Commons Sitting of 19 February 1991

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  DEFENCE

    The Gulf
    Mr. Tim Smith: To ask the Secretary of State for Defence what are the total costs of the Gulf war to date; and what proportion of this he now expects to be funded by allied nations.
    The Secretary of State for Defence (Mr. Tom King): The additional costs of the Gulf conflict so far assessed are some £1½ billion, including equipment lost and munitions used. On the basis indicated by my right hon. Friend the Chancellor in the debate on the autumn statement last week, we expect that the eventual costs could be £3 billion.
    Allied and other nations have promised contributions of some £1¼ billion and support from host nations is worth about £200 million.
    Mr. Smith: Is not it very good news that, following the successful visits of the Foreign Secretary to the Kuwait Government-in-exile and of the Chief Secretary to the Treasury to the United Arab Emirates, we now have a substantial commitment to our costs in the Gulf? Will my right hon. Friend confirm, however, that the Government will continue to try to ensure that countries such as Japan, which can expect to gain most from stability in the Gulf, make their fair contribution, too?
    Mr. King: I am grateful to my hon. Friend for his comments. I confirm that we have hopes and expectations of significant additions to the sums that I have announced. My hon. Friend mentioned Japan. I had the pleasure of meeting the new Japanese ambassador yesterday and I know that the Japanese Government are keen to show their appreciation of the very significant contribution made by British forces to the coalition effort.
    Mr. Radice: In view of the substantial allied financial contributions and the fact that replacement costs could be spread over a period of time, could not the financial costs of war to Britain easily be met?
    Mr. King: I am not quite sure what the hon. Gentleman means by "easily be met." This is a very costly undertaking. I have set out what I think the costs will eventually be—of the order of £3 billion. We very much appreciate the contributions that are being made to help towards that sum, but I do not disguise from the House the fact that a signficant cost will remain to be borne by the United Kingdom.
    Mr. Cash: Does my right hon. Friend share my gratitude and that of the British people for the £275 million that has been provided by the German people? Does he agree, however, that there may still be some leeway for a further and much more substantial contribution from them and that it does not particularly help to give £275 million one day and then to increase interest rates by 0·5 per cent. the following day?
    Mr. King: That question goes a little wider than my immediate concerns. I appreciate the contribution that has been made. As my hon. Friend realises, we are also most grateful for the very substantial help that has been given by the German Government—the German Ministry of Defence—in a range of different matters, including vehicles, training, ammunition and equipment of one sort and another. I think that I am right in saying that every request that we have made to the German Government has now been met.
    Mr. O'Neill: The costs that are being borne by our service personnel in the Gulf are a cause for concern to many people. That applies in particular to the poll tax. Will our troops be compelled to continue to pay the poll tax and, if not, who will make up the lost revenue that local government will have to raise?
    Mr. Speaker: That question is just about as wide as the last one, I am afraid.
    Mr. King: rose—
    Mr. Speaker: If the right hon. Gentleman wishes, he may answer the first part.
    Mr. King: I do not remember what the first part was, although I thought that both were out of order. The hon. Gentleman was perhaps trying to anticipate some of the discussions later today.
    Mr. Favell: Has each of the Community countries now made a contribution towards the effort in the Gulf? In particular, have the Irish done so?
    Mr. King: No. The House knows the Irish policy of neutrality and Ireland has not made a contribution in this respect.
    Mr. McAvoy: To ask the Secretary of State for Defence if his Department is contributing funds or personnel towards the operation to clean up oil slicks in the Gulf.
    The Minister of State for the Armed Forces (Mr. Archie Hamilton): The Ministry of Defence, in common with other Departments, responded promptly to requests for assistance in dealing with the oil slicks in the Gulf. For example, we made available three charter flights to transport 90 tonnes of pollution control equipment from industry stocks held in the United Kingdom to Saudi Arabia on 28 to 30 January. In addition, ships of the Royal Navy and our military aircraft flying in the area of the slicks have, where possible, been providing information on the slicks to assist in the assessment of their location, extent and movements.
    Mr. McAvoy: It is all very well for the Minister to say that, but why, after so many predictions that oil spills were likely in the Gulf war—whether deliberate or accidental—did the Ministry of Defence take no steps to position oil spillage clean-up equipment in the Gulf before the fighting

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    started? Will he give priority to the environmental clean-up? Will he give a further commitment that the allies will not worsen what Saddam Hussein has done by bombing oil tankers or oil wells?
    Mr. Hamilton: That is not the position. Saddam Hussein decided to put oil slicks in the Gulf. It would have been difficult for the allies to position oil spillage clean-up equipment in the area because it would have come under attack and been shelled by the Iraqis. The hon. Gentleman should make no mistake that the allies' aim was to stop off oil flows into the Gulf. Precision bombing has succeeded in stopping some of the slicks.
    Mr. Hannam: Is my hon. Friend aware from reports in the media by the Royal Society for the Prevention of Cruelty to Animals that it is the only organisation that is sending people to the Gulf to deal with the problems of wildlife damaged in the oil spill and that it is making a direct appeal for funds? Can any help be given to that organisation and will he clarify whether the RSPCA is the only organisation looking after wildlife in the Gulf?
    Mr. Hamilton: I am not aware of whether the RSPCA is the only organisation doing that work, but it is certainly making a valuable contribution. I hope that the British people will respond generously to what it is doing.
    Mr. Boyes: Does the Minister agree that there was insufficient planning for an inevitability? Saddam Hussein should be in the dock for his malicious, wicked and futile gesture. He stands virtually unanimously condemned by the whole world for pouring millions of tonnes of oil into the Gulf which has proved dire for humans and calamitous for wildlife. Will the Minister join me in taking this opportunity to praise all those volunteers who have travelled to that troubled land to save as much wildlife as possible?
    Mr. Hamilton: Yes, I certainly do, and I echo the hon. Gentleman's remarks. Saddam Hussein's callous act has led to the oil slicks and I pay tribute to the volunteers who are doing all that they can to clear them up.
    Mr. Hinchliffe: To ask the Secretary of State for Defence what account is taken of the possible consequences to the environment in the military strategy employed in the Gulf war.
    Mr. Archie Hamilton: Environmental factors are taken into account to the extent possible in the planning and conduct of military operations in the Gulf. We have repeatedly made it clear that we do all we can to ensure that collateral damage from our operations is minimised.
    Mr. Hinchliffe: Bearing in mind the appalling environmental consequences of the Gulf conflict so far and the sad fact that worse may be to come, what dialogue has there been within the United Nations about that aspect of the Gulf conflict? Has consideration been given to the formation of an environmental equivalent of the Red Cross or Red Crescent to tackle that aspect of the war?
    Mr. Hamilton: There has been a great deal of international co-operation on that aspect and I believe that the United Nations is conducting studies to ensure that minimal damage is done.
    Mr. Brazier: Does my hon. Friend agree that the best thing for the environment in the Gulf would be for the allied forces to win the war so that the polluter will be forced out of the Gulf and we can start the clean-up?
    Mr. Hamilton: I could not agree more. We must also bear it in mind that Saddam Hussein is capable of polluting the area with nuclear and chemical weapons, too.
    Mr. Dalyell: Why should Mr. David Olsen, the consultant adviser on the environment to the Saudi Government, complain about a shortage of equipment?
    Mr. Hamilton: I cannot answer for Mr. David Olsen. However, we have done our bit by sending about 90 tonnes of equipment which has been held here by the Department of Transport to help to clean up the problems in the area.
    Mr. John Marshall: To ask the Secretary of State for Defence how many representations he has received about the use of British forces in the Gulf.
    Mr. King: I have received a substantial number of letters from Members of Parliament and the public regarding the situation in the Gulf. Some 20 per cent. of a recent sample of letters reflected opposition to the presence of British forces and military action. This is very much in line with recent opinion polls, which also indicate overwhelming support for our forces in the Gulf.
    Mr. Marshall: I thank my right hon. Friend for that answer, which praises the professionalism and self-restraint of British soldiers in the Gulf. Does my right hon. Friend agree that civilian casualties—the direct consequence of any war—are the result of the intransigence of Saddam Hussein? Will he contrast the attempt of the allies to minimise civilian casualties with the efforts of Saddam Hussein to maximise them by aiming Scud missiles at innocent civilians in Israel and Saudi Arabia?
    Mr. King: My hon. Friend puts it very clearly and is absolutely right. I confirm again to the House that the absolute instruction for our service men—and, with the present air campaign, for our aircrews—is at all times to minimise civilian casualties. As my hon. Friend says, there is a sharp contrast in that we are seeking to minimise casualties while Saddam Hussein aims to cause them deliberately by aiming Scud missiles at civilian areas. The House may also have noted another contrast: if something goes wrong, as can happen, tragically, we manifestly try to set out the truth as well as we know it and do not try to conceal anything.
    Mr. Menzies Campbell: Like the rest of us, even now the British forces in the Gulf would welcome Iraq's withdrawal from Kuwait in accordance with the United Nations resolution. However, can the Secretary of State confirm that, if Iraq does not withdraw from Kuwait, the British ground forces have now reached such a state of readiness that they can fulfil any military task that may be assigned to them?
    Mr. King: Yes, I can confirm that. I spoke to General de la Billiere yesterday and he confirmed that the British ground forces are ready for a land campaign should it prove necessary. Of course, we hope even at this very late stage that Iraq will recognise the essential need to observe to the full the United Nations resolution. If not, it will have to face the consequences.
    Sir Nicholas Fairbairn: Is not it strange that in the alleged attack on the bunker only women and children were in that air raid shelter? When on earth have only women and children entered a shelter during an air raid? Can the BBC please not provide propaganda for the enemy by suggesting that it was an attack on a civilian target?
    Mr. King: The whole House will regret the death of any civilians, including women and children. The United States has made it clear that the building was a military command and control facility and that it had been on the target list for some time. However, it is very much regretted that there were civilians there, too, and the United States has made it clear that if it had been known that civilians were in that bunker, it would not have been attacked.
    Mr. Duffy: While the Secretary of State is referring to public opinion, will he on every appropriate occasion bring to the notice of our men and women in the Gulf the quite extraordinary blend of public opinion at home, in the Arab world, in the international community and in the United Nations supporting totally their role, as well as the fact that their's is truly an historic mission and that they have the confidence of the House of Commons?
    Mr. King: I am very grateful for what the hon. Gentleman, particularly with his background and experience, has said. I hope that those men and women know that. He is right to draw attention to the remarkable coalition, now involving 33 countries which have provided forces or contributions to the Gulf effort. That is very significant. He is right to draw attention to the contribution of our armed forces, which approach the matter not in an aggressive sense, but in the recognition of a job that may need to be done.

    Forces and Equipment
    Mr. Dickens: To ask the Secretary of State for Defence if he will make a statement on the training of United Kingdom armed forces and the servicing of United Kingdom military equipment.
    Mr. Archie Hamilton: Members of the armed forces undertake regular training to prepare them as fully and as realistically as possible for the tasks that they may have to undertake in hostilities and to assist them in carrying out peacetime duties. Servicing of military equipment is aimed at maximising operational availability while ensuring that quality is achieved at a cost-effective price.
    Mr. Dickens: Does my hon. Friend agree that the Gulf war has vividly demonstrated to everyone that today's warfare is highly technical and highly sophisticated? Must not we have the right calibre of personnel in our armed forces and give them the right well-maintained equipment and good training? Is not that what the British armed forces have always done and why they have always been considered to be the best in the world?
    Mr. Hamilton: I am grateful to my hon. Friend and I follow him in paying tribute to our volunteer forces who are superbly trained and highly motivated and who have some of the best equipment in the world.
    Mr. Douglas: Will the Minister acknowledge the contribution made by the Rosyth naval base and the
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    adjoining dockyard to the training of personnel and to the servicing of equipment? Does he accept that it would be a cruel acknowledgement of that activity if the naval base were peremptorily closed? That would have a severe impact on the economic fabric of Fife.
    Mr. Hamilton: I pay tribute to Rosyth naval base and the dockyard for keeping much of the Navy well equipped and enabling it to perform an excellent job. I am unable to comment on "Options for Change", which is reviewing all our support facilities. I cannot help the hon. Gentleman any further on that.
    Mr. Sayeed: Does my hon. Friend agree that low flying has played a very important part in the courageous missions that the Royal Air Force has flown? Does not that give the lie to the Opposition's considerable irritation when they said that low flying was no longer necessary?
    Mr. Hamilton: Yes, absolutely. One lesson that we have learnt is that low flying is something at which it takes a long time to become proficient. It is not something that can be worked up quickly in a short period before hostilities. I am afraid that, for the foreseeable future, we must continue with low flying, the value of which has been very much proven during this conflict.

    Foreign Forces (Training)
    Mr. Tony Banks: To ask the Secretary of State for Defence if any consideration is being given to a review of training facilities offered to the military forces of foreign governments in the light of events in the Gulf.
    Mr. Archie Hamilton: Our policy on the provision of military training for overseas countries takes into account a wide range of factors and is kept under continuous review.
    Mr. Banks: How can the Minister justify the fact that until March 1990, we were training Iraqi military personnel in this country? When Saddam Hussein was gassing the Kurds and invading Iran, we were supplying him with technology and training his military forces. When will the Government realise that when we accept money from every tinpot dictator who wants to send his troops here we are acting against the long-term interest of not only British troops in the Gulf, but all the British people?
    Mr. Hamilton: The hon. Gentleman should get things in perspective. Since 1979 we have trained the forces of 110 different countries.
    Mr. Banks: How many more of Saddam Hussein's forces are we training?
    Mr. Hamilton: I totally accept that with the advantage of hindsight we would not have trained the Iraqis. However, the hon. Gentleman is now showing the wisdom that we would be at war with Iraq which no one else was able to do.
    Mr. Cyril D. Townsend: Does my hon. Friend agree that it is greatly to the credit of this country that so many students from overseas wish to come to our training establishments? Perhaps they pick up some good ideas about relationships between politicians and service men. Does he also agree that they give us quite a lot of cash in the process?
    Mr. Hamilton: That is absolutely true. Much of the training that we provide leads to export sales and the whole business of training for the armed services cements relationships with a number of countries.

    Ulster Defence Regiment
    Mr. John D. Taylor: To ask the Secretary of State for Defence how many part-time and full-time members there are in the Ulster Defence Regiment.
    Mr. Archie Hamilton: On 1 January 1991, there were 3,088 part-time and 2,955 permanent cadre members of the Ulster Defence Regiment.
    Mr. Taylor: As a Minister involved 20 years ago in the launch of the Ulster Defence Regiment, I welcome those figures. Will the Ulster Defence Regiment continue to have sufficient resources made available to it to maintain its manpower, especially as it is in competition with other security forces such as the RUC, the Territorial Army and various Irish regiments in the regular British Army? From the experience of the past 20 years, will the Minister ask the Leader of the House to provide time for a debate on the Ulster Defence Regiment so that we can further improve and strengthen that regiment in Northern Ireland, whose service is respected throughout the whole community?
    Mr. Hamilton: I, too, pay tribute to the Ulster Defence Regiment, which plays a valuable role in combating terrorism in Northern Ireland. We will, of course, ensure that it is properly funded. I am sure that my right hon. Friend the Leader of the House will have heard the right hon. Gentleman's remark about a debate.
    Mr. Conway: Does my hon. Friend accept that the UDR is an effective part of the Territorial Army and that any move to reduce the scale of the Territorial Army, which consumes less than 3·5 per cent. of the Army's budget, would be greatly contested by many in the House?
    Mr. Hamilton: I must put my hon. Friend right. The UDR is not part of the Territorial Army; in Northern Ireland, the Territorial Army is a wholly different organisation. However, I hear what my hon. Friend says about the Territorial Army and I will take that into account when we come to consider its future.

    Chieftain Tank
    Mr. Cousins: To ask the Secretary of State for Defence when he will announce his decision on the replacement for the Chieftain tank.
    Mr. Trotter: To ask the Secretary of State for Defence when he expects to be able to announce an order for a new tank to replace the Army's Chieftains.
    The Minister of State for Defence Procurement (Mr. Alan Clark): We had hoped to announce a decision on equipment for our future main battle tank fleet in the early spring. Hon. Members will appreciate that it would not be realistic to take such a decision at present and that it is sensible to defer it.
    Mr. Cousins: Does not the Minister recognise that this further postponement, for perhaps as long as 18 months, on a firm decision on Challenger 2 puts at risk the jobs of many hundreds of people on Tyneside and in Leeds? Does
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    not the Minister further recognise that those same people are working—and have been working for many months—to supply our forces with Challenger 1 tanks, which are now in the Gulf, with all the equipment that they need? Does not he realise that his answer means that those workers face the production line now and the redundancy queue later?
    Mr. Clark: No. The hon. Gentleman's question is entirely unjustified. However, I join him in paying tribute to the workshops in those factories and to the tremendous support that they have given to the existing tank fleet in the Gulf. The figure of 18 months is pure invention by the hon. Gentleman and he should know better than to try to spread it round.
    Mr. Trotter: Does my right hon. Friend accept that the same skill and dedication as have been shown in support of the Army in the Gulf by the work force at Vickers have gone into the design of Challenger 2? It has been designed specifically to meet the British Army's requirements for the future and it does meet them. Does he accept that we want the tank order to be placed with Vickers on the basis of our confidence in its capabilities and that an early decision is necessary to remove the present uncertainty in the plants in the north-east?
    Mr. Clark: I certainly confirm that Challenger 2 has achieved all the thresholds that we put in place for it to satisfy. My hon. Friend will agree that, faced with the likely prospect of the first major armoured engagement since the Yom Kippur war, it would not be prudent to make a precipitate decision in advance.
    Mr. Batiste: Does my right hon. Friend agree that many of our friends overseas who were planning to buy battle tanks for themselves have been very favourably impressed by the performance of Challenger, but that they are waiting to see the outcome of the United Kingdom competition? Will he bear that very much in mind in deciding his timing and so assist the company in building on the dramatic progress that has been made since the day that Vickers took over the royal ordnance factory at Barnbow?
    Mr. Clark: My hon. Friend is right to draw attention to that point. The performance of Challenger 1 in the region has been impressive and the mean time between failures has greatly exceeded the figures that it was turning in in Germany. That has been apparent to a number of potential customers in the area who have noticed it favourably.
    Mr. Cryer: Would not it be a good idea for the Government to consider the development of alternative uses of such factories to employ their great skills and equipment? Dependency on one product makes factories vulnerable. Surely the Government will examine the odious international arms trade after the cessation of Gulf hostilities in an attempt to curb that trade. That would stop our troops having British weapons used against them.
    Mr. Clark: It is not the business of government to direct companies on the form of their commercial activities. The hon. Gentleman might care to make his point to the work force or have a quiet word with his hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins).

    Builders (IRA Threats)
    Mr. Kilfedder: To ask the Secretary of State for Defence whether the armed forces in Northern Ireland are experiencing any problems as a result of IRA threats to builders and suppliers.
    Mr. Archie Hamilton: The Government take all the steps necessary to ensure that the requirements of the armed forces in Northern Ireland are met. Intimidation and brutal, cold-blooded murder by terrorists of ordinary people working for their living has not, and will not, advance the terrorist cause one inch.
    Mr. Kilfedder: Will the Minister pay tribute to all those people of courage who have fulfilled their contracts for the security forces, especially those who have been murdered by the cowardly members of the IRA? Is the Minister aware that the Ulster people have nothing but contempt for those who seek out such soft and easy targets as civilians who work for the security forces, especially Roman Catholic members of the community who are trying to do their best for Northern Ireland and for their families?
    Mr. Hamilton: Yes, I am delighted to pay great tribute to the people who work for the security forces in Northern Ireland. The whole programme of construction in Northern Ireland, which has been massive, as the hon. Gentleman is aware, has not been put back one bit by terrorist acts.
    Mr. Ron Brown: While we all roundly condemn terrorism, especially the terrorist acts recently in London, does the Minister agree that there is an argument for withdrawing, especially British troops, from the Province—as there is an argument for withdrawing Scottish troops from the Gull—[Interruption.]—and may I remind the Minister that about 42 per cent. of all British troops are Scots? We must argue the case—
    Mr. Speaker: Order. The question is about Northern Ireland.
    Mr. Brown: I was talking about the linkage and pointing out that, as we all say, negotiation is better than conflagration and peace is better than war.
    Mr. Hamilton: I remind the hon. Gentleman that the presence of British troops in Northern Ireland is to uphold the democratic will of the majority of the people there. He must believe as much as I do in the democratic rights of the people of Northern Ireland.

    Defence Equipment (Overseas Sales)
    Mr. Flynn: To ask the Secretary of State for Defence what new initiatives he plans in the area of overseas sales of defence equipment.
    Mr. Alan Clark: Officials in the Defence Export Services Organisation are in constant touch with friendly foreign countries, both directly and through overseas posts, to best help furnish the equipment they require for their own self-defence.
    Mr. Flynn: Does the Minister recall that the Indonesian Government killed a bigger proportion of the population of East Timor than Pol Pot killed of the population of Cambodia? Why are Government agencies at this moment
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    encouraging British Aerospace to sell Hawk aircraft and other weapons to the butchers of Indonesia? When will we realise that the international arms trade is the greatest cause for evil in the world? When will Britain stop selling arms to the madmen, butchers and tyrants of the world?
    Mr. Clark: I reject the imputation that the hon. Gentleman puts on his supplementary question. Very strict and stringent conditions are applied to the sale of armaments. All armaments require export licences and they are considered by three Departments—mine, the Foreign Office and the Department of Trade and Industry.
    I reject the hypocrisy that is evident in many of the questions that are directed from the Opposition Benches on this subject. Provided the rules and guidelines are strictly followed, there is a considerable benefit, in terms of domestic employment and overseas earnings, from defence sales. The House is littered with hon. Members on both sides who lobbied me, when I was Minister for Trade and since, on contracts that affected their constituencies, although I recognise that they prefer to keep silent on this occasion.
    Sir Dudley Smith: Does the Minister believe that once the war is over, there might be some merit in having a thorough European appraisal of the whole question of the sale of defence equipment, perhaps via the aegis of a body such as the Western European Union?
    Mr. Clark: Yes, certainly. After the successful conclusion of the conflict, the most important concern will be to build up and maintain stability in the area. In his Blaby speech, my right hon. Friend the Foreign Secretary developed that theme at some length.
    Mr. Rogers: Further to the remarks by my hon. Friends the Members for Newham, North-West (Mr. Banks) and for Bradford, South (Mr. Cryer), coalition forces in the Gulf are now faced by Iraqi troops who have weapons supplied by coalition countries. Surely that demonstrates the need for more effective control of the arms trade, especially in the light of the fact that in his main answer the Minister said that we should supply arms to friendly foreign countries, which Iraq recently was. Will the Government give the highest priority to the issue of the introduction of weapons into an unstable area, such as the middle east, as soon as the war is over?
    Mr. Clark: The basis of Britain's role in defence sales is the right to self-defence as enshrined in article 51 of the United Nations charter, but, of course, that question must be considered sensitively and intelligently and in the light of all the diplomatic and political factors prevailing at the time. When the conflict is over, I have no doubt that, together with the Foreign Office and the Department of Trade and Industry, my Department will look at many of those topics with that point in mind.

    The Gulf
    Mr. Riddick: To ask the Secretary of State for Defence if he will make a statement on the latest situation in the Gulf.
    Sir Philip Goodhart: To ask the Secretary of State for Defence whether he will make a further statement about Operation Desert Storm.
    Mr. Burns: To ask the Secretary of State for Defence if he will make a statement on the conflict in the Gulf.
    Mr. Tom King: Allied pressure on the Iraqi military machine continues to grow. The main weight of the air campaign is now directed against Iraqi forces in and near Kuwait, and the Iraqi navy has been largely destroyed. Yesterday, British artillery was in action for the first time in a limited engagement. This is part of the preparations for the ground campaign which will be inevitable unless Saddam Hussein complies with UN Security Council resolutions.
    Mr. Riddick: Is my right hon. Friend aware that a former Labour Cabinet Minister yesterday described reporters in Baghdad as "fifth columnists" not, perhaps, without some cause? Will my right hon. Friend communicate to the BBC and ITN the real sense of anger that is felt by many people in this country at what they see as Britain's reporters reporting back to this country from Baghdad only what Saddam Hussein wants them to report in his efforts to undermine the morale of the British people—efforts which will, of course, prove ineffective?
    Mr. King: I very much agree with my hon. Friend's sentiments. It is extremely difficult for the correspondents in Baghdad to be able to begin to discharge their proper responsibilities when operating under the conditions which manifestly exist. One cannot draw a bigger contrast than to point to the way in which, over the weekend when it is possible that there may have been a most unfortunate and regrettable incident in which some civilians may have been killed, we made a point of putting before the public such facts as were available to us.
    Sir Philip Goodhart: While saluting the skill and bravery of our service men and women in the Gulf, does my right hon. Friend recognise that it will take some time to evaluate the military lessons of Operation Desert Storm, which will inevitably mean that there will have to be a fundamental review of the paper "Options for Change"?
    Mr. King: As my hon. Friend knows, I have made it clear that we wish to learn any lessons that can be learnt. The remarks of my right hon. Friend the Minister of State for Defence Procurement on the subject of the next tank order will obviously take account of the lessons that can be learnt. We shall be keen to take full stock of the implications that flow from Operation Desert Storm.
    Mr. Home Robertson: Given that there is still some outside hope of a diplomatic solution to the crisis, are there any contingency plans for supervising a peaceful withdrawal of the Iraqi forces from Kuwait, and how long would that take?
    Mr. King: We do not yet know whether the Iraqis will withdraw. We have made it quite clear that we wish to see an immediate and unconditional withdrawal. Once we are satisfied that that is happening, arrangements about the way in which it is to be carried out will be a matter for urgent discussion.
    Mr. Burns: Will my right hon. Friend accept that the conflict and peace in the middle east cannot be won simply by the acceptance of resolution 660? Does he agree that the
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    other resolutions, up to and including resolution 678, must be implemented and that Iraq's chemical and nuclear capability must be removed?
    Mr. King: We have always stood by the United Nations resolutions. As my hon. Friend says, that means more than resolution 660.
    Ms. Short: Will the Secretary of State explain how it helps to get Iraq out of Kuwait to bombard Baghdad more heavily than it has ever been bombarded before, as we have been told in the press that the allies did last night? Is not it a breach of the Geneva convention to deprive civilians of water, food, electricity and proper medical treatment and to destroy their sewage system, so causing disease in the centre of Baghdad?
    Mr. King: The attacks conducted as part of the air campaign are specifically directed at strategic or military targets, as the House knows. In Baghdad, there are control centres and communication centres which directly control and order the people in Kuwait. Those centres are certainly legitimate targets.
    Representing the constituents she does, the hon. Lady should think hard before she starts talking about the Geneva convention. She knows perfectly well that there are families of service men who do not yet know whether their sons or husbands are alive or dead. Those service men have been shown on television and we do not yet know their fate. We have not had a single word from the Iraqi authorities to fulfil the most elementary obligation under the Geneva convention. I do not know how the hon. Lady can stand up and berate us about the Geneva convention without addressing that aspect.
    Mr. O'Neill: Will the Secretary of State assure the House that there will be no reduction in military pressure until Saddam Hussein clarifies last Friday's announcements from Baghdad and starts to make arrangements to withdraw from Kuwait?
    Mr. King: My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs made the position clear. I make it clear that until and unless Iraq immediately and unconditionally withdraws from Kuwait, hostilities will continue as planned.
    Mr. Hayes: While fully appreciating the difficulties experienced by journalists in Baghdad in reporting the situation out there, does my right hon. Friend agree that the report on the "Today" programme from a BBC journalist who talked about the allied forces perpetrating five hours of bombing was disgraceful? According to the Oxford English dictionary the definition of "perpetrate" is to commit a crime, a blunder or something outrageous. Does my right hon. Friend agree that that report was nothing short of disgraceful and that such reporting does nothing to help the morale of our people here or in the Gulf?
    Mr. King: On the last point, I would not be so despondent about the morale of our people here. In spite of reservations that we may have about the way in which some of these matters have been reported, we can recognise with admiration the steadily increasing support shown in the polls and right across the country for our forces in the Gulf, the dangerous work which they are undertaking and the difficulties that they face. We, for our part, will tell the truth about the circumstances in which we

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    are involved in the conflict, even if mistakes are made or things go wrong. Broadcasting authorities and correspondents have a heavy responsibility to make sure that at all times they give the fairest possible representation of the true facts.

    Quality Assurance Unit
    Mr. Cartwright: To ask the Secretary of State for Defence when he expects to announce a final decision about the future location of the Directorate General of Defence Quality Assurance.
    The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Kenneth Carlisle): Our studies are well in hand. We are considering several options for the relocation of the Directorate General of Defence Quality Assurance and will come to a decision as soon as possible.
    Mr. Cartwright: Does the Minister realise that uncertainty about defence quality assurance has continued for more than 15 years? As one final decision to build a new headquarters at Woolwich is said to have been overturned and a second final decision to move to Teesside now seems in doubt, can he assure us that this costly dithering will stop and that the next final decision will really be final?
    Mr. Carlisle: As I said, we are looking at all the options and no decision has yet been taken. We hope shortly to come to a decision. I know that the hon. Gentleman is concerned about his constituency, but he should bear in mind that it will greatly benefit from any redevelopment of the royal arsenal west site.
    Mr. Devlin: It is nothing short of disgraceful that the Government, who previously announced the movement of the quality assurance unit from Woolwich to Teesside in 1989, now seek to renege on that commitment to move those 1,500 jobs. When will the Minister bring this matter to a positive conclusion in favour of the previous announcement?
    Mr. Carlisle: My hon. Friend has fought long and hard to win the relocation for Cleveland and I pay tribute to his efforts. He will understand that we have a public duty to look at all the options in order to achieve the best value for money. I repeat that we have not yet made any decision, but hope to make one shortly. We certainly recognise the merits of his Preston farm site.

  PRIME MINISTER

    Engagements
    Mr. John Carlisle: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister (Mr. John Major): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Carlisle: Does my right hon. Friend agree that the one event in these troubled times that has given much pleasure to people, and especially to our troops in the Gulf, has been the comprehensive English rugby victory at Twickenham? In that context does he further agree that we
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    should begin to think about providing them with some real opposition which can now come only from South Africa? Is my right hon. Friend encouraged by the meeting of Commonwealth Foreign Ministers at the weekend which virtually saw the beginning of the end of the infamous Gleneagles agreement? Will he take further initiatives to restore British-South African sporting relations?
    The Prime Minister: In answer to my hon. Friend's first point, I am not sure that many Scots troops in the Gulf would necessarily agree with him. I recall occasions when both the Scots and the Welsh had rather too satisfactory results at Twickenham and elsewhere. I agree with my hon. Friend's substantive point that the time has come to resume sporting links with South Africa in areas where there is now proper integration of sport within the Republic of South Africa. I have discussed that matter with other Commonwealth leaders and I hope to take it forward.
    Mr. Kinnock: The Secretary of State for Education and Science today said:
    "I'm not interested in proposals that transfer expenditure on education from the local taxpayer to central Government taxation".
    Does the Prime Minister agree with his Secretary of State?
    The Prime Minister: As the right hon. Gentleman knows, we are examining a whole series of options in the community charge review. If the right hon. Gentleman will be patient we shall announce the result of that as soon as possible.
    Mr. Kinnock: But the Secretary of State could not have been clearer in ruling out the idea of transferring expenditure from local taxation to central taxation. Will the Prime Minister make his position clear on this aspect of concern? Does he support his Secretary of State for Education and Science?
    The Prime Minister: I shall make the position entirely clear on the matter under review when we have finished the review.
    Mr. Kinnock: Why does not the Prime Minister save a great deal of time and the country a huge amount of money by abolishing the poll tax and accepting the Labour party proposal for a modern system of fair rates? That is the best way to, deal with the poll tax.
    The Prime Minister: I am sure that the whole country will have listened with interest to the right hon. Gentleman. What a shame that when he announced his proposals in Scotland they did not meet with the acclaim that he expected.
    Mr. Malins: My right hon. Friend will be aware that the man who was so cruelly murdered by the bomb at Victoria station yesterday came from Thornton Heath, which is in my constituency, and leaves a wife and baby son. Will my right hon. Friend send the sympathy of the whole House to that family, and can he assure us that no expense or effort will be spared, to bring the callous killers to justice?
    The Prime Minister: The whole House will share the views that have been expressed by my hon. Friend. I certainly offer to the family of the gentleman who was killed, and to all those who were injured, our very warmest sympathy. One is bound to ask what sort of people it is that can carry out attacks of this kind. They are certainly

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    consumed with hate, and they are certainly sick of mind. And they can be certain of one thing—that they will be hunted and hunted until they are found.
    Mr. David Marshall: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Marshall: With unemployment soaring past 2 million, with record numbers of homeless people and home repossessions, with pensioners freezing to death because of his penny-pinching policies, is not the Prime Minister reminded of the tale of the king's new clothes? Can he tell the House just what is different about his premiership, when it is apparent to all that, if he is not altogether naked, he is simply wearing the threadbare clothes of the previous Prime Minister?
    The Prime Minister: I am not entirely sure that they would wholly suit me. With regard to the hon. Gentleman's substantive point, I have to say that he left something out of his catalogue. For example, he omitted the work on the £55 million programme to transform a rundown area of Glasgow's east end. I should have thought that he would know about that. He also forgot that that programme will create 1,000 jobs in that part of Glasgow.
    Mr. Gale: My right hon. Friend is aware of the level of public concern that has been expressed about media coverage of Gulf events—particularly reports from Baghdad. Does he agree that it is not incumbent upon either the BBC or ITN to sink to the levels of some foreign news organisations? Is not it particularly important at this time, when the wives and families of service men are watching television, that every effort should be made to ensure that the public are made well aware that any report coming out of Iraq is subject to very severe censorship?
    The Prime Minister: I think it is clear to people that reports coming out of Baghdad are subject to censorship, and I hope that the BBC and the other transmission channels will make that clear on every occasion.
    Mr. Livingstone: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Livingstone: In the light of the news from Moscow that President Gorbachev has given Saddam Hussein 48 hours to reply to his peace proposals, can the Prime Minister assure the House that no ground war will be launched by the coalition while those negotiations continue?
    The Prime Minister: I do not think that the hon. Gentleman can seriously expect me, on this occasion or on any other occasion, to give information of a military sort. Certainly I can confirm that President Gorbachev sent to me late last night the proposals that he had put to Tariq Aziz.
    Dame Elaine Kellett-Bowman: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Dame Elaine Kellett-Bowman: Has my right hon. Friend seen this excellent report of the North Western regional health authority, a copy of which I sent him? If so, he will have noted that the health authorities of Lancaster and Blackpool top the league in the immunisation against diphtheria of children under two. Those districts also have the lowest rates of death from cancer at all ages.
    Will my right hon. Friend join me in congratulating all those concerned—the administrators, the doctors, the nurses, the ancillary staff and all others involved—on their splendid team effort?
    The Prime Minister: Yes, I have seen the brochure that my hon. Friend sent me. I congratulate all those concerned in the Blackpool and Lancaster districts on their achievement in respect of immunisation rates and the low rates of death from cancer. The national target for immunisation is 90 per cent., and that has been achieved. It is worth mentioning that the accelerated immunisation schedule for younger children and the introduction of the new GPs' contract should further improve the immunisation uptake figures nationwide. It is becoming clear that the health reforms are improving preventive medicine in a remarkable way.
    Mr. Kirkwood: Has the Prime Minister had a chance to study reports in today's press on the progress made to date on the internal Government review of the poll tax? Is he aware that those reports imply that no one involved in those review negotiations is in favour of the Government retaining the poll tax? If that is true, does not the right hon. Gentleman have a duty to make an early statement to the House and the country that, whatever options are still being considered, the poll tax is now well and truly ruled out?
    The Prime Minister: We will make a statement at the end of our review and not before.
    Mr. Harry Greenway: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Greenway: Is my right hon. Friend aware that his commitment to an excellent education for all our children is widely supported and welcomed throughout the House and the nation? To that end, is he pleased that Her Majesty's inspectors' report shows that the first year of national curriculum maths is going extremely well for five and 11-year-olds and throughout the age range, and that children and teachers are working well to achieve that? Will my right hon. Friend congratulate them?
    The Prime Minister: Yes, I am happy to do as my hon. Friend suggests. The report demonstrates that the national curriculum has stimulated a range of improvements in schools and that teachers have worked hard to take advantage of the opportunities. That can be only to the benefit of the children and I look to see it continue.
    Ms. Primarolo: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.
    Ms. Primarolo: Given the expected statement this afternoon by the Secretary of State for the Environment giving poll tax exemption to forces serving in the Gulf, will the Prime Minister this afternoon agree to extend exemption from this vicious tax to all deserving groups, such as the nurses?
    The Prime Minister: The hon. Lady and her colleagues will carry more weight on the community charge matter when all of them pay their community charge and their fair share of local government taxation. I have no doubt that the hon. Lady has already done so. [HON. MEMBERS: "She has not."' I note that the hon. Lady has not and I hope that others will have noted that, too.
    Ms. Primarolo: The right hon. Gentleman is wrong. I have paid my poll tax.
    The Prime Minister: The community charge reduction scheme will help 18 million people who face community charge bills.
    Mr. Knowles: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Knowles: Despite the scaremongering from some local authorities, I welcome the community charge relief scheme, but will my right hon. Friend comment on the effects of that scheme throughout the country? If he had available the figures for Nottingham in particular. I and my constituents would welcome them.
    The Prime Minister: As my hon. Friend knows, the community charge reduction scheme will make a significant difference to a large number of people this year with more than 18 million people being eligible for rebates under it. If Nottingham city council sets the same level next year as it did this year, a couple living in an averagely-rated property would receive a reduction of £238 between them.
    Mr. Turner: Will the Prime Minister comment on the recent statement by the hon. Member for Harlow (Mr. Hayes) that unless substantial funds are made available to the NHS before the end of the financial year, elderly people and people from other groups might die? Does the right hon. Gentleman agree with that statement? [Interruption.]
    Mr. Speaker: Order. I did not hear that.
    The Prime Minister: The hon. Gentleman will be pleased to know that my hon. Friend the Member for Harlow (Mr. Hayes) sitting behind me says that he said no such thing.
    Dame Jill Knight: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Dame Jill Knight: Has the Prime Minister any up-to-date knowledge of the British airmen who were shot down or who ejected over enemy territory? Will he assure the House that any peace terms that are accepted will include as a priority the return of those airmen unharmed?
    The Prime Minister: I wish that I could say to my hon. Friend that I had the information that she seeks. We have tried repeatedly but thus far have had no success in getting it. I share my hon. Friend's great concern about Iraq's failure to fulfil its commitments under the Geneva convention and to grant the Red Cross access to prisoners of war. We remain in constant touch with the International Committee of the Red Cross and are urging it to do everything possible to get Iraq to live up to its obligations. I agree very much with my hon. Friend that the immediate release of prisoners of war, including our airmen, must be part of any ceasefire.
    Mr. Strang: To ask the Prime Minister if he will list his official engagements for Tuesday 19 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Strang: If President Saddam Hussein responds to the Soviet peace initiative with an undertaking to withdraw all his forces from Kuwait unconditionally, does the Prime Minister agree that the allies should respond by stopping the bombing and halting moves towards a ground war in Kuwait?
    The Prime Minister: We are all aware that proposals have been put by President Gorbachev to Iraq. I confirmed that to the House earlier. In his message President Gorbachev specifically asked me to keep the proposals confidential. Therefore, upon those I can offer no substantial comment. In any case, as the hon. Gentleman intimated, we have to bear it in mind that it is the Iraqis who have been asked to respond, not us. We await a response from them. Nothing has yet happened which would incline us to agree to a ceasefire or a pause in the conflict. If Saddam Hussein wants to avoid a land battle, he knows what he must do: he has to withdraw unconditionally and immediately from Kuwait and implement the Security Council resolutions in full. Unless and until he does that, the conflict will continue.

Point of Order
3.31 pm
Mr. Tony Banks: On a point of order, Mr. Speaker. As you were entering the Chamber at 2.30 pm, the last 50 of the 8,000 passengers who were on the Central line this morning were being escorted out of the tunnel, having been there for about four hours. This is the second day running that the whole of the London transport system has snarled up. There is nothing that British Rail or London Underground can do about the activities of the IRA, but there is a lot that they could do about communicating with passengers and letting them know how the system is working, so that people could avoid getting themselves into terrible problems.
Have you had any request, Mr. Speaker, from a responsible Minister to explain to the House what happened on the Central line today and to try to explain why, given so many years of under-investment on the Central line and on London transport, we have reached a stage where London transport is in chaos?
Mr. Speaker: I have not had a request for a statement. It seems to be a good subject for an Adjournment debate. Why does not the hon. Gentleman try that?

Prescription Charges (Exempt Medical Conditions)
3.32 pm
Mr. Gary Waller: I beg to move,
That leave be given to bring in a Bill to provide an exemption from payment of prescription charges in respect of any permanent medical condition or ailment.
I hope that the House will give me leave to bring in the Bill for which I am about to make a case. In addition to the various categories of people, such as retirement pensioners, children under 16 and pregnant women, who are entitled to free prescriptions, people suffering from one of a list of medical conditions and disorders are also included. Those conditions include, among others, various forms of diabetes, Addison's disease, colostomy and epilepsy requiring continuous anti-convulsive therapy. However, there is a longer list of permanent conditions, sufferers from which may still be required to pay for vital drugs and medicines. Those include Parkinson's disease, cystic fibrosis, psoriasis, and schizophrenia.
There is no logical reason why some conditions are included while others are not. To give them their due, I do not think that Ministers have attempted to justify the distinction on the basis of logic. When the list of exempt conditions was drawn up in 1968 to coincide with the reintroduction of prescription charges by the last Labour Government, it was argued by medical practitioners that they could agree to exemption only for readily identifiable medical conditions that called automatically for continuous, life-long medication. However, even then the list must have seemed arbitrary and illogical. I wonder how much time since then has been spent by Ministers and their civil servants in responding to patients and hon. Members who questioned the basis for the list.
Those people who do not qualify for free prescriptions but who require regular medication are able to take advantage of prepayment certificates, which are better known as season tickets. That often provides a considerable saving. Furthermore, the Goverment may justifiably point out that, as a result of the present exemption arrangements and of the season ticket system, a prescription charge is paid on less than one item in five dispensed, whereas in 1968 the proportion was close to two in five items dispensed.
Nevertheless, the fact that only a minority of patients have to pay makes it all the more galling for sufferers of disabling and unpleasant conditions, who are given the impression that their complaints are regarded as less significant and are taken less seriously than other complaints which confer exemption. Medical science has moved apace during the past decade and for several conditions, such as Parkinson's disease, drugs are available which can make an enormous difference to the quality of life for sufferers.
As has been repeatedly pointed out, the difficulty is that an extension of the list, although not necessarily costly to the Exchequer in itself, could lead to yet further calls for the boundaries to be moved. I do not think that the fact that change would present difficulties is an overwhelming reason for maintaining the present inertia.
The cost involved in extending the list need not be as great as it appears at first. Many patients will already be exempt from paying charges because they are elderly, because their disability prevents them from leaving home

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without help, or because they are entitled to income support. Some of the costs could also be clawed back by altering the arrangements so that prescriptions in respect of medications for ailments other than a specific condition are not free. At present, if people need a prescription because they have influenza or the bad throat from which I am suffering, it does not cost anything if they are exempted by virtue of one of the conditions specified in the regulations. Some people would go further, arguing that any list of exempt conditions is bound to present problems and that it would be better to abolish lists altogether, relying instead on the season ticket system. If that were done, it would no doubt be possible for prepayment certificates to cost a great deal less.
I mention these points because I suggest that almost any system would be better than the present one, which maintains the illogical distinctions to which I referred. Perhaps the principal factor which prevents change is the belief that people are less likely to complain about a system which has been hallowed by time. We require a fresh look at the whole scheme of prescription charge exemptions to assess whether help could be directed more effectively to people who need it.
In bringing forward this Bill today to extend help to sufferers from conditions other than those on the existing list, I hope to demonstrate that there is a consensus which believes that a change sooner rather than later is not only desirable but necessary.
Question put and agreed to.
Bill ordered to be brought in by Mr. Gary Waller, Mr. Jack Ashley, Sir David Price, Mr. Ivan Lawrence, Mr. Tom Clarke, Mr. Peter Viggers, Mr. Roger Sims and Mr. John Hannam.

Prescription Charges (Exempt Medical Conditions)
  PRESCRIPTION CHARGES (EXEMPT MEDICAL CONDITIONS)
  Mr. Gary Waller accordingly presented a Bill to provide an exemption from payment of prescription charges in respect of any permanent medical condition or ailment: And the same was read the First time; and ordered to be read a Second time upon Friday 15 March and to be printed. [Bill 88.]
Opposition Day
[7TH ALLOTTED DAY]
Opposition Day

  Poll Tax
  Mr. Speaker: I have selected the amendment in the name of the Prime Minister. I understand that a large number of hon. Members wish to participate in the debate. In a half-day debate I have no means of controlling the length of speeches, but if hon. Members were to stick to approximately 10 minutes each I should be able to call most, if not all, of them.
  3.39 pm
  Mr. Bryan Gould: I beg to move,
  That this House calls upon Her Majesty's Government to bring forward legislation to abolish the poll tax.
  The motion invites the House to support a simple proposition. It requires us only to acknowledge what is now widely apparent—that the game is up. The poll tax is now virtually bereft of supporters. There is nothing for it but to acknowledge that a ghastly mistake has been perpetrated and that a new start must now be made.
  So that the House can concentrate on that simple point, we have excluded from our motion anything that might be regarded as contentious. We do not argue that the poll tax has proved itself to be hopelessly unfair, though that is now universally admitted. We do not argue that the poll tax has failed to secure the consent of the people and, as a consequence, is widely resisted, though that is now undeniable. We do not argue that it has proved horribly difficult to administer and collect and that the business of maintaining a register has been a nightmare, costing local authorities up to £130 million, according to the local government information unit, as they grapple with 13·5 million changes to the register that affect 38 per cent. of the register in the current year. We do not argue that local government administration, budgeting and delivery of services are near to chaos as a consequence of the poll tax. We do not even argue that the attempt to impose some order on the whole nightmare has meant a perversion of the original rationale of the poll tax. Intervention by central Government to an unprecedented degree has delivered a mortal blow to local government independence.
  We do not make those arguments in our motion because they no longer have to be made. They have been established and admitted not just as a result of the attacks on the poll tax by the Government's political opponents—though we should naturally wish to claim some modest credit for that—nor have they been established and admitted by the horrified complaints of local government or the cries of pain from those who have to pay the bills and suffer the cuts in services, though these, too, have all played their part.
  The arguments have in fact been made most eloquently by the actions and statements of Conservative Members of Parliament—those hon. Members who stood for election on manifestos that contained commitments to the poll tax, those hon. Members who have been whipped ferociously to ensure their continued support for the poll tax, those hon. Members who, more than anyone else, must recognise all too clearly the political penalties if the poll

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  tax is seen to fail. Yet the condemnation of the poll tax is all the more convincing because it comes from those who were hitherto committed to supporting it.
  It comes, first, in the votes cast against the poll tax by Conservative Members of Parliament. No fewer than 66 hon. Members who sit on the Conservative Benches—one fifth of the parliamentary party, one third of the Back Benchers—have defied a three-line Whip and refused to support the poll tax on one occasion or another. They will have the chance again tonight to confirm that decision and to ensure that this time their votes count.
  Conservative Members of Parliament have not limited themselves to voting against the poll tax. They have been remarkably fertile in proposing suggestions as to how it could be reformed, amended and changed out of all recognition. Those who have put forward such suggestions have gone well beyond the ranks of the usual poll tax dissidents. Thus, the hon. Members for Spelthorne (Mr. Wilshire), for Wellingborough (Mr. Fry) and for Congleton (Mrs. Winterton) have backed relief for non-working wives. The hon. Member for Birmingham, Northfield (Mr. King) supported relief for those under 21. The hon. Member for Chichester (Mr. Nelson) recommended an extension of the rebate scheme, and the hon. Member for Lancaster (Dame E. Kellett-Bowman) proposed relief for pensioner wives and mothers of young children. The hon. Member for Chorley (Mr. Dover) wanted to extend the rebate taper. The hon. Member for Gravesham (Mr. Arnold) sought help for the owners of empty houses. The hon. Member for Norfolk, North-West (Mr. Bellingham) suggested charging top-rate poll tax payers more. The list is a long one. I could go on for some time yet. No fewer than 43 separate schemes have been put forward from the Conservative Benches to ameliorate the poll tax.
  Nor have those hon. Members contented themselves with simply proposing amendments—
  Mr. Roger King: The hon. Member has listed a catalogue of Conservative Members who have wanted to see some changes in the community charge. Would he care to give the number of his colleagues who have sought to develop an alternative policy?
  Mr. Gould: I am delighted to say, in case the hon. Gentleman is unaware of it, that we are in the happy position of being united in support of the policy that we propose, something that I believe the Secretary of State will be unable to boast this afternoon.
  Nor have Conservative Members contented themselves with proposing amendments to the poll tax. They have also—usually in the local press—been remarkably quick to distance themselves from the poll tax even when they have demonstrated loyal support for it in votes here at Westminister. Thus the hon. Member for Southampton, Test (Mr. Hill) told The Reporter and Southampton Guardian:
  "The poll tax has definitely caught Mrs. Thatcher napping—she cannot talk her way out of this totally new policy. It is too much for people to pay".
  The hon. Member for Dartford (Mr. Dunn) told The Independent:
  "The figures have got worse every time they are revised. We have been led down the garden path".
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  The hon. Member for Shipley (Sir M. Fox), who is or was vice-chairman of the Tory party, said to the Daily Mirror:
  "We are punch drunk over this. Mrs. Thatcher must change her mind."
  Disenchantment with the poll tax now runs wide and deep in the Tory party. I have limited myself to just a small selection of the comments and actions of Conservative Members, but I could equally well have quoted a large number of critics from Tory local government and from the Tory party's organisation and senior staff.
  Perhaps the most famous—or should I say the most notorious?—of the Tory party's dissidents is the man who is now Secretary of State. His record in voting against the poll tax is pretty meagre—just one revolt on the question of banding—but he is the undisputed champion when it comes to ideas for reforming and amending the poll tax and changing it beyond recognition. He has been by far the most prolific source of ideas, from requiring councils to submit themselves to a referendum if they spend more than permitted by central Government to surcharging councils in the same circumstances; from halting the withdrawal of the safety net to calculating transitional relief, not according to assumed figures, he tells us, but according to actual figures; and from improving the rebate scheme to exempting student nurses. The ideas have flowed freely.
  The right hon. Gentleman's main problem has been that as each idea has bubbled to the surface it has been promptly pricked by a senior colleague. His every idea has been contradicted by senior Tories and on some occasions by a senior Tory called Michael Heseltine. There can be no doubt where the Secretary of State stands: he stands in a fever of indecision. He is assailed by contradictory advice from all sides. He seems to lack the political will or the political skill to persuade his colleagues that any single one of his many ideas could conceivably work.
  We know where the Secretary of State would like to stand: at least, I assume that he would like to stand for the abolition of the poll tax. Where he actually stands is a great deal less comfortable—usually on his head and with alarming frequency. So it is that he opposed capping, for very good reasons, and then presided over a major extension of his own capping powers. So it is that he assured us that poll tax would average £380 this year—already a £100 improvement or increase on the similar figure postulated for this year—then immediately conceded, just two days ago, that, in fact, the average will be at least £400. So it is that he proposed to exempt student nurses but has failed to lift a finger to help them or to help other groups such as non-working wives.
  So it is that the right hon. Gentleman accepted that the old transitional relief scheme was flawed because it dealt in invented figures, yet has now introduced a scheme with a different name—the community charge reduction scheme—but which is equally flawed because it, too, deals in invented figures. Attached to the very statement in which the right hon. Gentleman misled the House was a list setting out an assumed community charge for every local authority in the country. The consequence is that many thousands of people who have been led to believe that they will benefit from that scheme will find that they are excluded. As the real figures become apparent—in some cases, they are nearly £100 per head higher than the assumed figures—they will find that they have to pay every penny of that difference themselves. Many more thousands will find that the same exclusions that debarred them from the transitional relief scheme will exclude them

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  from help under the new scheme—if they have moved house or if they live in a household of more than two people.
  The Secretary of State has offered little, therefore, by way of immediate relief for poll tax payers whose anger and sense of injustice will be felt even more keenly this time round because of those raised and dashed expectations. Many of them will feel that they have been taken for a ride by the Secretary of State and the Government.
  In the long term, too, the Secretary of State falls far short of the decisive action that he promised when he was seeking the Tory party leadership. Instead, he is bogged down in a review whose purpose, timing and outcome remain shrouded in mystery. Even his own Prime Minister seems unsure as to when we can expect the conclusions of this famous review. In advance of a speech to the 1922 Committee, journalists were briefed to the effect that the Prime Minister would undertake that the results of the review would be published before the May elections, but before the speech had even been delivered that briefing had been reversed. All that the Prime Minister will do—he did it again today—is to repeat the fatuous and evident absurdity that of course when the review is completed we will have the results. Perhaps the Secretary of State will clear up that confusion this afternoon.
  As to what the review is about, the only clue that we are given is the constant recitation of that curious mantra, "Nothing is ruled in; nothing is ruled out". It would perhaps be more accurate to say that everything has in its time been ruled in but that equally everything has in its time been ruled out. One thing only is clear: any solution that retains the poll tax will surely be unacceptable, not least to dozens and scores of Conservative Members.
  Mr. Patrick Thompson: Is the hon. Gentleman aware that recent surveys have shown that, of all the options that have been advanced by hon. Members on either side of the House and by those outside, the most unpopular of all is the Labour party's proposal, in Scotland, of a roof tax?
  Mr. Gould: I am afraid that I must flatly contradict the hon. Gentleman. All the polling evidence that I have seen—and I have seen a great deal—shows that the poll tax is by far the least popular option and that a modernised and fair system of rates is the most popular.
  We are told that the Secretary of State is now less enthusiastic about transferring education spending to the central Exchequer as a means of keeping the poll tax down. According to today's edition of The Times, another device has now been suggested. Its main purpose is to serve the demands of those idealogues in the Conservative party who will fight to the death to maintain the principle of the poll tax. That solution is said to be a two-tax system—a new property tax to add to a lower-rate poll tax or head tax. That is a nightmare scenario, with all the transitional costs and confusion of moving to a new tax without alleviating the huge administrative burden of keeping the poll tax in place. The problems of the poll tax under such a scheme would not only be retained; they would be doubled—indeed multiplied many times over.
  At what level will the new poll tax or head tax be set? If it is set high enough to cover the cost of collection, it will continue to bear heavily and unfairly on those with no income with which to pay it. But if it is set so low as to be
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  a tolerable burden for those with no income, it will cost more to collect than it could conceivably raise in revenue. It is shot through with anomalies.
  Floor space is the crudest of measures and bears little relationship to the ability to pay. The addition of an element of personal taxation is a recipe for family discord. It is two taxes dressed up as one—a twin tax torture. It is a head tax and a floor tax rolled into one—a catch-you-at-both-ends tax and a top-to-toe tax. It counts the number of bedrooms in one's house and then adds the number of people who eat breakfast there—a bed-and-breakfast tax. It is doomed to disappoint all those who hoped for a fair and rational system of local government taxation.
  My conclusion is that the Secretary of State needs help. To be fair, he has already sought help. His only escape from his dilemma appears to be his offer to others to share his dilemma. His offer of consultation was not, however, all that it might have been. A genuine offer would have been preceded by some informal contact and accompanied by suggestions about a serious agenda, machinery for consultation and a time table.
  We have heard nothing from the Secretary of State along those lines. We simply cannot be drawn into a process, the likely outcome of which is that the Secretary of State will say "Thank you for your interesting ideas; we are delighted to see how closely they accord with our own. We are pleased, therefore, that you will support them when they appear in the Tory manifesto". Alternatively, he will say, "Thank you for your interesting ideas. We have now put them through our computers, had the civil servants crawl all over them, and we are sorry to say that they are hopelessly impractical".
  The rather naive Liberal Democrat Members now have good reason to know how fully they fell into that trap. We shall not be drawn into a process, the likely outcome of which may still be to prop up the poll tax. That would be to betray literally millions of people who look to the Labour party, above all, to sweep away the poll tax as soon as it gains office. It is here that the Secretary of State needs help, not from us but from his own party. He lacks the will or skill to prevail on his own. As matters stand, the idealogues will force him to retain the poll tax against his better judgment.
  Mr. A. J. Beith: As the hon. Gentleman believes that our local income tax proposals have been afforded a great deal of scrutiny and consultation, will he now say precisely how the Labour party scheme works so that we may know whether it is a viable alternative?
  Mr. Gould: Rather than delay the House, I shall recommend to the hon. Gentleman that he should read the full proposals that we published at the end of July.
  Our motion provides the opportunity for all Conservative Members who have openly expressed or secretly harboured hostility to the poll tax to ensure that the Secretary of State's hand is strengthened and that a clear message is sent to the Cabinet to the effect that, whatever else is proposed, the poll tax must go. There will be no prospect of sanity and common sense until it has been abolished, and a vote for our motion tonight could end the misery. It would end the misery of local authorities which are caught up in chaos and confusion, the misery of millions of poll tax payers who are worried sick about how

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  to pay this year's bills, and the misery of the Secretary of State, who cannot escape the insistence of his colleagues that the poll tax should remain; and, most of all for Conservative Members, their votes tonight would end the misery of the Tory party that arrogantly and mistakenly imposed a wicked and unfair tax and now has one last chance to admit its mistake.
  If the Secretary of State will have the courage and honesty to say now what he said so eloquently from the Back Benches, we can sit down and consider sensibly what should replace the poll tax. We are ready: we have published our proposals and put them on the table. The question is now a simple one: will Conservative Members have the courage and wisdom to admit their mistake, set about putting it right, and bring the nightmare to an end?
  4 pm
  The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'welcomes the Government's thorough review of the functions, structure and finance of local government; notes that the Government has provided for a substantial increase in Aggregate External Finance for 1991–92; and welcomes the introduction of the Community Charge Reduction Scheme which will provide £1·7 billion extra help in England for those former rate payers, the elderly and the disabled who have faced the biggest increases in their contributions to the cost of local services.'.
  Perhaps the House will understand that the first task that fell to me as Secretary of State in conducting the review with which the Prime Minister entrusted me was to look at the issues that could be immediately addressed in the context of the settlement for the next financial year. The House will be all too familiar with the constraints that the need for primary legislation to change the existing framework imposed on any review. There were bound to be specific sectors of concern and I shall say a word or two about a number of them, particularly the liability of service men in the Gulf, in the light of recent legal decisions.
  I know that many hon. Members are concerned about the service men and women in the Gulf and their treatment with regard to the community charge. In an earlier debate, I promised to provide further guidance on that subject. It is likely that last Thursday's judgment in the Anderton case, dealing with the sole and main residence of a merchant seaman, has implications for the advice that we gave local authorities last November, and which we would have updated in the further guidance. We have yet to receive the final terms of the High Court judgment, and yet to consider the full implications.
  In our view, service personnel and associated civilians posted to the Gulf should not have to pay the personal community charge during the period of their posting. If detailed study of the judgment shows it to be necessary, we shall take appropriate steps to ensure that they do not have to do so, either by legislation or by other means. I am grateful that the Opposition have already made it clear that if we do take such legislation, we shall receive their support.
  Mr. Gould: I happily confirm our earlier assurance. Will the Secretary of State make it clear that the
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  dispensation he mentioned will apply to all service men and women, irrespective of where they are based in the Gulf and will extend, particularly, to merchant seamen? Will he also make it clear that the Government will recompense local authorities for any loss of revenue that they suffer as a result?
  Mr. Heseltine: The assurances that I have given apply to all those involved in the military endeavours in the Gulf, and I announced on an earlier occasion that it applies to auxiliaries as well as to the professional services. However, it does not apply to those who are engaged in the normal pursuit of their careers as merchant seamen. We are dealing with people who are involved in the Gulf endeavour and I must carefully ring-fence that particular arrangement.
  Mr. Gould: It is important that we should try to make this point clear, because many thousands of merchant seamen and their families will want to know the answer to this question. Is the Secretary of State excluding merchant seamen as a category, or does he accept that some merchant seamen will be present in the Gulf in a supporting role to the military effort and they will be included in the scheme?
  Mr. Heseltine: Of course, if they have been involved in the Gulf as a consequence of Gulf activities, they will come within the assurances that we have given. In what I said earlier, I was referring specifically to merchant seamen pursuing their normal activities. They would not come within the context of the announcement that I have made.
  The second issue about which I am concerned—and this covers a point raised by the hon. Member for Dagenham (Mr. Gould)—relates to those local authorities where service men represent a significant proportion of their charge payers. Those authorities face a drop in their community charge income when troops are sent to the Gulf. My hon. Friend the Member for Aldershot (Mr. Critchley) has raised that issue with me extremely forcefully and he in particular made representations about the effect on the authority with which he is concerned. We have therefore announced this afternoon a scheme to provide grants for the authorities most affected to compensate them for loss of income. I know that that extra Government help will be warmly welcomed in the areas concerned.
  Mr. Gould: I am sorry to bother the Secretary of State again on this point, but it is important that we get it as clear as possible. The phrase that the Secretary of State just used was a little opaque. He referred to grants to cover the authorities most affected. Is he not prepared to make it clear that, as a consequence of this scheme, he will recompense every authority for all loss of revenue suffered?
  Mr. Heseltine: I do not believe that my statement was opaque. Some authorities have very limited numbers of service men within their areas and they would not be outwith normal movements that one would expect in normal circumstances. We have introduced a scheme to deal with authorities in which a significant number of local inhabitants have been moved as a result of troop dispositions. I have no doubt that once the details of the scheme have been examined, and in the light of

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  consultation with the authorities concerned, the House will be satisfied that we have dealt with the matter effectively.
  Mr. Julian Critchley: My right hon. Friend will be aware of the sense of relief felt by service men who are serving in the Gulf and their families and by the electors in places like Rushmoor, which is Aldershot and Farnborough combined, who faced a notional additional charge of £14 a head. My right hon. Friend knows that he is always welcome in Aldershot and never more so than when he comes to speak to the local Tory party in May.
  Mr. Heseltine: On that occasion I shall be able to explain to the electors in that constituency that, were it not for the persistent pleas of my hon. Friend, they might not have gained the benefits that I have announced this afternoon.
  I announced the details of the community charge reduction scheme some time ago and I am the first to recognise that, as it must take into account the level of the community charge that is set for next year, it is not possible in advance of that to be precise about the exact quantification of benefit that will flow to individual charge payers in each local authority. However, it is possible to identify the indications, and examples can be given in general terms.
  In gross terms, about £1·7 billion will go to more than 18 million people in England. When we turn that sum of money into individual cases, it will be clear to anyone who has made the calculations that a couple living in a previously averagely rated house in Lancaster, for example, could see a reduction of nearly £300 in their joint liability next April if their local authority sets its community charge at the same level as this year. We have a very important responsibility to bring home to large numbers of people precisely how much help will be available. I know that all my right hon. and hon. Friends will take it specifically on themselves to spell out locally exactly what that means.
  Mr. D. N. Campbell-Savours: Does the Secretary of State recognise that the nightmare of the poll tax has meant that hundreds of thousands of young people—some in my constituency—are refusing to pay? Does he recognise the implications of driving that number of young people into illegality? Should not some special concession be introduced? Are those people to remain in debt for many years to come? They form a sensitive age group.
  Mr. Heseltine: The hon. Gentleman is fully aware that the provisions in legislation cover the age groups to which he has referred. There is no way in which they can be excluded in the absence of primary legislation to deal with the issue. All over the country, many young people recognise the force of the law and are paying their bills. Those who are not paying are, doubtless, fully aware that some Labour Members are encouraging others not to pay. There is no justification for individual hon. Members to assume that they are above the law of the land.
  Several Hon. Members rose—
  Mr. Heseltine: You have asked us to make progress, Mr. Speaker. This is a short debate and many hon. Members wish to speak.
  Several Hon. Members rose—
  Mr. Speaker: Order. I support what the right hon. Gentleman has said. Many hon. Members wish to participate. Some of them now seek to intervene. That will not help their chances to make speeches later.
  Mr. Heseltine: The community charge reduction scheme does not, as I have said, apply only to many people in general. Specific additional relief has been give to those living in sheltered housing. That is additonal to the scheme that we announced for poll tax payers generally. In addition, we were able to exclude certain people who were living in property that came within the definition of "charitable". The scheme was the first response of the review. It is a comprehensive scheme which will bring significant benefits to many millions of people. It was, perhaps, in advance of the expectations of what we might do in such a short time. Perhaps the indignation of the hon. Member for Dagenham is a sign of his growing awareness of just how many people are likely to benefit from what we have already done.
  The hon. Member for Dagenham also questioned meabout the review. It has been under way for only a few weeks and it would have been wholly unrealistic to assume that we would come to conclusions about so complex a matter in so short a time. We have made significant progress in a wide range of detailed examinations into function, structure and finance. We have now reached a point where we are able to begin to decide those options with which we may not wish to proceed. As I said recently to the House, I hoped that by April, I should be able to narrow the focus of attention—[Interruption.] I find it extraordinary that I am urged by the Opposition Front Bench to speed up the review, yet the moment I agree to do so there is a baying of indignation from Labour Members. They are obviously frightened that we might do just that and that they will not be pleased with our conclusions. The Opposition will not deter us from moving on with the expedition that the matter requires.
  Anyone who has the slightest doubt about the real views of the Opposition and about the timing involved in such a complex matter may have had the chance to listen to the hon. Member for Dagenham speaking on the "World This Weekend" last Sunday. When asked about the whole question of timing, he answered:
  "what we propose is that we should deal with the problem in stages—that it's futile to think that we can achieve all that is necessary overnight."
  However, when the hon. Gentleman comes to the House, he assumes that the Government can do precisely what he said could not be done. It is entrancing to note the speed with which the hon. Member for Dagenham has moved his position. I remind him of what he said about a year ago, when he was involved in this review—[Interruption.]
  Mr. Campbell-Savours: What did the right hon. Gentleman say, at that time?
  Mr. Heseltine: If the hon. Gentleman is not careful, I shall tell the House what Labour Members were saying a year earlier than that. That makes the position even more complicated. When the hon. Member for Dagenham was asked about this complex business, he said:
  "we are making very good progress with the work that we have undertaken to prepare our alternative…We have every confidence that in the coming months we shall reach a conclusion that we shall be able to bring forward with confidence."—[ Official Report, 18 January 1990; Vol. 165, c. 438–39.]

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  Two months later he was asked who would pay under Labour's new system, to which he replied:
  "that's the one issue we have yet to decide…We will reach a decision very shortly."
  He said that on 27 March 1990, but we still have no idea who will pay under Labour's proposals.
  Mr. Gould: The Secretary of State cannot be allowed to get away with that complete misstatement. I am disappointed—if it is the case, since the right hon. Gentleman has a reputation for not reading his papers—that, as we published a full statement of our proposals in a document entitled "Fair Rates," which I passed across the Dispatch Box at the end of July, he has not yet read that statement. Not having read it, he will not necessarily have understood our proposals. I recommend him to read the paper because in it he will find the answers he seeks.
  Mr. Heseltine: The hon. Gentleman is helpful in inviting me to go on giving what he must regard as uncomfortable quotations, for, although he tries to say what he would like us to believe, he gave a much clearer indication about a month after making the statement that I quoted last, when he said—
  Mr. Campbell-Savours: What did the right hon. Gentleman say when he was on the Back Benches?
  Mr. Heseltine: As the hon. Member for Dagenham interrupted me to say that I had misquoted him, I am surely in order in trying to put the record right. He said that people would be given
  "plenty of information in good time so that they will have some idea of what the relative size of their bill will be."
  Labour's "Fair Rates" document was published in July 1990. It outlined a range of proposals for a property tax, but it gave no indication of how much anybody would pay.
  What I found most revealing about the remarks of the hon. Member for Dagenham this afternoon was that he criticised the Liberal party for being prepared to talk to me, when he was frightened that his proposals would be put through the computer and that the facts might emerge. So now we know that at least the Liberals have a policy in which they have confidence, that the Scottish Nationalists and Welsh Nationalists have policies in which they have confidence, but that the Labour party has a policy in which it has no confidence—[Interruption.]—and that has been revealed all too clearly.
  Mr. Richard Tracey: My right hon. Friend's proposals for relief for those who have been hit by the community charge will be most welcome. Does he agree that the most important question now for the occupants of the Labour Front Bench is whether they will condemn those in the community who are refusing to pay the community charge, in particular Labour Members who are law-breakers?
  Mr. Heseltine: My hon. Friend is of course—
  Ms. Dawn Primarolo: On a point of order, Mr. Speaker.
  Mr. Speaker: I shall call the hon. Lady to raise a point of order in view of a misunderstanding that occurred earlier.
  Ms. Primarolo: During Prime Minister's Question Time, I asked a question—[Interruption.] I urge Conservative Members to listen for a moment. They should calm down. I asked a question about the extension to other deserving cases of the poll tax exemptions. In the baying and braying that goes on during Question Time, the Prime Minister said that I had not paid my poll tax. Unfortunately for the right hon. Gentleman, he was wrong in that statement. For the future, may I urge all right hon. and hon. Members who utter such comments in the Chamber to check their facts?
  Mr. Speaker: I allowed the hon. Lady to make that point of order to put the record straight because I believe that most of those in the Chamber at the time took her nod to be a negative, but it was evidently a positive.
  Mr. Heseltine: Let me say at once how much I admire the hon. Lady for having complied with the law. Although I am not saying that she feels exactly as indignant as I do about the fact that so many of her right hon. and hon. Friends have not paid their poll tax, I must advise her that the only effect that that can have is that her constituents will be likely to find their costs rising because others do not
  pay.
  I return to what has now been so clearly revealed about the difficulties of the Opposition in this matter. It should not be a great surprise to my hon. Friends because when the hon. Member for Birmingham, Perry Barr (Mr. Rooker) was responsible for the Labour party's local government policies, he described his party's dilemma with admirable clarity when he said:
  "I'm saying to the NEC policy makers, I'm saying 'Hang on a minute, what's our policy on local government?…Putting it at its boldest, we haven't got a policy, that's the actual truth"
  Time has marched on, but the policy making has not.
  Mr. Jeff Rooker rose—
  Mr. Heseltine: The hon. Gentleman has popped up, so I shall give way to him.
  Mr. Rooker: The Secretary of State should make it clear that he is quoting from an article in The Independent of September 1987, which was true because our consultation process and policy formulation on local government had been interrupted during the general election. The article then stated—the Secretary of State will not have the guts to read this out—that my party was being the more honest about local government by admitting that we were going back to square one to look for a better way of funding local government.
  Mr. Heseltine: The hon. Gentleman has made my point. There is a gap, a ravine, between us, but this process takes time. The difference between the Government and the Opposition is that we shall reach conclusions that people will understand, but, three years on, the Opposition still have not done so.
  Mr. Campbell-Savours: On a point of order, Mr. Speaker—[Interruption.]
  Mr. Speaker: Order. What is the point of order?
  Mr. Campbell-Savours: May I ask you, Mr. Speaker, to read the motion and the amendment that are on the Order Paper? Will you ensure, as you normally do, that right

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  hon. and hon. Members keep to the motion and the amendment? The Secretary of State is debating a matter that is not on the Order Paper.
  Mr. Speaker: The Secretary of State is addressing himself to the Government amendment.
  Mr. Heseltine: By this time, I am sure that the House is beginning to share my acute anxiety for the hon. Member for Dagenham as he finds himself—
  Mr. Alistair Darling rose—
  Mr. Heseltine: No.
  The hon. Member for Dagenham is now facing increasing difficulties defending the position of Labour authorities which consistently overcharge at local level. As the House knows—because I have read it into the record previously—we now have the clearest indication that in all classes of local authority—the London authorities, the metropolitan districts, the shire districts, and in England as a whole—the fact is that, when stripped of the safety net, Labour authorities consistently set higher poll tax charges than all other political parties. The evidence is not only a matter of history—the evidence is there for the coming year. This week's Municipal Journal gives the figures for the counties. Only three of the 22 counties that are controlled outright by the Conservatives or by the Conservatives in conjunction with other parties have set their budgets above their SSA, whereas all but three of the 13 authorities where the Labour party is in charge or in joint control have exceeded the level of their SSA. Again, it is the old, old story—
  Mr. Geoffrey Lofthouse rose—
  Mr. Heseltine: No.
  The next difficulty for the hon. Member for Dagenham is that, in order to justify his talks, he has to talk in terms of cuts when all hon. Members are fully aware that there are no cuts. The Government have been responsible for injecting an additional £4·25 billion of central support to keep down the level of charges this year. If the Labour party claims to be fit to be the Government of this country, it ought to tell the people just how much above £4·25 billion it believes that a national economy can stand in any one year. But it cannot do that.
  The next argument with which we are all too familiar is that all the changes bring about dramatic cuts. There is an annual ritual of claiming that cuts will have to be made. Yet time and again the anticipated cuts that we hear about do not materilise when the budgets are set. Last year we were told that the Government's proposals would have the most serious implications in many authorities; but charges broadly within acceptable levels were introduced and the cuts disappeared. Economies were found without great difficulties.
  The hon. Member for Dagenham has now taken to suggesting that the assumptions on which we based the community charge reduction scheme were ill founded. He suggests that we are working on some notional calculation, as opposed to the actual calculations on which the scheme is based. He managed to put out a document which suggested that 26 authorities are in significant excess of the figures that we estimated. My right hon. Friend the Member for Bath (Mr. Patten) said that if local authorities set their charge in line with the Government's assessment
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  of what they needed to spend, the charge would be £380. The list published by the hon. Member for Dagenham included 26 authorities, 13 of which had set their charges at £380 or, indeed, less. The hon. Gentleman reveals clearly that he has not understood the essence of our announcement.
  Dr. Lewis Moonie: On a point of order, Mr. Speaker. As the Secretary of State is speaking, three of his hon. Friends have fallen asleep. Will you ask the Serjeant at Arms to check the ventilation in the House to find out whether it is detrimental to the health of us all?
  Mr. Speaker: That is one of the common accusations made in this place. Sometimes when there is some noise, hon. Members lean their head sideways towards the amplifiers.
  Mr. Heseltine: The hon. Member for Dagenham failed to understand that we took as the basis of our assumptions the actual community charges for the current year but that we had to adjust them to take account of the safety net. It is obvious that we would not have established a community charge reduction scheme in which the safety net was included. So we adjusted the figure for the actual charge, net of the safety net. In some cases that meant that we increased the assumption on which the benefits are provided. It is apparent to anyone who examines them that the figures produced by the hon. Gentleman show that our assumptions are largely accurate. The figures for the list of authorities support everything that we have said, even on the hon. Gentleman's calculations.
  Mr. Kenneth Hind: Does my right hon. Friend agree that one fundamental thing which the British public understand is that any fool can spend money but that it takes a lot more ability to spend it well and that that is what local authorities should do? If he takes the opportunity in his busy day to examine Lancashire county council, which is Labour controlled, he will find that the authority commissioned a report from the consultants P and A, who advised it that its social services were expensive and badly delivered and recommended a series of alterations to the service. The authority totally neglected those recommendations and a poor service to the public is continuing as a result. That authority continues to increase its spending well above the rate of inflation. Perhaps not only my right hon. Friend but the voters of Ribble Valley will take note of that.
  Mr. Heseltine: I have not the slightest doubt that my hon. Friend is right in saying that well-managed Conservative local government is much more likely to give value for money to its electors and will continue to do so.
  The last area of increasing embarrassment is the failure of the hon. Member for Dagenham to take part in the consultation process to which we have invited him. Undoubtedly there was a chance there for the Labour party to measure up to the responsibilities of a national party genuinely interested in a constructive debate. I could not have asked for greater evidence of its reasons for doubt than the speech by the hon. Member for Dagenham who said that he did not take part in consultations because he was frightened that we would put his figures through the computer. That is the greatest giveaway of all time. He will not put his figures through the computer because he does not know the implications of the scheme on which he is campaigning.

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  The hon. Gentleman blames us for taking our time in a thorough review to get these matters right. We will take what time is necessary for that comprehensive review and will come forward with policies which we believe are right and on which we can secure the support of the British people. We will not fall into the Labour party. trap of producing words without facts to underline them. It is quite apparent that the Opposition are more interested in raising the anxieties of the British people than in contributing to a constructive debate. That is why my right hon. and hon. Friends will vote against the motion.
  4.31 pm
  Mr. Peter Archer: Notwithstanding his robust peroration, I hope that the Secretary of State for the Environment will forgive me when I say that he was rather longer on history than on contemporary facts. In a lengthy career in the House, I do not recall a Minister making it clearer that he had been given a distasteful brief, that he was speaking to a case which he found difficult to argue, and that altogether he would have preferred a different job if one had been on offer.
  I propose to follow the Secretary of State in not referring to any of the facts of higher national finance, but I shall do so for a rather different reason. I want to tell a simple parish-pump story because the poll tax is about parish pumps. At this time of year, most councils consider their budgets for the forthcoming year. The rate of tax in Sandwell in the west midlands was announced at the end of last week. It will be £459—an increase of £36 over last year.
  Colleagues and I who know Sandwell have spoken many times in the House about its problems. By any possible criterion and on any possible perception, it has more than its fair share of problems. It has all the difficulties of an inner city, although an accident of history has meant that it is not an inner city and so has missed much of the help that would otherwise be available. The increase in poll tax will not be warmly welcomed by the people of Sandwell. The blow will not be cushioned when they discover that even that figure has been achieved only by the imposition of further cuts in public services.
  I shall offer the Secretary of State a few facts about Sandwell in case he is not as familiar with them in his new job as he may be later. He will not be surprised to learn that the amount available from Government grants and industry taken together, the jargon for which is aggregate external finance, has increased by 8·7 per cent. The gratitude of the people of Sandwell is tempered a little by three reflections. The first is that inflation is running at 10·5 per cent. The second is that that increase did not come from the Government at all. In fact, total Government grants, in absolute terms, have decreased. In the forthcoming year, the figure will be £200,000 less than that for the current year.
  The whole increase, plus the deficiency that had to be made up, came from the uniform business rate. Not a day passes when I do not receive correspondence from business men in my area saying that there have never been so many businesses calling in the receiver, that never has unemployment in Sandwell risen in such a way. In December of last year unemployment in the west midlands rose by 8·8 per cent. Business men are saying, "Here we
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  are, having to look at all our overheads in order to be able to stay in business, yet we are making payments for which councils might otherwise have looked to the Government."
  For the Secretary of State, the good news—if the absence of bad news can count as good news—is that the poll tax rate that has been set has been achieved because, in the forthcoming year, poll tax payers in Sandwell will not pay a contribution of £26 per head by way of relief for more affluent areas. Over the last 12 months their hardship was aggravated by the fact that they were contributing to the safety net—something that, traditionally, has been regarded as the responsibility of the Government.
  The third reflection is that the figure has been increased as a result of provision for people who have not paid. This afternoon we have heard a little from the Government side on that theme. At present the non-collection rate in Sandwell is running at 25 per cent. That does not indicate a lack of enthusiasm on the part of the council to collect; indeed, it is despite a sequence of reminders, final notices, summonses, liability orders, seven-day letters and information requests. Admittedly, some of the people who have not paid are those who are always prepared to take a free ride. Every area has a number of such people. Furthermore, some people are using non-payment as a means of protest. As my hon. Friend the Member for Dagenham (Mr. Gould) said, the Government have succeeded in turning people who are normally law abiding to the point of conformism into people who are prepared to go outside the law as a means of protest.
  Mr. David Wilshire: Will the right hon. and learned Gentleman give way?
  Mr. Archer: I shall give way in a moment, but, lest the hon. Gentleman forestall the point that I am making, I shall first complete it.
  I hold no brief for those who are refusing to pay. I believe that the impact of their protest is felt not by the Government but by their own neighbours in Sandwell.
  Mr. Wilshire: Will the hon. Gentleman make it absolutely clear that the free riders whom he denunciates include his hon. Friends who are setting a bad example by breaking the law and thereby indicating that the Labour party believes in law breaking?
  Mr. Archer: Of course I am happy to make that absolutely clear. I have already said that I hold no brief for those who do not pay their poll tax. But the hon. Gentleman has failed to notice that I made a distinction between free riders and those who, as a mistaken form of protest, choose not to pay their poll tax. The two categories are not necessarily the same. One of the tragedies is that people in my area who, two or three years ago, would have been horrified at the suggestion that they might go outside the law are now doing exactly that because they think—misguidedly, I believe—that that is a proper form of protest. This is not a record of which any Government ought to be proud.
  Mr. Brian Wilson: I am sure that my right hon. and learned Friend would wish to include in his perfectly correct denunciation of the non-payment campaigns an interesting movement which is growing in Scotland and which will undoubtedly be seen in the south before very long. I refer to the Tory non-payers—leading figures in the Conservative party, holding office

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  bestowed by the party, who are inciting Tories in Scotland not to pay that portion of the poll tax that they believe to be due to non-collection. In so doing, those people make no attempt to differentiate, as my right hon. and learned Friend rightly does, between wilful non-payment by people who are perfectly able to pay and the vast majority of non-payment, which is endemic in the tax itself. Will my right hon. and learned Friend join me in condemning the Tory non-payers? I am sure that he would like to hear from the Government Front Bench a denunciation of that form of non-payment.
  Mr. Archer: I am grateful to my hon. Friend. I could show him letters from my constituents who say that they have always voted Conservative but do not intend to pay the poll tax, and the reply that I send to them is precisely the same as the one I send to everyone else.
  Mr. Dafydd Wigley: Does the right hon. and learned Gentleman accept that many hundreds of thousands of people who cannot pay and who do not go to court are the very people who should go to court and have someone to speak on their behalf? Of 1,000 cases in Caernarfon last Tuesday, only 40 were present and they were people who refused to pay as a matter of principle and who sought to make their views known in court. Those issues need to be heard in court.
  Mr. Archer: The hon. Gentleman has forestalled something that I was about to say.
  The majority of those in Sandwell who have not paid do not fall into either category—the free riders or the protesters. They are people who, as the hon. Gentleman said, cannot pay. Hardly a surgery passes when I do not have someone in tears because they have never failed to pay a debt, they have never owed a halfpenny, but they do not know how they will pay their poll tax. Every post brings letters to the same effect.
  The council must draw a sensitive line between enforcing payment and adding to the hardships of those who already have too many. It may be because councils are reluctant to enforce the poll tax where they know there is hardship that we do not hear about such cases.
  In the coming year Sandwell council will have to make allowance for those who will not pay—
  Mr. Matthew Taylor: Is the right hon. and learned Gentleman aware of the appalling situation of some of those in receipt of benefit who see money diverted to the poll tax leaving them on a low level of support after they have paid what is necessary by way of rent, the poll tax and so on? Many who are paying the poll tax find themselves in abject poverty in the process.
  Mr. Archer: It is not always those who have not paid their poll tax but those who have who pose the problem. If time permitted, I would have elaborated on that, but Mr. Speaker has enjoined us to be brief.
  Many now qualify for some transitional relief, and I hope that some of the ill-thought-out anomalies with which we have lived for the past 12 months are being ironed out. I wrote to the Secretary of State, as he may remember, about a student in my constituency. When that student was at school, his family received child benefit. He finished school on 5 September and began a course at university on 3 October. At that time, he qualified for relief. For all common-sense purposes, he had been in
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  full-time education throughout, but because the poll tax is calculated on a daily basis, during that month neither he nor his family received any relief.
  The Secretary of State sent me a kind reply to my letter. I do not know whether it will assist the right hon. Gentleman with his party, but his letter was rather warmer than might have been wise. However, I shall not publish it in detail. But the right hon. Gentleman admitted that that case represented an "administrative untidiness". He said:
  "Should the opportunity occur in the future, we will carefully consider what can be done to simplify this area of legislation."
  I hope that he and his hon. Friends will do exactly that. But we are not asking for simplicity, although, in any administration, that is devoutly to be wished for. We are asking for justice. Many anomalies need to be ironed out.
  In the coming year more will qualify. But, as the criterion adopted by the Government depends on former rate bills and when people last moved, most hon. Members will have a succession of callers at their advice bureaux asking why they are paying more than Mr. So-and-So when there is no real difference in their financial positions. That is the irony of the situation.
  Sandwell council calculates that 80 per cent. of families in the area will qualify for some form of transitional relief. That is the ultimate confession of confusion. Any burden imposed by a Government should be flexible and make provision for those who cannot bear it. There will normally be some exceptional cases, but if those exceptional cases amount to 80 per cent. that amounts to the logic of "Alice through the Looking-glass". It is an admission that the general principle is in chaos.
  The council has been realistic in recognising that, despite all its effort, it is prudent to make provision for a 10 per cent. non-payment during the current year and next year, and that has added £60 to every poll tax payer's bill. That will cause resentment, which I for one certainly understand. However, I suspect that that resentment may sometimes be directed at the wrong people. If it were directed at the right people, it would be directed at those who introduced the scheme. But it certainly will not make for that harmonious community for which many of us have worked so hard for so many years.
  The final fact of which the Government should be aware and with which the residents of Sandwell will have to live is that the figure of £459 has been achieved only by cuts in local services. The Government have attempted to raise unrealistic expectations by referring to an average poll tax of £380. That is a cruel joke because they must have known that for most councils that would have entailed further cuts, and it would have assumed 100 per cent. collection, with no non-payers. Last year the Government indicated expectations in Sandwell which, had they been implemented, would have entailed a 10 per cent. cut in teaching staff, a reduction in street cleaning and lighting, a cut in the warden service for the elderly, the end of catering concessions for senior citizens, the closing of every public convenience in the borough and many other privations.
  The council did not encompass so draconian a solution, but it did have to impose substantial cuts last year. A further reduction of £1·8 million will be required this year in the education budget, a 3 per cent. cut in technical services, further job losses by council employees in an area

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  where job losses are already increasing and where there are more than enough, and there will be further complaints that the quality of life in Sandwell has fallen yet further.
  I have some sympathy with the position in which the Secretary of State finds himself, and I can well believe that other problems exist which he would prefer to address. But there is only one way to rectify this position—a confession that the whole concept of the poll tax was a ghastly mistake and to listen to what Opposition Members have been saying for the past two years.
  4.49 pm
  Sir William Shelton: I want the House to hear me on behalf of my constituents who live in Lambeth. This is indeed a cry from the heart. The right hon. and learned Member for Warley, West (Mr. Archer) has described the stress that is caused to his constituents. I wish that in Streatham we had the problems that he seems to have in Warley, West.
  In my constituency the community charge is capped at £521 per head. The anxiety and the despair of people who are driven to break the law for the first time in their lives can be imagined. Their despair springs from the introduction of the community charge, but by heavens, it is aided and abetted by the incompetence and gross overspending of Lambeth council.
  As to incompetence, the low recovery of community charge in Lambeth is not so much due to refusal to pay, although the leader of Lambeth council has announced that she has refused to pay; it is more due to the incompetence of the council. By the end of August, 39,000 bills had not been issued. By the end of November, 13,000 bills had not been issued—let alone reminders. I am talking about the initial bills. The chairman of my Conservative association has still not received a demand; I cannot believe that that is because of political favouritism. By mid December, £32 million out of an expected total of £64 million had been recovered—a recovery rate of 50 per cent., not so much because of refusal to pay but because many people had not received bills. That shows gross incompetence.
  I shall give the House two small examples. A constituent wrote to me:
  "Unfortunately the situation has become rather out of hand with payment books arriving on a daily basis. To my knowledge we are now in receipt of at least 18 different booklets, all requesting different amounts."
  Mr. Wigley: That is not uncommon.
  Sir William Shelton: The hon. Gentleman clearly lives in Lambeth.
  There is a block of 10 flats in my constituency with an address of 76 such-and-such road; I will not name the road. One letter arrived from the council, addressed to "The Occupier", with one community charge form in it—another example of inefficiency.
  The council is guilty of gross overspending. The spending forecast, as far as I know because it is difficult to find the figures, is £345 million for 1991–92. The capping level is £307 million, so there is a gap of £38 million. That is despite a very generous settlement; total external support from the Government is £268 million, the highest settlement of all inner and outer London boroughs.
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  In addition, it is calculated that further provision will probably have to be made for such things as bad debts and the ending of the pension fund holiday which the council has been running for some years. The gap will probably be over £50 million which, uncapped, would give a community charge not of £521 but of about £800. Of course, I expect the charge to be capped, but how can one cap a borough and remove £30 million from its expenditure, let alone £50 million, and still give my constituents adequate services? I do not see how the circle can be squared. I support we shall win a compromise. The community charge will be £600, £550 or £650, and once again services will get worse.
  Mr. Wilson: I have listened to the hon. Gentleman with great interest and sympathy. He has been informative about conditions in Lambeth. Will he acknowledge that in other parts of the country it is possible for the poll tax to rise by 30 to 35 per cent. and at the same time for cuts of tens of millions of pounds to be made, not because of incompetence or the non-issue of bills, but because of the mechanism of the poll tax and particularly its gearing effect, which means that everything is piled on to the poll tax because the local authority has no control over any other source of revenue? I am happy to accept what the hon. Gentleman has said. Will he accept what I say?
  Sir William Shelton: I accept entirely what the hon. Gentleman says. The poll tax is highly geared, but I must tell the hon. Gentleman that when my constituents in Lambeth look around, they look to Wandsworth next door, which rides along with a poll tax of £148. The services there are better. I hear that Wandsworth will have a vast explosion in its community charge next year to something like £170. That is the direction in which my constituents look.
  I welcome very much my right hon. Friend's community charge reduction scheme. I spoke to the private office of my hon. Friend the Member for Enfield, Southgate (Mr. Portillo) which was very helpful. As a result, I issued a press release containing figures which I am sure are right because they were given to me by his office. Two community charge payers living in the same place since March 1990, on average rates, will receive between them £470; that will rise to £730. That is very much to be welcomed, and I am grateful for it. Clearly that cannot be a long-term solution, as the right hon. and learned Member for Warley, West said. One cannot go on paying such amounts year after year.
  What is to be done? I know that my right hon. Friend is very much enmeshed in the matter. Indeed, I wrote to him in December. The proposition which I put to him was for a minimum community charge plus some form of property tax. However, on reflection, I realise that a minimum community charge would cost the same to raise as the present community charge; I understand that the collection cost runs at 3 per cent. If the community charge was knocked down to an average of £100 or so, the cost of collection would be outrageous.
  I read today's report in The Times with great interest. Whether it is true, I do not know. The House knows what is suggested—a property tax by floor area plus a personal premium. The hon. Member for Dagenham (Mr. Gould), who is no longer in his place, was very rude about it, but I like it. I would certainly support it; indeed I will not conceal from my right hon. Friend that I would support

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  almost anything rather than the community charge. I like that proposal because it still has a measure of accountability and I warmly welcome it, if it is true.
  However, neither that proposal nor a local income tax would solve the problem of my constituents due to the incompetence and overspending of Lambeth council. For instance, if we had a property tax with a personal charge, I guess that a one-bedroom or studio apartment in Lambeth would have a tax of £2,000 a year. I do not know what the charge would be, but it would be outrageous.
  If I may give my ideas, gained from what I might call the Lambeth experience which I have endured for some years, I would urge on my right hon. Friend—I know he has this in mind—to seek major reductions in local government provision. It is wrong to draw conclusions from a single experience, but my experience has led me to doubt the efficiency of local government. Hon. Members may have very efficient local government in their areas, but that is not the case in Lambeth. Reductions in provision simplify the duties and ask less from local government.
  I ask my right hon. Friend to agree with our right hon. Friend the Member for Brent, North (Sir R. Boyson) and to make schools grant maintained, controlled not by Whitehall, but by the schools. Incidentally, there is something in that because there is a rumour in Lambeth that the council intends to raid the budget for other purposes. The SSA for education is £125 million, plus the transitional grant of £6·3 million, making £131 million. I am told that Lambeth is seeking to set an education budget of £111 million and wishes to use the rest perhaps to make the area more nuclear-free, or something like that.
  Cannot we reduce the responsibilities placed on these local councillors who have a job to do, most of them in their spare time? Lambeth employs 19,000 people. How can anyone employ 19,000 people in their spare time? What about local government social services? I understand that there are two or three experiments in which a trust has been set up to run the local social services. Perhaps this could be looked at. There are also the police, fire and ambulance services to be considered.
  My constituents are genuinely in real need and l feel deeply concerned about it. I seek help for them from my right hon. Friend and from the Government. I ask them to lift from my constituents the burden that they are suffering, placed upon them by Lambeth council.
  5.2 pm
  Mr. Matthew Taylor: I do not entirely agree with the hon. Member for Streatham (Sir W. Shelton) when he says that almost anything would be better than the present poll tax, but we Liberal Democrats have some sympathy with that view. The only thing I would say to him is that if one were to cut the services that councils are required to provide there is always the risk that one ends up paying for nothing but bureaucracy and inefficiency, and that might be even less popular. One of the ways in which local authorities can be controlled is to make them more democratic and, while I have heard many arguments advanced against electoral reform nationally, based on strong government, I find it hard to believe that it would not help the situation—at least of many local authorities where extremists gain control—if there were a measure of electoral reform.
  However, the substance of this debate is opposition to the poll tax and the great unanswered question in this
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  debate so far has been what the alternative should be. That was resonant in everything that right hon. and hon. Gentlemen, including the Secretary of State, said. That is the background brief to what they are saying—small changes now in the hope of better things to come, but no decisions on what that means. There is an irony here, because in Committee the Government and the Liberal Democrats both had something to put forward. Now it is only the Liberal Democrats. The Labour party failed to come up with any alternative during those long debates. Again, the Labour party's inability to play the role of an Opposition and to provide an alternative, not simply to oppose, was exposed for all to see. It has shown that in today's debate again—[Interruption]—even though Labour Members may say "nonsense". The fact is that not only did the hon. Member for Dagenham (Mr. Gould) fail to give a single indication of the Opposition's alternative, but the most recent articles that they have published on this, while going into fine detail on the difficulties involved, the lack of information before taking up government, and all sorts of other excuses, failed to give any idea of what people would have to pay under the Labour party's system. Without that it is impossible to believe that the Labour party can claim to be putting forward a credible alternative.
  The debate needs answers to two simple questions. First, when will the Government abolish the poll tax? Secondly, what will be put in its place? Dissatisfaction with the poll tax was widespread long before the measure was even passed. It was widespread within the Conservative party as well as outside it, although Conservatives allowed it to go through. Now that people have had a year of paying the tax, the resentment and hatred of this unfair burden goes much deeper than even the Secretary of State realises. He in particular must finally realise what everyone else knew from the beginning—that the poll tax is unworkable, unpopular and must go.
  An enormous amount of hardship is caused to low-income groups. Local government finance is in chaos. The tax is everywhere deeply unpopular. The high level of non-payment is undermining respect for the law. Radical change, not just review, must be on the immediate agenda.
  I give as an example my own area. We were once told that the Bills could be expected to be around £130 to £140 in Carrick and Restormel councils. Later I published figures showing £170 to £180 per head and was told by Conservatives that I was exaggerating. Next year's figure in Carrick will be £390 and in Restormel £365, if the proposals that are being put forward are accepted. The Government deceived their own party and Members of Parliament into supporting a Bill that should never have been allowed to pass through this House in the first place. While our figures are nevertheless comparatively low, and the Liberal Democrat councillors are to be congratulated on keeping them below average levels, the truth is that, in an area where average wages are among the lowest in the country, poll tax levels are causing hardship for many people.
  Only the Conservative Government can be blamed, both because they have cut support to local authorities and because they have introduced a system that is wholly unrelated to ability to pay. Only the Liberal Democrat alternative of local income tax can produce fairness in the financing of local government.
  Dr. John G. Blackburn: I am grateful to the hon. Member for giving way. I have listened intently to his comments suggesting that the community charge in his area would be anything between £130 and £180. He has produced these ghastly figures. Does he agree that there are many local authorities, such as the one in which this Palace is situated, that have brought forward a community charge of £195? Does he also agree that there is a need for two things to be recognised? The first is that there is a silent majority that finds the poll tax acceptable as an alternative to rates? Does he agree that there are many people, some in my constituency, who are now saving over £1,000 a year? Secondly, there is a need for a fundamental review of the efficiency of this tax.
  Mr. Taylor: The hon. Gentleman should have a word with the Secretary of State for the Environment who would undoubtedly put him right about his claim that there is support for the poll tax. I do not believe that many members of the Conservative party believe that; nor does the Secretary of State. That is why he is undertaking a review. I certainly do not believe that the great majority of people in this country believe in the poll tax. The Government are already talking about replacing it.
  The Government tell us that we must wait for the conclusions of the review and that it will take until 1993 at the earliest to replace the poll tax. The Liberal Democrats know that it could be replaced sooner than that. It could be replaced within the space of a given financial year, provided that the decision to proceed with its replacement was taken six months before the start of that financial year. That is because the base for our local income tax system is already in place. It could be implemented in a short period because the Inland Revenue already holds the necessary information. There is no need to have any valuation of the tax base, which would be necessary with any new property tax. That is an important reason for supporting such a tax.
  If the poll tax is abolished, the great expense that local authorities have suffered in implementing it will have been wasted. We do not want any new scheme to involve similar costs. That argument, if no other, should carry weight with the Treasury which, if newspaper reports are to be believed, has blocked implementation by the Secretary of State of a local income tax scheme. I assume that the necessary legislation could be quickly pushed through the House. There are many precedents for rapid action when things go wrong, as they have done with the poll tax.
  Mr. Jacques Arnold: The hon. Gentleman says that information about income tax is available. Is he aware that tax offices tax people according to their place of employment, not according to their place of residence? Therefore, local authorities and the Inland Revenue would not know the tax base upon which to charge a local income tax.
  Mr. Taylor: The hon. Gentleman refers to the present system, but the Inland Revenue knows where people live. That information is already available.
  If the reports today in The Times and other newspapers are correct, the Secretary of State must tell the House whether he is prepared to support a system that is not directly related to ability to pay. That is the nub of the matter. For all the sophistry of those who support other schemes, only one scheme is related to ability to pay—a form of local income tax.
  Mr. John Battle: Can the hon. Gentleman explain how a local income tax system would redistribute resources from wealthy areas to poorer areas and between areas of high unemployment, where people still need services, and areas of low unemployment where more money would be received in the form of income tax?
  Mr. Taylor: Any local government finance system must compensate poorer areas. My area is poor. A roof tax, a rating system or the poll tax have to take that fact into account.
  The Layfield committee of inquiry favoured a local income tax. Moreover, according to opinion polls, it is favoured by many people. In fact, in my own area, 20,000 Cornish men and women signed a petition at this time last year in favour of a local income tax in the matter of just a few weeks.
  If we examine how the Conservative party is handling its poll tax problems, we find that it is making vague promises for the future. It also makes claims about mitigating factors for the present. The Tories have just published a leaflet for the Ribble Valley by-election. It contains the line:
  "Nigel Evans and Michael Heseltine working together."
  It would have been better if it had said "undecided together." Both have refused to say whether they are in favour of retaining the poll tax. Both the leaflet and the Government herald the additional transitional relief that has been announced as the answer to people's basic objection to the poll tax, yet the transitional relief scheme is, and always has been, inadequate. It leaves out those in the rented sector, many of whom are old, or young, or poor. The relief does not apply to those who have moved house since the introduction of the poll tax. As Mr. Evans and the Government refuse to say whether they would abolish the poll tax, it might be more appropriate if they campaigned using the slogan "Nigel Evans and the Government confused together."
  The Secretary of State has admitted that the Cabinet is split on the abolition of the poll tax. A defeat for the Tories in the Ribble Valley by-election will ensure the end of the poll tax, in just the same way as the defeat in the Eastbourne by-election helped lead to the fall of the Prime Minister who introduced the poll tax.
  The Times report today suggests that a property tax, based on the number of people living in a household, is the Secretary of State's favoured option. I hope that he will confirm that today in the House rather than by leak and innuendo in newspapers. At least we should have an indication of the direction in which the Government are heading, although their reported alternative still fails the essential test—its relationship to ability to pay.
  Earlier today the BBC gave us the Secretary of State's latest version, so we were led to understand—a floor tax with a personal ceiling for each individual. Since it has a floor and a ceiling, perhaps it ought to be called a room tax. No doubt we shall be given a list of exemptions and rebates that we can call the windows. With Labour's roof tax, we could end up with a house tax, better known as the rates—just what the Tories opposed in the first place.
  Labour feels that the problems of the present can be solved only with yesterday's solutions, since it favours some form of property tax. Obviously it has little confidence in its alternative, since it is not even prepared to take part in all-party discussions with the Secretary of State. That was confirmed today when the hon. Member

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  for Dagenham said that the reason that the Labour party would not take part in the discussions was that it was afraid to have the figures analysed. The Liberal Democrats are well aware of the dangers of having figures analysed, so we do it ourselves. Ministers now accept that their earlier figures were not based on our scheme. The Labour party can give neither figures nor ask others to help out. That it the most abject cowardice of all.
  The Liberal Democrats have taken a constructive role in the talks. We have a solution in which we believe. We have the honour in this House to be the only party to have argued consistently for a scheme of local government finance against the old rating system. We saw and rejected its unfairness. We were against the poll tax when the Government sought to introduce it. There was an absence of Labour party policy throughout the debates. Now there is an absence of Conservative party policy. We have been proud to stand throughout behind a system that relates local government finance directly to people's ability to pay. We believe that the system, local income tax, commands the support of the country.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House of Mr. Speaker's appeal that speeches should not exceed 10 minutes in length.
  5.18 pm
  Mr. Andrew MacKay: There does not seem to be much enthusiasm on the Labour Benches for their own Supply day. It will not have gone unnoticed outside the House that few Labour Members are present for the debate. Having listened to the speech of the hon. Member for Dagenham (Mr. Gould), which was very disappointing, I am hardly surprised. It was one of the most inept and pathetic performances that we have heard for many a long year.
  I agree with the hon. Member for Truro (Mr. Taylor) that the official Opposition have absolutely no alternative to the community charge. They were not prepared to be flushed out by providing the House with a detailed policy. Critics of the community charge in my constituency readily acknowledge, when they complain to me about it, that the Labour party has provided no alternative. The Opposition are just not getting their message across.
  Mr. David Clelland: Will. the hon. Gentleman give way?
  Mr. MacKay: I am not prepared to give way. The hon. Gentleman has only just walked in to the Chamber.
  The unfairness of the old rating system has been completely forgotten by the Opposition. It caused an immense amount of distress, particularly to single people living alone and to pensioners who had to pay a disproportionate part of their income towards local government services. To return to such an unfair system would be very cruel. I am surprised the Labour party is considering a return to it.
  What has impressed me about the objections that I have received to the community charge is that people are prepared to acknowledge that it has certain benefits. 'They acknowledge that payment for the use of services is right. They acknowledge, too, that local government accountability is very important. They like to know how much money is being spent by local authorities on their behalf so
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  that they can reach their decision accordingly at local elections. Furthermore, it has to be acknowledged that the implementation of the community charge leads to unfairness. I should like to bring one or two instances to the attention of the House.
  People who have been very badly affected include couples, often pensioners, past working age, who perhaps have some small savings which make them ineligible for rebate on financial grounds but who are far from well off. They have found it a great struggle in many cases to pay the community charge. Another group that concerns me are young couples with young families, where the breadwinner is on a relatively low income but not so low that the couple are eligible for a financial rebate. Because of the age of the children, the non-working spouse is unable to go out to work, even if he or she wanted to, because they are, rightly, looking after their young children. Such couples have suffered greatly.
  By and large, these people tend to live in smaller, older properties which were low rated and they have found the increase from the old rating system to the new community charge very great. That is why I warmly welcome the community charge reduction scheme announced by my right hon. Friend the Member for Henley (Mr. Heseltine) last month, which comes into effect in April at the beginning of the new financial year.
  The scheme has addressed two areas of gross unfairness. I felt blasé when I first heard my right hon. Friend's statement; so often one is told by politicians of all parties that new arrangements will be of great benefit to certain sections of the community, but when one goes home one checks out the arrangements, talks to local authorities and others and finds that they will not be quite as good as promised.
  Mr. Battle: Like cold weather payments.
  Mr. MacKay: I can tell the hon. Member for Leeds, West (Mr. Battle), who is interrupting from a sedentary position, that when I returned to Berkshire and spoke to the borough treasurers and the council leaders in Bracknell and in Windsor I found that a large number of my constituents would benefit greatly under this reduction scheme. Many couples in Bracknell will save up to £250 on their community charge next year. That is not an insignificant sum, and these are precisely the sort of people that we need to help. Any couple who were paying less than £596 in rates under the old system will benefit to some degree, and many of them, particularly those paying well below that figure, will benefit by three figures. That is not insignificant.
  The other good news for my constituents is that due to worthwile savings by Berkshire county council, by Bracknell Forest borough council and by the royal borough of Windsor and Maidenhead at the other end of my constituency, there is a real possibility that all charge payers will pay considerably less in 1991–92 than they did last year and that those who are least well off will benefit considerably from the community charge reduction scheme.
  There are, however, one or two other areas where it is important that we review the community charge. I do not see much point in charging students. We have acknowledged that they can pay only a very small community charge, so we levy a mere 20 per cent. on them. In most cases, that sum is not worth collecting.

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  Nevertheless, it causes some hardship and certainly some frustration to students, who are not earning money and who cannot see why they should pay any community charge.
  Equally, students by and large are not studying where they are going to live permanently, so the accountability in local government is not relevant at all. There seems no benefit, therefore, in continuing to charge students 20 per cent. We should forget all about charging students.
  Another area worries me very much. I have corresponded with my hon. Friend the Member for Enfield, Southgate (Mr. Portillo), the local government Minister, and I await a reply. No doubt a considered and detailed reply will be forthcoming shortly. The matter concerns constituents of mine living, for instance, on the Broadmoor hospital estate who are staff at Broadmoor. Until the advent of the new system they did not pay rates directly; rates were part of the rent that they paid to the hospital. The houses in the Broadmoor hospital estate were rated as one entity. Although they would have been low-rated houses if they had been rated individually, they were rated in bulk as an estate, so they were not eligible for transitional relief; and we fear that they will also not be eligible for the new community charge reduction scheme.
  If that is true, it means that some of the people who can least afford to pay the full community charge and who, if they had been living elsewhere, would have been eligible for the reduction will not be able to obtain it. That cannot be either right or just and I hope that my hon. Friend the Member for Southgate, not tonight but when he replies to me shortly, will put our minds at rest on that point.
  I commend to the House the Government's decision fundamentally to review the workings of the community charge. Contrary to what Opposition Members would like to think, I have found that the public welcome the decision immensely. First, they approve of a Government who are prepared to take a further look at a policy which has not worked as successfully as some of us would have liked and who have acknowledged that in the implementation of it there have been anomalies and unfairnesses.
  The public also think that it was right for the Prime Minister to state from the Dispatch Box that nothing would be ruled in and nothing would be ruled out, and they are confident that the review will take into account many of the unfairnesses and many of the criticisms. I do not want tonight to give my hon. Friend the Member for Southgate too many suggestions. There is a lot that is good in the community charge, but there are many unfairnesses. Ability to pay needs to be taken into account, but the old rating system was wildly unfair. It would be extremely helpful if my hon. Friend the local government Minister could use his very real talents and those of the Secretary of State and their advisers to come up with a package of local government finance that would reflect the very best of the old rating system and the very best of the community charge system, while rejecting the anomalies, the unfairnesses and the irrelevance in both systems. That is no easy task. I am not giving my hon. Friend the solutions, but I wish him well when he replies to the debate.
  Mr. Deputy Speaker: In case hon. Members have not noticed, the digital clock stopped working at 5·17 pm. I hope that hon. Members will look at the clocks at each end of the Chamber to calculate when their 10 minutes are up.
  5.30 pm
  Mr. Joe Benton: I agree with my hon. Friend the Member for Dagenham (Mr. Gould) that in examining the effects of the poll tax one has to take account of local circumstances. I have found that to be very true, and several hon. Members have referred to it.
  At my constituency surgery last Saturday I dealt with four cases arising from the effects of the poll tax. I do not want to bore the House and I shall be as brief as possible, but I want hon. Members to cast their minds back to the Government's initial justification for the introduction of the tax, which was that it would be fairer, simpler and less costly. The four cases to which I shall refer give the lie to those claims.
  Mrs. Drohan is a lady with a severe handicap—she is deaf and dumb—but is fortunate enough to be working. Indeed, she is the sole breadwinner; her husband is unemployed and gets no benefit, because of her income, even though it is very small, at about £147 a week. Mr. and Mrs. Drohan have two children, both of whom are at school and their poll tax commitments amount to £308·47 for the husband and £383 for the wife. To compound the injustice, Mrs. Drohan has to pay her husband's poll tax.
  My constituents have no objection to my mentioning them. The second case involves a man and his wife, Mr. and Mrs. Mulhearn, and their four children. The husband suffers from a severe disability and has had to retire from work. Their total income is £179·68 and two of their four children are unemployed. After transitional relief and Government rebate, both parties have to pay £289·79.
  The third case is different from the others and very tragic. The poll tax was supposed to be efficient. Mrs. L. Somers is 85 and blind and disabled. She lives in a high-rise development. She has just received a court summons, even though on five or six occasions she has informed the local authority that the cash is available but that, because of her handicap, she requires someone to come and pick it up. So much for the poll tax being efficient.
  My final case is that of Mr. J. Lloyd, who has transferred into sheltered accommodation but receives no transitional relief even though, because of the block assessment, there is a link to the housing association. Again, so much for the efficiency of the poll tax.
  Those four cases provide an insight into what is really going on in terms of both the management and the injustice of the poll tax. I hope that, having listened to what I have said, Conservative Members will appreciate my point; after all, they claim that they are the Government of the family. It does not take much imagination to see the poverty and travail that lie behind those cases. It is tragic that people should be placed under all those pressures when they are trying to rear a family.
  Much reference has been made to law-breaking. The constituents of Bootle have always rendered unto Caesar the things that are Caesar's and unto God the things that are God's, although I must say that, even in his wildest moments, Caesar would never have introduced a tax like the poll tax into Great Britain. The Government should try to understand people's dilemma. I would never advocate that anyone should break the law and I would never encourage anyone to do so. I oppose law-breaking and I always say to people, "You should pay your poll tax." I would say that to anyone, right across the board. However, the Government must understand that many people cannot pay their poll tax and Ministers must make

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  a distinction between those who will not pay and people such as those to whom I referred, who face tremendous hardship.
  I do not know how many Conservative Members live on £160 or £170 a week and are trying to raise four children. I do not know whether they have the wit or imagination to perceive how difficult it is for people who genuinely want to meet their legal obligations but who cannot do so because they do not have the money. We must differentiate. No one is advocating that people should not pay their poll tax; I have told every one of my constituents that. But the fact is that some of them cannot pay. The Government must be big enough to appreciate their dilemma and to legislate to ease the hardship that those poor people have to endure.
  Let me conclude on a simple note. Hon. Members have referred to the Labour party's alternative proposals and also to a local income tax. I understand that legislation introducing such a tax would take three or four years to reach the statute book. I do not know whether that is the case, but I can well believe that it is. What do we do in the meantime about the poll tax and its injustices? Something has to be done. Even if one accepts the principle of a local income tax, we cannot wait three or four years for the abolition of the present unjust and heinous tax. Even though there may be i's to be dotted and the t's to be crossed, any alternative—and the Labour party's is the best—will be better than the poll tax.
  5.38 pm
  Mr. Robert Hayward: I followed with interest the remarks by the hon. Member for Bootle (Mr. Benton). I was especially interested in his comment that nobody was advocating that people should not pay. I suggest that he addresses his comment to a number of Labour Members of Parliament—one of them a near neighbour of his on Merseyside—who are doing precisely that.
  Not one of the three speeches that we have so far heard from the Labour Benches has described one aspect of the content of the Labour party's proposals.
  Mrs. Alice Mahon: They have been published.
  Mr. Hayward: The hon. Lady says that they have been published. If the details are so good and so well known, why has not one Labour Member had the courage to refer to any of the contents of the published document? As my right hon. Friend the Secretary of State and the hon. Member for Truro (Mr. Taylor) said, the hon. Member for Dagenham (Mr. Gould) has admitted that the Labour party does not want to subject its proposals to detailed scrutiny. That is the key
  Mr. Allen McKay (Barnsley,Vest, and Penistone): Will the hon. Gentleman give way?
  Mr. Hayward: I shall not give way, because Mr. Speaker and M r. Deputy Speaker have appealed for brevity.
  Mr. Allen McKay: On a point of order, Mr. Deputy Speaker. The hon. Member for Kingswood (Mr. Hayward) is, probably unwittingly, misleading the House. My hon. Friend the Member for Dagenham (Mr. Gould) did not say that; he said that there would be no
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  co-operation between the Front Bench spokesmen until the Government show their willingness to do away with the poll tax.
  Mr. Hayward: That was not a point of order, Mr. Deputy Speaker, but I shall not reassert my position on the subject. The hon. Member for Truro, who is sitting alongside the hon. Member for Barnsley, West and Penistone (Mr. McKay), shakes his head in disbelief, as do many of my hon. Friends.
  I have much sympathy with the comments made by my hon. Friend the Member for Streatham (Sir W. Shelton), as I am aware of someone who has written three times to Lambeth council in an attempt to pay his poll tax, and has received no response.
  Mr. Tony Banks: They do not want the hon. Gentleman's money.
  Mr. Hayward: It is not my money. I have paid my poll tax in Southwark and Bristol, both of which are charge-capped.
  My hon. Friend the Member for Berkshire, East (Mr. MacKay) drew attention to the problem of wives with husbands on low incomes, where the wife is at home looking after the children. For the sake of brevity, I shall not expand on that but I support my hon. Friend's comments. I have written to my hon. Friend the Minister of State about another group of people whose position concerns me—families in which the husband or wife stays at home to look after a disabled member of the family, therefore denying himself or herself a second income while easing the burden on the state by staying at home and looking after that relative. Such people should receive more favourable treatment.
  Will the Minister of State, when he winds up, clarify the Secretary of State's earlier remarks concerning the relief provided for people in the Gulf'? I think that he used the phrase "associated workers". Would that apply, for example, to the likes of employees of British Aerospace, who are already in the Gulf but are providing support services—not necessarily to the British services but, for example, to the Saudi Royal Air Force? Thousands of families would be affected by that provision.
  Much has been made, in this afternoon's debate, of the community charge reduction scheme. It is about time that the benefits of that scheme were clearly identified. The scheme was announced on the day the Gulf war broke out and few people noticed it. The right hon. and learned Member for Warley, West (Mr. Archer) referred to the scheme and complained that 80 per cent. of his constituents would benefit from it. That shows clearly the substantial benefit of the scheme and its progressive nature. I encourage the Government and all local authorities to emphasise the scheme's benefits. In my constituency of Kingswood borough, a household that previously paid £400 in rates—a fairly typical amount and assuming that a married couple would have to pay £50 per person more this year—would probably benefit by £100 per household. Most people expect to pay more next year, but do not realise that, in those circumstances, they will pay about £100 less.
  Part of my constituency has a combination of two loony councils. Half of my constituents come under Bristol city council, where the problems are enormous, and others come under Avon county council. They were both charge capped last year. According to The Sunday Times, we are

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  faced with perhaps the largest community charge increase of any district authority in the country. The Sunday Times suggested that the increase for this year would be £125, making the total figure in Bristol £550.
  I share the concern of the hon. Member for Truro about the amount of community charge being paid in areas where earnings are low compared with those in London. Bristol set out not to administer the community charge properly and is now making no effort to publicise the community charge reduction scheme, despite the fact that probably the majority of adults in 31 of the 34 wards in the city will benefit from the scheme. The latest estimate is that some 200,000 adults in Bristol will benefit from it. Bristol and Avon county councils are more interested in imposing ever greater burdens on ordinary community charge payers and on schools in the district. The headmasters and headmistresses to whom I have spoken have complained bitterly. Some of them have gone public about the burden imposed on them by the local education authority. Just before Christmas, they made public an appeal that the local education authority should get off their backs. That is the nature of the two local authorities with which we are dealing. Last week, the Labour lord mayor of the city was deselected because he was too moderate. I beg the Department of the Environment to consider seriously abolishing Avon county council and others as quickly as possible, because we cannot cope with two loony councils.
  In conclusion, Mr. Deputy Speaker, before I allow other hon. Members to speak, may I say that I regret that throughout the debate the Benches of the Labour party, which initiated this debate, have been so poorly filled.
  5.47 pm
  Mr. Tony Banks: I wish to raise issues that affect two local authorities in London—the London boroughs of Newham and Greenwich. Conservative Members will know that the London borough of Newham is one of the most deprived local authorities in the country. At my advice sessions on Friday, an increasing number of people complain that they cannot afford to pay their poll tax. Incidentally, in many cases those people have to pay only 20 per cent. of the poll tax. If the Government are to consider other ways of tinkering with the poll tax to make it more palatable, getting rid of the category that pays 20 per cent. would be of some advantage. I would welcome such a change on behalf of my constituents, although nothing would be better than the abolition of the poll tax. However, we shall have to wait for the advent of a Labour Government before that happens.
  Those who cannot afford to pay are taken to court in large numbers. They are not making a political statement. Several hon. Members have mentioned people who refuse to pay the poll tax. If it is an iniquitous tax, people have the right to say that it is so evil that they will not pay it. They must then pay the penalty of refusing to pay. I am concerned not about such people, but about the thousands in Newham who simply cannot afford to pay. Some 50,000 liability orders have been issued by magistrates in Newham and 5,000 cases have been sent to the bailiffs. Those people are law-abiding east enders who have been criminalised by the Government.
  Mr. Jacques Arnold: Does the non-payment and the wish not to pay of a number of the hon. Gentleman's constituents show that they agree with councillor Steve Timms that Newham is
  "seen as an unsatisfactory place with poor quality services"?
  Mr. Banks: I assume that the hon. Gentleman is quoting accurately from Steve Timms, who is the leader of the council. I do not know how much the hon. Gentleman knows about the London borough of Newham. I do not know whether he has simply passed through it or has spent some time there. Perhaps I can take him around the borough when he next visits it and I can then enlighten him about our problems. Some of the services in Newham are poor, but they are being made worse by the fact that the financial penalties imposed on us by central Government make it impossible for us to address the borough's real problems.
  It is no great coincidence that Labour-controlled authorities find it so difficult to manage. Labour-controlled authorities rather than Conservative-controlled authorities must face the social and economic problems which in many ways have been imposed on them by central Government policies.
  What really annoys me is that, even when we are trying honestly to address our problems, we hear only petty political points from Conservative Members who are not interested in a consensual approach to local government finance or organisation. They are interested only in making cheap petty political points. As someone who worked in local government for many years, I find that response most distasteful. I wish that we could get back to those days when central Government did not interfere in the affairs of local government as they do now. Once we got rid of the Boadicea of Finchley, I hoped that a little more sanity would enter central Government with respect to Government policies towards local authorities. Perhaps we will see that sanity one of these days, but I cannot see it coming from the Minister for Local Government and Inner Cities whose reputation is based on his Thatcherite attitudes.
  The Minister for Local Government and Inner Cities (Mr. Michael Portillo): If we were still in those happy days when the hon. Member for Newham, North-West (Mr. Banks) was on the Opposition Front Bench, I have no doubt that he would take a consensual view and want to talk to the Government about local government finance. Is he aware that his colleagues who now sit on the Opposition Front Bench, which he has recently left, refuse to speak to us or to adopt a consensual attitude?
  Mr. Banks: I am not surprised that my colleagues refuse to do that. The conditions upon which negotiations are taking place are completely unacceptable. The Minister cannot try to inveigle us into the Government's policy on the poll tax. If the woolly-hatted, Tory lickspittles of the Liberal party want to get involved with the Government, they can do so. They will get no honour or credit from that. The Government created the poll tax mess. We will not help the Government get out of their own mess. The poll tax is one of the major millstones that will drag the Government down to defeat at the next general election. We are not about to assume the weight of that millstone on our backs in order to save the Minister's wretched skin. That is why we are not prepared to deal with the Government.
  Mr. Clelland: I can confirm that the Government are in a mess with regard to the poll tax. Is my hon. Friend aware that the Northumbria police authority met this morning and it has had to cut its budget, as a result of the Government's poll tax policy, by £2·5 million which is equivalent to 116 police officers at a time when there is a crying need for more police officers—and that from a Government who claim to be in favour of law and order?
  Mr. Banks: My hon. Friend demonstrates the Government's sheer breathtaking hypocrisy. They load more and more responsibilities on local authorities and then deny those authorities the resources to meet those added responsibilities. When—surprise, surprise—those local authorities cannot meet those requirements, the Government accuse them of being inefficient and unable to do their job. If central Government were half as efficient as local authorities—both Tory and Labour—they would be twice as good a Government and that would be an improvement which many of us in Newham and elsewhere would like to see.
  Unfortunately, the London borough of Greenwich is not represented by a Labour Member of Parliament at the moment. There is no representative from Greenwich in the Chamber today because the Liberals are too busy collaborating with the Government. Those muesli-eating lickspittles who sit down with the Tory Government cannot be here today to defend the London borough of Greenwich.
  Greenwich set its 1990–91 poll tax level at £203 million. Greenwich was forced to use its reserves and to make cuts in services in order to reach the Government's targets. The indicated designation level for 1991–92 is £212 million, which is an increase of only 4·9 per cent. over the 1990–91 limit and the increase for Greenwich of 4·9 per cent. is the lowest in London.
  The Government do not seem to understand the great problems facing Greenwich. Why is the gap so large with regard to Greenwich and its standard spending assessment? It is clear that in setting an SSA for Greenwich the Government have failed to recognise the number of children in care and on the at-risk register; the impact of the developing new town of Thamesmead; the level of maintained opened spaces in Greenwich and the areas of population density, the effect of which is diluted in the formula due to the sizeable areas of parkland i a the borough. The Government have failed to take account of daytime tourism inflows into the borough. I noticed that Westminster council received additional money because of tourism, but Greenwich did not receive any additional recognition. No account was taken of the number of one-parent families in the borough.
  As a result, Labour-controlled Greenwich borough council must make massive cuts because of the Government's unrealistic SSA. The council is talking about closing a holiday home for the elderly and disabled, four branch libraries, two day nurseries, two council halls, one community centre, public conveniences, two art galleries, one staff day nursery and all council playgroups and adult education centres. That is what is happening in Greenwich, and the experience is being repeated in other Labour and Conservative controlled local authorities. It is evident, for example, from what is happening in Berkshire.
  When will the Government face up to their responsibilities? The Government have made a God-awful mess of local authority finance and local authority
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  services. They have reduced those services to the point at which they can hardly sustain themselves. It is about time the Government recognised their responsibilities and, more to the point, it is time that they stood down and Labour took over control of central Government. We will give local authorities the responsibility and resources that they deserve.
  5.57 pm
  Mr. Ken Hargreaves: I am grateful for the opportunity to take part once more in a debate on a subject which is of great concern in my constituency. When I last spoke in a debate on the community charge—when it was about to be introduced—the hon. Member for Warrington, North (Mr. Hoyle) described my speech as brave because I had said that, having listened carefully to previous speeches, I found myself agreeing more with Opposition Members than with my colleagues. I have not done that today.
  Three years ago I warned the Government that the introduction of the community charge would be a disaster, not least because no matter how often we repeated that the community charge would be fairer, it would not be perceived to be fairer by people in terraced houses who were paying more while people in detached houses paid less. Had we said that it would be fairer for everyone to pay a contribution to local services, that might have been acceptable, but the bold statement that the community charge is fairer was as unacceptable as it was wrong. Any system of local government finance must be based on the ability to pay.
  Speaking against the community charge from the Conservative Benches is now a less lonely affair and I welcome the Government's review and recognition that so many of the things that I predicted earlier have now come to pass. I welcome not just the fact the Government have recognised the problems and the hardship caused to so many thousands of people in constituencies like mine, but the fact that the Government have acted to reduce that hardship. They have acted in a manner that can only be described as generous.
  Twelve thousand households in Hyndburn qualified for transitional relief, despite a claim by the Hyndburn Labour party that no one in Hyndburn would benefit. Twenty-nine thousand households—80 per cent. of all households—will qualify for the new community charge reduction scheme and they will benefit to the tune of the £6 million which the Government will pay to reduce community charge bills. Therefore, £6 million will remain in the pockets of the people in Hyndburn to save or to spend as they wish. It will give a welcome boost to the local economy.
  If only Labour-controlled Lancashire county council would show equal concern for the hardship caused by the level of charge that it levied on Hyndburn last year, there could be enormous reductions in bills this year. Instead, for those for whom no relief is available, Iancashire county council is likely to increase the charge by double the rate of inflation.
  The Government's new scheme gives generous help to the 29,000 households in Hyndburn who qualify. For example, a couple who live in the average terraced house in Hyndburn will have this year's bill reduced by £265. A couple living in a house on which they paid rates of £180—and there are many of those in Hyndburn—paid £630 in

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  community charge last year. Even if the county council's increase is double the rate of inflation—as we expect—that couple will pay only £420, instead of £816. That is £210 less than they paid in the current year and £396 less than they would have had to pay but for the introduction of the community charge reduction scheme.
  There are similar reductions in the rest of east Lancashire, not least in Ribble Valley where, on 7 March, the public will have the opportunity to show their support for the Government's efforts to keep down the community charge bills. Based on the £216 average rate in Ribble Valley, a single person will save £38, a couple will save £279 and three people will save £297 as a result of the community charge reduction scheme. That is welcome news for the many people who have found paying the community charge this year a real hardship.
  People in east Lancashire are genuine, hardworking, honest folk, so, generally speaking, they have paid up, even though it has not been easy. They very much resent the fact that people who can afford to pay have not paid. They resent especially the fact that the campaign against payment was led by the local Labour Member of the European Parliament for Lancashire, East, Mr. Michael Hindley, by the then chairman and secretary of Hyndburn Labour party, Mr. Ken Slater, and by county councillor Peter Billington. Through their bad example which has encouraged law breaking, they have helped to ensure that people in Hyndburn will have to pay £25 extra next year. That is extremely unfair to many thousands of my constituents who have struggled to pay this year. They are angry and many say that they will not pay the extra £25.
  Only this morning I received a letter from Mr. Clark, one of my constituents. He said that his reason for writing could be summed up in one sentence. He wrote:
  "My wife and I have no intention of paying any increase of my poll tax payment next year which can be attributed to non-payment by others."
  He also said that he had seen a
  "full page of non-payers of the poll tax in the Evening Telegraph with quite a few who are resident in my area who enjoy a much more active social life than my wife and I and the majority have two wages coming in".
  I also welcome the fact that the community charge reduction scheme offers more help to those who live in sheltered housing, but I regret that the relief available under the scheme is lost when people move house. That will cause enormous problems and, again, it will be claimed that it is unfair.
  I have been against the community charge from the beginning. I would welcome its abolition provided that there was clear evidence that whatever replaced it would not be equally bad. Figures were available to show the effect on people in areas such as Hyndburn but, sadly, we have been given no such evidence today. It is easy to mouth slogans such as, "Scrap the poll tax" without explaining how local government would be funded. Whatever the system of local government finance, we shall have to pay more, one way or the other, unless local authorities keep their spending under control.
  Mr. Patrick Thompson: I am grateful to my hon. Friend for giving way. I agree with much of what he said. Does he agree that if we were to return to a form of property tax or, as the Opposition have suggested in Scotland, to a roof tax, we should have to consider many other categories of
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  people, especially the elderly, who suffered under such property taxes. We must bear such people in mind when seeking a way forward.
  Mr. Hargreaves: My hon. Friend makes a good point. One of the few good points about the community charge is that it attempts to make local councils accountable and, to some extent, it has succeeded. People are now beginning to understand that if their local council spends more, they will pay more. Unfortunately, in areas such as Hyndburn, even if people object—as they do—to large increases in their bills, they can do nothing about it until the next county council elections, which are two years and two further increases away. If the poll tax is to remain, even in an amended form, and if there is to be accountability, there must be annual elections for the county council as well as for the borough councils.
  I hope that, as a result of the review being undertaken by my right hon. Friend the Secretary of State, it will be decided to abolish the community charge. If that is not possible, I hope that, at the very least, education spending will be funded centrally. That would bring down the community charge to a more acceptable level, but we must recognise that that would probably mean an increase in income tax. There is no easy option, but that is a fairer one.
  Some control could be kept on local government spending by increasing its funding each year by the rate of inflation and by allowing it to increase its charges by only that rate. Pensioners have to live within those limits—why not local authorities? For far too long, local councils have, in effect, said, "This is what we are going to spend and you, the charge payers, must find the money to pay for it even if it means hardship." Local authorities should ask how much people can afford and then decide how best to spend that amount.
  6.5 pm
  Mr. Allen McKay: Throughout history, all despotic Governments have needed a scapegoat. We do not have a despotic Government in such a sense, but they advocate central control of a despotic nature. They needed a scapegoat, which turned out to be local government. Since 1979 they have used local government, local government services and local government councillors as scapegoats to cover all their mistakes. They introduced fiscal policies that have changed the nature of taxation so that the rich get richer and the poor get poorer. The poll tax is no different.
  There are several main considerations in local government finance. The Government are now struggling to find an alternative to the poll tax and to save face rather than admit that they have made a huge mistake. The best thing that they could have done was to admit that they had made a mistake. They would probably have been more popular if they had admitted it. They have thrown money at the customer side but forgotten local government services. They have tried to ease the pain caused by the way in which the poll tax was introduced, but they have forgotten the pain caused by the reduction in local government services. If they do not believe that pain has been caused by a reduction in services, they are not listening to what has been said by local government institutions.
  The Government have now introduced the community charge reduction scheme, which is fine. I have complained

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  on behalf of many of my constituents and there is not a shadow of a doubt that some of them will be £100 a year, probably more, better off. However, they will pay for that in other ways. The Government have failed to say that people in receipt of other benefits will not see any of that reduction. They may get the money back in one way, but it is taken off housing benefit. The people who think that they will be £100, £120 or £150 better off a year will get nothing.
  Despite all the expectations that have been built up, my constituents will get a surprise when the bills come through the letter box. On the one hand, the Government say, "Look at what we have done for you"; on the other, they say, "We will take it back in another way." Nothing has been said about that today. The scheme has given money back to some people, but those in greatest need will get nothing, or very little. It is time that we were told the truth.
  Local government must be paid for and has always had to be paid for. People complained about the rating system and said that it was wrong. For about 25 or 26 years, I and others in local government have looked for an alternative to the rating system, but we have never found one. We have looked at various schemes. Which scheme is easy to collect, does not cost much, is less easy to evade and provides what is wanted? All the schemes that have been considered have had one fault or another. One would have thought that no Government could ever envisage a scheme that had all the faults all the time. The community charge is easy to evade, it is expensive to collect and it does not provide the money for the local government services that are wanted.
  The Government talk about control of local government. There is control of local government—it is called the ballot box. The people decided what rates they should pay and how they should be spent. That was always so. However, this Government took away that control and what they came up with is a farce. The Government talk about accountability, but there is none, although the poll tax was supposed to be based on that. They talk about accountability in one tax, yet they introduced a uniform business rate that took accountability away. That tax and other Government grants are providing 75 per cent. of the money. The other 25 per cent. is under Government control. The whole of local government is controlled by central Government.
  The poll tax has damaged local government services tremendously and it will take a long time to get back to even stevens. The biggest damage has been done to the education services. My local authority has not built a nursery school for five years. When I asked the education director when the next one would be built, he said, "God knows; I don't." My constituents want nursery education to be provided because they realise the value of education at three.
  We have now run out of money for road gritting. What will happen if we have another snowfall like the one that we had recently? Where will the money come from? We are already over budget. Will central Government now recompense local government for the extra costs caused by the bad winter? At one time, local councils could move money from one part of the budget to another to overcome problems, but they can no longer do that because budgeting has been departmentalised. If an authority moves a little bit more money around, it is capped, which makes matters worse.
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  There have been big cuts in social services. We have closed old people's homes. There has been rationalisation and, on paper, it seems as if we have achieved value for money. However, people forget that the Government have taken away a person's home. That person may have been there for a considerable time, so it is home. Those people have been deliberately and actively uprooted.
  Conservative Members talk about the little old lady who came under the rating system. They kept trotting her out and saying that she was paying more rates than she should. What did the Government do when they brought in the rent rebate scheme? They put the boot into that little old lady. They said, "If you are living in too big a house and you don't get out, you won't get a rent rebate." That little old lady was wrong under the rating system, and under the rent system, she was wrong again. The idea of the little old lady is a red herring.
  The Government have already extended local government services. Where will the money come from? Spending may be capped. The Government have introduced the Children Act 1989, care in the community and the Environmental Protection Act 1990, which all cost money. Where does it come from? We cannot raise the money from the ratepayer because local government will then be capped. The Government will not provide the money.
  The cost of poll tax collection is escalating. In Barnsley, it costs £3 million more than it did to collect the rates. What is the sense of having a system of collecting local government finance that costs £3 million more than it did under the old system?
  Some people are non-payers as a matter of principle. That matter will be sorted out anyway. However, some non-payers genuinely cannot afford to pay. The poll tax has been a shock. A household of six poll tax payers who used to pay £296 in rates at one fell swoop had to pay £2,400. Of course they cannot pay that. Where will they get £2,400 when they used to pay £296? That is what is happening to people on low wages who live in low-value areas. There were grants to ease the effects, but they did not work.
  The Government have now caused uncertainty. The Secretary of State and his Ministers say that they are carrying out a review and that they will bring out something else. They have not got anything else. For 26 years, we have looked for an alternative and there is none. The Secretary of State comes out with twaddle about how they will find something else. All that he will come out with in April is some scheme to try to ease the situation so that the Conservative will win more seats in the May elections. That is what it is all about. It has nothing to do with the poll tax and it has nothing to do with local government services. The review will probably cause an increase in payments.
  Local authorities are also involved with the police, fire and transport services. The police and fire services probably received favourable answers, such as an invitation to break the law. There was an invitation: "We'll tell you that you can have 19 police. You may not be able to pay for them without being capped, but put in for those police anyway." There will be no grumbles about having 19 more policemen. However, although the authority may not be capped, somebody somewhere will pay—the poll tax payer. The same is true of the fire service. The review may cause the Home Office severe problems,

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  but we would be silly not to pay according to the Home Office requirements. If it costs a little more money, so be it.
  Mr. Portillo: Did the hon. Gentleman just say that it had been claimed before that his authority would have to get rid of 19 policemen to avoid being capped but that it was now recognised that it would not have to do so because savings could be found elsewhere?
  Mr. McKay: I said that we might have an objective of 19 extra policemen according to Home Office standards. I said that it seemed as if we would not be able to get those 19 policemen because we could not afford them. Representations were made. We were told that if we adhered to a careful budget, it might allow the 19 extra policemen. I do not want to mislead the House or to tell the Minister lies. The matter is serious. Many hon. Members do not take the work of local government seriously enough. Another problem, remuneration of councillors, is coming up. Some 50 per cent. of councillors will have to disappear simply because they cannot afford to do the job. However, that is a matter for another debate.
  It seems that the Government are considering a poll tax and a property tax. They should forget it because having two taxes will escalate costs. We need to get rid of the poll tax and to replace it with a system that will be sustainable not for the next five, 10 or 15 years, but for the next 100 years. That is worth doing and it is worth taking time to do. The Government should stop shilly-shallying. Let us put the cards on the table and have a proper system. Local government is too important to be a political ball in a political game.
  6.18 pm
  Mr. Jacques Arnold: The Opposition motion is a complete farce. The Labour party proposes to abolish a tax, but gives us no word on its replacement. The hon. Member for Dagenham (Mr. Gould) said that he did not not want to complicate the debate by putting forward an alternative. All we need to know, he told us, is that the Labour party is united behind the undefined alternative. Earlier today, the right hon. Member for Islwyn (Mr. Kinnock) told us what the alternative is—fair rates. However, not once did he or any other Labour Member clarify what was meant by that.
  Why is the Labour party so against the community charge? Perhaps the reason is not least that it shows up the record of Labour local government. This year, the first year of the community charge in England, has shown a trend that is becoming clear. Efficient Conservative councils charge less for frequently better services than wasteful Labour ones. The average Conservative council—and where there are two councils, as in the shire counties, where they are both Conservative—has charged £27 less than Liberal councils and £51 less than Labour ones. Further, if one strips out the safety net contributions levied on largely Conservative council charge payers to subsidise largely Labour councils, one finds that residents of Conservative districts on average paid no less than £107 less than those in Labour districts and £87 less than Liberal district charge payers. Those figures explain much of Labour's agitation on the subject of the community charge and its determination to lay a thick smoke screen.
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  Unfortunately for Labour Members, a torrent of figures are now coming out for next year's community charges. They are pouring out of the town halls and make the matter starkly clear. Let us consider the first batch of community charge announcements listed in The Times yesterday. Top of the pack was the city of Bristol where the Labour council plans to pole-axe local people for £500, a 17 per cent. increase on this year's charge. We then have a whole clutch of Labour community charges of over £400—for example, Hackney at £462, Cambridge at £469, a rise of no less than 25 per cent., and Hounslow at £425. What do they have in common? They are all Labour controlled—not the loony left, we are told, just managed by the new style Labour party.
  One community charge figure caught my eye, that for the London borough of Merton at £430, an astonishing 54 per cent. up this year. We must remember that that council went Labour at the elections last May. Its record reminded me of the 62 per cent. increase at Waltham Forest in 1987 following its capture the previous year by Labour and, worse still, the 66 per cent. increase in Ealing. That is in line with the long-standing Labour tradition of thanking local electors for their support by kicking them in the teeth, or rather in the pocket. Even in flagship Bradford, Labour has kicked local residents to the tune of another 31 per cent. next year, despite the continuation of Government safety net support at identical levels year on year.
  The people of Ealing did not forget. They chucked Labour out at the next opportunity, at the borough elections last year. It is interesting to note that the successor Conservative council there is cutting the community charge by 9 per cent. in the coming year. That is being achieved by going through the council services with a fine-tooth comb and scrapping nonsenses such as the gay and lesbian advisory services and other Bennite extravagances. Of course, we have yet to take note of the charging proposals of the more mainstream loony left Labour councils such as Lambeth, Southwark and Greenwich. No doubt more anguish will be expressed by Labour Members over those.
  I have the honour to represent in this place the people of Gravesham. They are served by a well-run Conservative borough council which has levied the low community charge of £293. Through good housekeeping, the council proposes to keep its charge unchanged at £293 in the coming year. I trust that my constituents will ponder deeply on the experience of the residents of Merton, Waltham Forest and Ealing before electing their new council next May. They already have the stark contrast between their own £293 community charge bills and the massive £413 bills across the river imposed on the residents of the Labour-controlled borough of Thurrock.
  The vacuum that passes for local government taxation policy on the Opposition Benches has been exposed clearly today, and I am sure that in the vote tonight the House will implode it.
  6.26 pm
  Mr. Brian Wilson: I am grateful for this opportunity, towards the end of the debate, to make a contribution. The speech that we just heard from the hon. Member for Gravesham (Mr. Arnold) was the type of contribution that gives tailors' dummies a bad name.

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  The hon. Gentleman represents a tendency in the Tory party which causes a major problem for the Secretary of State for the Environment, in that there remain some true believers on the Government Benches. We clearly have a Conservative Member who is still reading, if not wearing, last year's briefs. He is busy telling us that everything is all right with the poll tax, and the evidence for that is simply that in thrifty Gravesham it will be only £7 short of £300.
  With some of my hon. Friends, I had the dubious privilege and pleasure of serving on the Standing Committee of the Local Government Finance Bill. At that time there were queues of Conservative Members, not unlike the hon. Member for Gravesham, telling us, with greater sincerity and self-belief, that the poll tax levels in their areas would be £100, £150 or perhaps £160 as a result of the wondrous legislation that was being bestowed upon them. So they voted for every jot and tittle of it. Now they tell us, just two years later, that it has been a wonderful success—in Gravesham if nowhere else—because it is only £300.
  The speech of the Secretary of State was definitely the effort of a guilty man. The louder he speaks of his honour, the faster we should count the spoons. Rather than his speech being a serious attempt to address the issues, it was another go-as-you-please turn from the aging matinee idol in which he thought that if he kept the laugh lines coming fast enough, with little jibes at the Opposition occurring often enough, we might not notice that there had been no noticeable progress since he became Secretary of State.
  There has been a remarkable decline since the brave days of yesteryear when the right hon. Gentleman was on the Conservative Back Benches denouncing the Tory tax in vigorous terms. Indeed, we are grateful to the right hon. Gentleman for giving us the expression "the Tory tax," which is succinct and accurate. He prophesied that the poll tax would become known throughout the land as a Tory tax, and it has. The electorates in many parts of the country pay testimony to that.
  We heard nothing from the Secretary of State about what the Government are proposing. The Tory ranks are in utter disarray over the poll tax because while we have the Gravesham tendency—that everything is all right with the poll tax; at least Gravesham is secure—there are many, probably the majority, on the Tory Benches who yearn for a return to the relatively safe haven of a property tax. Then we have those on the far right among Conservative Members who were so over-zealous and extreme in denouncing a property tax that it would now be a gross embarrassment to many of them to have to return to such a tax.
  The comments of the present Minister of State, Scottish Office and of the present Secretary of State for Scotland about a property tax were so hysterically over the top—I am glad to see the Secretary of State coming into the Chamber—that should the Tory party adopt a property tax, they would surely have no alternative but to resign.
  Today's leak is that the Government intend to go one better than that. Apparently, not only will they adopt a property tax, but they intend to keep the poll tax as well. That should go down a bundle on the doorsteps. Even in Gravesham the Tories may find some difficulty explaining that one away. Although it may seem a manic proposal, it is in line with the dilemma in which the Secretary of State for the Environment finds himself. All the escape hatches that should open to him have been blocked by the previous pronouncements of many of his hon. Friends.
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  For example, we are told that the Government are no longer in favour of removing education from local financing and giving the responsibility to central Government. I suppose that that is a pity, if only in the sense that we shall not be able to test the assurance of the right hon. Member for Finchley (Mrs. Thatcher) that such a move would add 7p to the standard rate of income tax. I would have thought that those words from "Her Majesty" would have been regarded on their own as a singular deterrent, in the run-up to an election.
  The gearing effect is the key to much of the discussion. Because there are serious hon. Members present who want to talk seriously about the poll tax, let us strip away the rhetoric about so-called high-spending Labour local authorities, and even about Harrogate, and discuss the mechanics of the poll tax which are endemic to it and are the reason why not only Labour local authorities find that they cannot live with it. It will not be long before every Tory local authority in the land will not be able to live with it.
  What is happening can be summed up in the three words, "the gearing effect". That means that not only every piece of discretionary expenditure by a local authority but, much more important, every piece of non-discretionary expenditure by a local authority can be piled on to only one narrow base. I can give the House a vivid example from my constituency and from that of my hon. Friend the Member for Cunninghame, South (Mr. Lambie). Our little district council, Cunninghame district council, was unexpectedly and unpredictably faced with a £2 million bill this year for past years' valuation appeals that had succeeded. The council lost £2 million, all of which had to be paid within a year. Under the old system, that £2 million would have been spread across a rating base of commercial and industrial properties, as well as those in the domestic sector. There would have been many complaints and many bleeding hearts, but only a few per cent. would have been added to the rates. However, under the new magical system, no discretion is given to the local authority over its business and industrial rates. Therefore, such extra expenditure can be met only by the poll tax payers. So £2 million piles on to the poll tax in one year, which means an extra £19 on each poll tax bill, which is an increase of over 25 per cent. in the district's share of the poll tax—from just one source, a source which is outwith the control of the local authority. That is the gearing effect in action.
  Councils such as Strathclyde and Lothian are cutting tens of millions of pounds worth of services, but are also having to increase their poll taxes by between 30 and 35 per cent. at the same time. Perhaps there was logic in the poll tax, even if it was wrong, cruel and wicked logic, if the Government could say that they would impose on the local authorities the requirement to cut services to keep poll tax bills down, because those local authorities could not go to their electorates with a high poll tax. But there is not even that logic in saying to local authorities, "You cannot provide the services. You must slash the services, but at the same time you must increase your poll tax bills by 30 or 35 per cent." These increases are not in order to improve services, but simply because of the mechanisms built into the poll tax.
  That is what has been realised not only in Labour areas, but in Tory areas. That is why the Government cannot live

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  with the poll tax; nor, as I have explained, can they escape from the poll tax, and it is why it will haunt them until the day of the general election.
  6.31 pm
  Mr. John Bowis: We have heard a lot of passion from Opposition Members tonight about people who have not been able to afford to pay their poll tax bills. I share that passion when I hear those things, but the reason why so many people cannot afford to pay is that so many Labour authorities have overspent and overcharged. If anybody has a low income and his or her local authority is meeting the target figures, the poll tax payment is met by the benefit system and the taper that is above it—
  Mr. Battle: No, it is not.
  Mr. Bowis: Yes, it is—but if the spending goes above that level, it is not, and, if a council charges less, such a person will be in pocket.
  The debate has been about the three most fearsome words in the English language, "Labour local government". I am amazed that the Labour party has chosen this subject for its Opposition day. Whenever the Labour party raises this issue, my majority and the Conservative majorities in marginal seats across London increase because we know what the Labour party meant to Londoners when it was in charge. It meant that boroughs such as mine in Wandsworth were no different from the neighbouring boroughs of Lambeth, Lewisham and Southwark, about which we heard so eloquently from my hon. Friend the Member for Streatham (Sir W. Shelton). Wandsworth used to be one such borough. It was run-down. It had an uncaring, hopeless, wasteful council. People did not want to live or work there. It had council estates on which no one wanted to live. Now we have a Conservative council and people are queueing up to buy properties on those erstwhile sink estates. People are queueing up so that their children can go to school in those erstwhile sink schools. That is what can happen under sensitive Conservative council management.
  If this is any consolation to the Labour Front Bench, I say, "Please go on referring to local government policy because then we shall again have what we had this year in Wandsworth, which is a Conservative majority of one increasing to a majority of 35."
  It might be thought, therefore, that I would say that the community charge is fine. If one is thinking only of Wandsworth, one might well say that there should be no change. However, I accept that the cost of the community charge is unacceptable in some parts of the country for a whole variety of reasons. It is partly because of council treasurers accounting for increased spending and paying off debts and building up reserves. It is partly because of pay deals that were reached in the past. It is partly because of the complexities of the SSA formula and it is partly because of the removal of the subsidy from high-rateable-value areas to low-rateable-value areas. However, we must never forget that it is partly the intentional policy of Labour authorities to charge
  "as much as they can get away with".
  That was the advice that was given to Labour authorities—I have it in writing—and so many of them did just that.
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  We must look for alternatives and for ways of making the system more acceptable to more people. Although I shall not go into detail because time is against me, there are two ways of doing that. One could either remove the system altogether through central taxation grant, with local leeway in terms of income from sales and fees, or one could seek a balanced mixture, between the home and its occupants. It should be possible to take into account the size of the home and to multiply it by a neighbourhood factor to produce a household charge that would include the first two occupants. There could then be a flat-rate charge with a maximum of, say, £100 for each occupant thereafter.
  Whatever the system, we must achieve two things. People who can afford to pay must pay—and that includes Members of this House. We must also continue to look for efficiency improvements that can lead to a charge that people can afford to pay.
  My final example relates to the London borough of Ealing, to which my hon. Friend the Member for Gravesham (Mr. Arnold) referred. That borough went Conservative this year. It has made efficiency savings throughout and the beneficiaries are the residents of Ealing. I suggest that any hon. Member who wishes to speak to such a resident seeks out. Mrs. G. Kinnock and her spouse who are better off to the tune of £100—not as a result of good fortune, but as a result of good Conservative management in Ealing.
  6.36 pm
  Mr. David Blunkett: Before I turn to the thrust of the debate, I should like the Minister to answer a number of questions about the Secretary of State's announcement relating to the exemption from poll tax for troops in the Gulf. Although we welcome any such move and, as we have said, wish to see every possible support from Opposition Members for it, we are, to say the least, unhappy about this afternoon's announcement.
  It appears that only a small number of people will benefit. What is meant by "the authorities most affected"? What is meant by "significant numbers"? When can discretion be used? Can it be used from today, or does the 61-day rule for single people and the six-month rule for a married man or woman in the Gulf who has a spouse living at home still apply? Such questions are important in terms of the number of people who can claim an exemption, as is the area of the country in which they live. Without reimbursement, local authorities are not in a position automatically to grant an exemption to such people when they cannot grant exemptions to other deserving cases.
  Mr. Thomas Graham: Is my hon. Friend aware that the first £10 of a war pension was discounted? In Strathclyde, the Department of Social Security has now instructed Strathclyde regional council that that £10 must now be included. Is he also aware that the husband of one of my constituents is a war hero who lost half his brain in the last war and that, although he is exempt, his war pension must now be included as part of his wife's income for poll tax purposes? Does my hon. Friend agree that that is appalling?
  Mr. Blunkett: I agree entirely with my hon. Friend that it is. It illustrates a point made by Labour Members when we were told a few moments ago that those who were badly off were cared for and looked after. We all know that they

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  are not. What is given with one hand is so often taken away with the other, and that will be so while the poll tax exists. That is why our motion is simple and clear, as my hon. Friend the Member for Dagenham (Mr. Gould) said. It asks the Government to introduce legislation to abolish the tax. Why will not Conservative Members do so? It is because they are in disarray and are divided. There are still some—we have heard them today—who defend the poll tax and there are, of course, those who wish immediately to abolish it.
  On Sunday the Secretary of State said in his interview on the "World This Weekend":
  "You do not parade your disagreements in public."
  I understand that. The Labour party used to do it and it did us no good. But that does not hide the fact that disagreements exist. The solutions being considered by the Conservative party would in many cases result in a worse mess than the one that we have already. Let us take the announcement mentioned earlier which appears to have been leaked to The Times today about the two-tax solution—the floor tax and the poll tax. It is what my hon. Friend the Member for Dagenham referred to as the bed-and-breakfast tax. That will be hidden as, not a poll tax at a lower flat rate but a method of charging everyone something, whatever their income.
  But, as has already been said, such a solution leads us to ask whether people would be entitled to a rebate on the flat rate poll tax. What would be the administrative costs of collecting it? How would the register be maintained in terms of eligibility for the tax? The confusion and administrative nightmare that would face local authorities in chasing people has already been described.
  Of course, we do not need the words of Labour Members to describe the position if taxation had two elements. We have the Home Secretary's words. In the Daily Mail on 19 September 1989, referring to what he described as the two-tax nightmare of the Labour party, he said:
  "Only Labour would want to replace the unfair rating system with two taxes … They will hit millions of homeowners very hard…It is a socialist double tax."
  It seems to me that if it is a socialist double tax, it must he a Tory double tax. There can be only one thing worse than the Tory poll tax and that is a Tory poll tax plus a Tory floor tax. The floor tax would charge people more for living in a rambling, decrepit terraced house than someone living in a penthouse suite with Lady Porter. In other words, the poorer one is and the more one struggles, the more one pays. Those are the nonsensical ideas coming out of the Conservative party.
  The Secretary of State said this afternoon that the focus would be narrowed. When talking about the present consideration of the options, he said that his intention was to narrow the focus by April.
  Mr. Patrick Thompson: I am interested in what the hon. Gentleman says about the floor tax. Can he explain whether the roof tax, as proposed for Scotland, is still official Labour policy?
  Mr. Blunkett: Labour party policy, which the hon. Gentleman can read in our "Fair Rates", is clear and will involve the modern property tax adjusted according to the ability to pay. It is simple, straightforward and extremely quick to implement, unlike any other option before us. Of course, Conservative Members know that. The simple
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  solution would be to adopt our proposals. That is what is before us today—no floor tax, no roof tax, but a fair tax. That is what we propose.
  We must examine what the Secretary of State described on Sunday as "refining the options", which is Toryspeak for "We haven't got a clue." What are the options? A sales tax is clearly out. The Government have ruled out local income tax. They have ruled out our proposals. They will not go straight back to the rating system. So what are they left with? The flat-rate poll tax and floor tax appear to be the only runner, other than removing items from local government. The solution of the Conservative party is, "If you can't beat it, take it." Who in his right mind would want to hand over education to the right hon. and learned Member for Rushcliffe (Mr. Clarke)—the Rasputin of Rushcliffe, as he is rapidly becoming known in the classroom? Who would want to hand over the future of their children and the development of the potential of our loved ones to the tender mercies of the right hon. and learned Member for Rushcliffe? I have three children in school, and I certainly would not.
  It is bad enough in an authority such as mine, struggling to maintain the existing budgets and the high-quality service, accredited as one of the top half dozen in Britain by Her Majesty's inspectorate. It is hard enough to keep that service going spending millions of pounds above the standard spending assessment laid down by the Government. If authorities across the country had to reduce their education spending to the SSAs laid down by the Government, there would be enormous cuts in every part of Britain. Those will be cuts brought about by the poll tax. It has also caused misery because of the sums that people have to pay.
  Adult education is to be wiped out in Surrey. I had a letter from a lady yesterday appealing to me to put across the message of those who have limited or no Labour representation that their services are being decimated. Those cuts hit people. They are cuts which the former Secretary of State described as a parade of bleeding stumps. The present Secretary of State put it slightly more mildly. In his interview on Sunday, when he talked about likely cuts, he said that there was an element of ritual about them. There is not an element of ritual but there is an element of elderly people not receiving home helps. There is an element of not having books in classrooms that are not fit to use. There is an element of cutting back on teachers and closing schools which everyone knows should be kept open on educational grounds. There is an element of large cuts in Tory authorities—£7 million in Warwickshire and £11 million in Berkshire. There are massive cuts in Surrey. I hope that the hon. Member for Gravesham (Mr. Arnold) will bear in mind that the removal of services to keep his poll tax below £300 hits those who cannot go into the marketplace to buy alternative provision. That is what it is all about.
  Far from bringing relief to those in greatest need through extending the rebate system, far from ensuring that we fund services and prevent cuts, the community charge reduction scheme is a simple mechanism to bribe the electorate and to try to save Tory seats such as Ribble Valley.—[Interruption.] The Minister says that that is right. It is right. It is an attempt to bribe the electorate into voting Conservative. It is a temporary scheme which will disappear the moment the general election is over. It is a scheme to manipulate and massage bills when the Government know that the real problem is the poll tax.

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  The community charge reduction scheme compares what with what? It compares the poll tax with the old rating system. The despised rates are now the benchmark by which people are being bribed into believing that the poll tax is not so bad after all. The Government are putting £1·7 billion of our money into a Conservative scheme to help the Conservative party. To cap it all, at a time of recession, unemployment is being accelerated by the cuts. The downturn in investment in infrastructure and capital investment is being accelerated.
  We must be absolutely clear. The debate is between those who have a solution which can be implemented immediately and those who wish to buy time, as the Secretary of State clearly showed that he does, in an effort to dig themselves out of a mess of their own making. The mess which the Conservative party has got itself into was not inherited; it was invented by it. It is responsible for the scheme before us today, and it must take the blame in the general election.
  The mess in which the Government find themselves is entirely of their own making and they must carry the can. Our simple message is that tinkering is not an option. We say to the Government, "Fiddle with the tax at your peril." We offer the electorate a way out because we offer the British people the only solution, the real choice, and it will be voted on in the by-election and the general election. The British people will have a chance to get rid of the Conservative muddle and confusion and the extra costs and cuts. I ask those people to vote Labour, because we will abolish the poll tax.
  6.50 pm
  The Minister for Local Government and Inner Cities (Mr. Michael Portillo): It was quite extraordinary to hear the hon. Member for Sheffield, Brightside (Mr. Blunkett) talk about an alternative when, throughout the debate, all Labour Members have refused to talk about any alternative to the community charge. The point was well made by my hon. Friend the Member for Gravesham (Mr. Arnold). Opposition Members have been taking their cue from their leader who recently had a marvellous opportunity to address the Labour party conference on local government. A review of his speech in the Municipal Journal said:
  "Mr. Kinnock only made a passing reference to Labour's 'modern rates' scheme.
  That will be Labour's tone in the coming general election campaign—when the party will put more effort on exploiting voters' discontent with Government policies like the community charge, rather than promoting enthusiasm for its own."
  That is a despicable and disgraceful way for the Opposition to carry on.
  The hon. Member for Brightside derided the Government for allegedly having a two-tax policy. We have made no announcements whatever. Not only has his party officially espoused two-tax policies in the past, but apparently it has such a policy now. At the same local government conference, who should rise up and strike down Labour policy than that demon of the supper club the hon. Member for Kingston upon Hull, East (Mr. Prescott). In a speech to a fringe meeting the hon. Gentleman revealed that there should be a regional tax for
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  the new regional assemblies which will also receive Government grant. It appears that, after all, two taxes are now proposed by the Labour party.
  The Government have set out on a review of the community charge. Anyone looking for an example of why we should not make announcements until we are ready will find it in the Labour party which has produced a series of half-baked proposals at regular intervals every few months. In our review we shall consult widely and deeply. I am consulting my hon. Friends.
  The hon. Member for Dagenham (Mr. Gould) said that the Conservative party had promoted 43 schemes. My only explanation for his comment is that he cannot count beyond 43. Many more schemes have been proposed by my hon. Friends and I am giving them serious consideration. My hon. Friend the Member for Hyndburn (Mr. Hargreaves) is right when he says that the principle that everybody should pay is widely accepted. If the Opposition had listened to the Nick Ross phone-in this morning they would have heard that principle advocated time and again. Labour is in great peril if it gives up the principle that everybody should make a contribution to the cost of local government, because that principle is widely accepted.
  It is already clear in this round of community charge setting that once again Conservative local authorities will set the lowest charges and provide the most efficient government, as my hon. Friend the Member for Battersea (Mr. Bowis) illustrated so well. My hon. Friend the Member for Kingswood (Mr. Hayward) said that he is left with two layers of loony authorities imposing desperately high charges on the people of Kingswood and Bristol.
  Labour authorities such as Ipswich are budgeting to spend £65 a head over their standard spending assessment and that extra money will have to be paid by ordinary people. By contrast, the Conservative authority in Runnymede will spend £47 a head below its SSA. The Conservative authority of Medina in the Isle of Wight is cutting its community charge in half for the coming year. Labour authorities have exhibited the most staggering cynicism because they have increased their charges for the coming year to what my hon. Friend the Member for Battersea described as the highest level that they can get away with, to the very level at which they know they would be capped if they went a pound over. Cumbria is budgeting only £1,000 below its cap level. It is cynically getting every penny that it can out of the community charge payer.
  Mr. Graham: Will the Minister give way?
  Mr. Portillo: No. The hon. Gentleman did not speak in the debate.
  I am pleased to say that the community charge reduction scheme will provide some help for community charge payers.
  I can tell the right hon. and learned Member for Warley, West (Mr. Archer) that his community charge payers living in a half average rateable value property will be better off by £429 per couple. That is the sort of help that we shall provide. My hon. Friend the Member for Berkshire, East (Mr. MacKay) said that his constituents would be up to £250 better off. Even in the constituency of Bootle in the local authority of Sefton the reduction for people on half average rateable value will be £352 per couple.
  Mr. Bruce Grocott: Will the Minister give way?
  Mr. Portillo: No, because the hon. Gentleman did not speak in the debate.
  Those are enormous decreases in the community charge to be set next year.
  The Ribble Valley by-election has been mentioned in the debate. I remind the House that a couple living in that constituency in a property of half average rateable value will have £415 taken off their community charge.
  Mr. Grocott: Will the Minister give way?
  Mr. Portillo: No, because the hon. Gentleman was not here and did not take part in the debate.
  That is real help for the people who need it and will go to those who suffered most from the introduction of the community charge because they had low rateable values.
  Several Hon. Members rose—
  Mr. Portillo: I am sorry, I am not giving way.
  Mr. Speaker: Order. This has been a good-natured debate. Let us have the last four minutes of it in good order.
  Mr. Portillo: I now come to non-payment, a subject of great interest to the general public. My hon. Friend the Member for Streatham (Sir W. Shelton) spoke eloquently about the inefficiency of the borough of Lambeth in collecting the community charge. He reminded us that 39,000 bills had not been sent out in August and that 13,000 had not been sent out in November. The leader of that council refuses to pay the community charge and, apparently, the Leader of the Opposition now thinks that the borough of Lambeth needs to be sorted out. Is it any surprise that the charge has not been collected and that other people are being asked to pay the difference?
  The Opposition have paid lip service to the concept that people should pay their community charge. If they are in favour of that, why is it that 28 Labour Members and thousands of Labour councillors do not pay and advocate non-payment? My hon. Friends have noticed how the Opposition are prepared to deal ruthlessly with those who step out of line on the Gulf. People have been sacked in droves from the Opposition Front Bench and relegated to the Back Benches. When it comes to non-payment of the community charge and people breaking the law and urging others to do so, what does the Labour party do? How many Labour Members have had the Whip withdrawn or any sanctions imposed? The answer is that the Opposition are not concerned about that.
  Since the introduction of the community charge, Labour has shown an astonishing degree of insincerity. Labour Members have spoken about unfairness and about the difficulties that some people have in paying, but in practice Labour authorities have heaped up the charge upon people. As I have said, they have set the charge at the level that they can get away with. Again this year they are increasing the charge to the very limit over which they would be capped.
  The Opposition have derided the community charge reduction scheme and have refused point blank to join in the review of local government finance being conducted by the Government. They have failed to set out a clear alternative. Indeed, they have struggled hard to come up with an alternative so obscure that it cannot be analysed or
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  pinned upon them. Their entire struggle has been to find something too obscure for the British public to understand.
  The Opposition have not only failed to live up to what we have a right to expect of an Opposition, but have shown clearly that they lack the political maturity ever to form a Government. For that reason, I call on my right hon. and hon. Friends to support the amendment.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 229, Noes 325.

  Division No. 69]

  [7 pm

  AYES

  Abbott, Ms Diane

  Dobson, Frank

  Adams, Mrs. Irene (Paisley, N.)

  Doran, Frank

  Allen, Graham

  Douglas, Dick

  Anderson, Donald

  Duffy, A. E. P.

  Archer, Rt Hon Peter

  Dunnachie, Jimmy

  Armstrong, Hilary

  Dunwoody, Hon Mrs Gwyneth

  Ashdown, Rt Hon Paddy

  Eadie, Alexander

  Ashley, Rt Hon Jack

  Ewing, Harry (Falkirk E)

  Ashton, Joe

  Ewing, Mrs Margaret (Moray)

  Banks, Tony (Newham NW)

  Fatchett, Derek

  Barnes, Harry (Derbyshire NE)

  Faulds, Andrew

  Barnes, Mrs Rosie (Greenwich)

  Fearn, Ronald

  Barron, Kevin

  Field, Frank (Birkenhead)

  Battle, John

  Fisher, Mark

  Beckett, Margaret

  Flynn, Paul

  Beith, A. J.

  Foot, Rt Hon Michael

  Bell, Stuart

  Foster, Derek

  Bellotti, David

  Foulkes, George

  Benn, Rt Hon Tony

  Fraser, John

  Bennett, A. F. (D'nt'n & R'dish)

  Fyfe, Maria

  Benton, Joseph

  Galbraith, Sam

  Bermingham, Gerald

  Garrett, John (Norwich South)

  Bidwell, Sydney

  Garrett, Ted (Wallsend)

  Blair, Tony

  George, Bruce

  Blunkett, David

  Gilbert, Rt Hon Dr John

  Boateng, Paul

  Golding, Mrs Llin

  Boyes, Roland

  Gordon, Mildred

  Bradley, Keith

  Gould, Bryan

  Bray, Dr Jeremy

  Graham, Thomas

  Brown, Gordon (D'mline E)

  Grant, Bernie (Tottenham)

  Brown, Nicholas (Newcastle E)

  Griffiths, Nigel (Edinburgh S)

  Brown, Ron (Edinburgh Leith)

  Griffiths, Win (Bridgend)

  Bruce, Malcolm (Gordon)

  Grocott, Bruce

  Buckley, George J.

  Hardy, Peter

  Caborn, Richard

  Harman, Ms Harriet

  Callaghan, Jim

  Hattersley, Rt Hon Roy

  Campbell, Ron (Blyth Valley)

  Heal, Mrs Sylvia

  Campbell-Savours, D. N.

  Healey, Rt Hon Denis

  Canavan, Dennis

  Hinchliffe, David

  Carlile, Alex (Mont'g)

  Hoey, Ms Kate (Vauxhall)

  Cartwright, John

  Hogg, N. (C'nauld & Kilsyth)

  Clark, Dr David (S Shields)

  Home Robertson, John

  Clarke, Tom (Monklands W)

  Hood, Jimmy

  Clay, Bob

  Howell, Rt Hon D. (S'heath)

  Clelland, David

  Howells, Geraint

  Clwyd, Mrs Ann

  Howells, Dr. Kim (Pontypridd)

  Cohen, Harry

  Hoyle, Doug

  Cook, Robin (Livingston)

  Hughes, John (Coventry NE)

  Corbett, Robin

  Hughes, Robert (Aberdeen N)

  Corbyn, Jeremy

  Hughes, Roy (Newport E)

  Cousins, Jim

  Illsley, Eric

  Cox, Tom

  Ingram, Adam

  Crowther, Stan

  Janner, Greville

  Cryer, Bob

  Johnston, Sir Russell

  Cummings, John

  Jones, Barry (Alyn & Deeside)

  Cunliffe, Lawrence

  Jones, Ieuan (Ynys Môn)

  Dalyell, Tam

  Jones, Martyn (Clwyd S W)

  Darling, Alistair

  Kennedy, Charles

  Davies, Rt Hon Denzil (Llanelli)

  Kilfedder, James

  Davies, Ron (Caerphilly)

  Kinnock, Rt Hon Neil

  Davis, Terry (B'ham Hodge H'I)

  Kirkwood, Archy

  Dewar, Donald

  Lambie, David

  Dixon, Don

  Lamond, James

  201

  Leadbitter, Ted

  Rees, Rt Hon Merlyn

  Leighton, Ron

  Reid, Dr John

  Lestor, Joan (Eccles)

  Richardson, Jo

  Lewis, Terry

  Robertson, George

  Litherland, Robert

  Rogers, Allan

  Livingstone, Ken

  Rooker, Jeff

  Livsey, Richard

  Rooney, Terence

  Lloyd, Tony (Stretford)

  Ross, Ernie (Dundee W)

  Lofthouse, Geoffrey

  Rowlands, Ted

  Loyden, Eddie

  Ruddock, Joan

  McAllion, John

  Salmond, Alex

  McAvoy, Thomas

  Sedgemore, Brian

  McCartney, Ian

  Sheerman, Barry

  Macdonald, Calum A.

  Sheldon, Rt Hon Robert

  McFall, John

  Shore, Rt Hon Peter

  McKay, Allen (Barnsley West)

  Short, Clare

  McKelvey, William

  Sillars, Jim

  McLeish, Henry

  Skinner, Dennis

  McMaster, Gordon

  Smith, Andrew (Oxford E)

  McNamara, Kevin

  Smith, C. (Isl'ton & F'bury)

  McWilliam, John

  Smith, Rt Hon J. (Monk'ds E)

  Madden, Max

  Smith, J. P. (Vale of Glam)

  Mahon, Mrs Alice

  Smyth, Rev Martin (Belfast S)

  Marek, Dr John

  Snape, Peter

  Marshall, David (Shettleston)

  Soley, Clive

  Marshall, Jim (Leicester S)

  Spearing, Nigel

  Martin, Michael J. (Springburn)

  Steel, Rt Hon Sir David

  Martlew, Eric

  Steinberg, Gerry

  Meacher, Michael

  Strang, Gavin

  Meale, Alan

  Taylor, Mrs Ann (Dewsbury)

  Michael, Alun

  Taylor, Matthew (Truro)

  Michie, Bill (Sheffield Heeley)

  Thomas, Dr Dafydd Elis

  Michie, Mrs Ray (Arg'l & Bute)

  Thompson, Jack (Wansbeck)

  Mitchell, Austin (G't Grimsby)

  Trimble, David

  Molyneaux, Rt Hon James

  Turner, Dennis

  Moonie, Dr Lewis

  Vaz, Keith

  Morgan, Rhodri

  Walker, A. Cecil (Belfast N)

  Morris, Rt Hon J. (Aberavon)

  Wallace, James

  Mullin, Chris

  Wareing, Robert N.

  Murphy, Paul

  Watson, Mike (Glasgow, C)

  Nellist, Dave

  Welsh, Andrew (Angus E)

  Oakes, Rt Hon Gordon

  Wigley, Dafydd

  O'Brien, William

  Williams, Rt Hon Alan

  O'Hara, Edward

  Williams, Alan W. (Carm'then)

  O'Neill, Martin

  Wilson, Brian

  Orme, Rt Hon Stanley

  Winnick, David

  Owen, Rt Hon Dr David

  Wise, Mrs Audrey

  Patchett, Terry

  Worthington, Tony

  Pendry, Tom

  Wray, Jimmy

  Powell, Ray (Ogmore)

  Primarolo, Dawn

  Tellers for the Ayes:

  Quin, Ms Joyce

  Mr. Frank Haynes and Mr. Ken Eastham.

  Radice, Giles

  Randall, Stuart

  NOES

  Aitken, Jonathan

  Biffen, Rt Hon John

  Alexander, Richard

  Blackburn, Dr John G.

  Alison, Rt Hon Michael

  Blaker, Rt Hon Sir Peter

  Allason, Rupert

  Body, Sir Richard

  Amery, Rt Hon Julian

  Bonsor, Sir Nicholas

  Amess, David

  Boscawen, Hon Robert

  Amos, Alan

  Boswell, Tim

  Arbuthnot, James

  Bottomley, Peter

  Arnold, Jacques (Gravesham)

  Bottomley, Mrs Virginia

  Arnold, Sir Thomas

  Bowden, A (Brighton K'pto'n)

  Ashby, David

  Bowden, Gerald (Dulwich)

  Aspinwall, Jack

  Bowis, John

  Atkins, Robert

  Boyson, Rt Hon Dr Sir Rhodes

  Atkinson, David

  Braine, Rt Hon Sir Bernard

  Baker, Rt Hon K. (Mole Valley)

  Brandon-Bravo, Martin

  Baker, Nicholas (Dorset N)

  Brazier, Julian

  Banks, Robert (Harrogate)

  Bright, Graham

  Batiste, Spencer

  Brooke, Rt Hon Peter

  Beaumont-Dark, Anthony

  Brown, Michael (Brigg & Cl't's)

  Bellingham, Henry

  Bruce, Ian (Dorset South)

  Bendall, Vivian

  Buck, Sir Antony

  Bennett, Nicholas (Pembroke)

  Budgen, Nicholas

  Benyon, W.

  Burns, Simon

  Bevan, David Gilroy

  Butler, Chris

  202

  Butterfill, John

  Haselhurst, Alan

  Carlisle, John, (Luton N)

  Hawkins, Christopher

  Carlisle, Kenneth (Lincoln)

  Hayes, Jerry

  Carrington, Matthew

  Hayward, Robert

  Cash, William

  Heath, Rt Hon Edward

  Channon, Rt Hon Paul

  Heathcoat-Amory, David

  Chapman, Sydney

  Heseltine, Rt Hon Michael

  Chope, Christopher

  Hicks, Robert (Cornwall SE)

  Churchill, Mr

  Higgins, Rt Hon Terence L.

  Clark, Rt Hon Alan (Plymouth)

  Hill, James

  Clark, Dr Michael (Rochford)

  Hind, Kenneth

  Clark, Rt Hon Sir William

  Hogg, Hon Douglas (Gr'th'm)

  Clarke, Rt Hon K. (Rushcliffe)

  Holt, Richard

  Colvin, Michael

  Hordern, Sir Peter

  Conway, Derek

  Howarth, Alan (Strat'd-on-A)

  Coombs, Anthony (Wyre F'rest)

  Howarth, G. (Cannock & B'wd)

  Coombs, Simon (Swindon)

  Howe, Rt Hon Sir Geoffrey

  Cope, Rt Hon John

  Howell, Rt Hon David (G'dford)

  Couchman, James

  Hughes, Robert G. (Harrow W)

  Cran, James

  Hunt, David (Wirral W)

  Critchley, Julian

  Hunt, Sir John (Ravensbourne)

  Currie, Mrs Edwina

  Hunter, Andrew

  Curry, David

  Irvine, Michael

  Davies, Q. (Stamf'd & Spald'g)

  Irving, Sir Charles

  Davis, David (Boothferry)

  Jack, Michael

  Day, Stephen

  Janman, Tim

  Devlin, Tim

  Jessel, Toby

  Dickens, Geoffrey

  Johnson Smith, Sir Geoffrey

  Dicks, Terry

  Jones, Gwilym (Cardiff N)

  Dorrell, Stephen

  Jopling, Rt Hon Michael

  Douglas-Hamilton, Lord James

  Kellett-Bowman, Dame Elaine

  Dover, Den

  Key, Robert

  Dunn, Bob

  King, Roger (B'ham N'thfield)

  Durant, Sir Anthony

  King, Rt Hon Tom (Bridgwater)

  Eggar, Tim

  Kirkhope, Timothy

  Emery, Sir Peter

  Knapman, Roger

  Evans, David (Welwyn Hatf'd)

  Knight, Greg (Derby North)

  Evennett, David

  Knight, Dame Jill (Edgbaston)

  Fairbairn, Sir Nicholas

  Knowles, Michael

  Fallon, Michael

  Lamont, Rt Hon Norman

  Favell, Tony

  Lang, Rt Hon Ian

  Fenner, Dame Peggy

  Latham, Michael

  Field, Barry (Isle of Wight)

  Lawrence, Ivan

  Finsberg, Sir Geoffrey

  Leigh, Edward (Gainsbor'gh)

  Fishburn, John Dudley

  Lennox-Boyd, Hon Mark

  Fookes, Dame Janet

  Lester, Jim (Broxtowe)

  Forman, Nigel

  Lilley, Peter

  Forsyth, Michael (Stirling)

  Lloyd, Peter (Fareham)

  Forth, Eric

  Lord, Michael

  Fowler, Rt Hon Sir Norman

  Luce, Rt Hon Sir Richard

  Fox, Sir Marcus

  Lyell, Rt Hon Sir Nicholas

  Franks, Cecil

  Macfarlane, Sir Neil

  Freeman, Roger

  MacGregor, Rt Hon John

  French, Douglas

  MacKay, Andrew (E Berkshire)

  Fry, Peter

  Maclean, David

  Gale, Roger

  McLoughlin, Patrick

  Gardiner, Sir George

  McNair-Wilson, Sir Michael

  Garel-Jones, Tristan

  McNair-Wilson, Sir Patrick

  Gill, Christopher

  Madel, David

  Glyn, Dr Sir Alan

  Malins, Humfrey

  Goodhart, Sir Philip

  Mans, Keith

  Goodlad, Alastair

  Maples, John

  Gorman, Mrs Teresa

  Marland, Paul

  Gorst, John

  Marlow, Tony

  Grant, Sir Anthony (CambsSW)

  Marshall, John (Hendon S)

  Greenway, Harry (Eating N)

  Marshall, Sir Michael (Arundel)

  Greenway, John (Ryedale)

  Martin, David (Portsmouth S)

  Gregory, Conal

  Mates, Michael

  Griffiths, Peter (Portsmouth N)

  Maude, Hon Francis

  Grist, Ian

  Mawhinney, Dr Brian

  Ground, Patrick

  Maxwell-Hyslop, Robin

  Grylls, Michael

  Mayhew, Rt Hon Sir Patrick

  Gummer, Rt Hon John Selwyn

  Mellor, Rt Hon David

  Hague, William

  Meyer, Sir Anthony

  Hamilton, Hon Archie (Epsom)

  Mitchell, Andrew (Gedling)

  Hamilton, Neil (Tatton)

  Mitchell, Sir David

  Hampson, Dr Keith

  Montgomery, Sir Fergus

  Hannam, John

  Moore, Rt Hon John

  Hargreaves, A. (B'ham H'll Gr')

  Morris, M (N'hampton S)

  Harris, David

  Morrison, Rt Hon Sir Peter

  203

  Moss, Malcolm

  Shepherd, Colin (Hereford)

  Moynihan, Hon Colin

  Shepherd, Richard (Aldridge)

  Neale, Sir Gerrard

  Shersby, Michael

  Needham, Richard

  Sims, Roger

  Nelson, Anthony

  Skeet, Sir Trevor

  Neubert, Sir Michael

  Smith, Sir Dudley (Warwick)

  Nicholls, Patrick

  Smith, Tim (Beaconsfield)

  Nicholson, David (Taunton)

  Soames, Hon Nicholas

  Nicholson, Emma (Devon West)

  Speed, Keith

  Norris, Steve

  Speller, Tony

  Onslow, Rt Hon Cranley

  Spicer, Sir Jim (Dorset W)

  Oppenheim, Phillip

  Spicer, Michael (S Worcs)

  Page, Richard

  Squire, Robin

  Paice, James

  Stanbrook, Ivor

  Parkinson, Rt Hon Cecil

  Stanley, Rt Hon Sir John

  Patnick, Irvine

  Steen, Anthony

  Patten, Rt Hon Chris (Bath)

  Stern, Michael

  Patten, Rt Hon John

  Stevens, Lewis

  Pattie, Rt Hon Sir Geoffrey

  Stewart, Allan (Eastwood)

  Pawsey, James

  Stewart, Andy (Sherwood)

  Porter, Barry (Wirral S)

  Stewart, Rt Hon Ian (Herts N)

  Porter, David (Waveney)

  Stokes, Sir John

  Portillo, Michael

  Sumberg, David

  Powell, William (Corby)

  Summerson, Hugo

  Price, Sir David

  Tapsell, Sir Peter

  Raison, Rt Hon Sir Timothy

  Taylor, Ian (Esher)

  Rathbone, Tim

  Taylor, Teddy (S'end E)

  Redwood, John

  Tebbit, Rt Hon Norman

  Renton, Rt Hon Tim

  Temple-Morris, Peter

  Rhodes James, Robert

  Thatcher, Rt Hon Margaret

  Riddick, Graham

  Thompson, D. (Calder Valley)

  Ridley, Rt Hon Nicholas

  Thompson, Patrick (Norwich N)

  Ridsdale, Sir Julian

  Thorne, Neil

  Rifkind, Rt Hon Malcolm

  Thornton, Malcolm

  Roberts, Sir Wyn (Conwy)

  Thurnham, Peter

  Rossi, Sir Hugh

  Townend, John (Bridlington)

  Rost, Peter

  Townsend, Cyril D. (B'heath)

  Rowe, Andrew

  Tracey, Richard

  Rumbold, Rt Hon Mrs Angela

  Tredinnick, David

  Ryder, Rt Hon Richard

  Trippier, David

  Sainsbury, Hon Tim

  Trotter, Neville

  Sayeed, Jonathan

  Twinn, Dr Ian

  Scott, Rt Hon Nicholas

  Vaughan, Sir Gerard

  Shaw, David (Dover)

  Viggers, Peter

  Shaw, Sir Giles (Pudsey)

  Wakeham, Rt Hon John

  Shaw, Sir Michael (Scarb')

  Waldegrave, Rt Hon William

  Shelton, Sir William

  Walden, George

  Shephard, Mrs G. (Norfolk SW)

  Walker, Bill (T'side North)

  204

  Walker, Rt Hon P. (W'cester)

  Wilshire, David

  Walters, Sir Dennis

  Winterton, Mrs Ann

  Ward, John

  Winterton, Nicholas

  Wardle, Charles (Bexhill)

  Wolfson, Mark

  Warren, Kenneth

  Wood, Timothy

  Watts, John

  Yeo, Tim

  Wells, Bowen

  Young, Sir George (Acton)

  Wheeler, Sir John

  Younger, Rt Hon George

  Whitney, Ray

  Widdecombe, Ann

  Tellers for the Noes:

  Wiggin, Jerry

  Mr. John M. Taylor and Mr. Tom Sackville.

  Wilkinson, John

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the Government's thorough review of the functions, structure and finance of local government; notes that the Government has provided for a substantial increase in Aggregate External Finance for 1991–92; and welcomes the introduction of the Community Charge Reduction Scheme which will provide £1·7 billion extra help in England for those former rate payers, the elderly and the disabled who have faced the biggest increases in their contributions to the cost of local services.
  7.14 pm
  Mr. Gavin Strang: On a point of order, Mr. Speaker. It is clear that, since the Prime Minister answered questions this afternoon, an important rift has developed between the position of the United States and Britain towards the Soviet peace initiative and that of a number of other major members of the coalition. As it is hardly possible to exaggerate the seriousness of the situation, may I ask the Government through you, Mr. Speaker, to make a statement later this evening?
  Mr. Speaker: That is not my responsibility, but I am sure that those on the Government Front Bench will have heard the hon. Gentleman's comments.

  Manufacturing Industry
  Mr. Speaker: I have selected the amendment in the name of the Prime Minister. As a large number of hon. Members wish to participate in the debate, it would be helpful if the Front-Bench spokesmen would trim their speeches and if Back Benchers would limit their speeches to about eight minutes each. Then I think that every hon. Member who wished to be called would be.
  7.16 pm
  Mr. Gordon Brown: I beg to move,
  That this House condemns Her Majesty's Government for creating a recession which has led to falling output, falling investment and rising unemployment; deplores the damage that the recession in inflicting on Britain's manufacturing base and all regions of the country; and calls on the Government to prepare a budget for industry and adopt the policies for training, technology and the regions that will build a stronger industrial base.
  The motion contains three urgent proposals which will determine the size and success of British manufacturing. The first, is our proposal for a budget containing investment incentives targeted on manufacturing industry. The second is our demand for an industrial policy for training and technology, and the third is our call for balanced economic growth through a modern regional policy.
  Our argument is that manufacturing matters, that even our service sector depends ultimately on modern manufacturing strength and that the real challenge facing Britain is not to replace manufacturing by services, as some Ministers have argued, but to upgrade our manufacturing industry to make it, once again, the most modern in Europe.
  But let us be clear about the extent of the crisis that we face. As Thursday's figures showed, manufacturing output has now fallen £5 billion, a catastrophic loss of production unique in western Europe. Manufacturing employment is now falling below 5 million people to its lowest point in our history as an industrial economy this century—30 per cent. of our manufacturing employment gone for ever under the Government. Manufacturing investment has registered one of its steepest declines since figures were first recorded—a 15 per cent. fall during recent months. Even manufacturing exports are now falling.
  Can the Secretary of State name another country in the EC where manufacturing employment, investment, industrial output and exports are now falling at one and the same time? Can he name one country in the EC which is simultaneously cutting its industry and training budgets?
  This is a British recession, created by mistakes made first at 11 Downing street and now being compounded by mismanagement at No. 10. Unemployment is up by 53,800 in London and the south-east since the Prime Minister took over in November; unemployment is up by 73,000 in the south as a whole; unemployment is up by 43,000 in the north and the midlands. The Prime Minister, who boasted of a classless society and opportunity for all, has presided over a 125,000 increase in unemployment even before he has completed his first 100 days as Prime Minister.
  This is the Government who told us that they were creating real jobs, lasting jobs, jobs in new areas, jobs even in new industries. The truth is that they are now creating real unemployment, lasting unemployment, unemployment in new areas and unemployment even in new industries.
  Mr. Tim Devlin: What does the hon. Gentleman say to Dr. John Bridge, chairman of the Northern Development Company, who says that this recession is different from those in the past because it is hitting the north last rather than first, and that that is because the diversification and change in the industrial structure in the north of England which has taken place under this Government has strengthened its ability to withstand the shocks of the international market in the future?
  Mr. Brown: Is it any consolation for people in the north who are losing their jobs—thousands are now losing their jobs—that they were the last to be hit by recession? The hon. Gentleman has simply admitted the fact that the north is suffering a recession. The unique feature of the recession is that it has hit north and south, high-tech and traditional industry, manufacturing and services, offices and factories. If the hon. Gentleman will not face up to it, I believe that a verdict will be passed on him soon by his electorate.
  Let us remember what we have been told by Ministers. It was not just that the Prime Minister, when Chief Secretary, told us that we have an economic miracle at present where Germany had only the economic miracle of the past. As late as June 1990 he was boasting of what he called an astonishing economic transformation. What about the Trade and Industry Secretary in those heady days of the Budget of spring 1988? What did he say? He said that the supply side of the economy had been transformed, and that we were on top of the world league both in manufacturing industry and in growth. He is nodding. What of the Under-Secretary of State? What did he say in 1988? In his bid for office he said that the 1988 Budget was the last goodbye to the low-growth economy of the 1970s.
  Mr. Quentin Davies: Is the hon. Gentleman suggesting that, if we had a Labour Government, they would abolish the trade cycle and that we would no longer have recessions? Is he aware that in the 1980s we had the longest boom this century?
  Mr. Brown: The hon. Gentleman would do well to listen to some of his constituents. As I calculate it, his constituency has experienced a rise in unemployment of 26 per cent. over the last year.
  Mr. Davies indicated dissent.
  Mr. Brown: He denies it.
  Mr. Davies: The rise of which the hon. Gentleman is speaking is a rise from 3 to 4 per cent. It was a rise from an extremely low base. Once again, he is confusing the House with illusory statistics.
  Mr. Brown: The hon. Gentleman will have to face his electorate one day. May I remind him of what he said to his electorate in 1987:
  "Interest rates, vital to every home-owner and every family in business—we have brought them down…Let's continue to keep inflation down."
  That was just before the Government doubled it, and doubled it again. [Interruption.] Hon. Members are expressing astonishment. It was Conservatives who told us that they had abolished the economic cycle. They gave us

  207
  the impression that the economic cycle was a thing of the past. It was Conservative Ministers who said that we were on a self-propelling plateau of growth.
  Let us examine what is happening round the country. The president of the Engineering Employers Federation says:
  "The country will crash into the buffers".
  He also says that the Government seem hell bent on moving towards a peasant economy. Why? Because policies have been based on a short-term fix. Let us consider what other business men are saying. Mr. Keith Goodman, of Leonard Curtis, says:
  "It is a blood bath. This year is going to be horrendous, far worse than 1990."
  What about Mr. Taylor, managing director of Britain's biggest machine tool producer:
  "I feel bitter about this economic cycle. Industry has had to foot the bill."
  Companies are going bankrupt not because they are overmanned, overcommitted, overmanaged, overunionised or overcommitted to obsolete technologies or products. The companies that are now being lost in hundreds are fit, well-managed companies in the forefront of new technology. They are not going bankrupt because of fundamental failings of the work force or of management, because of a lack of will to sell and to survive, or because of a lack of dynamism or ingenuity, but because they have been weighed down and overburdened by the highest interest rates in western Europe, twice what they were three years ago. Interest payments are a £30 billion burden on British industry; in 1979 they were £6 billion. Interest rates have been too high for too long, at too great a cost to too many companies.
  Mr. William Cash: Has the hon. Gentleman looked at the unemployment figures which came out this afternoon? Has he also observed that the 17 constituencies which have the highest unemployment rates are Labour constituencies? However, many of them have a net increase in employment.
  Mr. Brown: I do not know where the hon. Gentleman has been for the last 11 years. Unemployment is higher in the constituencies of all my hon. Friends than it was in 1979, and in most cases it is more than 50 per cent. higher. If the hon. Gentleman will not face up to the fact that unemployment is rising not only in Labour constituencies but in Conservative constituencies, I fear for his future even as a Member of Parliament.
  Mr. Keith Mans: Does the hon. Gentleman agree that excessive wage claims lead to high unemployment?
  Mr. Brown: The hon. Gentleman does not seem to have been here during the last few years. Of course, wages have an influence, but everybody knows that companies are going bankrupt because they have faced high interest rates for the last two and a half years, and that those high interest rates have eventually pushed them under.
  Mr. Patrick Nicholls rose—
  Mr. Brown: I am not giving way. I gave way to the hon. Gentleman twice in the last debate when he clearly did not know what was happening.
  Mr. Frank Haynes: Is my hon. Friend aware that he is so good at his job that the central control office of the Conservative party has told all the Conservative Members to rough him up?
  Mr. Brown: I, too, have read a newspaper report, but I wish to keep to the subject.
  Several Hon. Members rose —
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. Many people, including me, would like to hear the debate.
  Mr. Brown: The interventions are so incompetent that they will make no difference to the case that I am putting forward.
  Mr. Phillip Oppenheim rose—
  Mr. Brown: I am not giving way. Mr. Speaker made it clear at the beginning of the debate that I should limit the number of interventions so as to allow other hon. Members to make their contributions. Unfortunately," on this occasion that is what I will have to do.
  Let us examine what has happened to manufacturing since 1979. Since 1979 production in manufacturing has increased by 22 per cent. in Germany, by 20 per cent. in Italy, by 19 per cent. in Spain, by 30 per cent. in the Netherlands, by 37 per cent. in America, by 57 per cent. in Japan but by only 7 per cent. in Britain. Production in mechanical engineering is down by 5 per cent., in metals by 9 per cent., in textiles by 26 per cent. and in man-made fibres by 35 per cent. Britain's manufacturing economy has fallen behind France; during the lifetime of the Government it has fallen behind Italy and it is falling to the size of Brazil.
  Mr. Anthony Coombs rose—
  Mr. Brown: I am not giving way.
  The old west Germany now exports two and a half times as many manufactured goods as Britain. Imports of computers have increased by 500 per cent. since 1979, of electronics by 161 per cent., and of precision and optical instruments by 297 per cent. In a debate on manufacturing the single fact that damns the record of the Government is that manufacturing output at home has increased by 7 per cent. while manufacturing imports have increased by 236 per cent.
  What of investment for the future? Italy has increased its manufacturing investment by 30 per cent., Netherlands by 50 per cent., France by 57 per cent., Germany by 60 per cent., and countries such as Luxembourg, Belgium and Ireland by more than 100 per cent. Britain has increased it by it total of 5 per cent. only—and that has fallen as we debated these matters during the past few weeks.
  The Government say that the prize at the end of this recession is an inflation figure comparable to that in Italy, Germany and France. The truth is that the price we will pay for this recession is a permanent reduction of industrial capacity, taking us down far below the levels of France and Italy—falling, I am afraid, to the levels of Brazil.
  What have Ministers done about these issues? They were warned in 1984 by the Trade and Industry Select Committee that the Government must take further
  "action to prevent the…decline of the UK's manufacturing base".

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  In 1985 the Government were warned by the House of Lords, in a much-reported document, about the disastrous consequences of letting manufacturing decline. In 1986, the former Cabinet Minister, who is now a Cabinet Minister again, the right hon. Member for Henley (Mr. Heseltine), made a plea that manufacturing should be taken seriously with his call for an industry and a regional policy. In 1987 the Department of Trade and Industry Select Committee called for a strategy, particularly for the new industries in information technology.
  In 1988, the Government's own Advisory Committee on Science and Technology recommended action on Opto electronics and yet the Government did nothing. The CBI warned that we faced the prospect of falling behind, and now the CBI is calling for a technology policy. The Advisory Committee on Science and Technology is calling for new measures to help growing firms. The Policy Studies Institute is worried about the Government's failure to take the long-term seriously and still the Government do nothing. What have they done over the past few weeks? The only thing that they have done is publish the autumn statement with their proposals for investment by the Department of Trade and Industry in the future. Planned investment in collaborative research is to be cut by 35 per cent.—
  The Secretary of State for Trade and Industry (Mr. Peter Lilley): The hon. Gentleman said that the CBI was critical of some technological policy. Is he aware of the press release that it has issued today, responding to some measures that I have announced in the past few weeks? It states:
  "This is just what we wanted, and goes a long way towards meeting the recommendations designed to help innovative smaller firms made by the CBI last year".
  Mr. Brown: It is a pity that the scheme that has been reintroduced by the Minister is very similar to the scheme which was cut by his predecessor. Even the SPUR scheme—many members of the CBI feel strongly about this—is for only £10 million a year which is £30 million after three years. Cuts in research and development and cuts in the technology transfer budget are going ahead. Regional industrial incentives are being cut by 35 per cent; export services have been cut by 13 per cent. At a time when we have a huge trade imbalance, there are cuts in support for trade fairs and for the export marketing research scheme.
  The do-nothing Department is now ensuring, by its failure to act, that thousands more will soon be condemned to do nothing because of it. What alone in the DTI's budget has seen a very big increase? Only the budget of the insolvency service, whose responsibility it is to wind up the affairs of failed companies. There has been a 30 per cent. increase in the budget for the insolvency service. With productivity savings, that means that it will be able to deal with the insolvency affairs of 50 per cent. more companies in the coming year.
  At a time when Britain's industry needs support for training, for technology, and for investment, what is the best that the Department of Trade and Industry can offer the companies of Britain? A bigger, better, and more efficient burial service for companies.
  Trust Government Ministers to find the only part of their budget that deals with the demise of companies and increase it, while denying funds for everything else. The
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  Secretary of State is like a clergyman presiding over a crumbling congregation, no longer officiating at baptisms or marriages, only at funerals—[Interruption.]
  Madam Deputy Speaker: Order. I would be obliged if hon. Members would not comment from sedentary positions. If they are seeking to intervene, then they should do so, but such comments do not improve the standard of debates in this House.
  Mr. Brown: What does the Conservative party, say when the Labour party voices the concerns of manufacturing industry? I have here a document, issued by the Conservative party entitled—and it does seem an irony now—"The Revival of British Industry" in which it said:
  "An abiding feature of the Labour party's industrial policy is its obsession with manufacturing industry".
  It goes on to characterise the Labour party's view as "this outdated attitude". Is it outdated to say that we should do our best to succeed in an area which employs more than 20 per cent. of our work force, and is responsible for 80 per cent. of our visible exports? Is it an obsession to say that manufacturing matters? Do they say that in Germany, France or in Italy? Do they talk about people being obsessed or outdated when they voice the concerns of manufacturing industry?
  Is not it the case that, in every area where the Government should have enabled industry to succeed, the Department of Trade and Industry has done absolutely nothing? Without putting in place the technology transfer network that we have proposed, and without creating the one-stop small business service, which is essential if small businesses are to develop in this country—
  Mr. Lilley: Is the hon. Gentleman unaware that there are 12 regional technology centres providing precisely the technological transfer service that he recommends? It already exists.
  Mr. Brown: I am not only aware of its existence; I am also aware that the Government are cutting the budget for technology transfer centres.
  Let us consider what the Government have taken away. They have abandoned the micro-electronics applications project, they have abandoned MAP training, they have abandoned the efficient ship programme and the resources from the sea programme—
  Mr. Lilley: The hon. Gentleman said, sotto voce, that I had cut the innovation budget. That is up by 19 per cent. in real terms.
  Mr. Brown: The right hon. Gentleman should listen to what I said, which was that the Government had cut the technology transfer budget.
  Mr. Lilley: That has been doubled.
  Mr. Brown: The right hon. Gentleman should consult the public expenditure White Paper, issued by his Department last Tuesday. He will find that the technology transfer budget has been cut by 2 per cent. Perhaps Ministers are no longer told what cuts are taking place in their own Departments.
  What of the regions? Britain needs a regional policy, in the interest not only of the north but of the south. It is in the interests of the whole economy, because it creates balanced economic growth, without which this country cannot succeed. At least the Minister cannot deny the strength of what is happening in the regions because of

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  cuts made by his Department. He has cut the value of regional incentives by nearly 40 per cent. The Department has spent £9 million on regional enterprise grants, which were to be the shining light of his Department and on which £42 million was to have been spent in the past two years—it has under-spent by £33 million which is almost 75 per cent. of the budget.
  Mr. Nicholls: Will the hon. Gentleman give way?
  Mr. Brown: No.
  Mr. Nicholls: On a point of order, Madam Deputy Speaker.
  Madam Deputy Speaker: Order. Is it a point of order, or a point of annoyance?
  Mr. Nicholls: It is a point of order. The Chair always protects the right of Back Benchers in the House so that we can join in debates. The hon. Member for Dunfermline, East (Mr. Brown) is refusing to give way—my right hon. Friend the Member for Shropshire, North (Mr. Biffen) had to point that out in the last debate in which the hon. Gentleman came to the Dispatch Box. You reprove us, quite understandably, for making sedentary interventions, but the hon. Gentleman will not give way to standing interventions.
  Madam Deputy Speaker: Order. If an hon. Member refuses to give way, I have to protect him if he has the Floor. I would do exactly the same if the hon. Member for Teignbridge (Mr. Nicholls) had the Floor.
  Mr. Brown: I recall giving way on about 14 occasions in the last debate, including twice to the hon. Member for Teignbridge (Mr. Nicholls), and I regretted it afterwards because he did not know what we were talking about during that debate.
  Let us consider what is happening in the north-west of the country, which is vital to our manufacturing future and yet 290,000 jobs have been lost there during the period of this Government. It is obvious that we should create a regional development agency for the area. We need regional incentives that are targeted on technology and training. We need to build a modern technology transfer network that is first rate and not underfunded. We need a proper company service for small businesses. However, Ministers persist in doing absolutely nothing.
  During the last few weeks I have looked at what has been written by the No Turning Back group. The Secretary of State is a member of that group. Moreover, the Minister of State and the Under-Secretary of State responsible for regional policy are also members of the group. What message are they sending out to the north-west, to the regions and to the electors of Ribble Valley? According to a publication entitled "Industrial and Regional Policy"—a document about Europe, though it ventures into other areas, as ideologues are often wont to do—they say:
  "Neither Government nor the European Community can create real jobs. They can only arbitrarily shift opportunities from the naturally successful part of the economy to the naturally ailing. There is no clearer illustration of this than the so-called regional policy."
  Those are not the ravings of a Young Conservatives fringe meeting. They are the stated views of the No Turning Back group which only a few months ago published that document. It went on:
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  "The money might…have created economic activity and jobs for which there was a demand rather than the phoney activities sustained by Government."
  Now we know the real views of the Under-Secretary of State, who is responsible for the regions, as well as the real views of the Minister of State, who was a co-author of the document, and of the Secretary of State, who, as a Government Minister, was unable to sign it, but who clearly is very much in touch with the views represented by that group.
  Germany and Italy invest twice as much in the regions as we do. In France there is a regional technology organisation of considerable stature. Japan has invested in technopolies to safeguard the future of its industries. Japan does not consider, as Ministers in this Government apparently do, that regional policies represent a phoney activity. It does not want its regions to be ailing parts of the economy; it believes that a sound regional policy can make a difference to the overall economy. However, what do Government Ministers who are members of the No Turning Back group say? According to the document, they say that
  "If national governments choose to spend money on providing special forms of assistance, it should be their own, not Europe's. Countries which choose to do so will pay a price by handicapping successful industries … Even the massive training and start-up schemes initiated by all European Governments, including our own, can be questioned."
  That is an argument not just against a regional policy but also against a training policy and a small business policy.
  Are those Ministers who signed the document and who support the group saying that there is no case whatsoever for any form of regional industrial policy in this country and that there is no case for assisting balanced economic growth throughout the country? If that is what they say, they should tell the voters of Ribble Valley and all the voters in the north-west. They will never convince the regions that a policy of opportunity for all, which is what a regional policy ought to be, should be replaced by the No Turning Back group's policy, which is based on a free-for-all.
  The Government ought to prepare a budget for industry that includes incentives for industry and puts industry—
  Mr. Nicholls: How much would it cost?
  Mr. Brown: The Government ought to put industry before the top rate tax cuts that have dominated this Government's philosophy since 1988, when the hon. Member for Teignbridge supported a Government who throughout the last three years have given £8 billion to those in the top rate tax bracket. That money could have been better used for other purposes. Nevertheless, they have questioned our public spending policy.
  Mr. Nicholls: Will the hon. Gentleman give way?
  Mr. Brown: They have spent—
  Mr. Nicholls: Will the hon. Gentleman give way?
  Madam Deputy Speaker: Order. The hon. Gentleman is not giving way.
  Several Hon. Members rose—
  Madam Deputy Speaker: Order.
  Mr. Roger King: On a point of order, Madam Deputy Speaker. You may have noticed

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  that the digital clocks have stuck at 5.17. The hon. Gentleman is making a long speech, but it is not quite as long as that. If we have to use the analogue clocks at either end of the Chamber, will you make a request that the television lights should be turned down? It is a little difficult to see the clocks because of the reflection of the lights on the glass covers.
  Madam Deputy Speaker: This is a very short debate. I think that anyone with common sense will want the House to make progress.
  Mr. King rose—
  Madam Deputy Speaker: Order. That was not a point of order.
  Mr. David Shaw: On a point of order, Madam Deputy Speaker. Could you please ensure that the Vote Office has adequate supplies of the annual report—
  Madam Deputy Speaker: Order. The Vote Office has all the papers that are necessary for the debate.
  Mr. Shaw rose—
  Madam Deputy Speaker: Order.
  Mr. Brown: If Conservative Members do not want to hear about manufacturing industry and its future, we shall certainly make sure that the country hears about it.
  I was talking about the claims that the Conservatives made about the difference that their 1988 Budget, and successive Budgets, would make to the fortunes of industry, particularly manufacturing industry. In 1988 the Secretary of State for Trade and Industry said that the Budget would powerfully reinforce the measures that had revitalised our economy during the last eight years and that it would bring us prosperity, generate jobs and restore national pride. The Minister who is now in charge of regional policy said that words such as "historic" and "radical" were not enough—that words such as "progressive" and "exciting" summed up a Budget on which he warmly commended the Chancellor of the Exchequer.
  We were told at the time that the top rate tax cuts announced in the Budget would transform British industry. We were also told that they would propel us irreversibly towards a new phase of endlessly renewable prosperity. We were told that the top rate tax cuts would stop tax evasion, raise charity donations, cut the emigration of top scientists and engineers, enhance the performance of top management in industry and, by the trickle-down mechanism, make even the poor less poor. What has happened since those claims were made in 1988? As is the way with false prospectuses, nothing is quite what it seems. Donations from the rich have fallen, tax evasion has continued, poverty has soared, scientists—as we saw this week—are leaving this country in record numbers.
  Mr. Nicholls rose—
  Mr. Brown: What of the biggest and most important economic goal of all—that British industry would be galvanised into making new and effective efforts? Where is the evidence for the cost effectiveness of handing out £10 billion of public money in tax cuts by the end of this financial year?
  Mr. Nicholls rose—
  Mr. Brown: What value for money has been achieved for the British taxpayer and what difference has it made to British industry?
  Mr. Nicholls: On a point of order, Madam Deputy Speaker. The hon. Gentleman is making various claims. Are we not entitled to give an answer?
  Madam Deputy Speaker: If there is time, I hope to be able to call the hon. Gentleman to answer those claims.
  Mr. Brown: What evidence is there for the cost effectiveness of the 1988 Budget? I have just read a study published in the past few days. Only 1 per cent. of the beneficiaries of top rate tax cuts, according to the study, claimed that, as a result of the hand-outs that they received, they had worked harder. Almost as many conceded that after receiving the tax cuts they had decided to work less hard. In a study specifically of accountants—men in suits, not fast-lane speculators; accountants whose job is to be responsible about money—did they save, invest, give to charity? Twenty-five per cent. said that they spent more, 13 per cent. simply went on more holidays and, after two years of tax cuts, 10 per cent. had decided to retire early.
  This has been the result of the £10,000 million to be given away by April 1992, yet the same money could have financed investment in skills and technology; it is being thrown away in a consumer boom, in holidays and in early retirement. The Government tell us that they are the efficient and responsible managers of the economy. If that is what was intended at that weekend in Chevening in January 1988, attended by the then Chief Secretary, now Prime Minister, by the then Financial Secretary, now Chancellor, and by the then Economic Secretary, now Trade and Industry Secretary, and if all these are the effects of that £8 billion give-away so far, that weekend must surely go down as the most expensive in British history.
  The weekend, the first gathering of the men of Chevening, was not a one-off event. The three—Chancellor, Trade and Industry Secretary and Prime Minister in their new roles—met again in January 1989 to plan another Budget, and when it was clear that what they had discussed in 1988 had gone wrong they took further action and interest rates went up again. They met again in January 1990, when it was clear that what they had discussed had gone wrong again. They decided to compound their previous offences, so the economy has been pushed into recession. These are the men who, after failing in the past and creating the problems that we now face, have the audacity to tell us that they can solve the problems of the future.
  It would be more convenient for the Trade and Industry Secretary if he could have moved straight from the City to his job at the DTI; it would be more convenient for the Prime Minister if he had moved from his position as social security Minister before 1987 to Prime Minister with no intervening period of economic responsibility, but the truth is that the present first Lord of the Treasury was also very recently the second Lord and before that the Chief Secretary. For three years the three talked and acted as if manufacturing industry did not matter—as if the trade deficit was of no consequence, as if a policy for industry was some sort of outdated, Marxist conspiracy. For three

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  years their actions were entirely consistent with their words. How can they expect now to have any credibility when they tell us, in contrast to everything they said and did before, that now somehow manufacturing matters, that somehow industry is a matter of close concern and that somehow the trade deficit is something that they recognise to be a problem?
  They cannot change their story, cover their tracks, deny responsibility or minimise the consequences of what they have done to manufacturing industry. We know where they were, what they said and what they did, and we know what has happened to British industry as a result. As their own Department of Industry inspectors would have it, they are not fit and proper persons to run an economy.
  As is now clear, Britain needs a new policy for industry, and that will require a new Government. We need a policy for industry to bridge the training gap with our competitors by setting high-quality standards and targets in a national strategy locally delivered, with a guarantee that all young people can enjoy training and all employers undertake it. We need a strategy to bridge the technology gap by encouraging companies to invest in civil research, encouraging more small firms to do more in near market research and by encouraging technology transfer in each region in a high-class scheme, so that even the smallest businesses have access to new technology as fast as possible. We need a policy to bridge the regional gap by creating regional development agencies and a new technology service in the regions—policies which we have proposed and will develop in our industry policy document, to be published next week.
  Here we have a Government whose Prime Minister promised us a classless society and opportunities for all. They are guilty of unfairness and incompetence, injustice and inefficiency. Britain needs a society that is built on social justice and on economic prosperity, where growth is both sustained and shared. For that, people will have to look to Labour.
  7.54 pm
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley): What a tour de force! Almost every fact that can be checked was wrong. Almost every policy that the hon. Member for Dunfermline, East (Mr. Brown) attributed to me was that of another group, laid out in a document that I neither wrote nor signed; and he brought forth not a single policy of his own of which any details were available.
  The hon. Member for Dunfermline, East poses as a friend—
  Mr. Gordon Brown: Just on one of the many proposals that I put forward, what is the Secretary of State's objection to regional development agencies in England?
  Mr. Lilley: The fact is that they already exist.
  Mr. Brown: Will the Secretary of State, who seems to be an expert on these matters regional, tell us where these regional development agencies exist in Britain?
  Mr. Lilley: We have a budget of £4 million devoted to them every year. They cover a variety of regions.
  Mr. Brown: Does the Secretary of State agree that there are regional development agencies in Scotland and in Wales—the one in Scotland is to be renamed Scottish
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  Enterprise—but that at the moment there are no regional development agencies similar to those in England? If he does not know that, he is not fit to be Trade Secretary.
  Mr. Lilley: I am perfectly aware that the regional development agencies that exist do not have the full powers and budgets of those in the regions.
  The hon. Member for Dunfermline, East three times repeated that we should introduce regional technology centres. They already exist. The hon. Member for Dunfermline, East poses as a friend of manufacturing industry, but he has never had a single good word to say about the achievements of British industry in the past decade. Yet everyone actually involved in manufacturing knows that industry has been transformed since the 1970s. Every manager I meet knows that productivity has been transformed. Every employee I meet knows that industrial relations have been transformed. Every customer, particularly overseas customers, that I meet recognises that the quality of British products and the speed and reliability of their delivery have changed out of all recognition.
  The hon. Member for Dunfermline, East described the past eleven and a half years as "a complete failure". Most people in business regard that as an ignorant insult. The Opposition may wish to return to the overmanned, unmanageable, strike-ridden, loss-making, state-dominated industry of the Labour 1970s—but no one else does.
  It is very much the hon. Member's style to denigrate what he pretends to befriend. He claims to be the friend of manufacturing but rubbishes its achievements. He claims to be a friend of Scotland but constantly runs down his country's performance. He claims to like the market but constantly harps on its failures, excesses and shortcomings. I suppose that I should take his personal criticisms of me as just an overture of friendship.
  The transformation in individual firms shows up in the performance of entire industries. Let us take the motor car industry, for example. During the 1960s and 1970s it received every kind of help that Labour Governments know how to give. They reorganised it, subsidised it, regionalised it, nationalised it and unionised it practically out of existence, until output was halved. Yet last week Hamish McRae, writing in The Independent said:
  "Amid the recessionary gloom, some cheer: one British industry is undergoing an utter renaissance. Within the next few years it will be in overall balance of trade surplus for the first time since the 1950s… it is the automotive industry, for so long the lame duck of British manufacturing… Export production over the six months to end-January was up 90 per cent. over the same period a year ago."
  That is the consequence of eleven and a half years of the policies that the hon. Member for Dunfermline, East described as "a complete failure."
  As for manufacturing as a whole, the most important change of all is the turn-around in manufacturing productivity growth. In the 1960s we were bottom of the major industrial countries league, at two-thirds the average growth of productivity of the rest. In the 1970s, we were bottom again, and had slipped to half the average. Yet in the 1980s we saw the fastest rise in manufacturing productivity—faster even than that in Japan and more than twice as fast as that in Germany.
  Of immense long-term significance has been the secular recovery in profitability in the latter half of the 1980s, to the best levels for nearly 20 years. How significant,

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  therefore, that the hon. Member for Dunfermline, East did not even utter the word "profits". It is profits—not Government subsidies, penalties or cajoling—that are the key to improved investment, more research and development and better training. Profits make spending on those activities both possible and attractive. Since 1979, business investment has risen by 50 per cent.—again faster than in both France and Germany. Manufacturing investment is as high a proportion of value added in this country as it is in Germany and a higher proportion than it is in the United States of America.
  In today's markets, it is not just quantity but quality that counts. My Department has led the way in encouraging total quality management systems. The British standard established in 1979 has effectively become the European and international standard. British companies are way out in front in gaining certification for quality. Already, 12,000 have done so. That compares with just 200 in France; and in Germany the process is only just getting off the ground. Does the hon. Member for Dunfermline, East think that that is evidence of a complete failure of industrial policy? What an insult to 12,000 high-quality companies.
  The growing competitiveness of British goods is demonstrated above all by the rise in exports—a rise of more than 50 per cent. over the past decade. Let us not forget that Britain exports 20 per cent. more per head than do the Japanese.
  The Labour party has opposed and criticised almost every measure that we have introduced to help and encourage British business.
  Mr. Tony Worthington: If we are so successful, why is it that we cannot afford to let the economy grow because our exports will be dwarfed by our imports?
  Mr. Lilley: The reason why we have to have a tough period of tight monetary policy is to get inflation down, as the hon. Gentleman well knows.
  Mr. Nicholas Budgen: Is not the money supply now firmly under control? Is not the Government's target of M0 between 0 per cent. and 5 per cent. per annum? Is not it rising at a little over 2 per cent? Is not the problem today that we have excessively high interest rates because we are in the ERM?
  Mr. Lilley: My hon. Friend is right to point out that the money supply is within its target. I am not sure why he objects to that or to the measures that have brought it about.
  As I was saying, the Labour party has opposed and criticised almost every measure that we have introduced to help and encourage British business. When we cut corporation tax to one of the lowest rates in any of the industrialised countries, the Labour party opposed it. When we tackled the excessive union powers to which the Labour party's trade union paymasters were attached, Labour Members opposed every reform. When we returned 42 nationalised industries—many of which had cost taxpayers billions of pounds in subsidies—to the private sector, the Labour party opposed every single
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  denationalisation. Nowadays, Labour Members claim that they accept virtually all of the changes that they have opposed so vehemently over the years.
  Mr. Richard Caborn: The right hon. Gentleman has referred to the return to the private sector of publicly owned industries. Industry has to be helped with its electricity bills. The electricity bill of United Engineering Steels in my constituency—it is not a small company—is to rise by about 30 per cent. or £12 million. It was paying out about £50 million for electricity. That company has pointed out that that figure is 17 per cent. above what the French pay and 10 per cent. above what the Italians pay. It has been making strong representations because such an increase represents hundreds of jobs lost in the industries to which the right hon. Gentleman has referred, whose productivity has been increased once more and which have good industrial relations but which are now being crippled by an increase of about 30 per cent. in electricity charges.
  Mr. Lilley: The hon. Gentleman knows that overall tariffs came down and that individual large users are in a position to negotiate better deals if they wish.
  Nowadays, the Labour party claims that it accepts all the changes that we have introduced and that it opposed. Can anyone doubt, however, that if Labour got back into power, it would tax and regulate, and renationalise, British industry as it has always done? British industry certainly does not need friends like that.
  I know that the present recession is painful, although this time manufacturing is bearing proportionately less of the burden than in past recessions, and services are bearing rather more. The defeat of inflation has to be our overriding priority. The very severity of the present measures means that inflation is likely to come down all the more rapidly.
  Mr. Giles Radice: The Minister may have seen the latest CBI report, which shows that manufacturing investment is going to fall very sharply; indeed, it is already falling. What do the Government propose to do about that?
  Mr. Lilley: The hon. Gentleman will hear shortly of some measures that I am introducing, which have been announced today. [HON. MEMBERS: "What are they?"] I shall come to them shortly.
  As a result, subject to the disciplines of the exchange rate mechanism, in time, interest rates will come down further too. Output will recover and non-inflationary growth will resume. By contrast, the siren voices of Opposition Members urge us to cut interest rates prematurely and push the pound down. That would give a jolt to costs and inflationary expectations. The agony of getting inflation down would be indefinitely prolonged. Cannot Opposition Members see that?
  There is a clear choice—on the one hand, an inevitably painful recession, resulting in the prize of low inflation and a rapid return to non-inflationary growth, and, on the other, a self-defeating attempt to escape the pain, which would entrench inflation, bring back high interest rates and result in the prolonged agony of stagflation.
  The most significant thing about the speech by the hon. Member for Dunfermline, East is what he did not say about inflation. He did not say that Labour would make the defeat of inflation a priority. That is all the more odd

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  because the Opposition are pretty promiscuous with their priorities. The hon. Member for Dunfermline, East last week made a reduction in interest rates his top priority. On the "Today" programme during the week, he added Government investment in industry as top of his "rigorous choice of priorities".
  Tonight he has added getting output rising again, training, regional assistance and investment in the regions to his growing list. The Labour party's approach to priorities reminds me of that of the Congolese president who, to cope with discontent in his army, promoted everyone to the rank of colonel. Labour has promoted almost everything to the rank of priority.
  There is one conspicuous exception. Labour Members have not mentioned the defeat of inflation as one of their priorities. To be fair, they have never really pretended that it is a priority. We can tell that from their attitude to interest rates—whatever the level, they advocate a cut, regardless of its impact on sterling in the ERM. The House knows that they have no response to inflation—except, when it comes to it, devaluation. Labour has always been the party of devaluation: it is still, at heart, the party of devaluation. It is the party that fuels inflation rather than defeats it.
  Mr. Budgen: My right hon. Friend refers to devaluation, but devaluation does not cause inflation, does it? My right hon. Friend will agree that devaluation has an effect on some prices but not on all prices.
  Mr. Lilley: Measures that cause the weakness of the pound cause inflation.
  Mr. Alex Carlile: Are we to take it from what the right hon. Gentleman has said that the Government are ruling out completely any question of devaluation, whether under that or any other name?
  Mr. Lilley: Of course we do; of course. There is no question, having entered the exchange rate mechanism, of not sticking by the disciplines of it. [Interruption.] That is scarcely a discipline.
  Mr. Worthington: Will the right hon. Gentleman give way?
  Mr. Lilley: I have given way to the hon. Gentleman once already; I shall not do so again.
  Let me deal now with the subject of innovation. The hon. Member for Dunfermline, East was right to emphasise its importance—particularly for manufacturing. It is absolutely crucial. But saying that it is important is not a policy. Denigrating industry's achievements in innovation is not a policy. Saying that there is not enough research and development is not a policy.
  The hon. Member for Dunfermline, East simply has no coherent policy on the issue. The key is to recognise that the prime source of spending on research and development must be companies themselves. In the late 1970s, when profits were squeezed to the bone and the tax rate was 52 per cent., it was small wonder that spending on research and development was pitiful. But as profits have been restored, spending on research and development has accelerated. Over the last five years for which figures are available, it rose by nearly 50 per cent. in real terms and any research and development problem that this country may have certainly does not spring from lack of spending by Government.
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  The British Government spend nearly £3 billion a year on civil research and development. That is more, as a percentage of gross domestic product, than Japan and the United States. What is more, our academic scientific research effort has been outstandingly successful. Our scientists have won more Nobel prizes than those of any other country except the United States, and 13 times as many as the Japanese.
  But, as a country, we have not until recently been successful at exploiting industrially that wealth of scientific talent. The Government have to help to bring industry and the scientific community together. One way to do so is by establishing industrial science parks alongside our universities.
  I was delighted to see that Labour's previous policy document recognised the value of science parks. But the previous Labour Government treated them with what George Brown once called "a total ignoral". There were just two science parks at universities when they came to power, and there were still only two when they departed in 1979. Today there are 39 science parks in our universities—and 22 more are planned.
  Mr. Keith Vaz: Does the Minister accept that it is not just about winning prizes? Mention has been made of the firm Bridgeport Manufacturing in Leicester, which won the Queen's award for industry in 1986. However, six months ago it had to make 100 people redundant because of Government policy. What words of comfort can the Minister offer the employees of Bridgeport Manufacturing, which now faces closure?
  Mr. Lilley: It is not just a question of winning prizes, which was my earlier point. I know that it is painful for many companies facing the current recession, but it would be far more painful to act foolishly, cut and run, and take soft options. That would mean a prolonged agony rather than a short, sharp shock.
  Smaller firms play an important part in science parks and can play a particularly impressive role in bringing new technology to the market place. Two weeks ago, I announced a new scheme, SPUR—support for products under research—which provides 30 per cent. grants up to a maximum of £150,000, for the development of new products and processes.
  Today, I have announced two further schemes to help smaller firms. One of those schemes will provide grants of up to £50,000 for expert consultants to help firms introduce modern manufacturing systems. The second scheme will help smaller firms to use local experts—from universities, polytechnics and research organisations—to solve technological problems. Together with SPUR, they will give a £50 million boost to innovation by smaller companies. That is a 25 per cent. increase in the grants available for smaller firms to encourage innovation.
  The Confederation of British Industry has welcomed those measures, saying:
  "This is just what we wanted and goes a long way towards meeting our recommendations".
  The hon. Member for Dunfermline, East made a number of mistakes in his speech, but the most glaring of all was his suggestion that we had cut the technology transfer budget by 22 per cent.
  Mr. Gordon Brown: I said 2 per cent.
  Mr. Lilley: The hon. Gentleman is wrong either way, because the figure is on page 12 of the report.

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  [Interruption.] The hon. Gentleman has the report, and that makes it all the more reprehensible that he gave a false figure. The report shows that technology transfer will almost double from £11 million to £21 million over the next year. Will the hon. Gentleman withdraw his allegation?
  Mr. Brown: The report states that, for 1991–92, £21 million will be spent and that for 1993–94, £20 million will be spent. If that is not a cut, what is? That does not take account of inflation, so the real value is being cut.
  Mr. Lilley: The hon. Gentleman calls that a 2 per cent. cut, but the amount will be nearly doubled over the next year.
  Mr. Brown: The House should be aware that the forecast for the Minister's budget for 1991–92 is £21 million; for 1992–93 it is £20 million; and by 1993–94 it will be £20 million—a cut from £21 million to £20 million, and the figure stays at £20 million. The real value is cut even further
  Mr. Lilley: That illustrates the hon. Gentleman's use of statistics. For the last full year the outcome was £11 million. In the current year it is estimated to be £18 million and the budget for next year is £21 million.
  This is an Opposition day so it was a reasonable hope that we would get an opportunity to discuss Opposition policies in depth. Labour's advance publicists have been trailing for some weeks the impending publication of the party's new industry policy. We were told it was at the printers in January. Then it was being revised in early February. Then it was due to be endorsed by the National Executive yesterday, to be issued in time for this debate.
  An eager world opened its newspapers this morning hoping that news of Labour's new policies would provide light relief from news of the Gulf war—only to find no mention of any policies. Perhaps the hon. Member for Dunfermline, East can tell us what has become of them. Were they rejected by the NEC? Is the Labour party still searching for a policy? Was it afraid to expose its new policies to the rigours of a parliamentary debate that Labour Members called?
  Mr. Brown: Let us get things right. I said that the document would be issued today. Does the right hon. Gentleman not recall that I said at the end of the debate that the document would be issued on Monday?
  Mr. Lilley: The hon. Gentleman's friends in the press have been widely trailing its publication for some time and he did not bother to deny those reports. Today, he has made it clear that he will deliberately not publish the document until after today's debate. That is a contempt of Parliament. What would happen if the Government called a debate and announced that they would publish their policy document the week afterwards? Unfortunately, the hon. Gentleman's speech did little to fill the gap left by the failure to publish the document.
  Whenever it comes to talking about Labour's policies the hon. Gentleman is as coy as a Victorian spinster talking about sex. He prefers to avoid the subject, refuses to discuss the interesting details and, if forced to discuss it, takes refuge in euphemisms. His speech today and previous policy documents are full of vague words about
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  partnership and co-operation, about encnuraging this, helping that, sustaining the other and supporting almost everything else. Gone is the old coarse vocabulary of socialism.
  I thought that it might help hon. Members if I gave them a glossary of Labour newspeak; culled from Labour's existing policy documents. Partnership state means corporate state, a levy means a tax, training investment contribution means another tax, help means subsidise, support means subsidise, sustain means subsidise a lame duck, encourage means compel, fairer taxes means higher taxes, close tax loopholes means higher taxes, a strategy means the absence of any policies, new strategy means ditching old policies without replacing them and social ownership means nationalisation.
  The hon. Gentleman has to revert to that code because of Beckett's rule: Labour will not make any new spending commitments "until resources allow". Therefore, it is reasonable to ask whether the plans that the hon. Gentleman claimed to present to the House this evening—for training, technology, the regions and a budget for incentives—would increase public spending. Have they been cleared by the hon. Member for Derby, South (Mrs. Beckett)? In the hon. Gentleman's view, should those policies be implemented today or must they wait until resources allow? The hon. Member for Dunfermline, East has been keen to intervene. Can he give us the answer to any one of those questions? I shall give way to the hon. Gentleman. [HON. MEMBERS: "Answer."] The hon. Member for Dunfermline, East is now even more coy than he was before. If he cannot tell us whether his policies cost anything, they cannot add up to a row of beans.
  The Labour party may have abandoned its old rhetoric and ceased to use its old socialist vocabulary, but it has not lost its old prejudices. When considering policies, it still automatically thinks in terms of extending state control over businesses and people's lives and of controlling industries through subsidies and state handouts.
  Dr. Kim Howells: I shall quote in oldspeak from the latest edition of the magazine of the National Federation of Self Employed and Small Businesses, which states:
  "Even at this late hour we call upon the Government to act with a greater degree of responsibility and thought for the future of Britain's business. There is little point in carrying out major surgery if the majority of patients die from lack of oxygen."
  That is straightforward oldspeak—what will the Secretary of State do about it?
  Mr. Lilley: The Opposition singularly fail to tell us what they propose to do in the short or long term. We have made it clear that our priority is to reduce inflation. The Opposition have not mentioned inflation and have no policies for getting rid of it. They did not spell out their policies for the longer term, but spelt out their prejudices. They still ultimately believe in picking winners, steering investment and setting priorities for British industry. Those are the sort of policies that we have seen from successive Labour Governments over the years—we have seen everything from groundnut schemes to De Lorean motor cars. Labour economics are De Lorean economics—plausible, expensive and fundamentally fraudulent. By contrast, our policy is tried and tested. It is to remove regulations and controls, reward success and enterprise by

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  cutting taxes, privatise state industries, promote competition and open markets abroad by enthusiastically supporting the European single market and the GATT free trade talks. As my announcement today demonstrates, we vigorously support industrial innovation.
  Our industrial policy has laid the foundation for British manufacturing to emerge from the recession stronger, healthier and more prosperous in the 1990s than ever before.
  8.21 pm
  Mr. Ken Eastham: There is no doubt that we are now in a deep recession. It is the second recession in 10 years. Some people call it a slump. I was thinking about the subject only this morning and decided to look at the dictionary. The definition of "recession" includes
  "A period… reduction in trade."
  The definition of "slump" was
  "a decline suddenly in value, volume or esteem."
  I believe that the word "slump" is appropriate in today's debate because we are in a grave position. Despite the claims made in 1980 and 1981 that all the sacrifices the workers had made would bring an improvement on the industrial front with prosperity for all, we have nothing. Now, 10 years later, we are in a far worse slump than we had in 1980–81.
  I am a member of the Amalgamated Engineering Union, which has prepared a survey called "Crisis at Home", published on 14 February 1991. I think hon. Members will agree that it is current and completely up to date. It analyses the job loss announcements made in February this year. The survey is divided into seven regions. The first region, Scotland, forecast job losses for February 1991 of 1,653, The second region, the north-west and north Wales, has predicted job losses of 3,461. The third region, the north-east and Yorkshire, has predicted job losses of 4,804. The fourth region, the west midlands, has predicted job losses of 7,542. The fifth region, the east midlands and east Anglia, has predicted job losses of 4,991. The sixth region, the south-west and south Wales, has predicted job losses of 3,907. The seventh region, the south-east and London, has predicted job losses of 7,330. The total of declared job losses for February 1991 is 33,688.
  Mr. Roy Beggs: Does the hon. Gentleman agree that the job loss figures do not include those for Northern Ireland? It is a disgrace that, after so long, Northern Ireland employment figures are not available with those of other regions.
  Mr. Eastham: I readily agree with the hon. Gentleman. We often forget to include the dreadful Northern Ireland figures. When he replies, perhaps the Minister will spend a little time trying to explain the Government's position in relation to the whole of Britain, including Northern Ireland.
  The job losses I mentioned will be in spite of the sacrifices made by, and the co-operation of, people in industry. Employers called for flexibility and co-operation and the Government spoke about it time and again, but we now face massive job losses.
  The British Foundry Association has just completed a report, which was published in January 1991. The foundry industry is important, despite its serious problems of the past 10 years. The report stated that in 1988 the industry
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  employed 52,000 workers, many of whom now find their jobs under serious threat. Coming as I do from the engineering industry, I am conscious of the foundry industry's special problems in relation to the environment and pollution. Those problems are serious, but they could be dealt with if there were Government support.
  Countries such as Germany, France and the Netherlands also have foundry industries, but they are given considerable Government support to overcome the pollution problems. My question to the Government and the Minister is: why does not British industry receive the same support as Germany, France and the Netherlands? Within the foundry industry there is also increasing competition from India, China, Poland and Turkey.
  A simple example of the day-to-day problems in the industry involves a rather humorous but important aspect of the industry—manhole covers. The current output of manhole covers in the foundry industry is 80,000 tonnes a year, but 60,000 tonnes of covers are under threat from imports from third-world countries. In 1986 only 622 tonnes of manhole covers were imported from India and China. However, in 1990 the figure increased to 12,000 tonnes worth £3·2 million. The Government must recognise that the foundry industry is vital and that it deserves valid and serious support.
  A few years ago the British machine tool industry was considered to be the world leader. Only this morning I spoke to representatives from that industry and I asked them about the current position. One representative told me that it was absolutely horrible. He told me that in December 1990 new orders for the last quarter of that year were down 31·5 per cent. in comparison to the same quarter in 1989. He put that down to interest rates, exchange rates and a lack of confidence generally in the industry. The machine tool industry is suffering as a consequence of the lack of confidence in the engineering industry generally. There is no opportunity to plan for the future.
  Last December I attended a meeting in the House with Professor Roland Smith about British Aerospace and the declaration that 3,000 jobs would soon be lost in the industry. Professor Smith outlined the grave situation facing the industry and said that there was a serious possibility that two factories would close. During the meeting he said that, with the present combination of high exchange rates, high interest rates and high inflation, not even the Archangel Gabriel could manage a business successfully. He said that, of those three factors, the exchange rate was the most serious. He said that politicians and the Government must decide whether Britain wants an aerospace industry which at present is number one in Europe. It is obvious that the Germans are waiting in the wings hoping that the Government will ultimately destroy our aerospace industry so that they can become prominent in that vital industry.
  On the industrial front nearer to home, Ferranti's Moston factory is in my constituency. The company was established in about 1906 and now 650 jobs are threatened at the factory. Earlier today the trade union representatives advised me that they no longer have craft apprentices in the company and there are no plans for them in future. There are two other Ferranti companies close to Manchester. At the Cairo mill 400 jobs are at risk, and at the Derker mill another 200 jobs are seriously threatened.

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  Workers were encouraged to buy shares in Ferranti when the shares were selling at about 70p each. Some workers spent their life savings on shares. Those shares are now valued at about 9p. As we see Ferranti tottering under this Government, it is interesting to note that the Labour Government, through the National Enterprise Board, saved Ferranti from liquidation. They revived it. After 10 hard years of this Tory Government, Ferranti is once again tottering and may collapse completely.
  There is no doubt that there is a national haemorrhage of jobs. The newspapers are full of the complete loss of confidence in commerce and industry. Indeed, when I read of bartering for goods in the high streets, I am reminded of my days in the Army. British shopping centres now seem like Arab bazaars, thanks once again to this very unsuccessful Tory Government.
  We all recall that everything was swinging during the 1980s. The yuppies used to do well. They would tank it up and buy bottles of champagne at lunchtime and tell everyone that they were so successful. However, they did not produce anything. One of my old friends who used to be a Member of this place died a few months ago. He told me that all those yuppies, spivs and wheeler-dealers in the 1980s never made anything; in fact, they did not even make a mousetrap. However, they made all the money during the 1980s. I wonder where they have gone now because they are certainly not around at the moment. They have disappeared as industry and commerce and the general industrial base of this country have collapsed.
  During the early days of the Government in 1980 and 1981 a Tory told us that the unemployed should get on their bikes. Someone else said that people should get ladders and buckets and clean windows. He said that he would clean our windows and we would clean his. We would not produce anything, but that was a solution for the unemployment problem in 1980–81. Alas, we have come full circle and we face the same problem.
  We have 300 years supply of coal, we have our own natural gas, and we are one of the world's leading oil producers, but we still cannot compete with other European countries. That is absurd. There must be something wrong in our economy if that is the position in which we, a so-called industrialised nation, find ourselves.
  It is obvious, as my hon. Friend the Member for Dunfermline, East (Mr. Brown) said, that we must get down to producing quality goods and exporting goods. The conspiracy of not facing up to our economic position must change. There is no doubt that that will happen only with a change of Government.
  8.39 pm
  Mr. Charles Wardle: I listened carefully to what the hon. Member for Manchester, Blackley (Mr. Eastham) said about job losses in engineering. I hope that he accepts that the greatest threat to jobs in engineering, as to any sector of industry, is inflation.
  Whenever the House debates manufacturing, strident claims fly from one party to another about who would do what for the benefit of industry. However, when the hon. Member for Dunfermline, East (Mr. Brown) spoke, he did
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  not make it clear which he regarded as the greater evil to manufacturing industry—high interest rates or high inflation. He appeared to skirt that point.
  Whether those who work at the sharp end of manufacturing industry and who have to cope with the dynamics of the market place day in and day out would set much store by what is said on these occasions is not for me to speculate on. I have no doubt that those who work in manufacturing would tell the House that there is one abiding fact of industrial life that transcends all debates about productivity, about marketing, about technology and about supply-side reforms and the rest. The single greatest contribution that any Government can make to private sector manufacturing is to contain inflation.
  The ability to keep inflation down to negligible levels allows well-run companies and highly motivated work forces to make a worthwhile contribution within the virtuous circle of price stability, low interest rates, competitiveness and a strong balance of payments. I imagine that few hon. Members would dispute the fact that the root cause of the current recession was the need to cope with an economy that overheated after the G7 countries agreed to relax controls following the 1987 stock market crash. In the debate on the Gracious Speech in November 1989, I predicted that the recession would begin in late-1990.
  In spite of a three-year boom for industry, with record levels of investment during those three years, there had to be a day of reckoning if inflation was not to run riot with all the disastrous consequences of that scenario. That is why my right hon. Friend the Chancellor of the Exchequer places so much emphasis on tight fiscal policy and on the need to maintain high interest rates until inflation can be seen to be falling sharply. In that regard, the exchange rate mechanism and the present sterling-deutschmark exchange rate is not a trap. It is a worthwhile discipline because the currency markets will sell sterling at the slightest hint that the Chancellor's resolve is weakening in the fight against inflation.
  By complete contrast, Opposition Members, especially the right hon. and learned Member for Monklands, East (Mr. Smith) in a debate on the economy last week, appear to want a large cut in interest rates now, plus fiscal incentives for more capital investment and still more spent on the infrastructure. All that that would achieve would be a little instant relief for industry. There would then be a painful resurgence of inflation a little later with many more receiverships and bankruptcies, and still higher unemployment than is now in contemplation.
  In 1974, the Labour Government made the same mistake of softening their approach when it would have been wiser to impose tough disciplines in which industry could have operated. The result was capital investment allowances for more plant and machinery than was justified by market demand and tax relief on the inflationary increase in stock values which encouraged manufacturers to build merely for the warehouse shelves. It left industry in 1979 overmanned, overstocked and vulnerable to the worldwide downturn which came in 1980.
  Yet once again, Labour policies are for instant relief from the pain of recession today without any regard to the even greater setback to competitiveness and to industrial strength that would swiftly follow. If some distinguished economists and, perhaps, some of my hon. Friends have similar faith in those nostrums, I must say, with respect,

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  that there is no painless path from an inflation-ridden economy to one that emulates the German success story. The French learned that a decade ago to their cost.
  I do not dispute the uncertainty, anxiety and discomfort of the recession, which is likely to get worse in terms of company failures and of job losses before it gets better. However, things will improve most rapidly if the Chancellor sticks to his policies with a tight grip on public spending and cuts in interest rates only when inflation falls away, as it surely will this year.
  There are many problems in any recession. Perhaps none of them would have occurred this time if Britain had entered the ERM with lower inflation and lower interest rates in 1985. However, there is no point in jobbing backwards. Manufacturers might be helped if an independent Bank of England were to assume control of exchange rate policy at a full arm's length from politicians of all parties. The sterling-dollar exchange rate undoubtedly still puts British industry in a seriously uncompetitive position, but that will not change overnight either.
  Difficulties also exist in industry because too little attention was paid in the recent boom to the cash-flow requirements for tax, dividends and investment. As a result of that and of a manic taste in some quarters for takeovers financed by junk paper, industry is now far too highly geared for its own good. The bankers, whose soft lending policies helped many companies into their present financial mess, do themselves no credit by denying responsibility for helping the greedy and for ignoring the belt-and-braces fundamentals of lending against good asset cover and strong interest cover.
  Whatever the difficulties, there is only one sure way to economic recovery, and renewed growth and competitiveness for manufacturing industry. It is to stick with the Government's present policies, no matter how painful they are in the short-term, and to show the world, especially the currency markets, that we are determined to reduce inflation once and for all. On that basis, good management and properly motivated work forces will be able to combine their skills to build future prosperity.
  8.46 pm
  Mr. Alex Carlile: Like most hon. Members, I find myself from time to time, either face to face or by letter, responding to a request for advice from a young man or woman who asks me what sort of job he or she should go into. As I am a lawyer, young people often ask me about careers in the law, and in accountancy and related matters. The best advice that anyone who is asked that question can give at the moment is that a young person should become an insolvency practitioner. That is the one part of the legal and accountancy professions in which redundancies are not taking place, in which there are plenty of openings and in which high salaries are available. An insolvency practitioner administers. the affairs of failing companies and tries to realise assets. What he is really doing is presiding over the demise of industry, and over the collapse of local enterprise and the loss of jobs.
  At lunch time today, I was in one of the great department stores of this city, in Oxford street. It was empty. I went to a number of tills to pay for various articles and I did not have to wait at any of them as one would expect to do at the busiest time of a weekday. If one goes into a car sale room in any part of the country to buy
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  a new car, the state of the market is such that it is possible to obtain discounts even on cars that were sold at a premium a year or two ago. A proprietor of a business dealing in second-hand cars told me a short time ago that if one went into a garage where second-hand cars were for sale, especially large ones, one could buy them at huge discounts because the motor market was utterly depressed.
  In my constituency of Montgomery, we have experienced two major industrial problems in recent months. The most recent announcement in my area was to the effect that the Tootal tie factory in Newtown would be closed. I assure those male hon. Members who wear five different ties a week that the chances are that on at least one day they will have worn a tie made in Newtown, under whatever brand name it was sold. More than 100 jobs were to be lost in the closure. Fortunately, the Development Board for Rural Wales introduced another company and, at any rate for the time being, 50 jobs have been saved. The Tootal factory had been there for a long time and seemed as safe as any industry in the area.
  The largest manufacturing company in my constituency, the Laura Ashley group, faced considerable restructuring recently, which was rationalised only by a Japanese conglomerate taking a significant shareholding in the company. The other part of the Laura Ashley rescue plan, apart from the injection of Japanese capital, was simple—stop manufacturing clothing in the United Kingdom and make the articles abroad, though not elsewhere in the European Community. Factories have been closed not only in Wales but elsewhere in the Community, and the company is now manufacturing goods in Hungary. Soon it could be manufacturing them in Poland, or elsewhere. I know that that is excellent for the economies of east and central Europe, but it shows a malaise in British industry.
  As the Secretary of State suggested, industry has reformed itself in many ways, and that is to be welcomed. Manufacturing processes have been reformed in a way that has made them more efficient, and industrial relations have been transformed, with archaic practices being expunged from British industry. I acknowledge the part that the Government have played in that.
  That having been achieved, those running industry are now saying, "We have done what we were asked to do. We have swallowed the medicine over the years. Why are we now suffering yet another recession? What more are we supposed to do to meet the requirements placed on us by the Government? After all, the Government assured us that their policies were right."
  Industry is not helped when it sees, as has happened in this debate, a Minister and the Front-Bench spokesman of the Labour party cooking the books as they spoke. An exchange that occurred earlier about the technology transfer budget should be revealing to the great British public. The Conservative party says that when something goes down, it has gone up, whereas the Labour party says that when something goes up, it has gone down, and they are both wrong—[Interruption.] They cook the books in such a way that their efforts are about as sophisticated as the cookery involved in a hard-boiled egg.
  Both sides should be telling the truth. British industry is entitled to be told that part of Government policy has been to raise the technology transfer budget, but, for reasons which I hope will be explained by the Minister later in the debate, having raised it—presumably because they thought it needed to be raised—they then decided to

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  cut it back by £1 million. It seems an extraordinary state of affairs that we cannot have straight speaking on such matters.
  It is meretricious for the Government to say that their policy is working. If it were working, we would not have both high inflation and a slump in manufacturing output and employment. It would be more forgivable if we were watching a Government sticking either to Adam Smith or Maynard Keynes, to some principle. Instead, we see the Government sticking to sticking plaster.
  Today we had an announcement about some small programmes simply because we are having a debate in the House on trade and industry. A little extra technological help is to be given to small companies. I wonder why that announcement was made today. Last week we had a debate on the economy, and on the morning of that debate an announcement was made of a reduction of 0·5 per cent. in interest rates. Why was it made on that day? On the eve of the Conservative party conference last year there was an announcement of a reduction in interest rates. I wonder why it was made on that day.
  That is not policy. It is sticking plaster, and industrialists realise it. They have no confidence in a Government who use that approach and who seem bereft of clear policy. I suspect that something similar will occur in the coming few weeks. The Budget is next month, and we shall witness at least a significant cut in interest rates and a prospective cut in local taxation, not for the sake of sound, structured, well argued policy, but because an election is coming up, and it will occur probably sooner rather than later.
  Massive interventionism will not work any more than sticking plaster. I hope that the Labour party will not subject us, as one might suspect from what has been said in the debate, to an economic policy which will make us recall what happened to companies such as the Rootes group in the 1960s and De Lorean subsequently.
  It is not fair to blame the market place. Germany, Italy, France and all our other competitors in the European Community work in the market place, but they are not affected to anything like the same extent by the depression and malaise that are affecting British industry. We need a more ambitious approach by Government to the future of British industry.
  Mr. Budgen: What does that mean?
  Mr. Cathie: There is plenty of which to be proud in British industry. As has been said, we have one of the most inventive scientific work forces in the world, but unfortunately, as people see money being taken out of science and technology, they are going abroad. We recently debated the Science and Engineering Research Council. It is clear that the cuts that were discussed during that debate will lead to a new brain drain of our brightest and best young PhDs who should be here to develop British industry for the future.
  Of course, the Government have a part to play in industrial policy. It is not enough to stand by and simply let things happen on a free-for-all basis. The Government's role is, in part, to do those things that industry cannot do for itself. That means providing a stable macro-economic environment, especially with regard to inflation, interest rates and the exchange rate. The Government can
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  intervene by ensuring that competition policy—I mean both pro and anti-competition policy, as appropriate—is enforced rigorously, nationally and internationally, and especially in Europe.
  The Government also have a role to play in influencing the way in which the City of London operates. I do not share the Labour party's knee-jerk criticism of bankers, stockbrokers and insurance underwriters as I think that they do a valuable job in earning foreign exchange and in ensuring that the United Kingdom is at least a major financial market. The financial market earns good and meritorious money for this country. However, I do criticise the way in which the City attempts to make its money in connection with venture capital. There is a need for a much more well-devised venture capital environment in this country. City merchant bankers spend much of their time doing nothing much more than churning fees. The takeover and merger booms that we have experienced recently are not beneficial to the efficient performance of manufacturing industry, but they are beneficial to fee-earning in the City of London. The Government should go to the City and say, "Spend a bit less of your time trying to change the structure of British industry and a bit more of your time trying to put venture capital into British industry to develop its continuing growth and success."
  The Government should also tackle many other policy areas. They should remedy the flaw in the 1984 corporation tax reforms, which has resulted in corporate tax bills increasing with inflation. In our view, they should support the move to a single European currency. They should reduce the bureaucracy of Government Departments dealing with taxation. They should increase investment in the transport infrastructure.
  British manufacturers are not asking the Government to do their job for them; they are not asking for hand-outs. They want a Government who recognise their economic importance and who are prepared to play their part.
  9.2 pm
  Mr. Nicholas Budgen: Before becoming a Member of the House, I spent many happy days in opposition to the hon. and learned Member for Montgomery (Mr. Carlile), and I used to admire him in those days. However, I did not find his speech this evening as brisk, detailed or compelling as some of his speeches that I heard before we were elected to this House. The hon. and learned Gentleman seemed to rest his argument tonight mainly on vague generalities.
  However, there was something much sadder about the speech of the hon. Member for Manchester, Blackley (Mr. Eastham), who spoke most movingly about the recession in his constituency. He seemed to imply that the Government had wished for such a recession. There is, of course, an intellectual vacuity at the centre of this debate, because it is distorted and darkened by the agreement between the two Front Benches about entry into the exchange rate mechanism. The attachment of a fixed exchange rate is the crucial factor that has brought this country and our manufacturing industry to its present state. The hon. Member for Blackley rightly said that we had a great boom between 1986 and 1988, that we are now correcting that and that that correction is unpleasant. However, we must ask why we had that boom. Why was it so excessive? The answer is at least in part because we

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  were then informal members of the exchange rate mechanism. We were shadowing the deutschmark and, as a result and for domestic reasons, our interest rates were much too low.
  There were other reasons, such as an over-correction of the stock exchange fall in October 1987. But the principal reason was the shadowing of the deutschmark. Why are monetary conditions too tight now? Why is manufacturing feeling such an excessive squeeze? It is because we are constrained by being formal members of the exchange rate mechanism now and we cannot reduce our interest rates as quickly as we would wish.
  The Labour party, desiring so much to appear middle class and respectable and believing that to appear European is to appear respectable, has lost all intellectual rigour and cannot explain that, having changed its position, it has made as big a mistake as the Government have made in entering a fixed exchange rate mechanism.
  But there is also a great deal that is ironic in this mock debate between the two Front-Bench teams in which each complains about the level of subsidy and distortion that will occur in the future. What will happen if we stick to the exchange rate mechanism? I am pleased to see my hon. Friend the Member for Carshalton and Wallington (Mr. Forman)—such a noble exponent of the exchange rate mechanism—come into the Chamber. If we enter the next stage of economic and monetary union, it will not be until 1 January 1994 when we shall enter a system of irrevocably locked exchange rates. A great deal of instability can occur between now and 1 January 1994 because ours is such a big, important and much-traded currency to enter the mechanism and the process of waiting is inherently unstable.
  Let us assume for the sake of argument that we are stuck for some time in the fixed exchange rate mechanism. What will happen? Let us consider the distortion that will spread throughout the economy. At present we have a pay policy in the private sector which is being run by illegal exhortation. The Government keep attempting to persuade private employers that they should pay less. Yet we have the irony that the Government have offered to pay their employees pay increases of between 8 and 12 per cent. per annum.
  We saw the whole process of distortion in the economy given a respectability by my right hon. Friend the Member for Worthing (Mr. Higgins) who suggested in a recent debate that we should have some form of formal pay policy. But it will not stop there, because, of course, when my right hon. Friend the Prime Minister finds that we have the same rate of inflation as the other European countries, he may find that the speculators, for other reasons, still put pressure on the value of the pound as against the deutschmark.
  So we shall find that the old arguments about import substitution and encouraging exporters come along. We shall be back into the old round of supporting one lot of industry or another and one lot of subsidies or another. When he opened the debate, my right hon. Friend the Secretary of State talked about the grants and subsidies that the present Government are giving to manufacturing. All that will become much worse if we stick to the fixed exchange rate mechanism.
  A floating exchange rate is not merely a symbol of a free economy. It is a necessity of a free economy. If we have a fixed exchange rate, it will work its distortion throughout every element of the economy. We shall have to have
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  subsidies and distortions everywhere. It will be damaging to British manufacturing industry and it will distort manufacturing industry. When we return to floating exchange rates, we shall find that manufacturing industry is in a weakened condition, as, indeed, it was in 1979. It will be quite unable to stand up to the competition that inevitably comes with a return to floating exchange rates. It is a great tragedy that there is no proper debate about that in the House.
  In order to appear respectable, middle class and European, the Opposition adopted the policy of supporting the ERM. That was a great mistake. They should remember the humiliations of poor Mr. Wilson when he tried to defend a fixed exchange rate. Similar humiliations will come the way of this Government.
  9.10 pm
  Mr. Robert Litherland: The Secretary of State for Trade and Industry said that manufacturing has been transformed. I suppose that is one way to put it. We in the north-west would say that it has been decimated. Since the industrial revolution the north-west has played a vital role in our country's economy. Manchester and its conurbation were once thriving, vibrant areas offering employment in heavy and light industrial engineering, in chemicals, wire manufacturing and textiles. Name it, and the north-west could provide it. All that has changed with the collapse of manufacturing in our area.
  Firms with household names and international reputations vanished overnight. Workers were thrown on the streets and the factory gates were slammed in their faces. Firms closed for ever. Week after week in the late 1970s and the early 1980s, companies were closed. Some factories that had provided jobs for workers' fathers, grandfathers and even great-grandfathers ceased production. One firm that had been in existence for more than 200 years finally succumbed and went under. Most of those firms were stripped of all their assets and the machinery was sold to the Chinese and others. The area was deprived of its dignity and the consequences for workers' lives were disastrous. Workers who derived a living, however meagre, were deprived of the opportunity to use their skills to earn that living. They were let down and demoralised.
  These issues have been debated time and again in the Chamber, and now when I consider speaking in such a debate I have difficulty in finding a major labour-intensive company in my constituency. Most such companies are now mere memories in the form of derelict, half-demolished buildings. According to the Government, all was not lost. They have had schemes to retrain and revitalise the north-west. At least, that is how the story goes. High-sounding words such as competitiveness, confidence and cohesion were bandied about, but they meant little to people who were still out of work. My constituency has the second highest unemployment rate in the country, topped only by the constituency of Liverpool, Riverside, which, if my geography serves me right, is also in the north-west.
  Workers jumped with joy, full of ecstasy, when they heard that his grace the Duke of Westminster was to assist in solving their problems. Here was a lad who knew what poverty meant. Fantastic; all that we need now is a fairy godmother. We in the north-west ask ourselves which is the myth and which is the reality. Is there or has there been

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  a resurgence of bringing prosperity to the region? Have the Government given additional resources and facilities to industry in the north-west in order to regenerate the area?
  The one industry that always gives an indication and is a barometer on which to judge economic viability is the construction industry. A trade inquiry report published this month by the Building Employers Confederation warns of a deepening recession and shows a sharp fall in output. It says that the slowdown is affecting all regions, and that will send icy shivers down the spine of every construction worker and small building business in the north-west, because they know from experience that our region will be greatly affected by any downturn. The report says that the likely consequences of the recession are
  "the first major decline in building output since…1982 the sharpest deterioration in new orders in a single trading quarter since…1980
  falling tender prices and wafer thin margins
  rapidly rising unemployment".
  It estimates that 150,000 jobs will be lost and that training in the industry will inevitably suffer. The report also shows that manpower, whether skilled or unskilled, is readily available. Materials are in good supply. There are no undue worries about finding carpenters, bricklayers, plasterers, builders or other workers. In other words, the operatives, the skills and the materials are available, but the economic climate to enable all these human and material resources to be put to good use does not exist.
  According to the Building Employers Confederation, the Government's commitment to maintaining the value of sterling and their reluctance to cut interest rates are leading to a bitter and deep recession. The building employers say that a cut of 1 or 2 per cent. in interest rates would be most unlikely to prevent a fall in building industry output this year. The prospect of the gloom ahead is not lessened by the CBI's suggestion that the demand for factories and warehouses will remain depressed throughout the year. And this comes from Tory Government friends—the very people who put money into the Tory coffers at election times.
  Where is the revitalisation to meet the needs of the people in the north-west? When I refer to the needs of the people of the north-west, I sincerely mean their real needs. The north-west business leadership team tells us that it is committed to the long-term prosperity and well-being of the region. I do not for one moment doubt that group's good intentions, but long-term prosperity means little or nothing to a worker who has been issued with his or her redundancy notice. It is always the same story: light at the end of the tunnel, a cloud with a silver lining, jam tomorrow. Meanwhile, the cupboard remains bare for the majority of people in the north-west.
  It is a sick society that has the necessary work force, skills and materials, yet is not allowed to build homes, hospitals, schools, roads and bridges to meet the needs of its people. The Government have repeatedly failed the north-west. The present recession can be placed firmly on the doorstep of No. 10 Downing street. The Prime Minister, in his former role as Chancellor of the Exchequer, was instrumental in creating the mess that we have today. At the weekend he was up in the north-west, clutching at straws, hoping to salvage seats. What a forlorn hope. For him, Iancashire is already lost. It is
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  strange that we never see a Prime Minister or a Chancellor visiting factories that are about to close, despite the fact that they would be most welcome in such places.
  The north-west has had more than its share of unemployment, more than its share of bad housing, more than its share of poor environment, more than its share of ill health and poverty. After 12 years of Conservative government, we have homeless people on the streets of Manchester and an escalation in violent crime. We have had more than our share of deprivation. The north-west is asking when it will get its share of the promised prosperity. I do not see that happening under the present Government. Only a change of Government can bring prosperity to the north-west.
  9.18 pm
  Mr. Graham Riddick: The speech by the hon. Member for Dunfermline, East (Mr. Brown) was somewhat instructive to Government Members. He took between 30 and 35 minutes to reach the part relating to the policies of the Labour party. He then took one, perhaps two, minutes to describe those policies. There were no costings or details, but we were given enough of the flavour of what the Labour party believes in to demonstrate that it is still stuck to the old dogmatic, interventionist policies of the past.
  We have heard Opposition Members going on about the regions. A relatively encouraging headline in the Yorkshire Post recently suggested that Yorkshire industry is doing better in the current recession than it has done hitherto. The CBI's recent quarterly report shows that business confidence in Yorkshire is more buoyant than anywhere else in the nation. That is a positive approach. It suggests that industry in the north is now more soundly based than it has been in the past and that the region no longer relies on the old smoke-stack industries.
  Of course I recognise that great difficulties face many firms in the north of England because of the present high interest rates. But we must realise that interest rates are high in order to beat inflation. The prospects for Britain are good. Inflation will come down, and come down rapidly, this year, and interest rates will follow. It is instructive to see how the stock market is behaving. The stock market tends to take a six-to-nine-months view of prospects, and at the moment it is booming. That is a positive reflection of future trends.
  During the 1980s we had consistent economic growth for eight years. That growth was brought about because we had low inflation, low taxation, minimum Government intervention and minimum red tape and bureaucracy. I have no doubt that British business men and entrepreneurs are as innovative as any in the world and are now able and willing to invest and compete in the modern world, but clearly they need a consistent, stable economic climate. They also need free trade throughout the world. Therefore, I urge my right hon. and hon. Friends to ensure that there is a successful outcome to the GATT negotiations in Brussels.
  There is no doubt that British industry is going through a difficult time, but British companies are in much better shape today to withstand the current difficulties and to prepare for the upturn. We must be careful not to talk ourselves into a state of doom and gloom. Today we have seen that the Opposition like to talk down Britain and British industry as much as possible.

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  In recent days I have had some evidence that things are not too bad. The future holds some positive things in store. Last week I met some executives from Vauxhall Motors. One told me that Vauxhall factories are working flat out and have massively increased car exports to the EC. This morning I went to a British textile exhibition at Olympia and I was heartened by the surprisingly robust and confident nature of the people I met there. I heard of the exporting efforts being made by many textile firms. I met one tie manufacturer who had just appointed seven agents in Italy.
  Some good news has been reported recently in the Yorkshire Post. A headline says:
  "Japanese create 400 textile jobs".
  The Japanese firm Toray is investing £50 million in a new factory in Mansfield. We have recently had the news that the Wakefield Shirt group of companies, best known for its Double Two brand, is taking on people. That is in the textile industry, one of the industries we are told is clown and out. There is good news. In my constituency I have seen a brand new textile factory built in recent years. No Government subsidy or regional support was required. Yet that factory, producing polypropylene fibres, is one of the most modern in Europe.
  There is good news in other parts of the country as well. The good people of Ribble Valley should be aware of the good news in the north-west. Investment in manufacturing has doubled during the 1980s. Companies like Glaxo, Pilkingtons, Shell Chemicals and General Motors have all made big investments in the north-west. The number of businesses has increased by over 20 per cent. Trafford Park in Manchester has continued to revive. Companies such as Kellogg and Proctor and Gamble, my old firm, are investing in the north-west. That is all good news.
  I have no doubt that the electors in Ribble Valley will recognise that it has been the sound, consistent economic policies of the Conservative Government throughout the 1980s which have resulted in that investment going into the north-west. When they go to the polls on 7 March, they will send back a Conservative Member, most probably with an increased majority, or certainly a majority as big as that achieved in the general election. In the meantime, I am confident that we will pull out of the current difficulties and will see economic growth taking off once again. That will happen only under this Conservative Government.
  9.26 pm
  Mrs. Irene Adams: I listened with great interest to the Secretary of State telling us how the Conservative party had transformed industry. I do not know about transforming industry, but it has certainly transformed my constituency. It was once a highly industrialised constituency. When the Government came to power in 1979, the cotton mills in Paisley employed 10,000 highly skilled women—spinners, doffers and tenters. They travelled widely, taking not only the products but their skills all around the world. They taught other people those skills.
  The first recession of the Government caused that industry to fail. The hon. Member for Colne Valley (Mr. Riddick) told us about seven jobs in Italy connected with the textile industry. Some of the 10,000 women who are now unemployed in my constituency and who "have Giro, can travel," would be interested in those seven jobs.
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  It is not just the thread industry which has been affected. We had a large male population who were heavily involved in engineering. We built ships that sailed the world. We do not do that any more. What the Government, the friend of industry, have given us in their place are fast food chains. We now make hamburgers instead of ships. They have also given us security guards and contract cleaners at the princely wage of £1·20 an hour. That is what they are asking the skilled engineers and the skilled textile workers to do.
  Mr. Ian McCartney: In the last few days I came across a case in the north-west of a young disabled woman who was offered a job so long as she agreed to work the first six weeks without wages. At the end of the six weeks this young blind girl would be taken on at the princely sum of about £2 an hour for a 45-hour week, and she would have to help provide the special adaption for the equipment that she would use. That is reality. [Interruption.]
  Mrs. Adams: Yes. Perhaps Conservative Members found that funny. I certainly did not.
  One of the great difficulties is that, because we have lost these work forces through redundancies, we have missed a rung on the evolutionary ladder of converting old skills to fit new technologies. Because of the lack of continuity in industry, and the lack of Government foresight, the next generation has to start from scratch, learning new skills without a firm knowledge of the old.
  What have the Government done? They have lost us more and more jobs. However, let us not run away with the idea that merely the cotton industry was affected, or industries which were failing. The latest victim in my constituency was Howdens at Renfrew. Howdens had been in production for 130 years, and was in the forefront of design and manufacture of energy, tunnelling and other precision products. Howdens was a name synonymous with advanced technology throughout the world. Its Renfrew plant was a centre of engineering excellence unique in Europe. The plant and the work force had been able to perform in markets for which there is sure growth—manufacturing equipment and kit for the greening of power stations.
  Howden's Renfrew plant had a bright and long-term future. It was in the process of negotiating contracts worth £20 million, but difficulties occurred when the United Nations trade embargo was put in place last August, following Iraq's invasion of Kuwait. Howdens was in the middle of building a huge power station in Iraq. Those difficulties should have been short term. If the Government had not been locked in the dogma of the past and if we had a Government willing to enter into partnership with industry, we would still have 500 jobs of engineering excellence in Renfrew, and all the subsidiary employment which backs up such jobs.
  One of the first speeches that I heard when I came to the House was made by the Secretary of State for Defence. He said that he did not think that sanctions could work in the Gulf. He did not think that sanctions had ever been viable. I wish that he had told that to the Howdens work force last August, when they were prepared to sacrifice their future for those sanctions.
  That is only part of the story for Howdens in Renfrew. Such was the uniqueness of the work force's skills and its technology, no other companies in the whole of Britain

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  now carry out the work that was carried out there. Contracts are pending in Britain for tunnelling equipment that will have to be placed elsewhere because Howdens is not there to carry out the work. That is the direct result of Government policy, a Government bereft of ideas, which could not bridge the gap in an emergency; a Government who failed to recognise short-term difficulty and did not know the difference between that and long-term investment in the future; and a Government too dogmatic to recognise that interest rates were too high and that we needed a Budget for investment in the future, and the capability to enter into partnership with innovative industries, such as Howdens, in a bid to encourage the research and development that could bring long-term prosperity to the company. That could bring jobs to the skilled work force, who deserve our loyalty, and to Britain's long-term security as an industrial nation.
  9.32 pm
  Mrs. Elizabeth Peacock: We have heard a lot about doom and gloom from most of the speakers in the debate tonight, but industry is not all gloom and despair, especially in West Yorkshire, where it is already planning for the future. Times are difficult. Yes, interest rates need to fall, but investment in manufacturing is still taking place and business confidence in Yorshire is more buoyant, as investment levels prove.
  A £15 million project, with 100 new jobs, was recently announced in Leeds. Double Two Shirts in Wakefield is investing and providing 68 new jobs. Maitland Menswear in Leeds is investing £4·5 million, creating an extra 40 jobs and guaranteeing that about 300 jobs will continue. Spring Ram plc at Birstall is making multi-million pound investments at its site, and is about to settle terms for another new factory there which will eventually create 300 new jobs, we hope by the end of the year.
  All that is not altogether gloom and despair. It is something which we welcome in Yorkshire as we are a great manufacturing county, and manufacturing will continue. That does not mean that we ought not to encourage the Government to bring down interest rates as soon as possible.
  We have heard about the lack of investment in training. There is great investment in training throughout the country, particularly in Yorkshire. The Confederation of British Wool Textiles has a marvellous training programme. Recently it conducted an award ceremony. Apart from investing in the training of young people, it invests in the training of those members of the work force who are aged between 25 and 35. It now offers opportunties for training and qualifications to many people who, through no fault of their own, left school at an early age with very few qualifications. It is a tremendously important scheme. Supervisors can be promoted because they have been offered training.
  There is great investment in the training of engineers. T. S. Harrisons, an engineering company in my constituency, has a tremendous training scheme for young people. It takes on apprentices every year and trains them in all the different aspects of its work. Its training machines and its trainees are as important to the company as its
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  exports. Recently it started to export to Japan. This country, particularly Yorkshire, can export to Japan. Orders are also coming to the company from Russia.
  I have provided a thumbnail sketch of money that is being invested not just for today but because those who run our manufacturing companies are confident about the future of this country. Indeed, they are so confident that they are investing vast sums of money in manufacturing and in new jobs.
  9.37 pm
  Dr. Kim Howells: Many hon. Members have referred to the transformation of British industry during the past 10 years. There has been a transformation, including one in my constituency. The pain caused by the contraction of industries such as coal has often resulted in the creation of new industries, which we welcome. They have provided a basis for optimism in my area.
  We must, however, be careful about how highly we regard the new industries. Good work has been done by the Welsh Development Agency and the Scottish Development Agency, though I understand that the SDA is being dismantled. Their good work has resulted in inward investment by the Japanese, the Germans and the Americans. It is very much to be welcomed. All too often, however, such investment can result in an assembly line economy, not in research and development centres or in the highly trained work force that this country needs if it is to compete with security. We shall soon be challenged by great companies such as Siemens in Munich and Philips in the Netherlands. I am confident that they will want to invest here, but we must ensure that their investment does not lead to the United Kingdom becoming only an assembly line economy.
  The regions must be self-sufficient so that they can determine the shape of our economy. They must be able to invest in and work on new products. We must therefore take into account the points made by my hon. Friend the Member for Dunfermline, East (Mr. Brown). We must invest in infrastructure and training. That will cost money. We cannot pretend that such expenditure can be avoided. We must think about our priorities. I am not ashamed to say that if we need to invest to ensure that our industries are dynamic and flexible and have the work forces that they need to meet the challenges after 1992, we must do so. If we do not, we shall become an assembly line nation. The United Kingdom will then be vulnerable to the cyclical trends that dog our economy now.
  I hope that the Minister will take that very seriously. I do not think that we are battling over that one: it is a question of how we do it. If we are battling, I am afraid that the Government are even more stupid than I thought.
  Mr. Tony Lloyd rose—
  Mr. McCartney: On a point of order, Mr. Speaker. I apologise to my hon. Friend the Member for Stretford (Mr. Lloyd). It is a matter of equity, Mr. Speaker. Last week I and hon. Members on both sides sat through a debate for three hours and were not called. An apology was made to us.
  Mr. Speaker: Order. What is the point of order? The hon. Gentleman should have this out with his Front Bench, not with the Chair.
  Mr. McCartney: Hon. Members who sit throughout the debate should be given precedence in speaking, yet others who have come in and out seem to be called. I have sat through six hours over the past fortnight—
  Mr. Speaker: Order. Perhaps I can put the hon. Gentleman out of his misery. I do call hon. Members with equity. The hon. Member has been called no fewer than four times so far in this Session, and on one of those occasions he spoke for over 30 minutes. That is bound to be taken into account by the occupants of the Chair.
  9.40 pm
  Mr. Tony Lloyd: Perhaps I can follow my hon. Friend the Member for Pontypridd (Dr. Howells) who asked if the Government really were more stupid than he had thought. The kind of complacency that we heard this afternoon from the Secretary of State for Trade and Industry is sadly typical of what we have come to expect from the Government who are so out of touch with what industry demands as to mean that the future of manufacturing is not in safe hands.
  Perhaps I may quote briefly from Peter Brighton, the director-general of the Engineering Employers Federation, who said a few days ago that Britain was moving
  "hell bent towards a peasant economy … There had better be an improvement before long, or this country will crash into the buffers."
  I hope that the Minister will respond directly to the Engineering Employers Federation.
  I hope that he will also respond to the Financial Times which said in a recent editorial:
  "The UK is probably in the midst of the second worst recession since the Second World War."
  No prizes for guessing which was the worst recession.
  The only thing that I am not clear about is whether this is the second Thatcherite recession or the first Major recession. There is no running away from the fact that the Secretary of State for Trade and Industry, the present Chancellor, and the present Prime Minister in particular, were the authors of the problems that led to the recession and so were the authors of the recession.
  It does not bode well when the Chancellor in his speech on the autumn statement and the Secretary of State earlier on in this debate made a great issue of the Government's desire to tackle inflation as their way of overcoming the nation's difficulty, the implication being that it is either inflation or interest rates. The reality is that we have high interest rates and high inflation. The Government have given us no choice, but rather, the worst of both worlds.
  Mr. Anthony Beaumont-Dark rose—
  Mr. Lloyd: I am sorry, the hon. Gentleman will have to forgive me. I am afraid that I cannot help him on this occasion because I have very little time.
  When the Chancellor tells us that inflation is central to the Government's policy, let me quote from the director general of the CBI who said:
  "The 10·9 per cent. increase in the UBR next year is yet more bad news for those concerned with the fight against inflation. It will add some £1 billion to business costs next year without any improvement in local authority services or performance. This is precisely the kind of inflationary own goal that should be avoided. The Government cannot expect to be taken seriously if it fails to practise what it preaches."
  Very shortly we shall enter 1992 and the whole process that stems from it. The Government are cutting down in all
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  the areas that might assist us in that process. They are cutting the training budget, assistance to regions and assistance to manufacturing. We are facing the opening of the channel tunnel, but the Government have obstinately refused to invest in infrastructure that would allow the manufacturing sector in the north of England, Scotland and Wales to take advantage of the tunnel. Look at what the French and Germans are doing. Any idea that the Government put across, as they try to do, that somehow Britain is in the midst of a little blip like our competitor nations is not true.
  Britain has a unique position in western Europe—a unique recession that can be laid at the door of the Government. We cannot produce any statistics from the past 11 years to suggest that manufacturing has been well treated by the present regime. For example, my own region has lost about 300,000 jobs in manufacturing and those jobs have not come back in services. I am glad to see that the Secretary of State is back in his place; he should listen carefully to my figures. I have told the House how many jobs we have lost in my region, but the same rules can be applied to Scotland and to most of the north. The lost jobs have simply not been compensated for in the services industry. The economy has been run for one region alone—the south-east—at the expense of the rest of the country.
  Conservative Members quoted the recent CBI quarterly survey, which is entirely pessimistic in respect of many of the regions. Not many minutes ago, it was quoted by the hon. Member for Colne Valley (Mr. Riddick), who said that the CBI's survey was good news for Yorkshire. Let me tell the House what the survey said about Yorkshire. It said that, although against the national trend business optimism fell by less in January, on balance, respondents were still heavily pessimistic about the business situation as compared with a year ago.
  Mr. Tony Blair: That is the good news.
  Mr. Lloyd: That, as my hon. Friend says, is the good news.
  Let me refer to the north-west. The hon. Member for Colne Valley referred to Ribble Valley. Let me tell the House about the prospects for manufacturing investment in the Ribble valley. According to the CBI's survey,
  "Investment intentions point to rapid falls in planned capital expenditure on both buildings and plant and machinery."
  That is the so-called good news that the Secretary of State wants to persuade the country is just round the corner. Is it good news given that, between the third quarter of 1989 and the third quarter of 1990, manufacturing investment in Great Britain as a whole fell by 8 per cent., that in the autumn statement the Government predicted a further 7 per cent. fall and that the CBI is now talking about a 16 per cent. fall in manufacturing investment?
  The Secretary of State had the gall—I hope that he will correct me if I am wrong—to claim that Britain's growth in manufacturing investment compared favourably with that in France or Germany. The Secretary of State does not indicate whether I misquote him or not. In no year throughout the 1980s was manufacturing investment, as a percentage of GNP, anything like that in France or Germany—either when the Prime Minister was Chancellor or when he was in any of his other roles. Manufacturing investment in Britain, both in real terms and in percentage terms, fell well below that put in by our competitors.
  Mr. Lilley: What I said was that the share of value added reinvested by manufacturing is the same in this country as it is in Germany and higher than it is in America.
  Mr. Lloyd: Let me simply place on record the fact that the percentage of GNP invested by the Germans this year will be massively higher than the percentage of GNP invested by the British, and that is on a much higher GNP base. That is why, under this Government, we have fallen behind the Germans and the French and why we have continued to fall behind other countries. We have even fallen behind the Italians.
  What are the consequences for regions such as my own—the north-west? We still bear the scars of unemployment from the first recession that the Government caused in the region. We have not recovered. That is especially true of the inner cities. As has been said, the constituency with the highest unemployment rate in Great Britain is in Liverpool. The second highest rate of unemployment is in the Manchester, Central constituency. Our young people and our communities suffer from increased crime rates, from the drugs problem, from unemployment and from poverty. That is what the Government have bequeathed to the regions of Britain.
  We have listened intently to what the Secretary of State had to say. We looked for significant and real commitment to policies that would result in an increase in research and development spending and for any suggestion that the Government do not intend to cut the training budget and that they intend to ensure that the British work force is as highly trained as any in the world. We heard no such commitment and nothing positive to suggest that the Government are serious about offering a future to manufacturing industry. For that reason, whether the Prime Minister runs in June or leaves a general election until later, the public, when faced with the reality of the decline of the British economy, will turn to the Labour party for a policy that will revive our society.
  9.50 pm
  The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): When I saw that the Opposition were to invite the hon. Member for Stretford (Mr. Lloyd) to sum up for them, I was hoping to hear something about the training levy that figured so largely in a previous Labour party document. Like so many Labour party policies, it seems to have disappeared into a black hole and there has been no mention of it.
  I shall be asking later about Labour party policy, but first I shall reply to some of the hon. Gentleman's remarks about the north-west. He did not mention the fact that, during the 1980s, manufacturing GDP in the north-west increased by a staggering 76 per cent. and the north-west is now second only to the south-east in terms of manufacturing GDP and investment.
  We welcome this opportunity to discuss all economic matters in their widest sense. How right that is, because manufacturing industry cannot and should not be seen in isolation. We have set out to make fundamental reforms that benefit all sectors of the economy. As my hon. Friend the Member for Batley and Spen (Mrs. Peacock) said, our reforms have, over the past decade, released new, previously untapped energies in the nation. That is what supply-side economics are all about.
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  For the benefit of Labour Members, I shall list some of the reforms: the tax regime facing companies and their customers; trade union legislation resulting in a sea change in attitudes; competition; the return of swathes of industry to private hands; reducing burdens of red tape; stripping out distorting controls and subsidies. All that has given us eight years in which average growth has exceeded the 3 per cent. previously thought to be attainable only by our competitors. None of our major European competitors has been able to match our manufacturers' record in productivity and profitability.
  Dr. Kim Howells: Will the Minister give way?
  Mr. Leigh: I shall give way in a moment but I have only 10 minutes in which to speak.
  The Opposition have never mentioned that success. That is to be expected, because our policies lie square behind it. Starved of bad news for eight successive years of economic growth, they greet the current downturn with ill-conceived glee and all the self-righteous canting denunciation that only the reformed sinner can muster. They pretend to care about manufacturing industry, but they see it simply as knocking copy for the next Supply day debate.
  By all means, let Labour Members attack us, but let them stop talking down British industry. Let British industry get on with the job.
  Mr. Allen McKay: Will the Minister give way?
  Mr. Leigh: I shall give way in a minute—sit down.
  Mr. Speaker: Order. I think that I say that—the hon. Member for Barnsley, West and Penistone (Mr. McKay) must sit down.
  Mr. Leigh: I acknowledge that the present difficulties are serious and that the policies are painful. It is impossible to be in my job and not recognise that industry is suffering from high interest rates. But, in turn, the Opposition should acknowledge that the downturn has a strong cyclical element. They should acknowledge, too, that the greatest threat to industry is inflation. I think that those were the very words used by my hon. Friend the Member for Bexhill and Battle (Mr. Wardle).
  We have heard nothing tonight from the Opposition. They have not revealed how they aim to cure inflation without curbing demand. Let us recognise, too, that as inflation comes down, recovery will be under way within the framework of the policies that we have created and through which so much has already been achieved.
  If the Opposition will not take my word for it, let them consider an area in the Department of Trade and Industry for which I am responsible—inward investment. This country is the No. 1 choice for inward investors world wide. Some 40 per cent. of total inward investment in the EEC comes through this country. France is next after this country, but it accounted for only 14·4 per cent. Two thirds of all American direct investment comes to this country. That is a British success story and a success story of this Government.
  What are Labour's policies and plans for British industry? Because the Opposition cannot abide the transformation of British industry over a decade, their view of British industry is necessarily like that of an old-fashioned camera—narrow, unfocused and thumb-onlens. To the extent that their vision is focused, it is focused

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  on short-term difficulties rather than on long-term achievements. To the extent that their policies are evident, they involve the facile call for interest rate cuts that greet every turn of the economic cycle.
  If we had listened to the right hon. and learned Member for Monklands., East (Mr. Smith) every time he called for interest rate cuts, inflation would now be roaring out of control. As always, the Opposition's immediate policies comprise the quick fix and the opportunist which are ideal for newspaper headlines today, but good for nothing except fish and chip wrapping paper tomorrow.
  The hon. Member for Dunfermline, East (Mr. Brown) sees short termism everywhere except where it is most apparent—under his own nose. His answer for short termism in industry is short termism by Government—interest rate cuts and cash handouts.
  I want to ask the hon. Member for Dunfermline, East four questions and I will give way to him if he wants to intervene. I have asked these questions in the four Trade and Industry debates over the past month, but he has refused to intervene. He ducked the questions. With total investment in the British economy now running at £100 billion a year, would a Labour Government be prepared to waste money coaxing investment over and above what the market provides and deems necessary? Do the Opposition deny that they will have to commit upwards of £10 billion a year? I will give way to the hon. Member for Dunfermline, East if he can explain his policies for the future of British industry. I have asked that vital question on many occasions, but he refuses to answer it.
  Dr. Kim Howells: Will the Minister give way?
  Mr. Leigh: I will not give way to the monkey, but I will give way to the organ grinder.
  Secondly, what funding will be available to the national investment bank, to British technology enterprise and to the regional development agencies? I will give way to the hon. Member for Dunfermline, East if he will answer those simple questions.
  My third question relates to the old National Enterprise Board to which we decided to give a mercy killing last week after a long period of hibernation. It was not referred to by the hon. Member for Dunfermline, East. It could borrow up to £750 million. Did it fail because it could borrow too much or too little? Should we do more or less? How much will British technology enterprise be able to borrow? I will give way to the hon. Member for Dunfermline, East if he will answer that simple question.
  Finally, how does all that square with Beckett's law? The hon. Member for Derby, South (Mrs. Beckett) has said:
  "What we are promising is an increase for pensioners and … child benefit. Everything else that is regarded as a desirable aim is also listed, quite clearly and specifically, as something that we hope to do as resources allow."—[Official Report, 13 February 1990; Vol. 167, c. 179.]
  There are my four questions and there have been four silences. We have heard no answers because if the Opposition were to answer, they would quite simply give the game away. We know that the presentation is different and the slogans have been put away. In their place are vague aspirations and empty promises. However, the reality is the same. It is the same mish-mash of state corporatism.
  The Labour party has nothing to offer but more controls, more subsidies and more quangos. As the
  244
  Minister responsible for consumer affairs, I would take a dim view of a shopkeeper who would not price what he displays and would not display what he really wanted to sell.
  The Government will stand firm. We will not resort to quick fixes or to the opportunism of Opposition Members. We and the British people know that Labour's policies are misconceived, misguided, mistitled and missing. Let them falter; we will not fail.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 221, Noes 334.

  Division No. 70]

  [10 pm

  AYES

  Abbott, Ms Diane

  Dixon, Don

  Adams, Mrs. Irene (Paisley, N.)

  Dobson, Frank

  Allen, Graham

  Doran, Frank

  Anderson, Donald

  Duffy, A. E. P.

  Archer, Rt Hon Peter

  Dunnachie, Jimmy

  Armstrong, Hilary

  Dunwoody, Hon Mrs Gwyneth

  Ashdown, Rt Hon Paddy

  Eadie, Alexander

  Ashley, Rt Hon Jack

  Eastham, Ken

  Ashton, Joe

  Evans, John (St Helens N)

  Banks, Tony (Newham NW)

  Ewing, Harry (Falkirk E)

  Barnes, Harry (Derbyshire NE)

  Ewing, Mrs Margaret (Moray)

  Barron, Kevin

  Fatchett, Derek

  Battle, John

  Faulds, Andrew

  Beckett, Margaret

  Fearn, Ronald

  Beith, A. J.

  Field, Frank (Birkenhead)

  Bell, Stuart

  Fisher, Mark

  Bellotti, David

  Flynn, Paul

  Benn, Rt Hon Tony

  Foot, Rt Hon Michael

  Bennett, A. F. (D'nt'n & R'dish)

  Foster, Derek

  Benton, Joseph

  Foulkes, George

  Bermingham, Gerald

  Fraser, John

  Bidwell, Sydney

  Fyfe, Maria

  Blair, Tony

  Galbraith, Sam

  Blunkett, David

  Garrett, John (Norwich South)

  Boateng, Paul

  Garrett, Ted (Wallsend)

  Boyes, Roland

  George, Bruce

  Bradley, Keith

  Gilbert, Rt Hon Dr John

  Bray, Dr Jeremy

  Golding, Mrs Llin

  Brown, Gordon (D'mline E)

  Gordon, Mildred

  Brown, Nicholas (Newcastle E)

  Graham, Thomas

  Brown, Ron (Edinburgh Leith)

  Grant, Bernie (Tottenham)

  Bruce, Malcolm (Gordon)

  Griffiths, Nigel (Edinburgh S)

  Buckley, George J.

  Griffiths, Win (Bridgend)

  Caborn, Richard

  Grocott, Bruce

  Callaghan, Jim

  Hardy, Peter

  Campbell, Menzies (Fife NE)

  Harman, Ms Harriet

  Campbell, Ron (Blyth Valley)

  Hattersley, Rt Hon Roy

  Campbell-Savours, D. N.

  Haynes, Frank

  Canavan, Dennis

  Heal, Mrs Sylvia

  Carlile, Alex (Mont'g)

  Healey, Rt Hon Denis

  Cartwright, John

  Hinchliffe, David

  Clark, Dr David (S Shields)

  Hoey, Ms Kate (Vauxhall)

  Clarke, Tom (Monklands W)

  Hogg, N. (C'nauld & Kilsyth)

  Clay, Bob

  Home Robertson, John

  Clelland, David

  Hood, Jimmy

  Clwyd, Mrs Ann

  Howarth, George (Knowsley N)

  Cohen, Harry

  Howell, Rt Hon D. (S'heath)

  Cook, Robin (Livingston)

  Howells, Geraint

  Corbett, Robin

  Howells, Dr. Kim (Pontypridd)

  Corbyn, Jeremy

  Hoyle, Doug

  Cousins, Jim

  Hughes, John (Coventry NE)

  Cox, Tom

  Hughes, Robert (Aberdeen N)

  Crowther, Stan

  Hughes, Roy (Newport E)

  Cryer, Bob

  Hughes, Simon (Southwark)

  Cummings, John

  Illsley, Eric

  Cunliffe, Lawrence

  Ingram, Adam

  Dalyell, Tarn

  Janner, Greville

  Darling, Alistair

  Johnston, Sir Russell

  Davies, Rt Hon Denzil (Llanelli)

  Jones, Barry (Alyn & Deeside)

  Davies, Ron (Caerphilly)

  Jones, Martyn (Clwyd S W)

  Davis, Terry (B'ham Hodge H'l)

  Kennedy, Charles

  Dewar, Donald

  Kinnock, Rt Hon Neil

  245

  Kirkwood, Archy

  Quin, Ms Joyce

  Lambie, David

  Radice, Giles

  Lamond, James

  Randall, Stuart

  Leadbitter, Ted

  Rees, Rt Hon Merlyn

  Leighton, Ron

  Reid, Dr John

  Lestor, Joan (Eccles)

  Richardson, Jo

  Lewis, Terry

  Robertson, George

  Litherland, Robert

  Rogers, Allan

  Livingstone, Ken

  Rooker, Jeff

  Livsey, Richard

  Rooney, Terence

  Lloyd, Tony (Stretford)

  Ross, Ernie (Dundee W)

  Lofthouse, Geoffrey

  Rowlands, Ted

  Loyden, Eddie

  Ruddock, Joan

  McAllion, John

  Salmond, Alex

  McCartney, Ian

  Sedgemore, Brian

  Macdonald, Calum A.

  Sheerman, Barry

  McFall, John

  Sheldon, Rt Hon Robert

  McKelvey, William

  Shore, Rt Hon Peter

  McLeish, Henry

  Short, Clare

  McMaster, Gordon

  Skinner, Dennis

  McNamara, Kevin

  Smith, Andrew (Oxford E)

  McWilliam, John

  Smith, C. (Isl'ton & F'bury)

  Madden, Max

  Smith, Rt Hon J. (Monk'ds E)

  Mahon, Mrs Alice

  Smith, J. P. (Vale of Glam)

  Marek, Dr John

  Snape, Peter

  Marshall, David (Shettleston)

  Soley, Clive

  Marshall, Jim (Leicester S)

  Spearing, Nigel

  Martin, Michael J. (Springburn)

  Steel, Rt Hon Sir David

  Martlew, Eric

  Steinberg, Gerry

  Meacher, Michael

  Strang, Gavin

  Meale, Alan

  Taylor, Mrs Ann (Dewsbury)

  Michael, Alun

  Taylor, Matthew (Truro)

  Michie, Bill (Sheffield Heeley)

  Thompson, Jack (Wansbeck)

  Michie, Mrs Ray (Arg'l & Bute)

  Turner, Dennis

  Mitchell, Austin (G't Grimsby)

  Vaz, Keith

  Moonie, Dr Lewis

  Walley, Joan

  Morgan, Rhodri

  Wareing, Robert N.

  Morris, Rt Hon J. (Aberavon)

  Watson, Mike (Glasgow, C)

  Mullin, Chris

  Welsh, Andrew (Angus E)

  Murphy, Paul

  Williams, Rt Hon Alan

  Nellist, Dave

  Williams, Alan W. (Carm'then)

  Oakes, Rt Hon Gordon

  Wilson, Brian

  O'Brien, William

  Winnick, David

  O'Hara, Edward

  Wise, Mrs Audrey

  O'Neill, Martin

  Worthington, Tony

  Owen, Rt Hon Dr David

  Wray, Jimmy

  Parry, Robert

  Patchett, Terry

  Tellers for the Ayes:

  Pendry, Tom

  Mr. Allen McKay and Mr. Thomas McAvoy.

  Powell, Ray (Ogmore)

  Primarolo, Dawn

  NOES

  Adley, Robert

  Blackburn, Dr John G.

  Aitken, Jonathan

  Blaker, Rt Hon Sir Peter

  Alexander, Richard

  Body, Sir Richard

  Alison, Rt Hon Michael

  Bonsor, Sir Nicholas

  Allason, Rupert

  Boscawen, Hon Robert

  Amery, Rt Hon Julian

  Boswell, Tim

  Amess, David

  Bottomley, Peter

  Amos, Alan

  Bottomley, Mrs Virginia

  Arbuthnot, James

  Bowden, A (Brighton K'pto'n)

  Arnold, Jacques (Gravesham)

  Bowden, Gerald (Dulwich)

  Arnold, Sir Thomas

  Bowis, John

  Ashby, David

  Boyson, Rt Hon Dr Sir Rhodes

  Aspinwall, Jack

  Braine, Rt Hon Sir Bernard

  Atkins, Robert

  Brandon-Bravo, Martin

  Atkinson, David

  Brazier, Julian

  Baker, Rt Hon K. (Mole Valley)

  Bright, Graham

  Baker, Nicholas (Dorset N)

  Brooke, Rt Hon Peter

  Baldry, Tony

  Brown, Michael (Brigg & Cl't's)

  Banks, Robert (Harrogate)

  Browne, John (Winchester)

  Batiste, Spencer

  Bruce, Ian (Dorset South)

  Beaumont-Dark, Anthony

  Buck, Sir Antony

  Bellingham, Henry

  Budgen, Nicholas

  Bendall, Vivian

  Burns, Simon

  Bennett, Nicholas (Pembroke)

  Butler, Chris

  Benyon, W.

  Butterfill, John

  Bevan, David Gilroy

  Carlisle, John, (Luton N)

  Biffen, Rt Hon John

  Carlisle, Kenneth (Lincoln)

  246

  Carrington, Matthew

  Hawkins, Christopher

  Cash, William

  Hayes, Jerry

  Channon, Rt Hon Paul

  Hayhoe, Rt Hon Sir Barney

  Chapman, Sydney

  Hayward, Robert

  Chope, Christopher

  Heath, Rt Hon Edward

  Churchill, Mr

  Heathcoat-Amory, David

  Clark, Rt Hon Alan (Plymouth)

  Heseltine, Rt Hon Michael

  Clark, Dr Michael (Rochford)

  Hicks, Robert (Cornwall SE)

  Clark, Rt Hon Sir William

  Hill, James

  Clarke, Rt Hon K. (Rushcliffe)

  Hind, Kenneth

  Colvin, Michael

  Hogg, Hon Douglas (Gr'th'm)

  Conway, Derek

  Holt, Richard

  Coombs, Anthony (Wyre F'rest)

  Howarth, Alan (Strat'd-on-A)

  Coombs, Simon (Swindon)

  Howarth, G. (Cannock & B'wd)

  Cope, Rt Hon John

  Howe, Rt Hon Sir Geoffrey

  Cormack, Patrick

  Howell, Rt Hon David (G'dford)

  Couchman, James

  Howell, Ralph (North Norfolk)

  Cran, James

  Hughes, Robert G. (Harrow W)

  Critchley, Julian

  Hunt, David (Wirral W)

  Currie, Mrs Edwina

  Hunt, Sir John (Ravensbourne)

  Curry, David

  Hunter, Andrew

  Davies, Q. (Stamf'd & Spald'g)

  Irvine, Michael

  Davis, David (Boothferry)

  Irving, Sir Charles

  Day, Stephen

  Jack, Michael

  Devlin, Tim

  Janman, Tim

  Dickens, Geoffrey

  Jessel, Toby

  Dicks, Terry

  Johnson Smith, Sir Geoffrey

  Dorrell, Stephen

  Jones, Gwilym (Cardiff N)

  Douglas-Hamilton, Lord James

  Jopling, Rt Hon Michael

  Dover, Den

  Kellett-Bowman, Dame Elaine

  Dunn, Bob

  Key, Robert

  Durant, Sir Anthony

  Kilfedder, James

  Dykes, Hugh

  King, Roger (B'ham N'thfield)

  Emery, Sir Peter

  King, Rt Hon Tom (Bridgwater)

  Evans, David (Welwyn Hatf'd)

  Kirkhope, Timothy

  Evennett, David

  Knapman, Roger

  Fairbairn, Sir Nicholas

  Knight, Greg (Derby North)

  Fallon, Michael

  Knight, Dame Jill (Edgbaston)

  Favell, Tony

  Knowles, Michael

  Fenner, Dame Peggy

  Knox, David

  Field, Barry (Isle of Wight)

  Lamont, Rt Hon Norman

  Finsberg, Sir Geoffrey

  Lang, Rt Hon Ian

  Fishburn, John Dudley

  Latham, Michael

  Fookes, Dame Janet

  Lawrence, Ivan

  Forman, Nigel

  Lee, John (Pendle)

  Forsyth, Michael (Stirling)

  Leigh, Edward (Gainsbor'gh)

  Forth, Eric

  Lennox-Boyd, Hon Mark

  Fowler, Rt Hon Sir Norman

  Lester, Jim (Broxtowe)

  Fox, Sir Marcus

  Lilley, Peter

  Franks, Cecil

  Lloyd, Sir Ian (Havant)

  Freeman, Roger

  Lloyd, Peter (Fareham)

  French, Douglas

  Lord, Michael

  Fry, Peter

  Luce, Rt Hon Sir Richard

  Gale, Roger

  Lyell, Rt Hon Sir Nicholas

  Gardiner, Sir George

  Macfarlane, Sir Neil

  Garel-Jones, Tristan

  MacKay, Andrew (E Berkshire)

  Gill, Christopher

  McLoughlin, Patrick

  Gilmour, Rt Hon Sir Ian

  McNair-Wilson, Sir Michael

  Glyn, Dr Sir Alan

  McNair-Wilson, Sir Patrick

  Goodhart, Sir Philip

  Madel, David

  Goodlad, Alastair

  Major, Rt Hon John

  Gorman, Mrs Teresa

  Malins, Humfrey

  Gorst, John

  Mans, Keith

  Grant, Sir Anthony (CambsSW)

  Maples, John

  Greenway, Harry (Ealing N)

  Marland, Paul

  Greenway, John (Ryedale)

  Marlow, Tony

  Gregory, Conal

  Marshall, John (Hendon S)

  Griffiths, Peter (Portsmouth N)

  Marshall, Sir Michael (Arundel)

  Grist, Ian

  Martin, David (Portsmouth S)

  Ground, Patrick

  Mates, Michael

  Grylls, Michael

  Maude, Hon Francis

  Hague, William

  Mawhinney, Dr Brian

  Hamilton, Hon Archie (Epsom)

  Maxwell-Hyslop, Robin

  Hamilton, Neil (Tatton)

  Mayhew, Rt Hon Sir Patrick

  Hampson, Dr Keith

  Mellor, Rt Hon David

  Hannam, John

  Meyer, Sir Anthony

  Hargreaves, A. (B'ham H'll Gr')

  Miscampbell, Norman

  Hargreaves, Ken (Hyndburn)

  Mitchell, Andrew (Gedling)

  Harris, David

  Mitchell, Sir David

  Haselhurst, Alan

  Montgomery, Sir Fergus

  247

  Moore, Rt Hon John

  Shaw, Sir Michael (Scarb')

  Morris, M (N'hampton S)

  Shelton, Sir William

  Morrison, Sir Charles

  Shephard, Mrs G. (Norfolk SW)

  Morrison, Rt Hon Sir Peter

  Shepherd, Colin (Hereford)

  Moss, Malcolm

  Shepherd, Richard (Aldridge)

  Moynihan, Hon Colin

  Shersby, Michael

  Mudd, David

  Sims, Roger

  Neale, Sir Gerrard

  Skeet, Sir Trevor

  Needham, Richard

  Smith, Sir Dudley (Warwick)

  Nelson, Anthony

  Smith, Tim (Beaconsfield)

  Neubert, Sir Michael

  Soames, Hon Nicholas

  Nicholls, Patrick

  Speed, Keith

  Nicholson, David (Taunton)

  Speller, Tony

  Nicholson, Emma (Devon West)

  Spicer, Sir Jim (Dorset W)

  Norris, Steve

  Squire, Robin

  Onslow, Rt Hon Cranley

  Stanbrook, Ivor

  Oppenheim, Phillip

  Stanley, Rt Hon Sir John

  Page, Richard

  Steen, Anthony

  Paice, James

  Stern, Michael

  Parkinson, Rt Hon Cecil

  Stevens, Lewis

  Patnick, Irvine

  Stewart, Allan (Eastwood)

  Patten, Rt Hon Chris (Bath)

  Stewart, Andy (Sherwood)

  Patten, Rt Hon John

  Stewart, Rt Hon Ian (Herts N)

  Pattie, Rt Hon Sir Geoffrey

  Stokes, Sir John

  Pawsey, James

  Sumberg, David

  Peacock, Mrs Elizabeth

  Summerson, Hugo

  Porter, Barry (Wirral S)

  Tapsell, Sir Peter

  Porter, David (Waveney)

  Taylor, Ian (Esher)

  Portillo, Michael

  Taylor, Teddy (S'end E)

  Powell, William (Corby)

  Tebbit, Rt Hon Norman

  Price, Sir David

  Temple-Morris, Peter

  Raison, Rt Hon Sir Timothy

  Thompson, D. (Calder Valley)

  Rathbone, Tim

  Thompson, Patrick (Norwich N)

  Redwood, John

  Thorne, Neil

  Renton, Rt Hon Tim

  Thornton, Malcolm

  Rhodes James, Robert

  Thurnham, Peter

  Riddick, Graham

  Townend, John (Bridlington)

  Ridley, Rt Hon Nicholas

  Townsend, Cyril D. (B'heath)

  Ridsdale, Sir Julian

  Tracey, Richard

  Rifkind, Rt Hon Malcolm

  Tredinnick, David

  Roberts, Sir Wyn (Conwy)

  Trotter, Neville

  Roe, Mrs Marion

  Twinn, Dr Ian

  Rossi, Sir Hugh

  Vaughan, Sir Gerard

  Rost, Peter

  Viggers, Peter

  Rowe, Andrew

  Wakeham, Rt Hon John

  Rumbold, Rt Hon Mrs Angela

  Waldegrave, Rt Hon William

  Ryder, Rt Hon Richard

  Walden, George

  Sainsbury, Hon Tim

  Walker, Bill (T'side North)

  Sayeed, Jonathan

  Waller, Gary

  Scott, Rt Hon Nicholas

  Walters, Sir Dennis

  Shaw, David (Dover)

  Ward, John

  Shaw, Sir Giles (Pudsey)

  Wardle, Charles (Bexhill)

  248

  Warren, Kenneth

  Winterton, Nicholas

  Watts, John

  Wolfson, Mark

  Wells, Bowen

  Wood, Timothy

  Wheeler, Sir John

  Yeo, Tim

  Whitney, Ray

  Young, Sir George (Acton)

  Widdecombe, Ann

  Younger, Rt Hon George

  Wiggin, Jerry

  Wilkinson, John

  Tellers for the Noes:

  Wilshire, David

  Mr. John M. Taylor and Mr. Tom Sackville.

  Winterton, Mrs Ann

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House congratulates Her Majesty's Government on the policies which have transformed the performance of manufacturing industry across the country over the past decade, which remain flexible and responsive to the needs of manufacturing, which have made manufacturing better able to withstand the present downturn, and which have enhanced its prospects for the 1990s; calls on Her Majesty's Government to remain steadfast in the pursuit of these policies and in its determination to defeat inflation which imposes a serious and damaging burden on manufacturing industry; and believes that any return to the discredited policies of subsidy, intervention, state control, public ownership and bolstering of union power would undermine manufacturing industry's achievements of the past decade.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Census (Confidentiality) Bill [Lords.] may be proceeded with, though opposed, until any hour.—[Mr. Painick.]

  CENSUS (CONFIDENTIALITY) BILL (LORDS
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 90(6) (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

  Mr. Derek Brown
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick]
  10.15 pm
  Mr. John Carlisle: I am grateful to you, Mr. Speaker, for giving me the opportunity to raise this matter on the Floor of the House. I wish to raise the case of Mr. Derek Brown, a constituent of mine, and the problems that he has had since a heart bypass operation in March 1988. This debate has become necessary because certain facts need to be given a public airing. Hopefully, my hon. Friend the Minister will listen with interest to a case of which I know that he has some prior knowledge. Hopefully some good may come out of this sorry saga, which I must necessarily relate to the House this evening.
  The unnecessary delays after my constituent's operation, the alleged negligence on the part of some of the staff, the misinterpretation of certain facts which were before the staff after Mr. Brown's operation and the delayed diagnosis now mean that my constituent finds himself unemployed. He had a very reasonable job. His character has become irrational and he suffers from loss of memory. He is unable to walk any distance. He needs a wheelchair so that his wife can take him to the shops. He is unable to pursue his favourite pastime, the leisure of walking. He is in constant pain daily and hourly and has to take a large number of drugs. He cannot take a bath without extreme discomfort.
  Sadly, because he has been prudent enough to save money and put it aside for his family and has his own home, he cannot qualify for legal aid, or, indeed, any form of social benefit. He cannot afford the alternative treatments that could be available to him, such as acupuncture, because his resources are limited.
  Throughout the sorry saga, Mr. Brown has been sustained and supported by his loving wife and his daughter Susan during a time which has been extremely difficult for the family. I hope that my hon. Friend the Minister realises the importance and gravity of the case, which leads me to bring it to the attention of the House tonight.
  It may be of some use if I relate as briefly as possible the sorry saga of the operation and what occurred afterwards. The words of Mrs. Brown in a letter which she wrote to Mr. Plant, the chief executive of Brompton hospital, will give the House some idea of the type of malady that my constituent has suffered. She said in November 1988 of her husband Derek:
  "After attending as an out-patient for approximately eighteen months he was advised by Dr. Honey that a bypass operation would give him a better quality of life. After a four month wait he was admitted in mid February 1988 and the operation was performed by Mr. Lennox on Wednesday 17 February 1988.
  When I first saw my husband straight after the operation in Intensive Care, his condition gave me cause for concern. Although unable to talk he indicated for a pencil and paper and wrote that he had a very bad pain from the waist down. The nurse said it was just cramp and rubbing his legs would ease it. I rubbed his legs for at least an hour but he was still in pain so they informed a nearby doctor who agreed it was just cramp.
  He was then transferred to the High Dependancy Unit and by Thursday morning the pain had increased further. I was becoming concerned and expressed this to the doctor who still insisted that the pain was due to cramp; however I felt it had
  250
  to be more than cramp as he was not a person to complain. He was then put on Omnipon but the pain still persisted. By the time Mr. Lennox"—
  the consultant surgeon—
  "came to examine Derek, the pain was intense, also there was loss of feeling in both legs. I insisted on talking to Mr. Lennox as he left the ward who said that everything possible was being done; it was a case of resting and waiting. On Friday he was taken down for a CT scan and I was eventually informed by the registrar that the scan revealed that the aorta was torn, he said it had torn when they clamped during his by-pass operation. They later informed me that a consultant from St. Stephen's hospital was coming to see Derek that day. I waited until 10.40 pm but he had still not arrived and no one had the courtesy to explain his absence. Months later I discovered that his visit had been cancelled when the scan results were known.
  On Saturday I was told that Derek might be transferred to Charing Cross hospital at some point. I then asked why this could not be done immediately and was told that it was a case of waiting; for what I do not know.
  At 3 am on Sunday, 21 February, a telephone call to my room informed me that Derek was being transferred to Charing Cross straight away. When I arrived at the ward minutes later I was met with the horrifying sight of my husband in absolute agony, held down by the ward sister and two nurses. The bottom half of his body was a terrible colour, completely starved of blood and there was no doctor in attendance. Derek begged me to get someone to relieve his pain but according to the sister the maximum dosage of omnipon had been administered. After a nightmare journey by ambulance the staff of Charing Cross hospital were waiting to receive him. A CT scan and x-rays revealed blood clots everywhere. Operations were then performed to remove these and I was informed that the situation was very serious and in fact my husband may have to have both legs amputated in order to save his life. Thanks to the skill and dedication of the team led by Professor Greenhaugh this measure was not necessary.
  However, two days later Professor Greenhaugh said that he was pleased with the right leg but that the left leg was causing concern and would require a further operation. This would have to be done without a general anaesthetic and Derek's agreement. At this point I was told that, should the operation prove unsuccessful, the left leg would have to be amputated. Once again the skill of the surgeon, Mr. Lane, saved the leg.
  Many other things caused great concern during the time he was in the High Dependency Unit, including renal kidney failure, liver problems, a very low blood platelet count which necessitated two sessions on a dialysis machine. On one occasion Derek went completely out of his mind, he ripped all his drips out and tore off all his dressings which were over open wounds. He sat on a chair all day with blood running down his legs, refusing to have anyone come near him. The doctors tried to assure me that this was temporary and that this was the result of the physical and mental stress which Derek had suffered. However later that day the doctor became worried and Derek was taken for a brian scan which fortunately was clear. During the night, he thankfully reverted to his normal self. One by one most of these problems were overcome. Derck was finally transferred to a general ward where he made further progress although still in pain."
  After that he returned to Luton and Dunstable hospital, was treated in the pain unit and since has had treatment at Stoke Mandeville hospital. As I said earlier, he still suffers minute by minute from a pain that I believe was partly caused by the unnecessary delays that occurred after his operation.
  After the operation Mrs. Brown was naturally very anxious and had an interview with Mr. Lennox, the consultant surgeon, which lasted two and a half hours. Mr. Lennox said that he did not know what had happened to his patient at Charing Cross hospital a matter of hours after he had seen him at Brompton hospital. Mrs. Brown said that it was a most unhappy interview. Following that my constituent, Mrs. Brown, had several months of

  251
  correspondence with certain people, including Mrs. Hardy of Brompton hospital, Mr. Geffen, the consultant in public health medicine in North West Thames authority, Mr. Plant, the chief executive, and others. At all times all that she received was sympathy and some sort of understanding, but never an explanation of exactly what had happened to her husband.
  She called on me as her Member of Parliament and together we went to see a Dr. Braithwaite at Brompton hospital who was extremely helpful and explained to us exactly what had happened after the operation. Mrs. Brown also applied to the health commissioner for some assistance, but was told that Mr. Brown's case did not fit the aegis and responsibility of the commissioner. At the same time she went to Action for Victims of Medical Assistance, and although it offered some help, it was seemingly unable to offer anything more than sympathy.
  That result meant that I and certainly my constituent, Mrs. Brown, and her daughter felt that the matter should be aired and that a further review should take place. So we started to press for a clinical review. I regret to say that our efforts were thwarted at certain times by certain officials, who tried to make out that, were a review to take place, my constituents would not be able to take the matter to litigation should they choose to do so. I sought the help of my hon. Friend the Member for Kettering (Mr. Freeman), the present Minister's predecessor, and he was extremely helpful. Indeed, the present Minister too has been very helpful. It was confirmed that if my constituents wished to have a clinical review they could have one, and that it would not affect litigation—a course that was still in their minds.
  The clinical review took place on 17 December. I was present, together with Mrs. Brown and her daughter Susan. A promise was made at that time that the result would be made known to me and to my constituents by the end of the month. On 21 January I was informed that the results would take a few more weeks. Time was beginning to run out for the Browns. If they were to mount any form of litigation, they would have to decide before 1 March whether to issue a writ against the hospital. I suspect that there may have been in the minds of those in authority, either at North West Thames or at the Brompton, that the time for litigation was beginning to run out. In those circumstances, they might have avoided that action.
  The results of the review were given in confidence to myself and my constituents, but as this is a matter about which the House should hear, I make no apology for revealing some of that information now. Basically, the review concluded that the clinical management during the operation was satisfactory. With that, my constituents and I do not argue. However, the review criticised the long delay between the Wednesday on which the fateful operation was performed and the Sunday morning when Mr. Brown was finally taken to Charing Cross hospital. The review report says that the process took very much longer than was necessary. I believe that it took very much longer than was necessary to diagnose the condition from which my constituent was obviously suffering. Blood could not reach his legs, and the poor man was in the most terrible pain. It is a fact that the nurses and other members of staff fobbed Mrs. Brown off with the story that the problem was cramp. But the hospital should have known that that condition is very rare after an operation such as this one. I believe that, with hindsight, the diagnosis was understood to be wrong.
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  Throughout this time, Mr. Lennox, the consultant, was a somewhat shadowy figure. Indeed, the review report, quite rightly, levels some criticism at him for the way he acted in this case. For example, he did not himself perform the operation; it was performed by Mr. Livesey, the registrar. Only when the review had been concluded—after three years—did my constituents find out that Mr. Lennox had not taken part in the operation, although he had virtually given them the impression that he had operated. The report says that he did not remember whether he had seen the patient at any stage prior to the operation. Obviously his memory is not one of his greatest assets. The report criticises him for having said that his routine was always to be in the operating suite but that he could not remember for certain whether he was there at the time of Mr. Brown's operation. So this high-ranking consultant surgeon could not remember whether he was in attendance.
  After the operation he said that he did not see the patient until the second day, by which time, of course, Mr. Brown was in the most terrible agony. So far as Mrs. Brown was concerned, Mr. Lennox was in charge of the operation, but her attempts to talk to him were in vain. Only on the occasion of one of her visits, when a sister ran after Mr. Lennox and asked—virtually begged—him to come back and talk to Mrs. Brown, did she finally get round to speak to the man who obviously was responsible for the operation on her husband.
  The report and the events that have been described to me by my constituents give me some suspicion that Mr. Lennox displayed enormous arrogance, was totally uncommunicative to Mr. and Mrs. Brown and, sadly, showed an uncaring attitude to the case.
  Two lines of redress are open to my constituents. First, there is litigation. On my advice, my constituents have issued a writ against the Brompton hospital in order to keep within time. However, I know that that is not within my hon. Friend's responsibility and you, Mr. Speaker, would be right to pull me up on that. The other line that is open to my constituents is some form of compensation by the special health authority, and that, I think, is the line that they will take.
  It is for my constituents to decide whether to go down the legal road or to seek compensation. It is not a matter for any hon. Member and certainly not for my hon. Friend the Minister, but I want justice for my constituent whose life has been ruined, largely because of the delay which occurred after the operation. I want some form of relief for my constituent who will suffer pain for virtually the rest of his life. He is now without means of support and completely reliant on his wife and her job and, to a lesser extent, on his daughter. His wife and daughter have been incredibly supportive during a very difficult time.
  Will my hon. Friend make a fuller investigation of the facts of the case that I have presented to him, in addition to the clinical review that took place? Obviously, the review has not been satisfactory in terms of understanding the full extent of the problem that occurred at that time.
  The special health authority must accept its responsibility for what went wrong. I was rather saddened that at one meeting that I had with the chief executive of the special health authority, Mr. Plant said that if compensation was given to the Browns
  "any money granted would necessarily reduce amounts available for other patients."

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  That is probably one of the most disgraceful comments that has ever been made within the NHS. It was virtual blackmail, telling my constituents that money was available but should they get it others would suffer.
  I bring to the attention of the House the case of one of my constituents who is in desperate need of assistance and who has genuinely suffered through malady, mistakes, negligence and delay that occurred after the operation. No criticism is levelled at the man who performed the operation or at the Charing Cross hospital which, on finding Mr. Brown in that particular state, was marvellous. But criticism must be levelled at the Brompton hospital, at the surgeon and at those around who did not recognise the condition and, as a result, have left my constituent in a terrible state with the terrible problems that he suffers today.
  10.33 pm
  The Parliamentary Under-Secretary of State for Health (Mr. Stephen Dorrell): My hon. Friend the Member for Luton, North (Mr. Carlisle) is an old friend and an old parliamentary hand, and he has used the procedures of the House to draw attention to one of his constituents whom he feels has not received proper treatment from the NHS. It is a classic example of the way in which Adjournment debates are intended to be used, allowing hon. Members to draw attention to inadequate performances within the public sector and to seek redress on behalf of their constituents. I congratulate my hon. Friend on that even if, in the process, he made me feel somewhat uncomfortable as the Minister responsible for the NHS.
  I begin by reciting what I hope can be regarded as common ground in the case. It is clearly common ground that the outcome of the operation performed on Mr. Brown was, to put it mildly, disappointing. The outcome was a cataclysmic decline in the expectation of the quality of life that Mr. Brown and his family had, as a result of the fact that he has lost his job, that he suffers mental stress because of the failure of the operation and that he can no longer enjoy a healthy life. In particular, he can no longer enjoy walking which he used to do. As somebody who also enjoys walking in open country, I particularly feel for that. I asked myself, as my hon. Friend was speaking, how I would have felt, faced with the fact that I would no longer be able to enjoy that pleasure as a result of a failed operation within the national health service. So it is common ground that there was a cataclysmic failure of an operation on my hon. Friend's constituent.
  I hope that my hon. Friend will accept that the regret that he feels, and obviously that Mr. Brown's family feels, at the outcome of the operation is shared by all who were involved in it. Although my hon. Friend criticised Mr. Lennox and Mr. Plant, they share that regret. The staff at the Brompton will feel particular regret and sadness that they, as people who spend their lives dedicated to a caring profession, failed in the case of Mr. Brown to fulfil the promise which the national health service offers of a return to health wherever that is possible. That much, therefore, can be regarded as uncontroversial.
  My hon. Friend, although entirely proper in his use of the Adjournment procedure, puts me in a difficulty on two counts. The details of the treatment of any patient within the national health service are confidential. The reports to
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  which my hon. Friend referred are headed "Confidential". It is, therefore, not open to a Minister to reply in detail, quoting from parts of a report that might present a more balanced picture to the House. So I am constrained on the one hand by confidentiality and on the other by the fact that my hon. Friend was open with the House about the allegation of negligence which stands in the background against some of the employees of the national health service and, therefore, against the national health service itself.
  I am neither a lawyer nor a medic, and I am therefore anxious in what I have to say to demonstrate that there is, as I have already said, regret on the part of all in the national health service at the outcome of the case. Clearly, I do not wish to compromise the commitment of the health service to confidentiality in dealing with its patients, or to compromise the position of the national health service if it is to find itself in the near future the defendant in a case of negligence.
  Having said all that, I think that it is of interest to the House to hear what procedures exist for addressing cases where patients are properly dissatisfied with the outcome of treatment within the national health service. As my hon. Friend has hinted, there are, broadly speaking, two ways in which a patient can pursue a case if he is not satisfied with the results of the treatment that he has received.
  First, if he believes that the national health service or doctors or clinical staff working within it have been negligent, the patient has a right, as any sufferer from the tort of negligence has, to sue the health service and to demonstrate in a court of law that its employees were negligent and that, therefore, the health service stands with a debt of damages to the damaged patient. That is not a matter for me and not something which is properly debatable in the House.
  Secondly, and standing separately from the possibility of redress through litigation, the patient can seek administrative review of the way in which the case was treated by the national health service through the clinical complaints procedure. The clinical complaints procedure goes through several stages. The third stage, the last stage of which has already been gone through in Mr. Brown's case, provides for an independent professional review. In that case, the regional medical officer will want to be satisfied that the complaint is of a substantial nature, but is unlikely to be the subject of more formal investigation by the authority or of legal action before it initiates the process. Two independent consultants, working in the appropriate field and at least in a comparable setting but in a different region, review the case. The review is in the nature of a second opinion, and that will have been explained to the complainant.
  The reviewers will submit a confidential report of their findings to the regional medical officer, who will decide how much of the clinical content of their report is reflected in the final letter to the complainant, which is sent to the officer who commissions the review. That is the end of the clinical complaints procedure. Mr. Brown's case has gone through that independent professional review.
  As I made clear in my letter to my hon. Friend last June, the object of the clinical complaints procedure is to resolve the complainant's anxieties about the treatment that a patient has received, or to make any necessary recommendations to the health authority, or to individual staff concerned, if it seems possible that a similar situation could occur in the future.

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  The purpose is not to consider questions of compensation—as has been made clear to my hon. Friend and to his constituent at all stages of the clinical complaints procedure.
  A key stage in the clinical complaints procedure is a review of the case by independent doctors. The aim of that review is to provide a fresh, professional opinion on the clinical handling of the case. If, in the opinion of the independent doctors, their review is taking in areas outside their expertise, or more appropriate to a court, they may halt the proceedings and report their findings to the regional medical officer.
  The clinical complaints procedure is intended to deal with complaints of a substantial nature but which are not, prima facie, likely to lead to litigation. If at the time a complaint is made the complainant made it clear that he intended to pursue litigation, there would be no point in the health authority starting a procedure which would later be superseded by the courts.
  That is the context of the question whether the clinical complaints procedure baulks a later resort to litigation. There is no suggestion—and there should never be—that by going through an administrative procedure a citizen forswears his right to litigation. That is not the position. The health service seeks to establish that there is not a clear intention, at the beginning of the administrative procedure, to resort to litigation. My hon. Friend and his constituent made that statement at the beginning of the administrative procedure that I have been talking about. My hon. Friend was concerned about the delay in the completion of the procedure, but I give him an absolute assurance that the delay was not in any way designed to baulk the 1 March date that he mentioned. Indeed, the
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  handling of the clinical review was not out of line with the time that such procedures normally take. If anything, it was on the short side of average. The regional health authority stands discharged of any charge that it was attempting to baulk my hon. Friend's constituent's right to litigation.
  I must comment in passing upon my hon. Friend's suggestion that the fact that Mr. Lennox did not perform surgery on my hon. Friend's constituent was in some sense unusual. It is a perfectly normal procedure in the national health service. Doctors who are well advanced in their training perform operations, subject to the overall clinical management of a consultant who may not be in the theatre at the time the operation is performed. That is a well-established part of training in the NHS.
  My hon. Friend then sought to raise the question of a claim for compensation against Brompton outside the context of negligence litigation. No health authority, including Brompton, is able to agree to make a compensation payment when there is no likely prospect of a claim for compensation being successful. In this context, compensation is paid against the possibility of an action for negligence. No health authority is able to pay compensation that is divorced from the principle of negligence. That is precisely the principle that the House reaffirmed by a very large majority in a debate on 1 February. The House has reaffirmed its view that compensation should be paid only when negligence can be proved. If that is my hon. Friend's case, his redress lies in the courts, not in this House.
  Question put and agreed to.
  Adjourned accordingly at fifteen minutes to Eleven o'clock.