However, if one reads the reports from Luton Town, one finds that during the first two years of its 100 per cent. scheme police costs rose dramatically, and that only last season did those costs fall from their high peak.

The Minister also claims that attendances by home supporters have risen by 38 per cent. Last year, attendances at Luton Town fell by 27 per cent. That was in a season when the club won the Littlewoods cup, reached Wembley three times, was ninth in the league and reached a cup semi-final. Many clubs which do not have such a record, and which have the sort of gates that Luton has, which on average are below second division level, will go to the wall. Hon. Members who represent constituencies with small clubs should remember that this scheme will almost certainly see the demise of those clubs.

The Minister said that the only arrest at Luton last season was outside the ground. The Minister is not in the Chamber, but will the Secretary of State for the Environment ask him to break down, on the same basis, the national figure of 6,147? Will such a breakdown prove that the vast bulk of arrests elsewhere are also not within grounds? The Minister bandies statistics about, so he has a duty to give us that breakdown.

Supporters are united in their opposition to the scheme. Rogan Taylor of the Football Supporters Association was speaking for millions of genuine football supporters when he said: This is a plan for football from people who have never passed through a turnstile, they have taken no advice from us the supporters. Earlier, the Minister with responsibility for sport was wearing his Charlton Athletic tie. He does that when he deems it to he advantageous. He falls into the category of not understanding the game, and his oft-quoted example of hooliganism at the recent Millwall v. Newcastle game highlights that. I am informed by those who were near the Minister at that time that his main concern was to be photographed with Dee Jay Bear, and that the incident to which he referred was hardly noticed by those closer to the occurrence than he was. An identity card scheme would have been of little use at that game, as there were no arrests inside the ground that day.

Finally, and perhaps most damning of all, most police forces oppose the identity card scheme.

Mr. Tony Favell (Stockport)

Will the hon. Gentleman give way to someone who has Stockport County in his constituency?

Mr. Pendry

No, I shall not give way. I dare not say too much about Stockport County, because it is close to my constituency.

As I was saying, most police forces oppose the identity card scheme. Those at the sharp end who are in charge of policing football matches condemn identity cards. The chairman of the Police Federation said: Surges at big matches will create injuries and possibly fatalities … it will create more trouble on the streets. Opposition to the scheme could hardly be blunter. I feel sorry for those who live around football grounds, because their problems will multiply if the scheme goes through. Football is a vital part of our way of life and, as an industry, it generates hundreds of millions of pounds for the Exchequer. More important, it gives hours of pleasure to millions of genuine football supporters. The Government are out to destroy our national game with this plan.

Twenty years ago, in his classic book "The Football Man", Arthur Hopcraft wrote: It has not been only a game for eighty years. What happens on the football field matters, not in the way that food matters but as poetry does to some people … it engages the personality. Bill Shankly perhaps overstated its significance when he uttered the immortal words: Football's not a matter of life and death, it's more important than that. It is clear that the Minister with responsibility for sport has got it wrong. He and his boss in No. 10 are the real hooligans and are setting out to destroy football with this idiotic scheme. The survival of our national game is at stake. The Government should drop this monstrous proposal before it is to late to save our game.

5.45 pm
Mr. Kenneth Warren (Hastings and Rye)

I enter this field of combat with some trepidation. I sensed that my hon. Friend the Member for Luton, North (Mr. Carlisle) had gone through the yellow card barrier and was approaching the red card. I am slightly disconcerted to find that my old friend the hon. Member for Stalybridge and Hyde (Mr. Pendry) has become a poet in the later years of our parliamentary acquaintance.

The Gracious Speech says: My Government will continue to … promote enterprise and to foster the conditions necessary for the sustained growth of output and employment. Competitiveness is the biggest challenge that faces industry. I should like to identify three areas where the Government, who are non-interventionist, have a duty to understand a little more clearly their relationship with trade and industry. They also have a duty to realise that they have a duty as entrepreneurs and promoters of enterprise.

There is no doubt that the Government have helped in industry's remarkable recovery. There are basic relationships between Government and industry that I commend to my right hon. and hon. Friends because they need special attention. First, I shall identify where I think trade and industry and the environment meet. They meet in the area of the needs and problems of transportation. The Government brought more private investment to British Airways, to the British Airports Authority and to other companies through the privatisation process. I should like to see the Government identify their responsibility more clearly to ensure that our trade flows smoothly.

There is a consequential cost to our business efficiency caused by the unacceptable, inaccurate forecasting techniques employed by the Department of Transport. The problem is made worse by the permanent lack of understanding by the Treasury of the duty of the Government to invest taxpayers' money to enable citizens to go about their business efficiently and effectively. That combination does not show the priority that is essential for Britain to be able to trade more effectively. We have only to look at the extraordinary chaos of the London traffic jams to see that the police and traffic wardens do not give priority to making sure that our main traffic routes are kept clear of illegally parked vehicles.

The year 1992 is getting closer, and on 1 January 1993 we shall all be expected to rush forward with new enterprise and to take advantage of new opportunities. There is no doubt that Britain's transport problems are growing faster than the solutions. Nowhere is this better illustrated than in my part of the country in south-east England where we are very much aware that the east-west routes south of London—the M20, the M2 and the M25—are already over the limit at most times of the day and night. The alternative south coast route, which has been promised and which will run through my constituency, will be a series of single carriageway bypasses until the 21st century. That will be the main alternative route, however, for Channel tunnel traffic to reach the south and west of the country.

We are faced with the paradox of the Treasury, which is awash with taxpayers' revenue, failing to invest in worthwhile enterprises and yet urging the public to invest in such enterprises. With transport, demand is far greater than supply. We are also faced with the extraordinary situation that money is allocated to projects, such as the bypass around Pevensey, and yet that money is not spent. My neighbour, my hon. Friend the Member for Bexhill and Battle (Mr. Wardle), and myself, together with other Members representing Sussex, discussed this matter only last week. It highlights the problems that can arise if integrating the needs of different Government Departments goes too far, but the Government must understand the multi-responsibilies of the Departments of Trade and Industry, Transport and the Environment. They must get things going so that our people are ready to offer good transportation services by 1 January 1993.

My feelings about the increases in interest rates are best illustrated by quoting the experiences of two young gentlemen in my constituency who have set up a shopfitting business. It has a turnover of just over £50,000 a year and it is moving ahead. Those men have families and both own small houses. In the past six months, however, their mortgages have just about doubled. They were counting on the cash that they must now pay in extra mortgage interest to further their business.

When the Government consider the macro-economic scale and the value of higher interest rates, I hope that they will consider the plight of the young people whom we have encouraged to be enterprising, to develop their business spirit, and to go out to the market place to sell their endeavours. They are paying a high price for their enterprising spirit. I am sure that the Government will think about those people who are working hard five or six days a week.

We have a non-interventionist Government who have made rapid strides in reducing the size of the Civil Service. In common with my hon. Friend the Member for Surrey, North-West (Mr. Grylls), I believe that the Government should consider the burden that is placed on young people because of Government requirements for fiscal returns and information and data of all kinds. Providing that information often consumes between 12 and 15 hours of a working week for a small business.

What will 1992 mean? It is not just a matter of one single, large trade area in Europe which will enjoy all the opportunities that have already been identified. The European Economic Community must be capable of combating the great and growing surge of enterprise from east Asia, and, in particular, from Japan.

There is no doubt that, in 1992, some of our strong industries, such as steel and retailing, will become stronger and that their success will pull other companies through. We must heed the warning of what happened, however, in 1973. Then we thought that we would do well from our membership of the Community, but we found that other countries did better than we did from our entry.

Post 1992, the problem that will face the EEC will be the competitive and economic strength of eastern Asia. Presently, our export record within the EEC is a problem and we must seek to solve it in the next few years. There are only three countries within the EEC—Greece, Ireland and Spain—with which we are in surplus in export manufactures. Our deficit with West Germany is now running at more than £14 million a year, which represents more than half of our total deficit with the EEC. That is worrying when one considers that West Germany has a high wage economy in comparison with our own.

In the 1980s we drifted from surplus to break even and on to the stage where we now have a serious trade deficit, principally with the EEC. If we consider the way in which our industry has changed since the 1970s, we may learn how to conquer the problems of the 1990s. In 1973, nine companies produced television sets—seven of them were British. The production and design of a television set requires, at best, medium grade technology; it is not the world's most difficult task. Nevertheless, since 1973, all the British companies have gone. Now 11 companies manufacture televisions in Britain and nine of those companies originate from east Asia, principally Japan. In the same period the share of world trade held by eastern Asia has increased from 10 per cent. to 20 per cent.

Technology, even that required to make televisions, is a world growth industry whether it is applied to the environment, transportation, health or Government standards. Although our industries improved during the 1970s and 1980s, they have not kept up with the rest of the world competitively. There must be discussions between Government and industry about how our joint resources can improve our export competitiveness, but that must be done without bearing down on industry or intervening in its strategy.

Nowadays, far too few of our people are coming forward to train as scientists and engineers. The latest information reveals that a quarter of the engineering course opportunities have not been taken up in this academic year. In 1960, we had as many qualified engineers as the Japanese, 250,000. By 1992, the number of our graduate engineers will have doubled, which is commendable until one discovers that, in Japan, that number will have increased seven times over.

One cannot ignore the tremendous drive for quality and for research that is now sweeping, almost like a plague, through most of the east Asian countries. The CBI recently pointed out that skill shortages are becoming a major constraint on output. In 1980 only 3 per cent. of the companies polled said that they faced problems because of skill shortages, but in 1987 that number had grown to 15 per cent. and it is still increasing. We need world quality scientists and engineers to increase our competitiveness, but we are not producing them at the necessary rate.

After 1992, the United Kingdom, as part of the EEC, will face an enormous battle. Presently the export deficit between the EEC and Japan stands at about $18 billion a year. By 1992 that deficit is forecast to rise to $38 billion. That is the deficit with Japan alone, but in 1992 our deficit with the other newly industrialised nations of east Asia will be well in excess of $20 billion.

I hope that I have identified the enormous task that lies before the Government and the European Economic Community. I am not an interventionist, but surely everyone can see that, although the Government may wish to be non-interventionist, they are entwined in the industrial fabric and future of our nation. I ask Ministers to heed that fact and recognise the Government's essential role as an entrepreneur and partner in the progress of our trade and industry.

5.59 pm
Mr. Malcolm Bruce (Gordon)

My hon. Friend the Member for Yeovil (Mr. Ashdown) described the Queen's Speech as one of "missed opportunities." That is particularly true with regard to environmental issues, and the Secretary of State's speech perhaps explained why.

The Queen's Speech reads: My Government will continue to attach very great importance to protecting our environment, both nationally and internationally. I stress the word "continue" because, as progress and action on that front have so far been extremely laggardly, this is not a particularly encouraging commitment from the Government. The attempt to suggest that the privatisation of water and electricity is specifically designed to achieve environmental benefits would be laughable if it were not such a serious matter.

The right hon. Member for Henley (Mr. Heseltine) gave what I can only describe as an excuse rather than a justification for the privatisation of water. It was unfortunate and regrettable that he chose to smear the environmental lobby as some kind of Communist fellow travellers. If that is to be the stuff of leadership from the Conservative party in the future, then it will be the kind of rhetoric that we hear from one-party state dictators rather than from people who are prepared to engage in democratic debate.

The privatisation measures have been in progress for several years, but not once, until the Prime Minister shocked her colleagues with her sudden announcement that she had been converted to concern on green issues, have we been told that they were being brought forward for environmental benefits and that, apparently, that is now the prime reason for the exercise. Ministers must think that the British public are green in the old-fashioned sense if they think that we will swallow that one.

In the days following the Prime Minister's unheralded change of heart, those of us who watched news broadcasts could see that her Environment Ministers were rushing around like headless chickens trying to convince themselves, let alone the public, that they were taking action on the environment and that they had anything in the cupboard that could be portrayed as positive action. They knew full well that, hitherto, their job was to slow down, delay, obstruct and resist in any way possible measures being proposed by others in the United Kingdom and the European Community and internationally to deal with environmental problems. Suddenly, they were putting a green gloss on everything, trying to kid a gullible public that real action was taking place when, in reality, nothing had changed.

The Government will find it hard to get away with that for long because those people who are genuinely concerned about the environment have given the matter a great deal of thought over a long period and know that getting to grips with the environment requires fundamental and philosophical changes. In short, positive action on green issues is incompatible with Thatcherism, and the Prime Minister must confront that problem.

The privatisation measures are included in the Queen's Speech simply for ideological reasons. The Government are as ideological as any Marxist or Socialist regime. The rhetoric from the Tories that now refers to the discipline of the market place and the stimulus of commercial pressure is hollow because the mechanisms for bringing those pressures to bear in respect of basic commodities, such as power and water, simply do not exist. There is no serious suggestion that consumers will have a choice of where they get their water or electricity supplies. In practice, they will deal with a monopoly supplier, no longer one whose prime concern is public service, but one whose prime interest is profit.

Costs will rise. That is admitted, even by the Government, and it is undeniable. Even before the transfer takes place, the enterprises will be fattened up at the taxpayer's expense and charges for water and electricity will be jacked up.

Mr. Richard Livsey (Brecon and Radnor)

Is it not true that the privatisation measures for water in particular are breaking the Government's philosophy, as they are not creating competition but are transferring public monopolies to private monopolies, and that the only way that they will achieve profitability is by milking the consumers who will pay for the privatisation? Does my hon. Friend also agree that the Secretary of State for the Environment excelled himself last week when he said in even more flowery language than he used today that he would float the 10 private water companies after privatisation?

Mr. Bruce

My hon. Friend is anticipating what I was about to say. He is right because the Government's excuse for jacking up prices in advance of privatisation is to secure revenue for investment. Perhaps Ministers can tell us what other enterprise could increase prices to its customers to finance future investment. Surely the essence of risk taking is that the shareholders and the City institutions put up the risk capital in the belief that the market will sustain a sufficient return to make it worthwhile.

However, the Government are turning all that on its head. The investors are being given cast-iron guarantees of assured profits for no risk. That is immoral and it turns the public, as consumers of essential utilities, into captive milch cows for international capital. That is the exact opposite of what an enterprise culture is supposed to be about.

It is important to record that the electricity supply industry has been built up as a great enterprise in the public sector. The national grid and its operation is a magnificent achievement, and no one can deny that. Certainly there is room for restructuring. The relationship between the generation and distribution sides can certainly be changed and the dictatorial power of Lord Marshall should be curtailed, but that is no case for privatisation. If the Government's rhetoric were being followed through, all forms of electricity generation would be put on an even footing so that the market could operate. In reality, for strategic reasons, nuclear power has enjoyed massive subsidy and protection, and it will continue to do so.

In the United States, where nuclear power has to take its chance commercially, the industry is dead. No one is prepared to finance new nuclear power stations. Indeed, in the United States, no one is financing any new power stations. Yet the British Government are proposing to force the industry to continue to buy in nuclear power for almost 20 per cent. of the total rather than make its own decisions simply on commercial factors.

However, not even that is sufficient for the Government. They are pledging an open blank cheque from the taxpayer to cover all risks associated with the industry, nuclear waste disposal and insurance against accidents. In other words, the taxpayer takes all the risks and the investor secure all the profit. No Socialist Government would have ever dared to try such effrontery.

The position is even worse because there is no doubt that, even on the basis of existing technology, using energy more efficiently and backing viable alternative forms of generation could more than replace all the electricity that we obtain from nuclear power and do so within less than a decade. That is a technical and economic fact that the Government refuse to accept.

Pursuing such a course is the one measure that would do most to reduce the pressure of the greenhouse effect and all other forms of air pollution related to the generation of electricity. We should, at the same time, become full members of the 30 per cent. club. The Secretary of State may boast, but Britain is doing less later than any other country, and no one believes that that is something to be proud of. The Secretary of State is proud of the fact that he will host an international conference on the threat to the ozone layer. That could rebound on him if we have not taken steps to phase out CFCs by the time it takes place.

Research and development of renewable energy sources has not only been starved of resources, but has been under the control of the nuclear lobby which has a vested interest in showing that they cannot work. Why else was the wave research programme curtailed just when it was about to become commercially viable? Why have we not made positive progress on a commercial tidal barrage?

We pioneered the development of modern wind power turbines, so why is it that the development has proceeded faster and on a greater scale in California, Denmark, Sweden and Greece? I suggest that wind power is one of the technologies that can create jobs and use traditional skills, especially in some of the older industrial areas. Unfortunately, the rules are heavily stacked against these technologies. For example, wind turbines are rated more highly than conventional units of generation—1.8p per kilowatt of installed capacity as against 1.7p for conventional power stations. Electricity boards will not pay a competitive price for surplus electricity from wind turbines.

The firm of James Howden of Glasgow is just outside the constituency of Govan. It is a pioneer of wind turbines. It is looking forward to building one of the Department of Energy's sponsored wind farms. It will be interesting to be given details of when these projects will go ahead. We await the presentation of a timetable. Representatives of James Howden have told me of the business that the firm could secure from wind farms, coupled with a change in the rating and a simple amendment to energy legislation. It estimates that it could create no fewer than 700 jobs in Glasgow and Renfrew within 12 months. That practical action will follow only if the Government do things instead of talking about them.

How do the Government propose to control the movement of shares after the privatisation of the electricity industry? The Secretary of State for Scotland has given assurances that the separate concerns that he is selling in Scotland will continue to be Scottish and Scottish controlled. How can that be achieved? With the phasing out of the social clause that relates to the hydro-electric board, how can we ensure that remote and rural communities will not lose out in future? These questions must be answered. How can the Government present their rhetoric about the privatisation of English and Welsh water and expect us to believe that they do not have a timetable for Scottish water? Let us have a clear statement of when they propose to privatise Scottish water or a clear assurance that they have no intention of privatising it because the way that the water industry is organised in Scotland is the model that England and Wales should follow.

It is interesting that the White Paper on the Scottish electricity industry contains assertions about the benefits of keeping the Scottish boards autonomous. One passage states: The Government … wishes to provide competitive pressures within the industry in Scotland … and considers that the proposal to privatise two companies will achieve this to a significant degree. I wonder why such an "excellent" argument in that context was not applied to Scottish gas, Scottish telecommunications or the Scottish steel industry? The Government seem to have adopted a selective use of argument.

The Government have created growing concern about their intentions for the future of economic development in Scotland. Scotland on Sunday leaked a proposal about the dismantling of the Scottish Development Agency, which the Government denied. They have only themselves to blame, however, for the mess in which they find themselves over that issue. I advise the Government that quite a good motto is, "If it's not broke, don't fix it." The work of the Highlands and Islands Development Board and the SDA has been widely praised, and to dismantle them in favour of regional enterprise boards that would be run by local business men would be the height of folly. The best business men are running their businesses. If they take over the enterprise initiative, who will man the shop? Much more sensible would be a partnership between the SDA, the HIDB, existing enterprise trusts, Scottish Business in the Community and local authorities. We should move forward in that way.

Mr. Favell

I shall be pleased to give the hon. Gentleman the benefit of my experience. In Stockport, there is an excellent local enterprise agency. It is run by local business men. Stockport is a northern industrial town and unemployment is now less than 6 per cent.

Mr. Bruce

I am grateful to the hon. Gentleman. I can say exactly the same about the enterprise board in my city of Aberdeen. I am pleased to say that it makes an important contribution to the community. I am not criticising enterprise boards, but it is important to ensure that they fit properly into the scheme of things. They cannot take overall responsibility for local development, which is what the Government suggest. Business men are busy running their own businesses and there is a shortage of business men to advise the queue of those who wish to start new businesses. I make no criticism of the enterprise trust movement. On the contrary, I think that it is excellent. I merely say that it is not the complete answer that the Government seem to think it is.

There is a long list of actions that the Government will have to take before they will convince me and others that their present green tinge is anything other than cosmetic. I think that hon. Members have all received copies of the Green Gauntlet, which sets out practical measures that the Government could implement with existing technology. The House will be interested to know whether there will be a constructive response by the Government. It is worth mentioning a few of the problems with which we must deal.

According to a United Nations economic commission for Europe, by 1993 Britain will be polluting the skies with as much sulphur dioxide as France, West Germany, Sweden, Denmark, Austria, Switzerland, Luxembourg and the Netherlands put together. That is the status that we have achieved. Water authority pollution incidents increased by 9.5 per cent. in England and Wales in 1987. Agriculture pollution in Scotland has increased by 49 per cent. Britain still dumps sewage sludge around its coastline. The amount of hazardous waste has increased from 53,000 tonnes to 81,400 tonnes between 1981 and 1986. We have the greatest output of noxious fumes of any country within the Community, yet we are still lagging behind other European countries in introducing unleaded petrol. Only one in nine garages in the United Kingdom sells it compared with 98 per cent. in West Germany. It may be a niggling point, but it would be impressive if the Prime Minister were to use a Jaguar that had been converted to use unleaded petrol, as it would have to be if it were sold in the United States.

There has been an investment of £24 million on wind research, £4 million on solar research, £1.9 million on tidal research and £935.6 million on nuclear energy. That imbalance will have to he redressed. If the Government are sure that they have their energy policy right, why are they cutting the budget for the Energy Efficiency Office? We should be jacking it up considerably if we are to turn round our energy policy.

Opposition Members need attach no credibility to the Government's stated position on environmental concern until they produce measures that are not cosmetic and advance arguments that are not twisted. They must respond to the facts that have been placed before them. As and when they take appropriate measures, they will be entitled to claim that they have confronted the problems of the environment. As yet, they have a long way to go.

6.17 pm
Rev. Ian Paisley (Antrim, North)

Since we debated the previous Gracious Speech the agony of the Ulster people has continued unabated. The IRA campaign of violence has claimed more victims, broken more homes and left more widows and orphans. That is the harsh reality of the situation in Northern Ireland. Far from being eradicated and eliminated, IRA terrorism is on the increase. Recently Sir Jack Hermon, the Chief Constable of the Royal Ulster Constabulary, warned us that the IRA is now better equipped than ever before and that Ulster must brace itself for an horrific end to the year.

Ninety-two people have died already this year as a result of terrorism in the Province. That must be compared with the total of 54 who died as a result of terrorism throughout 1985. It is clear that the signing of the Anglo-Irish Agreement has not brought the peace, reconciliation and stability which was promised. It has led instead to more deaths in the Province, greater instability and greater polarisation between the communities.

Some of the events of last week were not reported in the national press. At the beginning of the week, a 600 lb bomb was placed just outside the Army base in North Howard street. When it exploded, it injured eight or nine soldiers and caused tremendous damage to the base. It caused severe damage to many houses. Many people, both elderly and young, along with their families, were badly shaken by the explosion. No warning was given. It was only by the mercy of Almighty God that there were not many more injuries or even deaths. How is it that the IRA is able to place such a massive device on the perimeter of a major Army base in west Belfast? Among those who died was an RUC reserve constable, William Monteith, of Castlederg. He was murdered.

Tuesday witnessed a murder attempt on an RUC constable carrying out his duties in connection with the Royal visit. Also on Tuesday there was an IRA rocket attack on an RUC patrol at Castlewellan and an attack on the police headquarters in Strand road in Londonderry. On Wednesday there was an horrific IRA attack at Benburb on an unmanned police station which resulted in the deaths of Emma Donnelly and Barney Lavery, a grandfather and granddaughter who happened to be in a car in the vicinity when the bomb exploded. Eight people were injured, including a 78-year-old woman. On Thursday night a man was shot dead near Coagh, in county Tyrone.

That is the sad chronicle of what happened last week in Northern Ireland. At the beginning of last week the Chief Constable announced that he had to close the following police stations because of cuts: Achalee, Dromara, Waringstown, Annalong, Strangford, Greyabbey, and smaller posts at Larne, Carrickfergus, Greenisland and two in my constituency of Ballymena. The closing of the police stations is a terrible thing.

The Chief Constable discriminated against women police officers who took him to the local tribunal and won their cases to the tune of more than £1 million. Is it not a fact that money must be found from this year's budget and as a result we will have less security in Northern Ireland as the situation deteriorates? The Government should tell us whether that is the case. The stupidity of the chief of police to take on the womenfolk in his own force and to try to discriminate against them has caused the problem. When he was taken to the local tribunal it was found that he was acting out of order. I salute the womenfolk. They had every right to be employed. Why must the people of Northern Ireland suffer because of the Chief Constable's actions? The expenditure on security in Northern Ireland should not be taken from the. Ulster budget but should be funded directly from the Treasury.

I want briefly to welcome other aspects of the Government's policy on security. There is a feeling in Northern Ireland that some of the Government's policies do not go far enough. However, we welcome the fact that the Government are taking the proper course. What disappoints us and causes us sorrow is the fact that the Social Democratic and Labour party has come out strongly against all the proposals. It has said that the proposals will not help and as a result the IRA can continue its insidious campaign. By encouraging that the SDLP has become a party to it.

The tragedy of the proposed oath against terrorism is that it is fatally flawed at the outset. That rule will not be enforced by the Attorney-General or the Law Officers of the Crown. Individuals will have to take it on their own personal responsibility. In the regions where councils would be affected by such a proposal the majority of the councils would favour Sinn Fein councillors. As a result, they will not take any action. However, if a councillor took action and a Sinn Fein or IRA member of the council was disqualified and lost his seat, it is easy to see what would happen in Northern Ireland. The person who made the complaint and carried it through the courts would find himself in a coffin. That would be the end of the law.

The oath will be effective only if the Law Officers of the Crown are prepared to take on the responsibility. It is interesting to note that Mr. Adams said that he would not take his seat in Westminster because he would have to take an oath of allegiance to Her Majesty the Queen, but he would go ahead and take the oath of terrorism if elected to a council seat.

Belfast city council made representations to the effect that the oath of allegiance to the Queen should be restored—Sinn Fein members have said that they will not take that oath. That would deal with the situation far more effectively than the present proposal. The Government must face up to proscribing Sinn Fein and not tinker around with this matter.

The Government have placed great stress on extradition between Northern Ireland and the south and between the south of Ireland and this country. Anyone who has had his ear to the ground in the past few days will notice with concern what is happening in the case of Father Patrick Ryan. It has been said that the Attorney-General in the south of Ireland is deeply anxious because the feeling is that there is no justice in English courts. That accusation has been made against Ulster courts, and it is made continually against the judiciary of Northern Ireland. However, as the extradition in this case is not from the south to the north, but from the south to this part of the United Kingdom, the same argument is put forward. People in Northern Ireland will be looking carefully at this case because it illustrates the ineffectuality of the present arrangements under the much vaunted Anglo-Irish Agreement.

As I promised to be brief, I will finish by paying my tribute to the hospital services in Northern Ireland, and especially to the nurses. Ministers have said that justice has been done to the nursing profession. I do not agree with that. The nurses in Northern Ireland, as well as their counterparts in this part of the United Kingdom, have been badly treated in many instances. The nurses in my area told me that they have been asked to appeal but that they would hear the results of their appeal in three years' time. That is not justice for the nursing profession. The nurses in Northern Ireland deserve the full-hearted support of their public representatives, and they will have it in their battle for justice.

6.27 pm
Mr. Peter L. Pike (Burnley)

Today's debate is centred on two specific themes—industry and the environment. I want, first, to consider industry, because industry involves the creation of wealth and provides jobs. It is therefore vital to the nation. On many occasions over the past few years I have criticised the Government for their lack of concern about the importance of manufacturing industry to the future of this nation.

The figures have shown that we have been trading continuously in deficit in manufacturing industry, but the Government have said repeatedly that we must consider the picture as a whole and consider tourism and invisibles. I do not dispute that, but at the end of the day manufacturing industry is a basic requirement of this nation. The Government must be worried about the trade deficit figures of £2.43 billion and the manufacturing deficit of almost £3 billion announced last week.

While I accept that the figures may improve next month and that one or two factors may have affected the figures that were published last Friday, to call the figures a slight freak, as the Chancellor of the Exchequer did on Friday on television, is grossly to underestimate the situation. The underlying trend of the past few months has shown that our trade balance is increasingly worsening. It was announced on Friday that interest rates were rising yet again, to 13 per cent. Inflation is running at 6.4 per cent. and rising.

Since 1979 the Government have said repeatedly that we must accept unemployment, cuts in public expenditure and many other things that are unacceptable to Opposition Members because it is important to control the economy. Although the Government have managed to con the people that they are controlling the economy, it is becoming increasingly apparent that they are failing to do so. No doubt when the people recognise their failure in that regard they will recognise their many other failures.

If we are to export more manufactured goods than we import, we must recognise the problems posed by the high value of the pound and the tremendous burden imposed by increased interest rates, which will make it even more difficult for manufacturing industry to win the world's markets. Since 1979 public investment has fallen by 40 per cent., and the outline of the Government's expenditure programmes shows that it will fall by a further 6 per cent. in the next three years. The Queen's Speech mentions the Government's intention to make further cuts. Some of the cuts are occurring in the environment: spending on the water industry reached a peak in 1974, and in constant terms we are now spending only about two thirds as much as we were then on dealing with the industry's massive problems. That is an appalling indictment of the Government.

Manufacturing industry is particularly important to my part of the country, the north-west. The Government claim that investment in manufacturing industry is just above the 1979 figure, but in the north-west it is 38 per cent. below that figure in constant terms. The north-west is heavily dependent on manufacturing jobs, but they have declined by 38 per cent.—coincidentally the same figure, but in fact the two are linked. Until the Government right the position, unemployment and the balance of trade will continue to present problems.

We want a Government committed to ensuring that the regions can benefit from the Channel tunnel. We need rail and road links to bypass London so that we can get our goods into Europe speedily and efficiently and our people can travel there in the same way. We also want our regional airports developed and are hoping for an announcement this week that Manchester airport will be allowed to spend £500 million on a second terminal. We do not want the airport privatised. After years of development it is a successful airport, developed first by the city of Manchester, later by the county council and then by the consortium of local authorities that has run it since the council's abolition. We believe that that success can continue in the public sector, and we want a rail link to the airport as soon as possible.

The Secretary of State said that he believed the privatisation of water was the Government's greatest environmental move. The right hon. Gentleman is sadly mistaken. If given the right powers, the money and the staff to do its job, the National Rivers Authority could be a move in the right direction, but the industry need not be privatised for that objective to be achieved. If given powers to borrow on the commercial market, it could do so. If the Government did not limit them, by financial constraints, to passing on costs to consumers, water authorities could work effectively in the public sector, attacking the problems of pollution in our rivers and estuaries and ensuring our water quality.

Mr. Keith Raffan (Delyn)

rose—

Mr. Pike

I do not want to give way, because I am anxious for many hon. Members to speak in the debate.

The North-West water authority has the biggest problems of any water authority in the country, with the Mersey basin and the old mains and sewer pipes which owe their existence to the industrial revolution. Much money needs to be spent. We are also fearful of what may happen to our heritage and our valuable land holdings in the Lake and Peak districts and other parts of the north-west as a result of privatisation.

We are told that we are to have another Housing Bill. I wish that the Government would try to treat those wishing to rent properties in the same way as those who wish to purchase. Ever since 1979 they have been subsidised completely differently. Almost all local authorities have lost Government subsidy from their housing revenue accounts, which has forced up rent levels. We are now told that authorities themselves will not be able to subsidise. That will again mean substantial rent increases in many areas, penalising many people. The Government will say that those qualified for housing benefit will get it back, but other tenants will end up paying for the subsidy, and that is a dangerous way to proceed.

The person who will receive help is someone buying a house, receiving a large income and paying 40 per cent. tax and wanting a mortgage. It is quite different for someone who rents a property and will no longer receive housing benefit. Moreover, almost every local authority has had to cut back on its housing programme, which has affected the provision of sheltered housing, the improvement of stock and the building of new stock.

The Secretary of State said that the housing condition survey, published today, showed that there had been an improvement between 1981 and 1986. He has had the advantage of seeing the report, which Opposition Members have not. If the report shows such an improvement, it is unique, for every other report—political, Church or even with royal patronage—has criticised the present state of housing stock.

The Government say that they intend to do something about housing grants. I support any move that ensures value for money; at present many bad improvement jobs are done by cowboy builders and more checks would be welcome. We shall, however, look closely at the Government's proposals. The grants reached a peak in the free-for-all just before the 1983 election. There were cuts immediately after it.

In some parts of the country the cost of improving a house is not covered by the value of that house after it has been improved. My constituency in north-east Lancashire is a good example. A person can spend £10,000 or £11,000 on improving a house, but he will be lucky, depending on the area in which he lives, if he can sell the house for £10,000. We must know how the emphasis is to be changed and what assistance the Government intend to give.

There is a deterioration in the housing stock, whether it be in the public or the private sector. The Government must do something positive about it. The Housing Bill that the Government introduced in the last Session did nothing to tackle the housing problems. I fear that the new Bill will not tackle them, either.

Sufficient resources should be made available so that adequate sheltered housing can be provided for all elderly people who need it. Central Government, local government and housing associations must meet the growing need. The Government have announced that they intend to introduce another Local Government Bill. Since 1979 the Government have said that they believe in the freedom of local government and that they will set the town halls free, but they have curtailed the freedom of local authorities; for example, by limiting their financial powers to meet the needs of the communities that they have been elected to serve.

I fear that the new Bill will be another move in that direction. The Secretary of State and many Conservative Members do not believe in local government, but many of their Conservative colleagues on local authorities share my concern. Conservative councillors, and councillors of other parties, agree with Labour councillors that elected local authorities ought to be able to implement programmes that meet the needs of their communities.

The football Bill will do nothing to solve the problem. It is a mistake to call it a football problem. Even when there is no football match, or football team, one can go into certain town centres on a Saturday and be met by hooliganism and violence. People are thrown into fountains, and there are many other similar incidents. Do the Government intend to introduce identity cards for people who go shopping? That is the direction in which they are going.

I was amazed to hear the Minister with responsibility for sport say on television yesterday that if a card was rejected the person would be dealt with when he had passed through the barrier. What nonsense. Anybody who possesses a credit card knows how often the card fails to go through the wipe-through machines when paying for petrol or other goods. The scheme will not solve the problem at football grounds. It will create more problems. It is a move in the wrong direction. The Government need to think again.

6.43 pm
Sir Rhodes Boyson (Brent, North)

In a debate on the Loyal Address, as in any other debate, it is nice to be able to speak about general principles. It is also nice to deal with general principles that concern one's own constituents. I want to deal with a narrow planning subject—the preservation of the environment in north-west London and in suburbia throughout the country.

I regret the fact that the Gracious Speech contains no proposals to prevent the excessive building in suburbia that is taking place now. There was a meeting recently of north-west London Conservative Members of Parliament. I did not call that meeting, but I was asked to go to it. I realised then that my concern is shared by many other Members of Parliament with suburban constituencies.

There are between 70 and 80 constituencies outside the inner cities and towns that were developed in the 1930s, the 1950s and the 1960s. In the 1930s, those suburbs were the precursors of Thatcherism. Under the Conservative Government of the 1930s there was considerable economic expansion. The rising living standards that followed the economic expansion of the 1930s led to houses being built outside the inner cities and towns, in the then green belt that we now call suburbia. Germany and the United Kingdom advanced more economically in the 1930s than any of the other major countries of the world.

Suburbs also grew up in the 1950s but the great change came in the 1960s. People went to live in suburbia because they knew that their houses would have good-sized gardens, where their children could play on grass. Playing fields were provided. The quality of life in suburbia was much higher than in the towns and cities from which they had come. In the 1930s, families could buy houses in suburbia relatively cheaply. Similarly, compared with the position now, houses in the 1950s and 1960s were relatively cheap. The attraction for people to move into suburbia was the quality of life—the green gardens, the playing fields and the good schools.

Before I am accused of becoming a collectivist, or it is said that I may be intending to cross the Floor of the House, may I make it perfectly clear that I am a free-marketeer Conservative, as I have always been. I am quite happy that there should be no planning laws. I should be prepared to get rid of the lot and see what happened. I object to planning laws that go against the interests of my constituents and those of other Members of Parliament. The job of a Member of Parliament is to look after his constituents and to ensure that the law does not act against their interests, as the planning laws certainly do in suburbia.

Mr. Hugh Dykes (Harrow, East)

I thank my right hon. Friend for giving way, and also for the work that we have jointly done in north-west London on this matter. Does he not agree that increasingly we have come to realise that the planning legislation is excessively weighted in favour of the developer and against the interests of local residents?

Sir Rhodes Boyson

I agree with my hon. Friend and I shall turn to that point in a few moments.

Mr. Favell

Does my right hon. Friend also agree that the planning legislation is heavily weighted in favour of those who live in privileged circumstances in the open country and against those my right hon. Friend represents in suburbia and those I represent in my own constituency? They say that every available piece of green land should be built on before their view is obscured.

Sir Rhodes Boyson

I promise not to give way again, Mr. Speaker. If I am successful in the ballot for private Members' Bills, I know that I shall have my hon. Friend's support. He will certainly be involved at that stage.

So-called enlightened views—liberal views, in American political terms—have favoured the green belt. The green belt is sacred in some quarters and the inner cities are attractive in others, but nobody is concerned about the 10 million people, of all political opinions, at all levels of society, who live in suburbia. Houses are being pulled down and playing fields are being built over. That good environment is being destroyed.

I wondered whether this was my personal opinion, but then I found that my hon. Friend the Member for Harrow, East (Mr. Dykes) is of the same opinion. We are not on the same side of the party, which demonstrates our breadth of vision. Only two weeks ago the Institute of Economic Affairs, which cannot be attacked for its Left-wing views, published a paper "No Room! No Room!". It was written by Alan Evans, professor of environmental economics at Reading university. He said: Accessible open space, the space where most people live, primarily garden space, is developed and built over in order to preserve inaccessible open space, land in rural areas which few can visit because the land so preserved is almost invariably private. This environmental swap—the maintenance of the rural environment at the expense of the urban environment—is mostly unrecognised. But is especially ironic when the economic pressure for re-development to higher densities affects urban conservation areas, so that, in effect, an urban conservation area is destroyed (because 'one cannot stand in the way of progress') in order to preserve the rural environment (where, apparently, one can). Moreover, this reduction in the quality of the urban environment affects all the inhabitants of the urban area. So although owner-occupiers may make capital gains from the increase in the value of their housing, they are made worse off through the reduction in the quality of their immediate physical environment. The only unequivocal gainers are those, not unknown amongst the aristocracy of England, who live in a preserved rural area and own property in urban areas. I quote that so that the Opposition know that this is also a cross-party speech.

Since 1960, tens of thousands of good homes have been knocked down in suburbia. Some were built after the second world war, when the nation invested in houses with gardens where children could be brought up easily. They are being replaced by blocks of small flats. Houses with gardens are then overlooked by flats, the residents flee elsewhere and whole areas are destroyed. We could have a new inner city in the destruction of what was once a green environment. The green belt I want is gardens and playing fields in surburban areas, which should be preserved to enable all in those areas to enjoy a good quality of life.

I want to suggest a change in planning legislation for the next Queen's Speech—I am sorry that it was not in the Queen's Speech this year. First, no house should be knocked down without planning permission. At present, houses are knocked down and something else is allowed to be built in their place because the council does not want the site to be left empty. Secondly, it should be possible for the householders of the area to appeal against planning permission granted by the council. At present a developer can appeal if planning permission is refused, but if planning permission is granted by the council—whether because of the rateable value of the proposed development or because of vindictiveness against the people of the area whose environment is being destroyed—there can be no appeal. That goes against natural justice. The man who is making a quick buck can appeal, but the local people whose lifestyle will be destroyed have no appeal.

Thirdly, planning permission should be applied for only by applicants who own the land concerned. When I was first elected, somebody applied for planning permission to knock down 700 houses in my constituency. There was panic in the area. The old widow, for example, who had lived in the area since the 1930s was worried. People may say that she should have sold her house and left the area, but it was her quality of life that was being affected and her family, including her grandchildren, could not stay twice a year with her. Those visits are the life boats of her life. Man does not live by bread alone, and those visits kept her going. But many people sold their homes in panic. I may be a Tory romantic, but I am in good company in my views on this issue.

Fourthly, I wish to comment on the calling in of planning applications. I realise the difficulty of the decisions that have to be made by the Department on which of the major applications to call in. In the past three years, three major planning applications in my constituency have been called in and the Minister has agreed in each case that the green belt of playing fields and green areas should not be destroyed. The important point was that those applications were called in and the matter was referred to the Department. There is no clear line on which to make those decisions. Although it is easy for hon. Members to decide what is of national importance in their own constituencies, the Department deals with many applications. I have great respect for my right hon. Friend the Secretary of State for the Environment. I know how difficult it must be to make those decisions and it would help him to have a system for deciding which applications should be called in. I should no longer need to write letters about planning applications.

I shall give one example from my constituency. A big superstore was to be built which would have brought traffic on a road to a stop. Everyone in the area was opposed to it, but the council gave permission. The application was called in by the Department. An inquiry was held and the inspector, who was wise and good, took evidence and advised Ministers, who were also wise and good, saying that the development should not be built. However, three years later the same firm put in an application to build a bigger superstore in the same place. That application was not called in.

How was the application of national importance then but not now? I realise that there may have been differences between the two applications, but there must be a better system for calling in. Residents in my constituency will consider it to be against natural justice that one planning application was turned down by the Department whereas a larger development on the same site is allowed. We may have to ask for a judicial review of that case.

The hon. Member for Burnley (Mr. Pike)—the hon. Gentleman represents an area that I know well—said that he believed in local government. So do I. I do not like power to be centralised. A centralised state is almost as bad as a Socialist state. There is much wisdom outside Government—[HON. MEMBERS: "Hear, hear."]—which is why we have privatised several industries. I cannot let the Opposition cheer without explaining myself, or I shall be deselected. It is important that there should be a balance of power between central Government and local councils; it is part of the freedom of our society. If one section is in total charge, freedom will die.

We should have smaller councils. I opposed the reorganisation of local government in 1964, which was a disaster. Big tower blocks were built, big comprehensive schools were set up and size was everything. That policy has proved to be a disaster. The creation of Brent was typical. It was opposed by Willesden and Wembley, yet it was pushed through. The Boundary Commission should look again at the disaster area of Brent for the sake of both sides of the borough. That would have the backing of other hon. Members in the area. It should be split into areas where people know their councillors. They should vote not for a particular party, but for the person who will do the best job for them. As Lord Woolton said, local government should be government and should be local. The big local authority areas have brought about full-time local politicians, the politicisation of local government and other developments that are deplored by hon. Members from all parties.

If we continue to allow the green gardens and playing fields of suburbia to be destroyed, I foresee a future in which millions of acres of the green belt are preserved for the privileged and for American, European and even Asiatic tourists, whereas the residents of what was once green suburbia will have to drive out into the countryside at weekends along traffic-jammed roads to see what shrubs and trees look like and for their children to play on grass. We shall no longer have horticultural societies—we shall have window-box societies. Window-box prizes are already being given in my area. Present planners will then be attacked, just as we attack those who allowed the building of the tower blocks. That was considered to be enlightened at the time, but everyone now asks why it was allowed.

We have done so much damage to suburbia that people there are already appalled. People will say in the future, as they say now, "Why was it allowed?" Everybody from the working class and middle class upwards moved to suburbia, to the green belt, so that they could have gardens and playing fields for their children. To see all that destroyed now will be as disastrous as the tower blocks that have been built.

I am making a cross-party not a political speech. To return to what I said at the beginning, I am a free marketeeer. I say that to clarify the position for any Opposition Member who might temporarily agree with me and to ensure my reselection at the right time. I would prefer a free market that is allowed to sort itself out. Some of the best streets in London—or anywhere—with their big houses were built in a free market, as indeed were the good working-class houses in the north in, for example, Burnley and Haslingden. I would prefer such a free market society. However, if we are to have planning, let us be sure about what we are doing. We should not preserve the green belt areas only to destroy the areas of the little green belts of gardens where tens of thousands, if not millions, of our people live, because if we do that we will destroy the environment for the children.

Mr. Speaker

I remind the House that until 9 o'clock we are in the 10-minute limit period.

7 pm

Mr. Allen McKay (Barnsley, West and Penistone)

I am pleased that you have reminded me of the 10-minute limit, Mr. Speaker. It is good to follow the right hon. Member for Brent, North (Sir R. Boyson) because we have clashed on many occasions in Committee and have agreed to disagree. However, at least I can say that he has always explained why he has disagreed with me—and that is refreshing.

One thing that the right hon. Gentleman and I do agree on is that local government should remain local. I agree that our problems with local government began in 1964 because if we had not had the 1964 reorganisation we would not have had our problems in local government. Unfortunately, this Government's policies will destroy local government. It was a sad reflection of that fact that when I was speaking to local councillors this week they questioned whether it was worth being a councillor any more. It is serious when people who have spent a life time in local government question doing so any longer. However, they are right to view local government with trepidation when they read of the legislation in the Queen's Speech. It looks as if central Government is attacking not only the finances but the workings of local government. That attitude will create many problems at a local level.

The Queen's Speech states:

A Bill will be brought forward to reform the law on local government capital and housing finance, on home improvement grants". In his Budget the Chancellor of the Exchequer decided to alter the system of rebates or grants for renovating houses. In my area and in many of the areas represented by my hon. Friends there are many pre-reinforced concrete houses; many previously belonging to the National Coal Board, or British Coal as it now is, have been passed over to the local authorities and some belong to the local authorities themselves. Altering the system of grants alters the system under which a person can buy his house from the local authority if that is what he wants to do because he may be buying a house that he cannot put on the open market. It may also alter the system whereby a person can get an improvement grant if the house belongs to British Coal and pay for the improvements in that way—

Mr. Alan Meale (Mansfield)

Does my hon. Friend agree that it is hypocritical of the Government to proceed with the privatisation of the energy supply industry at a time when Ministers are giving assurances that former NCB houses will not be up for tender or auction without first being offered to local authorities or proper housing associations? Is my hon. Friend aware that 168 houses in Nottinghamshire have been put up for tender without going through that process, despite the assurances that were given?

Mr. McKay

It is regrettable, but my hon. Friend is right. I thought that there was an understanding on a formula to be adopted before reaching the final stage of putting the houses on the open market. If British Coal has decided to go another way, it is regrettable. I have had similar instances in my constituency and know of the problems of the tenants of such houses.

I turn now to homelessness. It will be very regrettable if we change the definition of homelessness to rooflessness. There are rumours about the involvement of private institutions. It will be regrettable if a person who is already down and homeless is subjected to that. I hope that the Government will not go that way.

I refer now to an issue that has already been referred to today—nurses' pay and the National Health Service. Whoever advised the Secretary of State for Health to give a wage increase at the same time as undertaking a regrading exercise should be sacked. If the Secretary of State knew about that and went along with it, it is time that he looked about as well. It is fundamental to any industrial relations policy that one should never give a wage increase at the same time as undertaking a reorganisation or regrading. The regrading should be carried out either before the increase is given or about three years later. It is known to be a disaster if both are given together, but that is what has happened. Somebody must have worked really hard to be able to put £2 billion forward as a wage increase for nurses only to have them then go on strike. The Secretary of State should look carefully at what has happened.

I should now like to ask a number of pertinent questions about the privatisation of electricity. We know that the electricity industry will be organised into three blocks: big G, little G or whatever, and the redistribution board. It is a fact that out of our five advanced gas-cooled reactors three are not working. Millions of pounds of taxpayers' money is being poured into trying to get those stations working before privatisation. The Secretary of State for Energy is always reminding us of the fact that it is taxpayers' money.

The Magnox power stations will be taken out of use in between five and 10 years time—10 years at the most. Therefore, we have 10 Magnox power stations that will be out of use within 10 years, three AGRs that are not working, two pressurised water reactors that are working and four PWRs are required at a cost of £6 billion. No one will buy shares in an industry that will have to fork out £6 billion for four power stations, no one will buy shares in an industry that has three AGRs that will need to be written off and no one will buy shares in an industry that will have to pick up a £3 billion bill for getting rid of nuclear waste. Either the Government can ringfence the nuclear industry and take the cost of nuclear generation out of electricity charges and pay for it themselves—if they do that the taxpayers will be paying for it—or the cost will be borne by electricity consumers. The Government should tell us exactly what they intend doing and tell the future shareholders what will be required of them.

It is wrong for the Government to privatise the water industry. We want to know about the land that belongs to the water authorities now. We should not forget that the water authorities belonged to local government at one time and that local government has never been recompensed for the water authorities being nationalised. We should certainly look for recompense now that the water authorities are to be privatised.

What will happen to all the land? Will it be dealt with differently? Will there be protection for the people who use the land for recreational purposes? Will the waterways, which are also used for recreation, be protected? Will we be able to use the pathways that cross the land just as we do now, without any charge? Are authorities to be brought into being which will not only increase the price of water but deny access to their land?

The Government are bringing green issues into water privatisation simply to camouflage the cost of the privatisation because they know that thousands of miles of sewage pipes and thousands of miles of lead water pipes need replacing. If those replacements are to be made under private enterprise and the enterprise has to make a profit, prices will rise.

What will happen to the people who cannot afford to pay for water? Will their water supply be turned off? Public health is another important local government function. The Government are trying to destroy local government, but here we shall have a serious public health issue.

In Committee, we shall have to consider a water rebate system along the lines of the rate rebate system, as that is the only way in which people will be able to afford the installation of meters, the rental on meters and the increased price of water.

7.10 pm
Mr. Michael Grylls (Surrey, North-West)

I shall not take up what the hon. Member for Barnsley, West and Penistone (Mr. McKay) said about privatisation because of the lack of time, not out of any discourtesy.

One aspect of the Gracious Speech will have raised a great deal of interest—it is certainly important. I refer to the proposed changes to legislation which affect mergers in industry and commerce. The issue has come to the fore recently. There has been a spate of merger mania during the past few years. The matter has also come to prominence as a result of the advance towards the single market in 1992.

It is important that certain ground rules should be laid down before mergers so that industry knows where it is. There is a need in a free market system for the threat of mergers to keep businesses on their toes. That is a useful weapon, but it is generally accepted in almost every industrialised country that it is necessary to have some regulation of mergers. We were talking about sport earlier. It is crucial to have referees on the playing field of mergers.

It is important to examine history to see whether there are any lessons to be learnt. If we look back over the past 20 or 30 years and compare British industry with that in more successful economies such as West Germany and Japan, we find that we have had a much freer system. We have allowed companies to grow by acquisition rather than by organic methods. That has not been allowed in West Germany and Japan, perhaps because they learned from their special experiences of 40 years ago.

As British industry becomes stronger and as we prepare for entry into the full market, we must ensure that our system is on all fours with the others. Many people will say that we have a much more developed capital market in the City of London. That is true, and it is an asset, but it presents threats to our industry as it is much easier to raise money for very large takeovers. We must try to encourage our industry to grow more internally.

In his Budget this year, my right hon. Friend the Chancellor helped the trend that I advocated. He put capital gains tax and the top rate of income tax at the same level—40 per cent. At a stroke, he removed one of the reasons why many entrepreneurs have gone public. They have floated their companies on the market so that they can get money out at the lower rate of capital gains tax, rather than at the higher rate of income tax, which used to run at 83 or 98 per cent.

There was previously a great temptation to sell a business to maximise success at the lower rate of capital gains tax. I hope that, now the difference has been removed, more entrepreneurs will stick with their businesses. I hope that, if they wish to reward themselves—they are fully entitled to—they will take money out as income.

We must consider what is happening on the continent. Germany, Holland and, to some extent, Italy have much more difficult markets in which to take over companies. I believe in the free exchange of capital in Europe and the world. It is crucial. Britain has benefited from acquisitions overseas. The Government's responsibility is to maintain competition policy within the United Kingdom.

My right hon. Friend Lord Young made that clear in a speech on 27 October, which is published as an attractive and interesting blue book. He issued a warning which we should heed. Talking about the efficiencies which are often claimed to come from large mergers—people talk about the international competitiveness which results from mergers—he said: but I have to say that all too often in the past the claims have not been borne out by results, and the track record of post-merger performance does not justify our simply taking such claims on trust. We must remember those words as we approach 1992.

We must maintain the spur of the threat of takeover, but we must also ensure that there is maximum competition in each market sector. Many of my hon. Friends may say that that is all very well, but that we have to make a judgment. There must indeed be a judgment. I am perhaps one of the least interventionist people by nature, but judgments are inevitable in the formation of competition policy.

We had to make a judgment in 1986 in regard to the attempted takeover by GEC of Plessey—a matter which has now arisen a second time. We had to judge whether the merger would reduce competition in, for example, the supply of defence equipment to the Ministry of Defence. It was decided that that would happen, so the merger was stopped.

Policy should maximise competition in each sector of the market. If a merger does not damage that competition, I would be happy for it to go ahead. The other wing of competition policy—the national interest—arises only rarely, as with BP. If we maintain competition in each market sector and encourage companies to grow organically rather than by acquisition, we shall have a more effective industry which is better able to compete in the EC and in the rest of the world.

7.17 pm
Mr. George Galloway (Glasgow, Hillhead)

One of the themes of today's debate has been housing and the Government's privatisation of it. One of my first serious parliamentary experiences—it was an experience—was sitting on the Committee which considered the Housing (Scotland) Bill. The Bill has been voted for by almost nobody. It had been rejected by more than four out of five Scots at the general election a month or two before. It was wanted by almost nobody except private landlord interests, which are by definition a small number of Scots. It was nonetheless imposed on the people of Scotland. In Committee, it was imposed by an alien majority.

Two English Members of Parliament sat on the Committee. One was the hon. Member for Wanstead and Woodford (Mr. Arbuthnot) and the other was the hon. Member for Penrith and The Border (Mr. Maclean)—the latter a deracinated Scot and the former an elegant London barrister whose experience of Scottish housing is limited, to say the least. They wrote out their Christmas cards between Divisions, but they were there when it counted. When the Divisions came, they voted the Bill through. The pattern was the same when the Bill came before the House. The experience of sitting on that Committee has proved an apt metaphor for how my country is treated by this Government and, more disappointingly and increasingly, by the House of Commons.

The Gracious Speech contains nothing about this question which has become the primary question in Scottish politics and is what I would call the national question. It has come as no surprise that the Queen's Speech is deafening in its silence on the subject. I wonder whether English Ministers of the Crown—I see one Scottish Minister on the Front Bench—realise the extent to which they have come to be regarded as essentially a foreign Government in Scotland. They show no signs in this Gracious Speech of adapting to the alienation that my country feels towards them. It was always said, and I was brought up to believe, that the British ruling elite knew that a bough which does not bend with the wind is in danger of breaking. Yet that does not seem to be the case with the national Scottish question.

The defeats of 1979 and 1983 were followed by the decimation of the Conservative party in Scotland in 1987. It was reduced to a rump Government with 10 Members of Parliament, four of whom had to sit on the Front Bench and the majority of the rest of whom could not in any conceivable circumstances be appointed to it. We have a rump Government of 10 attempting to govern a constituent part of the United Kingdom, a voluntary partner in the United Kingdom.

Instead of flexibility and nous following that decimation, the Government offered the Scots only admonition and insult. The Scots were told memorably by the then Minister for Trade and Industry, now the Secretary of State for Health, that they lacked "the enterprise culture"—Scots, from the land of Adam Smith, James Watt, Logie Baird and the world's finest engineers and scientists. We were told in a memorable editorial in a yellow newspaper to "Stop yer snivellin' Jock." We were told that the Thatcher revolution must be pressed home in Scotland, albeit on an unwilling population. So the poll tax, rejected by four out of every five Scots, had to go ahead and the opt-out proposals, wanted by no one who is anyone in Scottish education circles and supported by not a single leader writer, serious journalist, person outside the Scottish Conservative party, nor even by many members of the Scottish Conservative party, was rammed through. The privatisation of electricity and the steel industry are to be hammered home on this sullen, ungrateful Scottish population, with all the subtlety and resolute approach of Lord North dealing with the American colonies more than 200 years ago.

Increasingly in this House that attitude is seen in all its ugliness. A Select Committee on Scottish Affairs, which we shall debate next week, is the only Select Committee that has not been set up. The Scottish Office is the only Department of State which does not have a Select Committee monitoring its important work. The reason is not because the Scots do not want that or that the Department does not need it, but because the Scottish Conservative party cannot muster enough bottoms to sit on the seats to man that Committee.

With due respect to you, Mr. Speaker, Scottish Question Time has become a black farce. When the doors open at 2.30 pm in stream the obstructive and objectionable louts, bearing questions that someone else has written for them, not listening to the answers, representing English constituencies, never visiting Scotland or knowing anything about it, and doing their best to provoke and degenerate Scottish Question Time to the farce that it has become. The effect is that the 62 Opposition Members are unable to ask their questions and make their points because English Tory Back Benchers are drafted in to obstruct.

Mr. Favell

On a point of order, Mr. Speaker. Is it parliamentary to call an hon. Member of this House an "objectionable lout"? I am interested in Scottish questions, I attend them and I listen carefully to what is said, and I object to being referred to as an objectionable lout. I have no objection to Scottish Members taking part in English business and I expect them to show some decorum.

Mr. Speaker

I do not think that the hon. Gentleman was alleging that any individual Member was a lout. If he was, that would certainly have been unparliamentary. This is a United Kingdom Parliament.

Mr. Galloway

I could say that if the cap fits the hon. Gentleman could wear it, but I did not intend to refer to him in my remarks. You, Sir, know the kind of Back Benchers to whom I am referring.

The result of this arrogance and insensitivity has been an unprecedented rise in nationalism and nationalist feeling in Scotland. Anyone who denies that is simply flying in the face of reality. That nationalism is taking the form, as it did at Govan and as it has done in every opinion poll, pub, work place and street corner, in a virulent hatred of the Government who are imposing these alien policies on an unwilling population. Ministers are intelligent men and must know that what I am saying is true.

I take issue with my right hon. Friend the Leader of the Opposition who just the other week made an offensive remark in Scotland when he said that nationalists think with their blood. That was an ill-judged remark. Nationalists are all over the world—in Nicaragua, on the dusty streets of occupied Palestine and in the trenches at Stalingrad in the great patriotic war. Patriots and nationalists do not think with their blood. Many have given their blood against reaction, backwardness, Facism and undemocratic rule. That nationalism which is developing in my country is apparently being deliberately fostered by a Conservative and Unionist Government. If it is not being deliberately fostered, the Government could certainly not have done a better job of it.

The Sovereign is being ill-served by these Ministers whom she has appointed to govern the affairs of the British state in Scotland. Conservative and Unionist Ministers with a mixture of comprador complacency and cynicism are taking her United Kingdom to oblivion. I read nothing in the Gracious Speech which gives me any hope that the Government are bent on a change of course.

7.29 pm
Mr. Nigel Forman (Carshalton and Wallington)

I welcome the Queen's Speech as the latest instalment of major legislation from this radical and reforming Government. I wish to make two particular points that relate directly to the two subjects of today's debate, industry and the environment.

I urge my right hon. Friends, in the words of the Gracious Address, to continue to promote enterprise and to foster the conditions necessary for the sustained growth of output and employment. That must mean the continuation of the policy of privatisation which has brought a smaller public sector—it is about half the size that it was in 1979—wider share ownership—which is now about three times the level of the 1979 level—and impressive levels of profitability and performance, for example, in the National Freight Corporation and Cable and Wireless.

It is vital that the policy of deregulation, at both national and EEC level, should be pursued wherever appropriate to minimise the burden of compliance costs on the wealth-creating and job-creating sectors. The Government must stick to their macro-economic policy, which has produced the right framework within which we have had seven years of steady growth at an average of 3 per cent. a year. The growth has been well balanced over the period 1981 to 1987, with a real increase in consumption of 3.5 per cent., a real increase in exports of 4 per cent. and a real increase in investment of 5 per cent. That clearly gives the lie to the argument that consumption has been out of line with investment and exports over the years.

However, in one area it is vital that the Government and the private sector should do more than has been done so far, and that is in the provision of rigorous vocational training for non-academic children in schools and colleges and in private sector provision for craft and technical workers' training in industry. A recent NIESR—National Institute of Economic and Social Research—report shows that France produces three times as many trained mechanical and electrical craftsmen as we do, and that West Germany is still further ahead in that competition.

On the vital matter of vocational education and training, I commend to my right hon. Friends on the Front Bench the Financial Times leader on 24 November, which said: The Government has to put more resources into vocational education and think harder about the division of responsibilities between industry and schools. Equally, the private sector must do more to train and retrain its employees, particularly when industrial profitability is at such a satisfactorily high level.

Taking as an example engineering employers and unions, it is vital that, rather than go in for excessive pay settlements which are not covered adequately by increased productivity, they should use extra resources to increase still further their training and retraining methods. Otherwise, the inevitable consequence will be that skilled labour will become increasingly scarce in buoyant economic conditions, and profitable firms will add to the dangers of inflation by bidding up pay and other remunerations to poach scarce employees or to retain those they already have. Not long ago British Airways was paying some of its computer operators loyalty bonuses equivalent to one year's salary, to retain the same workers for a further three-year period.

The argument can be viewed in the even wider context of long-term national prosperity and security. I commend to the House an interesting article by Edward Mortimer, in which he asked the rhetorical question: Which is the more plausible threat to British national security in the next 10 or 20 years, that the country might be occupied by a foreign invader, or that its population might become little more than a pool of unskilled and largely unwanted labour for more advanced industrial economies? That is a very serious point, and I very much hope that my right hon. and hon. Friends in the Department of Trade and Industry and other relevant Departments will continue to press that case even harder on their colleagues in the Government.

When we have a really well educated and trained labour force we will be in a better position to cope with some of the problems that are likely to arise in the labour market, notably those that may be caused by demographic factors in the early 1990s.

My second point concerns the environment. Obviously I commend my right hon. Friends for the green thrust of the recently published Water Bill. However, I urge them to follow up my right hon. Friend the Prime Minister's excellent speech to the Royal Society with a whole range of cost-effective and scientifically well-founded environmental measures. I was particularly glad to hear my right hon. Friend the Secretary of State for the Environment earlier today say that there is to be further legislation on environmental matters later in this Parliament. I hope that it will not be long delayed.

Our aim should be nothing less than to achieve a better quality of economic growth that is congruent with, rather than divergent from, the need to protect the environment. I believe that, first, there must be more encouragement of investment in energy conservation and the efficient production and use of energy, such as combined heat and power. Secondly, we need more encouragement for investment in efficient mass transport systems, especially in London and the south-east and in areas near my constituency. Thirdly, we need more investment in what my right hon. Friend the Prime Minister has called "sustainable economic development"—that is manufactured goods without built-in obsolescence, environmentally sound vehicles, and biodegradable packaging.

The only future for Britain as an exporting nation that wants to preserve a decent standard of prosperity and quality of life is to move up-market and produce the quality goods and services which our customers around the world increasingly will expect and require. Recent evidence in a Gallup poll published in The Daily Telegraph showed that when given the choice between protecting the environment and holding prices down, a massive majority favoured protecting the environment.

Whatever one reads from an opinion poll, it shows the way that opinion is moving. Nine out of 10, or 88 per cent., of the sample thought that the Government should pass laws to control industry and other producers of pollution, while only 5 per cent. felt that industry could be trusted to regulate itself. That opinion poll contains a clear message. Therefore, I urge my right hon. Friends to press on with the course on which they have embarked and ensure that by the end of this Parliament we are able to build an environmental record of which we can be proud.

My right hon. Friend the Prime Minister said in her speech to the Royal Society: the health of the economy and health of our environment are totally dependent upon each other. Nowhere is that more obvious than in our vital export markets in western Europe, North America and Japan. Increasingly, our sophisticated customers will not accept motor cars which pollute above sensible, internationally agreed levels, machine tools which are unsafe, aircraft which are too noisy and design which is not ergonomically and economically sound.

Our economic future and our rising prosperity will be secure only if we meet the two vital conditions of which I have spoken. We must produce many more better educated and trained people, especially by concentrating on the needs of the non-academic majority. Secondly, we must design, develop and sell goods and services which are environmentally friendly and do not further degrade the quality of our lives or, at the extreme, our chances of global survival.

7.37 pm
Mr. Dennis Turner (Wolverhampton, South-East)

As a preamble, in examining the Gracious Speech, turning it about as much as I can and looking at it for as long as I can, I cannot find anything in it that will bring any more hope or any greater pleasure to the people of this country. Indeed, the measures outlined in the Gracious Speech will only exacerbate our problems; in particular the division between rich and poor, black and white and north and south.

I wish to speak about three separate but related matters which concern the Department of the Environment, the Gracious Speech and Government policies in that connection. First, I shall say something about the problems that have been created by the rate support grant settlement. I make no apology for mentioning my part of the world—the west midlands and Wolverhampton. As I have spoken about the rate support grant settlement in general in a previous debate, I now raise the matter of the passenger transport authority grant for the west midlands, which, on the basis of this year's outturn and next year's projected grant, has been cut by £13.1 million. Unless that is amended and changed it will have a profound effect on passenger transport in the west midlands.

It is clear that we shall see the infrastructure of our passenger transport system further eroded and the problems associated with car pollution increased as a result of the cutback in bus services. More important is the marvellous benefit which senior citizens in the west midlands have enjoyed in the past few years from their concessionary passes. For thousands of elderly people the liberalising approach to concessionary fares has been remarkable, and it has been a pleasure to see. The leisure, shopping, recreational and social opportunities for elderly people are marvellous. I fear that as a result of the cut in the grant, concessionary travel may be threatened. The Ministers met the chairman of the west midlands passenger transport committee today, and I hope that as a result of their discussions the Government and the Secretary of State for the Environment will now make some progress on that matter.

The remorseless attack on council house tenants continues unabated in this Session. The Housing and Local Government Bill places even greater penalties—financial and otherwise—on millions of people, and that is in addition to the iniquitous legislation passed during the previous two parliamentary Sessions.

Another particularly obnoxious measure in the proposals for this Session is the restriction of democratic rights and activities of thousands of good men and women in local government and the public services. I resent the fact that people giving their lives to local government and social services are deemed in some way not fit to participate in the democratic and political life of this country. The issue is, without doubt, the GCHQ of local government.

I shall now deal with the reactionary and doctrinaire privatisation of electricity and water. Opposition Members do not believe the statements made about the improvement of pollution and the environment as a result of the water measure. We do not believe the Government's assurances on the protection of the land, countryside and valuable beauty spots that will be handed over to private companies.

In view of the tremendous mess that the Government made of the recent social security legislation, what guarantees will the Secretary of State give of adequate income support for those millions of people in Britain who are on the poverty line? They will face greater hardships if higher water charges are imposed—whether it is the 7.5 per cent. or 12.5 per cent. that the Secretary of State mentioned, or the 20 per cent. plus, which may be a more realistic estimate. We know that the present water payments are inadequate, and metering will almost inevitably follow.

In my day essential reading for Socialists joining the Labour party was "The Ragged Trousered Philanthropists". I am sure that essential reading for Conservative Members may have been Adam Smith. Robert Tressall identified in a graphic way the unfettered and uncontrolled march of capitalism. He wrote that the ultimate phase of capitalism would be the provision of a huge gasometer which would embrace our planet, after which one shilling of old money would be charged for every gasp of oxygen that mankind inhaled. That is happening to water in this Session, and it may be our air in the next Session.

7.45 pm
Mr. Spencer Batiste (Elmet)

The debate combines the subjects of industry and the environment, which are particularly appropriate for my constituency. The constituency of Elmet embraces a chunk of the city of Leeds, the countryside, with the towns and villages that surround it, and includes a wide range of industries. In the short time available I should like to look at how to continue and enhance the industrial advance, which is the base of our local prosperity, and how to address the by-product of that success, which is most evident in the pressure on our environment.

How will the Queen's Speech affect those two issues? The Queen's Speech promises to continue to promote the enterprise culture. That continuity is important. For industry to plan over the medium and long term it needs to have some measure of certainty about the environment that it will be facing in the years ahead. Within that continuity, what new things are promised? Electricity privatisation is promised, and I welcome that. There will be other opportunities to debate the merits of that proposal.

I particularly welcome the fact that the Yorkshire electricity board, one of the biggest of the electricity supply companies, will have its headquarters within my constituency. What that means for my local business environment is that the decision centre of one of the largest companies within the United Kingdom will be located firmly within the region that it serves. That is a vital part of regional policy. Decision centres stimulate the local economy around them. They create new professional services which overspill in their sophistication into other aspects of the local business community. They create a sub-contracting network, and that in turn feeds new industries. The economy of a region has to be broadly based and must have included within it important decision centres.

I shall look carefully at the measures proposed in the Queen's Speech for merger and competition policy. I believe that over the next decade, with the approach of 1992 and the advent of the integration of the European market, nothing will be more important than a sensitive balance in our merger and competition policy. Regions such as mine need the investment of the European industrial giants, which I hope will emerge, if we are to compete effectively with the giants of Japan and the United States. At the same time, we need our own local plcs and medium and small businesses.

That is by no means an easy balance to strike. Our tax system, as it has existed for many years, concentrates far too much shareholding power in the hands of far too few fund managers too remote from our region. We need to divert the fruits of our prosperity from consumer spending to saving. We should encourage a much broader base of individual savings, so as to have more diversity in the way in which our companies are financed.

With that diversity and prosperity comes the other side of the coin—the growing concern about the environment, which we have heard expressed on a number of occasions in this debate. That applies particularly to areas such as mine, where the countryside butts on to a city and where there are planning worries. So far we have heard various horror stories from different constituencies. I shall offer what I think is an unbeatable triumvirate. There is a proposal for a new town in the north of my constituency, a new motorway in the middle of it and a new opencast site with a river diversion in the south. Moreover, the established communities from north to south in the constituency all feel threatened by excessive and unsuitable development.

All hon. Members have raised such issues in debate, and we have to recognise that the cities, the suburbs, the towns and the countryside are not isolated from one another. They are complementary and interlocking parts of one seamless robe of our environment. It is no good pleading specially for one part without trying to develop a coherent response for the totality.

Part of the problem so far is that we are embarking on an era of rapid change and growth, but we do not have clear policies that offer to local communities predictability in advance of planning applications. We do not have rapid decision making when applications are made, or the promise of strong enforcement of planning regulations when abuses occur. That feeling of unease, in all communities, in all parts of the country that face that problem, is growing and must be addressed.

Reference has been made to the need for a White Paper on planning and the environment, and I strongly support that. When an unsuitable planning application is put forward, people simply do not know what the end result will be—although they do know that it will take a long time to be determined. Even when it has been determined, the developers can keep returning for further bites of the same cake.

What should be the main features of such a White Paper? First, where development is appropriate for an inner city, it should happen in an inner city. There is no point in developers building new towns in the countryside when areas of dereliction exist which, if they were brought forward as a level-based site, would be far more suitable for such development. The riverside development in London has produced thoroughly desirable environments, close to facilities that people want. There is no reason why such developments should not occur in all our cities in areas currently regarded as derelict. That must be the start of our policy.

Then, in the suburbs and existing towns and villages around our cities, there is a fear of excessive and unsuitable developments. We must consider the role of conservation areas and dramatically expand both their area and their enforceability. We cannot block all developments in villages, towns or suburbs, but the people living there want to ensure that any development is of a density, style, design and character compatible with the local communities. Many of the fears expressed so strongly arise because, all too often, planning powers are inadequate to deal with both density and unsuitability of developments in existing communities.

I welcome what has been said many times by my right hon. Friend the Secretary of State—that the green belt forms a vital bulwark in our planning regulations. If we do not move to protect our green areas, they will not be there for future generations. There will be no bulwark to prevent the expansion of the existing cities into the surrounding towns, causing ever larger and more soulless conurbations. The green belt is just as important to those living in the cities as it is to those living in the green belt itself.

Finally, I am concerned about the growth in the use of private Bills in an apparent attempt to bypass normal planning procedures. Obviously private Bills are sometimes necessary, and there is a long tradition of private Bills being so used, but there is a growing practice of using a private Bill on slender grounds to carry with it much larger planning implications. The House needs carefully to consider the way in which that procedure is developed.

This is the ninth Gracious Speech under this Government. It is extraordinary that a Government who have been in power for such a long time should have so much new and lively policy making. This Gracious Speech especially reflects how far we have come as a nation during that time, but equally it signposts how much further we still have to go.

7.53 pm
Mr. David Clelland (Tyne Bridge)

At the beginning of today's debate the Secretary of State for the Environment made the rather curious statement that my hon. Friend the Member for Copeland (Dr. Cunningham) was seeking obscurity by making a radio broadcast. If my hon. Friend wants obscurity, he should speak from the Back Benches in this House when so few hon. Members are present.

All the predictions were that the Gracious Speech would once again contain proposals further to dismantle public services, to promote private interests and to curtail public freedoms. Those predictions have once again been proved to be right. All that is being proposed will be done in the name of progress and radicalism. The truth is that the Tory party is not about new thinking, is not radical, is not progressive, and is not even very clever—except for the success of its deception. The only progressive move that the Government are making is progressively to put the clock back, as is inevitable for a Prime Minister who looks admiringly at the Victorian era while talking of the next step forward.

All that the Government propose has been tried before. Although it is true that a strong, viable and efficient private sector is vital to our economic well-being and prospects, if privatisation is so right, so efficient, so unchallengeable in its concept and so self-evident in its progressiveness that it is sensible to hand over to its keeping public utilities that represent the very lifeblood of our nation, why was any change necessary in the first place? It is a measure of the Government's sleight of hand that the advancement to public utilities—something that was done because of the failure of the private sector—is now condemned as being a step back, while the breaking up of public utilities and a return to the old ways is hailed by the Government and their agencies as a step forward.

An unregulated, uncontrolled private sector will sacrifice all for bigger profits—whether it be health, safety, environment or people's livelihoods. As has happened only too often under this Tory Administration, if the assets are more profitable than the product, the product will be sacrificed. Making things is not important when making money is fashionable; hence the slump in our manufacturing industry. We have become not a nation of shopkeepers but a nation of shop assistants, all happily selling Japanese hi-fi's and sailing merrily along in what is thought to be a fast flowing current when, in fact, it is a whirlpool that is sucking us all down the plughole. Yet who cares, as long as they are having a good time along the way? People had better start to wake up to what is happening. They should see through the mind-numbing trivia of the tabloids.

The Gracious Speech offers a glaring example of the hypocrisy and double standards that the Government have practised over the past nine years. In the pursuance of tax cuts, they increase mortgage repayments, rents and charges for public services. In the name of wider choice, they drive council tenants out of democratic ownership into the hands of profiteers and speculators. In the interests of profit, they oppose European efforts to raise environmental standards and plan to sell life-giving water to private business and foreign investors.

The Government tell us and the country that public subsidy is wasteful and anti-competitive, yet they deliberately raise the price of electricity to industry and domestic consumers so that they can fatten up the business for prospective buyers. In order dogmatically to pursue a policy of encouraging the growth of the nuclear industry at the expense of coal, and in opposition to their deeply held view that the market should decide, they plan to extract from consumers a tax to pay a reluctant private sector and so ensure the continuance of their discredited nuclear policy.

The Government have been in power for almost 10 years, and yet the real level of unemployment remains at about 3 million. The Government have employed various devices to bring about an artificial reduction in the figures, and they are about to embark on yet another ploy. The Gracious Speech refers to removing unnecessary obstacles to employment, particularly in relation to women and young people. I shudder to think what that means, coming from a Government who promoted a White Paper called "Building Businesses … Not Barriers" and who criticised the very planning controls that were established to protect our people and our environment, proposing freedom for business to develop virtually as it pleased and ignoring community interests.

When such a Government talk of obstacles to employment, they are not referring to their non-existent industrial policy or their destruction of 3 million jobs; they are referring to proper wages and conditions, health and safety considerations, and sickness and pension obligations on employers. It is the likes of those hard-fought-for improvements for working people that business and the Tory Government regard as obstacles to employment. Having done their best over the past 10 years to denude the trade unions of power, they believe that the time is now right to give employers the freedom to dictate wages and conditions, as indeed the Government did in the great Victorian era. Another step forward, the Prime Minister will no doubt proclaim. It is more like another nail in the coffin of civilised life in Britain.

The last Labour Government left an inheritance of falling inflation and falling unemployment—something that this Government are still unable to match. Yet, despite inheriting that jewel and improving situation, despite all the benefits of North sea oil which Labour never enjoyed, despite massive income from selling off public assets, which Labour could not have had, despite savings made at the expense of the elderly by ending the link between pensions and earnings, which Labour certainly would never have done, after almost 10 years, unemployment is still almost three times higher than it was in 1979, inflation is creeping back to the 1979 level, and we have the worst ever trade deficit. So much for the so-called economic miracle.

In the midst of all that, such is the Prime Minister's belief in the gullibility of the British people that she can tell us that we have the best Chancellor that this country has ever had. What arrogance and what nonsense, and what an insult to the intelligence of the British people.

On the subject of the trade deficit, perhaps the Minister will tell the House how the interests of trade and industry will be best served if, as is strongly rumoured, the Cabinet have decided to award a substantial order for battle tanks to an American company rather than to the British company, Vickers Defence Systems. Is he aware of the impact that such a decision will have on jobs, to say nothing of the further adverse effects on our balance of trade? Why must Opposition Members constantly remind the British Government of the importance of supporting British industry?

As a northern Member, I ask the Minister—that is, if he is listening—to tell us why our confectionery industry was sold to the Swiss, why our brewing industry is in danger of being sold to the Australians, why our water industry is being sold to the French, and why our defence industry is to be sacrificed to the Americans. Why are not the Government doing anything about that, other than facilitate the process? Is the answer that the Tory Government are the real enemies within?

The Gracious Speech contains no hope for the British people or for British industry. It is the programme of a Government who are deaf to all but those whom they wish to hear. The advice of experts, the experienced and the well informed and the wishes of the majority of people in their localities are ignored as the Government dogmatically pursue their determination to drag our country back in time.

The Gracious Speech confirms the continuation of policies that are designed to return our country to an era that is long forgotten, and, in terms of the living and working standards of British people, best forgotten. However, I suppose that the Prime Minister will disagree with that. Perhaps she will even say, "We are not amused," as she has adopted the practice of adopting the royal "We", so often employed by Queen Victoria. But this country does not exist for the amusement of the Prime Minister. M.H. Thatcher will never be H.M. Thatcher. The sooner the British people remind her of that in a general election, the sooner our civilisation will stop the march backwards, and the better it will be for all of us.

8.3 pm

Mr. Edward Leigh (Gainsborough and Horncastle)

I remind the hon. Member for Tyne Bridge (Mr. Clelland) that it is not only Labour Members who have shown an interest in the replacement of the Chieftain tank. No fewer than 115 of my colleagues have put down an early-day motion in which they express confidence in Vickers' development of a Challenger 2 tank. Concern about that issue is not confined to the Opposition.

I hope that you will forgive me, Mr. Deputy Speaker, if I deal with an issue that has not received a great deal of airing today. I shall address my remarks to Northern Ireland, and particularly to the industrial and economic development of Northern Ireland. I make no apology for doing that. In a sense, I want to show solidarity from a mainland British Member of Parliament for the grevious state of that part of the United Kingdom and for the threat that it faces from terrorism.

We often blame our Northern Irish colleagues for what we deem to be their parochialism, but we often pass down the other side of the street. It is only right and proper that, occasionally, mainland Members of Parliament talk about the Province and show concern. One person who cannot be accused of passing down the other side of the street is the Secretary of State for Northern Ireland. I pay tribute to his great efforts. Last week in Northern Ireland I was told that, whatever the political differences may be with the Secretary of State, he is highly regarded for his courage, firmness, ability to listen, energy and commitment to the Province. We should pay tribute to him. By his personal efforts he has attained a significant industrial development in Belfast, which might produce as many as 500 jobs from a Japanese company. He actually went to the far east to secure the order. We should pay tribute to him for that also.

Notwithstanding the great efforts of the Secretary of State and his colleagues, all is certainly not well with industry and the economy of Northern Ireland. There is considerable deindustrialisation. There is also a high level of disposable income, but that is based on over-reliance on the public sector and on low house prices. There is a need, not so much for more public investment, but for foreign investment. After all, what better door into the EEC after 1992 than Northern Ireland, with a willing work force and many development opportunities?

However, foreign industrialists have an over-exaggerated fear about security. Therefore, in the few minutes available to me, I urge my colleagues not to try to set road blocks on the path towards a solution. I do not pretend to know the solution, but I shall mention a few road blocks.

There tends to be too much of the feeling that the situation is hopeless, that it will not go away, and that there is nothing that we can do about it. I am an eternal optimist. It does no good to state that sort of opinion. There seems also to be too much of the point of view that we can deal with the situation by a military solution alone. That is not enough. There must be a political dimension.

It is significant that one right hon. Member who dealt with the issue in some depth during the debate was the right hon. Member for Plymouth, Devonport (Dr. Owen). He dealt with the border security problem. If I misrepresent him, I shall be glad to give way to him, but I hope that he was not suggesting that, by dealing with the border issue, we could solve the problem of security. That is not true. If we want to carry international opinion with us, it is not feasible to erect a type of inner-German border fence along the border, even it it were possible to do so. The proposals in the Gracious Speech represent excellent steps. I commend all the legislation that the Government are putting forward.

I hope that my colleagues will not delude Unionist Members into thinking that there is a widespread movement among Conservative Members to have the Anglo-Irish Agreement abrogated. There is no such widespread opinion. If my colleagues say such things, they simply encourage Unionist Members to talk themselves into a blind alley of intransigence. The Anglo-Irish Agreement will survive, not because the Prime Minister or the Taoiseach are concerned about losing face, but because, if the agreement is abrogated, minority parties in Northern Ireland will refuse in any circumstances to become involved in talks leading to devolution. Whether we like it or not, the Anglo-Irish Agreement is with us.

I urge caution also in the Patrick Ryan affair. I hope that he will be extradited. I would not want to comment on his guilt or innocence, but clearly he should face a fair and proper trial. However, I caution against the view that it is a political decision. Under the Criminal Jurisdiction Act 1976 of the Republic, it is fundamentally a legal decision, not a political one. The Attorney-General must be satisfied that there is a sufficiency of evidence on the face of the warrant, and that decision is made on legal grounds. Whether or not Patrick Ryan is extradited—and I hope that he will be—I hope that his case is not seen as a litmus test of the success or otherwise of the Anglo-Irish Agreement.

In a very difficult situation, we should try to find ways forward instead of trying to set up road blocks. We should try to encourage our Unionist colleagues—and I do not seek to lecture them—to think about a way forward that will make practical sense. The only way forward is along a devolution path based on a Bill of Rights, proportional representation, and some kind of weighted majority voting. I should not like to speculate on the details. I am sure that, ultimately, some sort of compromise is possible.

Perhaps we could look at the Anglo-Irish Agreement in terms of amending it in a European Community dimension. The powers over Northern Ireland given to the Republic are insignificant compared to the powers given to the Commission over both the Republic and the United Kingdom under the Single European Act. In terms of a European-wide dimension it may be possible for Unionist leaders to hammer out some kind of compromise so that we can knock heads together and hold talks that will lead to devolution.

Many years ago I read John Bunyan's "Pilgrim's Progress". That book told of a wicket gate to which one had to find the key to be allowed on to the Delectable Mountain. I do not know the key to the Northern Ireland problem, but it is essential that men of good will should talk together. I do not ask them to agree, but they should at least talk, because unless they do that we shall never defeat the men of evil.

8.10 pm
Mrs. Ann Clwyd (Cynon Valley)

I thought that there might be some advantages in being returned to the Back Benches, but I not so sure about that, because I have had to listen to a debate that has suffered because it has been so broad ranging. I wish that it had been more specific to the issue of the environment, because that is one of the most important issues facing us.

I agree with the hon. Member for Elmet (Mr. Batiste), who spoke about the private Bill procedure. I am tempted to go down that road because, as the hon. Gentleman knows, I have a special interest in that procedure. I hope that the reforms that we are putting before the House will control what undoubtedly has been happening. Planning permission is being given by the back door for environmental projects that would never have received planning permission if they had gone through the proper public planning procedure.

I should like to concentrate on one matter in my constituency. If the Secretary of State for the Environment were here, I would present him with a bouquet of flowers. It is a quaint continental custom to present men with flowers as often as one presents them to women. My flowers would be rather special because they would be the species called phurnacitis narcissus. The narcissus is a pretty white flower, but in my constituency it is black because it is polluted by the Phurnacite plant. A recent environment programme on the BBC, the New Scientist and various journalists and organisations, have dubbed it the worst industrial polluter in Britain.

The plant makes smokeless fuel, but that term is ironic given the structure of the plant, which looks like something from the early industrial revolution. Its chimneys belch smoke of all colours day and night. What goes up must come down, and it comes down over people's cars, their newly-painted houses, their washing and their gardens. It is an appalling sight.

The plant is a wholly owned subsidiary of British Coal and everyone, including Her Majesty's inspectorate of pollution, believes that it is a relic of a bygone age. The national energy policy and a desperate need to protect jobs in my constituency, which has the highest male unemployment rate in Wales, have kept the plant open, despite all its critics. It has recently been described as Dante's Inferno mk 2, and that is no exaggeration.

The valley is one of the nicest in south Wales, and this plant is a great blot on the landscape. A 1978 inquiry into the works said: The confirming influence of the surrounding hills inhibits the dispersal of any effluents and tends to channel them in the direction of highest population density. Prolonged and severe temperature inversions during winter lead to a build-up of pollution. When there was no fog elsewhere, very often there was fog in that area.

At the moment the plant employs about 500 people, and in addition keeps hundreds of local miners at work. Closing the plant would have serious employment repercussions for the people in the plant and for the people in the few pits that are left in the area.

In the view of the strong anti-pollution committee that has been formed there, the plant has blighted the prospect of new jobs in the area. That is pure speculation, because there is no hard evidence to confirm that view. That is unfortunate, and it is a weakness of the Welsh Development Agency, the Welsh Office and of those responsible for trying to attract industry into the area that they cannot tell us whether the plant is a disincentive. If the Irish Government can collect statistics of that kind, I do not understand why our Government cannot do something as simple. As the New Scientist put it, Cynon Valley is trapped meteorologically, politically and economically with its pollution. I wish that the Secretary of State were here to tell me precisely what he will do to solve the problems in my constituency.

In 1986 Her Majesty's inspectorate of pollution served an improvement notice on the plant under the Health and Safety at Work etc. Act 1974, but the company appealed against it to an industrial tribunal on the ground, among others, that it could not afford to buy any new equipment. The tribunal upheld the company's case, revealing massive gaps in the present law. In this country there are no legal standards for emissions such as those that exist in the United States.

After pressure from the Secretary of State for Wales, the company recently announced that investment of about £3 million in the first stage of a five-year programme is to be made at the plant that will enable it to use a new and cleaner process. That is what British Coal Products Ltd. tells us. There will be a mild heat treatment process to phase out each of the remaining four Disticoke factories, and the company says that that will result in a considerable reduction in pollution. The managing director of British Coal Products Ltd. told a public meeting recently that that was the case. He said that the process had been tried out in Scotland and that it had worked there.

The people in the area have heard such promises before from National Smokeless Fuels, and now from British Coal Products Ltd., which is simply the same company with a change of name. They have carried out a check in Hamilton on the process that we are told will clean up the environment in Cynon Valley. I have discussed the matter with my hon. Friend the Member for Hamilton (Mr. Robertson) and we are asking for an appointment with the chairman of British Coal so that we can discuss it. Complaints were made about such things as unacceptable levels of coal dust, smells caused by the products produced by the breakdown of molasses used in the process, and coal stones caused by dust emissions due to weather conditions, and there was a general expression of concern at utterly untenable situations that are regarded as having the potential for nuisance and health risk.

That is the process that the company intends to bring into Cynon Valley. Cynon Valley has suffered for 39 years from pollution from this works, and we are now saying that this is unacceptable. The Secretary of State for the Environment and British Coal must tell us the facts, because we think that the facts are not as the company would have us believe. Apparently the company requires no planning permission to bring this process into Cynon Valley. I find it impossible to square that with the promises made by the Secretary of State for the Environment and the Prime Minister.

The Library has done a good piece of research for us. It tried to obtain an unbiased opinion on the mild heat treatment process, and it has told me that that has proved difficult. A member of the Library said: one of our senior academics speaking off the cuff has informed me that there is no one in the UK working in this field. Given access to the smokeless fuel plants, there are academics who could carry out the type of measurements needed to assess the hazards of MHT, but unless this happens only the Coal Board know how dangerous MHT really is. It is ridiculous to hear the Secretary of State say that he will put things right all over the country, and to hear the Prime Minister say: No generation has a freehold on this earth. All we have is a life tenancy—with a full repairing lease and this Government intends to meet the terms of the lease in full. The Coal Board has taken enough out of the Cynon Valley and its people. It is time it put something back, and it is certainly time that it cleaned up the environment.

8.20 pm
Mr. Keith Raffan (Delyn)

I shall not be as specific as the hon. Member for Cynon Valley (Mrs. Clwyd), nor as broad-ranging as some of the earlier contributors to the debate. I have considerable sympathy for the predicament of the hon. Member for Cynon Valley. No doubt she well recalls that I spent more than a month there as parliamentary aide to the Conservative candidate during the by-election at which she was elected. I sympathise with the hon. Member for Cynon Valley because of the environmental problems of her constituency.

I want to say a few words about both industry and the environment, the subjects for debate today. The Gracious Speech makes clear the Government's determination to continue to promote enterprise and to foster the conditions necessary for sustained growth of output and employment. Increasing enterprise and increasing growth of output and employment are evident throughout the Principality of Wales.

I wish to quote from two pieces of mail that I received at the end of last week. I hasten to add that neither of them is an off-the-record briefing from Mr. Bernard Ingham or from Conservative Central Office. Both are highly objective assessments of what is currently happening in the Principality. The first example is from the regional newsletter of the Welsh Development Agency, Link '88: Wales is now one of the fastest growing regions in the United Kingdom … in terms of securing new jobs WINvest is the best performing inward investment team in the country … regarding property, the Agency is increasing significantly its expenditure … following vacancy rates falling to their lowest level for many years. The second quote comes from a leaflet announcing a seminar on "Money for Growth" from four local enterprise agencies in the county of Clwyd, of which my constituency is a part: Clwyd is booming! Stories about major companies moving into or expanding within the County are a weekly occurrence. British Aerospace, Continental Can, Kimberly-Clark, Pilkington, Japanese firms such as Hoya and Optec—the roll call is impressive. Not since the sixties has the economic climate here looked so good. Delyn, in my constituency, has the fastest falling unemployment rate of the 38 parliamentary constituencies of Wales, just as Wales has one of the fastest falling unemployment rates of any part of the country. In the past year unemployment in my constituency fell by 31 per cent.; in the past two years it has gone down by nearly 50 per cent. The Gracious Speech modestly pledges that the Government will continue that trend. In Delyn that trend is not continuing; it is accelerating.

Since June, a further 1,000 jobs have been announced and more announcements are in the pipeline. Delyn is but a microcosm of the Principality—

Mr. Ieuan Wyn Jones (Ynys Môn)

Come on!

Mr. Raffan

The hon. Gentleman can make his speech later. It does not suit the hon. Gentleman's party political interests to see Wales doing so well because that will mean no Govan in Wales. The hon. Gentleman is well aware that he will have to fight very hard to cling on to his own seat because of the economic boom in the Principality, which has also affected his constituency.

In the past year, the unemployment rate in Wales has gone down 21 per cent. and in the past two years it has fallen 32 per cent. Wales, like Clwyd, is booming. The Principality's economy is being dramatically transformed. Stories of new companies moving into or expanding in the Principality are a weekly occurrence. Last month, Ford announced the biggest ever investment in the Principality, which is also the biggest ever single investment by any motor manufacturer in the United Kingdom—£725 million, or £715 for every household in the Principality. That money will create and safeguard 2,500 jobs. NEC Contract Distribution in Chepstow has announced a £16 million investment, which will mean 240 jobs. Bluebird Toys has announced a £12.4 million investment at Merthyr which will create 400 permanent and 200 seasonal jobs. March Race Electronics has announced a three-year expansion in Talbot Green and in Aberdare which will lead to a total of 1,350 jobs.

Wales has 5 per cent. of the United Kingdom's population, but it has achieved a 20 per cent. share of inward investment projects. That is the highest share of any area in Britain, higher that the 16 per cent. share obtained by the south-east. I am sure that the hon. Members for Cynon Valley and for Ynys Môn(Mr. Jones) would not argue with that. The Government are fostering that growth. They are encouraging it by a larger than ever investment in industry and in the WDA. In 1988–89, the level of assistance to Welsh industry is a massive 39 per cent. more than planned.

Of course there are still black spots and the valleys, in particular, have serious problems. That is why my right hon. Friend the Secretary of State for Wales announced his valleys initiative in June. That initiative has led to a record factory building programme, a record urban programme, a record house improvement programme and a record derelict land clearance programme, all being carried out by a Conservative Government. In June the then shadow Secretary of State for Wales tabled a motion—he was sacked a month or so ago and replaced by his sacked predecessor. It is almost as difficult to keep up with the shenanigans within the Welsh Labour party as it is with EastEnders; the plot is as complicated as are the personalities. In June the then shadow Secretary of State for Wales tabled a motion to try to shore up his sagging position which said:

That this House deplores the unacceptable level of deprivation and disadvantage in Wales. I agree with the hon. Member for Cynon Valley that that deprivation and disadvantage is no more evident than in the valleys. I agreed with the right hon. Member for Swansea, West (Mr. Williams) when he made that point in his speech. But why did the last Labour Government do nothing about it? They had the opportunity. It is no use the Opposition Front Bench spokesmen saying, as was said today, "It was 10 years ago." It is as though they think that 10 years' penance is sufficient to erase their record. It is as though they think we should all be infected by the amnesia which has broken out in epidemic proportions on the Opposition Benches. It is as though they expect us to forget when Labour was last tested in office. But why should we? Why should we forget how Labour performed when it was last tested? The Labour Government failed abysmally and they did nothing for their own areas in the valleys. It was left to this Government to act.

We cannot be accused of party political advantage as a result of our valleys initiative. After all, the dozen or so seats there are held by Labour with majorities varying from that of the hon. Member for Rhondda (Mr. Rogers)—God knows how he does it—of more than 30,000 to that of the hon. Member for Pontypridd (Mr. John)—which is marginal!—of 17,000. It is not as though we will benefit in party political terms from the valleys initiative.

The Opposition cannot stomach the fact that we have done something for their political heartland that they never did. They cannot stomach the fact that we have improved the environment, the quality of life, employment and industrial opportunities which the Labour Government lamentably failed to do when they had the chance.

We still have serious problems within the Principality—but they are the problems of success. When we had the Welsh day debate earlier in the year, and in June when we discussed deprivation and disadvantage in Wales, I mentioned that parts of the Principality were suffering from serious skills shortages. In my own constituency there is a shortage of metal workers and sewing machinists. Local surveys need to be undertaken so that we can match skill shortages with the necessary training.

Now, in addition, we are facing labour shortages. One of the fastest-expanding companies in my constituency is having great difficulty in recruiting female labour, despite the fact that 802 women there are registered as unemployed. Last Thursday, the chairman of the Wales tourist board made exactly the same point when he spoke at the annual general meeting of the North Wales tourism council. He said that demographic changes will lead to a very marked reduction in the number of young people entering the labour force. Schemes must be devised to attract married women and retired people back to work.

In Wales we always say that water is a "burning" issue. It dominated the Select Committee on Welsh Affairs during the 1979–83 Parliament. That Committee produced a massive report on water. It also played a significant part in the last Parliament when the Committee carried out an inquiry into coastal sewage pollution in Wales.

In 1984, when we were taking evidence from the chairman of the Welsh water authority, during discussions on the authority's capital works programme, I asked him: Perhaps you would rather be in the position of a private company so that you would then be able to borrow according to your needs? He replied:

The proposition has immediate appeal. My hon. Friend the Member for Pudsey (Sir G. Shaw) said at the beginning of the debate on the Loyal Address:

the water industry … has for too long been restricted in its ability to raise capital to meet the rising standards, expectations and increasing obligations that have been heaped upon it."—[Official Report, 22 November 1988; Vol. 142, c. 9.] Privatisation will free the water authorities from the constraints of the Government's external financing limits so that they can borrow more money as they require and thus accelerate their capital programme. That point—the need for freedom from Government financial constraints—was made by the Plaid representative and was argued eloquently earlier in the debate by the hon. Member for Burnley (Mr. Pike). It is of particular importance to the Welsh water authority because it has the longest coastline of any water authority in this country and faces tremendous demands on its capital programme. The authority has 112 outfalls discharging into coastal waters, a quarter of the total for England and Wales. Only 6 per cent. of those are less than 10 years old, 75 per cent. are more than 20 years old and 40 per cent. are more than 40 years old.

I am strongly in favour of water privatisation, but time does not permit me to give further arguments in support of this measure. I hope that I shall have the chance to do so on Second Reading of the Bill and I hope that the hon. Member for Ynys Môn will be here to listen to me again on that occasion.

It is no use the Labour party saying that we could free the water authorities from the EFL and that the capital programmes could be accelerated without privatisation. Why did that not happen under nationalisation? The Labour party did not do it when it had an opportunity to do so between 1974 and 1979. Nationalisation has not served the consumer well, but privatisation will.

8.31 pm
Mr. Ieuan Wyn Jones (Ynys Môn)

Despite the excited hype of the hon. Member for Delyn (Mr. Raffan), the Government's legislative programme for the current Session shows that they pay scant regard to the real problems facing people in Wales. While Scotland and Northern Ireland are given separate treatment—albeit not in an acceptable form—in terms of legislation, Wales is given no special consideration. Nothing set out in the programme will alleviate the economic problems in many parts of Wales, which have not been described by the hon. Gentleman. He did not mention the collapsing morale in the Health Service, the precarious position of the Welsh language, the scandal of youth unemployment and the enormous problems facing our old people, many of them in the hon. Gentleman's constituency, who face another winter wondering whether to spend their pension allowance on food or adequate heating.

I wish to concentrate tonight on the proposal to sell off the electricity supply industry, having regard to the fact that there is a nuclear power station in my constituency and a proposal to build another. We have been told that there will be an application for planning consent for a PWR station in the spring of next year. The people of Ynys Mon want to know whether the privatisation of the industry has any implications for the current and proposed nuclear power stations.

Since the Government published their White Paper in February this year, we have witnessed an unedifying power struggle between the Department of Energy and the CEGB over the structure of the electricity industry after privatisation. That has particular significance for nuclear power. The people of Ynys Môn feel very much like pawns in this struggle and, as any chess player knows, pawns are often sacrificed as either side moves in for the kill. My constituents, including those who work at the present power station, believe that they are being kept constantly in the dark, with no power to influence events, while decisions over which they have absolutely no control are being taken.

Eventually, when decisions are taken, both in terms of legislation in this House and in terms of the specific application for planning consent for a new nuclear power station, they will be taken without sufficient regard to their opinions, their jobs, and their welfare. It is their lives, their jobs and their safety with which the Government and the CEGB are playing, yet their views are being disregarded.

The fundamental question is whether nuclear power has a future after privatisation. As the Government have been so reluctant to disclose their plans in advance, we—the people who now feel so powerless—have had to look to leaks in the press for information and, according to the press, the portents for nuclear power do not appear to be good unless, as we have heard many times today, there is a hidden subsidy for the nuclear programme. That is the paradox that faces the Government.

The Government have a manifesto commitment to privatise the industry and they also claim to have a strong commitment to maintain the nuclear programme. The Secretary of State acknowledged in his evidence to the Select Committee on Energy earlier this year that the commitment to maintain a nuclear programme has had a substantial impact on the chosen structure of the industry. In other privatisation cases, the Government have maintained that privatisation would mean more secure jobs and a better service to consumers, and that competition would lead to lower prices. The Government know that they cannot claim that with the sale of the electricity supply industry and the Secretary of State himself acknowledged, again in evidence to the Select Committee, that the Government were advised from a marketability point of view that, if the nuclear power component were too large in any particular company, it would be difficult to market.

We also have the experience of the United States, where they stopped building nuclear power stations in the 1970s. Evidence submitted to the Hinkley Point 'C' inquiry confirms that view. In evidence an electricity adviser to several large United Kingdom companies said that there had been no orders for nuclear plants in the United States for a decade. All those ordered between 1974 and 1978 have since been cancelled. In the United States, nuclear power has caused widespread financial difficulties and depressed share prices of utilities.

When the Secretary of State was questioned on these matters by the Select Committee, he was remarkably coy about the full cost of maintaining a nuclear programme, which could not be left entirely to private industry. How can the Government claim that privatisation means a better choice for consumers and that an element of competition in the electricity supply industry will lead to lower electricity bills, when it is now clear that institutional investors are baulking at the idea of investment in an industry which has a commitment to provide 15 to 20 per cent. of its energy through nuclear power? How does the Government's free enterprise approach of letting the market decide square with the fact that nuclear power cannot continue as an important sector of the electricity supply industry unless there is Government support or the cost is passed on to the consumer, leading to higher electricity charges?

A leader in The Independent put the case starkly. It stated: If the Government was really committed to market economics, it would buy its nuclear plant from France, and shut the British nuclear construction industry completely. The Government does not have the courage of its convictions when it comes to nuclear power, and we are going to be left muddling through with a typically unhappy British compromise. A further report, published by Saloman Brothers investment advisers, said that the main problem with nuclear power was the unknown cost. The cost of decommissioning nuclear power stations was not yet known because it had not been done on a large scale. Sir Philip Jones, the chairman of the Electricity Council, said in evidence to the Select Committee:

All I am suggesting to you is I think it is likely that a private company may well find or may consider the financial and social risks not ones which it would put at the top of the list in support of nuclear and, therefore, in one way or another the nuclear component will need to be underpinned. The recommendations of the Select Committee show very clearly that it was unhappy with the way that the Government had approached legislation on that matter. It was concerned about the timescale that the Government had imposed to privatise the industry and said: Electricity is too important an industry for the country to gamble that everything will come out right. However, perhaps the most damning indictment of the Government's legislation in terms of the privatisation of the electricity industry was when the Committee stated: The Government has singled out only two factors to justify its decision: security of supply and party manifesto commitment to a continung nuclear programme. It has glossed over the industry's economics, ignored the industry's external costs, and still cannot be sure that the favoured PWR technology is the best available. How do the Government find their way out of the dilemma? We are told through the press that there is to be a so-called nuclear tax. Is that the Government's answer to the strong warning from the CEGB that it would not accept the risk of building nuclear reactors after privatisation? We are told in leaks to the press that the Bill will require all independent producers above a minimum size to levy a nuclear surcharge on their customers.

There are implications for employment within the industry after privatisation. There is considerable concern at the Wylfa power station in my constituency over the employment of outside contractors and the threat to existing full-time jobs in the short and medium terms. One of the significant arguments used by the CEGB in its case for a second nuclear power station in the area is the economic benefits that would flow from a large investment. It is clear that privatisation would destroy that argument.

Why are the Government still determined to privatise the electricity industry when they face all the problems that are inherent in its transfer to the private sector? They cannot guarantee adequate competition. They are not applying so-called market economics and they cannot guarantee that consumers will obtain cheaper electricity in the long run. I am driven to the conclusion that in this instance, as in so many others, the Government are interested only in their own ideological dogma, and in this case it is clearly divorced from reality. Would it not be far better to leave the industry in the public sector, where such an important utility should be, and give it sufficient resources to carry out adequate research into alternative forms of energy supply? That would provide the Government with the diversity of energy sources that they claim they are seeking desperately to achieve.

8.42 pm
Mr. James Cran (Beverley)

I am pleased to see the reference in the Gracious Speech to firm financial policies designed to bear down on inflation. It is of course legitimate for Opposition Members to say that the rate of inflation has increased, but I am satisfied that action is being taken by my right hon. Friend the Chancellor of the Exchequer—[Interruption.]—and by the Government generally to reduce it. I shall be happy in a year's time to confront Opposition Members who are now trying to barrack me. I am clear, having seen the effects of the inflation that was created by the Opposition when they were in government in three regions of the United Kingdom—the north of England, the west midlands and Scotland—that there is no greater killer of jobs or the prospects of companies than inflation. As I have said, I am certain that inflation will have been reduced in a year's time.

I am delighted also to read in the Gracious Speech that the Government will continue to promote enterprise". I agree with my hon. Friend the Member for Elmet (Mr. Batiste) that in economic terms the regions of the United Kingdom are doing extremely well. In fact, the northern regions are doing better than the southern regions. Like my hon. Friend, however, I believe that we require to encourage home-grown companies in all regions of the United Kingdom. I say this because it is a fact that when a recession or downturn comes along, subsidiaries of large companies tend to disappear like snow on a spring day.

I am pleased to see the reference in the Gracious Speech to the need for more training for the work force. It is clear to anyone who examines these matters that the economy is moving at such a speed that in some areas companies are beginning to run out of labour, and not only skilled labour. There is a need to bring the long-term unemployed back into employment, and companies, in self-interest, will dictate that this happens.

Before 1979, I saw companies with low morale in the regions of the United Kingdom. There were companies that could not overcome opposition anywhere in Europe or the world. Companies were overmanned and under-performing. Senior managers would use every excuse on the face of the earth to justify their companies' under-performance. Those excuses are all too reminiscent. I used to hear about a strong pound and too powerful unions. We do not hear the union excuse now. It was said that energy costs were too high and that wage claims were too high—it seemed that companies were unable to resist such claims before 1979. I think that I am entitled to say that since 1979, however, the industrial recovery, notwithstanding the tactical difficulties that may be encountered from time to time, has been nothing short of miraculous. That owes a great deal to the eight Gracious Speeches which preceded the one that we are now discussing. There will be some Opposition Members who disagree with me, and they should examine the facts. If they read the regional economic reports of the CBI, which deal with every region of the United Kingdom, I challenge any Opposition Member to find a reference that suggests that any of these areas are worried about their economic performance. I shall save hon. Members a great deal of time by saying that no region has that worry. In addition if Opposition Members examine the facts—it is clear that they do not often do so—they will find that this year alone there has been a 7 per cent. improvement in productivity growth. Every year since 1979 there has been, on average, a 4.5 per cent. improvement.

I believe that the success of the Government's industrial policy has also been based on a rejection of protectionism. That is something of which Opposition Members are exceedingly fond of talking. They like to talk about artificially protecting United Kingdom industry from the competition outwith this country. I reject that notion. I am delighted that the Government have rejected it in the Gracious Speech and in the ones that preceded it. It is clear that the Government accept, as I do, an open international market place. One manifestation of that approach is that since 1986 United Kingdom companies have invested about £24 billion in the United States, western Europe and Australia in addition to the record amount of capital investment that has taken place within the United Kingdom.

It is no good Opposition Members shaking their heads. What I have said is fact. We know that £20 billion has been invested in company acquisitions in the United States, £3 billion in western Europe and £¾ billion in Australia. Conversely, 500 successful bids have occurred within the United Kingdom involving foreign companies. The United Kingdom need not fear overseas investment in the same way that overseas countries need not fear an inflow of United Kingdom investment. Far too many people—many of them are on the Opposition Benches—seem to ignore the facts of merger policy. We have the usual Pavlovian responses from Scottish Members, and as far as I can see there is not one Scottish Opposition Member in the Chamber.

Mr. Tom Clarke (Monklands, West)

The hon. Gentleman cannot see very far.

Mr. Cran

It seems that there is one. That is splendid. He might have the opportunity to express his point of view once I have expressed mine.

Mr. Clarke

Will the hon. Gentleman give way?

Mr. Cran

I shall give way once I have made my position clear.

Whenever a major Scottish company is threatened by take-overs in any way, the first thing that happens is Scottish flag-waving chauvinism. That comes to the fore irrespective of financial or industrial logic. That is exactly the same approach that we hear from Opposition Members who seem to want a fortress Britain in terms of industrial policy to repel all industrial boarders. When they say that, they do not acknowledge the right of the Americans to say exactly the same, bearing in mind the amount of investment that we have made in America. The Americans could say exactly the same—that if we do not allow their companies to buy into our country, why should they allow our companies to buy into theirs? If we all retreated to such a policy we would all be worse off. The Government are correct to want the free movement of capital—inwards and outwards.

The Government must therefore re-establish what they mean by merger policy especially as they relate to foreign companies. I believe that that merger policy has absolutely nothing to do with trying to save companies from predators whether those predators come from within the United Kingdom or elsewhere. In most of the Scottish cases that I can think of, the predators come from overseas, which I believe to be an irrelevant factor.

The Government must also re-establish the fact that merger policy has absolutely nothing to do with insulating inefficient management or, generally speaking, cocooning them. Merger policy has everything to do with encouraging competition which at the end of the day protects the consumer. I look forward to the legislation referred to in the Gracious Speech, which states: Legislation will be introduced to reform … the law on mergers It is clear to me that that is what is required to get the law right and to air in this House and elsewhere exactly what we mean by merger and competition policy.

8.51 pm
Mr. Elliot Morley (Glanford and Scunthorpe)

I want to deal with one of the main aspects of the Gracious Speech, the environment. However, the subject for today's debate is environment and industry. Some parts of the Gracious Speech, in particular the references to changing section 137 of the Local Government Act 1972, will make it far more difficult for local government to support local industry. That support is very important in areas like mine and in the area represented by the hon. Member for Beverley (Mr. Cran), because county councils have done a tremendous job in encouraging industry. My district council has played its part through support for industry and through the enterprise boards which have been established by many Labour-controlled local authorities. That funding under section 137 is threatened, and I hope that the Minister will consider carefully the representations from local authorities before the proposals are finalised.

The two major proposed privatisations—of the electricity and water industries—have major environmental implications and consequences. Before I deal with the consequences, I want to consider the Government's so-called commitment to the environment.

The Nature Conservancy Council has done a marvellous job in identifying and protecting important wildlife habitat sites. However, that organisation's budget is being cut by 5 per cent. this financial year. That does not seem to be a commitment to green issues from a Government who are prepared to slash the budget of their foremost body in terms of protection of the environment. That 5 per cent. cut will almost certainly be passed on to the voluntary conservation bodies which do so much to manage reserves and sensitive environmental sites.

The existing legislation as it applies to sites of special scientific interest is not by any means sufficient or strong enough to protect those sites at the moment. Until March 1988, 166 SSSIs had been damaged, in particular by agriculture. Another main culprit was development.

That brings me to one of my main fears about the privatisation of the water industry. One of the great attractions of the water industry is its large tracts of land. Many people interested in purchasing sections of the water industry must have their eyes on that land and its potential for development. That is a serious threat when we consider what has happened in previous privatisations, in particular the British Aerospace purchase of the Royal Ordnance factories, which were purchased, not for investment purposes or to strengthen them, but to develop the land and sell it off and so make a quick killing through asset stripping. I do not believe that the provisions in the Water Bill protect many of those very scenic tracts of land from such exploitation.

We must also consider the question of access to that land. Large areas of water authority land are currently managed as nature reserves. Will that management continue, and will the voluntary bodies managing them at the moment continue to have access and co-operation? What about charges for the many thousands of people who use water authority land for recreation, including boating, angling or simply for walking? Will their rights be protected?

This debate should have given the Government an opportunity to tackle some of the major environmental consequences of the electricity and water industries. We all know that there is a serious problem with acid rain. We also know that there is a serious problem with regard to the investment needed in our generating capacity. We are also aware that more research is required to develop alternatives. It is no use the Secretary of State talking about nuclear power as the answer to the greenhouse effect. I do not believe that wall-to-wall nuclear power stations is the answer. It is a gimmick to try to justify nuclear power now that we know that the economic arguments do not stand up to examination.

No one involved with the conservation movement could be reassured by the Minister's opening speech, particularly as it was made by the Minister who put forward the idea of privatising nature reserves and who said that property developers are not in it for financial gain. No one can have confidence in his comments.

We need controls in other areas such as the importation of toxic waste. In my constituency we are surrounded by redundant ironstone mines. They are ideal places in which to dump toxic waste. Already a private company has made approaches to use one site, Roxby Gullet mine, as a dump for refuse and waste. The mines have been overgrown for many years and they are sites of particular interest. They are important ecological sites and they could be developed for the benefit of wildlife, the ecology and local people. They could also be developed to enhance the environment and the community.

At the moment there is too weak a restriction on the people who wish to exploit those sites for personal gain. There is too much of the creed of greed and not enough guarantees for the future of the environment and our whole ecological system.

I should like the Government to carry out some of their environmental promises, but unfortunately I am not convinced because their deeds do not match their words. Perhaps the Minister will confirm that in a recent EEC meeting of Environment Ministers to discuss proposed directives to protect SSSIs and important ecological sites the only two countries that opposed the directives were Spain and this country. It does not give much support to claims that the Government are interested in green issues when they are one of only two European Governments trying to frustrate progress on the protection of the environment.

I hope that when the Government talk about green issues they are talking about genuine progress and protection, and not about the gullibility of those who believe that they are doing something.

8.59 pm
Mr. Tony Favell (Stockport)

I am glad to see that my right hon. Friend the Secretary of State for the Environment and my hon. and learned Friend the Minister responsible for water and planning are present, because I too wish to speak about environmental issues.

In an excellent speech earlier this evening, my right hon. Friend the Member for Brent, North (Sir R. Boyson) explained that the suburban environment was being seriously damaged by the wish of conservationists to conserve the open countryside at any cost. He told us how, in his constituency, gardens were disappearing, playing fields were being built on and all available open space was being developed.

That is happening in the north as well. When I was first elected as Member of Parliament for Stockport there was a farm in my urban constituency; that has now gone. Is a farm any less valuable because it happens to be within a town boundary? In the south of my constituency, a nine-hole golf course that has been operated for years by one of the major employers, Mirlees, is about to disappear as well. Surely that, too, is no less valuable because it happens to be within the town boundary. People living in towns also want open spaces in which their children can play and they can walk their dogs.

Affordable housing, especially for the young, is affected by excessively tight controls. Over the past two or three years northern Members have watched fascinated as southern Members have argued about their housing problems. In the south, Labour Members have suggested more council housing—although, judging by much of the council housing south of the river here, goodness only knows why. Certainly we do not want any more such housing in the north. The Liberals appear to support anything favoured by their constituents and to attack anything not favoured by them. My colleagues in the south seem to be evenly divided between those who want no kind of comprehensive development—they use the phrase, "the concreting of the south-east", although goodness knows how the whole south-east could be concreted—and those led by my right hon. Friend the Secretary of State for the Environment, who say that the Conservative party is the party of home ownership and that it is essential to provide affordable housing for the young.

I must say that I agree with my right hon. Friend the Secretary of State. A report prepared recently for the Association of District Councils by Bristol university estimated that half the families in the south-east do not earn enough to buy a small starter flat, of which the average price is now £62,000. That is not good enough, says my right hon. Friend. He said at the Conservative party conference: Our duty as a party must be to allow for sufficient homes to be provided to house decently all our fellow citizens. That must indeed by our prime aim. It must certainly come before the conservation of the open countryside at any cost.

The selfishness of those who are prepared to deny the young a home to conserve their own uninterrupted view is breathtaking. That is certainly not what we want in the north where, alas, prices now seem to have taken off. I do not want the "I'm all right, Jack" attitude that appears to have been prevailing in many parts of the south to be applied to my constituents and their children.

Like my right hon. Friend, I understand the importance of the green belt and the narrow belt surrounding existing developments. I do not want those areas to be concreted over, and I should like the derelict land in our cities recycled, but there is a limited amount of that. As my right hon. Friend the Member for Brent, North said earlier, it is not recycling derelict land to build on gardens, to erect concrete blocks within feet of bedroom windows and to obstruct every piece of open space in the suburbs where so many thousands live.

The danger signals in the north are there for all to see. The latest property market report of the Inland Revenue valuation office shows an extraordinary increase in the price of building land over the last year, with 57.5 per cent. of that increase in the north-west, 109 per cent. in Yorkshire and Humberside and 127 per cent. in the east midlands. Just picture the effect of those increases on the price of new houses in the north. New houses are so often the choice of the first-time buyer. Picture also the effect on the quality of that type of housing. If the price of land is doubled, people will still have to buy houses, but the quality will go down.

Many of those who live in the country say that they do not want modern houses to be built there because they are not of the right quality, but if the price of land is doubled it will result in poor quality housing. The price of land, therefore, must be controlled and brought down. The only way to do that, as with anything else, is to increase the supply of land. That is the choice: tight planning controls, thereby pricing young people out of the housing market, or relaxing the planning controls, with the result that our children will have the same opportunities as we enjoyed.

9.6 pm

Mrs. Rosie Barnes (Greenwich)

The future of our country is inextricably linked to its industrial development. I intend to concentrate on one thing that the Government can and must do to enable all our citizens to participate fully in our industrial society and to enable it to grow and compete. They must encourage the development and skills of the work force and enable the skilled members of our society to take advantage of the jobs that are available.

We recognise that some action has been taken to address skills shortages. City technology colleges may make a welcome contribution, but one vital area that may not seem to be of immediate importance will, on closer examination, be ignored at our peril. I refer to child care.

Child care—particularly nursery education—is vital to industry in two fundamental ways. First, without proper care for their children during working hours many able, qualified and committed women are unable to work. Either they stay at home or they take menial or mundane jobs that have no other recommendation than that the needs of their small children can be accommodated.

Secondly, without taking more seriously the education of the under-fives, we place at risk our future development as a society. The foundations for every academic discipline can be found in early childhood. Children's learning is extremely complex, but recent evidence suggests that the proportion of learning and problem solving before the age of five is colossal—far greater than we appreciated in the past. Computer experience and second language development should start as early as the age of three. Other European countries are taking that course, and we must consider taking it, too.

Women in the work force is becoming an increasingly topical issue as the penny begins to drop that, with the impending demographic changes, the decline in the working age of the population and the increase in the number of dependent pensioners, there will be a shortage of workers in all spheres of life. Recent estimates suggest that by 1993, 50 per cent. of all girls leaving school will have to be recruited into the National Health Service just to make ends meet.

It is not only socially desirable to enable everyone to participate fully in society and in the labour market—women as well as men—but it will be economically imperative in the near future. There is a great reservoir of skill and ability available that is largely untapped at present—that is, women with children. Many mothers simply do not even contemplate working because they know that finding good, affordable childcare is almost impossible. Where good childcare facilities exist, they are invariably characterised by long waiting lists and prohibitively high costs.

There have been signs that the Government are beginning to respond to the need for strategic planning to avert the worst problems of the shortfall in the labour market in the future but, characteristically, there seems to he a feeling that, with the right exhortation, the invisible hand will provide.

It is perhaps hard for a Government who are rooted in so-called Victorian values to be seen to be encouraging women with children to go back to work. I do not expect action that is motivated by a commitment to equality of opportunity from the Government, but the economic case for childcare for working mothers is unanswerable. We now have less than half the number of places in state nurseries that we had in 1945 and only one in five of our children receives proper nursery education. It is time that we committed more of the country's wealth to measures that will not only assist the development of a more skilled and economically active work force in the long run, when the children taking advantage of nursery education come to maturity, but will, in the short term, enable the current skills of women to be fully used.

The Government must be aware of the report on childcare provision that was prepared by Bronwen Cohen for the Equal Opportunities Commission, as part of the European Commission's study. The Government must know about it because they have been deliberating on it for a long time and have, as yet, declined to tell us their formal response. I regret that we have had to wait for labour scarcity to provide the lever to press for the provision of nursery education, but however that nursery education is achieved, it will be welcome.

The report stresses how poor our record is compared with the record of our European competitors, not only in terms of the quantity of provision, but the quality. The report suggests a number of targets that we should set ourselves to improve dramatically the provision of childcare, both to benefit the child and to enable mothers to work if they want to. The first target is that we should provide places in nursery schools for 90 per cent. of four-year-olds and 50 per cent. of three-year olds by 1993. The cost of that would rise to about £650 million a year by 1993 if all those places were funded directly. That is not an outrageous demand—in fact, it was first established in 1972 in a Department of Education and Science White Paper, when the Prime Minister was Secretary of State. The question that we should ask ourselves is not whether we can afford it, but whether we can afford the loss of human potential, both in terms of the working mothers we could make available now, and in the skill of the work force in 20 years' time. The provision of nursery education is not only right but cost-effective.

The Government could facilitate the provision of pre-school daycare and nursery education in various ways. Tax incentives are always an effective means of generating greater private sector interest in new ideas. Tax incentives for joint employer or workplace nurseries would undoubtedly succeed in increasing childcare provision. Adding an incentive to provide places for women without jobs to enable them to train or to return to their education would be to go one step further. One immediate thing that the Chancellor could do is to abolish the mean-spirited tax on employees who benefit from nurseries provided by their employers.

I return now to the vital importance of the educational quality of under-fives provision. I refer to learning through creativity and play, not to cramming in inappropriate primary classes for three and four-year-olds, but with the intelligent, informed expertise of teachers who are specially trained to deal with that age group. That is what is required. Young children should not just be shelved and kept from harm, entrusted to those who are incapable of really understanding their needs, development and potential. They need a high ration of caring, intelligent and well-educated adults and the provision of play if they are to reach their full potential in later life. We need trained adults who are accountable to parents and governors, not just well-meaning do-gooders who are playing school with live children. We need more than just nine-to-three provision. We need an extended day facility where required. What jobs are available between 9.45 and 2.15 for the mothers of children currently in most state nurseries?

As international comparisons starkly show, children who have the chance of pre-school education benefit in later years with greater confidence and a more positive attitude to learning. Damage done by the age of five, especially to a child's self-esteem, may be irreparable. Improving the lamentable statistics on the number of children receiving pre-school education is a vital step in building a motivated, skilled and flexible work force.

We all talk about improving standards in education. No one is absolutely sure how to do that, but one irrefutable way is to take the education of under-fives far more seriously. A comprehensive national policy for children and for educational provision for the under-fives is long overdue. It will work for all our citizens and it will work for industry. Without it, society and industry will be immeasurably poorer.

9.17 pm
Miss Emma Nicholson (Torridge and Devon, West)

I should like to speak briefly on behalf of an industry which does not pollute, which flourishes particularly in Scotland and Wales, which works well in providing high quality work of high pay for women and young people as well as for men, and which requires little Government support. However, one facet of its work is that something so successful attracts predators. I am referring not to mergers or unwanted suitors, but to actual thieves. I speak of intellectual property theft and the computer software industry.

The common buzz word is computer "hacking." It is seen as a graduate's amusement—something graduates train themselves on just for fun. They penetrate particular systems and then withdraw saying that they did not know what a mistake they had made. Talk of viruses and worms is commonplace. It is not the sort of worm that Shakespeare would have welcomed if he had seen it in the bud.

This summer, in the Copyright, Designs and Patents Bill which is now an Act, we managed to insert a fine of £2,000, which was designed to deter computer hackers. In Britain we still have much work to do in the copyright industry in giving evidence for the European Green Paper, in supporting the Uruguay round of the GATT agreement, in which copyright may be involved in the negotiations, in supporting China in its search for a fresh copyright law The—first ever copyright law on computer software—which may well be in place within a year, and in welcoming the United States of America into the Berne convention, which it joined lastweek—a convention that started 101 years ago when Mark Twain wanted better recompense for his work.

A fine of £2,000 is not enough to stamp out the enormous abuses that will soon affect Government and industry alike. It is imperative that the Department of Trade and Industry brings pressure, and its expertise, to bear on the Home Office, and that industry makes representations so that we get a much more rapid response and a proper criminal law put in place earlier than might otherwise be the case.

I can now do no more than put down a marker that I shall table parliamentary questions and call for the earliest action by the Government on this crucial matter.

9.19 pm
Mr. Bryan Gould (Dagenham)

Nobody needs convincing that the flavour of the month—perhaps one ought to say colour of the month—is green. That is why we have that amazingly bland and uninformative sentence in the Gracious Speech. It is all language and no commitment, all illusion and no substance. There is, of course, a precedent. Last year, the inner cities were all the rage. They were the fashionable topic, but where are they now? There is no mention of inner cities in the Queen's Speech this year. They have disappeared from view.

The lesson is instructive, but not just because the issues are similar. The Government's conversion to the environment is likely to be as superficial as their conversion to the inner cities proved to be. The conversion proceeds, not from any real conviction that these matters are of some significance—far from it—but from the meanest and crudest calculations of electoral expediency.

The inner cities had the temerity in the general election to elect Labour Members of Parliament. That is why the Prime Minister said, "we will have them next time." That is why they moved to the top of her agenda last year. There is an equally crude electoral consideration in respect of the environment. The opinion polls show that there is a rising tide of concern about environmental issues. That is why, after 10 years of ignoring them, the Prime Minister has suddenly been converted.

Mr. Andrew Hunter (Basingstoke)

Will the hon. Gentleman reconcile what he is saying with the testimony given today by Mr. Stanley Clinton Davis, in which he said that in vital respects of waste disposal and toxic waste disposal Government policies are entirely consistent with the requirements of the Common Market? If the hon. Gentleman doubts what I say, I refer him to the official report of the Environment Select Committee's proceedings.

Mr. Gould

I prefer to rely on the much more generally applicable and much more condemnatory statements made by the European Commissioner on many occasions recently.

For both the environment and inner cities, we know that the response has to be merely cosmetic. It can be nothing else. On the environment, a Government and Secretary of State who argue that everything must be left to the market cannot possibly grapple with the issues. The same forces are at work with the inner cities, but they are reinforced by the Prime Minister's hostility to local government and her antipathy to public spending.

The result is that all we have had on the inner cities are political and electoral gestures. We have had the glossy brochures, the cosmetic packages and the £400 a head breakfasts, but nothing has really been done to resolve the problems.

All that fits in well with the new style Department of Trade and Industry under the stewardship of the current Secretary of State. Lord Young is, I suppose, the longest serving Secretary of State for Trade and Industry for quite some time but they are not a long-lived breed under this Government. Perhaps he should have joined his predecessors a little sooner. It is fairly clear from his record that six months is about the limit of his usefulness. Six months give him all the time he needs to design a dashing new logo and to initiate the programme of television advertising for 1992, which is his only contribution to preparing British industry for that momentous occasion. Having done the things he is good at, I am afraid that all the rest has been downhill.

We see that superficiality, lack of engagement and disclaimer of responsibility for inner cities right across the board in the stewardship of the Secretary of State for Trade and Industry. He may be called the Secretary of State for Trade and Industry, but he shows an airy lack of concern for British trade and industry. Despite his title, he seems to imply that the success or failure of British industry has nothing to do with him. It is the market alone which decides and disposes—that infallible market which must prevail. The DTI's role is simply to get out of the way.

We detected in this afternoon's debate, even from Conservative Members such as the right hon. Member for Brent, North (Sir R. Boyson) and the hon, Member for Surrey, North-West (Mr. Grylls), who professed to be the keenest of all free marketeers, that even they were anxious about where reliance on market forces would take us. The truth is that if we rely on market forces and see no role whatever for the Government, the DTI, far from being the powerhouse that it can and should be, and is in other countries, is simply a black hole imploding on itself.

The consequence of that is that we miss major opportunities that other countries well know how to exploit. Japan, France, Germany, Italy and even the United States—all successful economies—have a level of Government-industry co-operation that we have never contemplated, certainly under this Government. That means that the role of the Government in industry in co-operating, planning and enabling is simply lost and we are the weaker for it.

We see signs of the irresponsibility of the Secretary of State everywhere throughout his jurisdiction and perhaps, surprisingly, even in matters such as Barlow Clowes. Lord Young simply washed his hands of the obvious failures, deficiencies and derelictions of duty of his Department. That has meant that he has also washed his hands of the fate of 1,800 investors who should have been able to expect better of him. That irresponsibility was compounded by a willingness to mislead and to draw conclusions which could not be substantiated from the Le Quesne report. That report could not attribute and apportion blame because the Secretary of State told those involved to consider only the facts, but no one reading that report could draw the conclusions from it which Lord Young put to another place and which appear to exonerate his Department from responsibility. That means that we must now look to the ombudsman to bring Lord Young to a proper realisation of his responsibilities.

We see similar slipperiness and slipshodness in two further recent decisions by the Secretary of State. After Elders' purchase of Scottish and Newcastle shares and the decision to refer its bid to the Monopolies and Mergers Commission—the purchase raised its shareholding from 15 to nearly 25 per cent.—Lord Young was aghast, slapped the company over the wrist, but left it in possession of those shares acquired against the normally accepted rules. That is a classic example of ineffective rules applied by an ineffectual Minister. That episode demonstrates clearly that it is time we had proper statutory rules that mean what they say and are enforced in the same way and to the same degree as rules are enforced in every other part of our national life.

Even more curious was the recent decision not to refer the El Fayed bid for House of Fraser, despite undescribed, unidentified irregularities in it which, we understand, should command the attention of the serious fraud office. In other words, there were irregularities affecting the bid so serious as to go to the serious fraud office, yet we are told that nothing is to touch the validity of the bid. The Secretary of State's decision on that issue demonstrates a touching concern for the reputation of one of his predecessors, the right hon. Member for Chingford (Mr. Tebbit). It is only to be regretted that that concern does not seem to be reciprocated. The decision is a typical piece of Youngery and adds to the confusion to which merger policy has now sunk.

As the hon. Member for Surrey, North-West said, the Secretary of State presides over the biggest explosion of takeover activity in our history. The assets involved dwarf our national budget for the NHS or for defence, yet the noble Lord seems to have no view on the massive survey and academic evidence that shows that the scale of takeovers is positively harmful to those involved and to the national economy. The Secretary of State seems to have no view on whether it should be encouraged or discouraged, or whether it matters that British industry should fall into foreign hands. He has no recognition of the special problems facing Britain because of the openness of our market to corporate control. He has nothing to say except to parrot the tautology that competition policy is about competition.

The result is a series of bewilderingly confusing decisions on British Airways and British Caledonian, on Rowntrees, on Kuwaiti oil investment in British Petroleum and on Scottish and Newcastle Breweries. Who in the House can now predict what the Secretary of State's decision will be on any given issue, or which way he will jump on GEC and Plessey? That possibility is very remote because we simply do not know what criteria he now believes to be important. However, we do understand that those whose interests are most closely affected are least likely to be consulted.

A prime example of what happens when a confused ideology meets the real world occurs when the Secretary of State occasionally ventures into action, on those occasions when he decides to pursue one of his ill-judged forays into privatisation. When he does that, surprisingly, his beloved market does not seem to come up to scratch or to deliver the goods.

Dr. Michael Clark (Rochford)

Will the hon. Gentleman give way?

Mr. Gould

No. I shall press on because we are very short of time.

The National Engineering Laboratory is a successful research establishment of great importance to the Scottish economy, doing very valuable research and providing a forum of collaborative ventures for British industry. For reasons of dogma, it is to be privatised, yet, to the embarrassment and confusion of the Secretary of State, we discover that the only private buyer available has mysteriously disappeared. That confusion has yet to be cleared up.

Girobank is another success story in the public sector. It is a bank created by the public sector by a Labour Government to make good the deficiencies of the private clearing banks, yet again, for reasons of privatisation dogma, we find that Girobank is to be privatised. Yet again the Secretary of State finds that those elusive private buyers are suddenly slipping through his fingers. Those buyers have not materialised, and the price which now seems available is only half the price originally thought to be available. Yet again the consequence is quite unnecessary damage and uncertainty to a successful public enterprise.

North East Shipbuilders Limited is perhaps the most extreme example of dogma prevailing over reality. I heard someone say "stupid". But it does not seem stupid to a

shipyard worker on the Wear. Let us be quite clear that what is now threatening the future of those yards is not the absence of orders. The orders are there and can be pursued. There are orders from Cuba and from West Germany, and there may well be orders from British shipowners in future. There are also reports that the Danish ferries are the object of a purchasing bid by a Greek shipowner. There is no shortage of potential business.

What is stifling the future of those shipyards is dogma. The Government will not allow those orders to proceed, and will not allow the intervention fund help that is required until a private buyer is found. Yet again the absence of a private buyer will be allowed to destroy 2,000 jobs in shipbuilding, 6,000 jobs on Wearside and, most important of all, in the face of all market logic, as the shipbuilding industry turns up in terms of worldwide demand, it will threaten the survival of a major and essential British industry.

Even where privatisation is carried out and regarded as a success in its own terms, it is still bad news. For example, British Steel is to be privatised at a price that means that the taxpayer is defrauded of £200 million. Even at that knock-down price the success of that flotation must now be in jeopardy. Those unnecessary risks are to be taken in order to jeopardise the future of an industry, the long history of which shows that its pattern and cycle of investment and demand make it unsuited to private ownership. Private owners will not stick with it for the time needed and will not provide the investment necessary to preserve its future.

Even more problematical is the privatisation of Rover, which is being sold to British Aerospace. The great salesman himself—that is his only claim to expertise in this deal showed how maladroit he is. First, he maximised market opportunities by excluding all other potential buyers. Secondly, he negotiated a price—or giveaway—from which the European Commission had to rescue him by saying that he had offered £150 million worth of taxpayers' money more than was needed to clinch the deal. Thirdly, he handed over assets to British Aerospace of substantial value. They were so substantial as to confirm suspicions that British Aerospace is involved in an asset-stripping operation and that the Secretary of State does not care a fig for the future of the car industry, provided he can get rid of it from his desk. The Secretary of State likes a tidy desk. Unfortunately, his means of keeping his desk clear is to throw his files into the dustbin or into the hands of anybody who will walk away with them.

In case there is any suggestion that I am exaggerating, let me draw the House's attention to a memorandum from Warburg Securities to its investment clients, headed British Aerospace. Recommendation: buy. Price 492p. It says: Asset valuation: £10.48 a share. The enlarged British Aerospace group—safely delivered yesterday—has assets valued at £10.48p per share—more than double the current share price. It goes on: Our property valuation for all BAe, Rover and Royal Ordnance sites itemised overleaf shows that Professor Roland Smith now commands 14,323 acres worth over £2 billion. And we estimate surplus properties to be worth £1.13 billion. It then lists in substantial detail many of the sites given away to British Aerospace in the deals with Rover and Royal Ordnance. Many of the sites contribute substantially to "easily realisable"—the words of the brochure—surplus land that will net, on its estimation, over £1 billion. That is a scandalous waste and defrauds the taxpayer. It is a matter that should be drawn to the attention of the Public Accounts Committee, and I intend so to do.

That sad catalogue means that it is not surprising that when we draw back and look at the broader picture of what has happened to British industry we find that manufacturing output, having lost 20 per cent. during the early part of the decade, has only just crept back to where it started, that investment is still lower than it was in 1979, that employment in manufacturing has fallen by 2 million jobs, that our trade deficit is heading into the stratosphere, that our investment is worse than it has ever been, and that our share of world markets is lower.

No voice from the Department of Trade and Industry is speaking out for British industry. The Secretary of State's partner in crime—and, typically, the Secretary of State is the sleeping partner—is the Chancellor of the Exchequer, who is about to repeat the same old mistakes. Having weakened the economy through excessively high interest rates and an overvalued currency, he then unleashed a level of demand that it could not conceivably meet. Now he proposes to punish us all over again by pushing up interest rates yet higher and the pound to an even more ridiculous rate. The Chancellor has his own problems. He has a strategy with no escape hatch. The only way that he can escape is by changing the strategy, but his political credibility would be fatally damaged if he were to do so. That is why we are stuck in this predicament.

What of the Secretary of State? Where is he? What is his view? Do we hear his voice? Does he agree that the balance of payments deficit in manufactures is neither here nor there? Does he say that a £15 billion deficit on our trade is a problem of success? Does he agree that that deficit can be financed by hot money? Does he say that there is no limit to the level to which British interest rates might rise? Does he say that British industry can continue to compete even as the pound rises to 3.20 deutschmarks and beyond? Or does he agree with Greenwells, which said in a research paper published today that the Chancellor's strategy is mistaken, that the deficit will become worse, not better, that it arises because of the competitive weakness of British industry, and that the Chancellor's policies are making that problem worse?

Which is it? Does the Secretary of State go silently and sheepishly with the Chancellor, or does he speak up for British industry? If he disagrees, when will we hear his voice? When will he raise that voice in the interests of British industry? If he agrees and is willing to sit silently by and watch British industry crucified, he must go before more damage is done. We can no longer afford a Secretary of State for Trade and Industry who will not do his job.

9.43 pm
The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton)

Whatever we may disagree about, there is clearly something on which the whole House will agree, and that is that the link between the industrialists' views and the environmentalists' views has been the theme of today's debate. Obviously industrial and commercial activity can have unwelcome effects on the environment, whether it be planning or pollution. However, that is a case for a sensible and effective system to counter or mitigate those effects; it is not a case against industry and commerce or against economic growth. On the contrary, it is abundantly clear that a strong, competitive and profitable industry within a growing economy is an essential prerequisite for achieving our environmental aims and in sustaining the cost of measures rightly demanded of industry itself as well as in generating the wealth to pay for protecting and improving our surroundings in other more general ways.

As my right hon. Friend the Member for Henley (Mr. Heseltine) said in his very interesting speech, the very existence of a growing demand and opportunities for environmental protection and the prevention of pollution are themselves an opportunity for new industries to thrive and grow. In an important sense, therefore, the foundation of the Government's environmental policies is the policy that has so significantly raised the level of this country's capacity to generate wealth in recent years. Thus, we have opened choices, including the choice of devoting more resources to environmental aims that would previously have been closed.

In the light of what the hon. Member for Dagenham (Mr. Gould) said in the last few minutes, I make no apologies whatever for reminding the House once again of the degree of industrial recovery that has taken place in this country in the past eight years. We have had eight years of uninterrupted economic growth at an average of 3 per cent. That is the longest period of such growth for half a century, I tell the hon. Gentleman. [Interruption.] I shall come to the hon. Gentleman's interest in a moment. In this economy, since 1980—[Interruption.] I shall come to 1979 in a minute. Productivity growth in this economy since 1980 has been equal to that of Japan and better than that of all other major industrial countries.

In manufacturing, on which the hon. Gentleman focused, productivity is up by no less than 60 per cent. in that same period. Industrial profitability—the profitability from which the wealth to pay for our environmental measures comes—is at its best level for nearly 20 years, at over 10 per cent. in real terms for the non-North sea sector. Manufacturing productivity, at 9 per cent. in real terms, is at its highest level for many years. Investment in manufacturing is expected to be up 18 per cent. for this year alone.

I have been asked about 1979 and about manufacturing output. The hon. Gentleman will be aware, because he stated it somewhat grudgingly, that manufacturing output is now at record levels. That does not mean that it is higher than in 1979 only. It means that it is higher than in 1974, because it was still lower in 1979 than it had been in 1974. It fell when the last Labour Government were in office. What is more, since 1981, the United Kingdom's share of world trade in manufactures has stopped falling for the first time in a century. That reflects the restoration by British industry of its reputation for the quality, design and performance of its products and, no doubt, the end of this country's reputation as the most strike-torn country in the world.

Mr. Gould

In making the point about our share of world trade in manufactures, the right hon. Gentleman would not want to overlook the best and, indeed, only recent evidence that we have from the ITEM club, which showed that our share of world trade in manufactures had fallen to 6.9 per cent., its lowest level ever.

Mr. Newton

The hon. Gentleman had an exchange with the Chancellor of the Exchequer in a debate some weeks ago on that very matter. The reference that he made to the report to which he referred was based on a misunderstanding that has already been cleared up. [Interruption.]

Mr. Speaker

Order. This has been a well-conducted debate. We must give the Chancellor of the Duchy a fair hearing.

Mr. Newton

One of the most striking things about the British economy is that it is not only our own investors who have shown so much willingness and confidence to invest in our country, but those from overseas as well. I have with me some figures from the Invest in Britain Bureau which show that in the past 10 years about 2,250 overseas investment projects in this country worth £10.75 billion have created or safeguarded nearly 250,000 jobs. That is the foreign vote of confidence in the British economy under the present Administration.

The other matter brought out by my right hon. Friend the Secretary of State was the extent to which this greater industrial wealth that has been created has opened the way for greater expenditure on the environmental issues that are a matter of concern to us all. There is a £1 billion programme for the cleansing of power station emissions and an even larger programme of £1.2 billion over the next four years for improving sewage treatment and disposal. There is a £70 million a year programme for improving the quality of coastal waters and attempts are being made to deal with the problem of vehicle emissions.

My right hon. Friend spoke about other matters such as the international lead that Britain has given in seeking to tackle the problem of chlorofluorocarbons and their damage to our environment. Action is being taken to deal with the acid rain caused by our power stations, and work is going on to curb pollution in the North sea.

A major theme of the Gracious Speech is to carry forward the policies on which this country's industrial and economic resurgence have been based. One important aspect of that is the policy of privatisation which has featured largely in the debate. Against the background of what has been achieved and the way in which it is now being copied throughout the world—

Mr. Thomas Graham (Renfrew, West and Inverclyde)

The Minister speaks about privatisation. Is he aware that the Royal Ordnance factory at Bishopton has productivity that is second to none? It is a profit-making firm, and yet the Government are allowing it to be closed.

Mr. Newton

I have spoken to people concerned with one of the Royal Ordnance factories, the one at Patricroft in the north-west rather than the one about which the hon. Gentleman speaks, and I am well aware of the purpose and point of what British Aerospace is seeking to do with the factories. It is seeking to make sure that the work is carried out in a way that safeguards the jobs of the maximum number of people. If the Government that the hon. Member would no doubt have supported had faced that need in a wide range of industries over a longer period, we would not now be facing many of the difficulties wall which we are seeking to deal.

In view of some of the comments in the debate, I must reiterate what my right hon. Friend said about the Water Bill and its importance for the protection of the environment. The proposed creation of the National Rivers Authority, which will be responsible for the health of the rivers, estuaries and coastal waters in England and Wales and which will be guided by statutory river quality standards, is a major step towards improving control of the environment. The public health interest in the supply of drinking water will be met by my right hon. Friend setting statutory requirements and by local authorities' continuing scrutiny of the quality of water supplies.

Some of what has been said in the debate is far fetched in the light of the fact that a quarter of the population of England and Wales already receives its drinking water from the private sector, the statutory water companies. No less significant than our policy of returning much of the public sector of industry to the more competitive framework of the private sector is the range of measures to strengthen competition policy and to enhance the opportunity for encouragement of enterprise at every level. That is reflected by the enterprise initiative and by the huge volume of applications for assisted consultancy that we have received. It is reflected in the record figures for the creation of new small businesses, and it is reflected by the response throughout industry, both large and small, to the campaign to equip British industry for the challenge of 1992.

Nowhere is the link between the industrial policy and the environment clearer than in some of the less prosperous regions and those which, as a form of shorthand, we call the inner cities. Their problems have starkly shown the consequences of what happens to the environment when there is no secure and expanding industrial base. It follows that nowhere are the benefits of the greater national prosperity that we have created clearer than in those parts of the country which have faced some of the worst difficulties of earlier failures to bring about the necessary industrial change and to get the economy on the move.

I am well aware that the Opposition do not like being told some of the facts about the improvements.[Interruption.]

Mr. Speaker

Order. I repeat that we must give the Chancellor of the Duchy a fair hearing. He has five minutes more.

Mr. Newton

In the past years—[Interruption.]

Mr. Tony Marlow (Northampton, North)

On a point of order, Mr. Speaker. Is there any way in which you can stop the Opposition Front Bench from behaving like a charabanc of giggling schoolboys with the Leader of the Opposition as head girl?

Mr. Speaker

Order. I have already made that point clear.

Mr. Newton

In the past year, the largest falls in the rate of unemployment have been recorded in the west midlands, Wales, the northern region and the north-west. The greater industrial prosperity that has been created is now clearly spreading to all our regions.

The greater confidence of British industry to invest is matched by the greater willingness of people overseas to invest in the English regions, as was made clear by the recent announcement from Ford of new plant in south Wales with an investment totalling £725 million which will create or safeguard 2,500 jobs.

Mr. Brian Wilson (Cunninghame, North)

rose—

Mr. Newton

No, I shall not give way.

That example is matched by what has happened in the past 10 years when nearly 1,300 foreign investment projects, worth more than £7.5 billion, have gone to areas which have received regional selective assistance of more than £700 million. As a result 200,000 jobs have been created or safeguarded.

Mr. Wilson

rose—

Mr. Speaker

Order.

Mr. Newton

Something that exposes more clearly than anything else the claims that the Opposition have sought to make today is what has happened to spending on capital programmes of key importance to the environment. On roads, spending went down by 40 per cent. under Labour, but it has gone up by 30 per cent. under us. On railways, spending was static under Labour, but it has gone up by 15 per cent. under us. On hospitals, spending went down by nearly a third under Labour, but it has gone up by more than 40 per cent. under us.

When the hon. Member for Dagenham talks of our references being all illusion and no substance, he fails to remember the record of the Labour Government, who were all words and no action. They never put their money where their mouths were because they never had the money to do it.

Question put, That the amendment be made:—

The House divided: Ayes 237, Noes 348.

Division No. 1] [10 pm
AYES
Abbott, Ms Diane Campbell, Menzies (Fife NE)
Adams, Allen (Paisley N) Campbell, Ron (Blyth Valley)
Allen, Graham Campbell-Savours, D. N.
Alton, David Canavan, Dennis
Archer, Rt Hon Peter Carlile, Alex (Mont'g)
Armstrong, Hilary Clark, Dr David (S Shields)
Ashdown, Paddy Clarke, Tom (Monklands W)
Ashley, Rt Hon Jack Clay, Bob
Ashton, Joe Clelland, David
Banks, Tony (Newham NW) Clwyd, Mrs Ann
Barnes, Harry (Derbyshire NE) Cohen, Harry
Barron, Kevin Coleman, Donald
Battle, John Cook, Frank (Stockton N)
Beckett, Margaret Cook, Robin (Livingston)
Beggs, Roy Corbett, Robin
Beith, A. J. Corbyn, Jeremy
Bell, Stuart Cousins, Jim
Benn, Rt Hon Tony Cox, Tom
Bennett, A. F. (D'nt'n & R'dish) Crowther, Stan
Bermingham, Gerald Cryer, Bob
Bidwell, Sydney Cummings, John
Blair, Tony Cunliffe, Lawrence
Boateng, Paul Cunningham, Dr John
Boyes, Roland Dalyell, Tam
Bradley, Keith Darling, Alistair
Bray, Dr Jeremy Davies, Rt Hon Denzil (Llanelli)
Brown, Gordon (D'mline E) Davies, Ron (Caerphilly)
Brown, Nicholas (Newcastle E) Davis, Terry (B'ham Hodge H'l)
Brown, Ron (Edinburgh Leith) Dewar, Donald
Bruce, Malcolm (Gordon) Dixon, Don
Buchan, Norman Dobson, Frank
Buckley, George J. Doran, Frank
Caborn, Richard Douglas, Dick
Callaghan, Jim Duffy, A. E. P.
Dunnachie, Jimmy McTaggart, Bob
Dunwoody, Hon Mrs Gwyneth McWilliam, John
Eadie, Alexander Madden, Max
Evans, John (St Helens N) Mahon, Mrs Alice
Ewing, Harry (Falkirk E) Marek, Dr John
Ewing, Mrs Margaret (Moray) Marshall, David (Shettleston)
Fatchett, Derek Marshall, Jim (Leicester S)
Faulds, Andrew Martin, Michael J. (Springburn)
Fearn, Ronald Martlew, Eric
Field, Frank (Birkenhead) Maxton, John
Fields, Terry (L'pool B G'n) Meacher, Michael
Fisher, Mark Meale, Alan
Flannery, Martin Michael, Alun
Flynn, Paul Michie, Bill (Sheffield Heeley)
Foot, Rt Hon Michael Michie, Mrs Ray (Arg'l & Bute)
Foster, Derek Mitchell, Austin (G't Grimsby)
Foulkes, George Molyneaux, Rt Hon James
Fraser, John Moonie, Dr Lewis
Fyfe, Maria Morgan, Rhodri
Galbraith, Sam Morley, Elliott
Galloway, George Morris, Rt Hon A. (W'shawe)
Garrett, John (Norwich South) Morris, Rt Hon J. (Aberavon)
Garrett, Ted (Wallsend) Mowlam, Marjorie
George, Bruce Mullin, Chris
Gilbert, Rt Hon Dr John Murphy, Paul
Godman, Dr Norman A. Nellist, Dave
Golding, Mrs Llin Oakes, Rt Hon Gordon
Gordon, Mildred O'Brien, William
Gould, Bryan Orme, Rt Hon Stanley
Graham, Thomas Paisley, Rev Ian
Grant, Bernie (Tottenham) Parry, Robert
Griffiths, Nigel (Edinburgh S) Patchett, Terry
Griffiths, Win (Bridgend) Pendry, Tom
Grocott, Bruce Pike, Peter L.
Hardy, Peter Powell, Ray (Ogmore)
Healey, Rt Hon Denis Prescott, John
Heffer, Eric S. Primarolo, Dawn
Henderson, Doug Quin, Ms Joyce
Hinchliffe, David Radice, Giles
Hogg, N. (C'nauld & Kilsyth) Randall, Stuart
Holland, Stuart Redmond, Martin
Home Robertson, John Reid, Dr John
Hood, Jimmy Richardson, Jo
Howarth, George (Knowsley N) Roberts, Allan (Bootle)
Howell, Rt Hon D. (S'heath) Robertson, George
Howells, Geraint Robinson, Geoffrey
Hoyle, Doug Rogers, Allan
Hughes, John (Coventry NE) Rooker, Jeff
Hughes, Robert (Aberdeen N) Ross, Ernie (Dundee W)
Hughes, Roy (Newport E) Ross, William (Londonderry E)
Hughes, Sean (Knowsley S) Rowlands, Ted
Hughes, Simon (Southwark) Ruddock, Joan
Illsley, Eric Sedgemore, Brian
Ingram, Adam Sheerman, Barry
Janner, Greville Sheldon, Rt Hon Robert
John, Brynmor Shore, Rt Hon Peter
Jones, Barry (Alyn & Deeside) Short, Clare
Jones, Ieuan (Ynys Môn) Sillars, Jim
Jones, Martyn (Clwyd S W) Skinner, Dennis
Kennedy, Charles Smith, Andrew (Oxford E)
Kinnock, Rt Hon Neil Smith, C. (Isl'ton & F'bury)
Kirkwood, Archy Soley, Clive
Lamond, James Spearing, Nigel
Leadbitter, Ted Steel, Rt Hon David
Lestor, Joan (Eccles) Steinberg, Gerry
Lewis, Terry Stott, Roger
Litherland, Robert Strang, Gavin
Livsey, Richard Straw, Jack
Lloyd, Tony (Stretford) Taylor, Mrs Ann (Dewsbury)
Lofthouse, Geoffrey Taylor, Matthew (Truro)
Loyden, Eddie Thomas, Dr Dafydd Elis
McAllion, John Thompson, Jack (Wansbeck)
McAvoy, Thomas Turner, Dennis
McCrea, Rev William Vaz, Keith
McFall, John Walker, A. Cecil (Belfast N)
McKay, Allen (Barnsley West) Wall, Pat
McKelvey, William Wallace, James
McLeish, Henry Walley, Joan
Maclennan, Robert Wardell, Gareth (Gower)
McNamara, Kevin Wareing, Robert N.
Welsh, Andrew (Angus E) Wray, Jimmy
Welsh, Michael (Doncaster N) Young, David (Bolton SE)
Williams, Rt Hon Alan
Wilson, Brian Tellers for the Ayes:
Winnick, David Mr. Frank Haynes and
Wise, Mrs Audrey Mr. Ken Eastham.
Worthington, Tony

Question accordingly negatived.

It being after Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.