HC Deb 19 January 1990 vol 165 cc527-94 9.37 am
Mr. Ian Gow (Eastbourne)

I beg to move, That this House believes that the policies of Her Majesty's Opposition merit scrutiny. This is a non-controversial motion which is designed to secure support from all parts of the House, and I am sure that it will do so. At one stage, I thought of moving a motion in rather different terms, but I realised that it would be somewhat controversial. The alternative motion was that this House believes that the Prime Minister and the Leader of the Opposition should each hold office for life.

In preparing this speech, I have been assisted greatly by the highly entertaining autobiography of the right hon. Member for Leeds, East (Mr. Healey). It assisted me because I want to examine the development of Labour party policy as recorded in three momentous documents: the manifesto of 1983, the manifesto of 1987 and the policy statement of 1989 entitled "Meet the challenge Make the change". For the sake of accuracy I have copies of each of those historic contributions to contemporary history with me.

I said that I had been assisted by the right hon. Member for Leeds, East because on page 497 of his autobiography, which is available either in hardback or paperback, he writes: Labour started the election with enormous handicaps. He went on to describe the then Leader of the Opposition, the right hon. Member for Blaenau Gwent (Mr. Foot), as: A kindly and cultured man, but he simply did not look like a potential Prime Minister. No one could accuse the present Leader of the Opposition as being cultured, but, kindly, yes. He is also someone who simply does not look like a potential Prime Minister.

On the following page of his memoirs the right hon. Member for Leeds, East writes: Our second handicap was an election manifesto, which Gerald Kaufman"— that is the right hon. Member for Manchester, Gorton— rightly described as the longest suicide note in history. Though it was stuffed with detailed proposals in every conceivable field of policy, the section on defence was deliberately ambiguous.

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

Will the hon. Gentleman give way?

Mr. Gow

I will certainly give way to the hon. Gentleman. I do not want to injure his glittering political career, but I almost called him my hon. Friend. I shall certainly give way to him now and on any future occasion during my speech when he would like to intervene.

Mr. Campbell-Savours

Does the hon. Gentleman accept that the greatest active suicide on the part of the Government is their introduction of the poll tax? Surely that is suicidal.

Mr. Gow

I was quoting the right hon. Member for Gorton, who had been quoted with approval by the right hon. Member for Leeds, East. We are not talking about the suicide of the Conservative party as today's debate is about the Opposition's policies. I was quoting a comment made upon the policies of the Opposition by a man who is a former deputy leader of the party, a former Labour Chancellor and a former Labour Secretary of State for Defence. The hon. Gentleman should not rebuke me when I quote his right hon. Friends who used the word suicide not about the Tory party, but about his party.

Mr. Edward Leigh (Gainsborough and Horncastle)

My hon. Friend was right to say that previous Labour party defence policy was ambiguous. Present Labour party policy on local government tax is non-existent. Which is better, to be ambiguous or to have no policy?

Mr. Gow

My hon. Friend makes a characteristically excellent point and I shall return to it later. I hope that my hon. Friend will catch your eye, Mr. Speaker, later so that he can make a telling contribution to our proceedings.

I do not want to repeat myself too much, but the last words that I used that prompted the intervention from the hon. Member for Workington (Mr. Campbell-Savours) were part of a quote from the right hon. Member for Leeds, East who wrote: The section on defence was deliberately ambiguous. It was intended to accommodate both the unilateralists and the majority of the Shadow Cabinet who thought like me"— you may think, Mr. Speaker, that that is not very good English— that it would be politically wrong and electorally disastrous to give up our existing Polaris force for nothing. On page 498 of his autobiography the right hon. Gentleman concludes: It was impossible to conceal our deep divisions on defence any longer. That was not the judgment of my right hon. or hon. Friends; that was the judgment of the man who was then deputy leader of the Labour party and who we must assume had assented with the manifesto upon which the Labour party fought and lost the general election in 1983.

The hon. Member for Workington picked up the point about suicide, and the phrase: the longest suicide note in history is relevant because it is important to remember the length of that suicide note. It was 39 pages of large print, but that is as nothing compared to the 1989 Labour party document. I shall place a copy of it in your office, Mr. Speaker, at the conclusion of this debate in case you want to study it. That document contains 65 pages of small print, so the suicide notes get longer.

My hon. Friends and I have initiated this debate because we want to draw the attention not only of you, Mr. Speaker, but of others outside the House to Labour party policies. I shall consider the Labour party's defence policy because that policy was singled out by the right hon. Member for Leeds, East, for whom every hon. Member has a profound respect. He believed, in my opinion rightly, that it was the defence policy which did particular injury to his party, which he had served for so long.

I thought that it would be for the convenience of some of my hon. Friends who may not be as keen students as I am of Labour party policies if I were to mark the development of policy in respect of the three areas I have chosen this morning. We do not want to go back too far. There is no point in doing that as this is a short debate. It is perfectly legitimate, however, to look at three areas of policy and to study the development of that policy between 1983, 1987 and 1989. Mercifully—it is for the great convenience of the House—the Labour party has documented its policy. We do not need to make a guess about it, it is all here in print.

We are delighted to see so many Labour Members present. I also note that the hon. Member for Southwark and Bermondsey (Mr. Hughes), the solitary representative of the Liberal party, is here to make his contribution. I always listen to him with great interest, but whether he will be here in the next Parliament is a different matter. He might be gobbled up by one of the Labour party's candidates.

Mr. Campbell-Savours

indicated assent.

Mr. Gow

I note that the hon. Gentleman and I are in agreement about that prospect.

Mr.James Couchman (Gillingham)

Does my hon. Friend agree that it is a shame that that representative of the Scottish National party, the hon. Member for Glasgow, Govan (Mr. Sillars), is not here to give us the benefit of his superb forensic skills by dissecting Labour party policy?

Mr. Gow

My hon. Friend is right to refer to Scottish people. Mercifully my hon. Friends the Members for Eastwood (Mr. Stewart) and for Tayside, North (Mr. Walker) have come here from the northern kingdom of Scotland. The person addressing the House is also a Scot, so Scotland is represented by the Conservative party, but not, of course, by the Scottish National party.

Mr. Nicholas Bennett (Pembroke)

Or the Scottish Labour party.

Mr. Gow

Yes, I agree.

Let us remind ourselves and the country of the Labour party's defence policy in 1983, not a trifling matter.

Mr. Campbell-Savours

This is extremely boring.

Mr. Gow

I can well understand why; the hon. Gentleman had the impossible task of defending that nonsense before the electorate. The hon. Gentleman and his colleagues on the Front Bench may be bored because they are familiar with this as they had to defend this nonsense. Let us take them through that policy to see how it developed. We shall not allow hon. Members on the Opposition Front Bench to divert the attention of the House and of the country away from this important examination. Hon. Members who are bored are free to depart and it would be very agreeable if the debate were to take place and I were surrounded simply by my right hon. and hon. Friends.

Mercifully, my hon. Friend the Economic Secretary to the Treasury has arrived. I shall be referring to him with approval later in my speech, so it is timely that he should have torn himself away from fashioning the Budget to come to listen to what we hope will be an enjoyable and stimulating debate. It is a matter of deep regret to me that my hon. Friend the Treasurer of Her Majesty's Household is not here, as he is normally. No doubt he has to go to his constituency, but he will be able to study our proceedings in the Official Report, which is, no doubt, delivered to him tomorrow morning, so he will not have to wait until Monday.

I welcome you to the debate, Mr. Deputy Speaker. It is grievous for you that you have missed some of it, but you will be able to read it in the Official Report.

In 1983, the right hon. Member for Blaenau Gwent was leader of the Labour party. Even hon. Members on the Opposition Front Bench cannot disagree with that proposition. The Labour party manifesto for 1983 said: We will therefore not permit the siting of Cruise missiles in this country and will remove any that are already in place. The next Labour Government will cancel the Trident programme. [HON. MEMBERS: "Hear, hear."] I hope that people outside have noticed that interruption. I was coming on to say that it was not Labour Party policy any more. I see that the hon. Member for Brent, East (Mr. Livingstone) has torn himself away from his constituency. He still believes in cancelling the whole Trident programme.

Mr. Max Madden (Bradford, West)

Don't leave me out.

Mr. Gow

The hon. Gentleman should not worry because I am coming to him. That is why today's debate will be so hilarious.

Mr. Ken Livingstone (Brent, East)

Will the hon. Gentleman give way?

Mr. Gow

I shall give way each time if the hon. Gentleman wants to intervene three or four times, or even more. We have until 2.30 pm.

Mr. Livingstone

Does the hon. Gentleman agree that the real problem facing the Government is that the Americans are likely to cancel Trident before we have a chance to do so?

Mr. Gow

I am not sure that that intervention carries the debate much further. The debate today is not about the United States. As you will confirm, Mr. Deputy Speaker, if you care to glance at the Order Paper, this morning's debate is about the policies of Her Majesty's Opposition. As the debate proceeds, it may be perceived that it was not a bad choice.

Mr. Peter L. Pike (Burnley)

It is possible that the motion may be put to the vote today. Is the hon. Gentleman saying that if it were to be carried, our policies and the policies of his party could then be put to the people, who should have the opportunity of judging the policies of both parties? I am sure that the representation in this House would be very different if the electorate, rather than just the House, were allowed to judge the merits of the policies of the two parties. Yesterday, Ministers repeatedly talked about accountability. Why do we not have the opportunity for accountability now? Why are we not given the opportunity for an election now? The merits of the policies can then be judged truly.

Mr. Gow

We welcome growing numbers of Labour Members to the Opposition Benches. The hon. Gentleman may not have read this short motion carefully. I do riot know whether we shall vote at the end of the debate. I should have thought that the full House, including the solitary representative of the once mighty Liberal party, the hon. Member for Southwark and Bermondsey, could join me in agreeing the motion. However, I cannot help the hon. Gentleman, as I do not know whether there will be a vote.

Mr. Campbell-Savours

Come on.

Mr. Gow

If the hon. Gentleman intervenes and asks a question, I shall answer him. I have already said that I shall give way to every Opposition Member who wants to intervene.

Mr. Campbell-Savours

We want some jokes.

Mr. Gow

The hon. Gentleman must be patient. Patience is a virtue.

Mr. Frank Dobson (Holborn and St. Pancras)

On a point of order, Mr. Deputy Speaker. I understood that the Box to your right was to be occupied only by civil servants on Government business. As the hon. Member for Eastbourne (Mr. Gow) has said, this debate is about the policy of the Labour Party. Why is there a civil servant in the Box?

Mr. Deputy Speaker (Mr. Harold Walker)

I am sure that that has nothing to do with me.

Mr. Dobson

Further to that point of order, Mr. Deputy Speaker. Mr. Speaker ruled on one occasion that it was a matter for him as he sought to intervene in the matter.

Mr. Deputy Speaker

I hesitate to put myself in conflict with any ruling of Mr. Speaker. I shall have inquiries made.

Mr. Gow

I was reading out the text of the Labour party's manifesto dealing with defence. The final paragraph that I want to read out—we shall see whether it still commands the support of Opposition Members—says: We will, after consultation, carry through in the lifetime of the next parliament our non-nuclear defence policy. That was in 1983 and we mercifully have with us the next evidence that we have to consider. In 1987, four years after the 1983 defeat, the Labour party said on defence: We say that it is time to end the nuclear pretence".

Mr. Campbell-Savours

Enoch Powell said that.

Mr. Gow

We are talking about the policy of the Labour party, not the policy of our right hon. Friend, the former Member for Down South.

Mr. Campbell-Savours


Mr. Gow

He is certainly still my right hon. Friend. The manifesto said: We say that it is time to end the nuclear pretence and to ensure a rational conventional defence policy for Britain … We will cancel Trident. We now come to 1989.

Mr. Nicholas Bennett

Dennis has arrived.

Mr. Gow

We welcome the hon. Member for Bolsover (Mr. Skinner). I shall be happy to give way to him every time that he wishes to speak.

Mr. Dennis Skinner (Bolsover)

Has the hon. Gentleman recently seen the test for Trident, that so-called defence weapon? I saw a shot on television recently of the latest testing. The missile was spinning around like a Catherine-wheel on bonfire night. If that is the effectiveness of Trident, the Labour party would be well advised in the run-up to the next election to say that we shall get rid of Trident and use the £11 billion for the benefit of the National Health Service, to provide proper pay for the nurses, ambulance workers and all the others who work in the NHS, to provide sufficient money for old-age pensioners, to abolish standing charges for pensioners and for the disabled and to allocate free television licences for the old-age pensioners. There might be a little bit left over, but I should not provide any for those moonlighting Tory Members.

Mr. Gow

The hon. Gentleman's arrival is most timely. I can understand his growing interest in the subject of pensions as he will be 58 on 11 February. The hon. Gentleman is five years nearer retirement than I am. We share a birthday but he was born five years earlier than I was—

Mr. Skinner

The hon. Gentleman is fiddling the figures, Ike the rest of them.

Mr. Couchman

Is my hon. Friend aware that he, the hon. Member for Bolsover (Mr. Skinner) and I share a birthday on 11 February, but that I am five years further from retirement than my hon. Friend?

Mr. Gow

I am anxious to make progress. The arrival of the hon. Member for Bolsover was timely, because he is saying that we should scrap Trident—

Mr. Skinner


Mr. Gow

—and he has the support of many of his hon. Friends, and possibly even that of the hon. Member for Southwark and Bermondsey who, I notice, nods in assent.

I do not think that the 1989 policy review was fashioned while the hon. Member for Bolsover was the comrade chairman of the Labour party. In any case, instead of undertaking to scrap all four Trident submarines, the Labour party now wants to scrap one.

Mr. Campbell-Savours


Mr. Gow

I fully appreciate that the hon. Gentleman disagrees with the policy in the 1989 document. Part of the reason for this debate is to underline the continuing disagreement among the Opposition on the crucial subject of defence.

Mr. Harry Greenway (Ealing, North)

Perhaps my hon. Friend has left the subject of the retirement of the hon. Member for Bolsover (Mr. Skinner) prematurely. He said that the hon. Gentleman was five years nearer retirement than himself, but has he thought of what will happen at the next general election, which will be fought on the policies that my hon. Friend is describing?

Mr. Campbell-Savours

Has the hon. Gentleman thought about the next election?

Mr. Harry Greenway

I remind the hon. Gentleman that I have a majority of 15,000, which is more than he has, and that I gained the seat from Labour 10 years ago.

The Labour party will be forced to fight the election on the disastrous, stupid and loony policies that my hon. Friend is describing. He has not yet mentioned local government, but we must remember the lunatic and wicked policies of councils such as Ealing. The hon. Member for Bolsover is due for retirement at the next election.

Mr. Skinner

Get back to reality.

Mr. Gow

That is not so easy when we are considering this document. I do not know how familiar the hon. Gentleman is with it, but I shall lend him a copy, which will show him how far from reality it is.

Mr. Skinner

That was last year.

Mr. Gow

The change between 1987 and 1989 was that the Labour party decided to cancel only one—not four—of the Trident submarines. However, the cancellation of that one would deprive the Royal Navy of the minimum number of submarines that is necessary if we are to guarantee that one is on station all the time.

Mr. Campbell-Savours

On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) asked earlier about a person who was sitting in the civil servants Box; for some inexplicable reason he has now left that Box and is sitting in the Under Gallery. We can only deduce from that that he is not a civil servant. Will you, Mr. Deputy Speaker, find out who is paying his salary; from that we might be able to establish who he is—

Mr. Deputy Speaker

Order. This has gone far enough. I understand that the Box referred to is one that is usually available for the officials advising ministers responsible for the business before the House. No doubt the earlier point of order has been heard and responded to and if the person to whom we are referring has been made to sit in some other part of our premises beyond the Bar of the House, that is not a matter for me.

The Chancellor of the Duchy of Lancaster (Mr. Kenneth Baker)

Further to that point of order, Mr. Deputy Speaker. I shall be happy to clear this up. The gentleman to whom the hon. Member for Workington (Mr. Campbell-Savours) referred is not a civil servant—I would not have one with me for a debate such as this—but a member of the Conservative research department. I quite agree that it would be inappropriate for him to sit in the civil servants Box, so he is sitting in part of the Under Gallery.

The hon. Member for Holborn and St. Pancras (Mr. Dobson) who first raised the matter is the only member of the Shadow Cabinet to attend the debate—

Mr. Deputy Speaker

Order. I do not see how that arises out of the point of order—

Mr. Campbell-Savours


Mr. Deputy Speaker

Order. The hon. Gentleman must not rise while I am on my feet. The Minister's response to the point of order was not very helpful.

Mr. Bruce Grocott (The Wrekin)

Further to the point of order, Mr. Deputy Speaker. This is an important matter. Conservative Members have been making great play in recent months of the conflict between party and state in Eastern Europe. We know very well that the Chancellor of the Duchy of Lancaster is in an ambivalent position: is he in the Cabinet as a representative of the Government in Parliament, or is he there as a party apparatchik? That conflict is reflected in what we have seen today. Was the person in the civil servants Box there as a representative of the party or the state? Who is paying his salary—

Mr. Deputy Speaker

Order. I cannot give a ruling on these matters.

Mr. Campbell-Savours

Further to that point of order, Mr. Deputy Speaker. What has happened today is of constitutional importance. A member of the Conservative party who works in Conservative party headquarters in Smith square has been given access to the Box in which civil servants sit. That is a major development with implications for other debates. In debates on the poll tax or the NHS reforms a Conservative party member might be given access to that Box in preference to a civil servant who, in our view, was more entitled to sit there.

I ask you, Mr. Deputy Speaker, to ask Mr. Speaker to rule on whether it is in order for a member of the Conservative party to sit in the civil servants Box.

Mr. Kenneth Baker

I should point out on behalf of the official in question that he went to the wrong Box, and I apologise for that. There is no question but that only civil servants should sit there.

Mr. Skinner

Further to that point of order, Mr. Deputy Speaker. I believe that you would agree with me that those who enter the civil servants Box must do so by a route through which only a few are allowed to pass, because that is a high security area. We hear a great deal of talk from the Government about terrorism and the need for security, yet it seems clear that a person whose convictions border on those of the National Front—he works in Conservative Central Office, which has spawned some Conservative Members of the goose-stepping tendency in the last few years—has been cleared to go into the Box by the Minister. There should be an inquiry into this affair.

I well remember the full-scale debate in the House on the research assistant of my hon. Friend the Member for Islington, North (Mr. Corbyn); yet someone who could be a member of the Conservative party Securitate has been allowed into the civil servants Box. I demand a full inquiry and a full debate. If such things can happen to Opposition Members the same thing should happen on the Tory side.

Mr. Barry Field (Isle of Wight)

Further to that point of order, Mr. Deputy Speaker. If you are minded to order such an inquiry, may I draw to your attention the fact that some Members who arrived in the House for the first time in 1987 were regularly directed by a member of the House of Commons staff to a broom cupboard? Is that member of staff still in the House? If he is perhaps he inadvertently gave wrong advice to the gentleman concerned.

Mr. Madden

On a point of order, Mr. Deputy Speaker. Some hon. Members are trying to treat this matter lightheartedly, but it is a serious matter. It exposes yet again the difficulties of the Chancellor of the Duchy of Lancaster about his capacity when he speaks in the House. Clearly—

Mr. Deputy Speaker

Order. That does not arise because it is a separate and quite different matter.

Mr. Madden

I think that it does arise because we should know, for instance, how the Chancellor, who clearly intends to intervene in the debate, will be described in Hansard. Will he be called the chairman of the Conservative party, which is clearly his primary responsibility? He has admitted that he is aided today by an official from Conservative Central Office who seems to have been sitting in the wrong place without authority. Serious questions are being asked about the access to sensitive areas that that official might have had. Many of us are cited by the Economic League, the blacklisting organisation, as being subversive—

Mr. Deputy Speaker


Mr. Madden

and there is much evidence that Conservative Central Office is up to its neck—

Mr Deputy Speaker

Order. Hon. Members must resume their seats when the occupant of the Chair is on his feet. We have taken this matter far enough. The Chancellor of the Duchy of Lancaster, who is clearly here as a Member of the House and a designated Minister in the Government, will presumably address the House if he seeks to catch my eye later in the debate. The Minister has explained to the House that the person whose presence gave rise to this exchange was in the officials Box by error because he had been misdirected. That error has been corrected by his withdrawal. That ought to be sufficient explanation and we must get on.

Mr. Campbell-Savours

Further to that point of order, Mr. Deputy Speaker. If that is true—and no one wishes to doubt what the Minister said about this chap gaining access by error—he must have shown a pass to a person at the door. I should like to know the form and classification of that pass. Is it a Civil Service pass? How was he able to convince our very effective custodians of the House, who are responsible for security in all sorts of matters, that he had a right of access? When the inquiry takes place and Mr. Speaker inevitably rules next week—as he will now have to do—perhaps he could address himself to that matter in his statement to the House.

Mr. Deputy Speaker

The inevitability of a statement is a matter for Mr. Speaker to decide in the light of what he reads about our exchanges.

Mr. Nicholas Bennett (Pembroke)

Further to that point of order, Mr. Deputy Speaker. Can you tell us the name of the chairman of the Labour party?

Mr. Deputy Speaker

Let us be serious for a moment. We have taken matters as far as we can for the moment.

Mr. Campbell-Savours


Mr. Deputy Speaker

Order. The hon. Gentleman raised a point of order and now seeks to disregard my comments on it. No doubt Mr. Speaker will read with care the exchanges that have taken place. If he feels that further inquiries are necessary, no doubt he will initiate them. Perhaps we could get back to the debate.

Mr. Gow

The hon. Member for Bolsover told the House that Labour's defence policy had moved on since the 1989 statement "Meet the challenge Make the change" which was no longer the official policy of the party, or at least was not able to secure his support. We know that many of his right hon. and hon. Friends share his view about that matter. Like the two previous attempts, the latest attempt to define Labour's defence policy is designed more to provide a formula with which some of the divided factions of the party can live than to provide proper defence for the British people.

The Leader of the Opposition should consult the Socialist President of France. Mr. Mitterrand has made it clear that he and his Socialist Government will retain France's nuclear capability. That is hardly surprising because there are no unilateralists in the French Socialist party or even in the French Communist party. However, the British Labour party is still riddled with one-sided nuclear disarmers.

Mr. David Nicholson (Taunton)

About 20 minutes ago when my hon. Friend first mentioned defence, Opposition Members said that the subject was boring. The number of Opposition interventions since then suggests that the subject is anything but boring. In my constituency the Labour party was in a respectable second place until 1983 and held the seat in 1945–50. However, I found that the haemorrhaging of Labour votes at the 1987 election was principally caused by Labour's policy on defence. I am sure that that is still the case in my constituency and in many others.

Mr. Gow

My hon. Friend's view is shared by the right hon. Member for Leeds, East who, to his deep regret and to mine, will not seek re-election at the end of this Parliament.

I shall now turn to another subject that is dear to the heart of the hon. Member for Bolsover. I want to examine Labour policy on nationalisation, a cause of which the hon. Gentleman is still a faithful and principled champion. The 1983 Labour party manifesto said that Labour would: Return to public ownership the public assets…hived off by the Tories, with compensation of no more than that received when the assets were denationalised. We will establish a significant public stake in electronics, pharmaceuticals, health equipment and building materials, and also in other important sectors, as required in the national interest. The 1983 manifesto was a blank cheque for nationalisation. In 1987 the language had changed and the manifesto said: We shall extend social ownership by a variety of means,…we will set up British Enterprise, to take a socially owned stake in high-tech industries and other concerns where public funds are used to strengthen investment. Private shares in BT and British Gas will be converted into special new securities. The 1989 statement "Meet the challenge Make the change" says: We shall…take BT back into public ownership. The speed with which we can act on our commitment to return privatised enterprises to the community will necessarily depend…on the situation we inherit in each case and on the constraints of finance and legislative time. Running through each of those documents of 1983, 1987 and 1989 is a reminder that, certainly for many Opposition Members, clause 4 is still alive. It seeks to secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof…upon the basis of the common ownership of the means of production, distribution, and exchange". On Wednesday in answer to a written question by my hon. Friend the Member for Pendle (Mr. Lee), the Under-Secretary of State for the Environment gave some startling figures about shareholders.

Mr. Leigh (Gainsborough and Horncastle)

As my hon. Friend has been making his characteristically witty and able speech, he has not had the opportunity that I have had to hear the sedentary interventions of the hon. Member for Bolsover (Mr. Skinner). According to the rules of order, sedentary interventions are not normally published in the Official Report, but those of the hon. Member for Bolsover reveal the true face of the Labour party. When my hon. Friend was speaking about Trident, the hon. Member for Bolsover remarked that it was only a rolling programme. My hon. Friend then moved on to speak about Labour party policy on clause 4. Perhaps my hon. Friend can ensure that when his speech is printed in the Official Report, the sedentary interventions of the hon. Member for Bolsover appear in the margins, so that all right hon. and hon. Members and the public—

Mr. Deputy Speaker

Order. Interventions should be brief. Sedentary comments are not part of our proceedings.

Mr. Gow

In a written answer this week, my hon. Friend the Under-Secretary of State for the Environment presented startling figures about shareholders in the newly privatised water companies. That matter is relevant because the Labour party's 1985 policy statement made a specific undertaking to take water companies back into public ownership. My hon. Friend the Under-Secretary stated: A total of 37,488 employees, representing 85.57 per cent. of the eligible work force of the 10 companies, have successfully applied for shares in the companies under free and matching offers."—[Official Report, 17 January 1990; Vol. 165, c. 250.] He lists each of the 10 companies—nine of them in England and one in Wales—and reveals that in every case, more than 80 per cent. of employees applied for and received shares. I select for particular attention North West Water, not least because my hon. Friend the Member for Eddisbury (Mr. Goodlad), the Comptroller of Her Majesty's Household, is in his place, and he represents a north-west constituency. Eighty-nine per cent. of North West Water's workers bought shares in that company, and many of them thus became shareholders for the first time in their lives. What will they say when they learn that it is Labour party policy specifically to deprive them of their shares?

One must consider not only the 37,488 water authority workers, because over the past 10 years and more, hundreds of thousands of our fellow citizens have become shareholders in industry for the first time. The Government have applied a dramatic policy of extending opportunities for share ownership to people who have never been offered them before. There is a roll call of honour of industries that were previously in the hands of a small group of fallible men sitting in Whitehall, and which in many cases have now passed from the control of the state and that small group of people into the hands of the workers themselves.

My hon. Friend the Member for Eddisbury is among those of my right hon. and hon. Friends who have consistently advocated the concept of worker shareholders and the extension of ownership. My hon. Friend the Economic Secretary to the Treasury, who is also in his place, taught me much about privatisation and other issues. I was a keen pupil, and I sat at the feet of my hon. Friend the Economic Secretary.

I remind the hon. Members for Bolsover and for Brent, East, each of whom is strongly opposed to worker shareholders, and I remind even you, Mr. Deputy Speaker, of the full roll call of honour: Amersham International, Associated British Ports, British Aerospace, British Airports Authority, and British Airways under the inspired leadership of my noble Friend Lord King of Wartnaby, who has further service to render in British Airways' continuing improvement. My hon. Friend the Economic Secretary told me that it is called the world's favourite airline. My hon. Friend makes many journeys to Europe, probably in an aircraft owned by my noble Friend Lord King. I could make a long speech about British Airways and even about my noble Friend, but I shall not delay the House.

The roll call of honour continues with British Gas, British Petroleum, British Railways Board, British Shipbuilders, British Steel Corporation, British Sugar Corporation, British Technology Group—my hon. Friend the Economic Secretary to the Treasury is smiling, and. I am only halfway down the list. It includes also British Telecom, Britoil, and Cable and Wireless.

The hon. Member for Bolsover may want me to pause at this point, because he will recall that when Cable and Wireless was nationalised, the Labour party appointed as its chairman Lord Glenamara, who did not know one end of a cable from another. We have put a stop to such practices. No longer do my right hon. and hon. Friends on the Treasury Bench have the power to make appointments to the boards of such companies. On the contrary, the people themselves have the right to elect their chairmen and board members. As my right hon. Friend the Chancellor of the Duchy is in his place, I may add that until we privatised the water authorities, the Secretary of State for the Environment, assisted by the Minister for the Environment and Countryside, made those appointments. Who could believe that my right hon. Friend and I served together in that same Department? When my right hon. Friend the Chancellor of the Duchy was Secretary of State for the Environment, he appointed every chairman arid director for the nine water authorities in England, and my right hon. Friend the Secretary of State for Wales made the appointments in respect of the Welsh authority.

I mean no discourtesy to my right hon. Friend the Chancellor of the Duchy, but in my opinion the water authorities are better managed now that they do not have to refer to the Secretary of State for the Environment every time that they want to spend some capital. Before privatisation, they could not without the consent of my right hon. Friend the then Secretary of State for the Environment and the Chancellor of the Exchequer, spend a penny piece on improving the quality of services. The authorities can now go to the marketplace, which is a great improvement. That is a major advantage of privatisation, apart from ensuring the wider ownership of wealth.

Mr. Madden

The hon. Gentleman referred to the appointment of water authority chairmen and board members. Earlier, he expressed regret at the absence from the Chamber of certain right hon. and hon. Members. We all regret the absence of the right hon. Member for Chingford (Mr. Tebbit), who serves on a number of boards of directors. Can the hon. Member for Eastbourne (Mr. Gow) say by what method his right hon. Friend was elected to those boards?

Mr. Gow

I give the hon. Gentleman two assurances. A new director may be appointed by the existing board, but he will be subject to election to the board at the next annual general meeting, of which every shareholder—and sometimes there are hundreds of thousands of shareholders—is given notice. That is the procedure followed under company law.

I was contrasting the way in which Lord Glenmara was appointed with the way in which the chairman and directors are now appointed by the shareholders of Cab le and Wireless. A large proportion of the workers in that company are now shareholders and they have the opportunity to have a say in appointing directors. Worker shareholders can and do turn up at the annual general meeting and ask questions of the board and, at the end of the day, they have the right to appoint it.

The Crown Suppliers and the electricity supply industry are two more examples. We have passed the legislation and before this Session comes to a close those who work in the electricity supply industry will have the opportunity to become worker shareholders.

Enterprise Oil, Girobank, the Horserace Totalisator Board, Jaguar, the National Bus Company, the National Engineering Laboratory, the National Freight Corporation—I shall pause there. The Opposition seem to have the view, which is borne out by the commitment that I have just read out, that the National Freight Corporation should be renationalised and run by politicians and civil servants. I have never believed that. It is one of the lessons that I learned from my hon. Friend the Economic Secretary. He used to say to me, "What business is it of the State to own lorries? Why can't private bodies own lorries?" My hon. Friend was perceptive, because when National Freight was owned by the state, and Ministers appointed the chairman and directors, it made a loss. When we were able to restore it to the private sector, on the advice of my hon. Friend, the workers took over ownership of the company. One might have thought that that would have been welcomed by the hon. Members for Brent, East and for Bolsover, but in the Labour policy document there is a commitment to renationalise it. I draw that to the attention of the House because I wonder whether the workers and the worker shareholders of the National Freight Corporation, realise that if there should ever be another Labour Government there is a real prospect that their shares will be taken away from them.

I wonder whether the Economic Secretary remembers that we privatised the plant breeding institute?

Mr. Bill Walker (Tayside, North)

Yes, we did.

Mr. Gow

My hon. Friend says that I am right. Apparently, we also privatised the National Seed Development Organisation. I do not know whether any hon. Members bought shares in those companies. I did not know that they had been privatised.

Two more examples are Professional and Executive Recruitment and Rolls-Royce—that is a marvellous company to have restored to democratic ownership. Rolls-Royce is one of the most famous names in the world, and it is a matter of particular satisfaction to me, following the involvement of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who had a hand in bringing the company into the public sector, that my right hon. Friend the Member for Finchley (Mrs. Thatcher) was able to undo the damage that he did.

Mr. Pike

Is it not a fact that if Rolls-Royce had not been taken into public ownership at the time, and if what is now the Rover Group—it has changed its name so many times—had not been taken into public ownership, Britain would not now have an aerospace engine industry with a great worldwide reputation? When the hon. Gentleman goes on about public ownership, will he recognise that many publicly owned industries have served the country well for many years?

Mr. Gow

It is true that many of the industries that were in the public sector, and some of those industries that still are, have served the country well. I mean no criticism of those who work in the industries, but I am critical of the whole concept of public ownership. There have been losses in public sector industries, and that was due not to any lack of commitment by the workers but to the intervention and influence of the Government, which had such a harmful effect.

I have no confidence in the presumed superior wisdom of Ministers, or even of my right hon. Friend the Chancellor of the Duchy of Lancaster, to run an industry. Nor do I have any confidence in the presumed superior wisdom of the Opposition to run an industry. I prefer to leave it to those people who understand the industry.

Mr. Harry Greenway

Before my hon. Friend leaves the principle of moving companies from the public sector to the private sector, will he acknowledge that some 2 million individuals or families have purchased their houses, which were formerly publicly owned, to their enormous advantage, and against great opposition from hon. Members of the official Opposition, who voted against the right to buy, day-in and day-out for weeks on end, when the Government put the matter to the House? Most people who have been able to buy their homes have made palaces of them.

Mr. Gow

Of course, in the 1983 manifesto the Labour party promised to repeal the right-to-buy legislation which was contained in the Housing Act 1980. However, I wish to be fair to the Labour party; there was no commitment to repeal the right to buy in the 1987 manifesto, or the 1989 policy statement.

My hon. Friend the Member for Ealing, North (Mr. Greenway) is right to say that the extension of individual choice has characterised the 11-year administration of my right hon. Friend the Prime Minister.

Before the Housing Act 1980 tenants did not have a choice, but had to remain tenants for the whole of their lives. We gave tenants the opportunity to convert their tenure and to become owners.

We welcome most warmly, do we not, the shadow Secretary of State for Education, the hon. Member for Blackburn (Mr. Straw), who has just walked into the Chamber, because he is deeply interested in housing? The weekend seems to have begun for him already.

My right hon. Friend the Prime Minister was wise, because she believed that most local authority tenants would prefer to become owners if they had the choice. Therefore, the Prime Minister and my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley), who was Housing Minister at the time, gave tenants the choice.

We gave tenants the choice, and we have given workers in the long list of companies that I have mentioned—33; I have not quite got to the end yet—the choice and the opportunity to become shareholders.

I am glad that the hon. Member for Blackburn is here so that I can tell him about our astonishing discovery that nearly 90 per cent. of North West water authority workers applied for shares. That is the highest percentage in the country, although some might have expected the highest percentage to be in the south. I see that my right hon. Friend the Chancellor of the Duchy of Lancaster also finds that interesting. Southern water authority, which serves my constituency, had the lowest.

Because my right hon. Friend is so interested, and because he may not have had a chance to study the Official Report of 17 January, let me give him the exact figure: 89.46 per cent. of North West water authority's employees are shareholders. I think that that is thrilling, and so does the Comptroller of Her Majesty's Household. The Southern water authority figure is 80.56 per cent. Hon. Members may think that that is not too bad, but my point is that the North West figure is even better. Before he heard those figures, my right hon. Friend was inclined to agree with what would have been my guess—that the opposite was the case. Mercifully, my hon. Friend the Economic Secretary to the Treasury is also here, and will be able to retail all this to the Chancellor of the Exchequer when he goes off to report our proceedings at the end of the debate.

I had got as far as Rolls-Royce, but there are more companies on the great roll of honour: Rover Group, for instance, and the royal dockyards. That must have given particular satisfaction to the right hon. Member for Blaenau Gwent, who used to represent Plymouth, Devonport, and who must have been excited by the prospect of his former constituents being able to buy shares in the newly privatised dockyards.

Next on the list come the royal ordnance factories and Sealink. I believe that the hon. Member for Bolsover does not make journeys overseas, so he will not have travelled on Sealink ferries.

Mr. Skinner

I have been to the Isle of Man.

Mr. Gow

I have never been to the Isle of Man.

Mr. Skinner

It is all right.

Mr. Gow

Are there any Socialists there? I think not.

May I say how marvellous it is to see the hon. Member for Blackburn seated on the Opposition Front Bench? I hope that he listened carefully to the information that the percentage of workers who bought shares was highest in the North West water authority. He will have travelled on one of the Sealink ferries at some time in his life. I am making a journey myself this evening. I am not going to the Isle of Man; believe it or not, I am going to make a speech in the Isle of Wight. My hon. Friend the Member for Isle of Wight (Mr. Field) is here today: I am going to his constituency. I shall travel on a nationalised railway train from London to Southampton, and then on a privatised Sealink boat from Southampton to Cowes. If I ever manage to catch your eye again, Mr. Deputy Speaker, I shall give an account of my journey to you and the hon. Member for Bolsover, who may have travelled on a Sealink boat.

Mr. Skinner


Mr. Gow

Perhaps he went on a fishing boat.

Mr. Skinner

I walked on the water.

Mr. Gow

I believe that I am going on a Sealink boat; it is certainly privatised.

There are only two more names on the list of companies whose workers have become shareholders, and which are under threat from the Labour party.

Mr. Barry Field

Will my hon. Friend give way?

Mr. Gow

I will give way to my hon. Friend, as I am going to be his guest. Will he be looking after me at some stage?

Mr. Field

As the largest family of crematorium operators in the country, I am sure that we can promise my hon. Friend a warm welcome—but not that warm.

I hope that my hon. Friend shares my concern that, although the privatisation of Sealink has been such a success in my constituency and on many other islands, the nationalised board of British Rail sadly did not allow employees to buy shares when Sealink was privatised. Does he agree that there could not be a greater indictment of the board that refused to give that right to the employees who had served so faithfully for so many years? Sealink is the only company on the glorious roll of honour read to us by my hon. Friend not to do so.

Mr. Gow

It will come as no surprise to the House that there is an identity of view between my hon. Friend arid me. That identity of view presages a happy and agreeable evening, which we shall spend in the presence of new shareholders in formerly nationalised industries. My hon. Friend won his seat from the Liberal party. There is no representative of that party present today, but we welcome the arrival of my right hon. Friend the Patronage Secretary.

Mr. Skinner

He had a big job to do last night.

Mr. Gow

My right hon. Friend the Secretary of State for the Environment made a model speech of outstanding quality last night.

The last two names on the list are the Training Agency and the water industry. Let me put a direct question to the hon. Member for The Wrekin (Mr. Grocott). Who knows how he came to be put up to reply to the debate, but that task has been allocated to him—by whom I do not know. There he is, however: the official spokesman for Her Majesty's Opposition. Let me ask him which of those 33 companies will be taken back into public ownership in the event of a Labour Government's returning to power? I shall pause for the hon. Gentleman's reply.

Mr. Grocott

I am encouraged by the hon. Gentleman's implication that he is drawing his remarks to a close. The sooner that he does so, the sooner that we can get on with the rest of the speeches, and the sooner I can deal with his points at the appropriate time.

Mr. Gow

And answer came there none. It is not only the House of Commons that will note that answer; so will hundreds and thousands of new shareholders.

Mr. Barry Field

Before my hon. Friend draws his speech to a close, may I prevail on him to question the Opposition regarding their policy towards the security of frontiers in Europe? During the debate on the Aviation and Maritime Security Bill, I asked the hon. Member for Kingston upon Hull, East (Mr. Prescott) about his party's policies on retaining frontiers within Europe to prevent terrorism and drug smuggling. He informed me and the House that, broadly speaking, the Labour party supported that policy. However, time prevented me from asking him how his party reconciled that with its continual call for a vote to be taken in this House on the Prevention of Terrorism Act 1974. There is a complete contradiction between the Labour party's view on the retention of frontier posts in Europe and its continual calling into question of the Prevention of Terrorism Act.

Mr. Gow

Again, it is so fortunate that this evening I am to make a journey to the Isle of Wight. My hon. Friend and I, who are in such happy agreement, will be able to continue our discussion about the Labour party's policies.

I shall be unable in my brief speech—I have been on my feet for only one hour and 20 minutes—to cover every aspect of the Opposition's policy document "Meet the Challenge: Make the Change." It is four times the length of the previous document that has been described as the longest suicide note in history. It consists of 88 pages of closely typed script in two columns of very small print. Perhaps that was deliberate. It is sometimes said that if one wants to conceal things, they ought to be put into very small print.

It is a matter of great satisfaction to the House that my hon. Friend the Member for Crawley (Mr. Soames) is in his place. He has to leave shortly to make the journey to his Sussex constituency. He is a keen student of these matters and he has given me valuable assistance in preparing my speech. I thank my hon. Friend for the great help that he has given me. I hope that he will continue to assist me on future occasions.

I want to say, in the presence of my right hon. Friend the Patronage Secretary, since we have been considering the extension of ownership and choice during the last 10 years and more, that nowhere is that extension of choice illustrated more vividly than in an answer that was given yesterday in this place by my hon. Friend the Financial Secretary to the Treasury, although all of us know that the answer was prepared by my hon. Friend the Economic Secretary to the Treasury. My hon. Friend the Member for Birmingham, Northfield (Mr. King) asked the question, about share ownership.

We welcome most warmly, directly back from Hong Kong, my right hon. Friend the Member for Blackpool, South (Sir P. Blaker) who has just come into the Chamber. I know that he will wish to contribute to our proceedings.

In his answer, my hon. Friend the Financial Secretary said: The latest Treasury and stock exchange survey in February 1989"—

I pause there. My hon. Friend the Member for Crawley will agree that we are now in January 1990 and that next month there will be another survey, which means that I am about to give a figure that is 11 months out of date. My right hon. Friend the Member for Blackpool, South follows these matters closely. The figures given yesterday in this place by my hon. Friend at Question Time are not so good because they relate to February 1989. He continued: showed that approximately 9 million people"— I shall repeat that figure for the benefit of the hon. Member for Bolsover— showed that approximately 9 million people—that is 20 per cent. of the adult population—owned shares directly. In the last sentence of his answer—I want the Comptroller to listen very carefully to it—my hon. Friend said: This represents a threefold increase in the number of shareholders since 1979."—[Official Report, 18 January 1990; Vol. 165, c. 392–93.] I hope that my right hon. Friend the Member for Blackpool, South has taken that on board. Next month, we shall have the updated figures. According to my hon. Friend the Financial Secretary, 20 per cent. of the adult population now own shares, but the figures do not take account of the successful privatisation of the water industry. That point was made to me by my hon. Friend the Member for Crawley.

Mr. Nicholas Soames (Crawley)

The figures that my hon. Friend will be able to give to the House when a similar debate is held this time next year will incorporate not only the staggeringly successful response to the privatisation of the water authorities, but the privatisation of the Property Services Agency.

Mr. Gow

It would be correct to describe my hon. Friend as one of the architects of the privatisation of the Property Services Agency. During the critical time when policy was being fashioned, my hon. Friend was the Parliamentary Private Secretary to my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), who was then the Secretary of State for the Environment but is now the Secretary of State for Trade and Industry. It was a brilliant appointment by my right hon. Friend the Prime Minister to send the former Secretary of State for the Environment to the Department of Trade and Industry. My right hon. Friend the Member for Cirencester and Tewkesbury and I hold identical views about the extent to which the Government ought to intervene and interfere in industry: the Government ought not to interfere at all. We look forward to continuing our privatisation policy. However, there is not much left to privatise. The privatisation of British Coal will please the hon. Member for Bolsover. He will be able to buy shares in British Coal. He is a miner. If he is still in this place, his hon. Friend the Member for Brent, East will also be able to buy shares in coal mines.

Mr. Skinner

The hon. Gentleman is travelling a little further than he ought to go. He probably knows that Tory Ministers at party conferences have said, before giving the Prime Minister her 40-minute standing ovation, that British Coal will not be privatised until after the next election. That depends on the Tories winning. Such is the nature of the Opposition's policies, to which the hon. Gentleman is not referring today—he is concentrating instead on Tory party policies—that we shall win the next election. Therefore, British Coal will not be privatised.

Moreover, I shall put in a bid to repeal some of the measures that have already been enacted. We may reopen a few of the pits that the Tory Government have assisted in closing. We shall also repeal the legislation that is now going through the House that will lead to a massive increase in opencast mining. We are interested in saving the environment. We shall almost certainly repeal the new legislation to increase the number of men employed in private mines from 30 to 150. We shall have a pretty good programme for the coal industry. The hon. Member for Eastbourne (Mr. Gow) need not worry his head about that. He will have plenty of time to sail up and down Eastbourne marina.

Mr. Gow

It is always a great pleasure to follow an intervention from the hon. Member for Bolsover because his intervention illustrated so clearly the deep divisions that characterise the Labour party and the unity that characterises the Conservative party. I say that even after a little matter where apparently some of my right hon. and hon. Friends were not very enthusiastic about the community charge. However, I shall come to the point. The hon. Gentleman's intervention related to the coal industry. Although it is very unlike him, the hon. Gentleman is misinformed. I can inform him—and my right hon. Friend the Chancellor of the Duchy will confirm it—that it is the official policy of Her Majesty's Government to privatise the coal industry. That has been made perfectly clear.

Mr. Skinner

Not during this Parliament.

Mr. Cow

The hon. Gentleman is quite right. It is the policy of Her Majesty's Government to privatise the coal industry in the next Parliament.

Mr. Skinner

Only if they win the election.

Mr. Gow

I agree with the hon. Gentleman that only if the Conservative party wins the election will we be able to give the miners of Bolsover that choice and opportunity—which they do not have now—to become owners. It is thrilling and exciting news for us and appalling news for the hon. Member for Bolsover and his right hon. and hon. Friends that, given the chance, the miners of Bolsover and the entrepreneurs of Brent, East would prefer to be owners. And that is what will happen. [Interruption.] We welcome back the hon. Member for Southwark and Bermondsey, the absentee representative of the Liberal party.

Mr. Skinner

He has been digging up the Mary Rose.

Mr. Gow

The solitary representative of the Liberal party has now retired. We did not want to drive him away.

The really thrilling point which will cause such happiness in the hearts and minds of the hon. Members for Bolsover, for Brent, East and for The Wrekin, whose position is at some risk at the next general election, is that we have discovered from those 33 newly privatised companies that when people are given the choice of being tenants or owners they prefer to be owners and when they are given the opportunity to become shareholders they say, "Yes, we would like some shares."

This is only a short debate and we have to conclude our proceedings no later than 2.30 pm. The Economic Secretary has to report to the Chancellor on the momentous nature of the debate, and when he does so—[Interruption.] I remind the House of the gulf between the Opposition's suicide note which contains five or six times more words than the one that the shadow Foreign Secretary described as the longest suicide note in history, which has been superseded. I want to remind the House of the gulf between the policies set out in it and some of the policies of the Communist countries in eastern Europe. It was described yesterday in the House in a picturesque way by my hon. Friend the Financial Secretary. Again, although the words were spoken by the Financial Secretary, the hand that drafted the words was that of my hon. Friend the Economic Secretary who is seated on the Treasury Bench. I ask the hon. Member for Antrim, East (Mr. Beggs) not to engage in conversation with the hon. Member for Bolsover at this critical moment of my speech.

The words that fell from the lips of my hon. Friend the Financial Secretary—I commend, them to you, Mr. Deputy Speaker, as you were not in your place when that answer was given, although you will have studied it in the Official Report—were: the former Socialist countries of eastern Europe are appointing Ministers responsible for privatisation. That is what they are doing, yet the Labour party says in its suicide note that it will nationalise companies in the United Kingdom when in eastern Europe they are privatising. The British people will be rather bewildered by that. My hon. Friend continued: In Poland my opposite number has the splendid title of the plenipotentiary in charge of ownership changes."—[Official Report, 18 January 1990; Vol. 165, c. 393.] But the ownership changes that are taking place in Poland are moving ownership out of the hands of the state and into the hands of the people, whereas the Labour party in England wants to take ownership out of the hands of the people and back into the hands of the state. The debate is about whether we believe that we should concentrate ownership in the hands of the few—such as the hon. Members for Brent, East and for Bolsover, although to be fair to them, if there were a future Labour Government neither of them would agree to serve in it. Nevertheless, under a Labour Government ownership would be concentrated in the hands of the few.

You are a keen student of these matters, Mr. Deputy Speaker, and in the years that have elapsed since June 1987 there has been some attempt by the official leadership of the Labour party to distance itself from previous policies. There has been some recognition that the policies on which the Labour party fought in 1979, 1983 and 1987 were not popular with the electorate. That was a correct judgment. However, I single out the hon. Member for Bolsover for particular praise as he does not care whether the policies which he is expanding are popular. I salute him for that. The hon. Gentleman is one of those relatively few people who preach the message that they believe to he true, whether it is popular or unpopular with the audience. That shows him to be a man of principle. What is not principle is to continue to believe in the truth of the message but to try to adapt or adjust it to conceal that belief from those who are listening to the message.

The doctrine that I am expounding was put most vividly in a speech on the last Sunday of November 1959 at the Winter Garden in Blackpool. I expect that the hon. Member for Bolsover was there, and so was I. It was the last speech of Mr. Aneurin Bevan's life. I was so impressed by his words that I committed them to memory. The then deputy leader of the Labour party said, "You really cannot go before the country with a programme and tell the country that you thought the programme was good for the country, and immediately the country rejected it say you would like to alter it. It will not work. It is not right. It is almost like saying that you put before the country a false prospectus."

Aneurin Bevan was a man of principle. Today's Labour party has not altered its beliefs, but because it has found that they are not popular with the British people it has sought to conceal its true beliefs. As my last words, I quote the last sentences of Aneurin Bevan: "It will not work. It is not right."

11.10 am
Mr. Ken Livingstone (Brent, East)

There was one flaw in the basis of the speech by the hon. Member for Eastbourne (Mr. Gow). He confused two documents—the election manifesto that we put before the people in 1983, which was rejected, and the Labour party's policy review. The 1983 manifesto was flawed because it tried to square too many circles. Rather than being clear, it blurred the commitment to unilateralism to hold all the strands of the party together, and too many compromises were struck on the economic policy that it put forward. To compare that five-year programme for government with the present policy review is a mistake.

The policy review is not a manifesto but a long shopping list of all the things that we would try to do, the majority of which are not controvesial and would be supported by members of the Green party, bits and pieces of the old alliance and many moderate Conservatives. The commitments to better training, to better research and development and to a more positive stance on the environment would be shared by the majority of British people. The only place in Britain where one would not find majority support for those objectives is the Cabinet, and some of its members may secretly harbour those views. The policy review is not a manifesto for five years of government and therefore is not costed. No one would deny that that has there has been a shift to the Right between 1983 and the present Labour party policy review.

This debate is not appropriate just to the present time. The Opposition—who 100 years ago were led predominantly by the Liberals but are now led predominantly by the Labour party—face one difficult and unpleasant fact. For a century, no party in opposition to the Conservatives has won a second term with a working majority. The Liberal Government of 1906 to 1910 failed to gain a majority and had to form a working arrangement with the Irish Nationalists, who held the balance of power. The 1945 Government and the Wilson Governments of 1966 and 1974 failed to win a second term. During the two years when I was a member of the policy review I concentrated on trying to understand the reason for that. It is not that we have not been sufficiently accommodating to the centre or to the status quo. The reason is that the the Labour party and the Liberals of the past failed to be sufficiently radical in transforming Britain when they held power. They made so many compromises and lost so many opportunities that they failed to consolidate their hold on power. Unlike Conservative Governments, they failed to hold their natural interests together as a governing block in order to win re-election.

The problem currently facing the Labour party faced the Opposition at the beginning of the century—how to pay for a legislative programme. Throughout the century, non-Tory Governments have faced that problem and have often alienated key groups of their supporters by imposing wage controls, higher taxation and policies that led to higher inflation. If Labour is to govern Britain in the 1990s and thereafter to win a second term in office it must resolve those problems. That means making difficult choices.

I have tremendous respect for the present leadership of the Tory party. I do not agree with almost anything that they do, but I recognise that, following the oil crisis in 1973, and faced with the shift in the world economy that that brought about, the end of the 25-year world boom and a much more rigorous future, the Tory party acted swiftly. It removed its old one-nation Tory leader, shifted its policies to the Right and decided which policies to defend, which it has done effectively over the past 10 years. The policies that the Prime Minister and those around her have chosen to defend are defence spending and the freedom of capital to invest abroad rather than in Britain. That is not a recent decision, because those problems faced the British economy at the beginning of the century.

Mr. David Nicholson

The hon. Gentleman has referred to the Labour party's policies and the Conservative party leadership. Will he expand on a statement that he made on his party's leadership, which says: You can have all the best policies in the world but if you have a Ramsay MacDonald in front there isn't a cat in hell's chance of getting them implemented. Will he expand on that interesting theme?

Mr. Livingstone

It is obvious that Mr. Ramsay MacDonald was not one of the most successful Labour party leaders. He opened the way to almost a generation of Conservative Government. We have no desire to have another Ramsay MacDonald. We must avoid the mistakes of compromise, waffle and indecision, which opened the way to the disaster of 1931. The decade of the 1930s was wasted by Britain.

Two basic flaws that undermined our economic progress in the first decade of the century are still with us today. The British economy allowed too many of its resources to be drained away on defence spending and the Government of the day allowed a vast flow of capital out of Britain and neglected the reconstruction of our industrial base. The figures for the 15 years that led up to the first world war are stunning. In Germany, which was committed to a strong modern and prosperous industrial base, investment abroad was 5 per cent. of its gross domestic product per annum. Throughout that 15-year period, 54 per cent. of capital in Britain was invested abroad. If an economy invests abroad, a skilled work force is not necessary to the same extent as in an economy that is building a modern, strong domestic economic base.

The problems that we have experienced under the Prime Minister, which sometimes many of my colleagues believe are solely her satanic creation, have been at the core of the problems that Labour, Conservative and Liberal Governments have faced throughout the century. The Conservative Government are quite happy to see those policies continue.

In the past 10 years we have seen £120 billion sail out of this country to be invested abroad. It does not go into the Third world where it might help to restore the balance of poverty between the first and third worlds. Almost all of that wealth has gone into the economies of our major competitors—£60 billion during the past 10 years has flowed into America. The Americans have seen our money building factories. Our money has been invested in America and has created jobs there. We end up importing the finished goods that they create and have the burden of a trade deficit. That has been an endemic problem throughout the century.

No party opposing the Tories can win an election and govern sufficiently to win re-election unless it addresses these problems. Unlimited wealth is not available to any nation. If we want to increase spending on pensions, housing, health and all the matters to which we are committed in our policy review, we shall have to create new wealth somewhere else or switch resources.

Even if we could generate growth in the British economy of about 5 or 6 per cent. a year—no one sees that as immediately possible—it would still be far too long to wait to ease the burden that our pensioners have carried and increase the meagre resources which the nation gives them so that they can spend the end of their lives in reasonable comfort. It would be too long to wait to see the extra £3 billion that we need to invest in the Health Service to bring it up to the level of that in France or West Germany.

A Government taking office in the early 1990s who want to rebuild the welfare state and create the investment we need in expanding our industrial base, cannot wait for growth. It would be asking too much of people in Britain. Therefore, we are faced with a difficult choice: should we increase taxes on ordinary people as well as the rich to find those resources, or should we divert resources from elsewhere in the British economy? If the Labour party can come up with a convincing answer to that question, it could govern through the 1990s and beyond. If we fail, we face repeating the experiences of the Wilson and Callaghan Governments.

Mr. Skinner

My hon. Friend referred to defence expenditure and to the fact that Britain now runs a massive balance of payments deficit of about £20 billion. Does he agree that that is easily confirmed by the statistics of the balance of payments for the two major nations in the world: West Germany, with the equivalent of a $40 billion balance of payments surplus, and Japan, with the equivalent of an $80 billion balance of payments surplus? Those two countries have not had the massive defence burden around their necks which we in Britain have had since the end of the second world war.

Mr. Livingstone

I confirm what my hon. Friend says. It is interesting to look at the period during which Britain rose to global dominance at the beginning of the last century. Our defence spending then was less than 2 per cent. of GDP. America's defence spending in its rise to global dominance in the period up to the second world war was less than 2 per cent. of GDP. Throughout the post-war period Japan's defence spending was often less than I per cent. and never more than 2 per cent.; and the same applies to West Germany. There is no doubt that a dynamic economy cannot sustain, year after year, an armaments burden of much more than 2 per cent. of GDP.

The next stage forward for the Labour party and its policies is to create the financial framework and make it clear how we intend to pay for what we seek to do. No one in the Labour party, from Front Bench spokesman to the newest member, is prepared to say that we should wait for five to 10 years to create the growth that we need to take such action. We do not have the time. We are still slipping behind the rest of the world in terms of investment and our welfare provisions. It becomes a sick joke when we compare the level of pensions in Britain to the level of those available in other member states of the Common Market.

We must do what the Prime Minister has done—decide where our priorities lie and pursue them with the same vigour as she has done. But we must reverse her priorities. We wish to reverse the society she has created, which is one of greed and lack of fulfilment of individual potential. To do so we must consider those sectors of the economy which she has preserved and protected.

As my hon. Friend the Member for Bolsover (Mr. Skinner) said, we start with defence. Let us forget the latest changes in global politics wrought by Mikhail Gorbachev's policies. Let us consider the basic flaw between us and the rest of the major European nations. Throughout the '50s, '60s, '70s and '80s Britain, on balance, has spent 2 per cent. more of its gross domestic product on defence than the average west European nation. We now spend an incredible £9 billion more of our wealth on defence than France or West Germany.

Why on earth should Britain spend 2 per cent. more of its GDP on defence than does West Germany or France? It is nonsense. Does anybody seriously believe that we are about to be invaded by the Soviet Union? That question has only to be asked to reveal its stupidity. We see from the opinion polls that Mikhail Gorbachev is the most popular politician in the history of polling in Britain. He has a support rate among the British people of 89 per cent.—only 8 per cent. of people in Britain oppose Mikhail Gorbachev. He does not need to invade Britain; he is so popular that he could come here and win the general election. He is three times more popular than the Prime Minister.

Mr. Skinner

That is not difficult.

Mr. Livingstone

As my hon. Friend says, that is not difficult. Perhaps an inverse law is operating here so that the further away a politician is, the more popular he or she appears to be.

Mr. Nicholas Bennett

The hon. Gentleman has been questioning why Britain's defence budget is larger than that of West Germany or France. We have responsibilities not only in Europe but across the world. In addition, our other big responsibility is fighting a war against terrorism in Northern Ireland. The hon. Gentleman is well known as an apologist for the IRA. In his book, "Livingstone's Labour: A Programme for the Nineties", when talking about the killing of people in Northern Ireland, he said that it would leave the IRA with no choice but to break the ceasefire". That is the signature tune of black propaganda issued by the IRA. The quote was taken from Conor Cruise O'Brien's review of the hon. Gentleman's book which appeared on 9 September 1989. If the hon. Gentleman came off the fence and supported the Government in attacking terrorism instead of being an apologist for that organisation we would listen to him with more care.

Mr. Livingstone

The people of Ireland as well as the people of Britain would much rather see the £700 million which is spent on security in Northern Ireland go to creating a modern Irish economy. Some of us might think that, after 20 years of stalemate, we should consider some form of negotiated settlement. A Government have a simple duty to their people. If they are involved in conflict, that duty is either to win the war or to negotiate a peace, not to drag on, generation after generation, with no prospect of any end in sight.

However, this is a diversion. The reality of defence spending is that we spend a vastly greater proportion of our income on it, more than do other west European nations. Our research and development potential as a modern nation is a joke. Our investment in R and D is completely out of line with other modern European economies. Half of the scientists in western Europe working on defence spending are British. More than half of our entire research and development potential is consumed by defence.

When we ask why we buy good quality finished goods from Japan and West Germany rather than here, the answer is often because they are not produced here. It is not that the manufactured goods that we produce are inferior to those of West Germany or Japan, but that often we do not produce them. Therefore, we have no option but to buy them from our major competitors. That is because their scientists and technicians have had the time to develop those products, whereas ours are working on bigger and better ways of killing people. Therefore, we lost that potential for growth and trade.

Decade after decade, the British economy has been dragged down by defence spending. Even without the latest changes in the global political position, any British Government of the past 20 or 30 years should have had the target of reducing defence spending to the average level for west Europe and releasing that £9 billion.

Think what we could do with that £9 billion. We talk about needing £3 billion to restore our National Health Service so that it is at the forefront of those of modern nations. Think how much of that could be used to expand and re-equip our schools, and to give teachers and lecturers the remuneration that they require so that we have an education-led economy—a dynamic, growing economy based on the talents of the people. Think how much of that money we could use to build a modern infrastructure, with a modern transport system and modern housing provision. Anybody in Britain who considers all that we could do with the money would say that it was madness to continue to spend £9 billion a year more on defence than our major competitors. Are we more at risk of war than France or West Germany? What nonsense. That is one area from which we could shift resources to pay for decent pensions and the reconstruction of our welfare state.

The second area concerns capital. The wealth generated in Britain and invested abroad is not simply the wealth of the financiers who take the decisions to invest it abroad. Every penny of it has been created by the extraction of resources from the North sea or the productive labours of millions of British people day by day at their workplaces. The generation of new capital goes on every day.

Britain is unique in investing that wealth abroad rather than at home on a scale out of all proportion to any other major nation. Britain now owns more of the rest of the world's productive resources as a proportion of its national wealth than any country other than Japan. The Government may say, "That's fine; we can live off the profits", but it is clear from the trade deficit that we cannot. I am not opposed to some investment abroad, but I am opposed to it being so out of line with that of our major competitors that it starves and undermines our productive economy.

We are investing about £7 billion a year in our industrial manufacturing sector. To achieve West German levels of investment we need to double the figure to £14 billion, and to reach Japanese levels we need to multiply it to £55 billion. Those are stunning figures. We are falling behind, and the gap is getting worse. It translates into the trade deficit. It is not just the product of the 1979–81 recession, but has gone on since then year by year. We need to say to the British people, "You cannot have an economy that rests solely on a profitable financial sector in the City of London and a great service economy, where many of the jobs require minimal skills and are completely unrewarding." As the CBI said, we cannot export a haircut.

Our economy is out of kilter on a major scale. We can create the society that our people have a right to expect only if we see a massive expansion of investment in and the modernisation of our industrial base. No one can say honestly that that can be left to the market. It has been left to the market for a century or more. In the past 10 years the market has been allowed complete freedom and the financiers, probably no more than 3,000 of whom can take key decisions, have chosen to invest abroad the wealth created by British people.

Now we face an even more monstrous distortion. We are for ever debating the trade deficit. It is deeply embarrassing to the Government. It is the worse trade deficit of any of the G7 nations, the seven key industrial Western powers, at any time in the past 30 years. If we were to plot the deficits of the G7 nations on a graph, one after another and one year after another since 1960, it would show that Britain's present deficit of trade and capital outflow is three times worse than that of any of the other nations at any time in the past 30 years. That is frightening. We are worried about our £20 billion trade deficit. It amounts to 4 per cent. of our national wealth each year. That would put any company into receivership.

That is not even half the story. Hidden away and not getting the same attention is the deficit on capital flows. In addition to the £20 billion trade deficit, we have a £30 billion capital deficit. That is the money that our financial institutions invest abroad in long-term projects as opposed to money from abroad invested here. Add the two together—the 4 per cent. GDP deficit on trade and the now close on 7 per cent GDP deficit on capital—and the country is running an 11 per cent. GDP deficit. We are living beyond our means to the tune of £10 billion a year with no prospect of change. The only way that the Government can avoid international receivership is to organise a flow of short-term hot money into Britain, often on a 24-hour basis.

Mr. Skinner

Is there not another ingredient? In order to balance the £20 billion trade deficit, which is likely to remain for a considerable time, the Government have decided that we must have high interest rates. In order to finance the gap created by the consequential payments to finance the £20 billion deficit at high interest rates and the hot money, we face costs of about £26 billion. The bigger the trade deficit and the higher the interest rates, the more hot money we need to balance the books and pay out the interest rate instalments. That means £25 billion on our deficit.

Mr. Livingstone

My hon. Friend is right. That is the problem that we face; and it is more of a problem for the Labour party than it is for the Tory party. International finance knows full well that the Prime Minister will defend it, but that would not necessarily be its presumption if there was a change of Government. The British economy is running a 4 per cent. GDP deficit on trade and a more than 6 per cent. GDP deficit on finance capital. We are surviving that only by keeping interest rates high and attracting hot money.

The money that we have invested abroad has bought factories and shares, and cannot be liquidated easily. Yet the short-term hot money, which the Government use to balance that, can go in 24 hours. The Government survive only so long as they hold the confidence of international capital. So long as the Government keep interest rates high and pay profits, international capital will remain. When people complain about mortgage rates we should tell them that interest rates are high, so that we can continue to attract hot money from abroad, so that British financial institutions can continue to invest a total deficit of £30 billion in shares and building factories all over the rest of the world. They would think that we were mad. People are being bankrupted day after day and suffering pain to allow British bankers to invest money abroad.

The Government get away with that because international finance knows that when the crunch comes it can rely on this Government to put the burden of the crisis on ordinary British people and to preserve and protect it. International capital knows that it cannot rely on a Labour Government. Therefore, when the Labour party comes to power, we shall face a financial rack on a scale that makes anything that has gone before look like a tea party.

Mr. Nicholas Bennett

The hon. Gentleman's exposition of the problems that would be faced by a Labour Government, should one ever come to power, are most interesting, as is his description of the economic policies to be followed. I must remind him of what his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said when he suggested that the Labour Government would persuade banks to limit credit. He explained that the banks would do so: Out of a sense of reasonableness and of national duty and a desire to co-operate with the elected Government".—[Official Report, 24 October 1989; Vol. 158, c. 688.] That policy is not the same as that suggested by the hon. Gentleman.

Mr. Livingstone

I am about to discuss the interesting problem of how one imposes a sense of loyalty to the nation on our financial institutions given that we shall inherit an economy that is running massive deficits and that will be dependent upon international finance to continue to prop it up.

Under President Reagan a similar budget and trade deficit developed. If a Democrat had been in the White House and had run similar deficits, the economy would have collapsed. As Reagan and the Republicans were in charge, Wall street and the Japanese banks were prepared to prop up that Government. They knew that they could rely on that Government to defend their interests.

If the Labour party took office tomorrow—if by some wonderful chance that glory should come to be—the financial institutions that have propped up the Government would end their system of support immediately. They would not be prepared to allow a Labour Government to run a £20 billion trade deficit, nor would they be prepared to witness that deficit's impact on our economy.

We must come to power in the full knowledge of the problems we shall face and we must be firm about how we shall deal with them. I do not believe that we can simply allow the flow of capital from Britain to continue. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) is right. The incoming Labour Government must tell our financial institutions that they should invest less abroad and more here. We shall expect them to honour that request because the people will have voted for precisely that.

If the hon. Member for Pembroke (Mr. Bennett) is suggesting that the British banking system and the City of London will not accept the result of the ballot box and the election of a Labour Government committed to increasing investment in British industry, that amounts to an act of economic sabotage. I believe that a Labour Government would enjoy massive popular support for imposing a level of restriction on the financial system to guarantee compliance with the result of that general election.

If the Labour party can construct an economic structure that shows ordinary people in Britain that we can rebuild our welfare state and increase investment in British manufacturing without increasing taxation on ordinary families and without fuelling inflation, we shall win the next election, and we shall govern for a generation. If we fail to be rigorous in our thinking, and if we fail to spell out the bottom line, we shall leave it to the Conservative party to exploit the fear that the election of a Labour Government may lead to inflation, increased taxation and wage restraint. Those policies were tried in the past and they failed.

The debate about the economy is still continuing within the Labour movement. Occasionally my hon. Friend the Member for Bolsover and I have been criticised by some of our colleagues for being sound money men. I am not interested in fuelling inflation. It is our people who carry the burden of the economic crisis created by inflation. A Labour party economic policy based on production requires stable exchange rates and low rates of inflation, and it must be serious about the money supply. If Milton Friedman had any self-respect he would sue the Conservative party for claiming to be monetarist—it has been profligate on a grand scale.

Our rate of inflation is a disgrace. I am not interested in Conservative Members telling me that inflation is not as bad as it was 10 years ago. There is no point in comparing the two rates. The important consideration is how we stand in relation to Germany, Japan and our major competitors. As long as their inflation rates are lower, their economies will grow stronger and ours weaker. We are committed to sound money. I do not want money to be printed just to fuel inflation.

Mr. Matthew Carrington (Fulham)

I am listening carefully to the hon. Gentleman's fascinating economic analysis. If I am right, I believe that he is suggesting that, unless the banks and the financial institutions are prepared to co-operate willingly—that is fairly unlikely, given that the vast majority are not British—the Labour party would be forced to reintroduce exchange controls. Presumably the hon. Gentleman believes that that is the only coercive measure available to a Government to repatriate capita from overseas. What would that do to our relationship with the European Community as such exchange control goes against the policies currently pursued by the Community? Those controls would be in direct contravention of European Commission regulations. Is the logical conclusion of the hon. Gentleman's argument that we would withdraw from the European Community?

Mr. Livingstone

I am arguing for exchange controls, but not necessarily in the form that existed up to 1979. Despite those controls, we still did not receive the necessary investment in our economy. The money stayed in Britain, but it fuelled a major boom in advertising, property speculation and fringe banking. Those were the main growth areas in the economy in the 1950s and 1960s. We do not want to go back to that. We want to keep more investment in Britain and we want to direct it into rebuilding a solid manufacturing base. I am talking about a different form of exchange control, but one which will broadly produce the right results.

It is not possible for me, as one Back-Bench Member, with one economic researcher who works one day a week, to construct the exact mechanism of government necessary to achieve the desired result, but a range of options is available.

Mr. Couchman

What would happen to all the inward investment into this country from the United States, Japan and the continent, which has been so beneficial in recent years to our manufacturing industry, should the hon. Gentleman's policies be pursued?

Mr. Livingstone

I welcome all inward investment. My complaint is that it does not match the outward investment from Britain. If one considers the inflow of investment capital against the outflow, it is clear that this year we are running a deficit of £30 billion. We cannot sustain that year after year.

The hon. Member for Fulham (Mr. Carrington) spoke about the problems associated with the Common Market. There is not the slightest doubt that what I am advocating would cause a major trauma within the Community, but it must face that. By the time we have got through 1992, and the French have witnessed the impact of removing their exchange controls, we may find that we have many allies within the Community. They will realise that we cannot leave it to the European financial capital centres to decide where investment is made. That is already happening. Many financial capitalists in Europe are saying that perhaps they should not invest any further in France or West Germany as they could invest in Poland or Czechoslovakia, which have much cheaper labour costs because they are emerging from Stalinist dictatorships.

When a Labour Government come to office we may find that there is a tide of opinion across Europe arguing for the wealth created in our countries to be used to create a basic decent standard of living that rests on a sound industrial base. That will, as the hon. Member for Fulham suggests, involve changes to the Common Market.

I give credit to the deputy leader of the Labour party who, in the run-up to the election, proposed that we should operate differential levels of taxation. Those companies that chose to invest abroad on a scale considered unacceptable by the Government would be subject to a higher level of taxation. That concept was hardly revolutionary, but it would be effective. One could increase the level of taxation to the point where it became more painful to resist the elected Government than to comply with their demands. Or one could go to the other end of the spectrum and adopt the methods used by the old Bolsheviks who took power in 1917. I say this as a joke in case someone rushes up and puts it on the Press Association tapes. When the Bolsheviks took power, the banks would not co-operate. Lenin sent a detachment of Red Guards to the bank and they said to the manager that they needed the money in the state bank. The manager would not open the bank, so they put a gun to his head and said that he had a choice: either he could open the vault, or they would pull the trigger. New realism was obviously alive and well as long ago as 1917 and the bank manager co-operated. Now I am not advocating that we shoot the bankers, but surely somewhere between Roy Hattersley and Vladimir Ilyich Lenin we can find the method that we need for Britain in the 1990s.

It is the principle that matters. Finance capital must serve the people of Britain rather than subordinate the whole country to its own needs. The tragedy of the past 10 years is that when we had the wealth of North sea oil, which could have been used so easily, it was allowed to flow abroad. Our major competitors have had so much of the benefit from it. That is the dilemma that we face.

Mr. Harry Cohen (Leyton)

I appreciate my hon. Friend's excellent speech. Does he agree that excessive defence spending and the flow of capital abroad are dangerously linked for us in the medium and long-term future? If there were a world recession, many of the countries where British money has been invested would seek to appropriate it to get themselves out of that recession. All that would be left to us would be the threat of force and our defence budget, which could lead us into war—possibly not with the most powerful countries, such as the United States, but with other countries. We could find ourselves on a war footing because of the silly policy of excessive investment abroad. That is the link with defence spending.

Mr. Livingstone

My hon. Friend is right. Over the past 150 years, the British economy invested abroad on a large scale and felt that it needed a huge arms budget to defend itself from the growing power of Germany and America. That is the problem. However, there is also a link with our education institutions. We should compare ourselves with Germany. In 1870, already more scientists were employed in the German chemical industry than were employed in every public and private institution throughout the British empire. Germany was committed to building a strong industry, and it recognised the consequent need for a skilled and well-educated work force.

We had an economy that was investing abroad and that wanted, therefore, a huge defence establishment to protect those investments. It did not need to train its own work force because investment was going abroad. In the debates about the creation of a proper universal education system, Lord Salisbury, before he became leader of the Conservative party, opposed expanding the education system because he said that Britain did not need it.

He said that it would mean "pouring learning into louts." That philosophy has run through our education system. Our system is still skewed towards the old imperial objective of investment abroad, for which we need a colonial structure, rather than creating the skills among our own people that we need to provide a modern economy.

Mr. Madden

Will my hon. Friend confirm that even today in Germany there are more students studying engineering than the entire student population of Britain? Will he also confirm that we now have the most marvellous opportunity because of developments in eastern Europe? We could switch all the talent and ability here from production for war to production for need. That is the marvellous opportunity that faces this country and the Labour movement.

Mr. Livingstone

I shall close on that point. The world has been changed by Gorbachev. I said earlier that we needed to cut defence spending irrespective of the recent changes. We now see the chance emerging for a massive switch of resources—not just in western Europe, but in eastern Europe and the Soviet Union—away from arms and into a genuine modernisation of the economy right across Europe. We should look to eastern Europe and the Soviet Union where a market of 400 million people wants to trade with us, and to see the expansion and development of a closer and more integrated European home.

The hon. Member for Eastbourne should not judge the Labour party by comparing the 1983 manifesto with our policy review. He should judge us by the manifesto that we shall post before the British people in a year or two. He should ask us then whether we have costed our proposals, where the money will come from, how much we shall cut defence, an how much we shall control capital. We must ensure that when we go into the next election we can say to the people, "This is our programme and that is what it will cost." Our programme will be paid for not by increasing the money supply and fuelling inflation, by increasing taxes on ordinary middle-income families or by a structure of wage controls, but by redirecting our existing wealth, which is being consumed by excessive arms spending, and by ensuring that Britain's financial institutions first serve the reconstruction of our own economy before considering investment abroad.

Several Hon. Members


Mr. Deputy Speaker

Order. We have had two speeches in about as many hours. Unless speeches and interventions are briefer, most hon. Members will be disappointed.

Mr. Madden

On a point of order, Mr. Deputy Speaker.When we were involved in the exchanges earlier about how an official of Conservative Central Office obtained permission to enter the civil servants Box, you were good enough to say that inquiries would be made. Would those inquiries include whether there was an official request from the Government, including the Cabinet Office, for that official to be given permission to enter the Box? Before the chairman of the Conservative party speaks, may we ask him whether he will make it clear whether his intervention is being made in his capacity as chairman of the Conservative party or on behalf of the Government, as Chancellor of the Duchy of Lancaster?

Mr. Deputy Speaker

To the extent that the hon. Gentleman's points are matters for me, I assume that what he has said will be taken into account in the inquiries.

Mr. Skinner

Further to that point of order, Mr. Deputy Speaker. Discussions have been taking place behind the Speaker's Chair, of which you will not be aware, about the deep concern about how this person managed to evade the security people and how it was that a day pass was allocated. It was done perhaps on the basis that it was thought to be OK because the Chancellor of the Duchy of Lancaster, the chairman of the Tory party—non-elected and given his job by patronage from the Prime Minister—had induced the officials and almost intimidated them into thinking that they would be doing the right thing if they allowed this person into this high security place. In view of that deep concern, the fact that the Patronage Secretary came here some time ago with a worried look on his face and the fact that these inquiries are developing, we should have a statement before the House rises so that we may know what has happened. You, Mr. Deputy Speaker, should pass that message on as soon as possible to the relevant authorities.

11.58 am
The Chancellor of the Duchy of Lancaster (Mr. Kenneth Baker)

I have already said that I apologise to the House if there was a mistake. There should not have been an official from central office in the civil servants Box and he has withdrawn from that position.

I congratulate my hon. Friend the Member for Eastbourne (Mr. Gow) on having had the good fortune to win the ballot in this matter and on directing the House to this subject. We do not often have an opportunity to discuss Labour party policy. Some of my right hon. and hon. Friends try to direct questions to the Prime Minister at Prime Minister's Question Time about Labour party policy, but they are ruled out of order, as the Prime Minister is not responsible for that policy.

We have had two such opportunities in the past few weeks; the first was the debate before Christmas on a motion about the future of Socialism; the second is today.

I have no disrespect for the hon. Member for The Wrekin (Mr. Grocott) but I must tell him that I am surprised that on these two occasions, which have presented an opportunity for shadow Cabinet members to speak about Labour's policy, they have not tried to intervene. I remember the hon. Member for The Wrekin as the hon. Member for Lichfield and Tamworth, a seat which he lost; no doubt he will lose his present seat in the fullness of time, too.

The person chosen to reply to the debate must have been discussed collectively by the shadow Cabinet. No doubt Mr. Mandelson strongly advised the shadow Cabinet not to debate against me in the House because I might have to spell out what its members believe in, which, would be wholly unacceptable—to Mr. Mandelson, who is very determined on these matters, and to the shadow Cabinet.

Mr. Bill Walker

My right hon. Friend will probably also have noticed that not a single Scottish Opposition Member is present. They are holding a sham convention in Scotland today at which they will debate the future government of Scotland, instead of coming here to explain the Labour party's flawed, fraudulent and unworkable proposals on devolution.

Mr. Baker

So yet another opportunity has been missed by the Opposition—

Mr. Simon Hughes (Southwark and Bermondsey)

I can shed a little light on the absence of Labour Front-Bench spokesmen. The Labour Whip said that the hon Members for Copeland (Dr. Cunningham) and for The Wrekin (Mr. Grocott) would be in attendance, but a last-minute intervention removed the shadow Leader of the House, perhaps because he is more vulnerable than many others.

Mr. Baker

We need a parliamentary inquiry into that, too. Why has the hon. Member for Copeland (Dr. Cunningham) been removed from the Front Bench today? After all, he was in the Lobby last night to vote, and he is not only the shadow Leader of the House but the Labour campaign co-ordinator. I frequently find myself debating with him. I am grateful to the hon. Member for Southwark and Bermondsey (Mr. Hughes) for reminding the House of these circumstances. But why?

Mr. Grocott

I am sorry to hear that the Chancellor does not think me a worthy opponent, but we shall have to judge that when the debate is over. I can give him an absolute assurance that I have been well aware for some time that I would take part in the debate, and I look forward to doing so, although I doubted at one stage whether I would be able to, as the first speech lasted for one and a half hours. I hope that I shall at least be a match for the hon. Member for Eastborne (Mr. Gow)—

Mr. Deputy Speaker

Order. I have already said that unless speeches and interventions are shorter many hon. Members will be disappointed.

Mr. Baker

I do not believe that the hon. Gentleman is an unworthy Member, but he does not speak with the authority of the shadow Cabinet. It is clear that two names appeared on the Whip; the hon. Member for The Wrekin was going to wind up, but the hon. Member for Copeland was going to open the debate. Where is he? It is all very extraordinary.

I have several shadows. Sometimes I am shadowed by the deputy leader of the Labour party, sometimes by the chairman of the Labour party—it is hard to remember who he is these days—but I must point out that these debates deserve the attention of, and attendance in the House by, a member of the shadow Cabinet. The absence of such a member shows the Opposition's reluctance to debate these matters and the contempt in which they hold the House.

I want to touch on the speech made by the hon. Member for Brent, East (Mr. Livingstone). I have some regard for the hon. Gentleman; we crossed swords in the past on the GLC in the days of Red Ken and Blue Ken. Since he joined the House it has become fashionable to write him off and to say that he has disappeared without trace. I do not happen to agree with that view. I think that the hon. Gentleman represents a consistent strand in Labour party thinking and in Socialism; he has stuck to that, as have the hon. Members for Bradford, West (Mr. Madden) and for Bolsover (Mr. Skinner).

It was clear from the speech made by the hon. Member for Brent, East that he has little sympathy with the so-called Labour policy review. He said at the end of his speech that we should judge the Opposition not on the review but on the manifesto to be published in one or two years' time. But that manifesto will draw on the review. It has been approved by such bodies as pass for representative organisations in the Labour party.

The hon. Gentleman said in an interesting aside that he had been involved for two years in the policy review. He was obviously dropped thereafter, rather like the hon. Member for Copeland was dropped from the Front Bench today. I am not surprised, given what the hon. Member for Brent, East was saying. He spoke bluntly, frankly and openly as we would expect of him, and he clearly said that the economic policy that any Labour Government must follow must be based upon massive intervention in the markets. He openly said that there must be exchange controls; that is not the view of Labour Front-Bench spokesmen. No wonder the hon. Member for Copeland is not here today. He would have had to defend the non-return of exchange controls; Labour Front Bench spokesmen do not believe in their reimposition.

The hon. Member for Brent, East also admitted, when answering the intervention by my hon. Friend the Member for Fulham (Mr. Carrington), that these controls would lead to major trauma in the EEC but that he was prepared for that. That is not the view of the Labour shadow Cabinet or of the policy review document. The hon. Gentleman pictured the wonderful possibility of sabotage by the City and of Lenin's red guard marching down to the bank. If it ever came to that there would be no better person to command the march on the Bank of England than the hon. Member for Brent, East. We would relish it. It would be his personal Bastille and the flag of Socialism would be planted on the Bank of England. It is pointless to disguise these differences between strands of opinion in the Labour party.

The policies in the review document merit examination and discussion. Entitled "Meet the Challenge Make the Change", it gives rise to two questions of great interest: first, whether Labour policies have changed; and, secondly, whether a big idea lies behind them.

Thousands of column inches in the press have been used up discussing whether there is a big idea, and various people have tried to find one. The last article on the subject that I read suggested that the big idea was to have no big idea. Certainly, there is no guiding vision in the document, no overriding view of the future. The only big idea that one can detect behind the document is a desire for power and office at any cost. That is what has overtaken the Labour party.

Have Labour policies changed? We should recognise that there have been some changes—for instance, the language of the Labour party has changed. Throughout the document we find words such as "market", "choice", and even "the homeowner". Occasionally even shareholders are mentioned—a benighted group they would be under Labour. And sometimes, the document even mentions taxpayers.

Is there a new agenda? Let us examine the subject of choice. The document rightly says that quality is important in education. That means support for the national curriculum, which the Opposition are trying to change and modify. The document also says that Labour is committed to preserving diversity in schools so that there can be choice for parents. What does diversity mean in terms of Labour policy? The Opposition want to abolish the remaining grammar schools. That is not increasing diversity, it is reducing choice. They are on record as wanting to destroy the city technology colleges that we shall set up. By destroying those colleges, Labour will not be increasing diversity but reducing it. It wants to destroy the grant-maintained schools, the many schools that have already opted out and the many more that will want to opt out. That is not increasing diversity. The rhetoric has changed, but the underlying reality has not, because Labour basically believes that all our children should go to one type of school that is owned, controlled, dominated and run by the local education authority. So much for the page 46 statement that: Labour is committed to preserving…diversity.

Mr. Madden

I am grateful to either the chairman of the Conservative party or the Chancellor of the Duchy—I am not sure how I should address the right hon. Gentleman. He rightly talks about the importance of choice and diversity. May I refer him to one small but important aspect of choice and diversity? Does he think that schoolchildren should have the opportunity to dress according to religious belief? If he does believe that, will the Government reinforce that important aspect of choice and diversity?

Mr. Baker

As the hon. Gentleman knows, the matter of dress for children is determined by the governing bodies of schools. It would not be appropriate for the Government and the hon. Member for Blackburn (Mr. Straw), if he were in the Chamber, would not suggest that the Government should impose a particular pattern or solution for school dress. That is a matter for the respective governing bodies.

Mr. Madden

I understand what the right hon. Gentleman says, but I should like to press him further. Would he advise governors wherever possible to ensure—

Mr. Deputy Speaker

Order. We are departing from the motion before the House. Perhaps we should return to it.

Mr. Baker

The hon. Gentleman's comment shows that Opposition Members are always trying to find ways in which Ministers can tell other people what to do. We believe in true diversity and that parents should have a much greater say in the running of schools. Grantmaintained schools have a democratic process for deciding whether they wish to become part-maintained schools. Labour would set that aside. How does that tie in with Labour's statement that Parents are a cornerstone of a school's success and a pupil's progress. Labour pays lip service to such matters, but its underlying policies have not changed, and Labour continues its vendetta against private schools.

Labour makes it clear that it will withdraw charitable status and will abolish the assisted places scheme. The party wants to destroy private education and that is restricting choice, not diversifying it. We get little insights into the vindictiveness of the Labour party. It is not in the document that we see the true Socialist venom on public schools. Ten days ago, in a speech by the deputy leader of the Labour party on constitutional matters, he put forward the reasons why he did not believe in a Bill of Rights. He also put forward other proposals about the House of Lords and such matters with which hon. Members are familiar. He said: One of the reasons why we are against a bill of rights is that it would almost certainly protect the public schools. That is another indication of how Labour is prepared to trim its principles. It talks about people's rights, but when it comes to a Bill of Rights that would enshrine choice and protect the individual, it says, "We do not want that, because the individual might want to exercise his choice by spending money on the education of his children." It is unparliamentary to say that that is hypocritical so I shall say that it is very devious.

The hon. Member for Brent, East talked about industrial policy as it is sketched in the policy review document. One of the early passages of the document talks about a "productive and competitive economy". We know from reports in The Guardian that the article had to be redrafted. Its author, the hon. Member for Dagenham (Mr. Gould), is not on the Opposition Front Bench today. The hon. Gentleman is one of the thinkers in the Labour party. I am not saying that the hon. Member for The Wrekin is not a thinker or is incapable of thinking, but the hon. Member for Dagenham has set himself up as one of the revisionary thinkers. At the last general election, he held the fort when the Leader of the Opposition went round the country. He was the bright new guy whom we did not know much about before, and he was doing all the thinking. Never has a reputation plummeted so abruptly, completely and precipitously than that of the hon. Member for Dagenham. Yesterday, he made one of the most inept and disastrous speeches that we have heard for a long time.

I shall now turn to the parts of the document that deal with industry and markets. We know that Labour's adherence to markets is only skin deep. It talks of the importance of recognising market forces, but the whole document is based upon the analysis that the market and market forces have failed and that we need massive instruments of intervention. Labour has plans for introducing quangos, national banks and public enterprise agencies, and that bears witness to Socialism's cold embrace for modern economics. Under Labour, we would have a "British industrial bank" and "British technology enterprise". Those bodies will pump money into projects which, basically, the planners in Whitehall think are viable.

That takes us right back to the policies of the 1960s and 1970s. In a lecture to the Tribune Group, which was subsequently shortened and printed in The Guardian, the hon. Member for Sheffield, Brightside (Mr. Blunkett) looked forward to a local high street version of the national investment bank. All sorts of people will be encouraged to part with their savings to back winners. As I and my hon. Friends know only too well, we have been here before in the 1960s and 1970s.

The hon. Member for Brent, East knows only too well about the Greater London Enterprise Board. That body was to pump money into projects which would not otherwise be funded by people who were too short-sighted to invest in projects on the frontiers of science. The hon. Gentleman knows that we had meetings about that when he was running the GLC. In 1984, of 18 companies in which the GLEB held 10 per cent. or more of the share capital, four were in liquidation, one was in receivership, and nine had failed to provide proper audited financial statements.

Mr. Livingstone

Will the right hon. Gentleman compare those statistics about the minority of failures that we had with the record of his Government under whom 80 per cent. of all new firms created in the last 10 years failed within two years? If the private sector had achieved the success rate of GLEB, many jobs and firms would still be going.

Mr. Baker

The GLEB failed in virtually every one of its investments, and the hon. Gentleman knows that. He talks about the creation of businesses. As a result of the changes that we have made in Britain's general economic framework, we are creating about 1,200 net new businesses a week. That is because we have provided opportunities and rewards through reduced taxation and have not tried to tell businesses where to invest and what products and projects to develop. We have left those matters to the spontaneity, inventiveness and originality of individuals. That is why we have had eight continuous years of the highest growth since the war. That is also why we have created more jobs than any country in Europe. The unemployment rate in Britain yesterday was 5.8 per cent. and in Europe it is about 9.1 per cent. This has been a decade of economic success.

The Labour party policy document talks about forcing investment to state ownership. My hon. Friend the Member for Eastbourne eloquently set out all the different companies and nationalised industries that we have privatised. That policy has been one of the greatest successes of the last 10 years and has not only increased the number of shareholders but has allowed industry to expand. Cable and Wireless was transformed from a sort of post-imperial telegraph company into a major telecommunications business. We have seen such transformations one after the other. What will the Labour party do about such matters? According to page 12 of its policy document, it will renationalise British Telecom. Page 15 says that Labour will restore water to public ownership and buy back shares in gas and electricity. The language has changed. Nationalisation, the old cry of the Labour party—clause 4 and all that—has been transformed into social ownership. Those words have been replaced by another weasel phrase—"public interest companies". What is a "public interest company"? I would have thought that Marks and Spencer, Sainsbury's, or British Airways—to whose transformation after being a state airline my hon. Friend the Member for Eastbourne also referred—are all public interest companies, because they put the interests of the public first. That is what the market does, but Labour cannot resist the temptation to meddle, to own, and to take public companies back into state control.

It is little wonder that the hon. Member for Copeland is not present to defend his party. It is extraordinary that no member of the shadow Cabinet is here to reply to the comments that have been made.

In his recent infamous interview, the hon. Member for Dagenham spoke about the way in which a Labour Government will treat shareholders and dividends. I believe not that that interview was an aberration but that it revealed the true nature of Labour's thinking. That is another example of Labour changing the rhetoric but not the reality.

The Labour party does not want to debate trade union reform, either. It declines to answer straight questions on that topic because its relationship with trade unions is one of the closest in political life. The Labour party grew out of the bowels of the trade union movement, which is why 90 per cent. of the voting power at Labour party conferences is in the hands of trade unions, why 40 per cent. of the members of the electoral college that selects Labour's leader are trade unionists, and why 40 per cent. of the votes for Labour party parliamentary candidates throughout the country are controlled by trade unions. There are rumours that those percentages might be changed, but I guarantee that they will not be eliminated, because Labour cannot cut its residual links with the trade union movement.

Mr. Couchman

Does my right hon. Friend agree that the hon. Member for Oldham, West (Mr. Meacher) gave such a frank insight into the actions that Labour would take for trade unions if elected that he was removed from his post as shadow Cabinet spokesman for employment, because his remarks did not sit well with the new policy of glitzy packaging and not too much truth?

Mr. Baker

The hon. Member for Oldham, West (Mr. Meacher) meant what he said, and that is no way to hold on to a place in the shadow Cabinet.

The "People at Work" section of Labour's policy document reveals a party looking over its shoulder at its paymasters and not a party concerned with the industrial realities of the 1990s. It states that under Labour, not all sympathy strikes would be unlawful—which means that Labour will reverse our legislation and legalise secondary action. We wait for further clarification on that aspect of the Opposition's policy. The document adds that under Labour, walk-outs and strikes would go ahead before ballots have been taken. In other words, strike first and vote Labour.—[Laughter.] I mean, vote later. My slip of the tongue revealed absolutely the true nature of that policy—strike first, vote later, and vote Labour all at the same time. Under Labour, individuals would have the right to strike without their union's funds being seized by the courts, which would put unions above the law.

Since the publication of Labour's policy review, we have witnessed a blinding flash of light, as my hon. Friend the Member for Gillingham (Mr. Couchman) observed. The hon. Member for Sedgefield (Mr. Blair), who is Labour's new spokesman on such matters, could have come to the House today to clarify Labour policy. One might well ask where he is. One can be sure that he is not present to answer questions about Labour policies. The hon. Member for Sedgefield has said that the Opposition will not defend the closed shop when the Government move to outlaw it in the Employment Bill. That is quite a change on the road to Damascus. When did Labour decide not to support the closed shop? It was when it realised that we intended to take action. Labour realised that it would be totally indefensible to defend the closed shop in debates in the House and throughout the country. That is another example of Labour trimming its previous views.

The Employment Bill contains many other new measures. It will be interesting to see whether Labour supports our proposals to abolish wildcat strikes, which will mean extending the responsibilities not only of trade union officials but their members. It will be interesting also to discover whether Labour supports our action to eliminate secondary action. Again, it is hardly surprising that there is no official Labour spokesman present to clarify Labour's policy on those matters.

Mr. Harry Cohen (Leyton)

Closed shops will be debated when the Employment Bill begins its progress through the House in a couple of weeks. Labour's thinking is that such matters fall within the scope of the European social charter. That part of the charter outlawing closed shops is something that many of my right hon. and hon. Friends do not like, but members of our Front Bench are prepared to accept it because they want to see introduced all the good elements in the social charter—including the banning of blacklists, such as those produced by the Economic League, and rights at work provisions, such as parental and family leave. The Government are anxious to implement the social charter's move against closed shops but none of the other provisions that it contains. How does the chairman of the Conservative party justify that?

Mr. Baker

I can justify it because we believe that many of the matters dealt with in the social charter should be dealt with within the relationship between the employer and the employee. We have already received from the hon. Member for Brent, East a clear indication that he wants to dismantle the EEC as it is now organised—to traumatise the EEC.

Mr. Livingstone

No, to reform it.

Mr. Baker

To see the hon. Member for Brent, East as a reformer requires a imaginative jump of a kind that I am not prepared to make.

Labour's policy on defence is also obscure. It would have been useful if there had been present for this debate Labour's shadow Cabinet spokesman for defence or even one of his three hon. Friends who serve as defence spokesmen. I dare say that there is hardly one right hon. or hon. Member who can name them, so well known are they. They must be somewhere in the country today, putting over Labour's defence policy. Not only is it impossible to name them, but one never hears from them. I am not surprised, because defence policy is another policy that Labour has given the appearance of changing but has not changed.

Labour has given the appearance of abandoning unilateralism and adopting a multilateralist policy. When the matter was debated at the last Labour party conference, The Times ran a leader commenting that Labour had at last rid itself of what had probably been its most consistent decisive and consistent handicap. If there has been a change, we must recognise it, but Labour are unhappy, unwilling and hesitant to debate it.

If Labour's policy is new why do they hide it under a bushel? Why is it so vague and why do we have to piece it together from speeches and interviews? Why does the leadership refuse to give straight answers to straight questions?

I shall pray in aid Mr. Bruce Kent, of the Campaign for Nuclear Disarmament, who has summed up Labour's problems when he spoke at the Labour conference last year. He said: It doesn't make any sense today. Read the papers. Baker—quite correctly—and the Conservatives say that the real issue is, are we going to have nuclear weapons as long as anybody else? That's the question they won't answer here in the NEC. I have put that question to the right hon. and learned Member for Monklands, East (Mr. Smith) in Question Time, and on many other occasions to Labour Front-Bench spokesmen.

In the disarmament process it is not the weapons that one starts with that are important but the weapons that one ends up with at the end of the process.

I have to ask that question again, and perhaps the hon. Member for The Wrekin could have a stab at answering it. I know that it can only be a stab at it, because he is not a member of the shadow Cabinet. It would know the answer to the question, which is quite straightforward—should we give up our nuclear weapons while other countries have nuclear weapons targeted upon us? We shall ask that question again and again until polling day.

In a recent interview, Mr. David Frost put that question to the Leader of the Opposition and I put it again. The reason why he did not give a clear answer is again given by Bruce Kent, who says: The policy review is an electoral strategy, not a set of disarmament proposals. A genuine and well-thought-out policy designed to defend Britain in the 1990s could withstand scrutiny and provide answers to these questions, but Labour's policy is a fudged formula, multilateral in language and unilateral in essence. It cannot survive any thorough going examination.

Mr. Hugo Young, the well-known political journalist and commentator, whom no one could describe as a closet Conservative—

Mr. Gow

He writes for The Guardian.

Mr. Baker

My hon. Friend confirms me in my belief that he is not a closet Conservative if he writes for The Guardian. This is Mr. Young's comment on the Leader of the Opposition's appearance on the David Frost interview the other morning—the hon. Member for Brent, East will enjoy this: His discourse on defence policy, and Labour's attitude to nuclear disarmament, contained so many seamless obscurities, delivered in such ungrammatical verbiage yet with an air of sententious candour, as momentarily to convince you that this man is not fit to be put in charge of a pea-shooter. That is the considered view of one of our leading political journalists upon the Leader of the Opposition when he is pressed on defence policy.

Yesterday, the House debated local government and the community charge. Questions have been asked this morning about how Labour would propose to pay for local government and the questions have not been answered, because Labour has no proposals. It has agreed to half of our proposals for the business rate. It is in favour of revaluation, but against the uniform rate. Therefore, it wants revaluation, but it wants the councils to be left to decide what the local rate will be. Labour would leave it to the Socialist brothers and sisters in the town halls to make up their minds. Where would that leave people in Haringey, where business rates increased by 56 per cent. last year? Is that democracy for the business men of Haringey? What about Islington, where the business rate went up by one fifth last year?

Under the Government's proposals, individuals will pay the community charge, but there will be comprehensive rebates for special categories of child care and for the less-well-off. Labour have opposed that tooth and nail. Many members of the modern Labour party, including 18 hon. Members, have openly encouraged law breaking and declared that they will not pay the charge.

Why have Labour opposed our policy? They know that it will sound the death knell for extremist Labour councils up and down the country because Labour is not interested in restoring sound financial discipline to local government. Next year, in Ealing, the council will find it more difficult to impose a 31 per cent. rates increase and to offer free self-defence classes to lesbians. Next year, Liverpool city council will find it harder to justify spending £250,000 on the council media room, when some classrooms are closed because of dry rot.

Labour's opposition to the community charge is meaningless until they come up with an alternative. Hon. Members in the House yesterday—

Mr. Grocott

Leave things as they are.

Mr. Baker

We have had another alternative. The hon. Member for Lichfield and Tamworth has added his twopenn'orth—

Mr. Grocott

I am the Member for The Wrekin.

Mr. Baker

Well he will not be the member for The Wrekin for very long. He has said, let us leave thing as they are. Is that official Labour party policy? Of course it is not.

Mr. Grocott


Mr. Baker

That is encouraging.

Mr. Grocott

I am quite sure that if there had been a free vote in the House last night instead of a coerced vote, many Conservative Members would have shown that they wished that we had left things as they were.

Mr. Baker

The only striking speeches in the debate yesterday were those by my right hon. Friend the Secretary of State for the Environment and by my hon. Friend the Minister for Local Government and Inner Cities when he wound up. The hon. Member for Dagenham gave a disastrous and inept performance. He has made two bad speeches this week, one on Monday and one on Thursday. He had to admit that Labour do not know what to do.

The Minister for Roads and Traffic (Mr. Robert Atkins)

The keeper of the Grail.

Mr. Baker

Yes, he is the keeper of the Grail. I was describing the intellectual distinctions of the hon. Member for Dagenham. Yesterday he admitted that Labour does not know what to do. It has had four or five years. A year ago it knew what to do, and produced a document. The hon. Member for Copeland spoke about it. It is no wonder that he is not here today.

The document said that Labour would introduce a modern property tax based on the capital value of a property, combined with an element of income tax dedicated to local government". That would mean two new taxes. The Independent reported, however, that an Opposition Member had discovered while canvassing that a system of two taxes was not popular on the doorstep. The Opposition have therefore abandoned that idea. What are we to have instead? Will a small chink of Labour's policies be revealed to us today? After all, a member of the shadow Cabinet is now here: he must know what his party is going to say. He has gained a distinguished record on profligate Labour councils over the years, and he should use this opportunity to tell us what form of local government finance the Opposition favour. I suspect that they incline towards a tax on the capital value of homes, related somehow to the wealth or income of the families or individuals living in those homes. But I shall give way, because I think that we are about to hear the answer to my question.

Mr. Dobson

What Labour will put to the people at the next general election is a system of local government finance, funded by central Government, that will find enough money to build and provide homes for London's 30,000 homeless families and the 8,000 families living in bed-and-breakfast accommodation. We shall find adequate funds, including funds from central Government, to ensure that central Government can perform the functions that the country wants it to perform. We will not put up with any ragbag nonesense from the right hon. Gentleman, who was so concerned about homelessness in the inner cities that when the boundaries were reorganised in 1983 he did a bunk from Marylebone and went off to Mole Valley. He knew that that was the only place where he would be safe.

Mr. Baker

The hon. Gentleman has added to Labour's spending plans in the past few minutes. We noted what he said very carefully, and I dare say that the shadow Chancellor will do so as well, but where will the hon. Gentleman find the money? His hon. Friend the Member for Brent, East has spent all the money that he has found on other matters.

I can tell the hon. Gentleman that we have found money with which to deal with homelessness: just before Christmas we announced a £250 million package. Governments can provide funds only if they run a sensible economy, and Labour will not do that if it ever returns to office. All the Labour Governments that we have had have left the country with higher taxes and bigger debts.

Mr. Dobson

If the right hon. Gentleman was not so ignorant about homelessness, he would know that to keep a family in bed-and-breakfast accommodation costs £12,000 a year, whereas finding a home for that family would cost less than £7,000. The policy to which I am referring would both find families homes and save money.

Mr. Baker

It would certainly not do that initially, and it is unlikely that it would do so even in the long term. If the hon. Gentleman is advocating a massive house building programme, he should cost it. If that proposal is to form part and parcel of Labour's policy review document, let us have the sums that are involved. I am surprised that the Opposition spokesman on these matters, who knows rather more about them than the hon. Gentleman, is not in his place to answer all my questions.

I have demonstrated the complete absence of local government policy on the Opposition Benches. Let me now deal with the continual evasion by Labour spokesmen, particularly the leader of the party. There is duplicity here. On 5 January I sent to the Leader of the Opposition a list of 52 questions relating to uncertainties in the policy document. Each was itemised. The list also included uncertainties surrounding what has been said by shadow spokesmen—for instance, the hon. Member for Holborn and St. Pancras (Mr. Dobson). I asked him to answer questions not about education, housing, defence or constitutional matters but about economic policy. I have not received a reply to my letter.

I wrote again on 12 January. I have still received no reply. I have written again today and reduced the number of questions to the Leader of the Opposition. I have asked him to answer just one question, if he cannot cope with 52: to say how the Labour party intends to find the money for all its exciting and imaginative policies on housing and everything else.

I can understand the Leader of the Opposition's reticence. All the other Front-Bench spokesmen make enormous gaffs when they speak. The hon. Member for Dagenham has made gaffs about shares, dividends and restrictions on mortgages. The hon. Member for Perry Barr (Mr. Rooker) made a gaff about banning second homes. The hon. Member for Kingston upon Hull, East (Mr. Prescott) made a gaff about repealing all the Government's employment legislation. The Leader of the Opposition can neither answer questions nor speak with authority on policy matters because his approach to modernising his party is deeply flawed.

In an interview a few months ago in The Sunday Correspondent the Leader of the Opposition was asked whether there was anything that he could possibly learn from the last 10 years of Thatcher Government. His answer was short. There were no qualifications; there was no hedging; there was no "maybe"; there were no baker's dozens, with adjectives fighting for supremacy in long-winded sentences. He just said, "No." He had nothing to learn from the last 10 years; the creation of over 2.5 million jobs, the drastic cut in the number of strikes—last year the lowest since the war—eight years of steady economic growth and stable finances that have led to debt repayment, tax cuts and additional spending on priority programmes. He had nothing to learn from a Prime Minister, a Government and a party who have won three elections in a row.

What hope is there for an Opposition party and a Leader of the Opposition who are supposedly reviewing policy when they have nothing to learn? His inability to learn and his lack of qualifications for high office have not gone unnoticed, not just on this side of the House but even, I regret to say, among his own supporters. In an opinion poll published last Saturday in The Daily Telegraph, 35 per cent. of Labour voters thought that he was a windbag. I do not object to that. It also showed that 25 per cent. of Labour voters have the impression that he does not know what he is talking about. Moreover, according to the opinion poll, 42 per cent. of Labour voters—not Conservative, Liberal or SDP voters—said that he was a lightweight politician.

Lightweight politicians cannot change their parties. The hon. Member for Brent, East knows that. We have seen a brave attempt to change the rhetoric, but this document is a scissors and paste job. The Labour party remains essentially a corporatist, dirigiste party, that wants to extend state ownership, increase taxes and direct people into doing what the party wants them to do.

The Labour party's policies would be a departure from all the successes of the last 10 years. We have transformed people's attitudes during that time. All that would be thrown away. We should return to the failures of the 1960s and the 1970s. That is why we should lose no opportunity to debate and discuss the Labour party's policies. The more that they are debated and discussed, the quicker they fall apart. Those policies show that the Labour party has not changed fundamentally. They also show that we cannot draw out of the policy document a manifesto that will win the Labour party the next election.

12.43 pm
Mr. Bruce Grocott (The Wrekin)

The gag, if that is the right word, that ran through the speech of the Chancellor of the Duchy of Lancaster was, who should or should not have been on the Opposition Front Bench this morning. I think that he asked for the shadow Secretary of State for Defence, the shadow Leader of the House, the shadow Secretary of State for the Environment and a few others. We can be forgiven some confusion, because we do not know what job the right hon. Member for Mole Valley (Mr. Baker) is supposed to be doing. We do not know, therefore, who ought to be here to reply to his speech. That confusion has become noticeably worse during the debate. Perhaps the right hon. Gentleman can spell out precisely whether he is here as chairman of the Conservative party—the only chairman who is not subject to election—whether his advisers are paid for by the Conservative party or by the state, and whether the people who turn up in the Box reserved for civil servants and who are now playing musical chairs are here on the basis of a state allowance or a Conservative party payment. If the right hon. Gentleman clarifies exactly what role he is performing for the Government, we shall provide our opposite number. However, we in the Labour party have a strange system whereby our chairmen are elected. Perhaps the right hon. Gentleman will consider that at some stage. Let us be clear that we will provide whoever is required when the right hon. Gentleman clarifies his own job.

Mr. Kenneth Baker

Will the hon. Gentleman say who is the chairman of the Labour party?

Mr. Grocott

The hon. Member for Barking (Ms. Richardson).

Mr. Baker

Then she should be here today.

Mr. Grocott

No doubt the Chancellor of the Duchy would like to give us instructions as to exactly who should perform on the Labour Front Bench, but for the time being we shall make up our own minds.

The debate was initiated by the hon. Member for Eastbourne (Mr. Gow), who spoke for about one and three quarter hours. I fully understand the dilemma and the concern that led him to choose the subject for today's debate. He had the priceless opportunity of winning a ballot that we all should love to have won. He has had more parliamentary time today than most of us get in a year. He could have used that time to raise the numerous problems and complaints of his constituents—the doctors who no doubt are complaining about what his party is doing to the Health Service, his constituents' worries about the poll tax, the business rate and the problems of schools and transport. But, quite rightly—and I totally sympathise with him—he feels the same sense of weariness that is felt by the Opposition, that it is a complete waste of time to go to the present Government with those worries and anxieties. So, quite rightly, he decided that we should cast our eyes forward and think about what could happen in future instead of doing what so many hon. Members on both sides of the House have done to so little effect to try to make the Government see sense and change their policies. He had ample opportunity to do that, but, rightly, he decided against it.

What we would most like is not simply to look forward to the next election but to have the opportunity to have it. The sooner we have it, the better. Then we shall be able to test whether seats such as The Wrekin are marginal. I have a lifelong interest in the activities of voters in marginal constituencies, having spent a lifetime contesting marginal. seats, and I sense, as I am sure the hon. Member for Eastbourne does, that there is a groundswell of change among people in Britain who are sick and tired of the Government.

The hon. Member for Eastbourne and the Chancellor of the Duchy will be disappointed that I am not able to announce today the Labour party manifesto for the next election. I am sorry to disappoint them, but we shall announce that at our own pace and in our own time. Shadow Ministers will make speeches in the House and in other parts of the country at times of their choosing and at their convenience and not at the convenience of the hon. Member for Eastbourne or the Chancellor of the Duchy, whatever his job happens to be. The right hon. Gentleman could bring forward the process rapidly by advising his right hon. Friend at Downing street to call an election. We would then deliver our manifesto very rapidly indeed. As he has more influence on choice of election days than I have, I would be happy for him to do that.

I entirely reject Conservative Members criticisms that the Labour party has been reticent about spelling out the issues to which we think the country should be addressing itself and the policies appropriate to the 1990s. We have undertaken the most extensive policy review—I have the real document here, not the cyclostyle one that Conservative Members have; they can have the glossy brochure if they wish—that any democratic party has ever undertaken. It consists of 88 tightly typed pages and gives details on all the issues that will face Britain over the next 10 years.

I have looked in vain for any comparable exercise that was conducted by the Tory party when it was in opposition. I have been able to find only its 1979 manifesto. I always carry a copy of that very useful document. It contains a mere 32 pages and bears little resemblance to anything that has happened to Britain since 1979.

Mr. Nicholas Bennett

It is a pity that the hon. Gentleman does not do his research a little better, because I think that that document was called "The Way Ahead". It was published in 1976, and the author was the present Leader of the House.

Mr. Grocott

No doubt the author of that document came under the chairmanship of the then chairman of the Conservative party, who was appointed by its leader. We do not regard that as a very democratic process. Ours is a thoroughly democratic document. It was spelt out in front of a hostile press and was analysed in detail by the considerable brain of the Chancellor of the Duchy of Lancaster, who did not make a very effective speech on it.

I shall not embarrass Conservative Members by reading the sections of the 1979 manifesto on the fight against crime. The one issue that that small document, which cost 15p, addressed itself to was the priority of the fight against inflation.

The Conservative party manifesto of 1983 was smaller than the 1979 one. The only difference was that its price had increased from 15p to 25p. That 66 per cent. increase characterised the extent to which Conservatives managed to fulfil their electoral promises.

It is flattering that Conservative Members are so interested in what the Labour party proposes to do while in opposition. What the Conservative party says it will do when it is in opposition bears no relationship to what it does when it is elected to office. Conservative Members will no doubt ask what we shall do when we are elected to office. We shall have to undo those policies that Conservatives have carried out in government to which they were resolutely opposed when they were in opposition. I shall give one classic example of that—the way in which they have cheated pensioners.

I was the hon. Member for Lichfield and Tamworth when the Labour Government rightly decided that pensioners should enjoy any increases in prosperity by increasing their pensions in line either with inflation or with earnings, whichever was the higher. There was not a flicker of opposition from the Conservative party, but as soon as it was elected to power it destroyed that link. I searched in its manifesto for the explanation of how it intended to cheat pensioners, but of course there was no reference to it whatsoever. Conservative Members at least do us the credit of knowing that when we establish our manifesto in opposition it will be our programme for government, which we shall implement when we are elected. Exactly the same is true of the Health Service. We are in the throes of a great reform Bill on the Health Service, but there is no reference to that in Conservative party manifestos. The Conservative party was wise enough not to mention it when it went to the electorate last time.

There was no reference to the constant rundown of key sectors of the Health Service since the Government came to power. In my constituency, beds are unused simply because there are not enough nursing staff to look after the patients. Hospitals are being closed and 10 per cent. fewer beds are available in the West Midlands health authority than there were in 1979. There was no statement in the Conservative party manifesto to show that it had any intention of making those cuts when first elected to power long ago in 1979.

There are many aspects to our policy review. It states our commitment to defend and extend the Health Service and to ensure that it is free at the point of delivery. Many aspects of our review are designed simply to repair the damage of 10 years—maybe it will be 12 years—of Thatcherism in office. Naturally each Member will concentrate on the particular parts of the review that interest him or her. Not surprisingly, the Chancellor of the Duchy wanted to say a fair bit about education.

I can describe one nice piece of Labour party education policy which the electorate of The Wrekin will be pleased to see implemented: the scrapping of the absurd policy on city technology colleges. The right hon. Gentleman will remember approving for The Wrekin a system of secondary education schools for 11 to 16-year-olds. If I had gone to him two years ago and asked him to build an additional school, he would have fallen about clutching his sides at the absurdity of the proposition. Now £8 million of public money is to be spent on a totally unwanted city technology college in The Wrekin.

The Chancellor of the Duchy talks about parental choice. Every conceivable form of opposition and expression of public opinion in The Wrekin—local authority, parents, teachers and pupils—is opposed to the establishment of a city technology college, which would be deeply to the detriment of existing schools. Everyone finds it preposterous that a Government who will spend only £4.9 million on all the schools in the country think it right to spend £8 million on one school. I recommend that more prudent expenditure to the Chancellor of the Duchy.

Mr. Madden

My colleagues in Bradford and I feel the same sense of concern about the proposed Bradford CTC as my hon. Friend has expressed about the CTC in The Wrekin. The Conservative party chairman has talked a great deal this morning about choice, including parents' rights to choose their children's education. Would my hon. Friend be as surprised as I am to hear, in reply to a parliamentary question today, the Minister of State at the Department of Education and Science telling me: CTCs are independent schools and parents will have no automatic right of appeal if their children fail to achieve one of the limited number of places available. However, my right hon. Friend will expect colleges to look at individual cases on their merits. Surely that does not reflect the sort of sentiments which the Conservative party chairman was stressing so much today.

Mr. Grocott

My hon. Friend makes a strong point. On 19 December I had a reply from one of the right hon. Gentleman's former junior Ministers. I asked an innocuous question to find out whether the Minister would list the number of representations that had been received on the Telford city technology college, both in favour and against. I discovered from the reply—Ministers do not like answering such questions—that of all the replies received not one was in favour of the proposal. I wish that the Conservative Government would occasionally apply the consumerism about which they talk so much to some of their own policies and scrap the whole silly scheme.

I come to the dreaded question of the poll tax. The right hon. Gentleman is a skilled political operator. He knows when to quit. This morning I heard him quoted on the radio as saying, "Last night in the vote we won the vote and we won the argument." He does not seem to have won the argument with the treasurer of his local authority. I was intrigued to read in "Local Council Review Winter 1989" an article by Mr. Roger Scott IPFA, FRVA, treasurer of Mole Valley district council, Surrey, on the cost implications of the poll tax. It states: Although we pride ourselves on being a very efficient authority, to handle the community charge we need to employ an extra 18 people; in other words, to double our staff. In salary bills alone, this will increase our costs substantially. To house the extra staff and equipment, a new extension to our existing building has been erected, at a cost of threequarters of a million pounds. We expect our postage costs to rise four-fold. Reminders, notices of entry, the community charge bills and amended bills will push up our annual total from £10,000 to around £40,000. Our bank charges will more than double. A bigger, more expensive computer is needed to handle the extra work. What can we say other than, "We told you so."? The proposal to introduce the poll tax was ludicrous from the start, as many Tory Members who opposed it in Cabinet know well. Yet it has been installed against the will of the British people.

Mr. David Nicholson

As we are debating Opposition policies, will the hon. Gentleman tell us how it is that the constituency Labour party of the hon. Member for Dagenham (Mr. Gould), who was responsible for the two-tax policy of the Labour party, has denounced that as unacceptable electorally and administratively?

Mr. Grocott

That is a helpful intervention. The issue of how to finance local government has been debated since the second world war. The only consistency throughout the debate has been the constant rejection of the poll tax as absurd, even by many Tory Members and members of the Cabinet.

I look forward to seeing one or two aspects of our policies developed and extended. I commend them to the House. There is a section on working practices and arrangements. I look forward to life in the 1990s and I am strongly in favour of seeing the development of our policies on the reduction of the working week and new patterns of working arrangements whereby the working week can be four rather than five days. Tory Members will undoubtedly throw up their hands in horror at the cost implications of that. I have negotiated shorter working weeks, so I know that the cost implications are always grossly exaggerated by employers.

When Tory Members cost the various aspects of Labour party policy, as doubtless they will, I hope that they will use better economists than those they used for their own economic forecasting on the balance of payments, the rate of inflation, and other key economic indicators. They have been about 50 per cent. out, so perhaps we shall not have to take their considerations seriously.

Mr. Nicholas Bennett

Does the hon. Gentleman think that the best way forward is to support every inflationary wage demand and strike? That seems to be the Labour party's way of reducing the working week.

Mr. Grocott

I shall come to the public sector shortly, and the hon. Gentleman will find my comments interesting.

Tory Members respond consistently to our policies with, "You must dot all the i's and cross all the t's. You must be absolutely precise about exactly what you will do in office." Again, I must disappoint them. They never did that when they were the Opposition, but they expect it from us. There is no way, however, that we will know exactly what we can deliver when in office because we do not know what kind of mess we shall inherit when the day comes. We have a fair idea, however, and the right hon. Member for Henley (Mr. Heseltine) spelt that out. I know that Conservative Members do not like listening to him, but he summed up the mess we shall inherit when he said: We've blown North Sea oil; we have sold the assets. We are a society too anxious to consume, and an economy too reluctant to invest. That could well be the epitaph of the Government. Despite the priceless and unspeakable advantages of the oil revenues, the Government have wasted them. In the 1970s we all knew that those revenues were coming and we knew that, whichever party won in 1979, it would enjoy massive economic advantages during the 1980s. In 1977 a prophetic document, "The Right Approach to the Economy" was published by a group of Conservative Members, including the present Leader of the House, which said: It would be comforting to believe that North Sea oil will transform our situation; but an improvident government could all too easily allow these resources to be frittered away. How true. I wish that the Leader of the House would appreciate the implications of his prophecy.

Although the Labour Government will face a grave economic inheritance, the social inheritance is far more serious. We shall inherit a deeply divided society. We shall inherit an attitude that, last year, faced with equanimity company directors being awarded pay increases of 72 per cent. This year the Government have told the ambulance crews that they should be pleased with a 6.5 per cent. pay offer. Such are their double standards.

The Government have raised self-interest to the level of idolatry. They are now living with the consequences of their actions. The problem could not have been better described than it was described a couple of weeks ago in an article by Robert Harris, who said: The message pumped out from Westminster since 1979 has been that there is nothing wrong with personal greed. Indeed the acquisitive instinct was supposed to be the motor of national recovery … the reality is that to have been employed in a non-profit making job in the past ten years is to have been a second class citizen. There has not been even the traditional compensation of pride in working for the public services. Instead, the Government has routinely implied that health service workers, civil servants and teachers are Left-wing, lazy and inefficient. The message, not always unspoken, has been: 'If you don't like what you are paid, clear off, do something more productive.' It is a record which it will take a long time to live down. I can only say amen to that.

One of the key functions of the next Labour Government will be to restore confidence in the public sector. Contrary to the Conservative party, we believe in collective provision and we believe in the welfare state. The Chancellor of the Duchy of Lancaster has said that there is no theme running through our policy review, but there is a common theme in that review and a common theme shared by my hon. Friends. Unlike the Government, we do not believe that the welfare state is one group of people paying, rather against their will, for other people to be looked after. The welfare state is all of us looking after one another at different stages in our lives. We do not know when we might be unemployed or sick. We do not know what our needs will be when we reach old age. We regard the principle of the welfare state as being a fundamental and irrevocable difference between the two parties. We reject with contempt the Prime Minister's view that there is no such thing as society. We reject with derision her view that people who disagree with her are enemies. She even uses that language when talking about some of her former hon. Friends. I am sure that in private conversation she sees the ambulance workers as the enemy within, just as she does any other group of people who try to improve their living standards.

The bunker mentality at Downing street, where the Prime Minister sits behind fortress gates, is alien to the instincts and values of the British people. What is going on in the Cabinet Office? The Chancellor of the Duchy of Lancaster must know far more than I do about that. Just occasionally we have had glimpses of what life must be like around the Cabinet table with this Prime Minister. Two senior Ministers have resigned: the Secretary of State for Defence and, more recently, the Chancellor of the Exchequer. Neither resigned over matters of principle or policy; they resigned because they found the behaviour and style of government of the Prime Minister wholly intolerable. Increasingly we have government by tantrum. We heard yesterday the Prime Minister—

Sir David Mitchell (Hampshire, North-West)

On a point of order, Mr. Deputy Speaker. The motion concerns the policies of Her Majesty's Opposition, so should we be given a lengthy speech which does not refer to and gives no revelations about the policies of the Opposition?

Mr. Deputy Speaker (Sir Paul Dean)

Such motions lend themselves to wide debate, but I am sure that the hon. Gentleman will refer to the motion.

Mr. Grocott

We have seen the style of government of the Prime Minister, and her personality has been referred to in opinion poll after opinion poll. People see her as being arrogant, unsympathetic and oblivious to their needs. There is more than a touch of megalomania about her. I have here a document which is part of the Conservative thought apparatus. It is, of course, blue.

Mr. Leigh

Is this about Labour's policies?

Mr. Grocott

I am talking about this Government and how matters would change under a Labour Government.

Despite instructions from the Cabinet Office that Government documents should not be personalised—an instruction that came from the Prime Minister herself at some milder period in history—this document has pictures of the Prime Minister throughout. Incidentally, it also describes Britain as a "force for peaceful change" in Southern Africa—a real piece of double-speak. There is a picture of a smiling Prime Minister on the front, a close-up together with a quotation from her, on page 5, another picture on page 14, another on page 17 and one on page 22, with another extended quotation. [HON. MEMBERS: "Hear, hear."] Conservative Members may cheer. Would they do that if, in 18 months' time, documents came out regularly—at public expense—with red covers and with repeated pictures of members of the present shadow Cabinet inside? Regrettably, we shall not have the opportunity to test that because we shall stop such absurd practices and abuses of public money.

Mr. Leigh

Will the hon. Gentleman also stop Labour authorities abusing their position by distributing party political propaganda at the expense of ratepayers and community charge payers?

Mr. Grocott

I welcome the hon. Gentleman's intervention if he is suggesting that the same standards of conduct should apply to central Government as to local government. That would be a tremendous step forward. As he knows, the controls are far stricter for local government than for central Government. Governments involve not only policies but the people who implement those policies.

During the debate on the Queen's Speech the Prime Minister was good enough to allow me to intervene to ask her when, after her 10 years' management of the NHS, she expected to be so pleased with it that she would start to use it herself. There was no answer. The Government are full of Ministers who manage our state education and health services but would not dream of using them. The Prime Minister is like the proprietor of a chip shop who would not be seen dead eating on the premises. That is how the Government view the electorate.

The Prime Minister's view was encapsulated perfectly in the immortal lines she uttered during the last election campaign. Describing why she went private, she said: I insure to enable me to go into hospital on the day I want and at the time I want, with the doctor I want. And for me that is absolutely vital. It is vital for a lot of other people, too, but there is no possibility of it happening under this Government.

It is not surprising that the country is turning against the Government. The Chancellor of the Duchy kindly referred to The Daily Telegraph poll of last weekend. I happen to have it with me as well, and not only does it show a 10 per cent. Labour lead—that will do for the time being—but Professor Richard Rose said: The size and stability of Labour's lead in all the recent Gallup surveys is impressive. More than 40 per cent. of the electorate has now said for eight months in a row that it would back Labour in an early election. We want these polls tested at an early election.

Mr. Nicholas Bennett

Before the hon. Gentleman becomes too overjoyed, may I remind him of the position of the Labour party at precisely the same point in the 1979 and 1983 Parliaments? In January 1982 and January 1986 the Labour party had a substantial lead, yet it lost the subsequent elections by large margins.

Mr. Grocott

The hon. Gentleman is not right about the last Parliament, into which third party politics intruded. I am glad to say that the electorate will make a straight choice between two parties at the next election.

It is not opinion polls that interest us; we are interested in real elections. The news on that front is excellent as well. Across the country last year, from the Vale of Glamorgan to the county council elections and, most importantly, the European elections, Labour did very well. The Guardian called the Conservative vote in the last elections the worst this century—not bad for the worst Conservative Government of the century. It said: The Conservatives have 34.7 per cent., which is their worst result this century. To find a lower share of the vote one has to look back to Lord Palmerston's victory in 1859, when the Tories, under the Earl of Derby, received just 34.3 per cent. I welcome this debate on the choice facing the country; the sooner it is made, the better. The debate has enabled us to look back to the 1980s and forward to the 1990s. During the 1980s we had a Government rich in oil but mean in spirit, led by a Prime Minister who is arrogant with power. The sooner she allows the British public to make their choice, the better.

1.18 pm
Mr. Alan Stewart (Eastwood)

The hon. Member for The Wrekin (Mr. Grocott) launched a typical personal attack on the Prime Minister. In view of the time I shall not answer all his points; I merely mention in passing that the Labour party received 31 per cent. of the vote at the last general election.

The hon. Member for The Wrekin did not touch on the Labour party's policy for the constitution. My hon. Friend the Member for Tayside, North (Mr. Walker) rightly pointed out in an intervention that no Scottish Opposition Member is here, not because of constituency business—

Mr. Couchman

My hon. Friend may also have noticed that no Opposition Back-Bench Member is here to defend Labour policies either.

Mr. Stewart

My hon. Friend is right, although one or two Back-Bench Opposition Members were here earlier.

Scottish Labour Members are absent not because they are in their constituencies, but because they are participating in a meeting of the self-styled Scottish constitutional convention, a self-appointed and self-annointed body considering proposals that have fundamental consequences for the House and for the United Kingdom. Those proposals are based on a document called "The claim of right" which asserts that: Parliamentary Government under the present British constitution has failed However, not one scintilla of evidence is provided to support that statement.

The Labour party is now considering the detail of its proposals for a Scottish assembly, for unilateral devolution. We have been down this road before. I draw to the attention of the House some words of great wisdom. They are: The irony of devolution is that it will smash beyond healing the unity of Britain. People who light fires must expect explosions. These devolution proposals offer a maximum of risk with a minimum of gain to the Scots people. Those words are from the South Wales Echo of 25 February 1978 and they were uttered by the right hon. Gentleman who is now the Leader of the Labour party.

As always, the devolutionists are in considerable disarray. The hon. Member for Southwark and Bermondsey (Mr. Hughes) is seeking to catch your eye, Mr. Deputy Speaker, and if he does I hope that he will spend a minute or two on that point. I draw to his attention a recent article in Scotland on Sunday which says: This week's meeting of the constitutional convention is heading for a confrontation over the Labour party's refusal to accept the right of a Scottish Parliament to decide for itself which powers it would retain. The hon. Member for Argyll and Bute (Mrs. Michie) said about Labour's proposals: It is contrary to the claim of right which says it is the right of the Parliament to decide on matters including taxation. This will be hotly contested. The hon. and learned Member for Fife, North-East (Mr. Campbell) said: I am sure many in the party will be as dismayed, as I am, that a more radical approach has not been adopted. It is centralism with a Scottish face. I hope that the hon. Member for Southwark and Bermondsey will have an opportunity to confirm that that is the position of his party.

In practice, Labour's position on devolution is completely confused. I shall give two examples of that. This week we gave a Second Reading to the Environmental Protection Bill. It provides for a new conservation agency for Scotland to take on the functions of the Nature Conservancy Council. It is opposed by the Labour party. My right hon. Friend the Secretary of State for the Environment said: For a party that wants a Parliament for Scotland it is extraordinary that it argues that the Scottish people cannot be trusted to protect their own environment.—[official Report, 15 January 1990; Vol. 165, c. 43.] Labour also voted against a Bill to provide for the transfer of responsibility for training from Sheffield to Scotland.

What are Labour's answers to the key questions that are raised by devolution? What does it say about the number of Members in the House? Labour asserts that Scotland should still have 72 Members of Parliament when none of them will have any responsibility for Scottish affairs. That is absurd. What about the Secretary of State for Scotland? The convention says: There is a consensus that there should be a Secretary of State for Scotland but it must be admitted that he would serve no useful purpose. That means that the Secretary of State for Scotland will have nothing to do.

What about the West Lothian question? Would Scottish Members vote in matters relating to the domestic affairs of other parts of the United Kingdom? Labour says yes, but why should English Members allow Scottish Members to vote, possibly decisively, on legislation affecting English education, housing and local government, when none of them could vote on comparable Scottish matters? Scottish Members of Parliament will find themselves deciding schools policy for Doncaster but not for Dundee; transport policy for Kent, but not for Caithness. Such a situation would be absurd.

As to finance, a recent article by Professor Donald Mackay in the booklet "Scottish Assembly: We're better off without it" analyses the financial implications of devolution. Professor Mackay points out that Scotland would be unable to finance the present level of public expenditure without either a substantial and unfair grant from Westminster or substantial increases in taxation.

Devolution would inevitably result in a continuing constitutional crisis. The ambitions of the new legislature would be upwards, but the pressure on its finances would be downwards. Disenchantment would set in as the imperfections of a flawed system became apparent. The beneficiaries of that in Scotland would be the Scottish National party. As the arguments continued, the attraction to England of breaking up the Union would grow.

My hon. Friend the Member for Eastbourne (Mr. Gow) has done the House a service by his choice of motion and by his comprehensive and entertaining speech. He concluded by quoting Aneurin Bevan. I am sure that the speech of my hon. Friend the Member for Eastbourne will also be quoted in years to come.

The debate has been wide ranging, and gave me an opportunity to emphasise the dangers to the House and to the United Kingdom—

Mr. Don Dixon (Jarrow)

Will the hon. Gentleman allow me to intervene? If there is any truth in the allegation that Labour's policies would be disastrous for Scotland, can the hon. Gentleman explain the latest opinion poll, published this week, showing that Labour has the support of 50 per cent. of the people of Scotland and the Conservative party only 16 per cent.?

Mr. Stewart

If one asks the people of Scotland whether they want a Scottish assembly, the immediate reaction of many of them is to answer yes. But when hard questions are put, people's opinions swing away from a Scottish assembly—which is precisely what happened in the referendum debate of 1978–79.

I congratulate my hon. Friend the Member for Eastbourne on initiating an important debate and thank him for giving me an opportunity to emphasise the dangers of the current proposals in a sham convention attended by Scotland's 49 Labour Members of Parliament.

1.27 pm
Mr. Simon Hughes (Southwark and Bermondsey)

Opposition Members spend most of their time attacking Government policy, and rightly so. That is their job. However, it is useful and proper occasionally to scrutinise the policies of the official Opposition, who have the largest aspirations to Government. Perhaps I can add a slightly different perspective.

I have some sympathy with Labour's general aspirations. I am anti-establishment and anti-Conservative, and in general terms I believe that it is better to have a Government of the Left or centre Left than of the Right or centre Right. I feel sure that my right hon. and hon. Friends share the same view. However, even a sympathetic reader of Labour's latest policy statement must view it with substantial reservations.

I think about Labour party policy quite often. I live in a Labour-run borough and Labour's national headquarters are only about three yards outside my constituency boundary—which is fortunate for Labour because it would be embarrassing if its headquarters were based in territory held by the Liberal Democrats. I am surprised—as I intervened earlier to point out—that Labour's chief policy co-ordinator is not present to explain what his party's policies are. The name of the hon. Member for Copeland (Dr. Cunningham) appeared on the Labour Whip to speak today, and it is unfortunate that his party did not consider that it was important to send him to the House for this debate, to explain Labour's policy positions. I think the explanation must be that he is not quite the personification of Labour policy on some key subjects that the Labour party would wish.

When Labour says, "These are our policies." I would love to know how many of the members of the Labour party support them. Many Labour Members in the House do not support them. That is certainly true of defence policy where 50 Labour Members have signed a letter saying that they do not agree with it. One of the Labour party's problems is that it is not democratic, although it is more democratic than the Tory party. Until it is democratic and until its policy-making bodies are elected on the basis of one person, one vote, and decide policy on that basis, and until the Labour party chooses its candidates for Parliament on that basis, its credibility when it argues for policy reform, particularly when it speaks of democracy, is severely impaired.

In the constituency of Birkenhead, for example, the Member of Parliament was deselected because of the block vote of the trade unions, as has happened in other Labour deselections.

In the constituency of Vauxhall last year, for example, the local Labour party chose one candidate but found that it had another candidate imposed on them.

Indeed, some constituencies have no local Labour party at all. I am fortunate. In my constituency the local Labour party has long been suspended, and the same has also happened in Peckham. The hon. Member for Peckham (Ms. Harman) is not accountable to any local Labour party. In that constituency as in mine it is even less democratic—there is no person, no vote.

The Labour party must therefore first sort itself out. Only when it has done that credibly can it lay any claim to governing the country. That is why we must be interested to know whose are the policies that Labour is putting forward.

The Labour party takes a possessive view of its electors. The hon. Member for Brent, East (Mr. Livingstone) gave that away when he described policies on inflation and the economy as bearing down on "our" people. It is about time that the Labour party realised that the British people do not like to be possessed by any party, and many of them not infrequently change their political allegance. The age of class politics has gone and the sooner that the Labour party realise that too, the sooner it will make progress.

But the Labour party is trying to get its act together. I commend it for this exercise and for producing the document "Meet the challenge: Make the change". If we have to look anywhere for Labour party policy we must look at that document. I think that the hon. Gentleman the hon. Member for The Wrekin (Mr. Grocott) would agree that this is where we must now look to see how Labour have decided to overhaul their policy since the last election. This is the latest collective work.

What we discover is that the Labour party is slow to make change. It says that it is pro-European but Members are reluctant Europeans. Members of the party say that they are internationalists, but they are inadequate internationalists where the civil liberties of the people of Hong Kong are concerned. The Labour party says it is for constitutional reform, but the speech by the deputy leader of the Labour party to the Fabian Society in Oxford shows that they are very hesitant constitutional reformers indeed. The Labour party says that it is environmentalist, but one only has to consider the views of the hon. Member for Copeland, for example, to realise that they are only at best inadequate and belated environmentalists after all.

The Labour party is not a radical Opposition party, although it is trying hard to become an acceptable Opposition party. Its policy is not radical, and its practice is not radical either.

I know a little about the practice of the Labour party when it is in government. I shall not do what hon. Members often do here and look back to the last time that Labour was in Government. I live in a local authority that has been run by Labour ever since the boundaries were reconstituted. And having studied local Labour government in practice has given me little consolation that a national Labour Government would be desirable. I became a Liberal party supporter at a time when Labour was in government because among other reasons I found Labour practice undesirable. I do not think that anyone who lives in Southwark, with the experience that they have of a Labour local government there, would think that a national Labour Government in practice had much to recommend it now, either.

We could take any issue, but let us take education. I happen to be on the distribution list of Walworth road or the local Labour party, which is very convenient. In January last year I received a letter which read: Dear Comrade/s, 33 ILEA and 7 Southwark School Governors vacancies We urgently need to fill the above vacancies as they will otherwise be given to the SLD/Liberals. I am also asking Peckham and Dulwich CLPs if they have any members who can fill the vacancies as we have a matter of days to do it. Both School Governor and Charity places are an important role for local Labour Party members to represent us and to get socialist views across in the local community. That was the purpose of appointing the governors.

Mr. Nicholas Bennett

It was not to run the schools.

Mr. Hughes

No, it was to put Socialist views across.

The letter continued: The SLD/Liberals are pressuring both Southwark and ILEA to get these places and claiming that it's illegal for them to be unable to fill them so please respond quickly. In fact, the letter did not obtain that quick response, but my main point is that, after years of not appointing sufficient people to governing bodies, the local Labour party then decided that all the nominations must come from Labour in any event. Labour could not fill the vacancies, but would not allow any other party to fill them either. That is hardly democracy.

Next, let us take public works and environmentalism. I honestly believe that Southwark must be among the five dirtiest boroughs in Britain. Until last year the local council apparently provided no rubbish bins at all, although the area has a large urban population and many visitors. It is a regular complaint that Labour environmentalism in theory means filthy streets and rubbish-strewn areas in practice.

As for the caring services, Southwark has not a happy record. Scandal after scandal has featured in many of the institutions that look after vulnerable people. In the Nye Bevan old people's home, old people were left unattended, on occasions lying in their own urine. Some actually died following neglect, which occurred in a home where members of the management would meet to enjoy themselves downstairs, although I do not suggest that the neglect was the only cause. The Opposition spokesman—who happens to be the local Labour Member—has never condemned that publicly in the House.

Mr. Nicholas Bennett

Will the hon. Gentleman give way?

Mr. Hughes

I will not, because there is little time.

In children's homes, children have been allowed to run riot. When the parents of a baby, at risk from birth, were eventually held responsible for her death, the local Labour party turned down the request for a public inquiry.

The housing department is a shambles; we have empty properties galore, and people can never obtain a transfer when they want one. Until very recently, the Labour party did not even let anyone else take over any of the management of any of its housing, with rent arrears of some £40 million as one of the results. The local authority's debts have increased from £627 million in March 1988 to £820 million in March 1989, and are likely to exceed £1,000 million by March 1990. Interest payable on local authority debt now amounts to over £100 million a year—£1 per week for every adult resident.

With the approach of the local elections in May, Labour is again announcing its intention of devolving services to a local level for the purpose of local constitutional reform. It promised that in 1982 and nothing happened; it promised the same in 1986, and again nothing happened. Now it is about to make the same promise in 1990: so far, nothing has happened. Labour in practice is not like Labour policy in theory, and my local area is living proof of that.

I could also give many national examples, but I must be selective, as others wish to speak. I do not intend to speak for as long as many of the hon. Members who have spoken. I apologise to the hon. Member for Eastbourne (Mr. Gow), who is not here at present, for leaving the Chamber for a while during his speech, but it did go on for an hour and a half, and the best bits were clearly over; I am told that I did not miss much.

The Labour party has claimed a belated conversion to environmentalism, but the last Labour conference rejected a motion to phase out nuclear power within 15 years. Although environmental in principle, in practice the Labour party has decided to keep nuclear power. It pays lip service to energy conservation but it envisages a large nuclear power output for the forseeable future.

The Labour party said that it would not build any more nuclear power stations, but it has not said what it intends to do about those that are already under construction or that are the subject of a public inquiry. It has done worse than that. It intends to press ahead with the Thorp reprocessing plant at Sellafield, which would result in a large volume of waste imports, yet it is sort of calling, in general terms, for an international ban on the trade in toxic waste except, according to the hon. Member for Copeland, where it is proved to be in the wider international interest to do otherwise. That must take the biscuit when it comes to a fudged environmental policy.

Reference has been made to the Labour party's local government finance policy. That is not surprising. May I interpose that a good review is available to all hon. Members of the Labour party's new policies. It is a non-party review, published by Public Policy Consultants at £30. It is entitled "Labour's New Policies: The Complete Guide" and it was ordered to be printed only this month, in January 1990. It reviews the Labour party's policies and says that some are good, that some are less good and that it cannot be clear about others. It makes a preliminary point that it is worth putting on record, that The Policy Review completely satisfied no one, but then a public relations exercise never does. It makes the more important point that Current Labour policy is effectively what Neil Kinnock and communications chief Peter Mandelson want it to be. That is a worrying thought. But, returning to local government finance, the Labour party's local government financial proposals are still all over the place. It has not yet decided, although it has had 10 years in which to do so, what it would do if it were to replace the rates. Would it introduce capital revaluations of property? Would it introduce a local income tax. The Labour party was going to have both. Now it might have neither.

I could make an entire speech on the Labour party's economic policy. It is certainly nationalistic and it is also very inconsistent. I could give many examples. The Labour party intends to introduce credit controls, with the objective of controlling inflation. Credit controls have been tried before, but have not succeeded. Credit seekers can always go abroad.

The Labour party has a national minimum wage policy. If that were to lead to an increase in the wages of those at the bottom end, that would be good. I would support any proposal that remedied low pay. However, research suggests that the Labour party's economic policy, as set out in its policy document, would increase unemployment by 500,000 and that the resultant inflationary pressure could reduce the value of social security benefits, thus making those who are not in work, who are the poorest of all, even poorer.

Mr. Grocott

Does the hon. Gentleman not concede that whenever any suggestion is made about improving working conditions the response is always that it would result in unemployment and lead to a fall in manufactured products?

Mr. Hughes

I accept that point. We need to do something about the widening gap between the rich and the poor. I agree entirely with the hon. Gentleman's sentiments. However, there are other ways of doing it. I ask him to examine carefully the integration of tax and benefits, which we suggest is a better way to deal with this sort of problem.

We understand that the Labour party would reform taxation policy in order to outdo the Tories. It would introduce a basic income tax of 18p in the pound, just to be lower than the Tory's 20p in the pound. That would lead, however, to middle-ranking earners having to pay more. That message may not yet have been widely and clearly received.

I have a wonderful selection of quotations concerning the Labour party's views on the European monetary system. Extraordinary inconsistency is revealed if one looks at quotations from the right hon. and learned Member for Monklands, East (Mr. Smith), the hon. Member for Sedgefield (Mr. Blair), the hon. Member for Dagenham (Mr. Gould), and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), about what the Labour party would do about European monetary union. In reality they are not converted to the idea. The policy review makes it clear that although the Labour party likes the idea of economic monetary union in principle, it would impose many pre-conditions. It has, in fact, very much the same views as the Government. Labour is wedded to the theory, but in practice it will not deliver.

I also know from serving with the hon. Member for Blackburn (Mr. Straw) on the Committee considering the Education and Student Loans Bill that everything Labour intends to do is qualified by the Monklands, East appendage, "When resources allow". It is important for everyone to understand that, too.

I have strong views on defence. I believe that the views and principles of Labour Members render much of what they say incredible. If they do not believe in nuclear weapons, a commitment to having them but not using them—no first strike—is completely illogical. Either we should have nuclear weapons in the belief that they deter or we should not have them because we do not believe they deter. If Labour does not believe that we should have them, then it should not cancel one Trident, it must get rid of the lot. The Labour party has so far presented an incredible middle way.

Labour Members try to pretend that they are great Europeans, but when we discuss imports, exports and problems for domestic industries, they show much support for tariff barriers and protectionism. They say that they are great internationalists, but their record on Hong Kong shows them to be as prejudiced and nationalistic as the Government, if not worse, as they try to catch the votes of those who fear any non-white immigration from anywhere.

Perhaps the most fundamental concern goes to the heart of what any party would do in office—what it would do to the structure of government. I briefly follow on from the theme of the speech by the hon. Member for Eastwood (Mr. Stewart) about Scottish constitutional reform. I endorse my colleagues' quoted views on that subject. We are greatly concerned that, as on many other aspects of its constitutional package, the Labour party is not committed to fundamental reform.

The right hon. Member for Sparkbrook clearly does not understand the difference between civil and political rights and economic and social rights, and therefore reaches the conclusion that under Labour there will not be a Bill of Rights because it might be open to the judges to interpret it, but there will be a charter of rights as defined by Labour. I have to say that I should rather have my rights defined and agreed by international jurists throughout my continent than by the Labour party. I do not think that constitutional reform of a partisan nature would be acceptable to anyone in Britain.

We are meant to presume that the safeguard would be an elected second House. I believe in that, but Labour proposes that the second House should have proportional representation, so that it would become more democratic than this House while this House would retain the primacy for legislation.

Finally, Labour's constitutional programme would take at least 10 years. Section after section of the policy review reveals that the details have not been worked out on constitutional matters such as Welsh representative government, Scotland, the regions and local government.

The reality is that the Labour party will never deliver. The only way in which they could do that is through a Bill of Rights, guarantees of people's rights, real devolution and proper electoral representation.

The Labour party should be thankful that there is not yet an election because its policies are certainly not yet ready to be put to the electorate. Whether it will get them ready remains to be seen. The Labour party is not yet a democratic party and it does not yet have a policy for a democratic country; it does not yet accept that we are a pluralist political system and Labour Members keep talking about "our people"; it is not now a principled party and it does not now have principled policy. The Labour party is not consistently internationalist as is evident from its record on Hong Kong; it is not consistently environmentalist, as is evidenced by its position on nuclear power; and it is not consistently pro-disarmament, which is evidenced by its policies on defence; it does not have sufficiently clear policies, for many of them as the hon. Member for The Wrekin conceded, have yet to be resolved and questions answered. Above all, it is not even clear whether it will be a Socialist party. The dilemma facing the Labour party is whether it is a Socialist party which will implement Socialist policies or whether it is a different non-Socialist party that implements different non-Socialist policies.

The Labour party has undergone a policy review. Perhaps next, like all the Left-wing parties in eastern Europe, it should have a name and philosophy review. It will then be in a position to decide whether it needs a principles review as well.

I do not often make predictions, but I predict—and I may be wrong—that Labour packaging and presentation will improve its performance at the next election. But it is not certain that its lack of principle will be outweighed by Mr. Mandelson and the presentation and packaging. Without principle, a party cannot have good policies, and without good policy all the packaging in the world will not deliver the goods. The Labour party will make progress, but whether it will be sufficient to give it a majority in the House is very doubtful; articles written every week by psephologists make that clear. For the fourth time in a row, its policies will not deliver political success. I hope that they do not deliver the Tories political success either. We shall have to wait to the next election to discover whether my prediction is correct.

1.51 pm
Sir David Mitchell (Hampshire, North-West)

Like other hon. Members, I am grateful to my hon. Friend the Member for Eastbourne (Mr. Gow) for giving us the opportunity to speak in this debate. I listened with great and growing regret as the hon. Member for The Wrekin (Mr. Grocott) failed to give the Opposition's policies but devoted his speech entirely to other matters.

I found myself in considerable agreement with the closing remarks of the hon. Member for Southwark and Bermondsey (Mr. Hughes). The essence of the message from the Leader of the Opposition is, "Comrades, we will not be elected on the policies in which we believe. Therefore, we shall search for others that may be more acceptable to the voters. We still believe in the nationalisation of the means of production, distribution and exchange and in concentrating power, wealth and decision making in the hands of the state, but that will not get us elected. Therefore, let us consider a range of alternatives with a view to getting elected." As the hon. Member for Southwark and Bermondsey made clear, the difficulty is that that conveys no conviction and offers no encouragement to the troops on the ground who believe in their original faith in Socialism in which they were led for so long by their leaders.

Plausible policies are beginning to be fed out from time to time as offerings to encourage the electorate to believe that the Labour party has some credibility. Rather like the girl going to a party for the first time and being told that her slip is showing, every now and again the Labour party slips up and lets out some information which we should consider.

I do not want to detain the House for long, but I should like to consider two points. First, the shadow Chancellor of the Exchequer has intimated that he would impose a top rate of income tax of 50 per cent. However, to that must be added 9 per cent. for national insurance contributions. The figure therefore is not 50 per cent. but almost 60 per cent. I am waiting to hear a denial that the Labour party is secretly planning to introduce a local income tax to finance local government expenditure. It is clear that that is on the short list of recommendations on the subject. With national income tax, national insurance contributions and local income tax, the tax rate may amount to about 75 per cent. I wish to draw the attention of the House to the demotivating effect of such a tax.

In the 1970s, a number of hon. Members—and not just Conservatives—were concerned about the low number of small businesses in this country and the fact that there were about 40 per cent. more small firms on the continent than here. They realised that the small firm of today was the middle-sized and larger business of the future and that, if a large number of new businesses did not start up or small firms grow, the prospects for prosperity would be severely diminished.

The reason that we had such a low number of small firms and start-ups in this country in the 1970s was first that the people who might have started them or made their career in them were demotivated by the high level of income tax, the top rate of which was 83 per cent. Those starting a business do not aim to stay on the standard rate of income tax. They aim for the stars and their purpose, hopes and ambitions were so blunted and demotivated that there were few businesses starting up or growing.

The prospect, under a potential Labour policy, of returning to about 75 per cent. income tax—when all the factors are added together—is a major demotivator for small businesses. Such a policy would kill the motivation which has brought about so dramatic a change in our affairs. Between the 1970s and 1980s there was a huge change in this country's prosperity. There was a huge increase in the gross domestic product and massive increases in jobs. So many of those successes can be related to the turnround in the number of businesses starting up and expanding. We were unsuccessful in the 1970s and successful in the 1980s, because we now have a lower income tax and do not suffer the damage which would have resulted from Opposition policies.

The second major cause for the change round was that small and growing businesses were formerly starved of the resources that they needed to grow. The Government have reduced the rate of corporation tax for small firms from 42 per cent. to 25 per cent., leaving them with much more of their profits to plough back into the business. Today there have been no revelations about Opposition views. I had hoped that the debate would enable us to discover the Opposition's views on the level of corporation tax and the amount of internal resources that would be made available to small businesses to enable them to grow. That is a separate issue from that of income tax and motivation.

We must consider the issue against the background of the third cause for the greatest damage done to the small business community in the 1970s: the soaring levels of inflation, which made every business cash hungry. Money which should have been spent on research, development and investment and improving the efficiency of the business for the future had to be diverted purely and simply into the extra cost of the same volume of stock or work in progress. The damage which inflation does to the small business community cannot be measured, but curbing it is one of the three major ways in which the Government have brought about a dramatic change which is to the benefit of the small business community.

Some 10 days ago, in an interview in The Daily Telegraph, the shadow Chancellor of the Exchequer said that he sees no great merit in a balanced budget". Hon. Members may want to ponder those words because they are the clearest possible signal that, if we were to have the misfortune of a Labour Government, it would mean the restoration of inflation at the same or even higher levels as those when we last had the disaster to suffer under a Labour Government. At that time we had a top level of inflation of 26 per cent. which destroyed dramatically the savings of elderly people and those on fixed incomes, and the investment, resource and growth base of small businesses.

I said that I would not detain the House for long, and I have been on my feet for nine minutes. I shall close by saying that so far as we have been able to extract the Opposition's policies, they reveal that the base on which the prosperity and the change around of the past decade under a Conservative Government have been brought about, and the heart of the way in which business has been motivated, inflation brought under control and resources made available within industry for it to grow, will have the supports pulled away from underneath it with disastrous consequences for our prosperity.

2.1 pm

Mr. Roy Beggs (Antrim, East)

I pay tribute to the hon. Member for Eastbourne (Mr. Gow) for providing an opportunity for this debate. We in Northern Ireland consider him to be of such high principles that we shall always hold him in high regard.

I, too, have noted references in the Labour policy review document of the 1990s, "Meet the Challenge: Make the Change". The Opposition make a commitment to a modern and wider democracy for the individual and community. That reads well and sounds good. We as Ulster Unionists represent the vast majority of the electorate in Northern Ireland. I say on their behalf that we wholly oppose and reject the solution to our problems advocated in that document, which is to establish a united Ireland.

I welcome, however, the document's firm rejection of the use of violence from whatever quarter it comes. That reaffirms the position of the vast majority of people, whether they are Protestant or Roman Catholic, Unionist or Nationalist. For the Opposition to give hope to those who seek to achieve a united Ireland through terrorism is not to help to bring the IRA terrorism campaign to an end. They fail to recognise that, unless IRA terrorists murder and maim, and intimidate massive numbers of Unionists to leave Northern Ireland, there is not the slightest hope of a united Ireland through consensual, peaceful and democratic means.

It is a matter of fact that the Roman Catholic birth rate is falling dramatically. Most intelligent Roman Catholics realise that their future prosperity, opportunities for their children and improved standards of living will be best secured within the United Kingdom. Therefore, not in the next 100 years and perhaps never will there be enough Roman Catholics—and within that group—Irish Nationalists—in Northern Ireland for them even to consider exercising their democratic right to vote themselves out of the United Kingdom and into a united Ireland. Even then, Ulster Unionists will have no intention of following them. I appeal to the Opposition to abandon their belief that the solution to the problems of Northern Ireland is a united Ireland.

Many right hon. and hon. Members on both sides of the House have acknowledged the futility of the Order-in-Council procedure. They recognise the unfairness of presenting an unamendable draft Order-in-Council for consideration by hon. Members. In the early stages of this Session elected representatives of all constitutional parties have joined together to oppose that iniquitous procedure.

The Opposition want to achieve a wider democracy and they should recognise how much we detest and abhor the Order-in-Council procedure. They should join hon. Members representing Northern Ireland in pressing the Government to consider further legislative changes in procedures in respect of Northern Ireland. Politics is about achieving consensus and about meaningful participation in decision-making. The Order-in-Council procedure does not encourage meaningful participation in governmental matters. Those hon. Members who want to contribute in a positive and principled manner have no opportunity to do so when they are faced with an unamendable Order-in-Council.

The Opposition should endeavour to persuade the Government to ensure that the same democratic and parliamentary rights enjoyed by their fellow citizens elsewhere in the United Kingdom are enjoyed by British citizens in Northern Ireland. The Government should, therefore, cease to introduce primary legislation for Northern Ireland through the Order-in-Council procedure.

I trust that my brief remarks will find support and will bring about some changes in the policies proposed by the Opposition.

2.7 pm

Mr. James Couchman (Gillingham)

May I add my thanks and congratulations to my hon. Friend the Member for Eastbourne (Mr. Gow) on introducing this debate. As my right hon. Friend the Chancellor of the Duchy of Lancaster has said, we rarely get such a good opportunity in the House to examine the policies of the Opposition.

I am sure that the House will have noticed that the second motion on the Order Paper is in my name and it congratulates the Government on their decision: to offer full British citizenship to 50,000 special category households, involving some 225,000 Hong Kong people". Because of the enormous interest my hon. Friend the Member for Eastbourne has engendered in the Opposition's policies, I fear that my motion will not be reached today. Therefore I should like to draw the House's attention to the positively disgraceful policy, or lack of policy, adopted by the Opposition towards Hong Kong.

It is vital to maintain the confidence of administrative workers, educational and health service workers, the business community and the disciplined services of the territory in the lead-up to 1997. The Opposition's attitude in this test of the intergrity of British foreign policy seems to me, as a publican of 20 years' standing, to be all froth and no beer.

My right hon. Friend the Foreign Secretary made a formidable statement on Wednesday soon after his return from Hong Kong. He said of the Labour party's policy towards Hong Kong: I am in total confusion. He said that the right hon. Member for Manchester, Gorton (Mr. Kaufman) Sometimes … oozes sympathy, and sometimes … says that there is nothing to be done. From all his foggy phrases, I get the strong impression that the right hon. Gentleman and his colleagues have no interest whatever in a sensible future for Hong Kong".—[Official Report, 17 January 1990; Vol. 165, c. 296.] My right hon. Friend's confusion had nothing to do with jet lag.

I believe that my right hon. Friend was too generous in his view that the Opposition's policy towards Hong Kong was driven either by fogginess or by confusion. That lack of clarity would be forgivable. My view is less charitable. I view their policy—if it can be called a policy—as mischievous at the best and as a cynical betrayal of our colonial past and the last large population of British colonial citizens at the worst.

On 5 July 1989, during a statement following a visit to Hong Kong by my right hon. and learned Friend the Lord President of the Council, the right hon. Member for Gorton said: The Opposition believe that it would not be right to offer any commitment to Hong Kong British dependent territory passport holders on the right of entry to the United Kingdom or the right of abode here … I state clearly that the Opposition are against the creation of special favoured categories based on status or affluence."—[Official Report, 5 July 1989; Vol. 156, c. 312–3.] On 20 December 1989, my right hon. Friend the Foreign Secretary announced the Government's decision to allow full citizenship to 50,000 households. The right hon. Member for Gorton repeated those remarks and sought to make a virtue of his position. He described my right hon. Friend's package as instituting a system that was inherently unworkable, invidious and divisive … The Foreign Secretary has come to the worse way of fulfilling what he regards as his commitment"—[Official Report, 20 December 1989; Vol. 164, c. 365.] It is clear that the right hon. Gentleman who was presumably speaking as the definitive voice of the Labour leadership, believes that Britain should give the right of abode neither to all Hong Kong citizens nor to a few.

During my right hon. Friend's statement on the citizenship package on 20 December 1989, the last question was from the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). He asked a customarily frank question: Why does not the Foreign Secretary admit that although there are two tenable logical positions that the Government could have adopted, there is only one tenable principle position? The two tenable logical positions are either that everyone should be given the right to come to Britain or that no one should. The one tenable principle position is that everyone should be given the right to come to Britain.—[Official Report, 20 December 1989; Vol. 164, c. 376.] It is clear that there is a gulf of confusion between the Labour leadership and the vox populi below the Gangway.

On 17 January 1990, the questioning of my right hon. Friend the Foreign Secretary gave the House and the nation no glimmer of enlightenment about the real policy of the Labour party for the purpose of reassuring those in Hong Kong whose continued residence there is vital to the colony's continuing prosperity. My right hon. Friend announced a package of measures on 20 December which was intended to anchor those who have vital professional, educational, administrative, managerial and entrepreneurial skills in the colony. He has done so because in 1984, Britain and China signed the solemn and far-sighted joint declaration, which lays the foundation of the one nation-two systems principle for the future of Hong Kong beyond 1997. That joint declaration envisaged Hong Kong in 1997 as the bustling, thriving and successful commercial and trading centre that it was at the time of the signing of the declaration in 1984.

Over the five years since the agreement was signed there has been an erosion of confidence in the territory. That erosion was given a great boost by the brutal repression of the pro-democracy movement in Tiananmen Square in Peking on 5 June 1989 and has led to a haemorrhage of talent, as my right hon. Friend described it on 20 December. Those leaving have been those with the most transferable skills and greatest experience—the very people that Hong Kong can least afford to lose.

I understand that in major enterprises in the private and public sectors in which local management had been installed, companies have been forced to promote people beyond their skill and experience because so many of those better equipped to manage the enterprises have sought to establish residence in Canada, Australia and the United States.

I give my absolute support to the package introduced by my right hon. Friend. It is crucial that Hong Kong's citizens be reassured so that they may continue in their vital tasks until and beyond 1997. My only anxiety is that the number of 50,000 households to be granted citizenship may be insufficient to provide the necessary anchor for all whose support is necessary.

When I asked him the final question on Wednesday, my right hon. Friend was unable to allay my fears, and I urge him to hold further discussions with our right hon. and learned Friend the Home Secretary, so that he may establish an option to increase the 50,000, if that proves necessary.

It is clear that my right hon. Friend's package has jolted the Government of the People's Republic of China. The intemperate comments of Lu Ping on Wednesday—that Hong Kong's residents with British passports will not have the right to British consular protection after 1997—prove that my right hon. Friend's package has already begun to have the desired effect of bringing the negotiators of the PRC back to pragmatic good sense—

Mr. Simon Hughes

On a point of order, Mr. Deputy Speaker. The hon. Gentleman has the second motion on the Order Paper, and he is speaking to it, not to this one—

Mr. Deputy Speaker

Order. I am the judge of that. I am listening carefully to what the hon. Gentleman is saying, and he is in order.

Mr. Couchman

Thank you, Mr. Deputy Speaker.

The gerontocracy that rules China has realised just how great would be the PRC's loss if Hong Kong's economy collapsed and its pre-eminent position as a trading centre were lost. The words of the right hon. Member for Gorton prove to me that he has allied himself and the Labour leadership with China's aged rulers in seeking to intimidate my right hon. Friend and dissuade him from introducing the necessary legislation to implement his package of citizenship.

That a few of my right hon. and hon. Friends take a similar line is a source of sadness to me. They underestimate the need for us to honour our part of the joint declaration and to seek to keep buoyant the economy of Hong Kong. If that economy collapses because the managers and professionals leave to establish residence elsewhere, there will be an exodus from Hong Kong which will make the emigration of Vietnamese boat people pale into insignificance. The world will look to Britain to help those fleeing Hong Kong in those circumstances.

My right hon. Friend the Foreign Secretary has my support, circumscribed only by my concern that the number of passports may not be enough. My right hon. Friend should have the support of the Opposition, but the Opposition are prepared to abandon Hong Kong and its population to the old men of Peking. They seek to cloak their embarrassment by urging a swifter pace or the democratisation of Hong Kong's Legislative Council. The party of the trade union bloc urges greater democracy for people for whom democracy has never been a natural state and of whom only a tiny vociferous minority have aspired to more democracy. If Hong Kong's economy collapses before 1997 for lack of management and enterprise, and if the population leave in their hundreds of thousands—even millions—it will be irrelevant whether the LegCo is fully democratically elected, partially democratically elected or wholly appointed. In such circumstances, that council would have little or no power to shape events. Unless the House gives my right hon. Friend the power to issue those passports, the debate about increasing the proportion of the Legislative Council that will be elected democratically will be increasingly seen as a meaningless cul de sac.

The policy of the Opposition on Her Majesty's colony of Hong Kong and her subjects there is misguided and mischievous at best and destructive and dishonourable at worst. The people of Hong Kong will judge Labour's attitude towards the colony just as the people of Britain will judge Labour's attitude to Britain on today's debate. The people of Hong Kong and of Britain owe my hon. Friend the Member for Eastbourne a debt of gratitude for his choice of subject in the debate.

Two years ago, I initiated a debate and chose as my subject the future of the Property Services Agency. Because of his considerable ministerial experience, my hon. Friend the Member for Eastbourne was able to give a dazzling performance in support of my modest opening speech. I like to think that our joint exposure of the inadequacies of the PSA led directly, or made a substantial contribution to, the welcome Bill that is in Committee and which will bring the PSA into the private sector where it will be exposed to the full rigours of the market.

My hon. Friend's intervention in my debate was crucial, and I have no doubt that the great service that he has rendered to the House and the nation in today's debate will be similarly memorable and influential in persuading the electorate of the folly of voting for a party that would wrap up the tawdry and discredited policies of the 1960s and 1970s in a parcel with pretty paper. I hope that my hon. Friend welcomes my brief contribution.

2.21 pm
Mr. Harry Cohen (Leyton)

I shall be brief. I congratulate the hon. Member for Eastbourne (Mr. Gow) on winning the ballot for debate and choosing the subject. I should have liked an amendment to the motion because our policies merit scrutiny "and implementation." Perhaps we will get to that at some stage.

The hon. Member for Eastbourne is such a respectable Member that I would not dream of alluding to mad "Gow" disease. However, the Government are increasingly infected by mad cow disease. They are flailing about and are desperately out of touch. They go around saying, "Bully for me" and beef up their failures to make them look like successes. They should be put out of their misery at the earliest opportunity.

Tory policies are massively unpopular. For example, the poll tax will bankrupt people and it is unjust because a millionaire will pay the same as a midwife. Poverty has reached an outrageous level. The National Association of Citizens Advice Bureaux report illustrates the degree of misery because it shows that 49 per cent. of pensioners and 23 per cent. of sick and disabled clients are refused grants from the social fund. It shows that 81 per cent. of the unemployed and 21 per cent. of single parents are also refused loans, and that 80 per cent. of young people are refused any help at all.

Child benefits have been frozen and the benefit has been cut for 16 to 17-year-olds. There have been cuts in the National Health Service which faces deficits and waiting lists, and there is a shortage of life-saving equipment. There are teacher shortages. In terms of our environment, we have the scandals of unclean drinking water and sewage-ridden bathing beaches. Profits come first and that is why the Government will not do anything about cleaning up the environment and will not put in public money. There is squalor on London Regional Transport.

Money continues to be spent on defence despite world trends in disarmament. The Government will spend an extra £1 billion per annum over the next three years even though the defence budget is already inflated. That money could be used in the National Health Service to help our people. Whole groups of people such as ambulance men have been victimised. The Government have refused to pay them a decent wage and have ruled out arbitration. They cast a slur on them by calling them professional drivers and they ignore the public will, because 85 per cent. or more of the population support the ambulance men. That has been accompanied by Conservative authoritarianism, with attacks on trade unions, local government, the Church, the media, and the BBC. Even Prince Charles has been ridiculed.

The Government have made an absolute mess of the economy, with high interest rates, high unemployment, high inflation, record balance of payments deficits, and a decline in manufacturing. North sea oil revenue has also been wasted. There is a desperate need to get rid of the Government and to implement Labour policies.

I do not agree with everything in my party's policy review—such as the official party view on Trident—but there is much in it that is worth while. It promises investment in education and skills in industry and in our infrastructure—communications, transport and sewers—environmental protection and improvements in welfare, the National Health Service, housing, and pensions. There will be a national minimum wage, and a vast improvement in health and safety at work. There will also be better policies for women and for child care. A clean water Bill will be introduced.

My hon. Friend the Member for Brent, East (Mr. Livingstone) asked the crucial question of where the money will come from to pay for those policies. The answer is that it will come from rearranging Government spending priorities, and in particular by defence cuts—through implementing the Labour party conference resolution to link defence spending with the level of our gross domestic product. We shall also take back all the money that the Tories have given to the rich over the years, and we shall return to this country capital that has been invested abroad. Labour will use the skills of our people by ensuring full employment. We shall create more wealth instead of pursuing a policy of high unemployment as a tool against workers and wages.

Not only policies but values will change under Labour. The Conservative Government are interested in money—money first, second and last. Labour is more interested in caring values that respect the community and encourage co-operation, the development of the family, better education, and improved cultural understanding. Labour will also promote the environment and a better quality of life. We shall improve democracy and decency—another value which has been lost under the Government. I shall return to those points on another occasion. Meanwhile, the Government have fallen a long way short, and we must get rid of them.

2.27 pm
Mr. Nicholas Bennett (Pembroke)

The hon. Member for Leyton (Mr. Cohen) spoke of the need to return to decent values, and I echo his sentiments. However, he believes that the Government should instil decency in people and that society is controlled by the state. My belief is that moral systems make people decent and encourage them to treat one another responsibly. The Government have been trying to develop such systems of morality for the past 10 years, and to make people responsible for their actions by giving them a choice in the first place.

One cannot have responsibility unless one has choice as well. Unfortunately, the whole of Labour's policy document is about taking choice away from people and creating an irresponsible society. Labour does not believe that the ordinary individual is capable of making decisions for himself and for his family without the state taking control.

Today, we glimpsed the glitter of the package that the Labour party has carefully promoted over the past 18 months, but which is gradually being unravelled. Inside the packaging, we find that designer-wear Socialism is really the same old tatty underclothes. Labour has not changed. Right hon. and hon. Members who sat through the 10 January debate on the Associated British Ports (No. 2) Bill saw the real Labour party in action. The Opposition defended monopoly trade unionism, opposed the construction of ports to allow better imports and exports, and demanded a siege economy and import controls.

At one moment Labour says that it wants lower taxes, but whenever the Opposition have an opportunity to vote for them, Labour votes against. The party supports every inflationary wage demand that confronts the economy, and in every strike its supporters can be seen on the picket lines. The reality is that Labour does not believe in its own policy document. A small number of the members of Labour's Front Bench cobbled together a package whose only purpose is to ensure that Labour wins the next general election by abandoning the principles for which it once stood.

The Leader of the Opposition has been contrasted to the Prime Minister. I am glad that that contrast has been made because my right hon. Friend the Prime Minister has stood for principle during the past 10 years. On occasion the Government have been unpopular because they fight for what they believe in.

For the Leader of the Opposition and the Labour party, no principle is so important that it cannot be abandoned, no policy so sacrosanct that it cannot be overthrown, and no sacred cow so holy that it cannot be slaughtered if it means electoral advantage at the next election. I do not believe that the great British public will be taken in at the next election by a party which is prepared to abandon anything and everything to win a few votes.

I am glad that my hon. Friend the Member for Eastbourne (Mr. Gow) has introduced this debate because it has exposed the tawdry package which represents Labour party policies.

It being half-past Two o'clock, the debate stood adjourned.