Industry and Education

HC Deb 21 November 1994 vol 250 cc350-438

Madam Speaker

Before calling the Secretary of State, I must tell the House that a number of hon. Members wish to take part in the debate. I have decided to limit speeches to 10 minutes between 7 pm and 9 pm. Outside those times, I ask hon. Members to limit the length of their speeches.

4 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

I welcome the right hon. Member for Copeland (Dr. Cunningham) to his new position and hope that he will be able to remain in it with distinction for a considerable time.

The first priority for a successful industrial and commercial policy is to establish the economic conditions within which enterprise and competitiveness can flourish. Last summer, the Government published a Command Paper outlining a comprehensive strategy to raise the competitiveness of the economy. The Gracious Speech includes a number of specific initiatives where legislative change is necessary to move that agenda forward, but before dealing with those and other specific matters it is appropriate to start with the overarching significance of the economy.

For decades, our companies have not enjoyed such favourable conditions as they do today. It is recognised internationally that the United Kingdom has led western Europe out of recession. Inflation is at levels not seen for nearly 30 years. National output is rising by more than 4 per cent. while manufacturing output is 5 per cent. up on a year ago. Industrial relations are as good as at any time in the past century.

The situation looks even better when one recognises that unit labour costs have shown the biggest monthly fall for nearly a quarter of a century. Wage levels increased by 4.5 per cent., but a rise in manufacturing productivity of over 6 per cent. has more than absorbed that. To improve the outlook further, I should say that the profitability of our companies is markedly higher than at any similar stage in past recoveries.

The latest CBI surveys show that investment confidence is at its highest since April 1989, and the UK now attracts more than 40 per cent. of American and Japanese investment in the European Union. Export volumes to the European Union have risen by 17 per cent. in the past 12 months, although the market has grown only by 5 per cent. They have risen by 6 per cent to the rest of the world and, increasingly, analysts speak of the elimination of the UK's balance of payments deficit within the foreseeable future.

We are enjoying high growth, low inflation, falling unemployment and a record recovery led by exports, which has coincided with rising investment. It is quite clear that the House, the national media and commentators outside should now recognise the dramatic improvement in our national economic statistics. The central determination of Government policy is to pursue that climate of opportunity.

The central theme of the competitiveness White Paper was the comprehensive nature of the agenda for change that it encompassed. The Gracious Speech refers to two specific matters of direct concern to my Department: the liberalisation of the gas market and the privatisation of AEA Technology.

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

rose—

Mr. David Winnick (Walsall, North)

rose—

Mr. Heseltine

I give way to the hon. Member for Walsall, North (Mr. Winnick).

Mr. Winnick

The right hon. Gentleman has just mentioned the gas industry; earlier, he mentioned labour costs. How can he justify the 75 per cent. increase that will bring the salary of the gas industry's chief executive to about £500,000 a year, at a time when the Government are constantly telling people in both the private and the public sector that there is no justification for any pay increase above 2 per cent? Is not such an increase disgraceful, given that the gas industry is to raise its prices next year? It is an affront to millions of gas users.

Mr. Heseltine

The hon. Gentleman has heard my right hon. Friend the Prime Minister explain the Government's view on that many times. My right hon. Friend has said—and the Government believe—that it is necessary to exercise restraint. Restraint can be exercised by the market or by the shareholders, but the fact is that any increases in remuneration above inflation must be paid for by productivity and rising profitability. What the Labour party cannot face is the fact that British Gas has been turned into a world-class company, winning in the marketplaces of the world, has held down its prices consistently over the years and, since privatisation, has been transformed.

The Gracious Speech refers to two specific matters of direct concern to my Department. Before I deal with them, however, let me address the wider issue of privatisation itself. A decade or so ago, the commanding heights of the economy were owned by the state: that was the consequence of different post-war Labour Governments carrying through the doctrinal commitments of clause IV of their party's constitution.

Everyone knows that the organisations that those Governments created were monopolistic, producer-driven and subjected to the most intense Treasury control. By and large, they were denied access to the world marketplace and heavily subsidised; they became the plaything of politicians and trade unions. They also had the effect of concentrating power in London at the expense of the provinces, on a scale without precedent in our industrial history.

The 1980s saw a transformation in the relationship between those organisations and the national economy. Losses and subsidies were turned into profits and tax receipts; loss-making monopolies became world-class competitive companies; trade union power was replaced by consumer choice; and state ownership was converted into millions of individual and corporate shareholders. The essence of the policy, however, was the pursuit of competitiveness. In many cases productivity leapt, investment shot ahead, new markets were opened and new competitors emerged.

What the Labour party cannot understand is that there is a fundamental contradiction between a state monopoly and a genuinely competitive marketplace. Labour cannot realise that allowing Government-owned companies to raise money with the overt or implied guarantee of taxpayers' support undermines the essential disciplines within which private sector companies must trade and account.

To add to Labour's problems, hardly a country in the world is now prepared to defend the discredited theories of nationalisation. It took the courage of this Conservative Government to confront those theories, and to reverse them by placing companies in the private sector, but every time we took a step in that direction it was resisted by the Labour party. Labour Members recognised that we were right only when they realised that they had been rejected so often by the electorate that they would have to abandon their own convictions to have a prospect of winning power.

Mr. Dennis Skinner (Bolsover)

Will the President of the Board of Trade tell hon. Members whether he supports public ownership of the Post Office?

Mr. Heseltine

The hon. Gentleman is fully aware of my views about privatising the Post Office: I made my position clear to a Select Committee of the House. The intellectual arguments for introducing private capital into the Royal Mail are overwhelming; the only arguments the other way are social and political. I made it clear that the Government would have liked to proceed with privatisation, but that a small number of supporters on the Conservative Back Benches were not prepared to do so. In the end, democracy rules: I should have thought that right hon. and hon. Members might be able to understand that. The fact that it does so is the reason why Labour Members are kept bedded on the Opposition Benches.

Several hon. Members

rose—

Mr. Heseltine

I shall not give way.

The new leader of the Labour party, the right hon. Member for Sedgefield (Mr. Blair), tells us that he wants to repeal clause IV. My right hon. and hon. Friends will find it surprising that a reference to privatisation produces a belly laugh among Labour Members, with the exception of the right hon. Member for Sedgefield. That shows that, although a small handful of my colleagues may disagree with my views on privatisation, a united Labour party rejects its leader's views on clause IV.

Several hon. Members

rose—

Madam Speaker

Order. Hon. Members should not persist in rising; it is obvious that the Secretary of State is not giving way at this stage.

Mr. Heseltine

The dilemma for the Labour party, which has conveniently brought the Royal Mail and the Post Office into the debate, is most clearly revealed by the press release that the right hon. Member for Copeland (Dr. Cunningham) issued today explaining what he sees as the alternative way forward. He has listed a range of suggestions that he thinks will solve the problem.

A significant proportion of those proposals are already Government policy and I shall tell right hon. and hon. Members what they are. We have already made clear our determination greatly to expand the commercial opportunity for post offices. After all, 19,000 post offices are already in the private sector. We have made it clear that we intend to help those organisations to automate their services to widen their ability to compete.

Mr. Campbell-Savours

They are in the public sector.

Mr. Heseltine

They are not in the public sector. That is the point that the hon. Gentleman cannot understand. Nineteen thousand post offices are owned individually by men and women in this country. They are private sector shops in towns and villages. We want to help them to go on flourishing in that environment and we have made that clear.

The right hon. Member for Copeland listed some other changes, but he merely restated the opportunities that are already available to the Royal Mail under the private finance initiative—our private finance initiative and we have always made it clear that it was broadly available to the public sector. The British Broadcasting Corporation is taking advantage of the opportunities that the right hon. Member thinks he has discovered for himself, but which he would find listed in the Government's policy statements. None of the things that the right hon. Member lists goes to the heart of the matter.

Dr. John Cunningham (Copeland)

I am grateful to the right hon. Gentleman for giving way and I thank him for his kind opening remarks, of which at least 50 per cent. were kindly intended. As he seems to think that everything in the Post Office is fine now and that he has cracked the problem, why did his right hon. Friend the Chancellor of the Duchy of Lancaster, in a letter to the Prime Minister, say: For his part, Michael made it clear that he regards greater commercial freedom for the Post Office as essential to its long term health"? If all is fine now, why does the Secretary of State want greater commercial freedom?

Mr. Heseltine

I made the point to my colleagues, as I did to the House a few minutes ago and to the Select Committee when it first discussed the matter, that the Royal Mail could be a world-class, competitive company, but that to become such it must operate in the competitive world with the freedom to raise and be responsible for its cash, just like British Telecom. That is what I believe to be right. Persuading the last tiny rump of my party of the wisdom of those views is a task to which I shall set the rest of my political career, but do not ask me to stand at the Dispatch Box and tell the House something which I profoundly believe to be untrue. I believe that there is a huge opportunity for the Royal Mail.

I wish to make a further point, and the right hon. Member for Copeland has helped me along the journey. If it was all so simple, if it was simply a question of changing the odd rule here or there in the way that the right hon. Gentleman's press release suggests, why did not the Labour Government do so between 1974 and 1979? I do not want the House to be left with the impression that the Labour Government did not face the dilemma: they certainly did, but what did they do? Instead of doing all those simple little things that the right hon. Gentleman would have us face, when they had to decide between letting the Royal Mail and the Post Office free in the public sector and cutting the capital programmes in the public sector, they cut the capital investment programmes of the Post Office by one third between 1974 and 1979. If it was so simple, perhaps the Post Office was in some special straitjacket.

Why did not the Labour Government let the electricity industry be free to expand, as apparently they could have done? Why did they cut capital investment in it by 25 per cent. between 1974 and 1979? The answer is simple: in power, the Labour party realised that the disciplines of the public sector bound the whole of the public sector and that it was not possible to be credible if one thought that one could find some illusory piece of jiggery-pokery to change the odd Treasury rule. That is the real world.

In his press release, the right hon. Member for Copeland gives the game away. He says clearly at the end of it: The Government's political problem is that if they accept our proposals it would be transparently clear that earlier privatisations had not been necessary and future privatisations would be called into question. If the right hon. Gentleman is saying that past privatisations were unnecessary, why is the Labour party desperately trying to abandon clause IV? Why does it resolutely refuse to threaten to renationalise any part of the public sector that we have privatised? The reason is that its leadership knows that the theories are bust, that the concepts are bankrupt and that across the world there is hardly a Government who are prepared to defend the doctrinal obsessions that led us down that blind alley of nationalisation.

Mr. Mike O'Brien (Warwickshire, North)

If the President says that more commercial freedom is essential for the Post Office to succeed, and if he is not prepared to change the Treasury rules, is he not in effect condemning the Post Office to decline in the future? In his letter, the Chancellor of the Duchy of Lancaster clearly says that he told the Cabinet Committee that this was the last opportunity before the end of the 1990s to do anything about commercial freedom for the Post Office. The President of the Board of Trade is not prepared to provide that commercial freedom. He has rejected what was called in the letter the "Prescott option". Therefore, is he not condemning the Post Office to decline?

Mr. Heseltine

I know what the House would do if I pursued the logic of the hon. Gentleman's argument. The first time that money was raised to threaten a constituent company of the hon. Gentleman, he or it would be in my office saying that it was unfair. The first time that the Royal Mail invested overseas and lost money, the Labour party would demand a statement. The first time that anything within the activities of the organisation became politically sensitive, demands would be made for a debate in this place. The House has always behaved in that way, and I believe that it always will. The short-term political opportunism of Opposition Members will always override this country's commercial interests. That is why the only way forward is to liberate Britain's wealth-creating processes from state ownership and put them into the hands of the private sector, with all its existing accounting disciplines.

Mr. Peter Hain (Neath)

Will the right hon. Gentleman give way?

Mr. Heseltine

Madam Speaker made it absolutely clear that many hon. Members wish to speak in this debate, and I have already given way several times.

The gas competition Bill will aim to bring genuine competition to the gas market by creating a framework that will allow competition to be phased in to the domestic market, starting from April 1996. The average domestic gas consumer, who has already benefited from a fall in gas prices of more than 20 per cent in real terms since privatisation, will reap further benefits. I cannot authenticate the claims of those who want to enter the marketplace, but it is common to hear suggestions of price reductions approaching 10 per cent.

Under the Bill's provisions, newly licensed suppliers will be able to enter the domestic gas market, providing 18 million customers with choice for the first time. Competition will place powerful downward pressure on costs and prices and will provide a strong incentive for efficiency. It will promote innovation and development of the products and services that customers will choose.

Gas suppliers will be required to adhere to codes of practice in order to meet certain social obligations regarding procedures for debt and disconnection, the care of older and disabled customers and the provision of energy efficiency advice. We will have the opportunity to discuss this matter at length when the Bill comes before the House for a Second Reading.

I now turn to the privatisation of the commercial activities of the Atomic Energy Authority. As my right hon. Friend the Minister for Energy and Industry made clear last February, ownership and the safe management of the UK's atomic energy and nuclear responsibilities will remain in the public sector. The technology wing of that organisation, which deals with science, engineering and business and selling technical, environmental and safety advice, will be privatised.

The privatisation process will enable AEA Technology to realise the full potential of its commercial activities, allowing it the freedom to sell its services as it is and not as the Government see fit. It will benefit consumers and, of course, add to national competitiveness.

It is some time since we debated coal in the House. On 12 October I was pleased to announce that we had identified the preferred bidders for the regional coal companies and certain care and maintenance collieries. Subject to further detailed negotiations with each of the preferred bidders, we aim to complete the sales by the end of this year.

It might interest the House to look back over the past two years at what was said and what has actually happened as a result of the privatisation process. British Coal has ceased operation at all but 16 pits, including one which is in development. All of these pits will transfer under the privatisation packages.

Four other pits where British Coal has ceased operations are the subject of bids as part of the privatisation process, and an interest in another one—Frances— is being pursued. In addition, nine pits that British Coal had closed were licensed to the private sector in 1994. A total of about 30 collieries are likely to be operating in the private sector in 1995, compared with the 16 that British Coal currently runs.

The House will want to remember precisely the validity of the forecasts that were made when we took our difficult but courageous decisions two years ago. The Chairman of the Select Committee on Trade and Industry, the hon. Member for Sheffield, Central (Mr. Cabom), told us that we would have only 15 pits in two or three years' time. The hon. Member for Livingston (Mr. Cook), the Opposition spokesman on trade and industry, made his position clear: that 50 pits had been in operation at the time of the general election and that in the next month or two there might only be 15. For the hon. Member for Livingston to be only 100 per cent. out is, by his standards, to score a bull's eye. It is worth looking at the matter in more detail.

Mr. Michael Clapham (Barnsley, West and Penistone)

rose—

Mr. Heseltine

The House will need to look at productivity—output per man shift in tones—if it wants to know why this great industry declined so far and so fast—

Mr. Adam Ingram (East Kilbride)

We know why.

Mr. Heseltine

I wonder whether the hon. Member for East Kilbride (Mr. Ingram) does know why. I will tell him. In 1978-79, when the Government were elected, output per man shift in tonnes was 2.31. In the 24 weeks to the end of October, it was 13.04 tonnes. That is why the private sector is finding ways in which to open pits that British Coal closed.

Mr. Bill Etherington (Sunderland, North)

rose—

Mr. Heseltine

The next great canard to which we had to listen with nauseating regularity was that if we closed the pits we would destroy the mining equipment industry. In the three months to July, mining equipment exports were up by 17 per cent. on a year ago.

We had a whole Select Committee report about the devastating consequences on employment of four proposals. I have asked for the figures and I have here the figure for unemployment in the travel-to-work areas for the coalfields in October 1992—254,248, an average of 11.6 per cent. I asked for the latest unemployment figure. It has gone down to 227,900 and the average unemployment rates have fallen from 11.6 per cent. to 10.8 per cent.

Mr. Skinner

rose—

Mr. Heseltine

In the real world, all the forecasts made by the Labour party have been proved to be fallacious. They were nothing more than what we knew them to be at the time—scaremongering from the worst of political motives.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. It is obvious that the President of the Board of Trade does not intend to give way at this stage.

Mr. Heseltine

Nothing more illustrates the difference between the achievements of this Government's industrial strategy and the Labour party's empty phrases than the recent speech by the right hon. Member for Sedgefield (Mr. Blair) at the Labour party conference on the subject of the information revolution. I shall quote one sentence that gives the flavour of what he said. We should be investing in the new electronic super highways—satellite and telecommunications technology that is the nerve centre of a new information economy—doing for the next century what roads and railways have done for this one. Let us assume that we are prepared to pass over the fact that, between 1974 and 1979, the previous Labour Government cut the road programme from £1.8 billion a year to just £1 billion a year. That gives us the clearest indication of what a Labour Government do to the infrastructure of our country.

Mr. David Blunkett (Sheffield, Brightside)

The right hon. Gentleman does not know what highways we were talking about.

Mr. Heseltine

I will tell the hon. Member for Sheffield, Brightside (Mr. Blunkett) what highways I was talking about. I was talking about the highways to which his leader referred in his party conference speech.

The fact is that since this Government pursued their strategy for the telecommunications industries in the 1980s, we have seen the liberalisation of the marketplace and the privatisation of British Telecom. Since 1991, more than £27 billion has been invested in the networks—£22 billion by British Telecom, £2 billion by Mercury and more than £3 billion by cable companies.

New markets have opened up in mobile telephony and the United Kingdom market is almost twice as large as that of any other European Union country. We have 122,000 public telephone boxes, of which 96 per cent. actually work. When we began on this journey, we had only 80,000, of which 75 per cent. worked. In 1984, BT had 9,000 km of high-capacity fibre; in 1994, it has 2.5 million km. BT's prices are down by 35 per cent. and those of some of its competitors are down by more. There has been a 30-fold improvement in call reliability. There are 146 new public telecommunications operators, including 18 national licensees, and more are on the way. New technologies are being delivered in radio, opto-electronics and.digital applications.The consequences of the 1980s' revolution in telecommunication have been more choice, more reliability, better quality, higher efficiency, lower prices and perhaps the best platform from which to expand into the future to be found in western Europe.

As a result of our experience—gained in the teeth of the Opposition—we have been able to persuade our European partners to move to liberalise the European single market by 1998.

Mr. Campbell-Savours

The right hon. Gentleman has forgotten one little thing.

Mr. Heseltine

I bet that I have not, but I shall listen to the hon. Gentleman.

Mr. Campbell-Savours

Has the President of the Board of Trade forgotten that tens of thousands of BT's workers were effectively sacked and replaced at wage rates often 25 or 30 per cent. lower by people working for a company called Manpower? Has it not been a deliberate policy of BT simply to cut wages?

Mr. Heseltine

I am very glad that I gave way to the hon. Gentleman. He has come to the heart of matter. It was precisely because the Labour party thought that it could sustain employment in the mines, in the shipbuilding industry and in the steel industry that it went on regardless of what was happening in the marketplace, of what overseas exporters were doing and of the opportunities to win contracts overseas. It went on and on protecting, subsidising and removing the disciplines of the marketplace because its paymasters in the trade unions would not face the realities of a changing world.

The argument that the hon. Gentleman advances is a classic one. The only way in which BT can bring about the communications revolution is to be a world-class competitive company. That means that people will have to move from job to job to be retrained and re-educated and reskilled. Those are the words that the leaders of the Labour party are constantly using. Are we being told that, in power, they would deny the logic of all the things that they say? Has the hon. Gentleman read any of the speeches of the right hon. Member for Sedgefield? Does he begin to understand what his leader is saying to him? The answer is that he does not. Even if he did, he would not care, because the power structure behind the Labour party is that of the producers and against the consumers. It is of the state and not the private sector. Labour Members will never come to terms with the real world, which this Government have embraced, with an enormous increment in wealth to the national economy.

Mr. Patrick McLoughlin (West Derbyshire)

Does my right hon. Friend believe that any of the investment that he has just explained in outlining the total of £27 billion invested in networks would have been made if BT had remained a nationalised industry? Would we have seen any of the investment by the cable companies, which will allow us to take advantage of the super-highway?

Mr. Heseltine

My hon. Friend is absolutely right. If BT were still in the public sector, still held back by the restraints of that, it would be begging the Government to be given the freedoms of the private sector to become a world-class company.

Mr. Blunkett

Who stopped BT?

Mr. Heseltine

I am asked who stopped it. I will tell the House who stopped it. It was the Labour party year after year after year which stopped it. It is precisely because BT has proved what can be achieved by turning it into a private sector, world-class company that I want the Royal Mail to have exactly the same opportunities.

Three other areas are important to the competitiveness agenda that we will pursue. The first is the continuation of the deregulation initiative. The House will be aware of the recent enactment of legislation enabling us to propose procedures and thereafter make changes at a speed not previously available. That is an important aspect of our determination to free up the marketplace while preserving essential protections for the environment and for safety.

I am delighted to see my hon. Friend the Member for Tatton (Mr. Hamilton) in the Chamber and I pay tribute to his remarkable work in pursuing our deregulation initiative. As a result of his work and the leadership of Lord Sainsbury, and now Francis Maude, 900 regulations are either in the process of being repealed or are at an urgent stage of reform. We have already notified to Parliament under the new legislative procedures 55 measures that are saving business millions of pounds. That is an important aspect of our market-opening activity.

The House will be fully aware of the recent satisfactory outcome of the GATT negotiations, which we hope to see concluded by the end of this year. That will manifest one of the Government's central beliefs: that there is much gain in widening the world's marketplace and freeing up opportunities for import and export. Nowhere is that more so than in the less prosperous parts of the world, which will gain far more from increased trade than they ever will from increased aid.

The third area relates to the Government's remarkable success story of pursuing policies of inward investment. As announcement after announcement is made about the scale of inward investment to this country, and as we now have 40 per cent. of all inward investment in the European Union from America and Japan, I wish every so often that when Opposition Members see new investment, plant and factories opening in their constituencies, they would recognise that that is happening because the Government's policies have made this country the most competitive European economy in which to invest.

Let me make a clear statement on behalf of the Government: we have transformed the competitiveness of this economy and have made ourselves one of the most attractive investment bases in the European Union. The economic outlook is among the best that we have seen in recent years. We have achieved a record of low inflation, low interest rates and have restored public finance to health. We have a range of policies to enhance the competitiveness of this nation. They have required guts and determination from a Government determined to ensure that they lead to the improved performance of our national economy, and nothing will persuade us to throw those opportunities away.

4.37 pm

Dr. John Cunningham (Copeland)

We fully anticipated that the President of the Board of Trade would come to the House today with a combination of bluff and bluster to cover his embarrassment about the great hole in the Queen's Speech where his party political prize was supposed to be, and he has not let us down. Rather than come naked into the debating Chamber, the President apparently exchanged his loincloth for a White Paper, but it could not disguise his political nakedness. Rather like the emperor's new clothes—or in this case, the President's new clothes—apparently no one but the President was fooled.

The Queen's Speech was intended to have as its centrepiece the privatisation of the Post Office, but it is not there. Apparently, the space is being filled not by alternative proposals from the President, who had nothing new to say today, but by Mr. John Maples and what he has to say about what the Government's real programme should be.

Mr. Maples certainly does not agree with the President of the Board of Trade. Mr. Maples said: What we are saying is completely at odds with what Tory supporters experience. On the national health service, Mr. Maples said: The best result for the next 12 months would be zero media coverage. I wonder what his right hon. Friend the Secretary of State for Health has to say about being gagged fully for a year.

Mr. Blunkett

That would be wonderful.

Dr. Cunningham

It would indeed be wonderful, as my hon. Friend says.

On the media—nothing new here, really—he says: We need to feed our friends and potential friends in the press with good stories. On voters and the media: The influence of the media on voters' perceptions cannot be overstated. On my right hon. Friend the leader of the Labour party: If Blair turns out to be as good as he looks, we have a problem. Of course, the President of the Board of Trade has several problems, as we know: declining political credibility; failure to carry his own party with him; failure, above all, to convince the British people that his ideas for Post Office privatisation had any merit whatsoever.

It was nice to have confirmed on the record what we have all known for a very long time—that is, that the yobbos on the Tory Back Benches are organised, planned, prepared and part of that party's approach to preventing sensible and coherent debate in the Chamber of the House of Commons. I wonder what the right hon. Gentleman thinks about Mr. Maples and yobbos.

It was the Prime Minister, only in September, who said in London that he would like to create a yob-free culture in Britain. The Prime Minister wants a yob-free culture in Britain, but the deputy chairman of the Conservative party wants a yobbo-ridden culture on Conservative Benches in the House of Commons. Now we know that there is a vacuous programme from the right hon. Gentleman on what industry and the economy need, and a hidden agenda from his friend the deputy chairman of the Conservative party.

I congratulate the Union of Communication Workers and its members on the excellent campaign they waged to prevent privatisation of the Post Office and Royal Mail. The President's proposals, unfortunately, came back to him from his Cabinet colleagues marked "return to sender". They were from the depths of the Jurassic Park of Tory politics—privatisation, an idea whose time has certainly come and gone. Opposition Members, however, do not accept, as the right hon. Gentleman apparently does, that, if the Post Office cannot be privatised, it has to be ossified—deliberately forced into decline to satisfy the failed dogma of the Tory party.

Mr. Den Dover (Chorley)

Will the right hon. Gentleman give way?

Dr. Cunningham

I will take the hon. Gentleman as a friendly yobbo.

Mr. Dover

I thank the right hon. Gentleman for that compliment. What is his view of top management's opinion of Post Office privatisation? Surely they are in the best position to judge. They either face problems keeping the Post Office in the public sector or they have freedom in the private sector. Does the right hon. Gentleman not think that their views count?

Dr. Cunningham

I do not know, because I have not had the opportunity of their advice, except from what I have read in the newspapers, but I half suspect that, like many other top managers in privatised industries, they would be thinking of their share options and their salaries, rather like Cedric Brown and Mr. Giordano have been doing at British Gas. But we may return to that matter in a moment.

The people of Britain are fed up with being ripped off or overcharged by people in private monopoly industries giving themselves huge salary increases with apparently no accountability and no care for what Ministers, including the Prime Minister, have to say about it. I remind the hon. Member for Chorley (Mr. Dover) and the President of the Board of Trade what the Prime Minister had to say in his Mansion house speech. At the Lord Mayor's banquet, he said: There is more that business could do to further improve its image. There is no doubting the resentment that large and often unjustified pay rises can cause, so I welcome what Sir Brian Nicholson, the president of the CBI, had to say about the need for responsibility in setting the pay of company executives. The power is there to control it, and I hope it will be used. Apparently, the only member of the Government today who was willing to defend what has happened in British Gas was the President of the Board of Trade—no Back Bencher, no chairman of any Conservative committee, and certainly not the Prime Minister. The only one to defend it was the right hon. Gentleman. I wonder for whom he thought he was speaking. He certainly was not speaking for consumers; he certainly was not speaking for the British people; he certainly,. apparently, was not speaking even for his own Prime Minister. I wonder who is really in charge.

On the Post Office privatisation and its future, I hope that the right hon. Gentleman will be a little more forthcoming than he has been so far. It is clear from the letter of his right hon. Friend the Chancellor of the Duchy that the President of the Board of Trade does not think that the Post Office can succeed in the public sector. He seems to think that it will wither and fade away, and that other private sector operators will take over.

The real question is this: are the right hon. Gentleman, the Government and the Conservative party willing to see that happen, are they willing to see more freedom, more latitude and more opportunity for the Post Office in the public sector, or will they simply let it fade away and die? The right hon. Gentleman's argument, apparently, is that everything that could be done has been done. That is simply not true. That view is not even shared by senior management of the Post Office, let alone by the Opposition.

We could have changes to the calculation of the external financial limit. We could have the removal of capital expenditure limits. We could have the relaxation of Government scrutiny of specific projects. The President of the Board of Trade had much to say about political interference. Why does he not remove that bit of political interference from the Post Office?

We could have freedom from Department of Trade and Industry interference in proposed training projects, ability for the Royal Mail to enter joint ventures, new freedoms for Post Office Counters Ltd, and the Royal Mail given more latitude in its private finance initiatives. All those things are possible, but the right hon. Gentleman's thesis is that he would rather seek to defend his dogma on privatisation, with the Post Office forced into commercial difficulties.

We do not share that view. What is more, it should be possible, in a sensible country, for us to sit down and agree a way forward for the Post Office with the management, with the UCW, with the Government and with all those who are interested in helping the Post Office to build on its successes. I make that offer to the right hon. Gentleman now. Is he willing to accept it? Why does he not answer—yes or no? The answer is clear. The right hon. Gentleman has been put in his place by the Chancellor of the Exchequer, because the answer to the question is that it is his right hon. and learned Friend the Chancellor of the Exchequer who will not agree to anything of that kind.

I remind the right hon. Gentleman of what he said. He said that he does not believe that the Post Office can succeed in the public sector. However, if we look at the 1994 Blue Book which was published a few weeks ago, we see that British Nuclear Fuels plc has been reclassified to the public sector. The right hon. Gentleman has effectively nationalised British Nuclear Fuels. He never said a word about that, of course; there was no statement and no great speech. Apparently he thinks that British Nuclear Fuels can operate successfully in the public sector, but that the Post Office cannot.

That is quite a political flip-flop—quite a head-stand—from the right hon. Gentleman. One successful, profitable company with a huge positive cash flow and lots of business can operate successfully in the public sector, because the right hon. Gentleman has just agreed to its being put there, but the Post Office cannot. The right hon. Gentleman's argument is a complete and utter fraud.

Mr. Gary Streeter (Plymouth, Sutton)

On sitting down with trade unions, did the right hon. Gentleman hear this morning the diary tapes of the right hon. Member for Chesterfield (Mr. Benn), in which he described in graphic detail how the previous Labour Government had the life squeezed out of them by trade union power? Does the right hon. Gentleman really think that a future Labour Government would do any better, and if so, why?

Dr. Cunningham

Yes, I believe that a future Labour Government could do better—not only better than that Administration, but a lot better than the present one, too.

The right hon. Gentleman's argument is not only flawed, but it is not borne out by an examination of what has happened over privatisation.

The most recent examination of the results of privatisation, carried out by London Economics—one of the few organisations, as Victor Keegan reminded us the other day, to have done comparative studies—shows that there has been no great gain in productivity following privatisation. There has been no great gain in profitability, either. Many of the improvements took place before privatisation ever happened. This study and many other analyses bear that out.

What has happened, however, has been the creation of private monopoly power—power which, as we saw again this weekend, has been roundly abused by those who have it in their hands: with share options, for instance. They have frittered the money away. The privatised water companies have had to write off more than £500 million because investments made outside the water industry have failed. These people would rather give bonuses to shareholders—East Midlands Electricity gave away £187 million in this way—than cut prices for consumers and give them a better deal.

The making of money, arguments with the regulators, bumping up emoluments, salaries, bonuses and perks for managers—these things have had a far higher priority for those who run the privatised utilities than has service to consumers.

Mr. McLoughlin

The right hon. Gentleman has just proved what the President said would happen. He has complained about some of the enterprises in which the privatised companies have invested and about the money that they have lost. How then would he make sure that the Post Office did not go into the same sort of enterprises if it got the extra commercial freedom that he is arguing it should have in the public sector? Instead of private investors losing money, the taxpayers would.

Dr. Cunningham

Taxpayers have already lost heavily in these privatised enterprises. So have consumers—we have Mr. Maples's authority for that. [Interruption.] We are well aware that the Tory yobbos are here this evening, but we are not going to be put off our stride by them. If the hon. Gentleman goes to the Library, he will see, in the shape of the write-offs that were given to the privatised water undertakings to get their balance sheets in shape, that the taxpayer lost billions of pounds before privatisation ever took place.

The Government and the President of the Board of Trade are almost alone in believing that the present system of utility regulation is adequate, effective and fair. I almost split my sides laughing this morning when I heard, on commercial radio in London, a British Gas advertisement that said: We put our customers before ourselves". Today of all days, one would have thought that someone in the PR department would say, "I think we'll give this one a miss."

This week, 3 per cent. price rises have been inflicted on consumers—including some of the lowest paid people in the country. This same week, they have been told, in what is supposed to be a democracy, that, if they do not sign direct debits, they will have to pay more. That amounts to a hidden tax on people without bank accounts—usually the lowest income families and households. All this comes at a time when more VAT is to be imposed on people's energy bills. Is it any wonder that people are infuriated by the announcement of British Gas salary increases?

We should have seen the warning signs when British Gas appointed a part-time chairman at a salary of £450,000 a year. Mr. Giordano is well known for making sure that he is well remunerated wherever he goes. Now the chief executive is to have a 75 per cent. increase, while directors will get a 50 per cent. increase. That really is an abuse of private monopoly power and, as these industries are answerable to him, the right hon. Gentleman should have said so loud and clear.

The President has had the chance now to reflect; does he still support these decisions? Does he expect that his credibility can be sustained while this is going on, at the same time as people are having another round of VAT imposed on their energy bills? It is a scandal, and the right hon. Gentleman knows it. He should have had the courage to stand up and oppose it.

The regulators should have the power to do something, and, while considering the gas Bill that the right hon. Gentleman foreshadowed in his speech, we shall seek opportunities to provide such power. It will be interesting to see whether any Conservatives support such powers—the public will be watching closely. Will the right hon. Gentleman at least give the House a guarantee that these problems will be dealt with in his legislation? Apparently he will not. Obviously, he thinks that there is nothing wrong.

We do not agree. We see our priorities as the protection of vulnerable consumers and the right of the 18 million households that depend on gas for heating and cooking to enjoy a safe and secure supply, free from the sort of exploitation that appears increasingly to be the trend with British Gas.

What of the work force? They were told that their industry could afford only a 2.9 per cent. pay increase, despite all the productivity and profits. Yet the chief executive gets a 75 per cent. pay hike. That is the kind of grotesque unfairness that occurs in the private monopoly companies of which the right hon. Gentleman proudly boasted in his speech.

The President had nothing to say either about another major industrial issue of the moment: the proposed takeover of VSEL by either British Aerospace or GEC. The struggle is going on before our very eyes, yet the right hon. Gentleman says nothing, and the Secretary of State for Defence says nothing. [HON. MEMBERS: "Of course not."] Well, why boast about their White Paper on competition, if they are willing to stand by and watch another private enterprise monopoly being created, this time in warship building? That is one possible outcome.

Why this silence? Why no action from the man who said that he would intervene before breakfast, before lunch, before tea and before dinner? Why was he silent on the sale of Rover to Germany? Why was he silent about the transfer of Raytheon's business and technology to the United States? Why, a few days ago, was he silent about the transfer of the ownership of Boots's pharmaceutical division to a German company?

The right hon. Gentleman's silence is legendary. He did not even intervene to save Swan Hunter shipbuilders on the Tyne, or to ensure that a maritime nation could go on building merchant ships. We must be just about the only such nation in the world in this invidious position. So much for the right hon. Gentleman's intervention.

We know, however, that people are not silent in the corridors of the DTI or the Ministry of Defence. We know that Lord Prior, one of the right hon. Gentleman's old political friends and comrades, and the other people from GEC—including, no doubt, Lord Weinstock—are patrolling the corridors trying to fix up a deal.

I should like to know whether the right hon. Gentleman has a strategy. I ask, not for myself, but for the thousands of workers on Clydeside and in Barrow-in-Furness whose jobs, skills, livelihoods and mortgages are at this very moment being squabbled over. Meanwhile, no statement of any kind is made. The Government appear to have no policy at all—or do they?

Mr. Heseltine

I realise that the right hon. Gentleman has not been in his job for very long. He and the House will understand that I have quasi-judicial responsibilities in all these merger and monopoly cases. It would be quite inappropriate for me to make any statement or to become involved in the way that the right hon. Gentleman suggests.

Dr. Cunningham

I said that the President's response would be patronising and, predictably, it was. What about the Secretary of State for Defence? He has no quasi-judicial role in this matter. He has been boasting for two years of his determination to maintain competition to protect taxpayers' interests.

Why does the President not say that the matter should be referred to the Office of Fair Trading? That would not cut across his quasi-judicial role. Why does he not do that in the light of the implications for warship building, jobs, skills and technology and in the interests of the taxpayer? The reality is that he is transfixed because his political friends have probably once again got their sticky fingers in the pie, and he does not want to do anything about it.

The President is carrying out a review of Companies House, but he did not refer to that today, and it is not mentioned in the Queen's Speech. It would be helpful to my hon. Friends who are interested in this matter, to those who have constituencies in south Wales and, more importantly, to the people at Companies House to know when the review is to end. Is the right hon. Gentleman contemplating legislation on Companies House? Will he follow the advice of the consultants .that he appointed to carry out the review? He took on board SRU, a private consultancy which was co-founded by Mr. Peter York.

As Prufrock told us in The Sunday Times a week ago, the paper made an inquiry to Companies House and reported that the service was satisfactory. Prufrock wrote: the company records I ordered last week arrived promptly. They show that, in its last filed accounts, SRU recorded a fall in turnover to £3.7 million from £4.1 million in 1992. And its profit of £193,000 in 1992 slumped to a loss of £328,000. During this clearly difficult period for the company, the chairman, Henry Stevenson, saw his pay rocket from £338,000 to £497,000. That is the firm of consultants that the right hon. Gentleman favours and has found a place for in his review of Companies house. Does he not think that the people who work there and carry out many essential services deserve better? Do they not deserve a clear answer from him soon about what he intends for them, their organisation and their future? I hope that he will find an early opportunity to clarify that.

The President speaks about the economic recovery as if some great miracle has occurred. He speaks of British industry needing to be world class. Britain could do with a world-class Government, because at present we certainly do not have one. In opening the debate, he spoke about a wonderful economic and industrial recovery. Unfortunately for the right hon. Gentleman, as his friend in Tory central office has told him, no one believes him. He has not convinced his own supporters, and he has certainly not convinced the British people or Mr. John Maples.

Over the period of Conservative rule, we have not improved our position vis-a-vis our competitors in Europe or in the wider world. Last Thursday, the Financial Times reported: Europe's long-term outlook gloomy but short-term business confidence bubbles. That is a familiar story—short-term booms for Britain but no long-term strategy for our industry, manufacturers or our economy.

A plethora of reports, which are available to us all, contradict almost everything that the right hon. Gentleman said in his speech. The Engineering Employers Federation says that, next year, UK engineering output will be no higher than it was in 1990. It says that output will remain below 1990 levels in mechanical engineering, metal goods and transport equipment. In its November "Manufacturing Bulletin", the CBI says: the manufacturing trade deficit continues at around £10 billion … Weaknesses remain … the longer-term underlying weaknesses still remain, with a 20 to 40 per cent. shortfall in the average levels of productivity, sluggish investment, lower levels of skills than our main competitors and persistent trade deficits in manufactured goods.

Mr. Barry Sheerman (Huddersfield)

The President made a euphoric statement about British industry. Is my right hon. Friend aware that a recent IBM consultancy survey suggests that only between 1 and 2 per cent. of British companies are world class?

Dr. Cunningham

I am happy to confirm my hon. Friend's intervention, because I was coming to that matter in my speech. For good measure, the second "Lean Enterprise" report from Andersen Consulting states: The UK shows the lowest productivity of any European country, and the second worst quality. Low production volumes, coupled with the presence of many different car makers, creates a fragmented industry with multiple standards and different messages from different customers.

Mr. Gyles Brandreth (City of Chester)

Will the right hon. Gentleman give way?

Dr. Cunningham

I shall do so in a moment, and I hope that I shall not be told that it is all the fault of the workers, because our labour costs are as low as those of almost any other country, with the possible exception of Japan. They are lower than those in the United States, Germany, France and Italy. The problem is that our unit labour costs are higher than those of all the countries that I have mentioned except Italy. That is the real problem, and it has nothing to do with wage rates. It has to do with lack of investment, training, skills and proper equipment for our work force.

Mr. Brandreth

I am pleased to intrude on the right hon. Gentleman's catalogue of misery, which is another example of talking our country down. What he says does not tie in with the facts. Over the past decade, manufacturing output in Britain has risen by 22 per cent., compared with 21 per cent. in Germany and 11 per cent. in France. Our productivity is greater than that of France and Germany. What the right hon. Gentleman says is the reverse of the truth. The reason for inward investment in Britain is that what he says is not so.

Dr. Cunningham

That was not an intervention: it was a short speech—[HON. MEMBERS: "Answer it."] I am answering it. Our productivity is hopelessly lower than that of our principal competitors. It is worth reminding the hon. Gentleman and the House of the Government's incompetence. They manage to run a trade deficit with 10 of the world's richest nations and a trade surplus with 10 of the poorest. That puts the trading performance of the right hon. Gentleman's policies in some sort of context.

Over the period about which the President spoke, UK average growth was lower than that of Europe as a whole, lower than the OECD average and lower than that of the G7 countries. That is our performance on growth, and on investment it is much the same story. As the right hon. Gentleman said, export growth has remained steady at 3 per cent. However, the manufacturing trade deficit continues to be very large. As I have said, the underlying weaknesses are lack of proper training, lack of skills and a shortage of effective investment for our work force. In reality, manufacturing output is barely higher than it was 20 years ago. So much for the right hon. Gentleman's wonderful success story about 15 years in government.

As The Sunday Times said, Britain's productivity is so poor that our unit labour costs are higher than they are in almost any other country. It ran the headline: UK 'bottom of league' in car productivity". That is where the right hon. Gentleman's policies have brought us to.

Plenty of people in this country want change and recognise that we must live and succeed in a global economy. The evidence, over and over and over again, is that, far from getting us to that stage, the policies of the right hon. Gentleman and his right hon. Friends are taking us lower and lower down the performance leagues.

As for grappling with some of the problems, I was astonished to read that European Union officials are angry because the right hon. Gentleman and his colleagues are actually refusing European Union aid worth half a billion pounds intended to retrain workers in front-line industries in Britain. They talk about not getting a fair deal from Europe and not getting enough back, so why are not they taking that money? Why are not they taking the money to combat Euro-fraud? It is because none of them can ever agree on a policy on Europe. Listening to Ministers talking about Britain's place in Europe is like being at a Karaoke evening—they do not quite know the words, but they are singing a different song anyway.

I want to deal with the right hon. Gentleman's long-term support for the social chapter. In his book, he said that Britain had paid a heavy price for standing on the sidelines when the common agricultural policy was formed. The implication of his remarks was that he felt the same about the social chapter. Of course, since he has returned to the economic and political fold, he has changed his tune.

The Prime Minister made great promises on mailers such as European works councils. I am delighted to tell the Secretary of State—although I am sure that he knows—that, just a few days ago, my union, the GMB, and my lifelong friend, the national officer, David Williams, signed the first European deal with a British manufacturing company to form a Europewide works council. The company involved is United Biscuits.

Of course, what that really means is that the benefits of the social chapter are coming to British workers, despite all the bluff and bluster and the huffing and puffing about the opt out. What many of us always knew—indeed, what the hon. Member for Southend, East (Sir T. Taylor) predicted—was that that was exactly what would happen.

The Secretary of State could at least afford a little smile, because that agreement is likely to be the first of many. More than 100 British companies are covered by the regulations because of the extent of their operations in the European Union. United Biscuits is just the first of many. That is good news for working people in Britain. It is something of an aberration, or perhaps it is just a fluke, that the first company to sign such a deal has as a non-executive director Lady Howe, who I am sure was very much to the fore in arguing for a fair deal for the work force of United Biscuits.

When the right hon. Gentleman was deprived of Post Office privatisation, he was bereft of something to say to the House. He came today with flannel. He had nothing new to say and no proposals to create new opportunities for investment or skills training. Indeed, he continues to reject any. He once made a speech about abolishing the Department of Trade and Industry. He has moved a little way from that, and now talks about the essential need for an industrial strategy—another one of his political flip-flops—and his wish to reduce the Department by 30 per cent. Perhaps he should be the first to go.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. The House is aware chat Madam Speaker has placed a 10-minute limit on speeches between 7 and 9 pm. A large number of hon. Members wish to speak, so I hope that those who are called outside those hours will bear that in mind.

5.14 pm

Mr. Nick Hawkins (Blackpool, South)

Judging by the speeches of Labour Members, including that of the right hon. Member for Copeland (Dr. Cunningham), they are experts in trying to rewrite history. They have forgotten all the disastrous results of the policies that they pursued every time they were in government, but especially, as I remember, between 1974 and 1979. We constantly hear Labour Members talking about the 1970s and what has happened to British manufacturing industry since then, but they never mention that it was trade union militancy that destroyed that industry throughout the 1960s and 1970s, and especially when Labour Governments were in power.

I also recall that every Labour Government that there have ever been left office with unemployment higher than it was at the beginning of their term in office. I am sure that that would again be the result if this country were ever foolish enough to elect another Labour Government. I lived in the midlands throughout the 1970s and I suffered with the rest of the British people from the effects of a Labour Government. Labour Members should remember that then there was inflation in the high 20 per cents. and compare that with this Government's success in bringing down inflation to low single figures. They should also remember the mistake made by the shadow Chancellor, who predicted that unemployment would rise month after month, yet since then unemployment has fallen month after month.

Labour Members, especially those in the shadow Cabinet, usually have one or two faults. First, they have had no experience at any time in their lives of working in industry. If the press were to investigate the jobs many of them had before coming to the House they would find many social workers and university lecturers, but few with any experience of working in industry, in any capacity. Secondly, those who speak about industry are frequently motivated by an unfortunate combination of ignorance and prejudice—ignorance because of their lack of experience of the sharp end of industry, which I have been lucky enough to have, and prejudice because they believe that profit is a dirty word.

When Labour Members talk about investment, they usually mean Government subsidy. They do not realise that companies raise the money for investment by making profits. To hear many of their speeches, one would think that they all believe that profit is a dirty word, yet it is profit that allows a company to invest. They throw around cheap insults about senior company officials and their pay while failing to recognise that companies must pay the rate for the job. While I would not defend every pay rise that directors vote for themselves, sometimes companies seek to recruit in the international market, and to get the right people with the right leadership for British industry they must outbid United States, Japanese and European competitors, all of whom pay very high salaries. Those factors are often forgotten by the opposition parties.

Both of the main opposition parties constantly call for the implementation of the social chapter and the minimum wage. I had the good fortune to visit some factories in Germany during the summer recess, where I met senior works managers at the sharp end of industry. They said, "Make sure that you do not make the mistake in Britain that we made in the 1960s and 1970s." German manufacturing industry today has precisely the problems that we had in the 1960s and 1970s, when I recall that management at places like Longbridge had lost the right to manage. In German companies, particularly those in which the IG Metall union has great power, managers do not have the right even to chose to move a machine on the production line 5 ft to the right without consulting the works council. A thick book of rules, closely typed with small print, entitled the "Bevertriebsrad", insists that the works council must be consulted on everything.

The senior works manager who used to manage a plant for his previous company in south Wales as part of massive German investment there said that it was a joy to work in Britain because we have not saddled ourselves with the stupid bureaucracy under which German companies labour. That manager told me, "Make sure that you don't go down the road that we did. Don't have a minimum wage or saddle yourselves with social chapter regulations, because you will strangle your industry the way that German industry is now being strangled."

Labour Members who claim that the social chapter works fine for Germany should ask those who work at the sharp end of German manufacturing industry. They say that it is a disaster, which is why German companies are losing out right, left and centre to Japanese and other far east manufacturers, and why companies such as Bosch, which is in south Wales, are closing their plants on the mainland of continental Europe and relocating to Britain. Britain enjoys 40 per cent. or more of all inward investment to the European Union.

The debate is about both industry and education, which are closely linked. If British industry has a well-educated work force and well-trained managers, it will have a successful future. I was delighted to hear last week's announcement of the new national curriculum, which will bring a return to the high educational policy standards that were so sadly lacking over many years because of the trendy socialist ideas peddled through teacher training colleges since the 1960s.

The new English curriculum will make increased demands on pupils. There will be greater emphasis on grammar, spelling and punctuation—the traditional values that parents want and children need, but about which the Opposition parties have forgotten. There will be more emphasis on reading, writing and arithmetic—particularly in the primary years, and on the need for pupils to be taught written and spoken standard English. There will be greater emphasis on high-quality English literature and, for the first time ever, more attention will be paid to correct English across the curriculum.

In mathematics there will be more emphasis on arithmetic, particularly during the primary years. The use of calculators by five to seven-year-olds will be restricted so that children will learn mental arithmetic. Calculators cannot be a substitute for arithmetical skills. As someone who has taught and is the son of a university lecturer and mathematics teacher, I know that those things matter.

Mr. Don Foster (Bath)

Will the hon. Gentleman give way?

Mr. Hawkins

Not at this stage, because of Madam Speaker's ruling about the length of speeches.

The new curriculum will place a strong emphasis on history, on targets for attainment, and on the ability of pupils to recall and to deploy knowledge, facts and understanding. There will be a strong emphasis on British history. A specific reference to British industry has been added, rightly, for five to seven-year-olds. Of the eight core historical periods that seven to 14-year-olds will study, six will focus on British history and one on the 20th century, including Britain's part in both world wars.

I am secretary of the Conservative Back-Bench sports committee and joint secretary of our Back-Bench education committee, and sport is a subject dear to my heart. The proposal that 14 to 16-year-olds should be required for the first time to play competitive team games has been strengthened, and competitive team sports for younger age groups have also been confirmed. That will help to ensure that young children will be taught well and be kept fit, to become the well-trained work force that we will need in future. Pandering to outmoded educational ideas is ending.

A crucial part of education policy must be encouraging young people to turn to constructive pursuits and to keep them away from drugs. Labour's new leader suggests that he and his party are tough on crime and tough on the causes of crime. How does he square that claim with the action of many Labour Members in signing motions and speaking in favour of legalising cannabis? The Liberal Democrat conference also voted to legalise cannabis.

The most serious cause of crime in my constituency and, I suspect, in many others, is drugs. I want my party to continue adhering to tough policies on crime, to ensure that there is a clamp down on drugs. I hope that, during my lifetime, no Conservative Member will ever call for legalisation of cannabis or any drug.

Mr. Deputy Speaker

Order. I remind the hon. Gentleman that this debate is about education and industry.

Mr. Hawkins

I understand, Mr. Deputy Speaker, but I was seeking to stress the importance of an education policy that encourages traditional values in law and order. I understood that hon. Members are allowed more latitude in the debate on the Loyal Address and to range wider than usual.

Mr. Deputy Speaker

Order. The Chair has been allowing reasonable latitude.

Mr. Hawkins

It is vital that schools adopt tough policies to ensure that there is no drug taking in their playgrounds. I was greatly concerned to discover recently that many schools, particularly those in inner cities and inner urban areas—including in my own constituency—are finding that drug dealers are congregating in the vicinity of playgrounds, trying to encourage children as young as 10 or 11 to buy and to take drugs. We have heard nothing from the Opposition Benches about tackling such problems.

It is crucial that traditional values in education are reinforced and that young people are encouraged by their teachers and parents to participate in constructive activities, because that will take them away from the danger of drugs. Competitive sport in and outside schools is an important part of that. I hope that my right hon. Friend the Secretary of State for Education can reassure me that she will stick to traditional standards and values.

We have already heard from my right hon. Friend the President of the Board of Trade about the great success of British industry. If we can ever get the British press to talk proudly about Britain's successes instead of constantly knocking our country, and if we can ever get either of the main Opposition parties to stop running Britain down, we shall have the right kind of debate. My party will build on our strength in industry and education rather than be diverted by the sideshows on which Labour often concentrates.

5.28 pm

Mr. Denzil Davies (Llanelli)

This was the 15th Gracious Speech since a Conservative Government were elected in 1979. Like the others, it consisted mainly of generalities expressed in felicitous language. The Government are apparently in favour of economic growth, rising employment and permanently low inflation. The reality of 15 years of Tory policies and of 15 Queen's Speeches for a constituency such as mine—which, by the skin of its teeth, is hanging on to the status of an industrial constituency—and others in south Wales is quite different from the description given by the President of the Board of Trade this afternoon.

The grim picture for my constituency—which is not very different from others in the north-west, the north-east and Scotland—is one of high unemployment among young people, and among young men in particular; long-term unemployment; many part-time jobs offering low incomes; and low per capita incomes, with the consequences that that has for town centres, ilocal authority expenditure on community services and everything else. We do not have much to praise after 15 years of Gracious Speeches produced by Tory Governments.

Recently, I met a group of about 20 of my constituents who had been declared redundant. They had been working for a small company in the constituency. Most of them thought that they would never work again. Some were fairly optimistic in thinking that they might, in the not-too-distant future, obtain part-time employment.

A gentleman in his late fifties sounded much more optimistic than the others. He said that he had already found another job. Indeed, he had found a full-time job. That came as some surprise to the others, and to me, He said that he had been made redundant four times since 1979. On each occasion he had found a full-time job within the constituency to replace the one that he had lost. Unfortunately, there was a sting in his message. He said, "In my next job, my take-home pay will be lower than the pay that I received in 1979 before I first lost a job." He was not engaging in any computations with inflation. He was simply talking about the cash return for his work since 1979 and the subsequent redundancies.

My constituent's account is, unfortunately, part of the reality. That is the position even where there is no unemployment and some part-time work. Even when people can secure jobs, they are finding time and again that they are earning less and less when they compare their take-home pay with that which they received in previous employment. That is certainly the position in constituencies like mine.

It seems, as far as I can discern, that the situation has not been very different in the United States. In the 1960s, when I was in the United States, it was almost the tradition among working-class families for people to take a second job. That enabled them to make ends meet and even to better themselves. In those days, a man would often take a second part-time job, and perhaps even the woman of the family would take one. There were such jobs available at that time, the United States economy being what it was.

I understand that that opportunity to improve a working family's standard of living disappeared in the 1980s. Second and third jobs are still available, but many of those who work in car factories, in industry generally and in the service sector in the United States are finding that their standard of living is becoming lower even when they take extra jobs. I suspect that that experience will come to Britain. It seems to be coming slowly to constituencies such as mine. There is not much joy there for the Conservative party if we choose to talk about such matters in political terms. As I have said, I think that the American experience will come to Britain and perhaps even to the rest of western Europe. The trend will be accelerated if we continue to hand over control of monetary policy to central bankers, whether in Britain or in the rest of western Europe.

Another testament to 15 years of Tory rule appeared in my mail recently. My attention was drawn to some figures that analysed the 1990–91 census. There were the usual grim statistics about unemployment, including activity and inactivity rates. The statistics that took my eye related to inactivity rates among households. In 1991—only four years ago—there was no one working in 41 per cent. of households in the Llanelli constituency. To use an old-fashioned term, there was no breadwinner in those households. The decline in employment had continued at about 1 per cent. a year since 1981. Taking account of that trend—I would not think that it has changed—the figure is now probably 45 per cent. It might be even higher because of recent redundancies. By the next general election, in about two years' time, it may be that no one will be working in 50 per cent. of households in the Llanelli constituency.

I understand the composition of households and I accept that there some are made up of elderly people who are not seeking work. Nevertheless, the figures to which I have referred are a grim condemnation of 15 years of Tory policies and 15 years of Tory Gracious Speeches.

The President of the Board of Trade has told us that he does not wish to subsidise industry. Although no one is working in about 45 per cent. of households in the Llanelli constituency—the position is not so very different throughout south Wales—there is no shortage of new build housing. The Tarmacs, Wimpeys, Westburys and McAlpines are building houses everywhere. That is despite the fact, as I have said, that no one is working in almost half the households in the Llanelli area. House building seems to be the main economic activity—it is certainly the most manifest one. Large estates of private houses, which have not been designed by Frank Lloyd Wright, are being built. The houses are rather cheek by jowl, but they probably meet the Parker Morris standards of a previous era. They are quite nice two and three-bedroom houses.

Before the few remaining representatives of the Adam Smith Institute on the Government Benches leap to their feet, let me assure them that the house building to which I have referred is not market driven. That is the vogue phrase that is used these days. It is not the result of real and proper planning, for there is no strategic plan.

Mr. Nirj Joseph Deva (Brentford and Isleworth)

The right hon. Gentleman has talked about a high level of unemployment and a great deal of housebuilding. Is that building providing employment locally for those who would otherwise be unemployed?

Mr. Davies

I am happy to deal with that question immediately. Bricklayers, masons and carpenters are being employed. It is curious, however, that most of the houses are not being built by local builders. Building is taking place but local builders are not getting anything out of it. As I have said, the houses are being built by Wimpey and other large companies. I accept, of course, that some people are being employed while the houses are being built.

It is strange that the building work is not market driven. No great strategic plans have emanated from the Welsh Office. It may sound parochial, but often the house building is the result of clearance by the Welsh Development Agency of old industrial land. Whatever critics of the WDA have said, and irrespective of the problems that have surfaced, the agency is extremely good at clearing and cleaning old industrial land.

It is unfortunate that in the early 1980s the Government stipulated that for every £1 of public money spent by agencies of the WDA, £3 or £4 had to be contributed by private industry. That sounds fine but there is a problem. The easiest way of finding £3 or £4 in south Wales nowadays is to approach national companies, such as Wimpey, which build houses.

Ever since the war, if there has been any money around, it has usually gone into property or house building, rather than into wealth-creating investment. That has been the history of the British economy under both Labour and Conservative Governments. That still happens. The £3 or £4 usually comes from the house builders. Nobody has an imaginative use for the land, so people say, "Let's put houses on it." No analysis is made about whether the houses should be there. No infrastructure questions are asked. Nobody asks whether schools and shops will be there to service the two and three-bedroom houses. Nobody thinks about the effect that the investment will have on the town centre down the road. Yet, public money is used.

Mr. Deva

I am becoming increasingly baffled. I have heard, on many occasions, the Labour party complaining that there are many homeless people and not enough housing, but the right hon. Gentleman is complaining because houses are being built. Will he please explain?

Mr. Davies

I am not complaining. Perhaps I should not do so in debates such as this, but I have been in the House long enough and I know that I am allowed to describe what is happening. The hon. Gentleman should not assume that I am complaining now. I shall come to my complaint when I get to the end of my speech. I am merely trying to describe the fact that, although no one is working in 45 per cent. of the households, thousands of houses are being built by national house builders. I am trying to point out that, in part, they are being built with public subsidy—the kind that must not go to BT, British Gas or to industry. Apparently, public subsidies are all right if they go to Wimpey, Tarmac or McAlpine.

The builders are pretty stupid. They can get cheap land that has been cleared for them, they can build reasonable houses at reasonable prices, but what if they cannot sell them in that low-income constituency? When I look around, I find that there is no problem. If they cannot sell them, there is always the fairy godmother of capitalism—the purchaser of last resort, which for houses in south Wales these days is the housing association.

Housing associations used to be collections of retired vicars, surveyors, trade unionists and various do-gooders, but not any more. They have become corporations. They have chief executives, public relations directors, nice motor cars, shiny offices. They buy the houses from the builders, who cannot sell them directly to individuals, and tenants are put into them. Again, I made some inquiries, and discovered that housing association rents are usually about twice as much as those for comparable houses built by that dreadful institution, the local authority. The Government are paying twice for those houses, which would have been built anyway. They are also contributing to the land, which is nice. They are creating problems for the future, because there is no planning for community services, or for anything else. So I am not complaining about public money—quite a lot of it goes into my constituency—but it is just scattered around. It is not planned. It is not even market driven.

I wondered how anybody could afford to pay the rent charged by housing associations, but it does not matter, does it? The Secretary of State for Social Security picks up the tab. He pays the extra rent, which goes to the housing associations to provide them with their empires. Yes, indeed, we have house building in my constituency, but it is not wealth-creating. All right, a few people will be employed, but we would rather have the money to recreate our industrial base so that my constituents do not have to live on handouts. Under the Conservative Government, a handout culture is developing. It does not really matter whether the money comes from Cardiff, from London or from Brussels, local authorities and Members of Parliament queue up for it. One cannot blame people, because the wealth-creating base of our communities has been steadily eroded since 1979.

Mr. Deva

indicated dissent.

Mr. Davies

The hon. Gentleman can shake his head as much as he likes. I am telling him about my constituency. I take no pleasure in what I have said, as it is sad. My constituents are proud people. The tradition of south Wales for a hundred years and more has been the production of wealth, which benefited the communities and the wider world around them. They do not want to live in a society of handouts. If we are to get some money from the Government, at least let it be planned properly. Let us have value for money, because I do not see value for money in the exercise that I have recounted to the House.

The problem remains one of no industrial strategy and no real belief in industry—the President of the Board of Trade may have believed in industry in a previous manifestation or incarnation, but probably does not any more. Certainly, many other Conservative Members do not. I was surprised to hear how few industrialists and how many people with experience in industry are Conservative Members. I see hon. Members with experience in finance, housing and other sectors, but not with experience in industry. It has been neglected for the past 15 years. We need an industrial strategy. If there is public money to be invested, it needs to go into wealth production. That is not happening in my constituency and will not until we have a new Government, devoted to rebuilding our industrial base.

5.46 pm

Mr. David Evennett (Erith and Crayford)

I am pleased to be able to make a contribution to the debate. I do not wish to follow on from what was said by the right hon. Member for Llanelli (Mr. Davies), because Conservatives believe in industry, in wealth creation and enterprise.

I shall concentrate my comments on education and the Government's education policies. Before doing so, I wish to say a few words about measures proposed in the Gracious Speech. I welcome warmly the proposal to promote enterprise and improve the working of the labour market and, particularly, to reform the unemployment and income support benefit and create a jobseeker's allowance.

All hon. Members, from both sides of the House, believe that unemployment is one of the greatest evils of our age. Although I am delighted with the falls that we have seen recently in the level of unemployment, must be done to encourage people to get into training, retraining and, I hope, back to work. My constituency has pockets of very high unemployment and my constituents look to the enterprise culture, to the retraining potential, to get jobs and opportunities for them along the Thames gateway. We look with interest at the development of the planning and industrial opportunities, which that area of the Thames gives.

I believe that the proposed contract between the employment service and the unemployed person will be of great benefit to both. A new approach to help genuine work seekers, with job experience, training and retraining, will result not only in better value for money for the taxpayer, but also a much better service to the client—those people who want to job. While the workshy are a small percentage of the total unemployed, the aim of the new allowance will be as a means of support while the unemployed person looks for work, and not an income for life divorced from the world of work. That is progress. We need good training and profitable and successful industries to create the jobs for those people.

I welcome the abolition of the regional health authorities, as proposed in the Gracious Speech. We need less bureaucracy. We need more cash up front so that the health service can provide service for the patient, not bureaucratic structures. Contained throughout the Gracious Speech is the belief that we need less government and more effective utilisation of our natural resources, for the benefit of all.

I am delighted that no major education reform Bill was included in the Gracious Speech. There have been many good measures in the recent past, and decisions from my right hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten), who was Secretary of State for Education. I feel, however, that the fact that this Session will include no major education reform measure is good for education, good for the taxpayer and good for the nation's children, teachers and parents. In the past, so much had to be done because, regrettably, the education service declined during the 1960s and 1970s as the wrong policies were implemented. This Government confronted and tackled the problems; the results are beginning to feed into the system, and more achievements will follow.

In the past decade, much more public money has been spent on education in real terms—some 47 per cent. since 1979. More has been spent on books and equipment; we have seen better pay for teachers, and improvements in the teacher-pupil ratio. We have also made considerable progress in our aim of improving educational standards.

Out have gone the trendy views of the 1960s and early 1970s—the destruction of good schools, and the endeavour to make the large, monolithic comprehensive the norm. In has come reform—attention to standards, and pure common sense. We have seen the establishment of the national curriculum, local management of schools, regular testing of pupils, greater choice, more information about schools for parents, pupils and the local community, the expansion of higher and further education and so much more. That is a real record of achievement in the past decade.

Those measures were intended to improve our education service—[Interruption.] Opposition Members do not like to hear about real achievements that were prompted by our ideas rather than theirs.

We aim to improve our education service, and to ensure that individual children are given the best chance to develop their talents to the maximum. In addition, those who must foot the bill—the taxpayers—want to know that their money is being well spent for the nation's future. The fact that we now have more information—not only about examination results but about discipline, truancy and all the other matters that are of interest in individual schools—allows parents to make reasoned choices.

Parents want to know more about which schools deliver which services, and what advantages their children will gain if they go to particular schools. Parents can now attend annual meetings and ask questions; they are no longer excluded. I congratulate the Government on what they have achieved so far. Moreover, my right hon. Friend the Secretary of State has launched a crusade to improve spoken English: our national language, which has now become the international language, is often spoken better by foreigners than by some of our children, and we want to make improvements.

Needless to say, the Opposition rejected all our reforms at one stage and have taken a long time to catch up. At the weekend, I was interested to learn that the Opposition's education spokesman—the hon. Member for Sheffield, Brightside (Mr. Blunkett)—now thinks that the publication of results is not such a bad thing after all. Some of us have been saying that for some years.

Mr. Don Foster (Bath)

indicated assent.

Mr. Evennett

The hon. Member for Bath (Mr. Foster) nods in agreement: I am glad that the Liberal view supports ours for once.

All the reforms in which we believe are intended to improve the education of our nation's children, not to change society as the Labour party wants to do. We want the best, and—as the past decade has shown—we are prepared to invest the necessary money. I do not know what the Liberal Democrats' views are; the hon. Member for Bath has sometimes favoured grant-maintained schools and sometimes opposed them. In any event, the Conservative party has been in the engine room when education reforms have been initiated—in the form of primary legislation, or decided within the Department for Education.

Although the Queen's Speech does not mention an education Bill, we need improvements in our education service. We need time for the reforms of the recent past to work through the system. We are already seeing improvements, and I believe that, as those reforms come on stream, we shall see a further vast improvement in standards and enthusiasm in schools, along with results in further and higher education.

I welcome the proposed extension of the nursery school system. During the time—until May—that the Conservatives controlled my borough of Bexley, we experienced a steady improvement in the provision of nursery education. Although I welcome that, I must introduce a note of caution.

The Select Committee on Education, of which I was a member, examined provision for the under-fives and produced a good report. We supported nursery education and the gradual expansion of provision, but insisted that education must be appropriate for the age group, not merely an extension of primary schooling. Early education is a helpful foundation for a child's later development, but the educational content must be appropriate.

Conservative Members, including me, strongly support the Pre-School Playgroups Association, which has done so much excellent work over the years. The staff-pupil ratio is far better in playgroups than in nursery schools. Playgroups encourage mothers to join in, allow pupils to attend for one or two sessions a week and enable children to socialise in a friendly and homely atmosphere.

I recently visited Christchurch playgroup in Erith, in my constituency. I was very impressed by the educational content of its activities, and by its super atmosphere. Similarly, when I recently visited the excellent St. Paulinus playgroup in Crayford, I was impressed by the commitment of staff, the interest and involvement of parents and the work of the children.

I should not like to see that work destroyed; the playgroups are still doing so much good work. Conservative Members want expanded nursery education provision—of course—to work alongside the playgroups: we believe in choice and diversity in education for those aged three and over. We know that education is a continuing process.

For many years, Britain has lagged behind its competitors in terms of vocational education. I accept that our A-levels are first class, and I certainly do not want that standard to be diminished; but we must ensure that general national vocational qualifications, and higher GNVQs, are raised to a standard of excellence that is accepted throughout the country—by industry, parents, schools and colleges. The course must be perceived as worth while and challenging.

I know that progress has been made. I understand that some 4,000 students took advanced GNVQs in the past year; that is excellent news. We must ensure, however, that rigorous standards are maintained and developed, especially in view of the amount of public money that has been spent.

This was a good Queen's Speech—moderate, effective, yet radical in parts. [Interruption.] Ah, I have woken the Opposition. They do not like radicalism; they are living in the past. We, as good Conservatives, believe that we should be radical where necessary, and conserve where necessary.

The speech will be welcomed in the country, both for what it includes and for what it omits. The omission of education legislation should allow our radical reforms of the past to work through the system—to improve standards, encourage excellence and ensure the best for all our children. My right hon. Friend the Secretary of State for Education has tremendous good will from all quarters in the country for what she is doing. Under her stewardship, results will come through which will be a credit to everyone in the education sector, whether they are administrators, teachers, parents or pupils. The education reforms have been right. They have been good and essential, and they will work. After they have worked their way through, our education service and system will again be the best in the world.

5.59 pm

Mr. Nick Harvey (North Devon)

As a day has been set aside for a debate on industry and education, one might reasonably have expected the Government to present large Bills involving those sectors. This afternoon, however, the Secretary of State for Trade and Industry told hon. Members with great gusto why there was no Bill for Royal Mail privatisation. It was strange that, having spent the entire summer on the nation's airwaves telling people why it was so important that the Post Office and Royal Mail should be allowed to compete, he said today that he had no intention of allowing them to do so, which in effect confirmed yesterday's newspaper stories.

Having lost his internal battle over the issue of ownership, and having not been able, evidently, to persuade Conservative Back Benchers, whom the Tory party deputy chairman is hoping to summon to his aid throughout the coming Session, not to behave as yobs and to get on side on the issue of ownership, the Secretary of State is now willing, out of nothing more than ideological principle, to prevent the Royal Mail from having the very freedom that he has spent the summer promoting.

That tells us where the right hon. Gentlemen's priorities lie. He is looking at the whole matter from a political view. He has no interest in allowing the Royal Mail to thrive in the public sector, despite the fact that that was one of the options in his own Green Paper earlier in the year. One must ask whether it was a bogus option all along.

The Green Paper contains the very solutions that could have been introduced in the Queen's Speech. Hon. Members must realise that maintaining the status quo in the Royal Mail is not an option. The Post Office needs commercial freedom in the public sector to modernise itself, to become more efficient and, yes, to be competitive. The rigidity of Treasury rules and controls over public bodies was one factor that contributed to the privatisation drive in the past few years. The Government's Green Paper recognised that that inhibited the Post Office's operations.

If the Post Office is to tap the benefits of private finance, it is essential that its practices should correspond more closely with those of the general corporate sector. That is most obvious when one considers the external financing limit, which, under existing rules, means that the Treasury is the sole gainer. It is unimaginable that private companies, even those with the most overly generous dividend payments, would pay 80 per cent. of their profits to shareholders in the form of dividends, but that is what the Post Office is required to do—£220 million, out of a profit total of £280 million, will go to the Treasury this year.

The Secretary of State referred to the proposed Bill to introduce competition into the gas market. The principle of competition in that market must be welcomed, as it has the potential to increase efficiency and quality of service and to reduce the cost to the consumer. There are, however, some worries in that regard, which revolve around three points.

It is self-evidently true that it is more expensive to supply gas consumers who live far from the supply source than it is to supply those who live closer to it. It is more efficient, or cheaper, to supply gas to big consumers than to small consumers. Furthermore, it is clear that any restructuring of the gas market will involve considerable transitional cost.

If competition is not organised properly, the consumer will pick up the tab. Competition might be attractive to large industrial gas consumers who are near to the point of supply, but it will not be good news if disproportionate costs find their way on to the domestic tariff of high consumers on low incomes in remote areas. Many hon. Members have that worry.

We want to know the detail of the Government's proposals. We want to be convinced that the regulator will have the power to attend to the three points that I mentioned. On the evidence to date, it seems that the gas regulator does not have the necessary powers to deal with the real issues in the industry.

Independent suppliers have claimed that they will be able to cut the cost to the consumer by about 10 per cent., and the President of the Board of Trade referred to that figure again today. A number of observers and industry experts have cast considerable doubt on that figure. When one considers the cost of gas at source and the cost of transmission, it is difficult to understand how they imagine that they can make a reduction of 10 per cent. They will have removed virtually all the operating margin.

Furthermore, the estimates of benefit to the consumer have been based largely on the experience of industry. They should be treated with caution, because they may not translate accurately or appropriately to the domestic consumer.

A separation of British Gas's transportation and storage business from its other functions is essential if people in remote areas are not to suffer, but that, as I have said, will involve considerable cost. People have worries, and it is right to be cautious and to remember that VAT on domestic fuel is set shortly to increase as well.

As we have heard today, executives in senior positions in the gas industry are the ones who are seemingly benefiting from the performance of British Gas. Shareholders have already done so, their dividends having almost tripled. It is high time that consumers benefited. We shall put the Bill to that test when the Government introduce it. We shall decide whether to support it on that basis.

Ratification of the chemical weapons convention is another issue that the Secretary of State did not raise today, and it is important. The Queen's Speech did not contain necessary legislation enabling ratification of the convention. The Department of Trade and Industry is responsible for introducing that. It has been reported that both the Foreign Office and the Ministry of Defence are frustrated that the Department has been dragging its heels. I would welcome it if the Minister could give some explanation of the Department's policy, and tell us when we can expect something to be done.

Education forms the other part of today's debate. It was notable that nothing in the Queen's Speech dealt with the issues. There was no sign that the Prime Minister's recent conversion to the idea of universal nursery education for three and four-year-olds would manifest itself in the form of practical action. That is a glaring omission. We would have wished such a Bill to be included in the Queen's Speech.

Listening to the hon. Member for Blackpool, South (Mr. Hawkins) running down the education system so comprehensively, even in the same breath as he was telling Opposition Members not to run down Britain, one was left wondering which party has been in control of the education system for the past 15 years. His touching idea that the answer to industry's problems is that people should be taught to speak standard English and to get their grammar correct is highly at variance with the facts.

Mr. Brandreth

Will the hon. Gentleman give way?

Mr. Harvey

I am mindful of the clock, and it would not be appropriate to give way to the hon. Gentleman.

The hon. Member for Blackpool, South is keen on reading and writing. He extolled their virtues in his speech. I shall send him a copy of the resolution of this year's Liberal Democrat conference in Brighton, which he felt so qualified to speak about. If, after reading that, he still seeks to perpetuate the myth that the conference passed a motion calling for the legalisation of cannabis, at least he will do so in the complete knowledge that he is making points that are wholly at variance with the facts.

Mr. Ken Purchase (Wolverhampton, North-East)

And the truth.

Mr. Harvey

Exactly.

British industry's problems, and the possibility of education helping to resolve them, are real. The skill shortages are the product of education systems that have not delivered what society and the economy have sought of them. I wondered when I listened to the Secretary of State today what his priorities and those of the Government are, as they look to the future and seek to improve our investment performance.

The great problem with our economy has been one of under-investment, yet all that one can read into the Government's economic policy is that there will be tax cuts before an election, as there were in 1974 and 1987, for example. Those cuts were followed, as ever, by huge tax rises to make up for what the Government had cut.

We need a Government who are prepared to look to the longer term and do something about under-investment. Investment per head per annum in Britain is currently £2,800. In France, it is £3,800. In Germany, it is £4,500. In the United States, it is £5,500 and in Japan, it is £6,500. We look to the Government, in their economic and industrial policies, to do something about that, and to introduce measures, perhaps in the Budget, to stimulate investment in the future.

We had hoped that the Government would look anew, as the privatisation programme has run out of steam, at the possibility of encouraging public-private partnership investment schemes. The hon. Member for Erith and Crayford (Mr. Evennett) talked about skill shortages and the need for training measures to do something about them. We welcome recent Government initiatives on vocational training, but it is a point worth making that we still have a long way to go to catch up with our economic competitors.

Only 25 per cent. of Britain's work force have any vocational qualification. That compares with 40 per cent. in France and 63 per cent. in Germany. An example is the fact that we are 22nd out of the 22 Organisation for Economic Co-operation and Development countries when it comes to producing qualified engineers. It is little short of a national scandal that, with 2.5 million people unemployed, many British firms find that skill shortages are holding them back from exploiting economic recovery.

Rectifying the under-investment in people's skills must be a more pressing priority than funding pre-election tax cuts. If we are to succeed in the global economy, a well-educated, well-skilled, adaptable work force is critical. That requires action from the early years, through post-16 training, to continuing opportunities for retraining and reskilling throughout adult life. Learning should be a continuous process. It is vital to both personal development and fulfilment and to Britain's economic success.

6.12 pm

Mr. David Tredinnick (Bosworth)

I am grateful for the opportunity to speak in this debate. I suggest to the House that this year's Queen's Speech, rather than being overshadowed by bad news, was illuminated by good news: the announcement on that day that unemployment was down by almost 50,000. That continued the trend in the past 12 months of a reduction in unemployment of 300,000. Coupled with the underlying rate of inflation, which is now 2 per cent. and the lowest for 20 years, that means that we have all the ingredients for a long and sustained recovery. The two factors of falling unemployment and low inflation demonstrate that the Government's economic strategy is working well.

Against the background that I have outlined, I welcome the Queen's Speech. Although it is less radical than most Queen's Speeches since 1979, it will consolidate past successes by building on the already successful privatisation of the gas industry, which is recognised now as a world leader, by improving the help available for the out of work through the new job seeker's allowance and by introducing new social reforms to tackle discrimination, improve the care of the mentally ill—which will be welcomed very much in Leicestershire—and improve the management of the national health service.

I represent a seat in the middle of England. It is not a traditional Conservative shire seat, but one that was Liberal and then Labour until 1970. Indeed, if Lord Wyatt of Weeford, the former Labour Member, had preached the philosophy that he preaches today, particularly when he writes in The News of the World, perhaps history would have taken a different course.

Mr. Brian Wilson (Cunninghame, North)

Philosophy in The News of the World?

Mr. Tredinnick

Yes, he philosophises in The News of the World. He usually writes about the importance of privatisation in creating jobs and that sort of thing.

It is my belief that the Conservative party has developed a strong showing in my constituency since 1970—the majority when I took over the seat was 17,000; by good fortune, it has now risen to 19,000—not only because the Government's policies have been right at national level but because at district council level the Conservative-controlled council has operated similar policies of tight monetary control and good management, which have kept the local taxes among the lowest in the country. The local services, including housing, refuse collection and job creation through an industrial strategy in the area, are among the best in the country. When our electors determine which way to vote in the next general election and in the local elections next year, I am sure that they will consider the economic progress that has taken place in the constituency and in the east midlands in general.

When we examine the economy in the east midlands, we find a dramatic improvement. There has been a vast increase in confidence in current and expected business conditions: 49 per cent. of businesses in the east midlands expect conditions to improve. Only a small proportion expect them to worsen. That is the most positive outlook for five years. In a recent statement, Leicestershire chamber of commerce said: We are extremely positive about the way forward for the small to medium sized companies … We would say that the economy is buoyant and a large number of these companies actually have full order books. If one drives around Dodwells Bridge industrial estate in Hinckley on a Friday afternoon, one can feel the increase in economic activity that has taken place in the past year. In the county, all sizes of businesses have performed well. That is reflected in the fact that 74 per cent. of businesses in Leicestershire have reported an increase in sales. In addition, in the past six months there have been 61 new business start-ups in my constituency alone.

Training is an area close to the heart of my right hon. Friend the Secretary of State for Education. It has been an area of growth and excellence in Leicestershire and in my constituency. I can tell my right hon. Friend that this month we held an award ceremony for 12 firms in the Bosworth division. They received the "training for excellence" award in recognition of the contribution that local businesses had made to the improved training and skills development of the working population. That is not to be underestimated. In addition, 11 businesses in the Bosworth constituency are committed to the Department of Employment's "investors in people" initiative. They are currently being guided towards that goal by the South Leicestershire Training Group. On Friday, I saw for myself the way in which its efforts have succeeded. I shall refer to that a little later.

On Europe, I am disappointed by the die-hard attitude of what has become known as the Euro-sceptic minority in our Conservative party. It would be catastrophic for Britain's prospects not to ratify the European Communities (Finance) Bill. I favour speedy action to put the Bill on the statute book. I am sceptical about many things that go on in Europe, but I suggest that the Bill is the wrong ground on which to fight. The right ground is fraud in Europe. Nothing drives my constituents madder than the thought of Euro-fraud. It is a tribute to my right hon. Friend the Prime Minister that he was able to have the issue of fraud addressed in the Maastricht treaty.

Mr. Dover

I agree.

Mr. Tredinnick

I am grateful to my hon. Friend. We need to pursue fraud and bureaucracy in the European Union with considerable vigour.

Another aspect of the European Union that alarms our constituents and hon. Members on both sides of the House is that Europe may spring an unpleasant surprise, such as the alleged demise of the British banger, the crisp that has to be black, or some other Euro-madness.

A week ago all those involved in the herbal industry held their breath when a proposal that could have devastated that industry was put forward. It could have forced it to shut down, with the loss of 3,000 to 5,000 jobs. Herbalists would have been unable to practise, retail shops would have lost 20 per cent. of their business, and manufacturers and service providers would have been similarly affected.

That proposal comes at a time when the popularity of alternative and complementary medicine is on the up. Every chemist now stocks homeopathic preparations, the Chiropractors Act 1994 and the Osteopaths Act 1993 are on the statute book, and more and more people are turning to Chinese medicine and acupuncture.

Rather than face such a threat from Europe, the Department of Health should try to integrate alternative and complementary medicine, in all its aspects, in the health service. We should then save a fortune in health costs.

Mr. Purchase

It is interesting to hear the hon. Gentleman's views about Europe. He takes a somewhat ambivalent stance on those matters. Is he telling the House that he would be favourably disposed towards an amendment to the European Communities (Finance) Bill? If fraud were tightened up, would he be prepared to see the legislation through?

Mr. Tredinnick

I am grateful to the hon. Gentleman for trying to help me in my speech. I certainly want to combat fraud in all its elements, although the choice of ground for achieving that is perhaps not within the scope of my speech. Nevertheless, combating fraud is a key issue, as is the need for vigilance to prevent the sort of action that threatened the herbal medicines industry last week. Fortunately, that threat has been averted thanks to the good offices of the Under-Secretary of State for Health, my hon. Friend the Member for Bolton, West (Mr. Sackville), whose lawyers have found that those products will not fall within the scope of the legislation.

I referred to the economic improvements in industrial infrastructure around Hinckley in the east midlands—improvements which I believe are largely due to the Hinckley and Bosworth borough council. Nowhere are they better demonstrated than in the creation of the Triumph motor cycle factory. My constituency will now be the capital of the motorcycle industry in Britain. Triumph motor cycles are being sold successfully abroad because of free access to European markets, and our favourable trading relationship with America has seen numbers in the order books increasing and additional workers employed at Triumph. Triumph motor cycles are outperforming and outselling Japanese models.

A very important part of the economic transformation in my constituency has been the use of computer-aided design. I recently visited a company in my constituency called Profilex.

Dr. Lewis Moonie (Kirkcaldy)

Profilex?

Mr. Tredinnick

The hon. Gentleman should not joke about companies in my constituency that are doing so well. The company, which manufactures access-hatches for hotels, has recently employed some trainees through the training and enterprise council system. Without the "investors in people" standard award, the company would not have the computer-aided design department that it now has and I do not believe that it would have been so successful.

My message to my right hon. Friend the Secretary of State for Education is that those schemes are working well. She will be relieved to know that the youth training commitment from the Government that no 16 or 17-year-old who wanted a place on a training scheme would have to wait longer than eight weeks is being met throughout Leicestershire. That is a considerable achievement.

The debate is also about education. I have spent a lot of time in the past year trying to educate the Child Support Agency on behalf of my aggrieved constituents. I welcome the proposals that were put forward in the report of the Select Committee on Social Security. Like my hon. Friend the Member for Bedfordshire, South-West (Sir D. Madel), who spoke on Wednesday, I should welcome a measure to incorporate the Select Committee's recommendation that past property and capital settlements be taken into account by the agency, as well as travel costs.

There is a moral aspect in that debate involving the custody of children. I do not believe that when one partner breaks up a marriage through an affair or for some other reason, that action should not be considered in determining custody of children. I shall give the House an example from my constituency.

Constituent "X" came to see me. His wife had walked out and gone to live with another person. That lady had broken the marriage and expected her former husband to support her and her new partner, who was unemployed, through the CSA. She also wanted custody of the children. He asked me, "Where is the justice? I have tried to maintain a family unit. I have tried to bring up my children to a very high standard and teach them to act well in the world. Now their lives are shattered. Should not I have the opportunity to gain custody of these children whom I love very much?" There is certainly scope for considering that proposition. The hon. Member for Dagenham (Ms Church) looks askance, but it is a very real problem. People hold those points of view and I believe that the House should consider them.

I raise two other points: one about foreign affairs; and the other, which is a little closer to home, about industry. I have witnessed, as we all have, the recent troubles in the Gaza strip. I visited the area several years ago with hon. Members from both sides of the House—one of them is now an Opposition Whip—in an attempt to address the issue of Gaza. It was a quite frightening experience.

It is completely unacceptable that the west has given pledges to Gaza that are not being kept. Half the reason why the area is such a tinder box is that it has not received the money that it was pledged. As we all know, when one tries to run any organisation without funds, the situation becomes very volatile and unstable.

Finally, I refer to Post Office privatisation.

Dr. Moonie

Hear, hear.

Mr. Tredinnick

Thank you; I am sure that the hon. Gentleman will agree with me. History will relate that privatisation, the child of the Conservative party in general and Lady Thatcher in particular, has been the key political philosophy of the late 20th century. The hon. Gentleman has not murmured, so he must agree with me. It is transforming economies across the world which have been ruined by socialism. The philosophy has been adopted worldwide; in Russia, eastern Europe, Australia, New Zealand and Latin America, privatisation is the key philosophy.

We have global communications. Computers are developing at the speed of light—what buys one system one year, the next year buys two systems that are twice as powerful. We have information technology systems. This year saw the 10th anniversary of the privatisation of British Telecom. What a huge success that has been—not only a milestone in UK deregulation, but an example to Governments throughout the world of how to turn a bureaucratic Government monopoly into a world beater. The Post Office, the other half of British Telecom, which should have been privatised, has now been put on ice, thanks partly to scaremongering by the Opposition. They try to portray the sub-post offices as part of the state. They are not. The sub-post office that I helped to save in Barwell in my constituency is privately owned, as are most.

The real problem comes from competition from abroad—from the German Post Office, the Dutch Post Office and international carriers of all shapes and descriptions, from DHL to Business Post. The collapse of the letter, the bedrock of Post Office business, is absolutely crucial. I do not believe that it is in the national interest, in the interests of Labour Members' constituents or in the interests of my constituents, that we shall, unfortunately, be unable to take on the issue in this Session. It is not right that we should put more money into a state-owned organisation. It must get into the private sector, which is the key point. On that note, I commend the Gracious Speech to the House.

6.30 pm

Ms Judith Church (Dagenham)

I thank you, Mr. Deputy Speaker, for allowing me to speak in this important debate. I welcome the Gracious Speech, not for the visionless, mean-minded and spiritless measures that are in it, but for what is not in it. I made my first speech to the House on the Government's planned privatisation of the Post Office. I said then that the Government would not be able to carry it through. Although the hon. Member for Bosworth (Mr. Tredinnick) seems to have had his head in the sand and not to have noticed this, the reason why the Government have not been able to carry it through is that there has been opposition from their own Back Benchers. Like the whole country, apart from the rabid right on the Government Benches, I am very pleased that the Government have been unable to carry it through.

As my right hon. Friend the Member for Copeland (Dr. Cunningham) said earlier, the welcome absence of Post Office privatisation is a hole in the heart—if they have a heart—of the Government's programme. That hole will not be plugged by the other measure about which I shall speak—the proposed Bill to extend competition in the gas industry. Labour is not against competition and Labour is not against efficiency—[HoN. MEMBERS: "Oh.") Conservative Members do not listen and will not hear. We are not against efficient, productive and profitable industry—far from it. Unlike the Government, who have inflicted damage on British industry, Labour supports industry in Britain. We want British industry to survive and thrive, but, unlike the Government, we are prepared, as is the case in every other successful industrial economy around the world, to take steps to help it to do that. We are prepared to do that not only for the sake of industry, but for consumers and for the economy and Britain in general.

What will the gas competition Bill be? It will mainly be remedial action—a legislative move made necessary, even in the Government's own terms, by the failure of gas privatisation. British Gas is now a successful and efficient company, and we welcome that, but what has privatisation achieved? It has certainly not achieved competition. Only the private sector, and especially the company's directors, are gaining at the expense of the public. As privatisation failed to bring about competition, this non-intervening Government now have to intervene in the gas market to bring it about. It is remedial action.

Privatisation has not brought about lower gas prices. The imposition of VAT on fuel has caused hardship and suffering for millions of people, although not for those rich enough to pay their gas bills years in advance. The repellent price manoeuvrings by British Gas last week have completely wiped out whatever price benefits privatisation brought. We are back to square one, with no competition and no lower prices. It is just a lot of rich directors getting richer.

We have only to look at today's announcement of the obscene pay rises for British Gas bosses. As my right hon. Friend the Member for Copeland said earlier, I cannot have been the only person in London to have fallen out of bed this morning on learning that British Gas has a new advertising slogan, which says: We put our customers before ourselves. My constituents find that wholly incredible. The Bill will not change that.

The Bill will simply spread the pickings more widely and will give some other fat cats a chance to get in on the act. Let us consider the recent Select Committee on Trade and Industry hearings on the gas industry. People were refused entry to the hearings and some who did get in had to sit on the floor because so many potential gas suppliers wanted to get a sniff of the money that they would make. One could barely hear the evidence being given for the sound of lips smacking in anticipation. Most of the independent potential suppliers are, of course, saying that, with greater competition, everything will be fine.

Mr. Deva

Will the hon. Member for Dagenham (Ms Church) explain whether she is in favour of competition or against competition?

Ms Church

I am about to tell the hon. Member for Brentford and Isleworth (Mr. Deva) the answer, so I shall carry on. The potential suppliers say that with competition, everything will be fine, everyone will be happy, everyone will be well supplied and safe, and everyone will have lower prices, perhaps 10 per cent. or 20 per cent. lower. As the President of the Board of Trade said earlier and as the hon. Member for North Devon (Mr. Harvey) said, nobody believes that prices will be 10 per cent. or 20 per cent. lower. Given what has happened with electricity, water and gas prices, we are a tiny bit sceptical that this gas utopia will be achieved.

In this welter of good will, occasionally a little bit of truth manages to slip through. Let us take what the electricity company Norweb said to the Select Committee: Apart from the requirement to offer minimum safety standards, all other areas of increased standards of service should be a marketing decision for the supplier. All other standards? So there will be no minimum standards to help the elderly, those unable to pay their bills, those living far away from the gasfields or low-income, low-use customers. Apparently, there will not. There will just be "marketing decisions". In other words, the companies believe that if they cannot make sufficient money, on marketing grounds all those people—our people—will be left to the market.

Let us consider Associated Gas Supplies—Agas. It said: Some customers will have to pay for services that were otherwise cross subsidised. Who might those customers be? Associated Gas Supplies helpfully tells us that they would, surprise, surprise, be the elderly, late payers, and geographically distanced and low-load customers. Many of my constituents are included in those categories.

The predatory independents will cherry-pick the industry. They will try to carve up the best customers between them. The Select Committee asked whether there was a risk of new entrants cherry-picking the most profitable customers, the ones from whom they could generate most money most consistently and most easily. Again, only Agas was honest enough to give the real answer: It is not a risk. It will happen under the present proposals. The company is right; it is already happening.

The price changes made by British Gas last week were straightforward cherry-picking, trying to get ahead of the competition by signing up on direct debit all customers able to pay in that way. I suspect that not many of them were in my constituency. The price changes were just British Gas trying to protect its market share, at the expense of the poor, the old and the vulnerable. In terms of the "marketing decisions" that will be prompted by the Bill, it is an example of British Gas trying to get its retaliation in first.

Labour believes in markets—I am answering the hon. Member for Brentford and Isleworth, as I have done so far—but not in markets free to ride roughshod over everybody. Labour wants to protect people who are less able to protect themselves.

What should the Bill contain? It is clear that there must be minimum standards to be met by all suppliers, shippers and network operators. Those standards should cover safety and there should be a single telephone number, like the 999 number for fire, police and ambulance services, connecting people straight away with emergency services for electricity, gas and water in case of failure. There should be an obligation to supply all potential customers, not just the most profitable ones. There should be common standards on debt and disconnection practices across all suppliers and on services to older customers.

Mrs. Cheryl Gillan (Chesham and Amersham)

I listened to the long list of proposals that the hon. Lady made from the Opposition Benches. Could she enlighten the House and tell us whether she has costed those proposals and exactly who will pay for them?

Ms Church

Many of those proposals have been put forward by British Gas itself in a letter that has been sent to all hon. Members. Frankly, we should not be worrying about the cost of the proposals. We have to provide proper services for the elderly. We have to provide proper services and guarantees for disabled customers. We have to provide guarantees on energy efficiency. Above all, we must ensure—something that has to be put into legislation—that all suppliers should have to offer the full range of payment methods. That would ensure that all the people who are being supplied with gas have a choice—not the sort of choice that British Gas is now putting before the people, that if they cannot afford to pay their bill months in advance, they will end up having to pay higher prices, and whereby the least able to pay the higher prices will have to pay them. Also, all suppliers should be required to publish their prices. Above all, we need clear regulations on cherry-picking.

If the Government do not implement those proposals, British Gas says that 12 million people will lose out and 6 million people will gain. One does not need a crystal ball to know who the 12 million are who will lose out and who the 6 million are who will gain. Listen to the voice of the gas customers and the Gas Consumers Council, which I strongly suspect that Ministers and British Gas would like see the back of. It says: Service standards are likely to fall below the present level that regulation … has forced on British Gas". It also says that competition will lead to price rises, which may be on a scale which will leave many people at a price disadvantage for several years, some of them forever. That may be what the Government want; it may be what British Gas wants; it may be what the independents want; but it is not what my constituents want and it is not what I want. It is not what the Labour party wants. After the bloody nose that the Government got over the Post Office White Paper, the Government may be well advised to listen.

6.41 pm

Mr. Neil Hamilton (Tatton)

I was proud to be elected a Member of Parliament and proud to be a Minister in Her Majesty's Government, especially a Minister in the Department of Trade and Industry—a Department about which I knew something, which I know is normally regarded as a disqualification for office. I was also very pleased to have responsibility for what I regard as one of the most important aspects of Government policy: deregulation. I welcome my hon. Friend the Under-Secretary of State for Corporate Affairs, my successor, to the Front Bench. The deregulation orders, which I hope that he will be bringing forth in profusion in the coming year, should significantly reduce industry's cost. I hope that he will pursue that policy with great vigour. I pursued my own deregulation interests with vigour and I am sure that my hon. Friend will as well. I enjoyed piloting the Bill through the House last year. I enjoyed being a pilot on the bridge. Now that I am a stoker in the engine room of the ship, I intend to enjoy that role as well and I shall play my full part as a Back Bencher supporting the Government.

I have, of course, accepted that I had to relinquish office, but I cannot accept the suggestion that I abused my position as a Member of this House or betrayed the trust reposed in me by my right hon. Friend the Prime Minister. I bitterly resent the suggestion that I was prepared to accept payment in cash or kind to ask parliamentary questions or change my opinions. As a Back Bencher and, indeed, as Minister for Corporate Affairs, I sought to uphold the standards of probity and integrity which this nation rightly expects of those holding high office in Government or in business.

The press and broadcasting are a major industry—some parts of it, of course, employ highly skilled manufacturers. They play an essential part in the education of a modern democracy. On both those grounds, the future of that industry is highly relevant to today's debate. The Gracious Speech could have included several measures which would strengthen the press by reinforcing the instinct for accuracy and fairness, which, if compromised, turns a tremendous force for good into a terrifying power to destroy.

Public confidence in Government and politicians has undoubtedly been seriously undermined by the way in which the story about alleged corruption in Government has been reported and presented. To—

Mr. Deputy Speaker

Order. I hesitate to intervene but the hon. Gentleman must get down to addressing the Queen's Speech, which we are debating this afternoon, and not what happened to him personally in the past.

Mr. Hamilton

I shall certainly be doing that. I did say that we were dealing with a very important industry and I was proposing a number of measures which might have been in the Queen's Speech in order to strengthen it.

I wish to illustrate the point that I have just made by referring briefly to my recent experience. On 20 October, as the House will know, The Guardian printed an unsubstantiated allegation about me by Mr. Mohammed Al Fayed, that I, as a Back Bencher, had corruptly accepted bribes of £2,000 a time to table parliamentary questions. There is no truth in this claim. Mr. Al Fayed has also alleged—this led to my being questioned by Sir Robin Butler — that I had received £50,000 for putting down 17 parliamentary questions for the House of Fraser. There is no truth in this claim—

Mr. Deputy Speaker

Order. I do not wish to have to keep rising and I have no wish to intervene in the hon. Gentleman's speech—[Interruption.] Order. However, he is straying widely from the Queen's Speech, which we are debating. I hope that he will address his remarks to the speech itself. If he does not, I am afraid that I shall have to rule him out of order.

Mr. Hamilton

I had understood, Mr. Deputy Speaker, that in the debate on the Loyal Address, one could speak on any aspect of policy and that the subjects for debate were merely indicative. I am not questioning your judgment, Mr. Deputy Speaker—nothing could be further from my intention—but we are dealing with what I regard to be an important industry, the operation of which has very significant effects on the way in which industry performs and the impact which that has on the trade balance and other aspects, which will most certainly be within the remit of today's debate.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker. I must say that when I became a Member of this House, I was told that in debating the Queen's Speech one could talk about anything. I think that—

Mr. Deputy Speaker

Order. I shall put the hon. Gentleman right. We are talking about policy and measures.

Mr. Sheerman

I know that—

Mr. Deputy Speaker

Order. The Chair has ruled.

Mr. Sheerman

Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

I have just ruled on that point.

Mr. Sheerman

But this is—

Mr. Deputy Speaker

Order. It cannot possibly be further to a point of order which never existed. I ruled against it.

Mr. Sheerman

Mr. Deputy Speaker, I am sorry—

Mr. Deputy Speaker

Is it a different point of order?

Mr. Sheerman

It is further to the point of order—

Mr. Deputy Speaker

Order.

Mr. Sheerman

I shall not allow it to rest—

Mr. Deputy Speaker

Order.

Mr. Sheerman

It is an infringement—

Mr. Deputy Speaker

Order. I have just ruled on that point of order. There can be nothing further to it.

Mr. Hamilton

I was hoping to demonstrate that if the press and the broadcasting industry operates in certain ways, it can assist the Government of the country. But, in other ways it could undermine it in a manner which would be highly disadvantageous to trade and industry. That is the point that I am trying to make about this allegation of so-called sleaze in Government. In my own particular case, to which I was going to allude briefly, all that I was going to try to show was that the plethora of allegations made against me do not in any way concern my operation as a Minister in Her Majesty's Government.

I was the Minister for Corporate Affairs in the Department of Trade and Industry with responsibility for competition policy and company investigations. Mr. Al Fayed, whom I mentioned a moment ago, was suing the Department in the European Court of Human Rights, claiming that the DTI inspectors' power were draconian and breached the convention. I was advised by officials that, in law, I was not debarred from taking decisions by virtue of my previous sympathies—well known to hon. Members of the House—with the House of Fraser case. Nor was I debarred by virtue of having enjoyed Mr. Al Fayed's hospitality in the 1980s as a Back Bencher. However, I considered it imprudent, if not improper, to expose the Government to the possibility of criticism by exercising ministerial discretions in relation to the House of Fraser and instructed officials not to send me any papers involving that company and not to involve me in any decision-taking affecting the company's interest. The upshot is that it has manifestly upset Mr. Al Fayed that he has been unable to influence Ministers or to overturn the Department of Trade and Industry inspectors' report on the takeover of the House of Fraser.

The press and television wield an enormous influence over public opinion and the power of an editor vastly transcends that of any individual Member of Parliament or most Ministers, and the ability of individuals to protect themselves against that misuse is restricted in practice in ways in which legislation could remedy. I know that better than most because, as the House will know, 10 years ago I was involved in heavy litigation with the BBC, when my costs amounted to £235,737.35. It took me three years to clear my name. In my opinion, the law should be changed to reduce the imbalance of risks. Greater risks for editors would increase self-discipline and greater powers for the victims of their mistakes would enable wrongs to be more easily redressed.

Dame Elaine Kellett-Bowman (Lancaster)

Will my hon. Friend give way?

Mr. Hamilton

I am anxious not to give way as I do not want to take up longer in this debate than is absolutely necessary.

The Press Complaints Commission is a sheep in wolf s clothing and it is treated with open contempt by wilder media moguls. It should be replaced by a serious body which can command respect.

Our court procedures should be tightened to reduce the delays in securing justice and there should be more balance in the risks run. Informal mechanisms to stamp out media abuses are plainly inadequate and legal mechanisms are ruinously costly and slow. A major lacuna in the Queen's Speech is that nothing is proposed to remedy those serious defects.

However, I read in yesterday's Mail on Sunday that the Lord Chancellor is preparing a Bill, based on proposals put forward by Lord Justice Hoffman five years ago, to make it easier for ordinary people to bring libel actions and to speed up and cut the cost of proceedings. I strongly support such ideas and I hope that legislation will be announced as soon as possible.

Mr. Gerald Bermingham (St. Helens, South)

Will the hon. Gentleman give way?

Mr. Hamilton

I apologise to the hon. Gentleman, but I am anxious not to take up longer than is absolutely necessary.

Democracy flourishes when public understanding is at its greatest. We are now faced with a situation in which the press, both broadsheet and tabloid, are sometimes prepared to go to any lengths to undermine the authority of our institutions. Too much of the media in this country are prepared to destroy anything in their sights.

While my right hon. Friend the Minister for Export Trade does a brilliant job leading trade missions to the far east, our business men's efforts and our constituents' jobs are put at risk by an avalanche of snide criticism and false accusations against our trading partners' political leaders.

Business men batting for Britain abroad are bashed by the media at home. Not only do they have to contend with fierce international competition, but, unlike their French or Japanese counterparts, they have to contend with a hostile domestic press. While British Aerospace sales teams are flogging their guts out winning orders in the far east to keep £1,000 million worth of manufacturing jobs going for my constituents and those of other hon. Members in the north of England, some unhelpful journalists sweat it out at their computer terminals, denouncing our trading partners and, in the same breath, the Government for failing manufacturing industry.

A commission has been appointed to consider standards in public life. Perhaps the Queen's Speech should have extended its remit to the lack of such standards in one of the most important of our national institutions—the press. Again, perhaps my own experience is instructive. The campaign against me appears to have been unleashed not because of sleaze in the Government, but because the Government are clean. Desperate to find sleaze, the media have accepted at face value the sincerity of Mr. Al Fayed's statement of his motives. They have accepted uncritically all his allegations.

On 8 and 9 March 1990, The Guardian castigated Mr. Al Fayed for lies, deceit, cock and bull stories and the commission of a very serious offence … the dishonest acquisition of one of our major stores groups. It would be interesting to know what has occurred in the mean time to produce that startling change of perception of Mr. Al Fayed by the editor of The Guardian.

A free press is essential to a modern democracy, but a licentious press is subversive of it. The right hon. Member for Chesterfield (Mr. Benn) has a point when he criticises the press for its obsession with trivia and personality rather than issues. Those factors, coupled with a cavalier disregard for accuracy and balance in the pursuit of profits from circulation, have contributed powerfully to the growth of national cynicism.

Nothing better illustrates that cynicism than a letter I received from a senior journalist on one of the newspapers which had hounded me from office. The letter read as follows: I hope you will accept my deep regrets about your departure from office. I know you blame the media in part, but I hope you will accept that, as far as I am concerned, it was a straight reporting job. We need more of your calibre in Government not fewer. When the dust settles please let me buy you both a very declarable lunch. So that is all right then; all in a day's work. I will not, of course, reveal my correspondent's identity as I well recognise that there is no more sacred duty in life than the protection of one's sources. In any event, we look forward to the lunch.

Editors accuse Members of Parliament of being corrupted by the acceptance of corporate entertainment, but apparently they are not corrupted by the same process. It would, of course, be daft to suggest that The Guardian would print something flattering to Barclays bank as a quid pro quo for inviting Mr. Preston and his wife to the men's finals at Wimbledon this year at possibly £1,000 a ticket plus £100 a head for a slap-up lunch and tea. I am not for a moment suggesting that that editor has been corrupted by that hospitality, but that is precisely the allegation that he makes against us as politicians.

I invite the House to speculate on the column inches of pious indignation that would have been directed at the Home Secretary or the police had they sought to obtain information on terrorism or drug smuggling by the kind of subterfuges that have recently been employed to expose non-existent sleaze in the Government. Surely a commission to look at standards in public life should concern itself with questions such as those.

Furthermore, for evidence of naked bias, one need only compare the kind of coverage that my now celebrated stay at the Ritz hotel in 1987 received with the two or three inches on page two accorded to a former Prime Minister who apparently received, but did not register, a payment of £12,500— three times my inflated so-called Ritz bill—from the bucket-shop bank, BCCI, also in 1987 when I visited the Ritz.

I make no charges of impropriety against Lord Callaghan and accept his explanation that that was a mere "technical oversight". However, I merely draw attention to the double standards of the press and invite the House to speculate on the paroxysms of denunciation that would have flooded the pages for weeks on end had that been Lady Thatcher and not Lord Callaghan.

Moving from the sublime to the ridiculous, what sense of priorities motivated The Guardian on the previous day to run its front page lead story under the banner headline, "Minister is part-time dentist"? The truth is that, sadly for the sleaze merchants, there is no sleaze in government here. Oh, how they must yearn for the United Kingdom to provide the rich pickings found elsewhere like in Italy, where former Prime Minister Craxi is holed up in Tunisia, unable to return home where he would join a significant portion of the political classes already in gaol, or in Spain where they really know how to satisfy an inquiring press. The chief of police for Madrid is on the run, wanted for corruption, while the Governor of the Bank of Spain has been called before the National Assembly to explain his own rather than the nation's finances. Even in France, two Cabinet Ministers were marched off by the gendarmerie on corruption charges.

I was told that if this speech attacked the Prime Minister for requiring me to resign, I would get the front-page headlines in every paper in the land and I have no doubt about that. However, I have concentrated on issues rather than personalities, so, if this speech is mentioned at all, it will probably be buried obscurely on the inside pages. If that is what happens, it will prove precisely the point that I have been making.

6.56 pm

Mr. Stephen Timms (Newham, North-East)

I am grateful for the opportunity to contribute to this debate and I want to refer to a topic which was not referred to in the Queen's Speech, but which I was pleased to hear raised by the President of the Board of Trade when he opened today's debate. That topic is the development of Britain's information infrastructure and the deployment of optical fibre and other advanced technologies to provide the new generation of telecommunications services to Britain's businesses and homes. They are the services which, through the so-called information superhighway, will underpin economic development in the next century.

There is enormous activity worldwide in that area, but it is remarkable that, as far as one can ascertain, our Government are doing nothing to promote the deployment of those new communications technologies in Britain. The picture is very different around the world in our competitor economies. In the United States, the Clinton Administration on taking office established an information infrastructure task force which produced its report—an agenda for action—in September 1993.

The report made it clear that, in the United States, the information super-highway will be developed through private sector investment and that the role of the Government will be as a catalyst, complementing the efforts of the private sector and working in partnership with business, education institutions and state and local authorities. That is a model with which, I imagine, the British Government would be entirely comfortable.

That United States initiative has inspired others. The Ministry of Posts and Telecommunications in Japan is developing a public-private sector partnership to establish a new broad-band infrastructure. Two industry bodies have been established, one of which is the Association for Broadband Business Culture Creation, comprising 150 major communications users taking part in pilot applications of the new technologies.

Last year, the main Japanese carrier, NTT, which, like its United Kingdom counterpart, has several new and aggressive competitors, said that it would establish an optical fibre network across the country by 2015. This year, the Japanese Government have said that they want the job carried out faster than that, with optical fibre links being provided to every Japanese home and business by 2010, a task to be carried out by the private sector, with competition between cable television and telephone companies.

The European Union's action plan acknowledges the vital economic importance of developing information super-highways in Europe. Optical fibre connections to customers are being widely deployed in Germany, particularly in East Germany, where there was not a proper telecommunications infrastructure before. The French Government have been considering an £18 billion proposal rapidly to establish an optical fibre network to every home and business, yet the United Kingdom Government are turning their face against opportunities to allow Britain to take a lead.

I am not asking the Government to invest billions and billions of pounds in an information infrastructure—that will not happen, and it does not need to—but we desperately need from the Government some vision, leadership and the willingness to act as a catalyst to bring together the partners who together can create the innovations that we need. So far, all that we have had is silence. That is very strange, because the Government frequently point to the need for partnerships.

I was very pleased that the Secretary of State for the Environment was able on Friday to pay tribute to the regeneration partnerships created by my local authority, by Newham council in Stratford, and by Hackney council in Dalston. However, for a national information infrastructure, only the Government can pull together the partnerships that are needed. How much longer must we wait before the Government make a start?

It used not to be like that. In 1983, the Government launched "The Cabling of Britain", which heralded modern British cable television. Things have not worked out as the Government then envisaged, and the regulatory regime which was introduced then has created some problems, but at least then there was a vision. At least the Government said that they were important issues, and major private sector investments followed, but today the Government are silent. A report which was published in February for the Department of Trade and Industry tactfully expresses it as follows: There is a view held by some in the industry that a clearer vision of the future shared with government would help. There is no sign of one yet, and that is deeply worrying.

The Government must begin soon to draw together the telephone and cable companies, the programme makers and software developers, and the leading commercial and public sector users into a national information infrastructure partnership. Britain can excel in developing the super-highway, but the Government must first show the leadership and vision that will allow that to happen.

The British model, in which competing operators provide local communications services, has been enormously influential, but it has one feature which is a growing embarrassment to us and which will not be copied elsewhere. Cable television operators are allowed to provide telephone services, but the established telephone operators cannot provide cable television. That asymmetry is understandable as a device to assist the fledgling cable carriers, but it is preventing telephone operators from developing their networks in the ways that are being proposed in the United States of America, Japan, France and Germany. We cannot allow our telecommunications networks to slip behind those others simply because we have got ourselves into a position in which our regulatory framework is wrong.

The Government say that they will leave the development of that infrastructure to the market, but, at the same time, they are tying the hands of the major players in that market. If that situation continues, the opportunity to develop a super-highway infrastructure will pass us by.

The Government have in this Session a golden opportunity to tackle the problem, by responding to the Trade and Industry Select Committee's report on optical fibre networks. The Committee has proposed that British Telecom and Mercury should be able to convey cable television in their networks, but initially only where there is no cable television franchise. That provides an imaginative way forward. It safeguards the interests of cable television companies and the existing investments that they have made. I hope that the Government grasp that opportunity.

Press reports today suggest that the Government plan to do nothing and will reject the opportunity that has been presented. I hope that those reports are not true. The Committee's proposal protects existing cable television investments. To leave things as they are is seriously detrimental to the national interest. If the Government do nothing, and thereby perpetuate the present exclusion from the market of organisations which should be key players, the economy and British competitiveness will be the losers, and we cannot afford that.

Mr. McLoughlin

The hon. Gentleman misses two points. If we had not allowed cable television companies to have a franchise and a monopoly in local areas, there would not be such investment by cable television companies. Does the hon. Gentleman accept that there is nothing to prevent British Telecom from undertaking cable franchises in local areas? It has chosen not to do that. Indeed, it had several licences which it gave up.

Mr. Timms

I am grateful for that intervention. The Select Committee offers a proposal that would allow existing telephone operators to upgrade their existing networks. That is the key. They must be able to upgrade existing networks on the ground in which they have already invested in areas where there is no cable television franchise. That would not threaten any cable television franchises that have been issued, but it would allow the main telephone operators the opportunity to develop their networks in line with developments that are taking place in all other industrialised countries. We cannot allow that opportunity to pass us by.

I now comment on what the European Union refers to as the trans-European networks—the key elements of infrastructure which, like the information super-highway, will underpin Europe's economic development in the next century—that is, a national high-speed railway network. I was pleased that the Gracious Speech referred to a Bill to enable at last the construction of the high-speed rail link from London to the channel tunnel. I accept the Government's assurances that the decision on the location of the intermediate stations will be made in a honourable way. As the Government have made it clear that they choose the present easterly alignment for the link in order to bring regeneration to east London, I look forward to long-awaited confirmation in the spring that there will be an international and domestic station at Stratford as well as elsewhere on the line.

I am pleased that the Secretary of State for Transport has told the House today that he will shortly meet representatives of the Stratford promoter group. However, the channel tunnel rail link is only a start. We need a national high-speed rail network, and Stratford international should be its hub. In that matter, too, we need Government leadership, vision and planning. Other European countries already have networks. As we recognise the limits on road building in future, so our need for high-speed rail services becomes more apparent.

An information super-highway and a high-speed rail network are vital components in the infrastructure for our economic development in the 21st century. We understand that the Government will not pay for them, but they have the key role in making them happen. The Government must take the lead in creating vision and setting up partnerships. The Gracious Speech was depressingly thin on those topics, but we cannot afford delay.

Several hon. Members

rose—

Madam Deputy Speaker (Dame Janet Fookes)

Order. Before I call the next hon. Member, I remind the House that, between now and 9 o'clock, speeches will be limited to 10 minutes.

7.8 pm

Mr. James Pawsey (Rugby and Kenilworth)

I wish to confine my remarks to education. I make it clear immediately that I am a parliamentary consultant to the Association of Teachers and Lecturers.

I have listened with interest to Opposition Members in recent weeks, but I have not been able to discover any blue water between their policies and ours; all I have found is a deep red sea. Labour Members have learnt nothing and forgotten nothing. For them, choice and diversity remain mere words without significance for the nation's children. They still appear to think that there is only one type of school—that only one type of school holds all the answers to all the needs of all the nation's children. They maintain their opposition to grant-maintained schools, to city technology colleges, to grammar schools and to the assisted-places scheme. I notice that Opposition Members are nodding in agreement. But those schools provide education for about 750,000 of the nation's children, and they are doing a great deal to provide essential diversity, choice, quality and improved standards.

The hon. Member for Liverpool, Walton (Mr. Kilfoyle)—I am sorry that he is not in his place—is now an Opposition Front-Bench spokesman, a position I trust he will hold for ever. He was quoted in The Times Educational Supplement as being "an unequivocal opponent" of grant-maintained schools. I am grateful to the hon. Gentleman; he clearly says what he means and means what he says. At least one knows where one stands with him, which is rather more than one can say for his right hon. Friend the Member for Sedgefield (Mr. Blair). Apparently, the right hon. Gentleman was considering sending his son to the London Oratory school, which—shock horror—is grant maintained.

Mr. Harry Greenway (Ealing, North)

A good school.

Mr. Pawsey

Of course it is: most grant-maintained schools are good. Someone should introduce the right hon. Member for Sedgefield to his hon. Friend the Member for Walton so that they can get their act together and decide on their attitude to GM status.

It would also be extremely helpful if, at some point in the debate, Opposition Members found time to describe their education policy—assuming they have one. My hon. Friends smile at that, but they know it is true. Are the Opposition still abolitionists, seeking to cram all the nation's children into one type of school, or are they slowly being dragged, kicking and screaming, into a growing acceptance of the Government's policies? Incidentally, as the hon. Member for Sheffield, Brightside (Mr. Blunkett) now believes that league tables are not all bad, perhaps we shall soon hear him talking about standards, excellence and discipline. Perhaps Opposition Members will eventually come round to believing that a measure of competition between schools is desirable.

I believe that the Government's reforms are delivering the goods. It has taken time and it has been a long hard passage from the anything-goes 1960s to the more demanding 1990s. The Education Reform Act 1988 signalled the Government's determination to improve the quality and standards of state education. It was this Government who introduced local management of schools, under which all schools now control 85 per cent. of their budgets. LMS quite naturally signposted the route to grant-maintained status—an imaginative concept much derided by Opposition Members but increasingly accepted by the nation's parents.

It was this Government who introduced the national curriculum and testing, it was this Government who introduced a new system of schools inspection—Ofsted—and it was this Government who introduced league tables, and the GCSE. This Government have expanded advanced education, so that there are now well over 1 million students.

All that has been achieved at great cost indeed. Spending per pupil has risen by almost 50 per cent. in real terms since 1979. Spending on books and equipment is up by 37 per cent. in real terms; and we have not forgotten teachers. I have long maintained in the House that the overwhelming majority of the nation's teachers are dedicated to their profession and the children in their charge. It is therefore entirely right that the Government should recognise that dedication in increased pay. Teachers' average pay has increased in real terms by 57 per cent. since 1979.

Another Government achievement has been the greater part now being played by parents in running their children's schools. There is a powerful argument to the effect that most parents know best what is right for their children. Parents do not leave their brains behind at the school gate when they go in to see their children's teachers. They have a contribution to make—I believe a great one.

Parents like a choice of school, for they recognise that children respond to different challenges and differing school environments. It is this Government who ensured that all parents now receive a written report on their child's progress at least once a year. Schools are now required to publish test and examination results.

The Government's reforms are working, I believe, and state education is improving. The debate initiated by Jim Callaghan in 1976 is beginning to reach a conclusion, despite the ill-conceived opposition of the Liberal and Labour parties to all our reforms. I am convinced that education is now much better than it was when Callaghan started that debate in 1976.

As a foot soldier in the long education battles throughout the 1980s and 1990s I must tell the House that these improvements have occurred not because of the Opposition but despite them. [HON. MEMBERS: "Hear, hear."] I am delighted to hear that support. The Opposition withheld support for the national curriculum and they opposed virtually every other education measure. Only belatedly are they seeing the educational light and ditching their comprehensive dogma and the old equality claptrap. Children are not equal; they do not have the same needs. Parents need freedom and choice to make the right decisions for their children and they will get that only from this Conservative Government.

7.16 pm

Mr. Gerald Bermingham (St. Helens, South)

I propose to raise five simple points. I noticed that the Gracious Speech contained a measure to increase our contribution to Europe. I understand from the newspapers that I read at the weekend that the measure is somewhat controversial for Conservative Members—perhaps even for some Opposition Members. I certainly find it controversial.

Our current payments to Europe total £1.75 billion. I have a cri de coeur: if we are paying into a club we really should receive its benefits. Parts of this country have objective 1 status—Merseyside, for instance. Our problem is with obtaining the money. We are eligible for up to £700 million over the next few years—money that is desperately needed in parts of this country to make good the ravages of the industrial decline that has attended the modernisation of British industry. I recognise that some of that modernisation had to happen. All we need now is investment, but to get the full benefit of the European money the Government are supposed to match it pound for pound.

The problem is that the Government will not do so. Although they want to increase our contributions to Europe, they will not enable the areas with the benefit of European money to obtain what they need for investment. I should like a commitment from the Government to the effect that they will direct the European money to the parts of the country where it is desperately needed to replace aging infrastructure.

Earlier, the hon. Member for Tatton (Mr. Hamilton) did not allow me to intervene, although I only meant to be helpful. The Gracious Speech contains a measure to do with the hearsay rule in civil evidence. I declare an interest as a practising lawyer. The problem with civil cases is that there is already too much hearsay evidence. We know from the family division that tittle-tattle from the neighbour's second cousin's uncle's aunt can often influence the outcome of cases. The same applies to libel and civil cases. The Government have adopted the wrong measure and it is opposed by many lawyers. Instead, they should have taken up the Lord Chancellor's proposal—Speedier trials and simplified costs.

My third point was one that I failed to raise on Friday, when I did not manage to catch Madam Speaker's eye. We Back Benchers find it a bit off-putting, to put it mildly, when Front Benchers take up two and a half hours of a five-hour debate, as they did on Friday. I appreciate that Back Benchers are not important in the minds of Front Benchers, but many Back Benchers will echo the sentiment that if Front Benchers continue to dominate 50 per cent. of debates many of us will begin to dominate the Back Benches in our own way. Let that be a warning. If my Whip, who is listening, wishes to report me to his superiors he is welcome to do so. With a smile, I tell him that I will take as much notice of him afterwards as I do now. [HON. MEMBERS: "Hear, hear."] That shows the power of Back Benchers. We are united against the Whips in particular and against Front Benchers specifically.

I sought to raise a simple matter on Friday. The Home Secretary spoke for between 45 minutes and an hour but announced few measures that will ease the problems in the criminal legal system or the prison system. He spoke about cutting home leave, but the idea of rehabilitation and the integration and reintegration of long-term prisoners seems to have passed him by. The best way to rehabilitate prisoners is to reintegrate them. Those of us who know anything about the subject know that, but the Home Secretary seems to know very little about the subject. That might explain his mistakes.

The Home Secretary proposes to take 40,000 people out of the home leave system. We all deplore people who break home leave conditions, but for every one who does so those who keep it are legion. The Home Secretary is penalising the many for the folly of the few, which is not good penal policy.

There are currently 51,000 prisoners in overcrowded gaols, many of whom are living in deplorable conditions. They are bored to death and think only of the next crime to commit when they get out. That makes one wonder whether our penal system is right. As I think every hon. Member knows, I am not soft on crime but I am in favour of a penal system that reforms and rehabilitates rather than educates people in the art of further crime.

My fourth point is a serious one. The Gracious Speech mentioned legislation on mental health, and reform of the Mental Health Act 1983 is long overdue. The 1983 Act resulted from a European Court case with which I had some connection as I was senior partner in the firm of instructing solicitors. I have always had several grounds for concern about that Act. First, no provision seems to be made to allow the clawing back into the system of a patient who deliberately does not take his medicine. There have been several such serious cases, some of which have led to deaths. A patient who is on a loose rein, if I may put it that way, and who refuses to take his medicine and do all that is necessary becomes a risk to the public at large. I hope that the Government will bear that in mind for future legislation.

Another matter that causes me concern relates to people who, through no fault of their own, are beginning to deteriorate mentally. There should be a means to identify such people and a measure by which care can be exercised and facilities made available so that they can be treated before they become a danger to themselves or to the community at large. The problem of mental illness is serious and needs to be addressed. I warn the Government that a solution will not be cheap. We must have measures that cover many current deficiencies in the mental health legal system and in the way in which people are assessed and reassessed.

In a recent classic case a patient was told that he was not being sent home but was being returned to Broadmoor. That patient escaped, giving rise to family fear. There must be a system to prevent such happenings. When considering the Mental Health Act and amendments to it, we must look long and carefully at the flaws that have been exposed time and again and take steps to give the appropriate authorities the necessary powers to deal with patients who either refuse to take their medicine or are beginning to deteriorate. Facilities also need to be extended to treat mental illness, which is increasing.

My final point is a cri de coeur on behalf of those who were foolish enough to listen to insurance salesmen who tempted them out of occupational pension schemes. Many such people lost a considerable amount and now have pensions that are worth nothing like the pension that they would have been paid if they had remained in their occupational scheme. The Government should consider altering pension law to enable a pensioner, potential pensioner or investor who has left an occupational scheme to return to it, subject to paying the premiums for the time during which he has been absent from the scheme. That would place them in the position that they were in before they listened to the outlandish advertising gimmicks of insurance companies who sold them what can only be described as duff pensions. We are aware of a number of companies that have had to retrain their agents and take other measures. The treatment of many pensioners is a crying shame, but it can be rectified and I hope that the Government will do so in the year ahead.

I shall end as I began. I want to see us making use of European grants and thinking of social policies that will benefit a nation that has such a need for social policy changes.

7.25 pm

Mr. Nirj Joseph Deva (Brentford and Isleworth)

The debate is about industry and education, and I should like to concentrate on industrial competition.

The British economy is growing faster than that of any other country in the European Union. Our GDP is growing at 3.8 per cent. a year, which is a higher growth rate than at the time of last year's Budget. Britain is the only major European Union country in which unemployment is falling. It has fallen by more than 400,000 since the recovery began. All that is happening at a time when, for the first time in 27 years, our growth rate is higher than the rate of inflation. Successive Governments over many years have tried to achieve that, and this is the first Government in 27 years to do so.

Productivity continues to improve, and by August it was up by 5.3 per cent. on August last year. Those are the best statistics on the economy for a generation, and the Opposition should be honest enough to recognise that and acknowledge the Government's achievements. We must continue to improve upon that performance, and in that context competitiveness is crucial. I shall concentrate on how we can build on our achievements and stimulate greater investment.

The CBI recently said: In the 1980s, enterprise was reborn in Britain and many self-imposed handicaps removed. The 1990s must see an era of investment—so that we can compete successfully in the new Europe". More importantly, we must compete in emerging markets. Investment is crucial to our industrial success, and lies at the heart of competitiveness. It leads to goods being produced ever more effectively and cheaply, and that leads to ever higher quality. In an increasingly technical and automated world, that requires investment.

Investment aids the development of more new products, and the United Kingdom is good at developing new ideas. Our scientists have won more Nobel prizes than any other country except the United States; we have achieved 14 times as many Nobel prizes as Japan. However, we are not always as good at exploiting our ideas. We need further investment and research and a little more guts.

Countries with high investment tend to have the highest rates of economic growth. Over the past 25 years, investment as a percentage of GDP—what I call gross domestic capital formation—in the Asian economies has been as follows: 27.7 per cent. in South Korea; 31.4 per cent. in Japan; and 41.7 per cent. in Singapore. In Britain, investment ran at 18.2 per cent. and has been comparatively low for a century, and significantly so since the war. Extra investment would boost capacity and block the inhibiting stop-go cycle, creating long-term, not cyclical, growth. Boosted investment would encourage companies to grow organically rather than through acquisition.

A commitment to long-termism and investment is not good enough. We need to introduce the conditions in which good investment emerges. During the 1980s, Britain's investment rose by 4.1 per cent. a year, compared with a 0.4 per cent. increase in the 1970s when the Labour party was in power. In the 1980s, investment rose three times faster than the European average, and was higher than it was in any other G7 country except Japan. Britain has emerged from recession, investment is taking off again, and, for the first time in decades, it is paralleling the increase in the rate of consumer spending. However, there is still a great deal further to go.

Above all, increases in investment rest on rational decisions taken by business. Yet in the past, especially in the 1970s when the Labour party was in power, the economic environment was hostile to development and expansion. The cultural environment in industry was hostile to investment, and it was uneconomic for business to invest.

The aggregate rates of return from investment in Britain have been far below those of Germany and the United States. The cost of capital in Britain has also been far higher, as has been the risk premium to guard against the future. Thus, the required rate of return for an investment project in Britain is often as high as 25 per cent., while in Japan the comparative figure hovers between 5 and 10 per cent. On those grounds, we should continue to free up the economy to enable business to stride ahead and take the opportunities available.

Investment is most successful when taken freely by private companies, as is confirmed by the investment record of the recently privatised industries when compared with their former nationalised industry roles. Government intervention in the allocation of the market tends to confuse the process. As the OECD said recently: Industrial support has generally proved to be inefficient as a means of preserving jobs or of easing the process of structural adjustment. A free enterprise culture, with an innovative, dynamic economy backed by the rewards for success, spurs on investment. A competitive environment disciplines and drives companies, and the penalties for failing have to be meaningful. Business needs an environment without burdens on free business activity. Unnecessary regulation needs to be squashed, with state expenditure and taxation cut. Trade unions need to be harnessed for the good of the company and the country. Those conditions, not state interference, have driven investment across south-east Asia.

Having got its economic policy wrong for the past five years, the Labour party has now conceived a new economic theory. It is proud to present it to the country as an endogenous growth theory. That has been accompanied by a number of pronouncements. However, airy rhetoric and new neo-Keynesian economic models are useless on their own. The Opposition cannot simply talk the economy up, as they have spent the past 15 years trying to talk it down. Investment has to be market-driven by business. The Soviet Union had the highest investment ratio in the world, but look what happened there.

What is the endogenous growth theory of which we have heard so much? As I understand it, it is about managing relationships. The Labour party has devised a system under which it believes it can tell the manufacturer, "You should do this or that. You should buy from so-and-so and sell to so-and-so, and manage a long-term relationship." Labour thinks that it can tell a pension fund, an investment fund or the City of London to invest in a particular company and then tell that company to invest in plant rather than in, for example, an advertising campaign.

Labour believes that it can go into boardrooms throughout the country and compel every company to take the investment decisions that Labour thinks are right. If that were to happen in Japan, I would take a step back, because the culture in that country might enable such an absurd policy to succeed.

However, the Labour party wants that to happen in Britain, where for generations the business community has been enabled by successive Conservative Governments to take investment decisions on the basis of the company knows best. Now, the Labour party wants to tell managing directors how they should invest. For example, it believes that if companies invest in plant they will get a higher rate of growth. That may be so in Japan or Singapore—

Madam Deputy Speaker

Order. The hon. Gentleman's time is up.

7.35 pm

Mr. Thomas McAvoy (Glasgow, Rutherglen)

Conservative Members claim that the Gracious Speech contained radical measures. It stretches the imagination to hear that repeated cry. They know full well that it is a holding operation—a "keep quiet" measure—for the coming year. They know in their hearts of hearts that that is the truth.

I want to concentrate on two aspects of today's debate—small businesses, and the co-operative sector of Britain's industrial and commercial world. A healthy and expanding small business sector is vital to a competitive economy. Small businesses are often the driving force of technical innovation, and they provide a vehicle by which individuals can contribute inventiveness and drive to the marketplace—although not a wholly free marketplace. Major corporations can compete internationally only if they are supplied and serviced by efficient, reliable small businesses, especially now that many large companies contract out many of their service functions.

We have two additional motives in backing small businesses. Obviously, the first is our commitment to full employment. I do not think that any hon. Member would deny that growth in jobs is most likely to come from small and medium-sized businesses. Over the past decade, 2.5 million jobs have been created by businesses with fewer than 20 employees. There is a lesson to be learnt there, especially when that growth in jobs is compared with that of the larger companies.

Our second motive is our commitment to local and regional economic development. The Scottish Development Agency was one of the most important post-war agencies to be created in Scotland. Its remit on investment, intervention in industry and industrial regeneration provided a powerful instrument for economic development. The impact of the SDA made significant advances and improvements possible. Its regeneration imprint can still be discerned in the Scottish economy. It played a role for Scotland and Europe in attracting inward investment.

Both Scottish Enterprise and the Highlands and Islands development board have the potential to be significantly stronger organisations with their additional powers and responsibilities for skills training and programmes for the unemployed. That wider remit should be encouraged, but instead the Scottish Office continually cuts the amount of money available to local enterprise companies. Scottish Office Ministers have admitted that fact.

We are looking for a greater role for those organisations, but that is only one side of our approach to Scottish industry. The other wing of that movement is the introduction of political devolution, through a Scottish Parliament that will work hand in hand with Scottish industry to rectify the considerable damage done in the past 15 years.

I have always felt sympathy for small businesses that suffer the late payment of debts, which creates huge pressures. Late payment seems to be an established culture among UK businesses. It may be all right for big companies to pressurise small firms to accept late payment, but that puts at risk the financial base of the small business that is trying to survive and expand. I am extremely disappointed that the Government did not support legislation for interest on late payments.

Lord Ferrers, the Minister for Consumer Affairs and Small Firms, wrote to me explaining the difficulties of implementing such a scheme. However, if the problem were approached positively, I am sure that the difficulties of a blanket approach could be examined, to ensure that small businesses do not continue to be disadvantaged by big companies. I would have strongly supported legislation to impose interest on late payments.

I am sponsored by the co-operative movement, and proud to be so. Many hon. Members in all parts of the House could learn from co-operative principles how to conduct themselves in business. Co-operatives provide an attractive model of corporate structure that I wish to encourage. I am pleased that members of my Front Bench will introduce a co-operatives Bill as part of the next Labour Government's strategy. That will create a level playing field for co-operatives, and allow them to expand in future.

The co-operative sector can be split into four main areas—mutually constituted enterprises such as insurance and finance, retail co-operative societies, farming co-operatives and employee-owned businesses. I will concentrate on the last of those.

Small and medium-sized enterprises are vital to economic development. There are more than 2 million UK businesses, and 96 per cent. of them employ fewer than 20 people. Those firms are the lifeblood of the economy. Conventional business structures discriminate against a huge proportion of people who would tackle running their own businesses if provided with the right mechanisms. Many unemployed people have usable skills, especially in recent times—but structural changes in the nature of management and in working practices mean that such people are effectively barred from entering into an enterprise by lack of finance and skills and from personal pressure.

Conventional logic suggests that the lone man or woman has the best chance of succeeding with a new enterprise, but that view is too simplistic, because it ignores the realities of business formation and personal circumstances. In practice, few people have access to even relatively small amounts of finance, or possess the wide range of skills necessary to establish and run a successful business with the capacity to grow and to employ others. Understandably, few people are prepared to take personal responsibility for finance or management.

The option of forming a co-operative business addresses those barriers. By bringing people together in an equitable way, personal financial commitment can be reduced and access to outside finance increased. More importantly, the greater the number of people involved, the better the chance of even higher levels of finance and of securing institutional finance. A group of people can also offer a wide range of experience and skills, thus increasing the chances of the business succeeding.

Dissipating the burdens of financial commitment and work load and establishing a peer group forum can create the energy to drive the business forward, with competency increased to a high level. Those factors combine to allow the enterprise entry point to be at a higher level—and the word "enterprise" is not the exclusive property of any party in the House. Larger, more credible businesses can be formed with a higher capital base and greater in-house expertise. The latter is particularly important if capital-intensive enterprises are to be established.

In Scotland, the concept of co-operative development has been embraced by local authorities, but has so far been shunned by the local enterprise networks. Those networks, which are governed by Scottish Office policies, must change. In this day and age, working co-operatively must be the corollary of good management practice, never mind anything else. Real commitment and motivation are derived from a sense of ownership. The higher output of a motivated and committed work force produces a successful and expanding business.

Development of the co-operative sector, however, is not a panacea. We in the co-operative world do not claim exclusively to have the answer to Britain's industrial problems, but we certainly believe that the rest of the United Kingdom could learn from the co-operative sector.

7.45 pm

Mr. Harry Greenway (Ealing, North)

I will concentrate my remarks on education, and I so agree with my hon. Friend the Member for Rugby (Mr. Pawsey) that the debate on education has been well won by the Conservative party for many years. Sir Edward Boyle put it as well as anyone: The purpose of the State in education is to give children an equal chance of proving themselves unequal. That view contrasts completely with Labour's handling of education over many years and with the way that it still approaches the matter.

I am not saying that the Labour and Liberal parties do not have their hearts in the right place, but they are not prepared to think hard enough about education. Many Labour supporters argue, for example, that one must be gentle with immigrants and the deprived and not expect too much of them—but that is to do such children no favour. Immigrant children or those with home difficulties must work extremely hard, provided that they have the ability, to overcome difficulties that others do not have. If they have a language problem, they need to work extra hard, not be allowed to take it easy because they are thought to have difficulties at home. Labour's whole approach is wrong.

I was surprised to receive in my post this morning a letter from the hon. Member for Sheffield, Brightside (Mr. Blunkett), addressed to all parliamentary Labour party members. It stated: Education is due to be discussed next Monday evening as part of the Queen's Speech Debate … I am attaching two separate briefing notes to assist you with any press or public inquiries you may receive in connection with these events."—

[Interruption.]

Madam Deputy Speaker

Order. I would prefer fewer interruptions—especially from the hon. Member for Rugby (Mr. Pawsey), from a sedentary position.

Mr. Greenway

I am surprised by the quality of speeches made by Labour Members, bearing in mind the paucity of the briefing sent to them by their spokesman. I will not describe that briefing at any length because it is not worth it—it does not say anything. However, on the question of accepting the value of publishing league tables, it states: There will also be separate league tables measuring attendance, which will for the first time distinguish between permitted absence and truancy. Is not that bright? League tables on absence from school will take account, as they always have, of absence as opposed to truancy.

It is important to have league tables on attendance at school. It seems that the hon. Member for Brightside is accepting that, and in so doing is making an obvious comment. The hon. Gentleman seems to be saying that his party will now accept the value of league tables, but on the radio this morning he did not punch home the fact that there are three essentials for a child at school: that he should work, that he must attend and that he must be punctual. If a child does not attend school and does not work, it is obvious that he will not achieve anything. If a child is not punctual, his achievement will be low.

The Labour party believes that comparative information should reflect the value added by a school to a pupil's education. The purpose of such information should be to highlight those schools which have achieved considerable improvements and to assist those schools which are not achieving their full potential. I warn the Labour party that "value added" is an extremely difficult concept to write into tables that are designed to show objectively what schools and children are achieving. There is nothing wrong with the idea, however, and there is nothing new about it. It is what the Government and schools have been trying to do since 1979 and, indeed, before that. It is extraordinary, however, to write the concept into briefing material for Labour Members as if it is a new one.

As my hon. Friend the Member for Rugby and Kenilworth said, the Labour party does not have anything to say about education.

Mr. Pawsey

That is right—not a word.

Mr. Greenway

I agree, it does not.

From my early days of teaching—too many years ago—the Labour party's drive was towards uniformity at both the primary and secondary stages. It seems that it cannot get over that. It is only the Conservative party that regards each child as an individual and recognises that team games and many other aspects of school life enable children to express their individuality. Children profit from the competitive instinct; there is nothing wicked about it. Unfortunately, the Labour party has always assumed that competitiveness in children is wicked and evil, but it is natural. It is important to harness competitiveness for the advantage of children and to schools. We must not try to suppress it.

When a Labour headmistress banned the egg-and-spoon race on the ground that it was damaging to children because it encouraged them to be too competitive, and when in some London schools competitive games were eliminated by the Inner London education authority, enormous damage was done to many children, especially to those whose only talent lay on the games field. Competitive games are a valuable way in which some children can express themselves. Indeed, it is the only way in which some can do so.

I welcome the emphasis that has been placed on training and development, especially by the Government. I welcome also the Labour party's rhetoric. It seems that Labour has been won over by the Government's education and training policies. It talks about them all the time. It is extraordinary, however, that, upon gaining control of Ealing council, Labour's first act was to declare that it would close the Ealing training and development centre, at which 60 or 70 16 to 17-year-olds receive valuable training. It is their only route into work. I understand that it costs £400,000 a year. Those who are running the centre say that they can raise £200,000 from private sources and from their own hard work.

Ealing council is required only to give about 70 young people the opportunity to get into work, which they need and should have. That entitlement is something that the Labour party recognises in its rhetoric both locally and nationally. It says that it is vital to get young people in employment. Ealing council has only to pay the salaries of the instructors and teachers at the centre, which will amount to about £200,000 a year. It has inherited balances of £12 million from the outgoing Conservative administration, yet it will close the centre.

I visited the centre last week, and met some stupefied young people. They thought that the Labour party meant what it said when it claimed that it valued training for young people. How disillusioned they are. Without a thought, without blinking an eye, the local Labour party in Ealing—its action has not so far been repudiated in this place—is to close a training centre for young people, for the very young people who need it and ought to have it. It is a disgrace.

7.55 pm

Mr. Barry Sheerman (Huddersfield)

It is a strange Chamber. For a change, I decided to make a rather non-partisan speech. As I listened to Conservative Members talk about education, it became more and more difficult to take that course. I shall try, however, to adhere to my original intention.

Mr. Pawsey

On a point of order, Madam Deputy Speaker. Do you find it extraordinarily discourteous to the House that during an important debate on education and training and trade and industry, not one spokesman or member of the Liberal party is in the Chamber?

Madam Deputy Speaker

That is not a point of order for the Chair.

Mr. Sheerman

It is an extra minute for me, Madam Deputy Speaker.

I was disappointed by the omission from the Gracious Speech of any solid reference to British manufacturing industry or any sign that the Government intend taking positive steps to encourage research and development, skills training or investment in a vital sector of our economy, which now accounts for less than 20 per cent. of gross domestic product.

As today's debate has been focused on industry and education, I thought it appropriate to spend time on one sector of education that I believe has enormous relevance to our future industrial success. That is not to underrate other parts of the education process, but rather to acknowledge the strategic role of higher education in working with industry to achieve a substantial increase in wealth creation.

Universities have changed dramatically since the time when I and most hon. Members were students. Beyond the simple fact that there are far more institutions conducting research and teaching courses—129 are funded by the Higher Education Funding Council, including the colleges of London university—the entire sector has undergone what the pundits would call massification.

If we go back further than my student days, in 1938–39 there were 69,000 students in full-time education. By 1962–63, when I was at the London School of Economics and Lord Robbins was about to pontificate on the future of higher education, the figure had risen to 216,000. By 1979, we had 510,000 full-time students and 268,000 part time. In the academic year beginning in 1992, there were about 934,000 full-time students, and 475,000 part time. That is indeed massification. It is clear that higher education is no longer restricted to a small, elite group. Indeed, 30 per cent. of young people can look forward to a university career, not 3 per cent.

The size of the university sector is evident to all, but in parallel there has been a qualitative change in universities and what happens between their staff and students. That has had an effect on the very culture that is to be found within university higher education.

Many of us remember a generation of students who were typically between 18 and 22. There is now a much broader age profile. Students are generally older, they are more aware and they are often self-financing. They have a much better grasp of the significance of their time at university and what they have to gain by experiencing it to the full. It is not just the student population that has changed. Staff numbers have increased. The staff-student ratios have changed—often for the worst—and many more staff are on short-term contracts.

So what does that enormous growth from 3 per cent. to 30 per cent. mean? The prime responsibility of universities remains that of core teaching and research. I do not think that any enlightened Member of the House would gainsay that. Universities are increasingly called on to be actively involved in a variety of new roles. Some of them sit more comfortably than others. Some need more Government help and intervention. Those new roles and objectives may include—the best examples do—a real role in community regeneration. Where we see best practice, that means not only physical regeneration of the hinterland in which they are situated, but cultural regeneration and regeneration of the wealth-creating process.

Given the size and cost to the taxpayer of the higher education sector, it is natural that our constituents should have high expectations that universities will help to create a better life for them. Historically, Britain has thrived on its ability to produce talented men and women—inventors, research scientists, engineers and entrepreneurs. But today the difference is that so many more of our talented people will come through higher education. It is essential, therefore, that we carefully assess the key elements in a successful strategy for maximising the full potential of the universities.

Universities have a crucial role to play in assisting the development of our country and its wealth creation. Research and teaching are still vital and the universities' contribution to the cultural and intellectual life of the nation is as important as ever. But that traditional role is undergoing change as fast as the sector itself is expanding. Many institutions are broadening their core activities, complementing teaching and research by participation in partnerships with the private sector, in science parks and innovations centres, and through the growth of cross-discipline research and partnership. Indeed, much of our old conception of teachers and researchers working on their own, publishing papers, is really a part of history. We are looking at teams working together, with cross-disciplines, in social science, science and the arts—so often, disciplines are barriers to change and innovation rather than something that help the participants.

New methods of working and, consequently, of rewarding staff are gaining greater credence. The traditional model will change, and the Government—all Governments—should be helping that change, because the one thing that most hon. Members with one of the 123 universities in their constituency have learnt is that they are the greatest powerhouse for change. They are the greatest dynamism for change in our environment. They are also usually the biggest employer. They make the biggest use of taxpayers' money and, indeed, have the greatest potential to make the lives of our constituents better in every sense.

The present situation presents a series of challenges, which must be approached with care, seriously evaluating our own and overseas experience and attempting to share and spread best practice. Universities must above all approach private sector partnerships with a clear sense of priorities, purpose and objectives. They must also ensure that they manage the boundaries between their own institutions and the private sector in a competent fashion. The Labour party believes that to be important. Labour Members want the relationships to be right, but we also want and demand that universities be well managed. That deficiency sometimes crops up. There must be competent managers at the helm of those great institutions, which affect our constituents' lives.

Government should also understand and encourage a diversity of funding sources and realise that institutions of higher education are diverse in their nature and much better at some things than at others. Not all universities are good at basic, core, scientific research, but they may be very good at more practical research that is of equal importance to the British economy.

Governments and universities should be wary of one-dimensional solutions. Fashions will change, from science parks, to innovations centres, to venture companies. The trick will be in variety and learning by success and failure. Some of the innovations will fail. Some will succeed. We must build on the successes if we are to have a successful partnership and economy.

Political parties must learn to be less doctrinal in assessing the patterns and potential for development, whether that means understanding what public-private co-operation really means in higher education, or how much more advantageous a more flexible contractual basis may be, for teaching as well as for administrative staff. I say that knowing that somebody may be jumping on me when I leave the Chamber, perhaps from the Association of University Teachers, of which I am still a member.

Universities are a major player in our future destiny, not just because we need a more highly skilled, adaptable work force, not just because we must continue to prize a critical mass of high-quality, basic research, and not just because the university sector is now the most potent force for productive change in our society. That is most important because, above all, universities can show all our citizens, not only their students, the quality of life that can be enjoyed working in a challenging, high-tech, modern, inclusive community.

The Gracious Speech could have addressed a number of measures to stimulate the exciting partnership between universities and the private sector. Unfortunately, it missed that opportunity. Indeed, it could have included measures that would have given back a feeling of status and self-esteem to the university staff and administrators who have made such a great success of the growth pattern of the university sector. But that is a missed opportunity.

8.5 pm

Mr. John Horam (Orpington)

I am one who argued recently that the legislative programme contained in the Gracious Speech should be both short and well considered. It is certainly short and, at first glance, seems also well considered, but the devil is in the detail of such matters, as we have learnt from experience over the past couple of years, so whether in the longer term we shall take that view I cannot say, but at first glance I am pleased by what is in it.

I favour a short programme because the over-large programmes that we have had over recent years have undoubtedly led to Acts being put through which have had to be considered and reconsidered and which have not always led to the most felicitous results. I am thinking, for example, of legislation that established the Child Support Agency, the two criminal justice Bills, which had to be revised, the Dangerous Dogs Act 1991, the poll tax and so forth. The reason why we had that adverse result is quite simply that we tried to load on to our existing systems in the House an over-weighty, complex system of Bills, which it has not been able to take.

As someone who has had to spend the past eight years earning his living outside the House, and welcomed the fresh air of private business, I have been astonished by the inefficiency of our procedures, and also by the fact that there has been so little change. If one lives in the market outside the House, the fact of life is continual change. Our legislative procedures have changed hardly at all. I regret that.

We now have some good news. There is the Jopling Committee report, which, I believe, hon. Members on both Front Benches are working out with a will. I hope that we shall see some results from that in the not too distant future. I also hope that they will then follow through with some changes in our legislative procedures. They have the blueprint in the Hansard Society's report, which came out about 18 months ago and which set out very clearly the sort of criticisms that all of us make about our procedures. I hope that those criticisms will be noted and changes implemented.

My hon. Friend the Member for City of Chester (Mr. Brandreth) is raising the report aloft. I hope that one day he will raise it aloft in triumph, as we Back Benchers force the Front-Bench Members, but particularly the Whips, to come out with some radical proposals in that area, and then we can live up to our best instincts. The fact is that, if we had a privatised Chamber competing with us to produce legislation in a more efficient manner, we should be out of business and all of us would be unemployed. I am sure that, unless we changed our ways, we simply could not cope with the procedures that a private sector Chamber would have thought sensible over the past 10 years.

The second reason why we should keep a short legislative programme is that one does not have to have a large number of Bills to be radical. That is especially so when the important thing is to bring down the level of Government expenditure and start reducing taxes once again. The position is abundantly clear. At present, general Government spending takes about 43.75 per cent. of our annual national income—only a fraction less than in 1979. I expect my right hon. and hon. Friends to improve on that, and to lower the figure by £5 billion or so; but I think that they should exceed what inflation and unemployment levels will allow them to do anyway, and make further cuts in public spending. I believe that that is the only way in which we can make sensible progress in invigorating industry and lowering taxation. Both the Institute of Directors and the CBI have called for precisely such action in their Budget recommendations; I hope that my right hon. and learned Friend the Chancellor has listened carefully to what they have said.

If my right hon. and learned Friend is looking at areas in which we can cut public expenditure—which he will naturally want to do—he need look no further than the Institute of Directors' charter for Government spending, which sets out a 25-year programme for reducing the total. Like the institute, I do not believe that we should reduce public spending in every area; indeed, in some areas we need to increase it. The problem is the relentless rise in the total, particularly as a percentage of our national income. That is intolerable.

As many of my hon. Friends have pointed out today, we have achieved a number of triumphs in the past 15 years. We have had a superb success with privatisation, which the Opposition have largely accepted; we have had a superb success with trade union reform, which they have largely accepted; and we have made excellent progress with education and training, which the Opposition—doing one of their usual U-turns—are accepting. If we can cap that with progress in reducing Government spending and taxation—which is, I think, implicit in the appeal of the Conservative party—we shall have increased our success substantially. Our current economic performance is the best that I have ever seen, and I feel that the Government deserve full credit. If they can maintain that performance over the next 10 years—and the approach that I advocate would enable them to do so—they will deserve to stay in power for a long time.

The Queen's Speech includes legislation to authorise the construction and operation by the private sector of a high-speed rail link between London and the channel tunnel. I am particularly keen for that to be implemented in good time, because until the link is constructed, all the trains will go through Orpington. We welcome that in some respects, but we do not welcome the increase in noise, vibration and general nuisance.

Hon. Members will remember all the business about "leaves on the line". To reduce that problem, it was unfortunately necessary to remove all the shrubs, bushes and trees that lay between my constituents' back gardens and the railway line, which has now exacerbated the problems of noise and vibration. The obvious answer is to erect noise barriers, and—owing to the sensible and constructive approach of Bromley council—there are plans to erect such barriers on lines carrying mainly freight. Unfortunately, it has not been possible to reach an agreement regarding lines carrying passengers.

The Government can help my constituents, and many other people in Kent and south London, by improving their proposals for the noise insulation regulations that they are about to introduce. They should extend those regulations not only to new lines, but to existing lines that are substantially upgraded.

With that caveat and hope for progress, I broadly commend the Queen's Speech. I believe that it is one more step towards sensible progress for our country, particularly in economic matters.

8.13 pm

Mr. Greg Pope (Hyndburn)

I was delighted to learn that the hon. Member for Ealing, North (Mr. Greenway) had been sent a copy of the Labour party briefing for the debate. In the past, even members of the parliamentary Labour party have not received that briefing; this is a clear sign of our improved performance.

It has already been said that the most noticeable feature of the Queen's Speech is what it lacks rather than what it contains. Obviously, the ditching of Post Office privatisation has been mentioned, but the absence of any education legislation is equally noteworthy. The Government have forced through some 20 separate education reforms over the past 15 years, but it would appear that the "permanent" revolution is over. No doubt that has been met with sighs of relief in staff rooms throughout the land, following the introduction of local management of schools, repeated changes in the national curriculum, the flop of grant-maintained schools and other reforms such as the new code of practice for special needs. Teachers are probably dizzy at the pace of change, and can be forgiven for craving a period of relative stability.

The Government were wrong to try to effect so much change so quickly; but it was less the speed of change than the nature of that change that was wrong. I believe that there is a compelling need for further change in education—indeed, the Government accept that to an extent: in the past fortnight they have introduced yet more changes in the national curriculum, which we welcome.

In my view, the Government have consistently got it wrong on league tables—not because it is wrong to give parents information about school performance, but because it is wrong to give them as little information as the Government do. League tables are a form of performance indicator, and the function of such indicators should be to improve performance and to drive up standards. Crucially, they should try to show the level of improvement in pupils' achievements—in short, to demonstrate the difference that a school can make. We want schools to have high academic expectations and good results; but the answer to the question, "What makes a good school?" is not simply, "One with good exam results."

One of the problems with the current league tables is that they are crude and relatively uninformative. A school with a comparatively bright intake achieving an average of five GCSE passes per pupil is not performing as well as a school with a less academically capable intake achieving the same result, or even less. In their current form, the league tables do not highlight such differences.

The Parliamentary Under-Secretary of State for Further and Higher Education (Mr. Tim Boswell)

Will the hon. Gentleman give way?

Mr. Pope

I should like to, but I am allowed only 10 minutes for my speech.

The present system takes no account of either the circumstances faced by individual schools or the way in which they can boost pupil achievement. There is a better way and, after years of opposing Labour and the other Opposition parties' support for value-added league tables, the Government are now at last commissioning research, some of it from London's Institute of Education. Why on earth has it taken so long for the Government to see sense? The answer, of course, is ideology: the Government have seen teachers as producers and parents as consumers, free to exercise market choice.

Leaving aside the bizarre notion that parents are the consumers of education—I should have thought that, if anyone were a consumer of education, it would be the pupils themselves; surely they should be at the centre of our approach—the league tables are a blunt instrument. The idea that parents should assess the league tables and then make a market choice, so that good schools can flourish and failing schools wither on the vine—or become subject to education associations—simply is not working; or, if it is working, it is working only at the margins.

We need a more sophisticated system. It should, of course, recognise and identify schools that are performing well, and those that are failing; but, crucially, it should not just recognise schools that are failing, but understand and demonstrate how and why they are failing. If we do not know how and why they are failing, how can we remedy the failings? The league tables are a weapon with which to attack failing schools. We need more information which can be used to turn failing schools into succeeding schools: the market mechanism simply is not enough.

Much research has already been done—by the Institute of Education, by Keele university and by the National Foundation for Educational Research. Surely it is time for the Government to pull some of that research together.

League tables for non-attendance are also inadequate. Although such tables are well meaning, the idea of authorised and unauthorised absence from school is deeply flawed. It fails not least to take account of pupils who register at school and then abscond from it. The Government have tried to deal with the problem by providing a £3 million grant to introduce computerised registration and pupil swipe cards, the idea being that pupils can register at the beginning of each lesson. However, according to yesterday's Independent on Sunday, even the company that makes the computerised system admits that it is a failure. The pupils at whom the system is most aimed lose the card, deliberately leave it at home or will not comply with the use of it. I should have thought that, before the Government spent £3 million of taxpayers' money, they might have dealt with that basic problem.

The Government's response to truancy has been woefully inadequate. Why do not they understand that the scale of truancy is almost certainly way in excess of the figures that the Government will publish next week? Tens, if not hundreds, of thousands of children are missing from our schools every day and they are missing out on their one big chance of education. Many of them will be exposed to crime. The Government, however, persist in treating the most important service that local education authorities provide in relation to this matter as a mere kid catcher.

The Government could start by recognising that non-attendance is a complex problem with varied causes. Some of the problems are school-based—bullying, poor academic performance and the unrecognised special needs of children—and some are home-based. It is not enough just to deal with the symptom of the problem—truancy. The Government should deal with its underlying causes. We should recognise that there is a national shortage of education welfare officers.

The debate is about not only numbers but quality. The Government should announce that, from now on, all education welfare officers must possess the relevant social work qualification. I hope that the Minister will soon announce that targets will be set for LEAs to ensure that all education welfare officers meet social work training qualifications.

Hon. Members know that part 1 general national vocational qualifications for 14-year-olds will be piloted next year in the subjects of business studies, health and social care, and manufacturing. That strikes me as being an extremely narrow range of subjects. I should have liked at least some emphasis to be placed on arts and the humanities. I hope that the Minister will say how much consultation will take place on course content to avoid a repetition of the fiasco over the national curriculum.

We are entitled to ask what the part 1 GNVQs are for. There is a danger that they will end up simply as an easier alternative to the GCSE. If that happens, we shall be back to where we were 20 years ago. We shall have a two-tier exam system, just as we did with the old CSEs and GCEs. If that happens, the danger is that low public esteem for GNVQs for 14-year-olds will permeate through to post-16 GNVQs, with catastrophic results. I hope that the Government will listen to that point before proceeding with the pilot scheme.

It is 22 years since Mrs. Thatcher promised universal nursery provision. As the Tories have been in power for 17 of those 22 years, when will the Government introduce such provision? Long-term supporters of universal nursery provision got used to the previous Secretary of State heaping abuse and scorn on us whenever the subject was raised. It appears that the current Secretary of State has done a U-turn, which I welcome. However, I should like to press her on some points. Will the commitment to nursery provision apply to all three and four-year-olds or will it, as the Prime Minister said, apply only to four-year-olds? When will it become available to all parents who want it? Have the Government provided a costed figure for it, a question that the Minister often asked Opposition Members?

In the past 10 years, the Government have won a great deal of praise for their policy on special educational needs, not least because that sector—

Madam Deputy Speaker

Order. I am sorry, but it is the end of the lesson from the hon. Gentleman.

8.24 pm

Mr. Gyles Brandreth (City of Chester)

Although education and industry are our themes today, neither word appears in the Gracious Speech. It includes several measures that are designed to encourage the improvement in the supply side of the economy, measures that will have an impact on the industrial performance of the country, but none specifically in the education sector, which is at it should be.

Thirteen Education Bills in 15 years have introduced an extraordinary range of reforms, from local management of schools to the spectacular growth of further and higher education. Looking through the education pledges in the Government's 1992 manifesto, I found that all of them have been fulfilled or are being fulfilled, whether it is a matter of completing the introduction of the national curriculum or of introducing regular testing for all children at seven, 11 and 14.

This weekend, I was delighted to learn that the Opposition have come round to testing in part. Having opposed virtually all our reforms in the past 15 years, they seem eventually to have embraced them. I look forward very much to a change of heart on the assisted places scheme. Who knows, we may hear of it in the Opposition spokesman's winding-up speech tonight. The scheme is helping some 30,000 children around the country, a good number of them in my constituency.

Given the extent and pace of reform in education, it is right to have a period of consolidation. I am not one of those who see the quantity of legislation as a measure of the Government's virility. The same number of Bills has been proposed for this Session as for the last and, although I welcome all of them, it must surely be quality rather than quantity that counts.

Since the war, the annual rate of legislation has shown little tendency to increase, but the length of that legislation has grown. The number of words has increased, and we should perhaps consider the quality of those words. I am one of those who would like privatising parliamentary draftmanship to be considered as one course that we might follow in our privatisation programme.

The cumulative effect of increased legislation is substantial. In the 49 years from 1945, I calculate that Parliament has enacted some 3,232 different Acts. Yes, the mind does boggle. It is no wonder, Madam Deputy Speaker, that at times you must feel a little bit daunted.

In other fields of endeavour, we tend to accept that less means more. The Government have been advertising the fact that the number of directives emanating from Brussels has fallen sharply in the past couple of years and that they see that as something virtuous. I agree. The Government have managed extraordinary change in the past 15 years, but I should be happy if, 15 years from now, Her Majesty got to her feet in her Gracious Speech to tell us that, as her Government had done so much and so well in the past 30 years, this year there would be no need for further legislation of any sort. Therefore, I welcome the absence of education legislation in the Gracious Speech. Our manifesto pledges have all been fulfilled or are being fulfilled.

I do not recall that the privatisation of the Post Office was a distinct manifesto pledge. Although I would have welcomed the inclusion of a Bill on that, I recognise that many of my constituents would not.

While checking through the manifesto, I found an interesting pledge on page 34. I came across it only because it happened to be facing the section on education, which I was studying. Before my arrival at the House, that pledge would have made little impact on me. It reads: We will propose Parliamentary reforms to ensure that the House of Commons conducts its business more efficiently and effectively". In that regard, I endorse all that my hon. Friend the Member for Orpington (Mr. Horam) said, and I shall not say any more about it.

In the hope of seeing further inward investment in my constituency, I recently visited all the businesses that have arrived in Chester in recent years to ask them what prompted them to locate in this country and in our part of the world in particular. Not one of them mentioned legislation of any sort, although several called for further deregulation ' and all acknowledged the role of Government in helping to create the right economic climate. They said that they came to the United Kingdom because of the exchange rate, because of low corporate tax rates, because of low interest rates, because inflation is at its lowest level for a quarter of a century, and because they believe that the Government mean business when they talk about sustained growth in a climate of low inflation.

Those businesses also talk of something that we now almost take for granted, although we do so at our peril: the transformation of the industrial relations landscape. Today, our strike rate is the lowest in Europe. Not only that, but we have the finest work force.

The largest recent example of inward investment in Chester was the arrival last year of the Maryland bank of North America. It is a £30 million project and one of the largest United States investments in the United Kingdom for several years. MBNA's chief executive, Tom McGinley, said that a principal reason for choosing Chester was the readily available work force, and the quality of the work force—a young and enthusiastic group of people of exactly the type that his bank liked to bring on board.

In recent years, Chester has been particularly successful in attracting inward investment. From America, the quality soap makers Original Bradford and NEBS Business Stationery are two recent examples. From the rest of Europe, Cacao Barry has invested the equivalent of £10 million in its factory. Even from the Isle of Man, another £10 million has been invested in a business manufacturing thermostatic controls for kettles and jugs.

Private sector investment in Chester has reached about £150 million in the past year, creating some 1,500 full-time new jobs. That is an exciting achievement. Those businesses join already well-established businesses with headquarters in Chester ranging from North West Securities and M and S Financial Services to Shell Chemicals and BICC.

In manufacturing, it is interesting how we have got so much into the habit of running ourselves down that we do not recognise reality. The right hon. Member for Copeland (Dr. Cunningham) was a good example of that this afternoon. In the past decade, Britain's output of manufactures has risen by 22 per cent. compared with 21 per cent. in Germany and 11 per cent. in France. Our productivity growth has outstripped theirs.

I welcome the Government's contribution to that success story. I welcome the encouragement of inward investment and in particular the work of INWARD in relation to the arrival of MBNA in Chester. I welcome the Government's commitment to competitiveness. We have recently opened our business link in Chester. I particularly look forward to the success of our bid for single regeneration funds. The Chester bid is a brilliant one and it needs to succeed because, despite our successes, we face very real challenges.

Unemployment in the city of Chester is down again. It is 7 per cent. lower than last month, 13 per cent. lower than last year, 16 per cent. lower than two years ago and 41 per cent. down on the level in 1986. Yet we do not live in cocooned isolation. In our area, unemployment is running at 12 per cent., against a national average of 9 per cent.

I am particularly worried about what has happened recently just across the border in north Wales and the fate of the work force at Raytheon Corporate Jets. I am pleased to see the hon. Member for Alyn and Deeside (Mr. Jones) in his place. Many of the people who work at Raytheon live in my constituency. Until September this year, the plant had been a major British industrial success story. When Raytheon acquired the Hawker Corporate Jets business from British Aerospace in 1993, the management and work force together set about undoubtedly the most impressive restructuring programme undertaken in the world's aerospace industry. In 12 months, a transformation was achieved. That transformation was recognised by the Department of Trade and Industry when it carried out a formal assessment of the company and confirmed its status as a centre of excellence under the "managing in the 90s inside UK enterprise" initiative.

Productivity increased by 33 per cent. The overhead cost was reduced by $19 million. The labour charging rate was reduced by 16 per cent. The product cycle time was reduced by 20 days. At Broughton, a world-class team is creating a world-class product. A significant track record it has, too. In the past 30 years the Hawker products have generated some $7.5 billion in exports for this country. In September, all that was threatened when Raytheon decided to transfer the production of the Hawker aircraft to the United States.

I am concerned at two levels. The first is the human level, with the future of the 900 and more men and women who work for Raytheon in Broughton, many of whom are my constituents. Secondly, at the industrial level, the loss of skills involved, which is an issue not only for north Wales or Chester but for the whole of the United Kingdom. The DTI should be concerned, too. I have written to my right hon. Friend the President of the Board of Trade asking for the fullest details of what the DTI did or did not know about Raytheon's intentions for the business at the time of its acquisition and asking for as much helpful intervention as possible, not before any particular meal but before it is too late.

8.34 pm

Mr. Paddy Tipping (Sherwood)

Earlier this afternoon we had some remarkable self-justification from the President of the Board of Trade. First, he told us that he was right about privatising the Royal Mail but he was unable to deliver the goods. Secondly, and more astonishingly, he told us that in retrospect he was right about the privatisation of British Coal. No collieries had closed. Unemployment was not spiralling in coalfield communities. Those phrases will bring hollow laughter in coalfield communities across the country and in particular in Nottinghamshire.

Unemployment in Nottinghamshire and in the Mansfield travel-to-work area is higher now than it was at the last general election. The most worrying thing is that although unemployment is falling across the country, the gap between unemployment in the Mansfield travel-to-work area and the rest of the country is increasing. It has increased from 4 per cent. at the time of the general election to 7.5 per cent. now. The gap between the rich and the poor is getting wider. That should not surprise us because pits have closed in Nottinghamshire. At the general election there were 13 pits in Nottinghamshire; today there are just six. At the general election, 12,270 men were working in the coal industry in the county of Nottinghamshire. Today there are 2,440. In the space of 30 months 10,000 jobs have been lost.

The future of the coal industry has yet to run its course. The preferred bids are now on the table. It is up to the bidders to put the money on the table. There are doubts about whether that can be achieved. I hope that the Government will insist that the bid that was made is the bid that is finally achieved. I hope that there will be no talking down of the bid. I also hope that the Government will look carefully at some of the preferred bidders. Some of them have a history of directorship of companies that have gone into liquidation. There must be real probity among the people who buy the coal industry. The worst is yet to come, so it is clear to me that whoever buys the coal industry will immediately throw the contractors out of work. There is a real possibility that further pits will close.

The coal industry has been in chaos in the past two and a half years because there is no energy policy. The only policy that can be identified is one in which the market operates. The energy market does not operate on a level field. Nuclear power, for example, has real advantages because of the levy. One is tempted to ask what has happened to the nuclear review that the Government promised. When will it report? What are the timetables? What will the conclusion be? There is an air of silence about the great debate that we were promised.

In the Gracious Speech another part of the energy industry—British Gas—is to be opened up. The domestic market will be subject to competition. Clearly, there will be winners and losers. As competition occurs, there will be more transparency in the market. We saw that last week when we were told that people who had a bank account and could afford to pay by direct debit would in effect get cheaper gas. People who paid by standing order or had regularly paid promptly would not benefit. The average bill payer would pay an extra £10 a year for the privilege of paying on time but not by direct debit. Clearly, there will be winners and losers. People who had paid regularly were annoyed about that. They are angry today about the massive pay increases that the directors of British Gas are to receive.

Clearly, the gas market will have to be regulated. Regulation has to ensure that all suppliers operate on a level playing field—that they take the rewards and the responsibilities. It may well be that that cannot be achieved by regulation alone. I hope that, as they produce the Bill, the Government will look at the notion of a levy on all suppliers so that everyone can take their share not just of the rewards, but of the responsibilities, too.

The Gracious Speech talked about continued economic growth, rising employment and plans to promote enterprise. But what has happened to the notion of enterprise, as in the phrase "enterprise zone"? Two years ago we were promised that 16 enterprise zones would be up and running producing 16,000 new jobs. Not one enterprise zone has yet been established. It looks as though, at best, it will be another two years before enterprise zones are operating.

There is wide-scale unemployment in Nottinghamshire. We have a private and public sector partnership at the Sherwood business park which could create 3,000 new jobs. The Government should put people first: they should cut out the bureaucracy, get the enterprise working and get the people back to work.

We also need some enterprise in the Department of Transport. We have to plan for a flagship business park north of Ollerton. It would create 3,300 new jobs through a private and public sector partnership. But it cannot go forward because a lack of enterprise in the Department of Transport forbids the construction of an access to the trunk road. It argues that the Ollerton roundabout is too small. But it is the Department's responsibility to do something about it. Why does it not create enterprise and new jobs and put people back to work?

What about the great unresolved mystery in British Coal? What will happen to its property and landholdings? The company is a major landholder across the country. That land should be put to work to create new jobs. Local authorities and English Partnerships want to develop that land and put the nation back to work.

But there is a lack of clarity about what will happen. I suspect that the valuable land will be sold to the private sector, leaving the contaminated land to the public sector for it to pick up the liabilities.

Much has been said about the value of inward investment. But, given the scale of problems in Nottinghamshire and coalfield communities, it is important that there be a mechanism to make that happen. In the east midlands we have a fledgling development company. Two years ago its budget was £250,000, now it is £400,000. But there is talk about cutting the grant from the Department of Trade and Industry next year. The other partners want to keep the company going; they want to expand it. A real commitment to coalfield communities and to promoting economic growth would be to increase the grant and give new firms an opportunity to come to the east midlands for a new future.

For that to happen, we need to raise the landscape too. That is why I hope that the environmental protection agency and the new legislation when it is produced will contain a clause which makes it clear who is responsible for mine water discharge. At the moment, everyone denies responsibility.

The Gracious Speech gives us the opportunity to clear up this matter. It also gives us the opportunity to plan the landscape— new industry in a new landscape; a new community forest. If British Coal landholdings were sorted out, we could create that forest across Nottinghamshire. We could create a new Sherwood forest; a place in which to live and work.

In Nottinghamshire today 7,498 young people aged 16 to 19 years are looking for permanent work. There are just 121 available job vacancies— none in Hucknall and one in Newark. There are 62 youngsters chasing every vacancy. They are our future; we need to invest in them. Investing in them is investing in our future.

8.44 pm

Mrs. Cheryl Gillan (Chesham and Amersham)

I am extremely pleased to make a contribution to the debate on the Queen's Speech because I believe that the legislative programme which has been outlined for this Session is not only comprehensive, but reflects an extremely steady hand on the tiller of government.

I wish to raise merely two matters in my brief contribution to the debate—one about proposed legislation, and another that has not been raised at all. I was surprised that many Opposition Members concentrated chiefly on matters that were not included in the speech rather than on what has been laid down for our legislative programme in the coming Session.

I am also surprised by the omission in Opposition coverage of the two privatisation measures proposed in the Queen's Speech. I say now how delighted I was to see the privatisation of Atomic Energy Authority technology included in the speech. It will no doubt be seen as legislation which reflects the Government's confidence in the operation, products, services and staff of AEA technology.

I have visited AEA twice this year and on both occasions members of the AEA team have expressed great eagerness to make progress on privatisation. I am pleased that we have been able to satisfy its requests.

The nuclear industry receives its fair share of attention—indeed, some would say more than its fair share. But the focus is normally placed on power generation, and I do not wish to cover that ground again tonight. Instead, I want to draw attention to some of the so-called by-products of our original investment in nuclear research and development. As a result of that investment, we have several centres of expertise: of highly skilled and world-acclaimed scientists and engineers using their skills to the benefit of mankind.

AEA technology is not a nuclear energy business and should not be confused as such because of its name. It is a science and engineering services business which is solving technical safety and environmental problems for Governments and industrial clients throughout the world. More than 70 per cent. of its contracts require a combination of skills in product development, plant and process performance, safety management and environmental protection. The business offers a large, multi-disciplinary capability, independent and impartial advice, and integrated solutions to a broad range of industries and markets. If I sound like a commercial, Mr. Deputy Speaker, I make no apology for my recommendation of this organisation.

Science and engineering is a huge growth market in the world. It is an area in which the United Kingdom has long been recognised as having particular strengths, and it is exactly these types of high technology areas in which we must invest and on which we should build our economic future. Our future will depend on our industries being not only at the front edge of technology, but competitive in international markets.

A privatised AEA technology will do better in the private sector because it will be liberated from the constraints of the public sector and be able to raise capital more freely to invest in the business. So long as it is part of the AEA involvement in nuclear power, which dominates the rest of the business, it will inevitably be impeded by the shadow of the nuclear power industry. If it is independent, it will be free to exploit the expertise that it has developed in the international market place.

This is not a pipe-dream born out of political conviction. We have only to look at my constituency and Amersham International which, following privatisation in 1982, has grown into an international business with 90 per cent. of its turnover outside the UK.

Amersham International represents only 9 per cent. of the United Kingdom's nuclear industry turnover, but it generates more than 50 per cent. of the industry's overseas earnings. It is no longer a nuclear company. It is a help science group, depending only in part on radiochemicals to produce its products. Its contribution now to health care, life science and research is indisputable and is one of the great benefits to come from nuclear science, as I am sure hon. Members on both sides of the House agree.

Before leaving the subject, I introduce a cautionary note for my right hon. and hon. Friends on the Front Bench. In some respects, AEA technology is intertwined with the rest of AEA simply because of its parentage. I hope that great care will be taken not to damage its prospects by the demands of the nuclear energy sector or the anti-nuclear lobbies. The new industries that have descended from the original nuclear programme have developed sufficiently to justify reorganisation separately from the nuclear generating industry. They have special needs and their problems, such as low-level nuclear waste disposal, are different from those of the rest of the industry.

In addition to privatising AEA technology, our programme involves creating a new environmental agency, a nuclear review and a review of radioactive waste management and policy. Although I welcome those initiatives, I do not want the benefits and the position of the nuclear-related companies strangled by the provisions that might be deemed necessary for their parent industry. I hope that the Department of Trade and Industry and the Department of the Environment—and, in due course, the environment agency—will establish separate machinery for consulting the smaller nuclear-related industries, especially in relation to regulation. We should not forget that low-level waste disposal is a problem faced not only by those industries, but by a whole range of organisations, including hospitals, clinics and research laboratories. Their needs are totally different from those of the nuclear power-generating industry and must be reviewed in a different light. I know that Amersham International would be willing to bring the benefit of its scientific knowledge and its business experience to produce safe, sensible and economically beneficial solutions to these difficult problems.

I now move on to a subject that was not raised in the Queen's Speech; I am sure that the House will be relieved to know that it is not Post Office privatisation. I had the privilege of raising on the Adjournment before the recess the question of space, expenditure and benefits. As we face such an important year of decisions on future space activities, I make no apology for touching on the subject again. I congratulate my hon. Friend the Member for Esher (Mr. Taylor) who, since his appointment as Under-Secretary of State for Trade and Technology, has taken such an active and intelligent interest in space. I believe that he now has the opportunity to make an important personal contribution during the preparations for the European Space Agency ministerial council meeting next year as well as at the meeting itself.

I am sad to say that our involvement and expenditure in European Space Agency programmes has been diminished in recent years. Frankly, we are at serious risk of damaging the industries that we have built up through our past contributions, primarily to ESA. We have now reached the stage where we can no longer just depend on the Department of Trade and Industry for funding for space. Virtually every Department now has a present and future identifiable interest in space and its development. I listed a few in a recent article in a magazine for the Bow group. The Home Office may have an interest in space in terms of drug traffic monitoring and drug crops growth monitoring. The Department for Education may have an interest in space in terms of communications and science and technology education. The Foreign and Commonwealth Office may have an interest in terms of aid to the third world—in water discovery, crop growing and the identification of natural resources, for example. I should like to see more cross-departmental co-operation and funding, and now is the time to start.

We should not neglect the increasing convergence between military and civil systems. I know that the military in all countries has a penchant for its own systems and that it talks about security requirements as a justification. Obviously, those requirements need consideration. Even in the Gulf war, however, the United States' military depended on the French SPOT satellite for some of its observation data and on communications satellites, some of which were civil systems. There are real problems in transforming convergence from a comforting buzz word into a common-sense and money-saving reality. Instead of debating the pros and cons of a European defence earth observation satellite system, it might be more practical to identify the actual data needs. We might find that much of the required data were available from the existing civil systems or that it could be provided by the private sector. It would be well worth an impartial evaluation before we went further.

We certainly need some new thinking about the way in which we approach space. I hope that in this Session, the Department of Trade and Industry, as well as other Departments, will take a special interest in the area and will increase their co-operation. It can only be for the advantage of our industries and the benefit of this country.

In common with all my colleagues, I wish the Queen's Speech and the legislation that it proposes a safe and speedy passage.

8.54 pm

Mr. Ken Purchase (Wolverhampton, North-East)

We are getting to the point where we have covered almost all the ground of what was in the Queen's Speech and what was not. I intend to touch on matters of industrial competitiveness and to look at other matters on a micro and a macro level.

Laissez-faire policies have not improved Britain's competitive position. Throughout the 1980s, the message to business was that fewer rules led to greater prosperity. I am afraid that that dogmatic approach to the economy ruled out useful Government intervention of the kind that has assisted our competitors.

It was hoped that in the labour market the agenda of deregulation would reduce labour costs and improve Britain's ability to compete. It is certainly true that our wages have fallen compared with those in other European countries. Even the Secretary of State for Employment now accepts that Britain cannot compete simply on low wages. Wages rates in the newly industrialised countries are often 50 per cent. lower than ours and unless we are all prepared to take cuts of 50 per cent. or more in our standard of living—that is what is implied—to hope to compete on wage levels is pure pie in the sky.

Whenever we asked the Government to tell us what they felt minimum wages should be, their answer was always the same: "Whatever the market demands. People will price themselves into jobs." The Secretary of State for Employment now tells us: Low-wage economies present formidable competition. Their wages are so much lower than ours that we cannot hope to compete by driving down our wage levels. We have heard a lot about U-turns in the newspapers and in the House this evening. As a U-turn, that is breathtaking from the person who, above any other, has talked about the need for people to price themselves into employment. He now says that we cannot hope to compete with the low levels obtaining in other countries. Is not it remarkable what responsibility brings to people? The Secretary of State made those comments to the Institute of Personnel Management. It is interesting that once Ministers understand the subject they soon start to trim the cloth a little.

What the Secretary of State for Employment said represented almost a triumph of the virtue of good management over political ideology, and that is very welcome. As the Opposition know, it is true that cost alone does not make an economy competitive. Innovators seek a quality work force, with high skills and team work, who can make quality products. Successful British companies all recognise that competitive advantage relies on investment, innovation and training.

The Government, who have deregulated British industry, cannot credibly offer something different. There is nothing in their tool box to suggest that they have anything different to offer. Despite the fine words of the Secretary of State for Employment, the policies of his Government foster short-termism, which destroys the long-term relationships between investors, management and the work force which are necessary to encourage investment.

Investment, of course, has been another theme of the Tories. "How successful we are", they say, "we attract more inward investment than any other European country." I do not doubt that that is so. As we advertise ourselves across the European continent as a country of low wages and low costs, it is hardly surprising that we attract some inward investment, which has been running at about £9 billion per annum.

That is only half the story. The other half is that outward investment has been running at an annual rate of about £18 billion. That leaves, in my humble estimation, a net shortfall of about £9 billion between income and expenditure—not a very good record. Much of the inward investment has been made merely to acquire shares. Has the Rover-BMW deal produced one more car? Not yet, but we are told to wait and see.

British industry is now littered with foreign holdings. Profits generated by the work force are being exported to the country of origin, from where the capital is gained. Britain lags behind every G7 country on the scale of investment. More than 29 per cent. of Japan's gross domestic product is reinvested in its infrastructure and industry. In the mid-range, even Italy reinvests 21 per cent., but the UK lags well behind—bottom of the table. The average level of GDP invested in Britain is 17.6 per cent—more than 12 per cent. less than the Japanese.

The lack of investment has, of course, led to British industry falling behind. We have also declined in innovation. We have specialised and have been very good at, for example, formula 1 racing and—I say with tongue in cheek—arms production, but we have failed to produce the mass products that would have made Britain a real leader in new technology.

Britain should be able to capitalise on the undoubted talents of its people and prevent the loss of our innovations to our competitors. One of the themes of our history is that we have invented—we have had the brain-wave and have done the brainstorming—but have had to go to overseas entrepreneurs to launch our products on the market.

Having looked at that side of the equation—the macro side, broadly speaking—I shall consider some of the micro issues, especially those affecting small firms. As hon. Members have expressed an opinion on the matter, I was very disappointed to find no mention in the Queen's Speech of the recovery of debt by small and medium-sized companies from large companies. Last weekend, the black country witnessed the failure of Bean Industries and the Reliant motor car company—I know that it produced only a wee three-wheeler, but it was the only remaining British car company and it went down the pan this weekend. Part of the reason for the failure was, according to the Bean company, that it had not been paid on time by its debtors. It is an important problem that must be tackled, and it could be tackled on the basis of a British standard along with a statutory right for industry.

Small companies do not always have access to finance. Time and again, we find that relatively small amounts of money—up to £150,000—are not available to small companies. The loan guarantee scheme, for which I applaud the Government, has simply not been taken up, mainly because the banks believe that its setting-up costs are too high and often because the premium that they levy on the interest rate is too high for a small company to bear. The irony is that the greater the risk the company has to take—usually with the owner's own money—the higher the interest rate the bank wants and the more certain it is that the company will not be able to keep to the schedule of payments.

In an attempt to offer proper funding to small and medium-sized companies in the west midlands, Midland bank and West Midlands Electricity have got together to start a small investment fund, which they are having managed for them. It is providing loans of up to £150,000. I commend that on the basis that utilities throughout the country could be required to pay into regional industrial development funds—perhaps managed by finance houses, banks or whatever—and have their tax remitted at a level commensurate with the amount of the surplus, windfall profits that they were prepared to put into regional development funds. Those utilities would benefit themselves because there is not a company on the market that does not need a supply of electricity or water, so there is a self-interest element. I hope that, at some stage, we shall consider that in depth and quite seriously.

Training for business is also important. The focus is now on skill training. We had such a focus in the 1960s and 1970s, but it was lost in the early 1980s. At last something is now being done to bring a new focus to skill training.

On many occasions, people with excellent skills and a good product know nothing about business. Such people very quickly experience difficulties. We need a system in which business skills can be taught to the smallest companies, comprising three or four people, as well as the largest companies.

When asked whether we should copy the American system whereby MBAs are available in every down-town university, Sir John Harvey-Jones said that he would be very pleased if his employees could read a balance sheet let alone obtain an MBA. I believe that business skills in smaller companies in Britain leave rather a lot to be desired. In that regard, I want schemes that will assist.

The hon. Member for Chesham and Amersham (Mrs. Gillan) revealed her interest in science and technology. Even if it is simply a sandwich course in science and technology training, instruction should be given in business principles so that the arguments that need to be made in the boardroom for product development can be made with the force with which they are usually made only by accountants and the legal profession.

There is so much to be done. The Queen's Speech must be seen as a miserable disappointment because it fails to recognise Britain's big problems in terms of its world relationships and competitiveness and because of its lack of attention to the detail and micro matters which, alone, can make Britain competitive.

9.6 pm

Mr. Barry Jones (Alyn and Deeside)

My right hon. Friend the Member for Copeland (Dr. Cunningham) laid about himself today to some good effect, but the President of the Board of Trade was over-sanguine; he tried to make his brick, but there was no straw for it.

There is no shred of policy in the Queen's Speech on British manufacturing industry. There is no Cabinet policy to promote, assist and develop Britain's remaining manufacturing industries. The glaring inadequacy in the Queen's Speech is that no thought is paid to tomorrow or the next century. There is no thought, plan, strategy or consideration of the needs of Britain's manufacturing industries.

As the new century hurtles towards us, the future of our nation and of our manufacturing must be defined as serious for as long as the Government are not prepared to produce plans, proposals and strategies. Without manufacturing, there will be no wealth, and without wealth we will not be able to sustain in the next century the welfare state as we now know it.

Having said that, I take issue with the President of the Board of Trade. I seek his active intervention in an industrial problem facing my constituency. It relates to a company called Raytheon, which is a worldwide conglomerate. Raytheon has decided to move 900 jobs in the aerospace industry in my constituency to Wichita in Kansas. That has perplexed and greatly appalled my constituents and I look to the Government, even at this late stage, to intervene. Ideally, the President should go to the Wichita headquarters of Raytheon and argue our case with the company's chairman.

The hon. Member for City of Chester (Mr. Brandreth) raised an issue that I have raised consistently in the House. It is of the utmost importance to Wales and to the north-west. Our problem relates to the decision of the British Aerospace board actively to canvas the sale of the corporate jet division of British Aerospace. It approached Raytheon, which saw a bargain and made the sale. A British Minister with responsibility for aerospace sanctioned the sale, and now my constituents are in a predicament. Time is running out, and we need intervention by the President of the Board of Trade and the Prime Minister.

Tomorrow, I shall take a small delegation to the United States embassy. We will plead with the American ambassador to intervene and persuade the company that it has made the wrong decision and that it should retain the 900 jobs in my constituency, where the great, world-beating, competitive twin-engined corporate jet should remain in production.

I emphasise that the Raytheon issue, although it might be called scandalous and unjust, highlights the problems from which Britain suffers when the Government, despite sanctioning the sale, will not face their responsibilities and will not support manufacturing in a meaningful way.

Before the end of the year, the Government will probably place an order with another American company, Lockheed, for 20 Hercules aircraft. At the end of this century, it surely cannot make sense for the British Government to place an order with an American aircraft company while sanctioning the loss of 900 jobs and the loss of production of a jet aircraft. It cannot make sense for those jobs to be taken by the United States. That is offensive to my constituents.

The issue is complicated further because my constituency is an aerospace constituency. At the moment, 2,300 of my constituents make European airbus wings. They are desperate for the Government to place an order for the future large aircraft, but, by the end of the year, there will be orders for 20 or more Hercules aircraft. At the same time, the Government will permit an American company to take from my constituency 900 jobs and a complete production process that is part of the great British aerospace industry. That cannot be right.

The President of the Board of Trade is present. I have said that I want his active intervention. I want him to journey to the United States, go to the Raytheon boardroom and insist that the chairman, Mr. Dennis Picard, reverses the board's decision. I ask the right hon. Gentleman to intervene and tell me whether he can offer any assistance to my constituents. In recent months, his Department has been of great assistance to me, as have his Ministers. So serious is my constituents' predicament that I beg him to intervene at the last minute to save not only my constituents' jobs but the aerospace industry.

We cannot allow any more of our great aerospace industry to be whittled away; it must have assistance. It needs cash for research and development and an order for the future large aircraft. It needs the intervention of the President of the Board of Trade. I urge the right hon. Gentleman to say that he will intervene and insist that Raytheon reverses its decision.

As there is no active, urgent intervention by the President, I suggest that the Gracious Speech is seriously flawed. It has no plan, no strategy and no proposals for British manufacturing. As long as members of the Cabinet are prepared to opt for day-to-day short-termism the future of British manufacturing will be very bleak indeed.

9.13 pm

Mr. David Blunkett (Sheffield, Brightside)

I pay tribute to the work of my predecessor as shadow Education Secretary, my hon. Friend the Member for Dewsbury (Mrs. Taylor), to the listening that she did and to the success that she enjoyed, as shown by the fact that the former Secretary of State for Education left his post in July after one of the least-ever satisfactory contributions from a Cabinet full of people with least-ever satisfactory contributions.

The contrast between what has happened over the past six years in education and what the country needed is a sad reminder of the Government's lack of direction. Tonight I thank my hon. Friends for their efforts to bring home in this debate the truth of what is happening to our manufacturing industry, our skills and our education service. Is that service equipping us for the challenges of the 21st century; is it providing sufficient special needs education in our schools?

One word that is not mentioned anywhere in the entire Queen's Speech this year—there is not even a hint of it—is education. Despite what the Prime Minister said at the 1993 Conservative party conference and despite his eulogy to nursery education only six weeks ago, there was not a word about education, training or skills in the Gracious Speech. The Government are not committed to the necessary investment for lifelong learning or for improving the chances for young and old alike to make a contribution to our future.

It ills behoves the Secretary of State for Education to accuse me of doing U-turns, as she had the audacity—nay, the political effrontery—to do yesterday on "Breakfast with Frost". The Government, and the Secretary of State, have done nothing but perform somersaults for the past 12 months—over the Post Office, over the national curriculum and over their favourite ideological experiment, grant-maintained schools. They have been doing double flips when taking policy or ideological decisions. The Secretary of State has crossed the motorway barrier and is driving on the left-hand side of the road—erratically and out of control, but still moving over to our side of the road. The super-highway of which the President of the Board of Trade spoke is now being travelled along in our direction.

The hon. Member for City of Chester (Mr. Brandreth) offered the national curriculum as an example of how the Government were implementing their policies. Let us take the 1992 Tory manifesto. In fact, anyone can take it, because virtually none of it has been implemented. Certainly the ideological thrust that the Tories inherited from the former Prime Minister has not been carried through. It said: We will complete the introduction of the national curriculum offering 10 subjects at a nationally defined standard—English, mathematics, science, history, geography, technology, art, music, PE and, in secondary schools, a foreign language. Anyone who knows anything about education knows that what was announced two weeks ago represented a complete volte-face by the Secretary of State, who capitulated after an ideological experiment that made children guinea pigs in the laboratory. It also failed the nation. Time and again those in the profession, in the Labour party and in local government had pleaded with the Government not to implement the curriculum in the way that they intended.

As for the commitment to testing, the manifesto said: Regular and straightforward tests will be in place for all seven, 11 and 14 year olds by 1994. We know what has happened on tests. I welcome the decision that future tests and assessments will have equal weight. I welcome the fact that common sense has prevailed on balance and consensus and on the way in which standards can be achieved and quality attained if those who are committed to national education and those who are teaching in the classroom and the laboratory work together.

What about the Government's commitment on grant-maintained schools? Targets were set, there were commitments in the White Paper and it was said that, by now, almost all the 3,000 secondary schools would be grant maintained. It was believed that a substantial number of pupils in primary education would be in grant-maintained schools. Let us look at the reality. Nationally, 8 per cent. of pupils are in grant-maintained schools and 80 per cent. of secondary schools remain within the local education authority fold. The experiment has failed. It is a sideshow that is completely irrelevant to the future of our children and of education.

Mr. Pawsey

The hon. Gentleman is making quite a point about grant-maintained schools. What is his party's policy on grant-maintained schools? Will it leave them where they are or take them back into LEAs? What is Labour's policy on education? We should like to know.

Mr. Blunkett

I am not surprised that a Conservative Member wants to know our education policies because Conservatives have certainly abandoned all theirs. The hon. Member for Rugby and Kenilworth (Mr. Pawsey) may be interested in the commitment to grant-maintained schools of the previous Prime Minister, now Baroness Thatcher. She said, in a press conference on 25 June 1987: Schools which opt out will have precisely the same budget as they would have had under the LEA. They certainly will have more latitude"— that is an interesting word— as to how they deal with it. That is to say, how they deal with the money. What does the hon. Member for Rugby and Kenilworth have to say about the way in which that promise has been broken? In August 1991, the present Prime Minister said: We have made no secret of the fact that grant-maintained schools get preferential treatment in allocating grants to capital expenditure. We are against preferential treatment for schools. We favour equity. We are against some children getting preference over others and some children in some schools being given either extra capital or revenue resources that give them an advantage over others. We are against unequal access to schools, with schools choosing pupils rather than pupils and parents being able to choose schools. We are against inequity wherever it exists, and that is why we oppose grant-maintained status.

As I have said, in debating education, I will talk to those working in, and currently committed to, grant-maintained schools to win them over so that they enter the fold of a wider community of education which offers real chance and opportunity to children from all backgrounds and in all neighbourhoods and situations. If I can win them over, so be it.

I make no bones about the fact that we oppose the Government's ideological payment to grant-maintained schools, the bribing of such schools. We shall seek an equitable education system for the future so that parents will not be bribed any more. They now understand the situation. The subject of Monmouth West school was raised at the last Education Question Time. My hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) said that videos had been supplied at public expense to every household because the first time round the parents had not voted for grant-maintained status. In other words, they had not followed the ideological line and had to be given a second opportunity, at which public money provided them with the latest technology to get them to change their minds.

The efforts were in vain because, on the second ballot, 70 per cent. of parents voted against grant-maintained status—some 10 percentage points more than had voted against it the first time round. I recommend that the Government either get a better video or link up to the cable network advocated by the President of the Board of Trade this afternoon.

The truth is that, in every sector, the Government have either capitulated or admitted defeat. For example, on nursery education the Conservative party conference took the great decision that four-year-olds would be provided with nursery schooling, and that has been trumpeted ever since. Let us examine exactly what the Secretary of State now says, and the problems that she is having—not surprisingly, because at a conference fringe meeting she said that she was having difficulty winning over her colleagues to the notion of investing in early education.

The right hon. Lady recently did an interview with David Frost on the programme to which I referred earlier. It was very revealing. David Frost asked her: Do you agree that you can do it by the year 2000—place every four-year-old whose parents want it in nursery education? The right hon. Lady said: I'm not putting a date on it. David Frost said: The cost—£400 million, £2 billion? What do you think the figure is? It's new money. How much? The right hon. Lady replied: I'm not putting a figure on it. Then, David Frost said: A universal primary school place for four-year-olds—that's still an aspiration? The right hon. Lady said: Early years education for children below the statutory school age, that's what we're to provide. That is not nursery education for four-year-olds, never mind three-year-olds. It is a change in the policy and a change in the commitment. That is not surprising as it was only a year ago that the Under-Secretary of State for Schools declared that it was impossible to provide all three and four-year-olds with nursery education. Of course, not long before that, the previous Education Minister, Michael Fallon, declared at a Carlton club dinner that it was not even desirable. It is not a U-turn; it is a series of U-turns—a complete capitulation in terms of the previous agenda and, now, of the new agenda. Everything that the Government have said on education is being reversed.

I shall take head-on the issue of league tables—the crude, flawed league tables; the sugar beet we would not put in our tea until it had been refined. What is the Secretary of State now saying? It is that perhaps, on their own, they are not so good after all. What is the School Curriculum and Assessment Authority about to say? It is—the right hon. Lady has accepted this—that added-value league tables and improvement indices are the way forward, not crude figures provided at a national level. She has even accepted—I congratulate her—that breaking down the national league tables into local authority areas and packaging them by alphabetical order is the best way to deal with the crudity of the information currently available, and that is what will be published tomorrow.

Let us be clear about the fact that the issue for children is standards and achievement in the classroom; it is opportunity at every level and in every part of the country—the opportunity to get the first foot on the ladder of lifelong learning. It is the opportunity to have the education for which, in the past, only the privileged could pay. That is why we will root out mediocrity wherever it exists. We want inner-city children to enjoy the opportunities that others have taken for granted, and we want to lift standards in every school. If that means intervening and using the information and drawing the comparisons provided by modern technology so as to spread the best to the rest, we shall do it.

We shall ensure that good example is spread from one school to another. Where a school is failing, we shall establish whether prior attainment in nursery and primary school has affected the progress of that school's pupils. We shall determine also whether the gender gap is affected by social and economic circumstances or by achievable intervention in the classroom.

We shall make sure that improvement indices tell us how schools are changing and improving their performance, so that we can reward them, changing the funding formula under local management of schools to help schools that are deeply disadvantaged. They will then be able to help children who are in difficulties, be it because of their language or because of the high incidence of special needs.

We shall make sure that no school can choose pupils simply because of their academic background and success, and that no school can exclude a child because of the cost of meeting his or her special educational needs. That is why we favour comprehensive education and reject the crudity of past league tables, which used the market and not intervention to punish and to denigrate rather than to lift and to bring about greater achievement.

At the heart of our policies is using information to bring about change and improvement, and providing the ability to use intelligent information to enable those in the classroom to do their job. We shall work with teachers and give them the backing that will ensure that the ideological experiments of the past few years are a forgotten nightmare. Those experiments to implement, revise and further implement the national curriculum alone cost £744 million, and brought constant turmoil and change that affected the life chances of many children in recent years.

If one views the whole vista of our education, one can see why it has been failing compared with industrial competitors in every other part of the world. Eighty per cent. of Germany's 18-year-olds are in some form of education or qualification training, compared with 43 per cent. in Britain. That is a disgraceful record, and to catch up with other countries that have already invested in the future will be an enormous task. That will be achieved not by turning college against college or by establishing super leagues at universities, but by ensuring that we get the best out of the investment that we make and design the system to be accountable and accessible, and by offering the diversity that meets the challenge of a learning society for the future.

We do not want a system that results in business ethics that turn colleges and universities into places that some people believe are commercial enterprises—as was clearly the case at Derby college, where the buying of French restaurants and the purchase of night clubs despoiled and undermined confidence in public investment and accountability. That is true whether it is St. Philip's college in Birmingham, or the situation that arose in Huddersfield, which my hon. Friend the Member for Huddersfield (Mr. Sheerman) vigorously revealed.

We want new probity in the education system. I moved from health to education only to find that the same problems of nepotism and of potential corruption are raising their heads in the education service because the same market-driven attitudes exist there as in the NHS of the 1990s. In the week of youth awareness—a week when we should be turning our minds to how we can help to provide a confident future of citizenship and achievement for our young people—it is time that we had a positive agenda for the 750,000 young people who are not in a training scheme, who are not in further or higher education and who do not have a job.

The Government have abandoned 750,000 young people between the ages of 16 and 25. Those 750,000 illustrate why investment in education and training is an investment for our economy and for social cohesion. The two go hand in hand and lead to the ability of people to earn their living, to use their enterprise and to take advantage of the information technology explosion that faces Britain and the rest of the world. They must have the ability to provide for themselves and for their families—independence and interdependence going hand in hand.

The Labour party's agenda is one for the future. It is focused on how lifelong learning can be achieved for everybody, not for the few. It should no longer be the privilege of those who went to public school or those who previously were able to get into university. We want to see the opening up of education as a central tool of the next Labour Government in implementing our economic and social policies. That Government will ensure that investment is directed to giving everyone the life chance that we wish to extend to him or her, wherever the individual comes from and whatever his or her background. Their future is assured with us.

9.37 pm

The Secretary of State for Education (Mrs. Gillian Shephard)

We have had an extremely wide-ranging debate. My right hon. Friend the President of the Board of Trade opened the debate by reminding the House of the Government's successes over the past decade. He made it clear that higher levels of skills and better qualifications are the keys to the long-term competitiveness of the United Kingdom.

In reply, the right hon. Member for Copeland (Dr. Cunningham), rather disappointingly, demonstrated that, first, he had not been in his Opposition Front-Bench job for too long and, secondly, that he prefers to rely for his material on leaked letters and press cuttings rather than on facts—for example, that the economy is in good shape, that output and productivity have increased, that unemployment is lower, that exports are at record levels and that inward investment has safeguarded 600,000 jobs since 1979.

On privatisation, one wonders when the flip-flop, to take the memorable phrase of the right hon. Member for Copeland, will occur within the Labour party. He failed to say that in 1979 the taxpayer paid £35 million a week in subsidies to the same industries that are now returning more than £50 million a week to the Exchequer. The right hon. Gentleman omitted all those facts from his contribution.

Other colleagues, thank goodness, made more constructive contributions. My hon. Friend the Member for Blackpool, South (Mr. Hawkins) talked of the importance to competitiveness of sound basic education. My hon. Friend the Member for Erith and Crayford (Mr. Evennett) spoke of the importance of vocational qualifications. My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) emphasised the importance of choice and diversity in education to produce quality, a cause to which Opposition Members are not yet converted but, I think, will be.

The hon. Member for Newham, North-East (Mr. Timms) was right to draw attention to developments in technology and the explosion of associated knowledge. The Government will shortly publish their response to the Trade and Industry Select Committee's report on fibre optic networks. In the meantime, I can point out to the hon. Gentleman that the United Kingdom has the world lead in the curriculum use of information technology, backed with cash and teacher training.

The hon. Member for North Devon (Mr. Harvey) should be reassured that developments in nursery education do not need legislation. They just need the commitment of new money, or new places, which I am happy to confirm to him and to the hon. Member for Sheffield, Brightside (Mr. Blunkett).

The hon. Member for North Devon also confessed himself unable to see the link between a successful economy and education. But my hon. Friends, whom I thank for their constructive contributions to the debate, do see that link. Conservative Members have always understood that education is crucial to the competitive future of this country. It is on the skills of the work force that the economic success of the nation will depend in the 21st century, and that is why over the past decade the Government have introduced a profound and comprehensive programme of reform across all sectors of education. It is a reform the nature of which the hon. Member for Brightside has clearly demonstrated that he does not understand, but a reform whose benefits the rest of us can now see: a doubling over the past 10 years of the proportion of young people gaining five or more good GCSEs or the equivalent vocational qualifications.

Mr. Wilson

For the third time in the few minutes in which she has been speaking, the Secretary of State has referred to the past decade or 10 years. Is there something unspeakable about the first five years, or is it just a convenient point from which to extract bogus statistics?

Mrs. Shephard

I am very happy to tell the hon. Gentleman that all the improvements date over the past 15 years. He will know perfectly well why I choose that date and that statistic. I am sorry to say that the contributions from Opposition Members this evening will reassure no one that things would be better if ever there were a chance for the Labour party to come to power, which there most certainly will not be.

Some 73 per cent. of 16-year-olds are now choosing to stay in full-time education, and the great majority of the rest are continuing with their education and training part time. Nearly one third of 18 to 19-year-olds are now going on to university, and a higher proportion are successfully completing their degrees than in any other European country.

In schools, colleges and universities, the emphasis on standards, put in place by this Government, is working. We have a success story to tell and it is welcomed across the board by business and industry. But, as my right hon. Friend the President of the Board of Trade pointed out earlier today, our competitors are not standing still, and our businesses know only too well that resting on today's success risks courting tomorrow's disaster.

I see three major challenges: first, to raise the standards of attainment of the less able, who otherwise may be ill equipped to play a full and productive part in our society; secondly, to embody a culture of life-long learning and development across the whole of the population; and, thirdly, to ensure that the new system of vocational qualifications, long overdue in this country, takes root and flowers alongside our more traditional educational routes.

That is why we have insisted in our education reforms on higher standards across the board, successful, effective vocational qualifications and ever-closer links between education, business and industry. [Interruption.] I thank Opposition Members for their close attention to my every gesture. I am delighted with the attention; I wonder how well they may have dined.

As for standards, first and foremost has been the establishment of the national curriculum, which has put in place a structured framework that is long overdue. The House will know that I have accepted in full the recommendations of Ron Dearing and the School Curriculum and Assessment Authority; the slimmed-down national curriculum will remove the work overload from pupils and teachers, strip out unnecessary bureaucracy and give teachers more freedom to exercise their professional judgment.

Mr. Blunkett

Will the right hon. Lady tell the House who was responsible for the overload in the first place?

Mrs. Shephard

I shall be happy to do so. I think the hon. Gentleman will understand that, when establishing something as new as the national curriculum--and we needed it; the French curriculum has been in place for 200 years—and asking subject specialists to contribute what they think it should contain, Ministers are bound to suffer from over-enthusiasm. That is what happened in this instance. I accept that the national curriculum was overloaded, but the Office for Standards in Education has made it clear that—even in its original form—the curriculum raised standards from the outset, and that it continues to do so.

It was right to note the overload and the concerns of teachers, however. I feel that the fact that teachers now have more freedom to exercise their judgment constitutes a vote of confidence in their professionalism, and that is how they have seen it.

Ensuring a broad and balanced curriculum for all pupils, with the emphasis on the basics of English and maths, will clearly help to continue the improvement. Moreover, the curriculum's effectiveness will be closely monitored by means of rigorous tests in English, maths and science for all pupils aged seven, 11 and 14. We shall have an annual check on schools' progress with the arrival of performance tables: as the hon. Member for Brightside said, this year's will be issued tomorrow. We shall also have regular four-yearly cycles of inspection of all schools, instituted by Ofsted. With the curriculum, test and exam results, performance tables and Ofsted reports, there will be copious information about schools for all of us—but especially for employers and parents. With that wealth of information, no school or college should be able to get away with a shoddy performance.

The hon. Member for Brightside was clearly very upset by his experiences on "Breakfast with Frost". As his right hon. Friend the Member for Copeland said, he performed a political flip-flop; he declared that he was a convert to higher education standards and performance tables. He and his hon. Friends have come late to the party. II: is a pity that, over the past 15 years, they have merely sought to obstruct our drive for higher quality in education; they have opposed the national curriculum, tests and the establishment of Ofsted and better teacher training.

Mr. McLoughlin

Many of us were very surprised and, indeed, heartened by the conversion experienced by the hon. Member for Sheffield, Brightside (Mr. Blunkett).

A number of examining boards are currently seeking examiners for the national curriculum. Does that concern my right hon. Friend? I fear that the boards may appoint members of the National Union of Teachers to supervise examinations and mark papers. Bearing in mind the NUT's opposition to the exams involved, does my right hon. Friend agree that such people should not invigilate?

Mrs. Shephard

That may be a dilemma for the NUT.

Opposition Members have sought to obstruct every improvement that we have sought to put into place in every sector. The hon. Member for Brightside still shows no sign of fully understanding the nature of the education reforms that the Government have introduced. Grant-maintained schools, however, will be the litmus test. We shall find out whether political flip-flops are performed in relation to policies for more variety, more choice and more diversity in the school sector.

Opposition Members have not shown much constructive enthusiasm for new developments in vocational education, which we have long needed in this country. We need vocational education of a quality equal to that of the academic route, putting job-specific NVQs and broad vocational GNVQs alongside traditional GCSE and GCE qualifications.

GNVQs have got off to a flying start. In just two years, the total number of GNVQ registrations has risen to almost 250,000. They are very popular and they are giving fresh motivation to students of all abilities. There is no room for complacency. The recent Ofsted and Further Education Funding Council reports confirm the high standards of GNVQs, but also emphasise the need to make them even more rigorous and more manageable for teachers. We shall ensure that work continues apace on an action plan that the Government announced in March. We have asked for it to be taken forward with renewed urgency because it is immensely important.

To achieve excellence in GNVQs, we must have constructive partnerships with employers—their active support and involvement is required. We need employer support for the pilot schemes, announced last week by my hon. Friend the Minister of State, Department for Education, for the new part 1 GNVQs. Those schemes provide an exciting opportunity for pupils aged 14 to 16 of all abilities to develop vocational skills. We must be confident that the new qualification commands broad acceptance, that it enables young people to achieve high standards and that it is manageable and deliverable by schools and teachers. That is why we have decided that from next year part 1 will be piloted, using the lessons that we have learnt from advanced GNVQs and that we have evaluated carefully, before we take final decisions about making it available to all secondary schools.

As I said, Opposition Members have performed a spectacular U-turn, finally accepting that standards matter and that it helps to be able to measure them. At this rate, can we assume that they will eventually also accept that an education system needs diversity and choice to flourish? Time will tell. Time will also show whether they can sink their traditional dislike of business to endorse the importance of links between education and industry. The importance of that partnership and of choice and diversity is well illustrated by the technology colleges initiative. Fifty schools have been approved since February this year, covering about 45,000 pupils. More are coming forward all the time. They are particularly relevant to the debate because those schools are committed to raising their standards in technology, science and maths, subjects which, as the hon. Member for Brightside said, are vital to the success of our economy.

The initiative is a natural development of the city technology colleges programme launched in 1986 to provide more and better technology and science education for pupils in disadvantaged urban areas, those very areas that the hon. Member for Brightside says he cares so much about.

Mr. David Jamieson (Plymouth, Devonport)

Will the right hon. Lady explain why Kingshurst city technology college was criticised in the Ofsted report for its technology teaching? Why is it that city technology colleges have a lower percentage of students achieving five or more grades of A to C than the average comprehensive?

Mrs. Shephard

The hon. Gentleman will be pleased to see the performance tables tomorrow. They will give the lie to the allegation that he has just made.

With unprecedented levels of private sector sponsorship and commitment, the CTCs are now well established. They have achieved some marvellous successes and innovations and some impressive results with their all-ability pupils. But, of course, that is what the Opposition cannot bear.

There have been other important developments in links between employers and education. We have adopted the employer-led national targets for education and training. Young people at 16 now have more choice of education and training options than ever. So it is particularly important that they make the right decisions to maximise their opportunities. That is why the Government are committed to providing high-quality careers education and guidance, which will help them to improve the match between the country's business needs and young people's skills and ensure a smooth transition from schools and colleges to the world of work. There will also be work experience for all young people before 16 and between 16 and 18, more teacher placements in business and industry and more local partnerships between education and business.

In all that, the role of employers is crucial. That is not much mentioned, it has to be said, by Opposition Members, but then they have traditional hostility to employers. We are working to secure the closest possible co-operation between colleges of further education and training and enterprise councils at national, regional and local level to ensure that college strategic plans take account of local labour market needs. That is being promoted by a new funding arrangement set out in the competitiveness White Paper, which provides a £300 million package to give young people and adults the skills that they and businesses need as we head towards the 21st century.

Mr. Blunkett

I have been confirmed tonight in my suspicion that the Secretary of State was put in place to bury education rather than to praise it. Perhaps the right hon. Lady will tell me what discussions she has had with the Secretary of State for Employment, who made it clear in August, shortly after his predecessor and the right hon. Lady's predecessor launched a White Paper, that his ambition as Chief Secretary and his programme as Secretary of State for Employment was to cut the training budget rather than to expand it.

Mrs. Shephard

I can reassure the hon. Gentleman that my relationship with my right hon. Friend the Secretary of State for Employment is entirely constructive. We speak of nothing but training.

Higher numbers of students than ever are now moving on to higher education: one in three compared with one in eight in 1979. There has been a similar increase in further education. Nowhere can the welcome interface between education and industry be seen more clearly than in the innovative and developing work that is happening in higher and further education. Our task is now to ensure that the welcome increase in quantity is accompanied by even higher quality and that we encourage the innovation in those sectors that is essential to our continuing economic prosperity.

Of course, the Labour party does not have much interest in all that. Its policy paper published in July this year made no mention of higher education. Indeed, Labour's policies in further education, vocational training and higher education are few and far between. So far, all that the hon. Member for Brightside has said about the 16-to-19 age group is that it is a major challenge. The Government have been dealing with that challenge for the past 15 years and Labour has opposed us at every turn.

To disagree with our policies is one thing, but to show hapless disregard for the future of young people and their place in the economy is another. Yet that is what the Labour party has done. Labour Members have voted against every major measure designed to improve standards and quality in education. Their so-called "White Paper" on education was introduced last July by the hon. Member for Dewsbury (Mrs. Taylor), who said that it had been based on "wholly exceptional consultation". It must have been very exceptional, since it did not include either the right hon. Member for Sedgefield (Mr. Blair) or the hon. Member for Brightside, who have lost no time since in rubbishing everything that the paper contained.

Will Labour come to understand that it is business and not Governments that creates wealth? I doubt it. The Government will continue to insist on high, measurable standards in education, wholehearted development of vocational further and higher education, and close and continuing co-operation with employers, business and industry to ensure that a well-educated population will produce a healthy and prosperous economy.

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

Debate to be resumed tomorrow.