The Economy

HC Deb 22 November 1995 vol 267 cc673-768

Madam Speaker

I have selected the amendment standing in the name of the Leader of the Opposition, and the amendment in the name of the leader of the Liberal Democrats will be put forthwith after 10 o'clock for Division purposes. Between the hours of 7 and 9 o'clock, I must limit speeches to 10 minutes only.

4.14 pm

Mr. Gordon Brown (Dunfermline, East)

I beg to move, as an amendment to the Address, at the end of the Question to add: But note Government election promises continue to be broken, with tax increases equivalent to 7p in the pound on income tax imposed to pay the costs of economic failure, with Britain having fallen from 13th to 18th in the world prosperity league since 1979, with investment worse than at this stage of previous economic cycles and living standards having fallen more sharply than for years, with widespread insecurity and one in five households of working age with no-one in work; humbly regret that the Gracious Speech excludes positive measures for jobs, productive investment and opportunities to move from welfare to work; regret the absence of action on the Greenbury Report and the boardroom excesses of the privatised monopoly utilities; regret the absence of a strategy for employment, skills, regional development and industry, including measures to raise educational standards and access to quality training, and to secure effective public-private partnership for infrastructure investment; and calls for the abandonment of rail privatisation and of the Prime Minister's pledge to abolish capital gains tax and inheritance tax. It is now sixteen and a half years since the Government came to power, and almost five years since the Prime Minister took office. The Loyal Address gives us the opportunity to assess where the Conservatives have taken Britain and where they are now trying to take us. Our amendment makes it clear that the economic test for the Queen's Speech and the forthcoming Budget is what the Conservatives will do to build an investment-rich economy that is equipped with skills, science, training and technology for the future, and whether the Government will take up our proposals to tackle the slowest increase in investment out of recession that we have seen this century.

The Queen's Speech needed to, and the Budget must, tackle the job insecurity that permeates this country, and so reduce the annual billion-pound cost of unemployment. That is why we propose a windfall tax on utilities—to get people back to work. The Budget needs to reunite the nation, as the Queen's Speech should; to build social cohesion and a fairer Britain, including a fairer tax system.

Let us recall the central Conservative promise of 1979, the aim behind the first Loyal Address, and the objective of the first Conservative Budget. The then Chancellor, Lord Howe, said that falling behind our competitors was the issue. He said that Britain's relative decline was not a prospect that I am prepared to accept."—[Official Report, 12 June 1979; Vol. 968, c. 237.] He said that ending that relative decline was the real challenge and the central issue, the make or break for the Conservative Government and the decisive test on which the Conservative party should be judged.

Yet what do we find after 16 years? The Conservatives said that their whole strategy was to avoid relative decline, but that has happened. We have not risen above more competitors, as they promised; we have fallen further below them. Only a few weeks ago, the league table for national income per head showed that we are not moving upwards, but we have been moving downwards. We have not reversed that relative decline, but our decline has worsened in relation to our neighbours.

We are 18th in the world league of national income per head. In 1979, we were in front of Italy, but we are now behind it; we were in front of Norway, but we are now behind it; we were in front of Hong Kong and Singapore, but we are now behind them. Under the Government, we have slipped from 13th to 18th. Last year, when the Chancellor said we were in a hole, he should have said that we were in the 18th hole, well behind 17 players. No wonder I regard with some trepidation the statement by the Chancellor some months ago that the task of overtaking our rivals needs the election of more Conservative Governments in the future.

Mr. Gyles Brandreth (City of Chester)

The hon. Gentleman mentioned job insecurity and competitiveness. He will be aware that, at the Confederation of British Industry conference last week, Sir Rocco Forte, whose company owns hotels in my constituency, spoke of the devastating effect on the competitiveness of his industry and on jobs of the minimum wage and the social chapter. Given that 16,000 of my constituents work in the hotel, retail and tourist industries, and given that a leading hotelier is saying that those policies would have a devastating effect on employment prospects, how can he continue to support those policies?

Mr. Brown

The hon. Gentleman's speech last week was a little better than the speech that he has attempted today. I would have thought that he and Forte itself would be more concerned about the takeover bid that has been mounted. He asked about the minimum wage. Is he not interested in the fact that, of the 17 countries ahead of Britain in the world prosperity league, 15 of them have minimum wages?

Where do I get the information about how we have slipped down the world prosperity league? [An hon. Member: "A Labour party researcher."] No, not from a Labour party researcher, as the hon. Gentleman said; not from the Trades Union Congress; not from an academic buried in a university. I obtained that information from Her Majesty's Stationery Office, from an official Government publication, a White Paper with all the authority of the Cabinet, entitled "Competitiveness: Forging Ahead".

The White Paper was presented to Parliament by the President of the Board of Trade and the Chancellor of the Exchequer, the Secretaries of State for Transport, Environment and Employment, the Chancellor of the Duchy of Lancaster, and the Secretaries of State for Scotland, Northern Ireland, Education and Wales". Half the Cabinet signed that White Paper.

As the Prime Minister said in an admiring introduction to that White Paper, it was the first comprehensive … survey of Britain's competitive position against that of our leading … rivals … a hard-headed assessment of our competitive position.

Mr. Nigel Forman (Carshalton and Wallington)

For the avoidance of doubt, will the hon. Gentleman tell the House a bit more about those figures? Will he tell the House, for example, whether they are based on purchasing power parities or current exchange rates?

Mr. Brown

Not only can I tell the hon. Gentleman that those figures are based on purchasing power parities, but I can tell him that even the exchange rate measure gives exactly the same answer about the deterioration in our competitive position. I can tell him that the position was the same last year as this year and, according to all surveys that have been done, is likely to be the same in the current full financial year.

It would be worth while for the hon. Gentleman to read the report. Not only have we fallen to 18th in terms of national income per head, but we have fallen to 21st in terms of investment per head—way below Spain and Portugal.

That White Paper says that we have consistently invested a smaller proportion of national income than our competitors, that United Kingdom industrial research and development expenditure is less than that of our competitors, and that all the changes that the Conservatives say that they have brought about in the British economy come down to the fact that we have slipped, under their policies, from 13th to 18th. They should be ashamed of themselves.

Mr. Tim Yeo (South Suffolk)

Will the hon. Gentleman give way'?

Mr. Brown

I shall give way on the White Paper, which no doubt the hon. Gentleman has read.

Mr. Yeo

Will the hon. Gentleman tell me how many of the 17 countries that are ahead of us devote as large a proportion of gross domestic product to the public sector as we do?

Mr. Brown

The question, as I shall suggest to the House later, is not, "What theoretical proportion is public expenditure of national income?" but, "What is investment as a share of national income?"

Mr. Yeo

What about answering the question?

Mr. Brown

The hon. Gentleman knows perfectly well that in Germany, France and many other countries, public expenditure is a greater proportion of national income, and they are more prosperous than we are. He should also know that, when assessing relative prosperity, most countries would go on the direct connection between investment and gross domestic product per head.

What has happened to the economy after 16 years? Let us remember what was said. Do Conservatives continue to boast of the "economic miracle", as they did in 1988? Remember the boast by the then Chancellor that we had become the envy of Japan, as Japan shoots ahead of us in the economic league. Remember the claim by the present Prime Minister that there was no longer a German economic miracle, but that a British economic miracle had replaced it. Remember the proclamation that the Conservatives had transformed the British economy.

Remember that other promise—indeed, assertion—that the pound was about to replace the deutschmark as the leading European currency, a characteristically prescient statement, made only a few weeks before we crashed out of the exchange rate mechanism. What do Conservative Members say of their economic transformation now that the pound has completed its passage and is worth 40 per cent. of the value of the deutschmark that it was worth in 1979?

There are no more big promises; no more weasel words. The following phrases are found in the speeches of the Prime Minister and the Chancellor now. "Conditions are right," they say; "we are poised"; "the fundamentals are in place"; "we are well placed". Surely, after 16 years being poised on the brink of laying the foundations of the essential preconditions for getting the fundamentals right for being on our way to becoming the enterprise capital of Europe, that is simply not good enough. It is time to judge them on their record, not on their promises.

The Chancellor of the Exchequer (Mr. Kenneth Clarke)

The hon. Gentleman makes much of the one page of the White Paper on competitiveness that he appears to have read concerning the list of GDP per head figures, at the top of which comes Luxembourg. The method used to calculate the figures involves the assets of all the secondary banks in Luxembourg, which puts it at the top of the table. But those assets are not enjoyed by all the inhabitants of Luxembourg, and it is not an ideal measure of the most successful economy in the world.

The hon. Gentleman appears to want to make an absurd comparison, to try to prove that the Thatcherite revolution never happened. Is he aware of the analysis in The Wall Street Journal by Mr. Marsden, an independent economic consultant, who uses World bank figures on a number of indicators that have more to do with improvements in our position? It shows that, since 1979–80, out of 16 countries, Britain is first in the list of improvements in productivity, first in reductions of tax burden, first in the increase of private consumption and overwhelmingly first in attracting foreign investment. If the hon. Gentleman studies league tables, he should use sensible ones, not misuse casual ones.

Mr. Brown

The Chancellor now seems to think that an extract xeroxed from The Wall Street Journal is more valuable than a Government publication—a White Paper from HMSO.

Mr. Clarke

rose—

Madam Speaker

Order. I cannot hear two hon. Members at once.

Mr. Brown

Perhaps the Chancellor has another report to which he wants to draw our attention. Perhaps he has an extract from a Japanese daily newspaper.

Mr. Clarke

It is not the way the hon. Gentleman reads them, but the way he tells them. He keeps misusing our White Paper on competitiveness to show it as some sort of world prosperity table. The figures refer to investment, productivity and personal consumption. He knows that the Conservative party has transformed this country for the better since 1979. We are currently well ahead of the league in our recovery from the recession.

Mr. Brown

If the Conservatives have transformed the country, why are 2 million people unemployed? Why is there massive job insecurity throughout the country? Why are we experiencing the slowest surge of investment out of recession at any time this century? Why—in terms of the measures that the Chancellor chooses to use, such as national growth—do we have the lowest non-oil growth of any European country for the past 15 years? The Chancellor thinks that national income per head is not a measure worth using. I thought that he would throw up that subject—he has to create a smokescreen, because at no point has he denied my central figure.

I looked back over the Chancellor's publications and was surprised to find one entitled "Britain in Europe", which spoke of new hope for the regions. Its authors are given as Kenneth Clarke and Elaine Kellett-Bowman—[Laughter.] The Chancellor chooses his co-authors well. I do not know who will take the blame or the responsibility for what I am about to say.

The Chancellor talks of how everyone should benefit and asks what action can be taken to sort out the regions of Europe. He asks how we should measure the difference between the richest and poorest regions and concludes that they are calculated in terms of gross domestic product per capita—exactly the same measure that the Chancellor now doubts when I put it to him.

Mr. Clarke

rose—

Mr. Brown

I shall allow the Chancellor to intervene once more, but this is my speech and I hope that he has a speech to give.

Mr. Clarke

The hon. Gentleman is obviously lost for words for a moment and is obviously searching for policy. I wrote another pamphlet on regional government in this country, which was adopted by the Labour party for a time as its regional policy, but it, like me, has changed its mind and has now dropped the policy. When I wrote that pamphlet—

Dame Elaine Kellett-Bowman (Lancaster)

When we wrote it.

Mr. Clarke

When I assisted my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) to write the pamphlet, when she was a Member of the European Parliament and I was shadow spokesman, we were making unfavourable comparisons of every sort with the rest of the continent. But I was not using those figures as a prosperity league, as the hon. Member for Dunfermline, East (Mr. Brown) keeps calling it. Will he not admit that, throughout the 1980s, we led the French and the Germans on growth, and we beat everyone else on productivity? Living standards have increased by 40 per cent. and the hon. Gentleman would see that we continue to move up any sensible league table if only he would use one.

Mr. Brown

I hope that the Chancellor will be more accurate when he delivers his Budget next Tuesday. His figures about growth comparisons with France and Germany are completely inaccurate. Our non-oil growth rate over the past 15 years is 1.6 per cent; even with oil, it is 1.8 per cent. That is way behind our more successful competitors, particularly Japan, which has a growth rate of more than 3 per cent.

As for the Chancellor's pamphlet on regional government, I know why he wants to disown it, as I am one of the few who has read it. He proposes indicative planning, a national plan, regional plans and regional economic plans. I am not sure that the No Turning Back group and the 92 group would look favourably on any of those proposals.

After four Chancellors, 11 Secretaries of State for Trade and Industry and 17 Queen's Speeches in 16 years, the Government now tell us that they have discovered the answer. They have found the key, as the questioner suggested, to the problems of the British economy. They ask us to look not at Britain—which the Conservatives have governed for the past 16 years—but at Hong Kong and Singapore, where they have not been in government. The Conservatives want us to judge them on their promises for the future and not on their record of the past. Their answer today is a return to their policy of 1979: cut public spending as a share of national income, instead of concentrating on the real task of raising the level of investment in the economy.

Why is current Government spending £80 billion higher in real terms than it was in 1979? Lady Thatcher confirmed that Government policy in 1979. Why is current public spending as a share of national income the same as it was in 1979 when we left office? The Government have not solved the problem of public spending, because they are paying the bills for unemployment, waste, decay and failure. In spite of £100 billion in North sea oil and £120 billion in privatisation proceeds, taxes have risen by the equivalent of 7p in the pound. Why have there been 21 tax increases in the past three years—nearly £1,000 per year for every family in the country?

Yesterday, the Prime Minister told us the reason for the tax rises. He did not admit his failure, but he said: we did so to protect people who were vulnerable".—[Official Report, 21 November 1995; Vol. 267, c. 456.] He should tell that to the pensioners and to the weakest and the frailest in the country who suffered the value added tax rises imposed by the Government. The Government did not help the most vulnerable: as is typical of the Conservative party, the tax rises were so unfair that they hurt the most vulnerable the most. It is on that unfairness and that betrayal that the Conservatives will be judged.

Mr. John Townend (Bridlington)

The Government have a target to bring public expenditure below 40 per cent. What would be the hon. Gentleman's target if he were Chancellor? Would he bring it below 40 per cent., would he leave it where it is, or would public spending increase?

Mr. Brown

Public expenditure would be below 40 per cent. of gross domestic product if the Government had solved the problems of unemployment, waste and the other bills of economic failure. I will not be lectured by a Conservative party which promised to cut public spending as a share of national income in 1979, but which saw public expenditure in all but two of the past 16 years rise above 40 per cent.

I admire the honesty of the hon. Member for Bridlington (Mr. Townend). He said that there must be tax cuts in the Budget and he issued a statement announcing how many billions of pounds in cuts he wanted to see. However, he said that, even then, it would not return the Conservatives to their 1992 position. No tax cut that the Chancellor may introduce next Tuesday will undo the damage of income tax rises equivalent to 7p in the pound since 1992.

At the same time as the Government have caused us to fall behind our competitors, the country has slipped back as massive job insecurity has dragged down the economy. Job insecurity in the labour market is now dragging down the housing market. When survey after survey shows that that is the greatest anxiety of British people, what are we told by the President of the Board of Trade? He says that job insecurity is only a state of mind. He says that it is not real, but a figment of the imagination. He says that it is all in the mind.

Let the right hon. Gentleman look no further than his own Back Benches. Do Conservative Members have no worries about their jobs? Is there no fear of redundancy on Conservative Benches? We know that any worries they might have about their jobs are not real and that it is all in the mind, but if the President of the Board of Trade really believes that job insecurity and the fear of unemployment is only a state of mind, how can he explain the extraordinary zeal for travel discovered recently by Conservative Members, particularly those with majorities of less than 10,000, and their willingness to take the advice of Lord Tebbit and get on their bikes, in droves? Surely their worry is nothing more than a state of mind.

Job insecurity is only in the mind, except for the former Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont), for whom it is in Kingston upon Thames. It is only in the mind, except for the standard bearer of Essex man, the hon. Member for Basildon (Mr. Amess), for whom it is to be found in Basildon.

Dame Elaine Kellett-Bowman

He is not here.

Mr. Brown

He has gone. He has run away as a result of his failure to hold a seat that Labour will definitely take at the next election because of the policies that we are putting forward. Job insecurity is only in the minds of many Cabinet Ministers, when it is actually to be found in real life.

As people's response to the Queen's Speech shows, Conservative Members now have short-term contracts and, for the first time in 16 years, they are facing the same anxieties as the British people. They should not reject out of hand Labour's proposals for jobs to help the unemployed, as they may need them after the election.

Dame Elaine Kellett-Bowman

Does the hon. Gentleman accept that many Members who are seeking new seats have simply had their boundaries changed, so their seats have disappeared? Whatever Labour Members may say, it is important to make it clear that Members are not running away from existing seats; they are simply moving because their seats no longer exist.

Mr. Brown

It is strange that the chairman of the Conservative party, who has a substantial majority in a seat that remains, is moving to another seat. People may wonder why he is so worried about defending that majority as a result of pressure from the Labour party.

Dame Elaine Kellett-Bowman

Will the hon. Gentleman give way?

Mr. Brown

I would rather give way to the hon. Lady's co-author.

Dame Elaine Kellett-Bowman

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker (Dame Janet Fookes)

Order. It is clear that the hon. Gentleman is not giving way.

Dame Elaine Kellett-Bowman

I am raising a point of order. I was not asking the hon. Gentleman to give way, as I knew that he would not. Is it in order for the hon. Gentleman to mislead the House by pretending that a Member is running away, when his constituency has been cut in two and he is simply taking half of it?

Madam Deputy Speaker

The Chair, perhaps mercifully, is not responsible for the accuracy of Members' remarks.

Mr. Brown

The hon. Gentleman protests too much about the position of the chairman. [Interruption.] I apologise to the hon. Lady.

Dame Elaine Kellett-Bowman

That is sexism.

Mr. Brown

I have apologised to the hon. Lady, and I hope that she will accept my apology.

Is there anything more symbolic of the Conservative party's lurch to the right than the content of the Queen's Speech, which announced legislation to cut help for the homeless, used the full might of the Oxford English Dictionary to redefine exceptional hardship as uniquely severe suffering in order to deprive people of housing benefit, and picked out single parents for further onslaught?

Although the Government really wanted yet another social security cuts Bill for the withdrawal of benefit, they hesitated, not from compassion, but, as the Secretary of State for Social Security said in a leaked memo, because they had no parliamentary majority to get it through. The Government do all those things, while at the same time they do nothing about excesses in the privatised utilities, implementing the Greenbury report in full, reforming capital gains tax to avoid excesses and abuses or dealing with the scandal of National Grid. Instead, day in, day out, the Government pour scorn on the measures that we propose.

Nowhere is the abuse of power clearer and the Government's failure to act in relation to privatised utilities more obvious than in the sale of National Grid, which was announced today—a £5 billion asset from which consumers and taxpayers will get only £1 billion in refunds on their bills. That makes every day the case for imposing a windfall tax. What is to happen to the other £4 billion?

Four National Grid directors have been able in the past few months—since Greenbury—to award themselves huge share options, even before shares were available on the open market. The Government did nothing. Directors were able to buy and sell shares even before there was a market in shares, and nothing was done. Directors were able to cash in their share options before the share price was set, to the tune of £1.6 million. Again, the Government did nothing. The share price was set by auditors, but cannot be set by the market. Again, the Government have done nothing. Despite more handouts to the directors and special dividends that they voted for themselves, still nothing has been done. Nothing has been done even about the compensation built into the share options.

National Grid's chairman, Mr. David Jefferies, is to retire, but he is to come back three days a week and, with his pension, will earn in total £300,000 a year—as much as he used to earn for working five days a week. How can we believe that decisions are being made in the national or public interest, or even in the interest of the electricity industry, when such powerful people are able to set the terms on which they benefit from demergers and privatisations without recourse to the public?

The half-a-dozen directors of National Grid are answerable only to a dozen regional electricity chiefs—who themselves have not only received a present of shares in National Grid but are reported to have had their tax bills paid, so that they get the full profit from the shares that they are receiving. That is the worst example of a privatisation or demerger. It is worse than the shocking abuses that arose from previous sales—so much so, there has in my view been a lurch to the right in the attitudes of the Conservative party more than that which is acceptable.

From National Grid's report, I have calculated today that the former chief of London Electricity, Mr. Roger Urwin, has done well 10 times over, bringing him an annual income of £1.5 million—and he moved from London Electricity to National Grid in the past few months. When such abuse is tolerated, there can be no doubt that matters have been allowed to get worse since the Greenbury report, not better.

What happened to the Greenbury proposals for legislation to disclose pensions, which I expected to see in the Queen's Speech? The Secretary of State for Trade and Industry said that the Greenbury proposals would be considered, and the Institute of Actuaries examined them and prepared a report. The proposal to legislate was accepted in principle by the Government, to be implemented after the measure was drawn up by the relevant bodies. The Government have not only failed to introduce the new Companies Act necessary, but have been persuading people that there is no need for action in that important area. Why has nothing been done?

The company report for British Gas reveals that the pension contribution for Cedric Brown is £19,000. In fact, his pension is worth £300,000 a year, and it will cost the pension fund an astonishing and budgeted £4 million. Because the Government do not want us, the shareholders or employees to know those facts, nothing is done to insist that the full figures are published. At National Grid, a figure of £8,000 a year is declared—but the pension is worth £160,000, and it could cost £2 million.

There is no evidence that the Government want those figures disclosed to the public, shareholders and employees. [HON. MEMBERS: "Shameful."' As my hon.

Friends say, it is shameful that consultation papers are prepared, promises made and legislation pledged—then the matter is sidelined, with no guarantee that the problem will ever be dealt with under this Government. A few powerful interests in the privatised boardrooms and elsewhere are blocking the full disclosure of pension information—and in yet another lurch to the right, the Conservative party is prepared to go along with it.

The Government want to do nothing and hope that the controversy will go away. Let us examine the Greenbury recommendations and what has happened to them. Two-year rolling contracts were to be outlawed in favour of one-year contracts. Nothing has been done. The utilities were to examine their remuneration and put their house in order, yet small shareholders have still been told nothing. The stock exchange listing changes have been delayed until the end of the year.

As for consultation on long-term incentives and share options, nothing has been done either. The promised review by the utilities to explain their remuneration packages, with a requirement for discussion at the first available annual general meeting, has not materialised. The report of a few days ago showed that only one of 24 utilities had taken steps to implement that recommendation.

What about the share option proposals? It was recommended that no share options should be awarded during the first six months after a privatisation. Nothing has been done about that. It was further recommended that share options should not be awarded at 85 per cent. of their value—nothing has been done. How can the Conservative party tolerate the Prime Minister and Cabinet promising in the summer to take action, but doing nothing by the autumn, even as the abuses continue? The Conservative party has become a faction promoting the interests of the powerful few.

What has happened to one-nation Toryism in Britain? The Conservative party stands by as the main recommendation to prevent exploitation and harassment is removed, in the Queen's Speech, from the housing and homelessness Act. At the same time, the party does nothing while abuses are identified. There was a time when one-nation Toryism controlled a majority in Cabinet. It was once even in control in 10 Downing street—it was even the dominant force among Conservative grassroots. But in the 1980s, one-nation politicians in the Conservative party were reduced to holding fringe meetings and attending the occasional lecture or well-fed dining club—

Mr. Michael Fabricant (Mid-Staffordshire)

It is interesting to hear the hon. Gentleman's discourse on the history of the Conservative party. What we have not yet heard are any tangible Labour party policies, or how the hon. Gentleman intends to pay for any of them.

Mr. Brown

I have just outlined 10 recommendations by Greenbury which the Government have failed to implement or whose implementation they have failed to supervise. We shall not take lectures from the Conservative party, which promises to implement proposals and then, as with Greenbury, fails to do so.

To return to one-nation Conservativism: even the solitary token wet speech traditionally given by Peter Walker to the Tory party conference is no more. At this year's conference the one-nation group could not even, muster a fringe meeting—they had to make do with a drinks reception. The Macleod society, which was to have been set up in a blaze of glory, could not find a sponsor for its first pamphlet, and is said to have only seven known members.

Mr. Fabricant

On a point of order, Madam Deputy Speaker. It is one thing, perhaps, to comment on what is not in the Queen's Speech; but is it in order to discuss the Conservative party conference in this debate?

Madam Deputy Speaker

That depends entirely on whether it is a passing reference or the mainstay of a speech. I am assuming that it is the former.

Mr. Brown

It is indeed, Madam Deputy Speaker. The hon. Gentleman appears to be somewhat carried away after his appearance in "The Final Cut". Perhaps he is trying to sketch out a scene for a future edition of the programme—but it carries little weight in this place. He would do better to tell me whether he supports the one-nation group or whether he is on the extreme right of the Conservative party.

The country wants to know what has happened to the social conscience of the Conservative party. It used to exist, but it has now almost disappeared—

Mr. Ray Whitney (Wycombe)

rose—

Mr. Brown

A one-nation Conservative? I shall take one intervention from a supporter of the chairman of the 1922 committee, and then another from one of his opponent's supporters—I do not know which the hon. Gentleman is.

Mr. Whitney

The hon. Gentleman talks of what the country wants to know. What the country wants to know, and what we have now been waiting to hear for 34 minutes, is the policy of the Labour party.

Mr. Brown

I have been outlining the investment and employment measures, and the action on the privatised utilities—

Mr. Brandreth

Will the hon. Gentleman give way?

Mr. Brown

Does the House think that I am going to give way to the hon. Gentleman—who might do better to spend more time in his constituency, given the narrow majority that he must hold on to? I shall proceed with my speech, and respond to no more interruptions.

A further lurch to the right in the Conservative party relates to taxation policy. We now find that the Prime Minister has set the party a tax objective: the abolition of capital gains tax and inheritance tax. Who are the main beneficiaries of the new proposal? None other than the directors of the privatised water and electricity companies, which stand to gain £40 million each.

The richest 5,000 in the privatised utilities have gained £500 million. Here is an idea that originated with the poll tax and from the No Turning Back group, the 92 group and the Adam Smith Institute. It was peddled on the right of the Conservative party, and then adopted by the Prime Minister for his leadership campaign. Capital taxation has been supported by every Conservative Prime Minister this century, from Bonar Law to Lady Thatcher, because they understood that it was necessary—in particular, to prevent tax avoidance through the declaration of income as capital. Yet the Conservative party has now come up with a proposal that can benefit only a small number of people, and the Chancellor is having to adopt it as a major objective in taxation policy.

Mr. Tim Devlin (Stockton, South)

Will the hon. Gentleman give way?

Mr. Brown

I will not give way again.

Abolishing capital gains tax and inheritance tax is now a tax priority. What has happened to the Chancellor—the person who once represented one-nation Conservatism, and who once called himself a one-nation Tory? How has that proposal slipped past him?

The Chancellor has never been a details man—as he confessed after his speech on the Maastricht treaty, which he had never read. Does he now wish that he had been a little more careful with the detail? Does he wish that he had studied it more accurately? Is it not true that a new objective in taxation policy that can reward only the richest has been smuggled through the Treasury?

Sir Peter Tapsell (East Lindsey)

Will the hon. Gentleman give way?

Mr. Brown

No, I will not.

The whole Budget process has been planned in Conservative central office, just like the Queen's Speech, and directed by the chairman of the Conservative party. The narrowest interests of the Conservative party are to come before the interests of the nation. It is all directed less towards getting the economy right than towards—in the words of the Conservative party chairman—"wrong-footing the Labour party". That is what the right hon. Gentleman said yesterday, when he held a press conference on tax and spending issues.

Even the Chancellor is now forced to admit that this will be "a political Budget". We know that it is not about the needs of the country, but about the needs of the Conservative party. Just as the Chancellor has been bounced into a policy favouring the abolition of capital gains tax and inheritance tax, on Budget day he will be bounced into doing things that he knows are not in the interests of the country.

What shall we see next Tuesday? The door of No. 11 Downing street will swing open; the photographers will step forward for the traditional shots; the Chancellor will appear on the doorstep, looking around for the official Rover that will drive up and from which, eventually, will emerge the chairman of the Conservative party to hand over the red Budget box. The Budget will have been conceived in Conservative central office rather than in the Treasury, but, to be fair to the Chancellor, he will already be well aware of what is in it: the chairman of the Conservative party will have briefed the press on its contents the day before.

So where is the Conservative party now? There is nothing in the Gracious Speech to rebuild our industries. There is nothing to tackle the huge skills gap revealed in the White Paper on competitiveness. There is nothing to bridge the gap between rich and poor in this country, and nothing to rebuild its infrastructure. There is nothing of which the Conservative party can be proud. There is no grand strategy, no broad vision, no new programme.

Even after the Budget next Tuesday, the Conservatives will still be in difficulty, still in the hole that the Chancellor says they are in. Nothing that they can give away next Tuesday can restore what they have already taken away. Even if they brought down taxes by 2p, 3p or 4p in the pound, the Chancellor would still have to find £6 billion to £10 billion to restore to the taxpayer the equivalent of the 7p in the pound by which he and his colleagues have raised tax since 1992.

That is the Tory strategy to try to win over the people, but a tax cut every five years will never make up for the 21 tax rises in the years in between—tax rises followed by tax cuts. No doubt, if the Conservatives had the chance, the new tax cuts would again be followed by tax rises after the election.

That is all part of a pattern that exposes a short-termist Government, motivated and driven only by electoral calculations, negative in all their campaigning and acting like an Opposition rather than a Government. Next week the Prime Minister will have had five years in power but, as the former Chancellor of the Exchequer, the right hon. Member for Kingston upon Thames, has said, he has been in government, but he has not been making the decisions. There will be no prize of five more years, no street parties and no celebrations.

In 1990, the Prime Minister promised a classless society, opportunity for all and a nation at ease with itself. Instead, under his leadership his party has become a group dominated by extremists who have abandoned the centre in pursuit of unity—a two-nation party when there are no longer two-nation answers to the problems that the country faces.

The Conservatives are a party of the past, huddling round burnt-out ideologies, too weak to face up to the challenges of the next century. As we heard in the Gracious Speech, they are reducing complex problems to the repetition of the simplest and crudest slogans—scapegoating, xenophobic and turning on minorities. They do not care what is left among the ruins.

A divided nation and an unsuccessful economy are too high a price to pay for the last days of the Conservative Government. They are out of touch and their Ministers are out of their depth; they are out of time, and they should be out of office.

4.57 pm

The Chancellor of the Exchequer (Mr. Kenneth Clarke)

Earlier this week, on a more solemn occasion, the nation was glued to its television sets as a major public figure made important pronouncements: the hon. Member for Dunfermline, East (Mr. Brown) was trying to make an announcement about tax policy. It misfired—yet the author of the 10p tax gimmick has the nerve to accuse me of being "never a details man".

The hon. Gentleman has not mentioned his new idea today. I thought that we might be given a few more details, but apparently the policy that nearly emerged over the past weekend of error has already been withdrawn, and it played no part in the speech of the shadow Chancellor in the House of Commons four days later, a week before the Budget.

Mr. Gordon Brown

rose—

Mr. Clarke

No. I shall give way in a moment, but first I ask the hon. Gentleman to tell us which of his shadow Cabinet colleagues gave him the strong advice that they wished to hear no more about income tax at lop in the pound.

Mr. Brown

The Chancellor's first two jokes have misfired. Which does he think is fairer—the objective of a 10p starting rate for income tax or the abolition of capital gains tax and inheritance tax? Will he give a truthful answer?

Mr. Clarke

It was not my joke—the 10p in the pound rate was the hon. Gentleman's joke. Perhaps the hon. Gentleman expected me to come back with a 5p in the pound rate, as he appears to want to conduct economic policy in that way. The hon. Gentleman knows perfectly well that it was a bizarre and ill-judged policy, and it is the nearest he has ever got to showing us an inch of detail that we could discuss in the House. That is an abuse.

Mr. Brown

rose—

Mr. Clarke

Will the hon. Gentleman give us a measure? Is there a Labour party tax commitment that he might wish to offer the House?

Mr. Brown

Will the Chancellor answer the question I put to him? I have set down the principles for a modern taxation policy as fairness, encouraging work and opportunity and being honest with the public, none of which is achieved by the modern Conservative party. Which is the fairer—a l0p starting rate for tax to help work opportunities and to reward effort, or the abolition of capital gains tax and inheritance tax?

Mr. Clarke

I believe in the principles of fairness in taxation, and we demonstrate those principles. I believe that taxation should encourage work and enterprise, and I am delighted to hear the Labour party at least pay lip service to the principle of incentive, which has guided the Conservative party's approach to taxation for a long time. We are committed in the long term to the abolition of capital gains tax and inheritance tax. The ex-socialist in the hon. Member for Dunfermline, East has not yet discovered the importance of capital taxation in an enterprise economy. His remarks on capital gains tax go back to the old politics of envy.

The hon. Gentleman's policy of a 10p in the pound rate of income tax is an incredible gimmick, and independent commentators have pointed out that such a rate does not serve the objectives that he said it would. The hon. Gentleman is merely trying to enter into a bidding match outside this House and is aiming below our clear objective of a 20p in the pound basic rate, to which I shall return.

The hon. Gentleman's speech was wholly typical of his approach to these occasions. He insists on having an economic debate less than a week before the Budget, and it is an obvious opportunity for the shadow Chancellor of the Exchequer to come to the House of Commons and give a shadow Budget. But he never does so.

If the hon. Gentleman can praise one-nation Conservatism—which I certainly support—I can praise the Liberal Democrats, although this may never be repeated on the Floor of the House. The Liberal Democrats always set out their proposals on taxation at this time of year, and they say what they would spend that taxation on. They set out their views on interest rates and set out their economic policy. The hon. Member for Dunfermline, East always comes here and gives a rant and he always goes back to a few of his favourite themes, such as the state of the Conservative party, but he hopes that he will not upset the shadow Foreign Secretary as much as his attempts to say something about economic policy always seem to do. The forced smile of the hon. Gentleman does not conceal the fact that arguments about divided parties do not come too well from that side of the House.

The shadow Chancellor should come to the House and give us a full set of tax plans, spending plans and borrowing plans. But he cannot do that, because the numbers must add up. The hon. Gentleman cannot deliver a shadow Budget, because he does not have the policy components necessary to do so.

Mr. Peter Hain (Neath)

Will the Chancellor give way?

Mr. Clarke

I will give way to the hon. Gentleman, who I hope will give me a policy on interest rates or inflation. I would also like to know whether he is rising in support of the official Opposition amendment, which was supposedly moved a moment ago by the hon. Member for Dunfermline, East. Does he support the amendment tabled by the right hon. Member for Chesterfield (Mr. Benn) and others, which has some policy in it? That amendment attacks the market economy and goes back to the old values of the Labour movement. I would like to know which amendment the hon. Gentleman supports, and then I want to hear a point of policy.

Mr. Hain

Will the Chancellor give us a clear commitment that, when he is the shadow Chancellor in two years' time, he will deliver a shadow Budget one week before my hon. Friend the Member for Dunfermline, East gives his Budget? Will he promise that that shadow Budget will give marginal tax rates, detailed spending commitments and all the other paraphernalia of the Budget he is demanding from my hon. Friend? Will the Chancellor give a solemn promise to the House this afternoon that he will give a shadow Budget in two years' time?

Mr. Clarke

I have been in opposition, and the Conservative party in opposition had clear economic policies. We most certainly knew what we were attacking the then Government for, as they had reduced this country to being the laughing stock of western Europe in any industrial league table. We put those policies into effect in the 1980s when we transformed this country into an industrial success story. We have clear objectives—

Several hon. Members

rose—

Mr. Clarke

I will not take any interventions for the moment. The hon. Member for Dunfermline, East was generous in giving way, but I do not want to take as long as he did.

We have a clear set of objectives for our economic policies—Government borrowing falling to zero; public spending below 40 per cent. of GDP; inflation below 2.5 per cent.; a basic rate of income tax of 20 per cent. Those are clear and consistent objectives, and we are putting them into place. We are delivering a recovery that will be for keeps and will increase the living standards of families year after year.

The Labour party, after years and years in opposition, does not have a single element of a policy framework that has either been agreed upon by itself or that its Front-Bench Members have ever expounded or set out.

Mr. Malcolm Bruce (Gordon)

The Chancellor has clearly set out his objectives, and has articulated them on a number of occasions. During the debate on the summer economic forecast, he said: borrowing is actually taxation deferred."—[Official Report, 12 July 1995; Vol. 263, c. 979.] Does he agree that—against the background of a huge overshoot in current borrowing—any tax cuts in next week's Budget would have to be clawed back after the next election?

Mr. Clarke

I have just set out our policy on borrowing, and one of the reasons for that policy has just been correctly set out by the hon. Gentleman. We are committed to reducing the borrowing balance to zero over the medium term, and that remains our firm commitment. We intend to return to a situation where the ratio of debt to GDP in this country is declining, and that is a policy that my predecessors and I have followed consistently. I have never heard the shadow Chancellor express a clear opinion on that objective, and certainly he did not do so this afternoon.

Several hon. Members

rose—

Mr. Clarke

I shall give way later, or I shall be giving way more frequently than the hon. Member for Dunfermline, East did. I shall give the background against which our policies should be seen, so far as the Budget next Tuesday is concerned.

The economy has been growing steadily for three years. Output in this country is now 6 per cent. above its previous peak in the boom a few years ago.

Mr. Roger Berry (Kingswood)

Will the Chancellor give way?

Mr. Clarke

The International Monetary Fund expects Britain to be joint top with Germany in the league table for growth in the seven main industrial countries next year. Unemployment has fallen by more than 700,000 since its peak, and 1 million new jobs have been created since the recovery started.

Mr. Berry

rose—

Mr. Clarke

Some 250,000 of those jobs were created last year alone, and the majority of those new jobs were full-time jobs.

Mr. Berry

Will the Chancellor give way on unemployment?

Madam Deputy Speaker

Order. I shall make it clear that hon. Members must resume their seats if the Chancellor does not give way.

Mr. Clarke

I was about to add that we are enjoying the best run of low inflation for half a century.

Mr. Berry

Will the Chancellor give way?

Mr. Clarke

I shall give way to the hon. Gentleman. I am the Chancellor of the Exchequer in the only country in western Europe that has got unemployment down by 750,000, and the only country in western Europe that has been creating jobs—some 500,000—since the recession, so I will not be shouted at about unemployment by a member of a party that is in favour of a minimum wage and the social chapter, but does not even have the nerve to say at what level a minimum wage would be, because it knows that we would put a figure on how many jobs the minimum wage would destroy. I shall listen out of courtesy to the hon. Gentleman on unemployment, as he might produce a policy. That would be more than his Front-Bench spokesman has done.

Mr. Berry

I thought that the right hon. and learned Gentleman was the Chancellor of the Exchequer, and not me. If his policies and those of his predecessors have been so effective in tackling unemployment, why has unemployment under the Tories not been less than the level they inherited in any single year since 1979?

Mr. Clarke

We employ a higher—[Interruption.] There have been huge changes in our labour market and those of our international competitors since 1979, and this country has prospered from these changes when compared with the rest of the western world. There are far more people in our work force now than in 1979. We have a higher proportion of our work force in employment than any other major western European economy. [HON. MEMBERS: "That is irrelevant."] It is not irrelevant. We have a lower level of unemployment than either France or Germany. The background is that we alone of the western European economies are creating new full-time jobs. We have a background of falling unemployment.

The Labour party has no policy on the labour market except the social chapter, the minimum wage and a bit of policy about bringing back trade union recognition. Labour Members never speak about it. They give no detail about it. They would not even tell the Labour conference what figure they would put on the minimum wage. They know that the only policies they have on unemployment would drive it up, destroy jobs and put us back in our good performance compared with the rest of western Europe. That is why—

Mr. Berry

Will the Chancellor give way?

Mr. Clarke

No. It is enough. It is one consequence of the rules of the House that, when one gives way, one has the last word. I cannot keep coming back to the same point.

Mr. Berry

It is not my fault.

Mr. Clarke

It is not the hon. Gentleman's fault. It is because Labour Front-Bench Members have nothing to say on unemployment.

The record that I have just described is the reason why an independent body such as the OECD has described our recent economic performance as impressive. I will not give the House all the other favourable adjectives that it has used about the current performance of the British economy. I have no intention of putting any of it at risk. The Labour party does not have the slightest clue what it would do about it if ever the whole thing were put into its hands. I hope that that will always be avoided.

This year, growth in the economy has slowed. That is because I raised interest rates in order to keep inflation down. I did so because rising inflation destroyed the last three recoveries. I increased interest rates early to nip inflation in the bud. That, and my control of public expenditure, allowed me to resist pressure that might otherwise have taken interest rates further.

The approach of the Labour party to public spending control, the tax measures that I had to take, public borrowing in general and all the interest changes that I have ever made or refused to make has been non-existent. There has been no response. The official Opposition, pretending to be a Government in exile, have no views on the struggle that we have made to ensure that the recovery is not jeopardised again by a return to inflation.

We used to have an official Opposition. We used to have a Labour party with socialist policies. We beat it time after time in elections. The Labour party has vacated those policies. Labour Members have turned from those policies to light entertainment in their speeches. They hope that they will get away with that and put themselves in charge of the best and strongest economic recovery in western Europe. Heaven forfend; the future of Britain is far too important for that.

No serious independent forecaster expects the economy to move back into recession. All the signs are that growth will be sustained. A great deal of that will depend on investment. Of course we agree on the importance of investment and improving Britain's investment record. Business surveys suggest that the prospects for investment are good. Good economic conditions stimulate investment.

Manufacturing investment rose by 12 per cent. last year. Consumer spending is on a steady upward path. Rising incomes and employment should keep it that way. We have retained our competitive position in the overseas market. Those are the policies. Those are the results on which the well-being and prosperity of British people and their families depend. Those are the serious matters to which the Labour movement in the House and outside contributes absolutely nothing.

We have heard a great deal about league tables. The Labour party has used the table out of the competitiveness White Paper, to which it has added a little. It has bought advertising space to publicise the table and said that the OECD figures of GDP per head since 1979 are some kind of prosperity league table. GDP per head is open to its difficulties. Is the Labour party going to turn Britain into a secondary banking haven? If so, exactly how does it propose to go about it? Are we going to compare the proportion of oil revenue per head of population to that of Norway? Is that somehow rediscovery of oil? Norway is always one of the countries that the hon. Member for Dunfermline, East cites as having overtaken us.

We have overtaken social democrat countries in Scandinavia which have followed the policies which until recently the Labour party advocated. Of course we have been overtaken by Hong Kong and Singapore, which are small island states in Asia. We should consider our position now in relation to productivity, inward investment and competitiveness in world markets. The hon. Gentleman misuses the tables.

The hon. Gentleman starts with 1979, when we took over an economy racked by debt, recession, strikes and unemployment. For a time in 1981 the United Kingdom's economy dropped to 19th—even in the hon. Gentleman's league table—but that was because of the hon. Gentleman's party's recession, and, even in his table, we have recovered from that recession.

Mr. Gordon Brown

Will the Chancellor give way?

Mr. Clarke

I shall give the hon. Gentleman some fresh figures and then give way.

Let us just examine where we are now. I agree that the measure of purchasing power parities is the way to do it. The United Kingdom's GDP per person is in line with the European Union average. The Central Statistical Office's recent "Business in Europe", another of our glossy publications, shows that, between 1981 and 1993, the United Kingdom's economy grew faster than those of Germany, France, and Italy, and it grew faster than the European Union average. That growth is showing on the ground: there are now 3.5 million active businesses in the United Kingdom, which is 50 per cent. more than there were in 1979. Business numbers are still rising, and business profitability is very high.

The hon. Gentleman referred to nationalised industries. The first thing to say about nationalised industries is that they used to cost the British taxpayer £50 million every week. Privatised companies now contribute about £55 million every week in revenue.

Mr. Alex Salmond (Banff and Buchan)

On a point of order, Madam Deputy Speaker. There is some noise in the Chamber. When the Chancellor was speaking about those comparisons, I could not hear whether he took as his starting year 1979, when the Conservatives came into office, or 1981, which was after a very deep recession.

Madam Deputy Speaker

The Chancellor can deal with that himself.

Mr. Clarke

The starting point that is always used by Opposition spokesmen—it is logical to look at when we first came into office—is 1979. In 1979, we took over from a Government who had an enormous amount of public borrowing because of its attempt to reduce taxation. It was an economy in steep decline which, between then and 1981, had to be turned round. Using 1979 as the date pulls down the average figures. Until 1981, the decline that we had been left carried on. The argument is very old, and it is only because those figures have been dug out that I resort to it. We had that argument all the way through the 1980s, and we always won it because people clearly remembered why we had to increase taxes and get borrowing under control when we first came in. They remembered how we got to the 1981 position, for which the comparisons are very different.

Throughout the 1980s, our growth pattern was faster than those of the other European countries I have named.

Mr. Gordon Brown

Will the Chancellor give way?

Mr. Clarke

The hon. Gentleman should listen a little further because he might learn something, perhaps for the next speech.

Mr. Salmond

How on earth can the Chancellor seriously compare the records when he misses out the first two years of an extremely deep recession? If he wants to compare the Government's record against that of other countries or against that of other parties, he should compare it over the whole 16 years; he should not miss out the first two years.

Mr. Clarke

I make it quite clear when I say that, throughout the 1980s, we grew faster than Germany, France and Italy. In his intervention, the hon. Gentleman pretended to mishear what I said, and he said that I was wrong. He knew perfectly well, however, what I was talking about. He wants to include the first two years after the winter of discontent in order to pull our record down. The winter of discontent was the creation of the Labour party, and it was the achievement of the Conservative party to get us out of it and set ourselves on the way to being the enterprise centre of Europe.

Mr. Gordon Brown

Will the Chancellor therefore confirm that he accepts that we were 13th in national income per head in 1979 and that we are now 18th? Will he also accept that we were 13th in 1974 and 13th in 1979, and that all the decline has happened under a Conservative Government? Will he explain why we have slipped from 13th to 18th under a Conservative Government?

Mr. Clarke

I have already pointed out to him that using GDP per head figures in that way is ridiculous. We published a whole document. The hon. Gentleman has become a monomaniac about one table, which he misuses in order to make his totally specious point. Our inward investment, our consumption, and our personal prosperity have risen throughout the years which, using this one table in a rather eccentric fashion, he claims were years of decline. It is no substitute for policy. We are doing better than the others now and the hon. Member for Dunfermline, East is trying to pretend that he has some hidden secret that might enable him to do better.

Mr. Brown

The right hon. and learned Gentleman now wants to talk about investment. Will he explain why we have fallen to 21st in the investment league since 1979?

Mr. Clarke

I shall give the hon. Gentleman some comparative figures on investment. Let us look at investment in the whole economy [HON. MEMBERS: "From 1979.'] I do not mind responding on the whole period of office. I am one of the last survivors of the long march and I am still here. I even survived a period in opposition to the Labour party, when it had a policy and it was a wrong one—it perhaps was even worse then.

Investment in the whole economy under the last Labour Government grew by a grand total of 1.4 per cent. Since the Conservative Government came to power, investment has grown by 31 per cent. Obviously, we have been in power far longer than the Labour party, so one has to look at the annualised rate of increase—for the hon. Member for Dunfermline, East, this man of detail, that means how much per year. It has been 1.8 per cent. per year under us, as compared with 0.3 per cent. each year under Labour. Investment has grown six times faster under Conservative Government than under the last Labour Government.

Let us look at a few international league tables—

Mr. Brown

rose—

Mr. Clarke

Let me give the hon. Gentleman just one more figure from the Organisation for Economic Co-operation and Development on increased investment—[Interruption.] I have dealt with unemployment and now we are on to investment, which was the next point that the hon. Gentleman laboured.

Judging from the annualised rate for the increase in investment between 1979 and 1994, we have moved to the top of the investment league for major economies in Europe. I just gave the annualised rate for the United Kingdom, which was 1.8 per cent. but in France it was 1.2 per cent., in Germany it was 1.1 per cent. and in Italy, 0.7 per cent. We have outstripped those countries, although they all did a great deal better than Britain ever did under a Labour Government. We are top of the table; we are not bottom any more.

The prospects for future investment, which is what matters—[Interruption.] That is what we are tackling in the Budget and that is what the hon. Member for Dunfermline, East will have to talk about next week—the prospects for future investment. Most forecasters share the Treasury expectation that investment will pick up strongly this year. The signs of investment growth are there. Manufacturing investment is, as I said, up 12 per cent. on a year ago. Business surveys all show that prospects for investment remain healthy and the Confederation of British Industry investment intentions balance remains buoyant.

All that investment record—the strong record now—shows that we are making progress towards our goal. It is one of the reasons why the British economy has been growing faster than the G7 average for the past three years. If we are looking at league tables, the International Monetary Fund expects the United Kingdom to be joint top with Germany of the seven top economies—the G7 growth league table—in 1996. That is because of the success of our policies, to which the hon. Member for Dunfermline, East presents not the slightest alternative.

Mr. Roy Beggs (East Antrim)

Does the Chancellor agree that Government policies have largely contributed to the success that Northern Ireland now enjoys in attracting inward investment? Does he further agree that the location of that investment is best left to individual companies to decide rather than being subject to the direction of officials?

Mr. Clarke

Yes, I entirely agree and I am absolutely delighted that the Northern Ireland economy is performing so strongly. As part of the United Kingdom, it is quite rightly benefiting from the success of British economic policy and of our success in making this country the most attractive location for inward investment in western Europe.

I can set out a policy, although I am in Budget purdah. The hon. Member for Dunfermline, East knows that he has the advantage of me on this occasion, or he ought to have, because I cannot give specific measures beyond that. With no purdah, he produces nothing. The veil remains tightly drawn and nothing is believed. Every time he comes to the House on occasions when he ought to be saying what he would do if he was given stewardship of the national economy, he ought to answer our questions—the questions that i always ask.

Does he think that public borrowing is too high, too low or about right? Does he believe that we are controlling public spending too much or too little, and would he control it more firmly to achieve his incredible 10p rate? I have asked him questions, but he retreats into the childish obfuscations, "We will wait to see what the economy will be like. We will await the full information."

As is obvious from the folders that the hon. Member for Dunfermline, East clutches when he comes to the Chamber to speak, we shower him with information. We have a Red Book of the Budget. Would a Labour Government put out a different Red Book? What on earth would be added to the knowledge of the British economy by a Labour Government, if they ever came to power? What about the statistics from the Central Statistical Office? We have put it aside; it is a totally independent agency. What statistics does he want it to produce to enable him to form some judgments on these vital matters?

It is not that the hon. Member for Dunfermline, East is waiting to see the books, or that he does not know anything about the British economy. Every other financial commentator in the country bombards me with advice on what to do in the run-up to a Budget. Everyone I meet in the Rose and Crown tells me what he or she wants me to do in the Budget. The hon. Gentleman is the only man with no advice and no opinions—the only man in this country who thinks that talking about politics and economics is not allowed in polite company. He is shadow Chancellor and he has no opinions on any of those matters.

At the last election, Labour stood on a policy. The party had a policy of increasing taxation and public expenditure. It was set out with clarity. There was a shadow Budget and there were no excuses then. Labour was a tax-and-spend party. We stood on a platform of aiming for lower taxation and cutting taxes—[Interruption.] Both policies were obviously based on the mistaken belief that the recession was about to end. Faced with £50 billion of borrowing, we acted in the national interest. We raised taxation and controlled public spending. In every sensible step we took, we were opposed by the Labour party.

Had Labour won the last election, what would it have done? Yes, a Labour Government would have raised taxation because they would have raised public spending, which is what they committed themselves to. They would have increased taxation more and more because they would have discovered that they had to tackle that borrowing.

Since that time, we have consistently set out our aims—our low taxation agenda, our desire to get borrowing down to zero and our desire for recovery. The Labour party—the all-tax-and-spend party, which it still is—has relapsed into silence.

Mr. Geoffrey Robinson (Coventry, North-West)

The Chancellor must be aware that, just before the last election, the Government knew that the public sector borrowing requirement would go up to £50 billion.

Mr. Clarke

No.

Mr. Robinson

Of course the Government knew that. Given that set of circumstances, how could they have gone into the election with the promises that they made at the time?

Mr. Clarke

If the hon. Gentleman thinks that all economic forecasting is spot on like that, so that Governments always know what is going to happen, he is making the job of Chancellor of the Exchequer sound a lot easier than I have discovered that it usually is. At the last election, all the parties plainly proceeded on the basis that we were out of the recession. We reacted in the public interest and the Labour party reacted by going into a burrow, from which it never emerges with any policy.

We know that tax and spend has not been abandoned. In one week last month in speeches in the House, 40 per cent. of Labour Members called for more public spending. Nearly half the interventions from the Labour party around this silent trappist monk who speaks on economic policy are to demand more public spending. The silence of the hon. Member for Dunfermline, East merely leaves him exposed to all the pressures in his party. It is no good him pretending to be a better one-nation Conservative than I am. I was there first and I know my way around this course much better than he does. He is no one-nation Conservative—he is not a shadow Chancellor of the Exchequer at all.

Let us have a look at what some members of the hon. Gentleman's party say about his pronouncements. The right hon. Member—I am sorry, I am premature, the hon. Member—for Hackney, North and Stoke Newington (Ms Abbott) used these words early this week when she heard of something that struck into her soul so that she felt she had to respond to the hon. Member for Dunfermline, East; I think it was the 10p promise but it might have been workfare for young people. On the air, she said: Gordon can say anything he likes if he thinks it is going to win the election. But ordinary Labour party supporters in this country, particularly the poor and the unemployed, when Labour is in power will be looking for other priorities from tax cuts. What about the TUC general secretary, John Monk, a man for whom I have considerable admiration? He said: Rather than tax cuts, the emphasis should be to increase spending on areas that need it. We have had enough of this stupid bidding match where the hon. Member for Dunfermline, East tries to emerge from his silence to claim that he is likely to cut taxes more than a Conservative Chancellor is likely to cut taxes—complete nonsense and quite incredible unless he gives us some policy.

It is not an impossible question, on the eve of a Budget, to ask the Labour party what it thinks the basic rate of tax should be. It does not know whether I am going to change it or what my views are, but it presumably knows what the basic rate of tax should be. Obviously, it will raise the higher rates of tax. It must know about that and have some ambition. To what is it going to raise the higher rates of tax?

Will anybody tell us what is the policy of the Labour party? Is there any Labour Member prepared to get up and say on this key issue, a week before a Budget, what the policy of the Labour party on this issue and what the basic rate of tax should be? Are interest rates too high or are they too low? What inflation target should be set? Is there any member of the Labour movement, from the left, right or middle or from the shadow Treasury team, who has the slightest view on that simple matter? This is a total farce. [Interruption.] Oh, we have a figure.

Mr. Fabricant

Does my right hon. and learned Friend realise that the reason why Labour Members cannot answer is that the shadow Chancellor's puppet master, the hon. Member for Hartlepool (Mr. Mandelson), is not in his place?

Mr. Clarke

I think that that is probably right. The hon. Member for Hartlepool came up with what he thought was a remedy for the Labour party: "Let's stop having these policies, leave the rest to me, shouting over the telephone to BBC producers." That is no basis on which any political party should ever aspire to government in a modern state. [Interruption.] I will not go back to the questions that I have already answered.

On the key things on which Labour has a policy that it will not withdraw—the minimum wage and the social chapter—no detail is given or referred to, but they would be destructive of our competitive position. Everybody knows that I am pro-European, but I am vehemently against ever accepting the social chapter in this country, and vehemently against setting a minimum wage. All the talk of the hon. Member for Dunfermline, East about moving from dependency into work—it was the theme of my Budget last year when I worked on family credit; he has stolen it from me—is made nonsense of by his talk on the minimum wage, as my hon. Friend the Member for City of Chester (Mr. Brandreth) made clear in his intervention.

Let me remind the House of what Adair Turner, the director general of the CBI, said on 15 November. This is the view of British industry and business. He said: We do not agree at all on the Social Chapter and the minimum wage. We fear that the European Union and Social Chapter would force us to sign a blank cheque to cover the huge raft of workers rights it promises. He went on: Mr. Blair claimed he would not sign up wholesale to everything in it. He may believe he does not want everything the EU wants. But because of this structure there are some things he won't be able to avoid. I am accused by the shadow Chancellor of not having read the Maastricht treaty. I can find my way around the Maastricht treaty a whole better than most people in the House, and as well as any. The Leader of the Opposition made it quite clear that he had not got the first idea about the social chapter and did not realise that he would not be able to pick and choose on the things that were introduced by a qualified majority vote.

This debate is occupied by the Labour party with no economic policy or plans at all, but a large number of threats loom in the background from some of its supporters and interests, and its record of incompetence in power in the past. It is no good saying to the hon. Member for Dunfermline, East, "Where's the beef?", to use the old phrase; he does not even produce a skinny kebab by way of policy when he comes to the House.

I will come to the House next Tuesday free of purdah and present the Government's detailed economic policies for next year. They will be guided by the clear, consistent principles that I have set out ever since I have been Chancellor of the Exchequer. They will be dedicated to making this country the enterprise centre of Europe, an economy that can earn the wealth in which all the people can share and which will pay for the public services about which they care.

We are on our way to out-performing the rest of Europe. We have recovered from the disaster of the 1970s. The 1990s are going to see this country at the head of every economic league table that matters if we stick to the course on which we are set.

5.35 pm

Mr. Tony Senn (Chesterfield)

I was elected 45 years ago next week in succession to a Chancellor of the Exchequer. I have heard many Chancellors of the Exchequer since, some of them eminently forgettable. I think that we may have heard another.

One thing that has not impressed people over the years is the selective use of statistics and selective quotations. People are not entirely and solely economic animals with a Treasury mode of thinking. Even if tonight, as he will, the Chancellor carries a majority in the House, he has not carried the British public on the policies that he has pursued. That is not only because of the so-called competence or incompetence of the Government; it is because the objectives of the Government are not shared by the generality of the British people.

My hon. Friends and I have put down an amendment to the humble Address, which though not called—I cannot complain about that—it is in order for me to read into the record. It states: But humbly regret that the Gracious Speech made no reference to the injustice and suffering caused by policies based upon the supremacy of market forces in the United Kingdom and world-wide, which have had the effect of elevating profit above the satisfaction of human need, widening the gap between rich and poor, causing mass unemployment and homelessness, starving industry of the investment it requires, harming the public utilities and the social infrastructure, eroding the Welfare State and universal benefits, neglecting essential public services in health and education, denying adequate pensions necessary for retired people, diminishing local authority and trade union rights, producing widespread personal insecurity and fear, creating social tensions and increasing the risk of conflict, encouraging the spread of racialism and intolerance, inflicting damage on the environment, undermining the democratic process and civil liberties and spreading disillusionment, pessimism and cynicism, all of which are features of global capitalism; and calls for the adoption of modern, democratic and socialist policies designed to secure the full use of all Britain's human and physical resources, and their fair distribution, for the benefit of the nation as a whole. It is by their objectives that Governments are judged. During wartime, victory is the only test. Nobody talks about inflation in wartime, only of defeating the enemy—killing the enemy. When I was first elected—and I am proud of it—the objectives that I have read out were widely shared by both sides of the House. After all, Winston Churchill had been an old Liberal. He had himself nationalised British Petroleum when he was First Lord of the Admiralty. He introduced the Sunday shopping rule and the wages councils. Since 1950, the centre of British politics has altered radically to the right.

We see the consequences in the opinion polls. I do not have a great deal of time for opinion polling. I have no time for political images. The image that I have is the one that I use to shave in the mornings. I cannot change it. However, the Chancellor would be foolish to believe that one can run a society on the basis that profit is more important than human factors.

My right hon. Friend the Leader of the Opposition, speaking in the House in June after the Halifax summit, said: is not the central issue the revolution in the globalisation of the financial and currency markets, which now wield massive speculative power over Governments of all countries and have the capacity seriously to disrupt economic progress?"—[Official Report, 19 June 1995; Vol. 262, c. 23.] The Chancellor of the Exchequer has no real control over what should happen in Britain because he has to satisfy the international markets that his policies will not interfere with their objective of the maximisation of profit. That is the function of a Chancellor of the Exchequer and if, by any chance, we were foolish enough to adopt a single currency, so that his job moved to Frankfurt, not only would those factors determine British policy, as they now do, and what we are allowed to do, but the power of the law would be in the Frankfurt bank rather than in the Treasury.

I, and people whom I meet when I go round the country, ask ourselves what the real cause of the problem is. Is it an incompetent and unfair Government? That is an easy thing for an Opposition Member to say. I believe, however, that there is something much deeper. If the House is in disrepute at the moment, it is not just because of sleaze and all the arguments, but because we in the House do not address the central questions that have to be addressed if we are to provide a decent society.

Mr. Matthew Carrington (Fulham)

Will the right hon. Gentleman give way?

Mr. Benn

I do not intend to be provocative. I hope to be thoughtful, and not to say anything that will bring a Conservative Member to his feet with a quotation that he might think will embarrass me. That is not the sort of speech I want to make.

Mr. Carrington

I was not going to quote.

Mr. Benn

I do not want to give way at the moment.

The county of Derbyshire, which I have the honour, in part, to represent, needs £100 million for school repairs. Derbyshire, like all local authorities, has been strangled by the Government. Local democracy—this matters to Conservative as well as to Labour councillors—has been absolutely strangled. In the 19th century, long before the Labour party was formed, Joe Chamberlain in Birmingham introduced municipal housing, municipal hospitals, municipal water, municipal gas and municipal museums. When I was an RAF trainee, I learned to fly at the Birmingham municipal airport. That was the heyday of local government, which has been absolutely destroyed by the Government's policies.

Let us look at health. I and the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) are the last remaining Members who sat in the House when Anuerin Bevan was Minister of Health. Anyone who looks at what we were able to start in 1948, when we were bankrupt after the war, will see that there was absolutely free health care when we needed it. It has never, of course, been a free health service. It was free when we needed it, but we paid for it when we were well. That health service has been utterly destroyed. The increases in prescription charges have been so high that prescription charges can even exceed the cost of the drugs if bought in a chemist's shop without a prescription—if that is possible. There are long waiting lists and services are being privatised.

I expect that the House has heard of the little document, which is circulating, about the boat race between the NHS and a Japanese crew. Both sides tried hard to do well, but the Japanese won by a mile. The NHS was very discouraged and set up a consultancy. The consultancy came to the conclusion that the Japanese had eight people rowing and one steering, whereas the NHS had eight people steering and one rowing. The NHS appointed people to look at the problem and decided to reorganise the structure of the team so that there were three steering managers, three assistant steering managers and a director of steering services, and an incentive was offered to the rower to row harder. When the NHS lost a second race, it laid off the rower for poor performance and sold the boat. It gave the money it got from selling the boat to provide higher than average pay awards for the director of steering services. That is what is happening all over the place. There is masses of bureaucracy in the health service and a denial of what people need.

The people who will have to pay for all this are the people for whom the welfare state was devised. I have been searching for the origins of the Secretary of State for Social Security's new proposals for dealing with welfare. I found them because, after 30 years, Government papers are published. The stationery office has just put on a CD-ROM all the papers for 1964. I give the Chancellor this quotation from his colleague. This is the Conservative Chief Whip, Martin Redmayne, sending a minute to the Prime Minister on 19 June 1964. The Conservative Chief Whip said: The first essentials are to accept that the benefits of the Welfare State should not be universally received and secondly, the insurance principle, which is already eroded, is not sacrosanct. In this connection I would like to see all above a certain income level excluded from benefits. The Conservative Prime Minister, Alec Douglas-Home, wrote in his own hand—I have a photocopy of this: Beveridge was very costly. Would another inquiry be as bad or if we win, should we not impose our own scheme? It was only the defeat of the Conservatives in 1964 that prevented the welfare state from being dismantled then. It is now the present Government's intention to dismantle it.

We then come to the arguments that are put forward when people say that things are unfair and when they protest. One argument is, "You have no rights without responsibilities." That is a very popular phrase nowadays. I looked at the origin of that phrase and found that those very words are in the Brezhnev constitution in the Soviet Union in 1977. An authoritarian system is being introduced, through the Criminal Justice and Public Order Act 1994 and so on, which aims to repress the dissent against policies that are manifestly unfair.

The Chancellor questioned us—that was fair enough—on what the Opposition would do in power. As a candidate, taxation is not an issue that has ever embarrassed me. There are two questions about taxation that ought to be asked: "What is it for?" and, "Who pays for it?" If we tax old-age pensioners by imposing VAT on their fuel to buy a Trident, that is wrong. If we tax people who are better off to fund a proper health service, that is right. The Chancellor, who is a member of the Government, has given 50 billion quid away to the richest 10 per cent. Every family of four—I had the figures broken down for me by the House of Commons Library—spends 40 quid a week on weapons, 40 quid a week paying for unemployment, which is a deliberate policy, 40 quid a week on law and order, much of it caused by mass unemployment, and 20 quid a week on the common agricultural policy.

The Government should not tell us that money is not available for the things that need to be done. Of course it is available, but it involves recasting the priorities to bring the nation's resources fully into use. That should be the objective of government. The Government should see that there is no waste of human resources when so much has to be done. In wartime, as I mentioned, market forces did not prevail. The weapons were provided by the Government. If we could have full employment to kill people, why can we not have full employment now? Why cannot we use unemployed building workers to build the houses that we need? Why cannot we recruit the nurses and teachers we need? Why cannot we have the people who are needed to look after the old? Why not? Because it is not profitable.

The core of the Chancellor's argument is that profitability should be the test of everything that we do. I utterly reject that. The Government use the word "customers". Someone who does not have any money is not a customer and that is why the Government have invented this use of the word "customer". The homeless in cardboard boxes are not customers because they cannot afford a house, so they can be disregarded.

The Government talk about competitiveness as if everything was competitive. Most things that matter in life are not profitable. Schools are not profitable, hospitals are not profitable, the police are not profitable, the Army is not profitable and the Chancellor is not profitable, but the nation knows that it requires those services to survive. We must get on—I do not say get back—to the position where the employment of all people is a national objective. The health of the nation is a national objective and we should ensure that we develop policies for that purpose.

I know that I speak at a time when left-wing views are supposed to be out of date. My own assessment is simple. It is not just socialism that market forces have attempted to destroy, but Parliament, democracy and the social fabric. The House should not think that the situation will remain like that. We need only look at the defeat of Lech Walesa, or what has happened in Russia. Look at the defeat of the right-wing leader of the German SPD. The people are now gaining a new perception of what they want in the 21st century. They want fairness, and they want to use the resources of their own countries for the benefit of their own people for the short span during which we live on the earth.

Debates of that character would be more interesting and relevant to people outside than what passes for an exchange of management expertise. We in this House are not, dare I say it, managers. We are representatives. Who represents the unemployed? Who represents the old who have been denied a pension related to average income? Who represents the kids who cannot get work when they leave school? Who represents the women who get married and cannot get a home? Who represents the people waiting for hip operations? They look to us to represent them in Parliament.

I am proud to be in a party with a strong trade union base because those trade unions, having won the vote, knew they needed to have representation for working people in Parliament. The reason I am a dedicated socialist, and get more so, is that I know that any party that adheres to a market economy or profit as its prime objective will never solve the problems that confront my constituents.

Although the Chancellor had fun in his speech, and I am sure that he felt that he had done well, the country cannot be run by disregarding human need and putting the almighty pound, dollar, deutschmark or ecu above people. Debates in the House about the economy should relate more to people and less to what we heard from the Chancellor today.

5.50 pm

Sir Terence Higgins (Worthing)

I am rather surprised that the shadow Chancellor is not still in his place, because there has been a long convention in the House that, after one has spoken, one remains at least for the next two speeches. It is a great shame that the hon. Member for Dunfermline, East (Mr. Brown) did not do so, because he would have been able to hear the right hon. Member for Chesterfield (Mr. Benn), and that would have given the hon. Gentleman some idea of the problems that he will face if he really thinks that in future the Labour party will become a party of low taxation and low public expenditure.

We could not have had a clearer indication of the way in which the Labour party—and it would be true if it were in government—is still a party that believes in high public expenditure and high taxation than the speech of the right hon. Member for Chesterfield. No amount of change by the shadow Chancellor will convince people otherwise. Such economic thinking is still deeply ingrained in the Labour party, as the right hon. Member for Chesterfield clearly demonstrated.

I am bound to say that this is the third occasion on which we have begun a parliamentary Session with an unsatisfactory timetable ahead of us. We have spent a number of days debating the Queen's Speech. We will then spend a number of days next week and the week after discussing the Budget. Before we know where we are, it will he Christmas. It is no longer possible under the current legislative process to have Second Readings of Bills, which could then go into Standing Committee and make progress, before Christmas.

What is even more surprising is that, ever since the change in the legislative programme, the Opposition have repeatedly insisted on debating the economy during consideration of the Queen's Speech—the week before the Budget. The shadow Chancellor is coming up for his third Budget and, by now, I should have thought that he had realised that that strategy is a mistake. As my right hon. and learned Friend the Chancellor has pointed out, today's debate gives the Opposition a marvellous opportunity to put forward their policies ahead of those of the Chancellor, who is severely handicapped by being in purdah. But what happens? Year after year, the shadow Chancellor has totally failed to produce any policies, except for one this year on lop tax, which I shall discuss later.

Although I have been somewhat persuaded by the Chancellor's view that a unified Budget helps the Government by focusing Ministers' ideas on the relationship between taxation and public expenditure, I am far from clear which way round that relationship operates. Does taxation determine the expenditure, or expenditure the taxation? As for the House, the Budget has not become a unified one, because for well-known reasons we still do not have the power to increase public expenditure or taxation. We can only reduce one or the other, or both, so we cannot exercise a choice. We cannot have a truly unified Budget in the sense that the House can trade expenditure and taxation against one another.

I am somewhat persuaded, however, by my right hon. and learned Friend's view that a unified Budget at least concentrates the mind of Ministers. Although we have only the same amount of time to discuss expenditure and taxation, we can take a view on both according to the events of next week. I want to defer my remarks on that until next week, which is the appropriate time to discuss the major issues of macro-economic policy.

If it is intended that the Budget should deal with public expenditure and taxation, I hope that my right hon. and learned Friend the Chancellor, and the Leader of the House, who will reply to the debate, will consider whether the Budget should be produced in the spring. I know that that would require a radical change in the Government's internal workings, but it would be vastly preferable from a parliamentary point of view.

Since I do not believe that this is the appropriate moment to discuss macro-economic policies, I merely want to refer to two specific issues, not least because they are of great concern to my constituents. The Gracious Speech referred to legislation being brought again before the House regarding the high speed rail link. That raises the question of compensation for those who are affected by such programmes. The high speed rail link will not affect Worthing, but it is important to consider compensation for those blighted by road programmes in my constituency.

The Chancellor is aware that that issue of economic policy potentially involves huge sums of money, but we are not giving members of the electorate a fair deal. I am strongly of the opinion that we are getting our road and rail infrastructure on the cheap and at the expense of those who happen to be in the way of a particular scheme.

A number of ombudsmen reports have been written about compensation to be paid in my constituency, where there has been a great deal of blight along the route of the A27. The Government have also lost a court case relating to compensation. I had hoped that those facts would provoke them to include in the Gracious Speech better and fairer proposals to compensate people affected by blight, not least that caused by rail projects. To my disappointment, instead of introducing new legislation to overcome the problem, which we could have debated and, if necessary, amended, the Department of Transport, no doubt aided and abetted by the Treasury, issued new guidelines for compensating people affected by blight.

The court case led one to believe that those who had been affected by a road or rail scheme would get compensation if the benefit they had gained from ownership of property was seriously compromised. One imagined that that compensation would relate to loss in the value of the property. That has not happened. In addition to making it clear that a reduction in the value must be apparent, the new guidelines still retain the old noise criterion. That means that the Department of Transport is saying that one must meet that old criterion on noise apart from that relating to reduction in the value of the property.

That is a serious issue. When we come to consider the matter in detail in relation to public expenditure, I very much hope that the Government will consider the implications. I am glad to see that the Chief Secretary to the Treasury is present. I recognise that even in my constituency the sums involved could run into tens of millions of pounds or even hundreds of millions. As for the rail link mentioned in the Queen's Speech, the sums involved could run to hundreds and hundreds of millions of pounds. It is still true, however, that the community as a whole is getting such infrastructure schemes without adequately compensating people who suffer because their homes happen to be in the line of a proposed route.

No doubt the Budget will contain proposals for changes in public expenditure. We have suffered from a number of rumours in the press about cuts in the road programme or other projects. That causes great distress to those who are expecting to benefit from a bypass or some other project.

We all acknowledge that the Government are likely to give priority to education or the national health service. It is common ground that those sectors need to receive priority. However, if there are to be cuts in other sectors, such as in transport infrastructure, it is tremendously important that full consideration be given so that we avoid wasting public expenditure that has already been incurred.

In a specific example that I can think of, we have already expended more than £6 million. It would be foolish if, in such cases, one were to stop the operation dead in its tracks, causing that money to be wasted.

Similarly, it is important that the Government consider the effect on expectations of sudden changes in public expenditure programmes. For that reason also I am glad that my right hon. Friend the Chief Secretary to the Treasury is in the Chamber. It is important that the Treasury, in dealing with other Government Departments, should take into account the human impact—the Treasury, of course, is always very concerned with humanitarian issues—of rapid changes in public expenditure programmes.

My right hon. and learned Friend the Chancellor of the Exchequer has discussed the proposal that suddenly emerged from the shadow Chancellor, before the publication of the Sunday newspapers, for an introductory lower rate of 10p in the pound for income tax. That is an extraordinary proposal.

Sub-editors wrote marvellous headlines in the Sunday paper: "Labour goes for lop rate of income tax without any regard at all for where it is coming from". That is not true. This time we were told where it was coming from. With all previous promises of that type by the Labour party, we were never told where the money was coming from. This time the shadow Chancellor said that it would come from economic growth.

If I may misquote Mrs. Beeton, first get your growth. Post-war history is littered—my goodness, the right hon. Member for Chesterfield knows enough about that—with promises that the Labour party has made in the expectation that there will be growth. One must get the growth first and then decide what to do with it.

Even if the Labour party had got the growth, is a lop introductory rate a sensible way to proceed? It would be more complicated administratively—especially now, because we are adopting a system of tax self-assessment—and that would be a waste of resources. Surely it would be better to lift the threshold and help people at the bottom of the scale.

This is an extraordinary gimmick. Totally impartial organisations such as the Institute for Fiscal Studies have said that it was an extraordinary thing to say. It reflects the shadow Chancellor's lack of judgment in those matters. He has, if I may phrase it that way, no feel for matters economic. That is a serious handicap—one that would cause anxiety if we believed that there was any prospect of his undertaking the job that he now shadows.

As my right hon. and learned Friend the Chancellor said, we heard nothing about what Labour policies will be. If the shadow Chancellor wants to hold this debate ahead of the Budget, surely he should tell us about that. He gave us no assessment. We are constantly told that he is having a battle with his shadow Cabinet colleagues about public expenditure, but we are given no sign of what his priorities in public expenditure are, and no explanation for his belief that there should be a 10p introductory rate of income tax.

The shadow Chancellor tells us nothing about how wide the band will be. If there is to be a lop rate of income tax for income of up to £60,000 a year, it would be of interest; but it was a 10p rate of income tax divorced from any band. For all that we know, it was a lop rate of income tax on the first £1. We were given no sign. That is a literally unbelievably superficial view of the way in which one should propose economic policy. It should therefore be treated in the way that it deserves.

The Leader of the House will reply to the debate. I hope that he may say a little about the parliamentary timetable. I find incredible the way in which he has stood up to the events of recent months, chairing the Select Committee on Standards in Public Life and the Privileges Committee, involved in public expenditure decisions, standing in until recently for the Prime Minister, as well as being Leader of the House, and now replying to the Queen's Speech debate.

The Queen's Speech includes several extremely worthwhile measures, which I am happy to welcome. I hope that the Chancellor of the Exchequer, in the Budget that he introduces next week, will be able, outside the purdah that inhibited him this afternoon, to propose a positive policy that will have excellent prospects with regard to taxation and public expenditure.

6.4 pm

Mr. Malcolm Bruce (Gordon)

The right hon. Member for Worthing (Sir T. Higgins) is right to warn about the dangers of basing spending proposals on future growth, but I hope that he would acknowledge that the same must apply to the Conservative Government, and that the Chancellor should not be talking—he is not yet talking—about tax cuts until he has achieved his objectives on the finances. I shall return to that subject later.

The right hon. Member for Chesterfield (Mr. Benn) also took us to an argument. Of course there is an argument about what overall taxation should be, but there is a legitimate and proper argument, within that framework, about the priorities that divide the parties. It is very unfortunate that sometimes our debates do not allow that argument to take place, and that only the absolutes, in terms of financial framework, are discussed.

The present debate may be regarded in future as historic. We are reaching the end of a Government who are further behind in the opinion polls than any Government have ever been and secured re-election. We might be holding the last debate on a Tory Queen's Speech, and in that context it might be the last chance to determine the extent to which the Government have performed on economic policy on their own terms.

It may be worth reminding the House that, since the Conservatives came to power in 1979, boasts have been made throughout successive Parliaments, by successive Ministers, that we are in a new era for Britain—that an economic miracle has been wrought, with higher growth and lower taxes. In fact, 16 years on, in most material ways, nothing has fundamentally changed and the Government have failed to deliver on all those promises.

It is not that nothing has changed. I am happy to acknowledge that, within the balance sheet, some good things have happened. The reform of the trade unions is especially important, may be long lasting and was actively supported by Liberal Democrats and our predecessors.

The recognition, which was not heard in the speech of the right hon. Member for Chesterfield, that one does not get something for nothing and one must operate in a disciplined budget framework and take account of market forces, is correct. The Government have acknowledged that one must have a policy about balancing the budget in the medium term, although it is interesting to note that the Chancellor has changed his language on that. His object used to be to balance the budget in the medium term. Now it is to get the budget towards balance in the medium term—a more relaxed attitude at this stage of the Parliament.

Having acknowledged that there are some achievements, it is worth recording the scale of the failure. Taxes under the present Government are greater than they were under Denis Healey, for all the talk about tax cuts. Growth has been, on average, about 2 per cent.—currently 1.6 per cent.—manufacturing output continues to be less than it was in 1979, and investment as a percentage of gross domestic product is the lowest on record. Unemployment is more than double what it was when the Conservatives came to power and has remained at that level. It is generally recognised that our education system and training standards are poorer than those of most of our competitors.

There is therefore no economic miracle, and it is interesting that Ministers no longer speak about it in the way that they did even a few months ago.

Manufacturing production growth is Zero per cent. and unemployment is 2.2 million and static. A very critical fact is that the public sector borrowing requirement is heading for a 50 per cent. overshoot on the current year.

Liberal Democrats have targets on those issues and publish them, unlike the Labour party, so we feel that we may with some legitimacy make a constructive critique of the Government's performance.

Retail price inflation is 2.9 per cent. It is greater than the 2.5 per cent. target that the Government set themselves for the present Parliament, and the Bank of England is sure that there is little or no chance of the Government achieving their forecast. Investment is low.

I had a meeting last week with the German chamber of trade in London. Its representatives said that the extraordinary thing about investment in the British economy was that it was appreciated by foreigners—the Government were constantly boasting about levels of inward investment—but they did not understand why there was such low investment by British-based investors. I ventured to say that perhaps British investors knew the British Government better than foreign ones and had less confidence in their ability to deliver policy in the long term.

There has been a devaluation under this Government, but its benefits are clearly waning, as this week's balance of payments figures demonstrated—they were the worst ever. Ministers had boasted abroad about a strong recovery—an economic miracle—but it is fading, weak and fragile and needs to be handled with considerable care if it is not to be derailed. That is why the debate about the drive to reduce taxes which has seized the Conservative party is worrying. The economy is now performing substantially less well than it was a year ago and borrowing has not been brought under control. It is therefore extraordinary that, having been told last year that the position was so bad that there had to be a 3 per cent. increase in taxes, we can now apparently, against an even worse background, discuss tax reductions. That policy does not add up.

The Government, who have claimed that they have an unyielding war on inflation—to reduce it and keep it permanently low—are clearly using much more relaxed language when they refer to inflation. The Chancellor of the Exchequer says that the target is 2.5 per cent., but if inflation turns out to be something above 4 per cent. we will be relaxed about it. That does not show the same degree of determination as when he first set the target.

The need to reduce interest rates is more important to virtually everyone involved in the British economy than immediate short-term and unsustainable tax cuts. A 1 per cent. reduction in interest rates would save the Government £2.5 billion a year in interest payments. [Interruption.] Hon. Members are making remarks from a sedentary intervention so perhaps I should quote the Chief Secretary to the Treasury when he was speaking about last year's Budget. He said: This year … we are set to borrow £34.5 billion, which is more than £25 a week of borrowing for every household … We forecast for next year a PSBR of £21.5 billion … Even at those levels of borrowing, no prudent domestic or international observer of the British economy should have expected to see tax cuts in this Budget … in the real world … it is more important for the British Chancellor of the Exchequer to be right than to be popular."— [Official Report, 30 November 1994; Vol. 250, c. 1237.] We seem to be hearing a different story. If £21.5 billion did not justify tax cuts when they were forecast and we are now talking about £30 billion as the outturn, it is difficult to see how the Government can justify the debate that they have allowed to take off among their Back Benchers. The Chancellor is being pushed to bribe the electors with their own borrowed money. He is borrowing at the rate of £1,000 per second. Some £160 billion of debt has been added to the national debt over the past five years--in addition to the equivalent of 8p extra on the basic rate of tax. Earlier, I intervened on the Chancellor to quote from his summer economic statement, in which he said: public borrowing is actually taxation deferred."—[Official Report, 12 July 1995; Vol. 263, c. 979.] That is a good summary and should be noted. It will be noted after the election if taxes are cut before the economic circumstances exist to justify and sustain them.

There was a time when Ministers took pride in the fact that they were sound financial managers of the economy, but they no longer listen to their own advice. The general election is pressing down hard on them and good economic management is less important than kidding the voters that the Government can deliver a miracle and hoping that the electors will not take account of the failure of the Government's forecasts.

In the same debate on the economic forecast, the right hon. Member for Fareham (Sir P. Lloyd) said: With the overshoot in public borrowing last year, this year and next year, I fear that any tax cut, large enough for the Chancellor to boast about it, would rightly undermine confidence in the City and abroad in his consistency and good housekeeping, and would leave taxpayers thoroughly unimpressed to boot … They"— the electorate— would note that the election was getting closer, and they would ask whether it would not have been easier all round not to have hiked up taxes last year just to lower them this year … Higher interest rates would not be good for investment, and the historically low rate of investment is probably our most persistent economic problem and the greatest threat to economic growth in the longer term."— [Official Report, 12 July 1995; Vol. 263, c. 992.] That was a Government supporter speaking in the House. Yet such is the political imperative that all that sound advice and sensible analysis is now being forgotten.

Conservative Members, perhaps understandably, criticised the shadow Chancellor's speech because it did not give an alternative policy, but he has tabled an amendment which we can support because it identifies many of the things that are wrong. I agree with some of the Conservative criticisms that Labour's position lacks clarity on a policy about which electors are increasingly anxious to hear. The Labour party does not have a clear economic policy or tax policy to convince anyone. It may have a useful electoral strategy, but not an economic policy.

The deputy leader of the Labour party has said on numerous occasions that cuts in the standard rate of tax could not be justified at present and should not be supported, but there has been no sign of what the Labour party will do. It seems that it will criticise policies, but allow cuts to be imposed even when they are irresponsible and will ultimately have to be reversed because they have been introduced at the wrong time against the wrong economic background.

It is hardly surprising that the late John Smith's economic adviser, John Wells, left the Labour party in disgust last week. He said that Labour's policy was "simply dishonest". He said: To argue the case for increased national investment … and then fail to provide and advocate the necessary means for achieving this is … a great deceit on the British people. Labour is apparently committed to a 10p tax—the right hon. Member for Worthing (Sir T. Higgins) was right to say that the level of tax is not known-5 per cent. VAT on fuel, higher benefits and higher spending. I wonder whether the shadow Chancellor is taking tax advice from Sting's accountant. The shadow Chancellor has been able to make his figures add up, but nobody outside the House can square them. It has been estimated that the minimum cost of a 10p tax rate would be £6 billion and we are entitled to know how that would be funded. It is not the most efficient way to deal with poverty anyway.

As the Chancellor of the Exchequer acknowledged in his speech, we set out our alternative strategy in the Liberal Democrat's alternative Budget that we published yesterday, from which I shall pick out four points. Our Budget comes in advance of the Budget and the Chancellor is still in purdah so he might benefit from advice. We believe that reducing interest rates would be the biggest single contribution to assisting the economy. Interest rates in the UK are higher than those of our main competitors; they are higher than those of America, Germany and Japan. The Chancellor must not put at risk any opportunity to reduce them and he certainly must not place them in danger of being pushed up.

That is one reason why we have consistently argued for an operationally independent central bank. It is important to include and understand the adjective "operational". The policy parameters for the independent bank should be set by Government, but their day-to-day administration should be a matter of economic judgment, not political judgment. If we operated on those terms, we would achieve lower inflation and permanently lower interest rates. Our inflation target is in the range of 0 to 3 per cent. because we believe that the 1 to 2.5 per cent. range is proving unrealistically narrow.

I wonder whether there should be some review of the operation of the inflation report. The discussions that I have had with the Bank of England suggest that trying to second-guess what will happen in two years is a very tricky business that is open to different interpretations. We must reach some agreement on how the report can operate more effectively and how we can take into account the balance of arguments. We must not have a futile argument about who is right, but must make a realistic assessment of the best estimate.

We have proposed several tax reforms in our alternative budget. As a Member of Parliament representing a Scottish constituency and one who is interested in Britain's trade, I am glad to announce that we have specific proposals about the spirits tax. It seems that the pique displayed by the Chancellor last year following his defeat over value added tax and his decision to introduce extra taxation of 26p per bottle on spirits has backfired. The Treasury received less revenue from the sale of spirits this year than in the previous year. I hope that the Chancellor will learn from that experience and will take account of the Treasury Select Committee's report on the matter. He must recognise that the time is right to reverse that decision, if not go further and cut spirits duty by 56p per bottle. Spirits are our single biggest export earner and it is astonishing that we should treat them so badly in our home market.

We have also introduced a progressive proposal to reform taxation which independent experts acknowledge is extremely efficient at delivering a transfer of funds from the better off to the poor and helping people to climb out of the poverty trap. We would impose a 50 per cent. tax on earnings over £100,000 per year and we would then use the resulting tax yield to remove 750,000 people from the tax bracket altogether by raising the threshold and harmonising the starting level for tax and national insurance. That would be a useful tidying-up exercise and I believe that the Chancellor should take our advice. Our proposal is progressive, fair, easily costed and self-financing.

The most important commitment in our alternative budget is our pledge to allocate £2.5 billion over and above the sum allocated by the Government to education and training. Unless we raise the standards of education in nursery schools, secondary schools, universities and training colleges, we will not lay the foundations for the sustained economic performance that will deliver the economic strength to finance future programmes.

In conclusion, the Government can no longer claim to have presided over an economic miracle. The economy is faltering, the Government have failed to meet their own targets and we desperately need money for education and training in order to secure our future. We must invest now if we are to deliver success in the future.

In that context, I shall make two points. First, if the Chancellor introduces irresponsible tax cuts in next week's Budget, we shall vote against them on the grounds that the money should be spent on education and on bringing borrowing under control. Secondly, if the Government do not switch from short-termism to a long-term vision for the future, they must recognise that they have been in power for too long and they should make way for those with fresh ideas and a fresh approach who may deliver what the Government have failed to achieve in the past 16 years.

6.22 pm

Dr. Keith Hampson (Leeds, North-West)

I was interested, at both a personal and an economic level, in the suggestion by the hon. Member for Gordon (Mr. Bruce) that we should slash the duty on spirits. However, he forgot one important argument. If we were to see the level of devolution in Scotland for which he and Labour Members argue, extra tax would have to be generated to pay not only for the cost of running that Government but for all the commitments that a left-wing Government in Scotland would inevitably impose.

Mr. Malcolm Bruce

No, it will not. We will have proportional representation.

Dr. Hampson

The Labour party might have some thoughts about that. Under the present constitutional arrangements, we have seen the massive transfer of resources from south of the border into Scotland. Public expenditure per head in Scotland far exceeds its levels in England. People in my constituency in the north-east and in Yorkshire will not agree to continue to fund high cost programmes if Scotland is afforded the degree of devolution that is proposed. Therefore, the Scots would have to meet the funding gap themselves. That seems totally absurd economically, and even a reduction in the spirits duty would not generate enough economic growth to meet that gap.

The hon. Member for Gordon—who has served on the Trade and Industry Select Committee—is one of the few hon. Members who studies the Committee's reports. Labour Members never read the reports, and Opposition spokesman after Opposition spokesman acts as if the information, tables and statistics contained in them are totally irrelevant—they certainly do not understand them.

The Committee's report on the competitiveness of the manufacturing industry contained some valuable assessments of productivity levels. The hon. Member for Gordon served on the Committee during that inquiry. The Committee found that productivity in this country improved by 6.3 per cent. last year and, throughout the 1980s, the figure was 4.5 per cent. That was the fastest rate of improvement of any of the advanced nations in the 1980s—admittedly, from a lower base—apart from Japan. The rate of productivity improvement in the 1970s was 2.2 per cent.

The shadow Chancellor is correct to refer to the relative decline—although he forgot to use the word "relative"—of the British economy. There has been a relative decline, as the Government documents on competitiveness clearly point out. However, at the heart of that relative decline are the rotten levels of productivity sustained, year in, year out, under Labour Governments. That is why we are now so far behind most of our major competitors.

On page 37 of the report there is an interesting box graph which illustrates the direct wages and the social add-on wage costs in the automobile industry across Europe. The Committee travelled to Munich and visited the BMW factory. The managers at that factory told us how they had spent two years negotiating with the unions to get rid of some of the imposed social costs. They said that they were looking forward to investing in industry in this country.

The figures are clear: wage costs are approximately the same in the United Kingdom and in Germany, but the add-on costs are 26 per cent. in this country and 47 per cent. in Germany. The add-on costs in Sweden are 46 per cent.; in Belgium, 37 per cent.; in the United States, 33 per cent.; and in Japan, 33 per cent. We have an enormous advantage, so why do the Opposition parties wish to saddle British industry with the sorts of additional costs that Germany is trying to be rid of?

Mr. Bruce

The hon. Gentleman is correct in his analysis. However, I attended that meeting when the managers spoke of voluntary costs, such as paying for their employees' weddings. They had agreed to meet those costs; they had nothing to do with the social chapter. Government Members must stop misrepresenting the situation. If social costs are too high in Europe, it is because countries have reached internal and domestic agreements, not because the costs have been imposed by the social chapter.

Dr. Hampson

But it is symptomatic of the psychology and culture of industry on the continent that is part and parcel of the social chapter. The social chapter embraces that sort of thinking. European industry is trying to get rid of some social costs, so it is sheer economic lunacy to try to impose similar costs on industry in this country.

The Chancellor referred to the fact that there has been substantial growth and that unemployment has fallen dramatically. In Leeds, in my constituency, there has been a dramatic improvement on the job front. There are now many unfilled places in the job market. I shall move from the Chancellor's Rose and Crown philosophy to the philosophy and outlook of the Fox and Hounds in Bramhope. Last week, business men told me that it is important that the Budget stimulates them to recruit new employees—particularly young people. The economy in Leeds is booming. Leeds remained successful throughout the recession, but it would still like some extra encouragement.

In one sense, I agree with the hon. Member for Gordon. Interest rates are at the heart of it. We have to ensure that they do not go up and that our economic strategy is not at the cost of preventing lower interest rates. As has been pointed out, the Treasury still has time to make adjustments. I am in favour of tax cuts, depending on exactly where they fall, as they are part of maintaining the enterprise system. We need that degree of stimulus and reward to ensure growth. We should aim and strive for a low-tax economy, and there is scope in the Budget to move further towards it. The business men in the Fox and Hounds were asking for help with national insurance. They thought that the NIC was inhibiting them taking on quite as many people. If there is still a chance, that tip and hint might go down very well.

I should draw attention to the role of the training and enterprise councils, which represents one aspect of the success of Leeds. TECs have had a bad name from an awful lot of people, particularly Opposition Members, but in Leeds the TEC has worked extraordinarily well in partnership with the private sector and has achieved dramatic success in increasing the number of young people and adults getting qualifications and work experience, while lowering the unit costs.

In the past three years, youth training provision has doubled and, in terms of national vocational qualifications, the Leeds TEC stands 27th out of 81. It has achieved dramatic success in increasing the number of young people getting qualifications and two and a half times as many adults go through the system. That is crucial to Leeds, where there has been enormous diversification in the city's economy, which has developed from a few stable, heavy industries to a broad range of high-tech and service sector industries, including insurance and law in particular. The city physically has benefited and gained enormously. It is vital, therefore, that the training base is developed as successfully as before and even more so. The whole country needs a more highly and broadly educated work force.

I have some figures from the Financial Times which show that, because of inadequacies of numeracy and literacy, an estimated £5 billion costs fall on industry. When we discuss our education programme and the measures in the Queen's Speech, we must not overlook a basic fundamental failure which has continued through every Government. One in five young adults needs urgent help with numeracy and one in seven with literacy, and 35 per cent. of 21-year-olds do not have the maths skills expected of 12-year-olds in the national curriculum. Report after report comparing the standards of those leaving education at 16 shows Britain falling way behind the standards of most of our rival nations, particularly in maths.

It is not enough to acknowledge that there is a problem; we have to deal with it and at last the Government have done something about it. Had the process of getting to grips with the problems been started earlier under the last Labour Government, we would be in a different position now.

Mr. David Clelland (Tyne Bridge)

That was 16 years ago.

Dr. Hampson

As a former teacher, I can tell the hon. Gentleman that education always has a lead time of at least 15 years. By the time a young person who enters the school system gets stimulated to take maths, for example, goes through school to college, into teacher training and back to school, different techniques have been introduced. There is a long lead time.

Hon. Members may recall the "great debate" when Labour was in power. The then Mrs. Williams launched that great debate, following the speech of the then Prime Minister, Lord Callaghan, at Ruskin college. He said that the education service was failing the nation, particularly industry, as it was not producing enough people with the right standard of maths and so on. So there was a great debate on the national curriculum. It went all round the country to conference after conference and what happened? Because the Labour party was the pawn of the teaching unions, nothing happened. They dismissed the whole thing.

Had there been a national curriculum in the mid-1970s or had Prime Minister Wilson, after his accurate diagnosis in the 1960s that we needed the white heat of the technological revolution, done something other than put as head of the Technology Ministry a clapped-out trade union magnate—Frank Cousins—and if those opportunities had not been missed, the lead time would now be producing results. The Opposition did nothing. We had to do it and they opposed the national curriculum every inch of the way.

When we set the standards and introduced the testing system, they opposed it. Of course the system had to settle down. It was not ideal in its early days, partly because we listened too much to the education experts with whom the Labour party is hand in glove. We have at least the basics in place, and the Queen's Speech takes the process further. We now have to ensure an awareness of learning and the seedcorn of literacy and numeracy as early as possible in the system.

I welcome thoroughly the voucher scheme for nursery provision. Yet the Labour party in Leeds ruthlessly attacked it and therefore did not apply for the pilot scheme money. So, for political reasons alone, the Labour party in Leeds has denied families in Leeds the opportunity of a huge expansion in nursery provision as early as next year.

According to the Audit Commission report, Leeds is not a good story in terms of nursery provision. It is below halfway down the list and requires a great deal of extra nursery provision. It simply will not do for the city group leaders in the Labour party to argue that the voucher scheme would deny the city money that it was already spending—the fact that it has not spent that much is another matter. It has to be stressed to the people of Leeds that they are missing out. If the city were producing such good nursery provision, it would not lose money under the scheme because there would be the same number of children in the schools or, if provision were so brilliant, there would be more. If nursery schools took more children, they would get more money and they would lose money only if fewer children entered the nursery education that the city provides.

Leeds needs a more diversified provision than is offered by the city itself. Out of a total of 130 nursery schools in the city, only three are in my part of it. So two young mothers, having found that there was a waiting list of more than 260 to get their three-and-a-half-year-olds into nursery school, decided to set up their own school. It is called Clever Clogs and operates in Cookridge primary school. It represents an excellent working partnership between the state school and a private enterprise initiative. If Leeds had the voucher scheme, parents could use that school on a bigger scale.

Other parents would be tempted to set up such new schools, but different from that one. The advantage is that a nursery provision incentive such as the voucher scheme stimulates different varieties of provision. It encourages some to be progressive and others to be more traditional. It allows parents that choice. The state provision would still exist, but parents might decide on a more progressive or traditional environment. They would be able to cash in their vouchers and enjoy a degree of choice, which would put competitive pressure on the city council to ensure that its provision is good enough to attract parents to its schools.

Mr. Beggs

I am pleased to hear about that excellent co-operation between parents and schools in the hon. Gentleman's constituency. I say with regret that the Department of Education in Northern Ireland would require such expensive modifications to vacant existing accommodation in primary schools that similar provision would not be possible there. Does the hon. Gentleman agree, given that children grow up in homes that do not have special toilets or hand basins for them, that massive adaptations to primary schools offering vacant accommodation are not necessary and that we should welcome provision in such locations?

Dr. Hampson

That is a valid point in the context to which the hon. Gentleman refers, and no doubt it will be taken on board by the appropriate Ministers in operating a system with which I am not au fait.

My final point concerns the higher end of the education system. A modern economy must offer the widest possible range and real excellence. If Labour had done anything about reforming and expanding higher education, the country's economy would be much stronger. I remind the House, and the shadow Chancellor, who has just returned to his place, that the only time since the war that the proportion of the age group entering higher education fell was under the last Labour Government. It was not high then—only 12 per cent. The figure has increased from one in eight 18-year-olds entering universities to one in three today. That target was set for 2000, but has already been achieved.

No other Government have ever expanded opportunities for young people on such a scale. The only Administration that came anywhere near was that of Harold Macmillan, who created the last major expansion in higher education provision. The Government need to boast more about their achievement.

Part of that expansion process involves giving financial assistance to students. The increase in their numbers could not have been funded by the traditional maintenance grant—there had to be a loans scheme, for which I argued over many years. However, I do not believe that the present scheme is operating effectively. The proposals in the Gracious Speech will help, provided that the banks are willing to participate in a generous way. Some of us called for the scheme to be operated initially through the private banking sector. That would have had the inestimable advantage of allowing the student to walk across the street to the local branch, where he probably deals with the manager about an overdraft anyway, to arrange a loan tailored to his needs. Instead, students have to operate at arm's length with a huge bureaucratic operation in Glasgow that has cocked up time and time again.

The new head of the Student Loans Company is doing a fine job of improving it, but only 55 per cent. of eligible students are taking up loans and that is not enough. The scheme must be expanded, and I trust that the banks will be given enough freedom to allow that. Will the banks be allowed to exercise discretion over the repayment period? One disincentive of the present loans scheme is that students must make repayments at a steady rate over five years. The worst time for any young person to repay a loan is when he has just entered into a mortgage or started family commitments, when he is at the low end of the income scale—yet faces the prospect of starting repayments at that front end. If the banks can have more freedom on repayments, we shall be on our way to funding properly the finest expansion of student opportunity that the country has ever seen—and one achieved by a Conservative, not a Labour, Government.

As with all the education reforms that the country desperately needs, if the economy is to compete effectively, that expansion has been overseen by a Conservative Administration but frustrated year in, year out, by Labour—whether in or out of Government. The sooner the people of Leeds recognise that fact, in a city in which Labour has its dead hand on the school system, the better. A Leeds university independent report published some years ago clearly proved just what a dead hand on the primary school sector Labour had. It was nothing to do with resources, and everything to do with expectations set by the LEA and with the nature and quality of teaching in those schools. Both locally and nationally, the country must recognise that Labour has done an enormous disservice.

6.45 pm

Mr. James Molyneaux (Lagan Valley)

I share the reservations of the right hon. Member for Worthing (Sir T. Higgins) in regard to the curious timetable in the early weeks of each new Session. That timetable, and the reasons for it, become more bewildering every year. The only advantage is that one can indulge in tendering advice to the Treasury Bench in regard to the Budget, which I shall try to do with restraint in the brief time available to me.

In two major debates a year ago, my hon. Friend the Member for East Londonderry (Mr. Ross) and I reiterated the consistent views of our Ulster Unionist party on key aspects of the economy. They were that there should be no fixed exchange rates, which view is gaining great popularity throughout Europe; that the national debt should be repaid, which ought to be an admirable principle for individuals as well as for nations; that the Government's excellent achievement of lower inflation, on which all else depends, should be maintained; and that there should be a steady reduction in the public sector borrowing requirement, with consequential beneficial effects in many areas of our national affairs—a point made well by the hon. Member for Gordon (Mr. Bruce).

Those objectives will not be achieved if the Chancellor yields to demands for tax reductions, which will really mean a reduction in revenue. Another serious loss of revenue resides in the expanding smuggling industry, which is reaching alarming proportions. There must be an early crackdown on those illegal activities.

Tax reductions in particular would jeopardise the present enviable position, in which Britain's long-term fiscal prospects are the strongest in the world—although that remark may be at variance with the comments of the shadow Chancellor. A curious feature is that investors, particularly overseas, do not seem to recognise the truth of that. The Chancellor reported a significant increase in investment but much more is needed. Perhaps potential investors are paralysed by the spectre of a general election that, with a bit of luck, is more than 18 months away. [HON. MEMBERS: "We agree."' Get the crystal ball out. Investors should take heart from the knowledge that we are all monetarists now.

Some months ago, the Chancellor was correct to overrule excessive caution by the Bank of England with regard to interest rate cuts. Modest further reductions would give a much greater boost to the economy than a confetti-like scattering of tax cuts, which would have only a short-term effect. A reduction in interest rates, on the other hand, would bring lasting benefit to the construction industry, for instance. Expansion in such areas would have beneficial knock-on effects on unemployment and social security, and would soon help to reduce the PSBR.

Not surprisingly, I found my feelings in tune with those of the right hon. Member for North Shropshire (Mr. Biffen), who has just left us, especially during his broadcast of this morning. I reflected as he spoke that he and I are the only true guardians of the right-of-centre faith left in the House.

I shall now deal with the report by the president of the European Court of Auditors of 14 November, which commented on the amount of public moneys lost through fraud or in other ways—at least 400 million ecu, with probably more to be discovered. Careless citizens may shrug off such losses in the belief that it is all Brussels money anyway, but they are unaware that it is mainly British and German money. Losses through fraud touch directly on the very reasons for the existence of Parliament: accountability and the control of supply. A substantial cause for concern lies in the considerable errors found elsewhere when payments have been made to recipients whom the court considers ineligible for them under the programmes concerned. The errors take place in member states, where tens of thousands of national, regional and local officials are involved.

Improved financial management and control are clearly required at all levels, but essentially responsibility for policing and disbursement of public moneys lies with national Governments—a point emphasised in the long-running saga of a certain beef scandal concerning one of Northern Ireland's close neighbours. [Laughter]. I am trying to be delicate. It is therefore extremely important to change the behaviour of member states, which should attempt not to maximise the funds that they can obtain but to gain the maximum value for money from them.

Nowhere in the United Kingdom is this more important than in Northern Ireland, where we hear much about proposed partnerships and accountability, especially in the context of the programme for peace and reconciliation. Her Majesty's Government have a heavy responsibility to ensure that the commendable objective of partnership does not supersede the vital issue of accountability. Nor must officials usurp the authority or functions of Her Majesty's Ministers. In his exchange with the Chancellor of the Exchequer, my hon. Friend the Member for East Antrim (Mr. Beggs) made a relevant point in this regard.

I remind the House that new and ad hoc structures do not necessarily have the in-built safeguard of long experience in meeting the close scrutiny of, say, the local authority audit. Our sound traditions and practices in those areas are worth preserving if we are not to degenerate into the laissez-faire methods that we find so unacceptable in other places.

Commissioner Liikanen said in Strasbourg recently: Where legislative improvements and clarifications are needed the Commission, Council and Parliament have to pay more attention to the requirements for effective implementation. Simplification, clear qualified objectives, ex-ante, mid term, and ex-post evaluation, should become standard for all programmes. I entirely agree with that proposition.

6.53 pm

Mr. Tim Devlin (Stockton, South)

In welcoming the Gracious Speech I must say in passing that I was staggered to hear the hon. Member for Gordon (Mr. Bruce) say that nothing very much had changed in the past 16 years. Seventeen and 18-year-olds who will be voting next time at their first general election look at the Tories and say, "What a shower; the Labour party would do things much better." Once upon a time, not so many years ago—in 1979—I was a 17-year-old. If people think that nothing has changed in the intervening years, they must be amazingly badly informed.

I remind the House of what was happening in the last years of the Labour Government. Rubbish was piling up in the streets because the Transport and General Workers Union did not want to collect it. There were strikes in our major industrial plants every day. The gravediggers were refusing to bury the dead. Hospital porters told people that they would vet them on their arrival at hospital to see whether they were ill enough to go in.

It seems extraordinary now that, when people went to the shops, they never knew how much they would have to pay for goods of the same kind as they had bought the week before. The same amount of money as was spent the previous week bought less the following week. Inflation rose to the quite unbelievable level of 27 per cent. at one stage.

Opposition Members will lean back on their Benches and say that that was old Labour, whereas they represent new Labour. I grew up in a Labour household, dedicated to the sort of socialism that the right hon. Member for Chesterfield (Mr. Benn) propounded earlier this evening. When I was young, I met a lot of people from the Labour party—all nice, idealistic types like those who sit on the Opposition Benches. They all wanted to do a good job. With their trade union backgrounds, they wanted to build a better nation. They all thought the Conservative party was making a mess of things and that everything would be better under a Labour Government.

Matters got worse, however—dramatically worse. People of my age with small children will tell their three-year-old kid not to put his hand in the fire: "Tommy, you'll burn your hand." They tell the child the same thing two or three times, but one day when they are not looking little Tommy puts his hand in the fire and burns it. He never does it again. I think that the 16 million people who have never voted in a general election when the Labour party has won are rather like Tommy. They are going to put their hands in the fire just to see if it is really as bad as granny says it is. They are in for a shock if they do—

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. It would be a good idea if the hon. Gentleman now turned to the Queen's Speech and the amendment to the Loyal Address.

Mr. Devlin

All this is why I welcome the Queen's Speech—it builds on the achievements of the past 16 years.

It is staggering that the Leader of the Opposition called it irrelevant. I have always thought that a Government's first responsibility to the nation is to provide peace and security, on which score this Government stand second to none. The Queen's Speech includes three Bills that deal specifically with military security.

Times have changed, however. In the 19th and early 20th centuries, questions of military security loomed large. Nowadays, our security is threatened not so much or so immediately from any military quarter as by an economic problem, which is why I welcome some of the economic measures both in the speech and in the forthcoming Budget. Another threat to our internal order is posed by crime and drugs, which constitute a significant threat to the peace and security of the realm. I am pleased to see measures in the Gracious Speech to tackle them as well.

In terms of economic security, we find ourselves in a position that no Labour Government have ever been able to achieve. Inflation is under 4 per cent., and we have had one of the longest runs of low inflation that we have experienced for 30 or 40 years. Industrial investment is at an all-time high.

I was amazed that the shadow Chancellor had not managed to find time in his busy day to look at today's Financial Times, which published an article headed Industry investments reach four-year high". I know that the hon. Gentleman is not very good on detail, however. Let me read hon. Members the first paragraph of that report: Manufacturing investment in the first quarter of the year was the highest for more than four years, official figures showed yesterday. I do not want to embarrass the shadow Chancellor by reading the rest of the article, but its general tenor was that Britain's economy is doing extremely well.

Labour has now set up an industry forum. It charges companies to go along and tell its members what they do not really want to hear, hoping that they may nevertheless glean something from it. I have attended a number of such meetings. Last night, I heard Sir John Egan addressing the Air league. He told us that the only companies that would succeed in the 21st century were companies that excelled—companies that were of high quality, and did whatever they did better than anyone else in the world. Indifferent performers would not survive, he said. Europe should play to its strengths—and Britain in particular was playing to its strengths better than many of its European competitors.

A couple of months ago I attended another forum, at which the chairman of BMW said: Great Britain, for example, is currently the most attractive country among all European locations for the production of cars. This results from the structural reforms initiated by Margaret Thatcher in the early '80s, the most significant of course being the re-arrangement of industrial relations between companies and trade unions". From time to time, unlike the shadow Chancellor, I look at OECD reports. The latest report states: There also appears to have been an underlying improvement in the competitive position of the manufacturing sector, reflecting inter alia an influx of foreign direct investment, and an upgrading in technology and quality control standards. A competitive exchange rate and low inflation have consolidated these gains. In 1994, strong net exports further boosted output in production industries". Forgive me if I am getting it wrong—I am no economist—but that strikes me as a fairly glowing endorsement of Britain's current and economic performance.

I do not want to talk about abstract measures; I want to talk about specific issues that affect my constituents. My constituents have undoubtedly been affected by the continuing fall in unemployment. That is the topic about which they always ask me, and the topic about which I worry most. I tell them that we have had month-on-month improvements in employment rates. Under Labour Governments, unemployment never fell; it always increased.

Moreover, we in the north of England have seen the fruits of the one third of all inward investment that comes into the European Union. Recently—along with the Queen—I attended the launch of Samsung's investment in Stockton-on-Tees. I also went to the Siemens launch on Tyneside. Fujitsu has just launched a huge expansion in Newton Aycliffe, and, according to a recent edition of Electronics Weekly, the north of England has become a globally significant area for the production of semiconductors. That has happened as a result of the Government's policies.

There is no possibility that the industrial renewal that I see when I visit factories in the north and the midlands would have come about if we still had Red Robbo and the old trade union bosses. They did not want to know. People now say that the British work force is one of the most flexible and highly skilled that can be found, and we are now exporting cars all over Europe—cars built by British workmen to better standards than those built in Japan. The north-east, and Britain as a whole, should be proud of that.

When the Leader of the Opposition visited Newcastle university recently, he said that the north of England had made fantastic changes and he poured praise on the region for its marvellous achievements, but did he mention the Government policy that had brought that about? Did he heck. That is amazing. No one would have known that the Department of Trade and Industry had been involved in the various investments; the name of Michael Heseltine would not have passed the right hon. Gentleman's lips as he passed the site of the new Siemens factory. People do not want to know where all the good news is coming from; what they want to hear from the Labour party is that everything is wrong.

Mr. Jimmy Hood (Clydesdale)

Will the hon. Gentleman give way?

Mr. Devlin

I do not want to waste the House's time by listening to the hon. Gentleman, who may make his own speech if he is called.

Not only are we living in a highly competitive country in terms of industrial relations; we are one of the most technologically advanced countries in terms of our investment in cable. I find it unbelievable that the Labour party wants to sign up to a deal with British Telecom to link every school, hospital and library to the information super-highway. The Leader of the Opposition's constituency is next to mine. My constituency is currently being "cabled up" by a company called Comcast Teesside, which is connecting every school, library and hospital free of charge—not five miles from the constituency of the Leader of the Opposition. Either the right hon. Gentleman does not know, or he does not want to tell the British public. Either way, there is something very wrong with what has been going on in the Labour party.

Labour's sole strategy now is to be an idea and commitment-free zone, as it tries its best—having paddled furiously for all these years—to let things drift and see whether the tide will take it into government. That is the ultimate counsel of despair; Labour has nothing to offer.

I welcome the marvellous opportunity provided by the Queen's Speech for us to tackle the problem about which our constituents are most worried: crime. Having recently spent a night on the beat with the police force at Stockton-on-Tees, I know that drugs are behind a good deal of crime. Given the state in which people are brought into the cells having been arrested at 4 am, I can only pay tribute to the heroism of our police officers. If I may use that great old LSD phrase, these people are completely out of it: they do not know what they are doing. They are as high as kites on all sorts of drugs. We must do something about that.

I believe that tackling the drug problem is the most important priority for the Government in the years to come. That is why I welcome the deployment of MI5 in the fight against drugs. I would very much welcome the redeployment of the Royal Navy in the Caribbean, where our solitary ship is doing marvellous work in tracking drugs that end up in this country. I also welcome—as will my constituents and local police force—the 5,000 extra police officers who will be deployed on the beat.

Mr. Hood

rose—

Mr. Devlin

Before the hon. Gentleman intervenes again—perhaps to tell me about my majority—let me remind him that, in the previous Parliament, he wrote me off. He said goodbye to me, and told me that I would lose. I returned with a majority that was five times bigger and represented the largest swing in the country. That was done in the north of England, but I believe that it can be done again in all the constituencies in the south.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. I remind the House that Madam Speaker has placed a 10-minute limit on speeches between 7 pm and 9 pm.

7.9 pm

Mr. Ian Pearson (Dudley, West)

It is apposite that I should follow the hon. Member for Stockton, South (Mr. Devlin), who talked about election swings, because less than 12 months ago at my by-election Labour received the biggest swing in post-war history, producing a majority of more than 21,000.

Economists tell us that, technically, we are three and a half years into a recovery. That is news to many people in my constituency. The Government should try telling it to Baggeridge Brick, a leading building materials manufacturer that is now warning of meltdown if nothing is done to support the housing industry. They should try telling that to the people who are unemployed in Brierley Hill, and in Brockmoor and Pensnett, who are still suffering desperately from the decline in traditional manufacturing industries in the black country, and the complete failure to create sufficient jobs and wealth. They should try telling it, too, to the many people who are suffering from job insecurity, which far from being a state of mind, is an evident fact for the people who talk to me at my advice surgeries.

I shall confine my remarks to four areas—economic growth, public sector accounting, the role of company profitability and inflation—and touch briefly on each in turn. First, anyone who is seriously committed to establishing high and sustainable levels of employment must recognise that the Government should set growth targets as well as inflation targets.

There is an urgent need to raise the economy's long-term sustainable rate of economic growth by increasing investment not only in plant, equipment, buildings and other works, but in human capital. Only in that way will we reduce unemployment, by increasing the employability of the work force, and thus the underlying productivity growth of the economy.

Secondly, the Government should use not the public sector borrowing requirement but the general government financial deficit—the GGFD—as the main indicator of fiscal stance. They should recast the public accounts in line with commercial practice. As the Minister will be aware, the GGFD is the criterion used in the Maastricht treaty as the European Union definition of Government debt for the purposes of measuring the degree of convergence between member states in advance of the single currency. So far as I am aware, in the other countries of the EU, it is accepted as the major indicator of fiscal stance.

The Government need to speed up their review of public sector accounting, and move towards more of a private sector approach. I should like to see a Government balance sheet, profit and loss account, and a statement of source and application of funds. The distinctions between current and capital spending are still far too vague and need tightening.

In particular, I should also like to see regionalised accounting of expenditure and assets, so that for the first time we would know how much money was being spent in each individual region. We could use that information as a starting point for establishing regional economic development strategies.

I see no rationality in our current public expenditure system, which treats NHS trusts as public corporations but GPs as private sector unincorporated businesses. Most schools are treated as part of central Government, but grant-maintained schools are treated as part of the private sector. Like universities, they are described as private non-profit-making bodies serving persons. And I see no justification for classifying, as the public accounts do, the Bank of England banking department as a private sector financial institution.

Thirdly, company profitability is important to economic growth. Profits and profit growth are good for the economy. Sometimes I feel that the Opposition do not emphasise that fact sufficiently, and do not say enough about the role of profits in a social market economy—the role of profits as a signalling mechanism.

Mr. Devlin

A signalling mechanism?

Mr. Pearson

Yes. Standard economics says that industries making higher profits than normal tend to attract companies into those industries. Where profits are below normal, the reverse tends to apply.

Mr. Hood

He does not understand; he is only a lawyer.

Mr. Pearson

Do not believe it.

Retained earnings provide the bulk of investment in small and medium-sized companies. They are also a major source of investment for many large companies. However, as the Opposition fully recognise, retained earnings do not automatically lead to a strong surge in industrial and commercial company investment. Certainly the rise in corporate profitability in 1994 did not translate into any increase in meaningful investment in the United Kingdom economy.

Profits are also important because they fund pensions for an increasing proportion of people in the United Kingdom. I do not want to enter what is called the Dorrell debate about the level of dividend pay-outs by companies. I say only that I am not persuaded that current dividend growth is excessive; there are strong arguments why dividend growth must be maintained for the sake of long-term investment vehicles, which will be required to pay for the pensions of the future.

My fourth topic is inflation. At present, there is a great misunderstanding about how inflation is created in the economy and about who should take the credit for reductions in inflation. A major reason why inflation has declined in the United Kingdom, as in almost every other western European country, has to do with the effects of global market competition.

The old economics lecturers used to talk about cost push inflation and companies raising their margins when there was strong demand in an economy, thereby increasing company profitability, but today we have price-based costing, not cost-based pricing. It happens in large swathes of manufacturing industry. Ford, for example, is imposing price reductions of 5 per cent. a year on its supply chain. Companies are taking that on board, taking the price as given, re-engineering their processes and driving costs out of their products. That is a completely different rationale for business, and it means that fears about inflation over the medium term are largely misplaced.

I await next week's Budget with interest. I expect to hear about measures to stimulate the housing market and to encourage investment and training. I should like to expect, too, that the Budget will encourage job creation and bring back job security. The people in my constituency have a right to expect that, but my deep suspicion is that we shall not see it.

7.18 pm

Mr. John Greenway (Ryedale)

It is a great pleasure to be back in the House after my recent illness. If we did not have a 10-minute limit on speeches, I would sing the praises of the NHS and particularly the doctors at York district hospital.

I want to talk about the rural economy and rural affairs. That is timely, because the Government published their excellent rural White Paper last month. People in rural areas have their own views about what should be in the Budget next Tuesday, and—if it is not too late—I shall suggest a few of these to my right hon. and hon. Friends in the Treasury.

No doubt we shall have further opportunities to debate the White Paper in detail, but it contains an important section about jobs. The White Paper asks how we can create new non-farming jobs in rural areas, and I would suggest that we add non-tourism jobs—in other words, jobs in the manufacturing sector—to that. The White Paper proposes a new "business use" class within the planning system. At best, that may be highly deregulatory, allowing no-fuss moves from farming into other enterprises. However, one envisages that it will not be quite that simple.

There will be pressure from conservationists, local planners and some local residents, which will mean that, in reality, the process will be much more difficult. Several constraints on the number of vehicle movements and the hours of operation may be imposed on firms, and that is a real worry. We need some early action on planning guidance, followed by action on structure plans and local plans.

My constituency is fortunate to have a number of go-ahead, enterprising manufacturing firms. Slingsby Aviation and Micro Metalsmiths are based in Kirbymoorside, while McKechnie vehicle components—which is making enormous strides, and is at present supplying Vauxhall—is based in Pickering. We also have the successful Ward business, and anybody who goes to Scarborough cannot fail to see the Ward building systems factory in Sherburn, some 10 miles west of Scarborough. We have the Malton bacon factory in, interestingly enough, Malton.

All those firms provide an enormous contribution to local employment, but many of them were started a generation or so ago and have premises for which it is doubtful that they would get planning permission now. One has only to look round the market towns to find that land that planners had allocated for industrial use was quickly filled up by workshops and warehouses. No one is suggesting that we want to put factories all over rural areas, but the factories to which I referred and which were started a generation ago have meant a great deal to the success of the Ryedale economy. If we want a vibrant and prosperous rural economy in the future, we must not just find similar sites, but encourage similar entrepreneurs to set up.

I shall give hon. Members another idea of the planning problems in a part of my constituency. In Scarborough borough, we have the very important and beautiful seaside town of Filey. Some hon. Members may remember that there used to be a Butlin's holiday camp at Filey, called Amtree park. On a good day in June, July or August, there might have been as many as 15,000 people on the site.

The site is now known locally as "little Beirut" and it is totally devastated. But Scarborough borough council refused to give outline planning consent for 600 houses on the site. One might argue about the number of houses, but by refusing the application, the council lost out on development providing up to 200 jobs. Why? Because the scheme does not fit with the local planning process. All the local people want the development, while the fact that it is covered with asbestos dust ought to fill everybody with utter horror and concern. Planning constraints mean that we are having a real struggle to sort out such a problem, of brown site that has been deeply contaminated. Clearly, something must be done.

I wish to mention rural shops and service industries. The rural White Paper suggests that there might be a rate relief scheme for village shops. But what about market towns? Far too many small businesses and services in the retail sector are in financial difficulty because they are having to pay rent and rates based not on what they can afford, but on what the building societies and national chains think they can afford. Action is needed on that. If we mean what we say in the White Paper about ensuring that market towns have a future, the cost of rent and rates needs our attention.

The White Paper also refers to the sparsity factor in rural areas in allocating support grant to local authorities. That is the most crucial problem affecting my constituency at present. We shall be one of the first areas to undergo local government reorganisation in April next year, when the new York district council comes on stream. Disaggregating the budgets between York and the residual Ryedale and North Yorkshire areas is proving to be a huge problem. I want to raise the matter on the Floor of House on behalf of many constituents who have written to me about it. We must have a fair distribution of the money, and we must do what we can to uphold our promise that reorganisation would not lead to a cut in local services to residents. Both Ryedale and North Yorkshire have serious problems, the latter especially.

The first priority in the Budget next Tuesday must be a better settlement for schools. We have again had excellent examination results, according to the league tables published for North Yorkshire schools, but we cannot dig for ever into the reserves, which are depleted. Schools have used up their balances, and we need a better allocation this year. The Government must heed the warning that, if we do not honour our obligations and responsibilities to education but still cut taxes, many of our supporters will be deeply resentful.

That said, I believe that we still must find some money to reduce taxes in the Budget next week, although not for the kind of party political advantage that the Labour party talks about. It must be obvious to anybody who looks at what is going on in their area that, while factories such as those I have talked about in my constituency are doing very well in an export-led economy, local services and the local economy are not doing so well. That economy is flat, and people need more money in their pocket. In my judgment, that can come only from a low-inflation economy, lower taxes and lower interest rates.

If we are trying to find the money for tax reductions, we should also increase personal allowances to take a lot of low-paid people in the rural economy out of tax altogether. Our failure to uprate allowances in line with inflation over the past two or three years has brought those people into the tax system, and we ought to take them out again.

Finally, those who say that abolishing capital taxes—capital transfer tax and capital gains tax—is simply a way of giving money back to the rich are wholly and utterly wrong. This month's edition of Country Landowner, the journal of the Country Landowners Association, contains an article that describes how capital taxation is wrecking enterprise. It stops businesses—particularly farm enterprises and other enterprises in rural areas—from doing the kind of thing that they want to do. The capital taxation structure is too complex, and the best way to deal with it is to get rid of it completely.

7.28 pm

Mr. Geoffrey Robinson (Coventry, North-West)

I shall not follow the hon. Member for Ryedale (Mr. Greenway) down his ever-lengthening wish list, and I shudder to think what his ideas would cost. Suffice it to say, scrapping capital gains tax and inheritance tax could cost £4.6 billion by the end of the century.

Before coming to the substance of today's aspect of the Gracious Speech, I want to refer in passing to the Asylum and Immigration Bill and a lady from the Philippines whom I am representing jointly in the House with the hon. Member for Warwick and Leamington (Sir D. Smith) and other hon. Members. Her name is Mrs. Teresita Bentley, whose permission to stay in this country was refused by the Home Secretary. I hope that the Bill will not prejudice her position and that the Home Secretary will look favourably on the representations that we have made.

We heard today from the Chancellor an attempt to redate the period of office of the Tory Government. Some time ago, my hon. Friends will recall, 1983 was taken as the start of the period of Tory government. That was the most propitious date that the Government could find at that time. They have been forced to change that. They now take 1981 as the start. They still refuse to take the obvious starting point of 1979, when they first came to office.

Whatever the Chancellor says, when one looks at the bare facts, the Tories' record is not one of great success, certainly not in the terms in which they have asked us to judge their performance. We did not set that standard. It was set by the former Chancellor, Lord Howe. He said that we must be judged against the relative performance of comparable countries' economies.

The Chancellor made the point, fairly enough, that growth was a key criterion. In terms of growth, we are 13th out of the 18 G7 and EC countries. That is not much to write home about. The Chancellor referred to jobs. There are 400,000 fewer jobs now than at the time of the election in 1979. I am sure that the whole House sincerely welcomes the recent period of declining unemployment. It is good that we have had such a period. However, the simple fact is that unemployment remains 400,000 higher than it was when the Conservatives took office.

In terms of employment creation, we are 20th out of the 24 OECD countries. In terms of male unemployment, we are fourth highest of the 15 EC countries. Since 1979, unemployment in Britain has been above the average for major industrial nations, the EU countries and the OECD countries. It is still above the average of the OECD countries, even after the welcome period of decline in the overall level. In terms of investment, we are still 21st in the league. Of the OECD countries, only Turkey has fewer 18-year-olds in education than Britain. That is not a particularly sparkling economic achievement on the part of the Government.

Let us take the precise factor on which the Government have set out to redress the balance and improve the position that they inherited—that is, taxation. There, too, their performance is poor. However, before I deal with taxation, I should like to deal with the vexed question from which the Chancellor sought to distract our attention. Why have we slipped from 13th to 18th in the league of GDP per head and purchasing power parities since the Conservative Government came to office? I am pleased to tell the House that I am aided in my argument by access to a Conservative research department brief prepared by Mr. James Walsh for the Queen's Speech debate on 22 November 1995.

The Chancellor diligently exploited the points in Mr. Walsh's brief. Mr. Walsh wrote: Labour's table is misleading and inaccurate". He does not tell us why. He went on to say: Labour's league table is another example of their cynicism: they don't care how spurious their figures are as long as they show Britain in a poor light. How can we reckon Mr. Walsh's chances of promotion if he is prepared to say that, when the chart that we used was produced by the Government and signed by half the Cabinet—the Prime Minister, the Deputy Prime Minister, the Chancellor and all the rest of them? It showed precisely the figures that we have given. It was not some chart tucked away at the back of the document in some obscure appendix. It was given prime position on page 13 of the Government's key document.

Far from the table being an irrelevant consideration, it is the most relevant of all the considerations. It shows income per head, which, in its summation, tells us about all the other aspects of policy. It is true that productivity has increased. We welcome that, but unless it leads to an increase in output per head, it is of only relative value. The total output of the economy as a whole expressed per head and in terms of purchasing power parities is a measure of the Government's success. By that standard, they are found woefully wanting.

The Government are found equally wanting on the question of tax. The tax burden and the tax share of national income in the economy rose between 1979 and 1995, from almost 35 per cent. to more than 37 per cent. Ominously, it is the Government's own forecast that it will rise even higher, to more than 38 per cent. During the 16 years in which the Conservatives have been in office, the tax burden has averaged 37 per cent., compared with the previous averages of 36 and 34 per cent. under Labour Governments.

A typical British family now pays more in direct tax and indirect tax than when the Conservative Government took office. That brings us to the most recent period of government by the Conservative party. The Chancellor tried his best to explain how, with a burgeoning prospective budget deficit of £50 billion, the Government could find it in them to make the statements that they did just before the previous election, which they had to reverse within the year.

We know that the increases in taxation that the Government have implemented come out at 7p in the pound, or getting on for £800 per family. Whatever the Government do, there is no way in which they can make good that enormous impost of taxation on the British people. What is the Conservatives' reaction? We have just heard the reaction of the hon. Member for Ryedale. The reaction to the fact that ordinary families are paying more tax than ever and that tax takes a higher percentage than ever of the income of working people across the board—not only the least well-off, but all those on average or even double average income—is to propose doing yet again something that will benefit only the very well-off at the top of the pack.

The Government want to abolish inheritance tax and capital gains tax at a cost of £4.6 billion by the end of the century. The Government's response to the increase in the tax burden for all those who really need help is shameful. There is a similar failure on investment. In the Budget, the Chancellor intends to cut capital spending yet again. He says that it will he made up by the private finance initiative. As we know from the preceding Chancellor, the PFI was meant to achieve an increase in public expenditure, not to replace Government expenditure. So we have the prospect of a further rundown in the quality of our infrastructure. I think that all hon. Members will agree that a singular failure of successive Governments is that they have cut capital spending on the improvement of services. What we should be doing is increasing that investment.

I shall now examine the Labour party's approach to the economy. It is wrong for Conservative Members to say that we are not beginning to evolve the policies that we shall put into practice when we form the next Administration. I do not agree with what the Liberal Democrats do. It is not appropriate to come up with a draft alternative Budget. That is not a job for the Opposition, whoever is in opposition at the time. What we must present are the policies that we intend to adopt and fill out in the period leading up to the general election.

In terms of investment, we have already proposed doubling first-year allowances. That is a modest proposal, and I think that other Labour Members will agree with me that we could do something more than that. It is the one proven measure that really—

Mr. Deputy Speaker

Order. Time is up.

7.38 pm

Mr. Barry Legg (Milton Keynes, South-West)

May I begin- my remarks by welcoming my hon. Friend the Member for Ryedale (Mr. Greenway) back to the House. It is good to see him back in the House after his illness, and it was particularly good to see him give such a vigorous speech. I think that we were all greatly encouraged by his performance.

I should like to comment on one or two other speeches that we have heard this evening. We have had an eminently sensible speech from the right hon. Member for Lagan Valley (Mr. Molyneaux). He made some very sensible comments about the balance of fiscal and monetary policy, and he made some even more interesting comments about how long he sees this Parliament lasting—some 18 months or so. Indeed, those might be the most significant comments that we hear in the Chamber this evening.

I also endorse the speech of my right hon. Friend the Member for Worthing (Sir T. Higgins). We will probably have three economic debates in less than three weeks. This one is less than a week from the Budget, which we will debate for a week from next Tuesday and shortly after that will be the Second Reading of the Finance Bill. Then we will probably have to wait until July for a further economic debate. The House authorities should consider the balance of our debates so that they can be held in a sensible way during the year.

This debate, which the Opposition have chosen, is too late to influence next week's Budget. I am sure that it has been set, but I hope that the Chancellor will be able to bring more confidence to the British economy when he addresses the House next Tuesday, and impress on people how good our economic prospects are. They are extremely good indeed. There is abundant scope for tighter public expenditure. During the past few months, many of my parliamentary colleagues have set out how that can be achieved, especially my hon. Friend the Member for Bridlington (Mr. Townend) and my right hon. Friend the Member for Wokingham (Mr. Redwood). There is plenty of scope for carefully controlling public expenditure and finding further savings. Consequent on firm control of public expenditure, there is scope for tax reductions.

My hon. Friend the Member for Ryedale was right to say that people need a bit more money in their pockets. Conservative Members believe that people are more likely to make the right decisions with their own money and to exercise their choice over spending that money. We do not believe that the Government by any means have a monopoly of wisdom. That is still a clear distinction between us and Opposition Members.

There is scope for tax reductions next week and we also need some adjustments in monetary policy, with interest rates coming down. I do not say so for political, but for economic reasons. When we see the Red Book next week and the way in which the economy performed in 1995, compared with what was forecast last year, we will see an economy that is growing less strongly. I believe that we will see weaker domestic demand, consumer expenditure, gross domestic product growth and fixed investment than was forecast in last year's Budget.

Significantly, we will also see a much lower GDP deflator—the measure of public sector inflation will be much lower than was forecast this time last year. That is the key reason why the spending totals for next year should be reduced and the reduction should be of the order of £7 billion to £8 billion. That is the degree of scope—[Laughter.] The hon. Member for Clydesdale (Mr. Hood) may laugh, but he once again demonstrates the ignorance of the Opposition on economic matters. It is an ignorance that stretches from the shadow Chancellor all the way down to the most humble Labour Back Bencher, who is giggling at the moment.

When we see the figures next week, we will realise that the economy has grown less strongly in the past 12 months than was forecast in the last Budget in November 1994. If an economy is growing less strongly and has plenty of potential for further growth, as this one has, lower interest rates are the appropriate mechanism to use. During the year, we have heard arguments from the Governor of the Bank of England that interest rates should be kept high and pushed higher. Those were misjudgments and I am glad that the Chancellor overruled him.

That also shows that the Bank of England is not yet ready for independence. Before one makes fundamental changes to institutions, one must be confident about those changes, and the Bank of England is not in a state to be independent. For an independent bank to operate successfully, it must have a strong collegiate approach, and the Bank of England is many years away from achieving that.

We do not need to see next week's Budget to realise how strong the deflationary pressures still are in this economy. We only have to look at the results of a major retailer, such as Sainsbury, to find that that company is under tremendous pressure to keep prices down in the high street. Those are competitive pressures.

Look at the latest figures on stock building. Many businesses have built up stocks in the past quarter and have probably done so to a higher level than necessary. If they are to release them into the economy, they will have to be sold at very competitive prices.

We heard a lot of nonsense about the privatised utilities from the shadow Chancellor. The Opposition want to concentrate on one issue, directors' pay, but we must consider how the utilities are operating, and the efficiencies and improvements in productivity that they are achieving.

The shadow Chancellor said that the next electricity privatisation would only result in a £1 billion rebate for the consumer. Under Labour, there would be no rebate because that business, like every other business that has been privatised, would have been retained in the public sector. By releasing those businesses into the private sector, we have provided the mechanism to improve efficiency and productivity. What does that mean at the end of the day? Lower prices for the consumer. That would never have happened under Labour. Those lower prices will continue to come through in our retail price index figures.

Next year we face the prospect of very low inflation levels. I suspect that RPI inflation may well be 1 per cent. What a crowning achievement for the Government to get inflation back to a level that we have not seen for 40 years. That is the prospect that we are holding out to the country. With inflation at that level we could also have significant reductions in interest rates. Low inflation and low interest rates—that is the recipe for economic success in the United Kingdom. They provide the scope for businesses to invest and not the efforts of the shadow Chancellor and his colleagues to build some airy fairy partnership with no economic framework behind it and are positive achievements that will get the economy moving at full steam, and there is plenty of scope for those during the coming year.

There is still only one party that can provide the leadership that this country needs and one party that understands how the economy works. I have no doubt that my right hon. and learned Friend the Chancellor of the Exchequer will present a confident Budget next week, which will lead to firmer control of public expenditure and produce tax reductions and lower interest rates. That is the recipe to ensure that consumers, investors and business men achieve their full potential and that Britain takes all the opportunities in the global economy that are available to it under this Government.

7.48 pm

Mr. Jimmy Hood (Clydesdale)

The hon. Member for Milton Keynes, South-West (Mr. Legg) started his speech by being delighted at the prospect of another 18 months of this Government. He went on to make a speech that made him sound like a man in a condemned cell who is delighted with a reprieve. He might be delighted if he gets 18 months, but at the end of the day the condemned man will come out of that cell and will be no more.

I compliment my hon. Friend the Member for Dunfermline, East (Mr. Brown), the shadow Chancellor, on an excellent speech and on his imaginative and refreshing approach to Labour's quest for fairness and social justice.

I heard some comments from Conservative Members about reviewing history. Some of them were trying less to review history than rewrite it. I especially welcome the commitment of my hon. Friend the Member for Dunfermline, East to taxing millionaires who evade tax—something that Conservative Members do not want to talk about.

I also welcome my hon. Friend's decision to impose a windfall tax on public utilities. Let us remember that we are talking about what were good public industries, which were taken out of public ownership and turned into private monopolies and which have made millions of pounds of profit off the backs of the consumer. Directors dip their dirty snouts in the trough of sleaze and we do not hear one word of criticism from the Tories.

I particularly thank my hon. Friend the Member for Dunfermline, East for nailing the lie that this is the Government of low taxation. I welcome his initiative on the 10 per cent. rate of tax for the low-paid. He has caught the Conservatives out on that. If the Chancellor of the Exchequer's response to the shadow Chancellor's speech proved anything, it was that the Government are rattled by my hon. Friend's initiative. I compliment him on that.

Mr. Jacques Arnold (Gravesham)

Will the hon. Gentleman give way?

Mr. Hood

No, I will not give way. Conservative Members did not let me intervene earlier and the hon. Gentleman was shouting and making noises, so he can sit down.

We know that the Government's real agenda is to cut taxes next week as a bribe for the general election. However, we know, as night follows day, that the real agenda is to get over the election if they can and then hype the taxes up again. I have heard some wonderfully interesting things tonight. The hon. Member for Ryedale (Mr. Greenway) spoke about needing to put money back through tax cuts into the pockets of consumers, but who took the money out of their pockets? Who increased income tax by 7 or 8 per cent. since 1992? Then Conservative Members stand up and say that we need to put money back. Conservative Members have robbed the taxpayer and wasted the taxpayer's money, but what do we hear from them—that they are the party of good management. As the opinion polls show, we are about to see what the people think of the party of so-called good management.

I want to discuss economic and monetary union and, in particular, the single currency. I share some of the concerns about the convergence criteria laid down by the Maastricht treaty. However, in response to the discussions on the single currency that we have had during the debate on the Queen's Speech, I should say that I am no believer in throwing the baby out with the bath water. Unlike the Government's response, which is driven by a right-wing agenda from the right-wing sceptics, Labour's response is constructive, correct and in the national interest.

In my capacity as Chairman of the Select Committee on European Legislation, I am fortunate to meet politicians from other member states as they visit this country and I visit theirs. There is equal concern in those countries about the single currency and monetary union. However, the Government are keeping us out of the debate because they are, sadly, the Government of the opt-out and the lock-out. They are locking us out of a constructive part in the debate that needs to take place in Europe about a single currency.

I shall give an example of the responses that I have had from politicians from other member states—especially new member states. A few weeks ago, I visited Finland and Sweden, which have had different experiences since joining the Union. In Finland, food prices have gone down 10 per cent. and in Sweden they have gone up by 10 per cent. That had something to do with the state of their economies when they joined the Union. They are equally concerned about the impact of monetary union but they are keen to be part of a single currency if it happens. That is the opposite of the Government's position. The Government are not taking part in the constructive debate.

The Government and the sceptics sometimes say that the single currency is a matter of sovereignty. I have never been persuaded by that argument. Where was the Government's concern about sovereignty when they imposed the poll tax on Scotland a year before they imposed it on England? There was no mention of the sovereignty of the Scottish people because we did not want the poll tax. The Government knew that but it was shoved down our throats and down the throats of England and Wales the next year. There was no question of sovereignty then. It was a case of, "This is Parliament. This is where decisions are made. We are the Government, we are going to have it whether you like it or not."

What was the effect of the poll tax? We have heard a lot about the plight of the taxpayer. It cost the taxpayer £14 billion to bail the Government out of the poll tax—the equivalent of £300 per man, woman and child. This is the same Government who tell us about sovereignty. We are not going to forget the poll tax or the Government who imposed it. When the general election comes, the Government will find that out.

Let us consider the exchange rate mechanism and whether we should go back into it. I remember how and when we went into the ERM. We went into it because the Prime Minister was corralled at an intergovernmental conference by the then Chancellor, Lord Lawson, and the then Foreign Secretary, Lord Howe, and threatened with their resignation if she did not join the ERM. She agreed but, as an act of spite to get her own back, she took the country into the ERM with a grossly overvalued pound. She wanted to impose her tool of high interests rates to keep inflation down as an act of spite. The million householders who now live in negative equity know the impact of that economic policy, because it was that single act, more than anything else, that hyped up interest rates and the problems of home owners. It is important that we remember that.

Conservative Members do not want to discuss the time when the right hon. Member for Kingston upon Thames (Mr. Lamont) was laughing in his bath. The former Chancellor of the Exchequer was singing in his bath just after he had wasted £15 billion in one day trying to prop up sterling and increased interest rates by 50 per cent., from 10 to 15 per cent. He went to his bath, had a glass of champagne, laughed and said how relieved he was. The British taxpayer carries that burden to this day. That is the burden that we are going to leave on the Government. When the general election comes, we will not rewrite history in the way that I have heard it rewritten tonight; we will remind people about the history of the Government and it is that history that will defeat them.

7.57 pm

Mr. Jacques Arnold (Gravesham)

I find the comment of the hon. Member for Clydesdale (Mr. Hood) on the exchange rate mechanism rich. I sat in this Chamber when the Conservative Government decided to join the ERM. I heard the Opposition spokesman say not only that we should be in the ERM but that we should be in the narrow band. If it was a fiasco that cost the sort of money suggested by the hon. Gentleman—that is disputable—we would have had that loss and very much more had there been a Labour Government at the time.

That is exactly the sort of the comment we had from the shadow Chancellor earlier this afternoon. I wonder how many hon. Members timed the shadow Chancellor. He took 43 minutes and his speech was an absolute smokescreen because there is a total lack of economic policy laid down by him on behalf of the Labour party.

The hon. Gentleman spent nearly 50 per cent. of his time on the subject of corporate governance—that is the correct name for it. We may ask why. The reason ties in with the Labour party's obsession with the politics of envy. The hon. Gentleman wallowed in what he called sleaze for an immense amount of time. He talked about top people's pay and perks and he offered us no solution. Why? The reason is that these issues are very complex and quite beyond his tiny mind. Nevertheless, they are important. They must be dealt with and that is precisely why my right hon. Friend the Prime Minister appointed the Greenbury committee to go into the matter in the greatest detail. Such matters should be got right because they are a serious problem, but one to be solved by the stock exchange, by corporate investors and by the shareholders who are the very people who are being ripped off.

The matter is complex, and it is no wonder that the shadow Chancellor did not dare to tackle it. The Greenbury committee itself got it wrong. It declared on Monday and by Thursday it admitted that it had got it wrong on a matter of detail which hit ordinary people. To suggest that the matter is simple is wrong; it is not and it must be tackled properly.

For most of the remainder of his speech, the shadow Chancellor ran down Britain. He mocked the way in which this Conservative Government coped with the recession. The problem was serious because we faced the worst recession since the 1930s. Our tax revenue was down. How did our Conservative Government respond to that? What did their predecessors, the Labour Government in the recession of the 1970s, do? They cut spending, they scrapped the hospital building programme, they cut the pay of nurses and they axed the pensioners' Christmas bonus. Is that what Labour would recommend to deal with the problem?

This Conservative Government stuck to their growth programme in education. We are now spending, over and above inflation, more than 50 per cent. more per pupil on our schools. We are spending, over and above inflation, more than 60 per cent. more on our national health service. The Government safeguarded the pensioners from inflation right the way through the recession.

Let us remember what the Labour party did to the pensioners. Labour changed the basis of calculation of the uprating to earnings and away from inflation. Why? The reason was that earnings lagged behind inflation under a Labour Government. They thought that the pensioners should be hurt as much as the rest of the public.

We kept up our spending increases on health and education and we safeguarded the pensioners. How did we do it? We borrowed. Why could we borrow? We could borrow because Conservative Governments have a sound reputation for sound finance, unlike Labour Governments. We should remember that the Labour Government of the 1970s could not borrow in the markets because of their rotten reputation for unsound finance. They had to go with a begging bowl to the International Monetary Fund. This country queued up with third-world countries at the IMF. Is that the kind of Government to whom the Labour party wishes us to return?

We kept our reputation. How did we do so? We kept our reputation because we demonstrated how we would close the deficit in Government finances. We have cut spending plans by £45 billion in the past two years or so and we also increased tax. I hear Labour Members gloating about increased tax; they believe in it, we do not. However, responsibly, taxes had to be increased without flinching despite the unpopularity of that move.

We are now through that phase. We had 4 per cent. growth last year, and our economy is growing faster than that of France, Germany and Italy. Our inflation rate, which has been under 4 per cent. for three years, is the best for a generation. Government spending is under control and unemployment is down by 710, 000 from its peak. In my constituency of Gravesham, it is at its lowest since April 1991.

We should compare those figures with our European partners. Unemployment is serious and rising in France. In Spain, 20 per cent. of the work force are unemployed. Under Spain's socialist Government, who abide by the social chapter, 30 per cent. of young people are unemployed. Is that what we want? The whole gamut of economic indicators, be they exports, investment, manufacturing output or consumer spending, is steadily increasing. If all is going so well, where is the feel-good factor? Why is it not yet here? The reason is the tax impact on the working family, the burdens on enterprise and the massive hangover from which the property market is suffering following the 1980s which hit the value of people's homes.

I shall now deal with the tax impact on the working family. It is a fact that since 1979, for a single person earning, the tax burden has gone down by one tenth. Organisation for Economic Co-operation and Development figures show that the tax and national insurance burden on the single earner is 26.5 per cent., which is slightly higher than the figure for the United States, but way below European Community levels. Our tax burden on the single earner is very much lower than that of our European partners.

However, the tax burden on the married couple has shown no reduction over that period. In Britain, there is a 24.1 per cent. burden of tax and national insurance. That is very much higher than the figure for the United States, with its 19 per cent., and very much higher than the figures for France, Italy and Canada. We have a higher tax burden on the family than is the case in any of the other G7 countries, bar one.

We should redress the balance in this Budget. We in the Conservative party believe in the working family, which is the bedrock of Britain. With the economy growing the way it is, now is the time to look at how we should put back the money in the taxpayer's pocket, whence it came in the first place. We should restore the married couple's allowance to the standard rate band, which would cost the Exchequer £2.4 billion, but there should not be an increase in the additional personal allowance for single parents with children other than those who are widowed, thus providing a disincentive to illegitimacy and divorce.

We should introduce a capacity for non-working mothers to transfer their basic allowance to their working husbands. In 1993–94, there were 9.1 million male married taxpayers and 5.8 million tax-paying wives. That would suggest that 3.3 million wives could transfer their allowances, providing their families with young children with a tax saving of 25 per cent. on the basic allowance of £3, 445. That would mean a saving of £861 in the pockets of families, which would have a significantly greater impact on the less well-off earning families. We should concentrate on that idea.

We must also concentrate on doing everything to support enterprise. What made this country great? It was our entrepreneurs who went out into the world to trade and invest. After all, the flag followed trade. That investment abroad is having a massive impact on our cash flow balances into this country. We are the biggest investor in the United States. We are a major player in the international markets and those investors should be supported. Next week's Budget is the opportunity to start giving back to people their own money. We should target families, small businesses and home owners.

8.7 pm

Mr. David Hanson (Delyn)

You will have to excuse me, Mr. Deputy Speaker, if I refuse to take lessons from the hon. Members for Gravesham (Mr. Arnold) and for Stockton, South (Mr. Devlin) on Labour Governments in the 1960s and 1970s. I grew up under those Governments with job security in my father's household and in a house built by a Labour Government. I went to university without having to draw a student loan and I had job security when I left university. I want a return to those days for the people whom I represent. I do not want any lessons about Labour Governments from the hon. Member for Gravesham.

Mr. Jacques Arnold

Will the hon. Gentleman give way?

Mr. Hanson

The hon. Gentleman can sit down because we are on a 10-minute limit today.

The Queen's Speech and the Chancellor's speech today are missed opportunities. The Chancellor is living under a delusion and the Government are masking their failures. The economy is not as the Government would like to think it is. The Gracious Speech mentions the need for economic growth, rising employment and low inflation. No Labour Member would disagree with that, but there is a need for the Opposition to look at whether the Government's achievements to date bear witness to what they are trying to achieve in the future. From where I sit, the Conservative party is living on another planet.

The Conservative party proclaims itself as the party dedicated to reducing the benefits bill. When my party left office, one in 12 people were dependent on benefit, but now it has risen to one in six. The Conservative party claims to be the party of low taxation, yet when my party left office average family taxation was 32.2 per cent. of gross income—now it is 35.6 per cent. As my hon. Friend the Member for Dunfermline, East (Mr. Brown) said, since the last general election income tax rates have risen effectively by 7p. Only those earning more than £64, 000 are better off as a result of the Conservatives coming to power.

The Conservative party claims to be the party of home owners, but between 1990 and 1995 some 295, 000 people have had their homes repossessed. This very year, according to the Government's own statistics, provided in a recent parliamentary answer to me, 850, 000 people are caught in the negative equity trap. The Conservative party claims to be the party of low taxation and home owners and states that it is dedicated to reducing the benefit bill, yet, when difficult choices must be made, it remains the party that hits the poorest people in our community. The poorest 10 per cent. in our community are now 17 per cent. worse off than they were under the Labour Government, while the richest 10 per cent. are now 62 per cent. better off than they were when my party left office. One in three children are now living in poverty, yet in 1979 the figure was one in 10.

Those figures show that the Conservative party's economic philosophy has not only failed but caused great economic and social damage to our community. As the years and months progress, the resulting tab is crippling our future economy. Unless a radically different approach is adopted, nothing will change.

We are failing to invest in our local community. We invest half as much as Japan in our local community. We invest £863 less per head than the United States. We invest £2, 766 less per head than Switzerland. Even Portugal has a higher rate of investment per head than the United Kingdom.

The unemployment rate is double what it was when my party left office. Today, 800, 000 people have been out of work for more than one year at a cost of £20 billion per year. What a drain on our economy. In my region, Wales, 106, 000 people are currently out of work. Unlike the claims of various Conservative Members today, the unemployment rate in my constituency has risen by 36 per cent. between 1990 and 1995. Many of the jobs that are offered in my constituency are low-paid, part-time, insecure and available on short-term contracts. They are doing nothing to build a strong future economy. One in six people remain out of work in my constituency; 18 to 24-year-olds account for 650, 000 of them.

All that unemployment has been created in the pursuit of low inflation. I am sure that my colleagues on the Opposition Front Bench would share the objective of low inflation, but if it is the cause of so much misery and social division, while pushing up the Government's bills on wasteful expenditure, we need to look at that strategy urgently.

Just yesterday I received a press release from Touche Ross, which I doubt is particularly favourable to my party. Robert Ellis of the company's Cardiff office reported that the insolvency figures in Wales in October were the highest ever recorded. He said: The figure this month is the worst ever recorded for October. You have to go back to January 1992 and the height of the recession for a higher monthly toll of receiverships. A study of the sectors in which receivership occurs reveals some dramatic figures. In the past 12 months, 52 businesses have failed in Wales; 45 failed in 1994. The miraculous pick-up in the economy has not hit my region.

The sector that has suffered most difficulties and experienced most receiverships in the past 12 months in Wales is construction. In the 12 months to October, 12 businesses failed compared with six in the previous 12 months.

I must emphasise that it need not be like that. The Gracious Speech could have contained measures that won the support of my party, which were designed to boost the economy, meet social need and provide reasonable and decent levels of service in the future. [HoN. MEMBERS: "What are they?"' Money could be allocated to local authorities from their capital receipts to build local council housing for rent. That would mean that the 2, 000 homeless in my constituency would be housed; employment would be offered to building workers; and the local economy would be boosted.

In my borough council area, this year alone £800, 000 capital receipts have been taken and not one penny of them can be spent on local authority housing. That has happened at a time when construction workers are out of work. I know that it has been said before and it sounds old hat, but the basic kernel of truth is that people are unemployed and in social need while money is available that could be spent on social housing.

Mr. Stephen Day (Cheadle)

Will the hon. Gentleman give way?

Mr. Hanson

No. Time does not permit me to do so.

One in 12 homes in the United Kingdom remain unfit for habitation. Wales has the greatest proportion of such homes. Money is available that could be spent on boosting the economy, creating jobs and meeting social need.

Further action could be taken. The Labour party has called for more investment in the information super-highway in partnership with the private sector. That directed partnership could provide key investment to create jobs, put people back to work and meet the needs of our society. We support the establishment of regional development agencies, which would create stronger economies in areas such as Wales by allowing them to draw on venture capital funds. We should invest in public transport, the infrastructure and the environment. Many public expenditure programmes could be introduced to create a competitive society that puts people back to work rather than a society in which money is wasted on huge dole queues.

There is much work that we could do, but we must look at the Government's taxation and social policies. My constituents are poorer because of the Government's policies. We need to ensure that taxation is fair. It should not be increased, but it should be fair. The Government will shortly have to choose whether to reduce the capital gains tax and the inheritance tax. They must decide whether to allow £4.6 billion to be cut from those taxes by 1999 or whether to introduce fair taxation, and use that money for productive good. I urge the Government not to cut those two taxes but to consider ways in which we can make tax fairer. For example, we have proposed cuts in the VAT on fuel, which would assist people in my constituency. We have advocated proposals to make taxation fairer.

If there is £4.6 billion to be given away, the Opposition could list community projects on which that money could be spent, and which would create employment opportunities and improve social conditions. In doing so, we would be able to reduce the Government's overall spending on unemployment benefit and other wasteful expenditure.

I want to see fair taxation, a fair programme of investment and—

Mr. Deputy Speaker

Order. Time is up.

8.17 pm

Lady Olga Maitland (Sutton and Cheam)

I warmly welcome the proposals in the Gracious Speech and the Government's commitment to firm financial policies. The Government have shown great courage in standing up against the national tide calling for easy options.

The truth is that our policies have worked. We are witnessing a continual, sustainable growth in the economy. The unemployment rate is coming down steadily. In my constituency it is now down to 7 per cent. and is declining month by month. I have seen new businesses coming on stream—it is interesting to note that many of them are successfully led by women—while established ones are pressing ahead with ever greater confidence than before.

There is, however, an area which in recent years has been an unexpected drain on national resources in both financial and social terms. I refer to the growing breakdown of the family and the consequent costs to the nation—a factor which can only concern my right hon. and learned Friend the Chancellor very much. Total spending on lone parents has leapt from £1.7 billion in 1979 to £9.1 billion for the year 1995–96. That, I should add, is 41 per cent. of our entire defence budget, which has the responsibility of looking after the security of the whole nation.

So not only are broken families creating a disproportionate cost in financial terms, but the cost in human terms is greater. Hence the importance of considering seriously ways to boost the family. We should be doing everything possible to keep families together instead of tearing them apart at top speed, as proposed by the family law Bill.

It would seem that we have reached a watershed in our society. What respect do we have for the institution of marriage? What role does it play in our community? Is it as relevant as before?

The family law Bill is forcing us to have a serious rethink of the type of society that we want. The Bill also poses the question: should Parliament reflect society, or should Parliament shape society? Indeed, should Parliament have a vision for society for us to aspire to?

Parliament has had no difficulty in other aspects in trying to set standards and build up a moral base. How, otherwise, does one bring a country to fight a war? If Churchill had not set the right tone in 1939, who knows how the debate about rapprochement with Hitler, the difficulties with rationing, or body bags coming home, would have ended.

What is for certain is that Churchill recognised that there was no easy option and firmly announced his intention—we had to fight. We added that the going would be tough, with blood, toil, tears, and sweat. Similarly, we need to have a vision for our society today, and that means a vision for the family. Nurturing the family also means blood, toil, tears and sweat.

No one can deny the urgency of taking a close look at the family today. This nation has bred a growing disembodied family at the rate of 150, 000 couples divorcing a year—the highest rate in Europe. Add to that the 1.5 million "never married" single parents with 2.5 million children and we become aware of the scale of what is before us.

Are we really content to create more legislation to hasten the process even further? Have we really taken into account the fact that the costs of even more broken families will only be an increasing burden on the state and therefore the economy? History has shown us that divorce has become easier with every piece of legislation that is passed, so more broken families have been thrust into society.

At whose behest is the family law Bill being introduced? Have there been mass demonstrations in Hyde park calling for it? Where are the vociferous lobbies calling for swifter, easier divorce? Have the children, the neglected VIPs in those scenarios, been crying out for yet more rapid break-ups of their homes? The answer is that the Law Commission, in its infinite wisdom, has decided that it would be humane to end marriages swiftly and painlessly and to reduce the trauma for the children". That is an escape clause for guilt-ridden parents. The trauma for the children is the break-up of the family home. The legal process is immaterial.

The real issue is the value that we place on marriage in today's society. Only when we come to terms with that can we think clearly about how and when it should end. If we decide that marriage is a short-term arrangement of mutual convenience to two people—with children as an option—then for the secular-minded it is plain logic that, when it falls apart, it should be ended as expeditiously and seamlessly as possible.

However, there is another opinion. Marriage is the foundation stone of society and it carries with it responsibility. Stable families bringing up children in emotional security can only be of benefit to society as a whole.

Marriage is not merely a contract between two people. It is a contract witnessed by society on behalf of the community at large. We are not farmyard animals. We do not approve of people living by an amoral code. We govern our lives according to an accepted framework, which seems to work pretty well. Breaking the law is an offence. We pay our taxes. We drive on the correct side of the road and so on.

Marriage, however, which is the bedrock of our society, seems to have no such boundaries. When it breaks down, it is a misfortune for the couple concerned. The reasoning, "Why keep a dead marriage alive?" means a hasty divorce, which, under the new proposals, will move from speedy to complete overdrive.

What really disturbs me is that, while the debate has raged in the past few weeks, I have heard scant concern expressed about the children's well-being. The oft-repeated phrase, "They are very understanding and adult" does not wash. It reflects self-absorbed people seeking to gloss over an inconvenience.

In truth, the children pay a heavy price. If one asks any teacher about the problems of dealing with distressed children whose parents have split up, one will hear of children, if small, becoming clingy and attention-seeking. In any case, they lose confidence, cry easily, lose concentration and fall back in class. Later, some never settle down. They fall out of the social swim and turn to crime, drugs, early pregnancies and so on.

Study after study has demonstrated the ill effects of divorce on children. So prevalent is the break-up of the family that another nightmare falls on children, as emphasised by Ruth Deech, principal of St. Anne's college, Oxford and a specialist in divorce and family law. In a paper on Lord Mackay's proposals, she drew our attention to a MORI survey for Reader's Digest last month, showing the fear held by many children that their parents will separate, and the years of longing on the part of those children whose parents have parted that they will be reunited.

Medical Research Council studies carried out over decades have shown that children whose parents divorce have less good life chances—poorer health, fewer jobs, more children born out of wedlock. They are less likely to finish school and have more broken marriages in the next generation, with all the resulting social security costs borne by the taxpayer.

Under the proposed new law, marriage will be ended with less formality than the hiring of a car: if you do not like the spouse after all, send her home. That bedrock of our society, marriage, from which everything flows in a civilised world, will be irretrievably damaged if we surge ahead at break-neck speed to end in a single year a commitment that had been made for life.

If nothing else will move liberal-minded thinkers, I beg them to consider the hapless victims—the children who have no say in the matter. They suffer, and in the end so do we all.

I urge the Chancellor to give very careful consideration to the growing costs of increasing broken families, and make his own representations to the Lord Chancellor, whose Bill will do so much to undermine his own excellent work in securing a firm financial base for the country.

8.27 pm

Mr. Andrew Miller (Ellesmere Port and Neston)

It is always a pleasure to follow the hon. Member for Sutton and Cheam (Lady Olga Maitland) because it brings us back from "Alice in Wonderland" to the real world. I often wonder, when I drive through Sutton and Cheam occasionally, in which part of Sutton and Cheam the hon. Lady finds those examples, because I do not believe that people in her constituency accept her model of the world.

It is curious that the debate on the royal speech has not received a great deal of press coverage. We all know the reason for that. A friend of mine suggested to me that the hon. Member for Crawley (Mr. Soames) is on the carpet in front of the Prime Minister for daring to attack the Princess of Wales. She kept the Queen's Speech out of the media.

However, some serious things have been discussed in the past few days and it is a great pity that the debate has not had a great deal more coverage.

Let me start with nursery education, the bedrock of our investment in the future, in people, in our society.

What has happened? There was a pilot scheme for vouchers—the Government decided to start with a pilot scheme for a change. After all the experiments in social planning had gone disastrously wrong, perhaps the Government thought that it was a good idea to have a pilot scheme instead of going full blast into a new programme that collapses in disarray. What was that pilot scheme? It was offered to local authorities to take up. Time after time we have heard criticisms of Labour and Liberal-controlled local authorities for failing to take up that programme.

Mr. Jacques Arnold

Quite right.

Mr. Miller

The hon. Gentleman says, "Quite right." That is interesting—perhaps he can say why Conservative-controlled Cheshire county council also refused the pilot scheme. It refused the scheme because it was bound to fail—

Mr. Arnold

Will the hon. Gentleman give way?

Mr. Miller

I shall not give way as the hon. Gentleman does not represent Cheshire.

Mr. Arnold

rose—

Mr. Miller

Oh, very well. I shall give way.

Mr. Arnold

Cheshire county council did not take up the scheme for precisely the same reason as can be clearly seen in Kent. We have always pioneered projects; the only time that we did not do so in my county of Kent—which is one that I know about—was precisely because it is controlled by Labour and the Liberal Democrats, who are under instructions not to participate in the scheme. Poor old Kent.

Mr. Miller

The hon. Gentleman is clearly not listening. Cheshire county council is one of the last bastions of Conservative administration and it refused to adopt the programme.

Mr. Peter Butler (Milton Keynes, North-East)

Cheshire county council is not Conservative-controlled.

Mr. Miller

Cheshire is Conservative-controlled; I represent a Cheshire constituency, so I should know.

The Conservative party has rejected the pilot scheme. The issue needs to be considered in terms of the overall programme of investment in education which is not taking place throughout that county. It is interesting that there is an all-party alliance—all three major parties working together to seek to persuade the Government that they are wrong. That is an interesting little concept about which we never hear from the Conservative Benches. All we ever hear are criticisms of Labour-controlled authorities which are seeking to do their best in impossible circumstances.

Earlier we heard about one aspect of investment. I listened briefly to the contribution of the hon. Member for Stockton, South (Mr. Devlin) who criticised the Labour party for having discussions with British Telecom. He has the gall to criticise the Labour party for talking about investment in the nation's future. It seems extraordinary that, when the Labour party starts to promote ideas that will create competition, it becomes the subject of criticism from Conservative Members.

Last year, we heard the Deputy Prime Minister, on his crusade for deregulation, say that every regulation had to be wiped out of industry's way. But when it comes to British Telecom, he says that the asymmetry rules must stay in place. Those rules were devised in 1984, when they may have had some logic—history will determine whether they did—but by the time those small cable companies were taken over by American multinationals, the logic had disappeared. There must be an agreed and phased programme of release from those regulations on a region-by-region basis, which is what the Labour party was saying. It is extraordinary that a mechanism to create greater competition in one of the industries that will provide the basis for the regeneration of the British economy has been criticised by Conservative Members.

On several occasions I have heard criticisms of industrial relations under previous Labour Administrations. I have heard the phrase "Red Robbo" used about six times—it must have been in a Conservative party handout which I have not seen. I met a group of trade unionists from Slovakia just yesterday who were complaining bitterly about the problems they faced in making progress with some of the multinational companies in their country. I asked them specifically, as did my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), how they ensured that trade unions were recognised. They said that it only took five people to be in the union and it would be recognised. In this society we have destroyed all rights of recognition.

Mr. Butler

Hear, hear.

Mr. Miller

The hon. Gentleman says, "Hear, hear." We have destroyed all rights of recognition and the Government now claim that as the basis for making progress. How can removing rights at the workplace be the basis for progress?

We have heard about transport issues. In my constituency, large and successful businesses are desperately crying out for investment in the west coast main line. Two Budgets ago promises were made. It was said that magical private sector money would rescue the west coast main line. Where is it? Not one penny piece of that money has emerged so far. How can businesses such as Shell, Vauxhall and Kemira, which desperately want to get to the market place by improving the rail infrastructure, he expected to make the sort of contribution that they could have made had that investment gone ahead?

My hon. Friend the Member for Delyn (Mr. Hanson) talked about the failure to invest in housing. In my constituency, 4, 500 families are on the housing waiting list—an extraordinary number. An authority that as recently as 1986 could guarantee to any family—

Mr. Stephen Day (Cheadle)

On a point of order, Mr. Deputy Speaker. I wish to be helpful to the hon. Gentleman, who has I think misled the House—I am sure not intentionally. Cheshire county council is Labour-controlled. Perhaps the hon. Gentleman would like to correct what he told the House.

Mr. Miller

I stick to my guns, and the record will prove that.

Investment in housing is important. Some 4, 500 families are waiting on the housing register in my constituency. As recently as 1986, a couple with one child would have been housed within one month; it now takes four years. That is as a direct result of this Administration's failure to invest in the housing infrastructure. The money is there and only if it is released on a phased basis will we achieve progress in providing low-cost, affordable housing. Such investment will result in the sort of progress that we need to house those people and revitalise the building industry. That would have an enormous spin-off effect on a wide range of industries across the country.

Everyone who drives up the motorway or travels on the train through Bedfordshire will see the problems faced by industry—

Mr. Deputy Speaker

Order.

8.38 pm

Mr. Stephen Day (Cheadle)

I shall take the opportunity, at the beginning of my speech, to give the hon. Member for Ellesmere Port and Neston (Mr. Miller) the information to allow him to correct what he said. I am a Greater Manchester Member of Parliament, but my postal address is Cheshire and my understanding is that the Conservatives hold 22 seats, Labour 35 and the Liberal Democrats 14 on Cheshire county council. It is only right to put those facts before the House. I should like to think that such circumstances led to Conservative control. If they did, we would be in control of many authorities.

I welcome the Loyal Address. During the debate this evening, many Labour Members have done nothing but run Britain down. I think that my Whips will agree that, on occasion, I have rebelled when I did not believe that my Government had got it quite right. However, it should not be inferred that I, or any other Conservative Member who has occasionally disagreed with the Government, believe that the Conservative Government have been anything but good for the British people since 1979.

I do not recognise the picture that Labour Members have painted of Britain before 1979. I went to school and on to further education during the 1960s, and I remember Labour Britain well. It is an experience that I do not wish to repeat. I remember a Britain where industry created more jobs than there are now, but unfortunately—especially for those who ultimately lost their jobs—that industry produced goods that the rest of the world did not want to buy at a price that the rest of the world could not afford. That reality, and not Conservative Government, cost people their jobs.

Companies struggled under the economic regime imposed by a Labour Government and many industries were put under public ownership. I remember well companies such as British Steel and British Leyland that were cobbled together by a Labour Government. They were a disaster for their own long-term future and a disaster for all who worked in them. The companies were almost destroyed. It was a Conservative Government who privatised those industries and turned them into successes. They are the real benefits of Conservative Government for Britain since 1979.

I remember when the Labour party went to the International Monetary Fund. It would embarrass anyone with pride in Britain to see any Government of any political persuasion grovelling before the IMF, with the economy in a mess. I remember an inflation rate of 27 per cent. in Britain. I remember that at one point the highest rate of taxation reached 97.5p in the pound. That is a typical result of Labour attitudes to taxation and to the economy. Labour policies produce not growth but the devastation that was Britain in the 1970s. I do not believe that the British people wish to return to that situation. They will reflect upon that in the polling booths, and vote accordingly.

There were calls for local authorities to be allowed to use receipts from council house sales to invest—that is a magic word beloved of Labour Members. Labour Members do not seem to understand that the proceeds of council house sales must he offset against the massive debts incurred by local authorities. Local people face enormous cost burdens largely because of the mismanagement of Labour-controlled authorities. The debt burden is enormous, and the Labour party cannot ignore that if it claims to believe in financial rectitude and good management of the economy.

Labour has proved again tonight that it is unfit to run a market stall, let alone an economy. It does not understand what wealth creation is all about. People have the talents and the Government must release those talents so that the people can create wealth. The people do not need politicians to direct them. The last thing they need is a Labour Government trying to control the economy, telling people how to spend their money and telling businesses where to invest. The people will make the right decisions in that regard. This Loyal Address proves that the Conservative Government hold basic, clear principles that are right not only in theory, but have been proved right in practice ever since the Government were elected.

I am proud to be a Back Bencher in this Conservative Government. Much mockery was made of an earlier comment that this Parliament may yet run 18 months. However long it runs, I hope that, at the next election, the people will do what they have done in the past, in spite of the pollsters' predictions: return a Government who are capable of running the economy.

8.45 pm

Mr. Brian H. Donohoe (Cunninghame, South)

The hon. Member for Cheadle (Mr. Day) said that he was a product of Labour and, judging from his speech tonight, he has not done too badly.

The Gracious Speech is paper thin as far as Scotland is concerned; it contains nothing of any meaning for Scotland. Two days after the Queen's Speech, the Secretary of State introduced a hare-brained scheme to engender some alternative to our well-thought-out proposals for a Scottish Assembly. The Government have no idea about the future of Scotland—the land in which I was born and which I shall always be proud to represent.

The Government cannot deal with the education problems in Scotland. Many children in Scotland, who receive little education and no training, find that there are no jobs in Scotland. Education without training and jobs is worthless. As a result, we have seen a rising culture of drug taking and crime in our society. The Government are responsible for those problems; no one could suggest that it is the fault of anyone else. I see those problems in my constituency and they exist throughout Scotland.

There is no point in trying to encourage the youngsters in our communities if we cannot provide them with real training. A company has recently commenced operations in my constituency and it has brought a number of jobs to the area. I visited that company a few weeks ago and I met the owner. He told me that he is not able to fill the positions in that factory because of a lack of training. He has plenty of desks and machines, but he does not have bodies to operate those machines.

That lad was conned by the Scottish Office and by Ayrshire Enterprise about the number of suitably trained people in the Ayrshire area. He has had to consider bussing people from the north and the east to the south of the county. He could employ 100 people tomorrow and meet his production requirements, but he cannot recruit suitable workers because of the lack of training in the local area. That problem should have been addressed before now.

We must also contend with the ill-thought-out reorganisation of local government in Scotland. The constraints that will be placed on the resources of the new authorities are now coming to light. The Government have not given the new authorities any assurances that their financial requirements will be met. Education and training needs have not been addressed. There will be immense problems in social work in respect of achieving any possible attachment to the needs of my constituents. That is another clear sign of an incompetent Government who have nothing to offer the people of Scotland.

We are also witnessing the breakdown of the national health service. I was born the year that the national health service came into being and, in the final years of the current Government, it is breaking down completely. Nothing is left of the dreams of those who created the national health service.

Mr. Jim Cunningham (Coventry, South-East)

Does my hon. Friend agree that one of the problems in the national health service that the Government have not addressed—it could be argued that they have exacerbated it—concerns the long hours worked by nurses and doctors in the national health service and their lack of incentive to do a good job?

Mr. Donohoe

My hon. Friend is absolutely right. While nurses, and other staff, are restricted to pay rises of some 3 per cent. per annum, general managers in the trusts and the health boards of Scotland award themselves increases of up to 25 per cent. There is something fundamentally flawed in a system that allows that to continue. The issue clearly needs to be addressed, and it is not likely to happen under any circumstances where we have a Tory Government.

In my constituency, what I understood to be a national health service is being broken up ant private hospitals are running almost all geriatric services. If the Tories thought that they could get away with it, they would privatise the birth of children. I am not so sure that that is not the next option that the Secretary of State for Health will consider.

My constituency also has problems with housing. The development corporation in the new town was enormously successful for 25 years. It created jobs and wealth, it attempted to address the lack of training in the area and it built particularly good housing. All that achievement has been lost because of the Government and their madcap ideas. They want to diversify the housing stock. They do not want the same as the public.

The tenants living in those houses want to be transferred to the local authority. That was proved by clear experience in other new towns in Scotland. A ballot revealed that 97 per cent. of people in East Kilbride believed that the only useful alternative to their continuing in the rented sector was to transfer to the local authority. [Interruption.] Does the Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson) want me to give way? Clearly, he does not understand his own brief, because he has never answered the points that I have raised with him in Scottish Questions.

Why should so many resources—some £350 million—be wasted on a housing association in Irvine when nobody seems to know whom it represents? Why should all that money be spent trying to entice people away from what they know is good for them to the unknown—away from secured tenancies to assured tenancies? My constituents will not be conned.

In the past 16 years, what have we gained from a Tory Government? We have experienced growth of some 1.7 per cent. How can we possibly compete in the world market when we are hitting such a growth figure? Earlier this evening, I had a discussion with representatives of ICI, which is a very successful company. It is not so successful in my constituency, where its employment figures have fallen from 13, 000 jobs in Stevenston to some 600 today. That does not suggest that the country has encouraged ICI to continue as an employer in my constituency.

Politicians on both sides of the House do not understand what is happening in the commercial markets of the world. Commercial companies have become transnational. Individual companies do not concern themselves unduly with what politicians have to say. Instead of all the discussion about sleaze, and Conservative Members taking money for advising industry on how to go about its business, we should look at industry to learn something about how we should conduct our business in politics. Clearly, Britain is old fashioned in that respect. We have to turn ourselves around and adopt an agenda that people on the streets understand and that will get them all back to work.

8.55 pm

Mr. Thomas Graham (Renfrew, West and Inverclyde)

I have a new pair of glasses and, as they are bifocals, I am having some difficulty in using them.

I found the Queen's Speech extremely difficult to understand. It is quite extraordinary, to say the least, given the problems facing Britain and those facing my constituents. In the past fortnight, I have looked at my mailbag and I shall tell the House what was in it—not the Queen's Speech, but letters from people who are deeply worried about the effects of the Child Support Agency on their families. My constituents have undergone traumatic experiences and are still writing to me about their unsolved problems.

I also received a number of letters about transport. The Government's deregulation of the buses has caused enormous problems in rural areas. My constituents are finding it difficult to get to work in the morning and back in the evening because of the lack of bus services. Not everyone owns a motor car; therefore public transport is extremely important. Those are the issues about which I find letters in my mailbag.

Once again, there are tremendous problems with the national health service in my constituency and that of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman). The waiting lists are unbelievable. There is a waiting list of between nine months and a year for a man with a heart problem. He should be seen this week and treated immediately so that his problem can be cured. Those are the issues that folk want to see in the Queen's Speech. They want my constituent to have an operation on his heart. They want the waiting list to be cut effectively, not a manipulation of the figures.

My folk are worried about young people. The Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson) is nodding his head, but education in Scotland is his portfolio. I know young folk who want to go to college but cannot get the wherewithal to do so. The local college does not receive Government support, so young people in my area are being denied the right to take themselves off the dole and to seek further education.

One young girl in my constituency who is an incredible asset to Scotland—she is a great actress—has been offered a place in a college in England, but she cannot get funding. So what will happen to her? Her family cannot afford to send her to college, but the Government can. They should pay for young kids to go to college. Those are the measures that we should see in the Queen's Speech.

I remember the last time I read a poem out of a certain book. I wish that the Chancellor were here tonight, as I am about to read another one. This is from "Hairy Knees and Heather Hills" by the famous Walter McCorrisken. Walter sums up the Government in this wee poem.

• "A miser from downtown Rangoon,
• Drank soup through a hole in a spoon.
• Said he with a smile,
• It's really worth while,
• For the soup I save is a boon."

That epitomises the Government, how they operate, and the Chancellor's regime. The Government do not realise that they must spend money to get Britain out of its problems. Providing employment for young people takes money and investment in education and training. That is the way forward.

The Queen's Speech should have given hope for Britain, and it should have given young folk pride, knowing that they would leave school, college or university and go into training that would give them a job. I make no bones about it. Every Member of Parliament has a job. Some do it well and some do it badly, but that makes no difference because we all collect a salary. Too many young graduates and other decent young men and women who have worked hard to pass their college exams to make a contribution to society are denied that opportunity by the madness of this Government.

After 16 years, the Tory party is still putting out bumf, such as a circular that I saw this week. I am sure that all Conservative Members have a copy. If not, I will make sure that they receive one. That circular says that Government's key objective is a centralist strategy aimed at not risking inflation, and at ending the days of boom and bust. After 16 years, the Government have the audacity to produce something like that, while constituents of mine—young people who have only ever seen that lot in government—are, through no fault of their own, languishing on the dole The Queen's Speech offers them no hope and nothing for the future.

I shall quote another poem from Walter McCorrisken:

• "Dear Sir,
• Never bite your finger nails,
• It makes your fingers lumpy,
• Never bite your finger nails,
• Yours sincerely, Stumpy."

That further reminds me of the Government, who are worried because they know that a general election is coming. They know also that the next Queen's Speech will be meaningful. They know that that Queen's Speech will offer young people the hope of carrying the flag and offer elderly folk in retirement a chance to enjoy a decent standard of living. If the Government do not look after the young, there will be nobody to look after the elderly.

The Government have abandoned their commitment to young people. Worse still, this week I received letters from elderly people asking why the Government could not put something in the Queen's Speech about abolishing value added tax on domestic fuel. Why could not the Queen's Speech have offered the elderly some hope this winter?

I remember the winter of discontent, but this winter many old folk will not wake in the morning. There will be a tap on the door that they will never hear. Eventually, the police or social worker will be told but, unfortunately, those elderly people will have a died because they did not have enough to heat their homes or to eat. They are forgotten individuals. That is the winter that those old people are facing.

The Queen's Speech did not talk about the young, the elderly or the future of Britain because the Government have abandoned them all in favour of the pathetic policies of a dyed-in-the-wool, heartless Government.

Hon. Members

More.

9.4 pm

Mrs, Ann Taylor (Dewsbury)

I understand hon. Members' wanting to hear more from my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham). His speech was direct and came from the heart. They would do well to listen to his underlying message.

We have had a wide-ranging debate, touching on

Mr. Robert G. Hughes (Harrow, West)

Will the hon. Lady give way?

Mrs. Taylor

I have only just started my preamble, but I shall.

Mr. Hughes

I am grateful to the hon. Lady. She played a leading part in changing the Standing Orders, particularly those relating to the declaration of hon. Members' interests. Perhaps this was an oversight, but I fail to understand why the hon. Lady—unlike her party's Chief Whip and deputy leader—has not declared an interest in one of the amendments tabled by Labour. The hon. Lady has a relevant interest but she has not declared it.

Mrs. Taylor

The hon. Gentleman should withdraw that remark because I have no interest relevant to the debate. Those names shown with the letter R against them have been so identified after the procedure was cleared with the Parliamentary Commissioner for Standards. Labour Members are clear about the rules. If the hon. Gentleman has any questions, he should not raise them in the House but with the parliamentary commissioner. I assure the hon. Gentleman that his allegation is incorrect and I invite him to withdraw it.

Mr. Hughes

The hon. Lady says that, but she nevertheless has an interest that I regard as relevant, relating to that which she receives from the Association of Teachers and Lecturers and from Unison. While I am on the subject, I think that the sponsorship of the Labour party leader by the Transport and General Workers Union is also relevant.

Mrs. Taylor

This is a typical abuse by certain hon. Members, who are trying to mislead people about the amendment. I say to the House, and to the hon. Gentleman in particular, that the procedure that the Opposition followed in tabling the amendment, in relation to the registration of interests, has been cleared in detail with the parliamentary commissioner, who was appointed to take notice of those issues. It is a matter for him. If the hon. Gentleman does not understand that, he ought to go away and read the reports so that he understands the system that we introduced about a week ago.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. Hon. Members should be clear that if they have a complaint in relation to registration, it should be raised with the parliamentary commissioner. Such a complaint is not for debate this evening. We will return to the Gracious Speech.

Mr. John Marshall (Hendon, South)

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

I have given my ruling. I hope that the hon. Gentleman is raising a point of order on a different matter.

Mr. Marshall

Mr. Deputy Speaker—

Mr. Deputy Speaker

Order. Is it a different matter? No. I call Mrs. Taylor.

Mr. Marshall

I wanted your advice, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order.

Mrs. Taylor

Thank you, Mr. Deputy Speaker, for confirming the interpretation that I gave the House.

As I was trying to say before the hon. Gentleman so misleadingly interrupted—

Mr. Anthony Coombs (Wyre Forest)

rose—

Mrs. Taylor

I shall not give way. I intend to make my speech, not to answer irrelevant interventions which you, Mr. Deputy Speaker, have already ruled out of order.

Mr. Day

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. I hope it is a new point of order.

Mr. Day

I want to correct a point of order that I raised earlier. The House will recall that, earlier this evening, the hon. Member for Ellesmere Port and Neston (Mr. Miller) claimed that Cheshire county council was Conservative-controlled. I rose to put the record straight, on the basis of the seats allocated to each party. The information that I imparted to the House was correct: there are 22 Conservatives, 35 Labour councillors and 14 Liberal Democrats.

It has since been brought to my attention, however, that the chairman of the authority is indeed a Conservative. I understand that that is the result of some deal struck between the Liberal Democrats and the Conservatives. I thought it only right to put the record straight, and if I gave any offence to the hon. Gentleman, I apologise.

Mr. Deputy Speaker

I am most grateful.

Mr. Miller

Further to that point of order, Mr. Deputy Speaker. I am grateful for the hon. Gentleman's comments and I do not blame him for what he said, although it was not a strong point in favour of the Conservative party.

Mrs. Taylor

If we could now return to the debate, that would be of benefit to the House.

We have heard the hon. Member for Ryedale (Mr. Greenway), for example, whom we are glad to see back with us following his illness, speak about local government reorganisation. We have also heard speeches on housing and the family. I would hesitate before trying to follow the cultural contribution of my hon. Friend the Member for Renfrew, West and Inverclyde; suffice it to say that many of the problems that he related are known to the constituents of many other hon. Members. I think in particular of the many difficulties that my constituents have experienced with the Child Support Agency—my hon. Friend highlighted some of them.

I start by reminding the House of the comments made by the Lord President on Queen's Speech debates. He wrote recently that the Queen's Speech is always an important signpost to the political year. That is true. This year, the wording on the signpost is large and clear: "General election this way". What is more, as everyone now knows, the sign writer this year was the chairman of the Conservative party. For the first time, the briefing on the eve of the Queen's Speech was given not by the Leader of the House but by the chairman of the Conservative party, who cynically told journalists of his strategy—that the speech had been drawn up to put Labour on the spot and to challenge the Labour leader after his warm words to the CBI.

As we all know, few things happen in Parliament that are not either openly political or have heavy political overtones, but we have surely reached new depths of cynicism when the whole thrust of the Queen's Speech becomes an exercise in party political point scoring.

What Ministers should recognise—although after 17 years of assuming a divine right to rule I doubt they do—is that Parliament is not an annex of Tory central office, and that the law-making process of this House should not be a crude extension of the writing of a party manifesto.

This evening, one of the least confrontational Ministers, the Leader of the House, is to wind up our debate. We may at last, therefore, hear something constructive. The right hon. Gentleman acknowledged in an article in The House Magazine this week that certain Bills were included in the Queen's Speech by agreement between our two parties' Front-Bench spokesmen. He drew attention to the consultation that had taken place on the drafts of the Armed Forces Bill and the Reserve Forces Bill. He also mentioned the offer that I made at business questions last year to facilitate the speedy passage of the Bill ratifying the chemical weapons convention, so he will acknowledge that there are occasions when the House can work constructively when there is agreement in principle on a certain issue.

That brings me to the Asylum and Immigration Bill. The Leader of the House knows from my evidence to the Procedure Committee in June that I favour a greater use of Special Standing Committees. So, I believe, does he in some circumstances. We were told yesterday—we have been told it on other occasions—that the offer of a Special Standing Committee made by my right hon. Friend the Leader of the Opposition on the first day of this debate could not be accepted because the Bill was controversial and Special Standing Committees could not to be used for that purpose. I disagree with that analysis; I do not think that that was ever the presumption.

During the passage of what became the Water Act 1989, which privatised the water industry, it was suggested that a Special Standing Committee should be established, despite our opposition to the privatisation. The first part of the Bill created the National Rivers Authority, in which, on principle, there was agreement. The suggestion of a Special Standing Committee was not accepted, but I believe that the legislation would have been better if it had been.

Even if the Prime Minister is right to believe that Special Standing Committees are used only for non-controversial Bills, we must ask what makes the Asylum and Immigration Bill controversial. On Wednesday, the Prime Minister said that it would ensure that we have a fair system of asylum—fair for those who need help, and fair for those who do not believe that this country should receive bogus asylum seekers either. On the same occasion, the Leader of the Opposition said: We oppose bogus applications and fraud and we recognise the need for immigration controls".—[Official Report, 15 November 1995; Vol. 267, c. 17–30.] There was apparent agreement between them.

It must also be agreed by hon. Members on both sides of the House that the Asylum and Immigration Appeals Act 1993 was flawed, and that the Government got it wrong then; otherwise, there would be no need for new measures now. The question is, what is required? Do we need administrative change to deal with the backlog of applications, or do we need more fundamental changes in the system? If there is agreement on the objective, as the Prime Minister has said, why should we not try to achieve that objective in productive ways?

If, however, the purpose of the Asylum and Immigration Bill is to act as a vehicle for extreme statements about race relations—such as those made by Andrew Lansley, a prospective Conservative parliamentary candidate who has talked openly of the political benefits of playing the race card, saying that immigration has the potential to hurt the Labour party—the Bill will not achieve the Prime Minister's stated objective of improving race relations.

Moreover, the Prime Minister and others ought to bear in mind the existence of real practical problems with the proposed legislation. Ministers should know that, not least because the Secretary of State for Education and Employment has pointed it out. She has said that she agrees in principle with deterring illegal working, adding: I do, however, have some concerns … Either way there could be racial discrimination … A balance needs to be found between the benefits achieved by such a scheme and the burden it would place on employers". I suggest to the Leader of the House that, if the Secretary of State for Education and Employment has such fears, it is surely reasonable for others to have them as well.

Parliament has tried to get asylum rules and procedures right in the past, and has failed. Opposition Members proposed the establishment of a Special Standing Committee in 1992, and it was rejected. Perhaps, had the Government agreed to it, we would not now be discussing the need for new legislation. The House of Commons should be able to say that, if it is agreed that a problem exists, that problem should be susceptible of solution by the House.

Let me cite just one problem in regard to which the Government's inactivity makes us worry about their approach to such problems. That problem could have been tackled, but has not been. This example may expose some of the double-speak of the Tory party in the Queen's Speech.

In 1990, the Government promised to deal with a loophole in legislation that enabled organised criminals to perpetrate many kinds of fraud. I refer to what was called at the time the "Day of the Jackal" loophole, which exploited the ease of access to birth certificates in Britain.

In 1990, the Government produced a White Paper, "Registration—Proposals for Change", yet some of its recommendations have not yet been put into effect—most notably those intended to counter the loophole that allows the creation of false identities by organised criminal gangs, who can obtain birth certificates, and subsequently other documents, that can form the basis for fraud in a wide range of areas from social security to immigration.

This year, in a letter to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), the Prime Minister said that he had been unable to find parliamentary time to close the loophole, yet there had been no approach to the Opposition to ask for our co-operation with such a measure. Why not? Surely if Ministers genuinely wanted to make progress, instead of simply making loud complaints about the problem, there would have been an approach.

Hon. Members frequently complain about the public image and standing of Parliament. They often blame television and complain that Prime Minister's Question Time is the only representation of the House, yet when constructive suggestions are made, the Government turn their back on them, as they are doing now in connection with the Asylum and Immigration Bill. That refusal does the House no good whatever.

I do not believe that the Leader of the House was allowed to influence that decision, which is a shame because he is a wiser man than the Home Secretary, and had he had his way the House could have been shown in a better light.

I shall now talk about some of the areas for which the Leader of the House is specifically responsible. Incidentally, I thank him for announcing today the dates of the 10 constituency Fridays for this Session, and I also thank him in advance for his anticipated early announcement of recess dates.

When I consider the parliamentary time that we have available, and when I hear comments such as those of the right hon. Member for Worthing (Sir T. Higgins), I am reminded how many failings our present system has. The Queen's Speech and the Budget—two of the biggest parliamentary occasions—are within days of each other. It is right that the debates on them are long and take a great deal of parliamentary time—but we may be short of time later.

What the House needs is not the tinkering changes to procedure to which the Jopling report led, but a far more fundamental rethink of how our parliamentary system could be made to work more effectively through measures such as the publication of draft Bills, the use of pre-legislative Committees and the reorganisation of our timetable so as to make better use of the time available and to avoid the long three-month gap, which makes no sense in terms of the accountability of the House to the public.

I believe that, unless we start thinking about those issues, and unless we make such changes, not necessarily to give more sitting days but to spread them more carefully throughout the year, Parliament will not be able to do its job effectively. I am sorry that this year the Leader of the House has not been able to lead a campaign for further changes in our procedures. I understand that change is always difficult, and that the House is always very traditional, but I hope that more change can come.

The House has been traditional today because, as has been our habit in recent years, we began the last day of the debate on the Queen's Speech with a debate on economic policy. At times today we might have been forgiven for thinking that we were in the middle of a Budget debate already—although clearly, judging by the questions that my hon. Friend the Member for Dunfermline, East (Mr. Brown) was asked, it would have been a Budget introduced by a Labour Chancellor. It was my hon. Friend who was asked to provide all the answers. [HON. MEMBERS: "He did not provide any."] He provided many of the answers—unlike the Chancellor, who does not seem to know the difference between objectives and policies.

I always find it amusing that Conservative Members expect my hon. Friend to answer details about what will be in his first Budget in 18 months' time. Conservative Members tell us that the election might not be for 18 months, but I am not sure that the Chancellor will be able to tell us what he is going to do next week.

Mr. Jacques Arnold

Will the hon. Lady give way?

Mrs. Taylor

I am normally willing—

Mr. Arnold

rose—

Mrs. Taylor

Will the hon. Gentleman let me finish? I am normally willing to give way but, unfortunately, Conservative Members wasted time at the beginning of my speech so I shall not give way.

I have worked out why my hon. Friend the shadow Chancellor is always asked for so many details. Quite simply, there is so much interest in my hon. Friend's first Budget because there is so little confidence in this Queen's Speech. There is little confidence that the Queen's Speech has any relevance whatsoever to the needs of the country.

The Chancellor, by contrast, has the luxury of sealed lips, and he cannot disclose the details of next week's Budget. I suppose that we will just have to wait until Sunday to read the briefings that the chairman of the Conservative party will give out. Nothing the Chancellor said today gives us confidence that he is anything other than incredibly complacent about the economic prospects for the country.

Throughout the week of debate on the Queen's Speech, many themes have emerged. The main one is that the Queen's Speech does not attack the fundamental problems that face the country. My right hon. Friend the Leader of the Opposition asked last Wednesday where the plan for job creation was, and how the Government proposed to counter insecurity. Do Ministers realise that, in the five years to the end of 1994, almost 11 million British people—or two in five of the work force—experienced unemployment? That insecurity is real.

Do Ministers realise that the amount of money that individuals have to spend has fallen, as a Financial Times article last week showed? That is not a state of mind, as the Secretary of State for Trade and Industry would imply. Do Ministers realise that 70 per cent. of all home repossessions are caused by job losses? That is not a state of mind, and those who suggest that it is insult the thousands of families who have been desperately hit by Conservative policies during the past few years.

One issue that was not mentioned in the Queen's Speech, but which I wish to touch on briefly—not least because I have a constituency interest—is the inadequacy of regulation of the private utilities. There was a debate in the House this morning on the problems facing my constituents and others in West Yorkshire. The House heard during that debate that Yorkshire Water supplied tankers of water free of charge to soften training grounds for racehorses while it was threatening rota cuts in the rest of West Yorkshire.

Yorkshire Water told firms in Bradford that they should either relocate or boil 500, 000 gallons of water a day during the crisis. It has shown sheer incompetence. That is the impression not just of Labour Members of Parliament, but of local industry. The company's incompetence shows that regulation of the private utilities is woefully inadequate, but all the Minister could say today was that if the situation did not improve, he might have to consider setting leakage targets. There are 600 tankers trundling through Yorkshire, but one in three is wasting its time, because, as soon as the water gets into the system, it starts leaking out. All the Minister could say was that if the situation did not get any better he might have to consider what to do. The Minister wanted to wash his hands of that situation—[Laughter] That would be more than the chairman of Yorkshire Water did—he claimed that he did not do such healthy things.

Many other problems are created by the Queen's Speech. I am sorry that the hon. Member for Leeds, North-West (Dr. Hampson) is not here. He talked about nursery education in Leeds and said that he welcomed the nursery voucher scheme because he thought that it would bring some nursery places. He said that the situation in relation to nursery places in Leeds was appalling. I have checked the figures since the hon. Gentleman spoke, which may be why he is not here.

In Leeds, 45 per cent. of all three and four-year-olds and 30 per cent. of rising-fives are in nursery schools, so 75 per cent. of nursery age children in Leeds are in nursery education. The dreadful, appalling con trick of nursery vouchers is that they threaten that Labour-controlled council's excellent provision of nursery places, from which many children have benefited over many years. The Government's cynical contract will not be accepted by parents, because parents do not want nursery vouchers: they want quality nursery education for their children, which the Government are failing to provide.

Throughout the Queen's Speech, Ministers and Conservative Members have clearly been practising for their time in opposition. They behave like an Opposition. They absolve themselves of all the problems that the country is facing. How often have we heard from Conservative Members during the past few days that something should be done about Government borrowing, interest rates, the quality of education and the level of crime? Those remarks were made by hon. Members who belong to a party that has been in office for 16 years.

Sir Terence Higgins

Will the hon. Lady give way?

Mrs. Taylor

I do not have time.

The Chancellor had no evidence whatever to give today when he was under fire from my hon. Friend the shadow Chancellor. The sad fact is that Britain has fallen from 13th to 18th place in the GDP league table. I have looked—perhaps the hon. Member for Lancaster (Dame E. Kellett-Bowman) would like to look as well—at what the Conservative research department brief says about the league table that shows that Britain has fallen from 13th to 18th place. It says: Labour's table is misleading and inaccurate … Labour's league table is another example of their cynicism: they don't care how spurious their figures are. The brief fails to mention that the source of the table is a document produced by the Government entitled "Competitiveness: Forging Ahead". The Chancellor chose to quote The Wall Street Journal as his only source of support. Perhaps he should come closer to home and look at last Thursday's Financial Times, which says: The pound sank to a record low on the foreign exchanges yesterday as figures showing a rise in unemployment and the biggest fall in living standards for nearly 14 years". The Chancellor said nothing to deal with that. He showed only utter complacency.

The Queen's Speech shows total complacency and gives no hope for Britain. It is a discredited Queen's Speech from a discredited Government who have failed Britain. The sooner they go, the better.

9.34 pm

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton)

I shall follow the pattern of the speech of the hon. Member for Dewsbury (Mrs. Taylor) by starting in a quieter tone. I recall that, on the first occasion that I had this task of winding up the debate on the Address in 1992, a senior former colleague, whose name I will not reveal, but some may guess, who was aware of the fact that the Leader of the House conventionally says something about House of Commons matters, advised me with words to the effect of, "Forget all that Leader of the House stuff and just sock it to 'em." Being of a naturally conservative nature, however, I stuck to the convention on that occasion, as I propose to do for part of my speech tonight.

Indeed, at a time when the House is so often much criticised for the way in which its business is conducted, it is worth spending a few minutes on the significant improvements of the past year.

Mr. John Marshall (Hendon, South)

I thank my right hon. Friend for giving way to allow me to mention a House of Commons matter. He may be aware that, last week, I wrote to Sir Gordon Downey after the publication of an amendment to the Loyal Address in which a number of the signatories, who had been sponsored by a trade union, did not declare that sponsorship. His advice on declaring the interest on the Order Paper was that this is the appropriate course of action to take. Would my right hon. Friend care to comment on the fact that a right hon. Gentleman—a member of the Transport and General Workers Union—sought not to do so when he put his name to an amendment today?

Mr. Newton

I note what my hon. Friend says. I also heard the exchanges between the hon. Member for Dewsbury and another of my hon. Friends about a quarter of an hour ago. While I note what my hon. Friend says, the proper thing for me to do is to say that, if there is thought to be a source of complaint, it would be proper for it to be directed to the Parliamentary Commissioner for Standards, whom we have put in place precisely to consider such complaints.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

As we are on House of Commons matters, may I report to the Leader of the House that there is genuine confusion about the interpretation of the new rule? Does he not think, therefore, that it would be a good thing to expedite the setting up of the new Select Committee, to give the new commissioner clearer guidelines and instructions?

Mr. Newton

As the hon. Gentleman will know, I circulated a note setting out the position as clearly as was possible in the light of the report, the debate and the resolutions that the House had passed. I consistently acknowledged in the debate, as the report acknowledged, that there would be a need for further guidance and guidelines and that that would be the task of the Select Committee, working with the commissioner. I can assure the hon. Gentleman that the usual channels are beavering away with a view to getting the new Select Committee established and I hope that it will be possible to proceed before too much longer, partly for the very reason that he reasonably mentioned.

Before I return to one or two House of Commons matters that I wanted to mention, I must say that I was particularly sorry not to have been in the Chamber to hear the right hon. Member for Lagan Valley (Mr. Molyneaux), but with the miracles of modern technology, I was able to follow some of what he said from afar. I want to assure him that the Government warmly welcome the programme for peace and reconciliation in Northern Ireland and the border counties of Ireland. It is a tangible contribution to the peace process, and the right hon. Gentleman might like to know that all expenditure incurred under that programme will be subject to the same standards of accountability and the need to secure value for money as apply generally to public expenditure in the United Kingdom. I hope that that will be helpful to the right hon. Gentleman.

To return to the House of Commons part of my speech, looking back on the speech that I made on this occasion a year ago, I noticed some reasonably optimistically worded paragraphs in which I hoped—and I was proved right—that the hon. Member for Dewsbury would be similarly supportive. I had an optimistically worded passage about my hopes that we would find an agreed way forward on changes along the lines recommended by what has become known as Jopling.

The hon. Member for Dewsbury may see some irony in this, but against the background of our efforts at that time to suggest and subsequently to bring to the attention of our colleagues—that is perhaps the most tactful phrase that I can use—the desirability of 20-minute winding-up speeches in debates such as this, it is curious that we should find ourselves with more time than that on this occasion, for reasons that I do not wish to go into, but which we both understand.

Since that debate a year ago, we have not only achieved that agreement but conducted an experiment that I think is widely seen on both sides of the House as having been a very considerable success. It has brought about a reduction of the House's average sitting hours of something like an hour a day. It has made sittings beyond 11 pm a rarity and sittings beyond midnight a wholly exceptional event. Combined with longer notice of business, earlier notification of recesses and the introduction of non-sitting Fridays, it has genuinely helped hon. Members to plan in a more sensible way for their constituency and family commitments.

The arrangements for Wednesday mornings have increased the time and opportunities available for Back Benchers to raise subjects of their choice. The Government have been able to get their necessary business through, but without the Opposition feeling that they have been deprived of the proper opportunity, which I, of course, respect, to probe, discuss and, where they wish, oppose.

I do not think that this has been remarked on before, but I asked for some checking to be done today. One result of the changes has been that we have just experienced the first Session for 35 years in which no guillotine motion has been moved, with the solitary exception, I should perhaps say—I do not know whether this will wipe the smile off the face of the hon. Member for Glasgow, Garscadden (Mr. Dewar), but it probably will not—of 1978–79, when the absence of guillotines was the result of the Government being guillotined and a general election taking place.

The changes that have enabled all that to happen have been turned into permanent changes in our Standing Orders, which should enable us, with what I hope will be continued good will in the usual channels—I was encouraged by what the hon. Member for Dewsbury said—to consolidate those sensible developments. Certainly that will be my aim. I take this opportunity to thank warmly the hon. Member for Dewsbury for her kind words about me. Whether they will still apply by the time I have got to the end of my speech I am less sure. Whether they would have been approved by the hon. Member for Thurrock (Mr. Mackinlay) I rather doubt, because last week at business questions he effectively suggested that I should resign for being too reasonable.

Meanwhile, other gains have been made by procedural changes. The introduction of new arrangements both here and in another place have markedly increased our ability to deal with non-controversial Bills arising from Law Commission reports, with the twin advantages of improving the statute book and reducing the frustration of the Law Commission at seeing so much of its excellent work apparently disappear into limbo. In the past two Sessions, 13 Law Commission reports have been implemented, which is a substantial increase on earlier periods. I should make it clear, as does the Gracious Speech, that my noble Friend the Lord Chancellor will bring forward further such measures in the Session now getting under way.

Another significant improvement is the changes brought forward by my right hon. Friend the President of the Board of Trade, then the Secretary of State for Scotland, which have enhanced the role of the Scottish Grand Committee. In the past year, the Committee has met in Glasgow and Aberdeen as well as in Edinburgh and Westminster. There have been extra sessions of Scottish questions in the Committee, as well as statements by Ministers and debates initiated both by Government and by the various Opposition parties. As the House knows, the Government are considering how those new procedures can be developed further, and my right hon. Friend the Secretary of State for Scotland will be making an announcement in due course.

Then, too, and certainly no less important, there is the matter to which my hon. Friend the Member for Hendon, South (Mr. Marshall) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred. I refer to the changes that the House agreed just before the end of the previous Session, following the work of the Nolan report and the Select Committee on Standards in Public Life. Although inevitably obscured, perhaps rather unfortunately, by the controversy on one point, people are less well aware than those of us who were concerned with the work of that Committee would like them to be of the fact that it was largely on the basis of consensus, in an all-party Committee, and with the support of large and sometimes overwhelming majorities in the House, that we put in place the most significant strengthening of our rules in many decades.

I hope that I make the following claim rightly on behalf of the House as a whole. In short, over the past year, the House has done a great deal to adapt to new needs, new circumstances, new conditions and new moods, showing exactly the strength that has made it probably the most enduring institution of its kind in the world. Although I note, as I have had to note on one or two radio programmes, the pressure for faster or more radical change, I believe that the evolutionary development of this place is a fundamental part of its strength and the reason why it has lasted so well and so long.

Mr. Benn

In the light of the experience of the Privileges Committee, to which the Leader of the House refers, has he given any further thought to the advantages to Parliament's reputation of such Committees being open so that the debates can be heard, a point that I made a year ago and for which I paid a heavy price? I believe that the time has come when the openness of such Select Committees should be seriously considered.

Mr. Newton

Obviously enough, I and, no doubt, many others have given further thought to that point. I draw a distinction between the question whether evidence should be taken in public under certain circumstances and the question whether deliberation should take place in public. I think that, far from being enhanced, the role of the Committees would be destroyed were meetings to be wholly held in public.

Certainly the hon. Member for Dewsbury will agree that we teased out, eventually successfully, the vast majority of the subject matter, such as the appointment of the parliamentary commissioner, the code, the new Select Committee on Standards and Privileges, the ban on advocacy and a whole range of what was agreed by the House a fortnight ago. Had we sought to achieve that unanimity on the basis of having everything openly reported and available—every exchange and every modification—it would not have worked. We would have ended up with a totally different and far less satisfactory way in which to proceed.

I make this point even without being able to prove it by revealing the proceedings beyond what I have said just now. Anybody who had been able to listen to the exchanges, assuming that they could have been entirely confidential and that the presence of a listener would not have inhibited them, which of course it would have done, would have thought that it was an example of all the parties in Parliament at their best, working in the interests of Parliament as a whole. The results demonstrate that.

Mr. Tony Marlow (Northampton, North)

My right hon. Friend talks about unanimity in the Committee. Sometimes when that happens, the House should be put on its guard. In the event, we had a three-hour debate and most of the people who spoke in that debate were either members of the Committee or related to the subject. Back Benchers or others who might have had a different point of view had no time to bring their points of view forward. When next a Select Committee has debates and produces recommendations, will my right hon. Friend give the House an undertaking that there will be proper time for people who have not been members of that Committee to put their points of view in a debate?

Mr. Newton

I always give consideration to such representations. I do not think that I can make an advance commitment without knowing what my hon. Friend might be talking about. Is he, for example, talking about a report that might come from the new Select Committee on Standards and Privileges? I assure him that I shall bear in mind what he has said, because I know that he reflects the views of other hon. Members as well.

I now touch on one other point which is more clearly for the Government as such, but which is very much directed towards improving the working of Parliament in relation to legislation. I know that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is interested in this point. I refer to the publication of Bills in draft so that those who may be affected by them have a good opportunity to comment not only on the policy, but on the detail and practical effect of proposed legislation. That proved helpful in the Session before last, in the case, albeit a rather special one, of the Sunday Trading Bill, and with the Environment Agency provisions of the Environment Act 1995. In the previous Session—the hon. Member for Dewsbury kindly referred to this—we published draft Bills on the reserve forces, on defamation and on arbitration, all of which we hope to bring before the House this Session.

More recently we published drafts of the Hong Kong (Overseas Public Servants) Bill and the Chemical Weapons Bill, which the House will consider tomorrow. Inevitably, it will not be possible for every Bill to be published in draft, but I have no doubt that, where timing and other considerations make it practicable and appropriate, that practice can greatly contribute to the quality of the legislation that the House passes.

As the Government said in the second competitiveness White Paper, which has been waved about in a different context several times today: Publication of draft Bills, in advance of introduction in Parliament, allows consultation to take place on clarity of structure and presentation, and on drafting detail, as well as on policy. The White Paper made it clear that we hope to move further in that direction and to increase the number of Bills published in draft in advance. I can tell the House, and I think that it has not been said before, that, in the current Session, and in the spirit of the White Paper, we intend to publish draft Bills on adoption, building societies and merchant shipping.

Mr. Peter Shore (Bethnal Green and Stepney)

The right hon. Gentleman has made a strong case for publishing draft Bills, to enable people to consider them and to contribute before they become final. Given the obvious controversy surrounding the Asylum and Immigration Bill, does he not think that it would be a suitable candidate for publishing in draft before the final Bill is presented?

Mr. Newton

Perhaps rather delphically, I used a phrase about "where timing and other considerations make it practicable and appropriate". The figures that my right hon. and learned Friend the Home Secretary gave in his statement the other day, and no doubt used in his speech on Monday, make it clear that the rapid and almost dramatic escalation in the problem suggests that it is one that must be tackled more urgently than would be allowed for by the suggestion made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore).

Sir David Mitchell (North-West Hampshire)

Does my right hon. Friend see scope for applying the principle to Euro-regulations and directives?

Mr. Newton

As for legislation initiated in Europe, that question would not fall to me as Leader of the House in this Parliament. I have been concerned notably with social security legislation, and moves have already been made to publish secondary legislation in draft, for example, for consultation with the Social Security Advisory Committee. Where practicable, and where it would genuinely help to improve the legislative process, I would like consideration to be given to such publication in draft, in appropriate cases.

Dame Elaine Kellett-Bowman

Does my right hon. Friend agree that it is one thing to refer Law Commission reports to a Special Standing Committee, as he mentioned earlier, but quite another to do as the hon. Member for Dewsbury (Mrs. Taylor) said, and refer such a controversial Bill as the Asylum and Immigration Bill to such a Committee?

Mr. Newton

The hon. Member for Dewsbury referred to that suggestion, which has been the subject of much argument in the House in the past few days and correspondence between my right hon. Friend the Prime Minister and the Leader of the Opposition. I basically agree with my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), but I do not want to add to the argument tonight, despite the blandishments of the hon. Member for Dewsbury.

The hon. Member for Dewsbury unhelpfully anticipated another point that I wanted to raise, which takes me back to the spirit of Jopling—in this case, the earlier notification of recess dates. The House may like to know that, subject to the progress of business, the House will rise at the conclusion of business on Wednesday 20 December until Tuesday 9 January. At Easter, again subject to the progress of business, the House will rise at the conclusion of business on Wednesday 3 April until Tuesday 16 April. That of course means that the recess this year will cover the week after Easter rather than the week before, as it did last Session. I hope that that is helpful to the House and that I may claim my brownie points. However, whatever else is obvious today, it is obvious that there is a good deal of debate to come on many issues before we get as far as the Christmas recess, let alone Easter, and it is to some of those arguments that I shall now refer.

I start by referring to the speech of the hon. Member for Dunfermline, East (Mr. Brown)—or rather, the annual re-run of the same speech, to which I always listen with interest, if only in hope, which has so far always proved vain, of hearing something new. That familiar but not especially friendly speech has two characteristics. First, it relentlessly runs the country down and ignores every achievement. The second characteristic is that, having said that everything is wrong, the hon. Gentleman says nothing whatever about what he would do about it. In both respects, he played true to form today.

We heard much about unemployment, which we all want to reduce and which we have reduced by 700, 000, but not a word about the extent to which the country has effectively the best record in Europe in reducing unemployment and in putting the biggest proportion of its population into work.

We heard many references to people who are less well-off and vulnerable, but not a word about the tens of thousands of people being helped by disability living allowance, introduced by the present Government, the more than £1 billion extra in real terms put into helping low-income families since 1988 and another £1 billion put into helping the less well-off pensioners.

We heard much about the need for investment—which the Chancellor countered with some striking figures showing how much better our record was than many others—but not a word about the country's record in attracting inward investment, obtaining one third of all investment into the European Union from outside, which embraced 41 per cent. of that from Japan, 43 per cent. of that from the United States and 50 per cent. of that from Korea.

To cap it all, we heard—from a Labour Front-Bench spokesman—about the lurch to the right. The most that can be said about that is that at least it is something of which Labour Front-Bench Members have some first-hand experience—but for how long? I do not know, because we can see the faces on the Labour Benches below the Gangway when hon. Members speak from the Labour Front Bench. We can also see the faces on the Labour Back Benches when hon. Members speak from the Labour Front Bench.

I make no apology for repeating what my right hon. and learned Friend the Chancellor of the Exchequer said this afternoon, when he quoted the striking words of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott): Gordon can say anything he likes if he thinks it is going to win the Election. But ordinary Labour party supporters in this country, particularly the poor and the unemployed when Labour is in power will be looking for other priorities from tax cuts. [Interruption.] What, "Hear, hear" from below the Gangway? Does the hon. Member for Worsley (Mr. Lewis) want to intervene?

Mr. Terry Lewis (Worsley)

indicated dissent.

Mr. Newton

That is only because the hon. Gentleman does not want to confirm what I am saying.

On the Opposition Benches, there is not a lurch to the left but a leap to the left, and an awful lot of people are left behind.

After his litany of gloom, what did we get from the hon. Member for Dunfermline, East? Frankly, we got even less than usual. However, the hon. Member for Dewsbury said that he was being asked for all the answers. I should not mind if we received any answers, let alone all of them.

In his speech last week, the Leader of the Opposition started off by describing the Queen's Speech, on which we are now debating the humble Address, as irrelevant to the needs of Britain and a pathetic mouse. Three paragraphs further on, he had—as the hon. Member for Dewsbury has tonight—expressed support for about half the programme or had said that he thought that Labour had thought of it. He continued to wriggle, to try to dissociate himself from his hon. Friends' opposition to the asylum Bill. It came down to the fact that he did not like the speech because it enhanced opportunity, choice and standards in education.

The Queen's Speech is not an irrelevant mouse; it is a vigorous programme in the interests of our country. I invite the House to support it tonight.

Question put, That the amendment be made:—

The House divided: Ayes 271, Noes 298.

Division No. 2]	[10.00 pm
AYES
Abbott, Ms Diane	Chidgey, David
Adams, Mrs Irene	Chisholm, Malcolm
Ainger, Nick	Church, Judith
Ainsworth, Robert (Cov'try NE)	Clapham, Michael
Allen, Graham	Clark, Dr David (South Shields)
Alton, David	Clarke, Eric (Midlothian)
Anderson, Donald (Swansea E)	Clarke, Tom (Monklands W)
Anderson, Ms Janet (Ros'dale)	Clelland, David
Armstrong, Hilary	Clwyd, Mrs Ann
Ashdown, Rt Hon Paddy	Cohen, Harry
Ashton, Joe	Connarty, Michael
Austin-Walker, John	Cook, Robin (Livingston)
Barnes, Harry	Corbett, Robin
Barron, Kevin	Corbyn, Jeremy
Battle, John	Corston, Jean
Bayley, Hugh	Cousins, Jim
Beckett, Rt Hon Margaret	Cummings, John
Beith, Rt Hon A J	Cunningham, Jim (Covy SE)
Bell, Stuart	Cunningham, Rt Hon Dr John
Benn, Rt Hon Tony	Cunningham, Roseanna
Bennett, Andrew F	Dalyell, Tam
Benton, Joe	Darling, Alistair
Bermingham, Gerald	Davies, Bryan (Oldham C'tral)
Berry, Roger	Davies, Chris (L'Boro & S'worth)
Betts, Clive	Davies, Rt Hon Denzil (Llanelli)
Blunkett, David	Davies, Ron (Caerphilly)
Boateng, Paul	Davis, Terry (B'ham, H'dge H'l)
Bradley, Keith	Denham, John
Bray, Dr Jeremy	Dewar, Donald
Brown, Gordon (Dunfermline E)	Dixon, Don
Brown, N (N'c'tle upon Tyne E)	Dobson, Frank
Bruce, Malcolm (Gordon)	Donohoe, Brian H
Burden, Richard	Dowd, Jim
Byers, Stephen	Dunwoody, Mrs Gwyneth
Caborn, Richard	Eagle, Ms Angela
Callaghan, Jim	Eastham, Ken
Campbell, Mrs Anne (C'bridge)	Etherington, Bill
Campbell, Menzies (Fife NE)	Evans, John (St Helens N)
Campbell, Ronnie (Blyth V)	Ewing, Mrs Margaret
Campbell-Savours, D N	Fatchett, Derek
Canavan, Dennis	Field, Frank (Birkenhead)
Cann, Jamie	Fisher, Mark
Candle, Alexander (Montgomery)	Flynn, Paul

Foster, Rt Hon Derek	McCrea, The Reverend William
Foster, Don (Bath)	Macdonald, Calum
Foulkes, George	McFall, John
Fyfe, Maria	McKelvey, William
Galbraith, Sam	Mackinlay, Andrew
Galloway, George	McLeish, Henry
Gapes, Mike	McMaster, Gordon
Garrett, John	McNamara, Kevin
Gerrard, Neil	MacShane, Denis
Gilbert, Rt Hon Dr John	Madden, Max
Godman, Dr Norman A	Maddock, Diana
Godsiff, Roger	Mahon, Alice
Golding, Mrs Llin	Mandelson, Peter
Gordon, Mildred	Marek, Dr John
Graham, Thomas	Marshall, Jim (Leicester, S)
Grant, Bernie. (Tottenham)	Martin, Michael J (Springburn)
Griffiths, Nigel (Edinburgh S)	Martlew, Eric
Griffiths, Win (Bridgend)	Maxton, John
Grocott, Bruce	Meacher, Michael
Gunnell, John	Meal, Alan
Hain, Peter	Miche, Alun
Hall, Mike	Michie, Bill (Sheffield Heeley)
Hanson, David	Michie, Mrs Ray (Argyll & Bute)
Hardy, Peter	Milburn, Alan
Harman, Ms Harriet	Miller, Andrew
Harvey, Nick	Morgan, Rhodri
Hattersley, Rt Hon Roy	Morgan, Elliot
Henderson, Doug	Morris, Rt Hon Alfred (Wy'nshawe)
Heppell, John	Morris, Estelle (B'ham Yardley)
Hill, Keith (Streatham)	Morris, Rt Hon John (Aberavon)
Hinchliffe, David	Mowlam, Marjorie
Hoey, Kate	Mudie, George
Hogg, Norman (Cumbernauld)	Mullin, Chris
Hood, Jimmy	Murphy, Paul
Hoon, Geoffrey	O'Brien, Mike (N W'kshire)
Howarth, Alan (Strat'rd-on-A)	O'Brien, William (Normanton)
Howarth, George (Knowsley North)	O'Hara, Edward
Howells, Dr Kim (Pontypridd)	Olner, Bill
Hoyle, Doug	O'Neill, Martin
Hughes, Kevin (Doncaster N)	Orme, RT Hon Stanley
Hughes, Robert (Aberdeen N)	Parry, Robert
Hughes, Roy (Newport E)	Perarson, Ian
Hughes, Simon (Southwark)	Pendry, Tom
Hutton, John	Pickthall, Colin
Illsley, Eric	Pike, peter L
Ingram, Adam	Pope, Greg
Jackson, Glenda (H'stead)	Powell, Ray (Ogmore)
Jackson, Helen (Shef'ld, H)	Prentice, Bridget (Lew'm E)
Jamieson, David	Prentice, Gordon (Pendle)
Janner, Greville	Prescott, Rt Hon John
Johnston, Sir Russell	Primarolo, Dawn
Jones, Barry (Alyn and D'side)	Purchase, ken
Jones, Ieuan Wyn (Ynys MÔn)	Quin, Ms Joyce
Jones, Jon Owen (Cardiff C)	Radice, Giles
Jones, Lynne (B'ham S O)	Rendall, Stuart
Jones, Martyn (Clwyd, SW)	Reynsford, Nick
Jones, Nigel (Cheltenham)	Reid, Dr John
Jowell, Tessa	Rendel, David
Kaufman, Rt Hon Gerald	Robertson, George (Hamilton)
Keen, Alan	Robinson, Geoffrey (Co'try NW)
Kennedy, Charles (Ross, C&S)	Roche, Mrs Barbara
Kennedy, Jane (L'pool Br'dg'n)	Rogers, Allan
Khabra, Piara S	Rooker, Jeff
Kilfoyle, Peter	Rooney, Terry
Kirkwood, Archy	Ross, Ernie (Dundee W)
Lestor, Joan (Eccles)	Rowlands, Ted
Lewis, Terry	Ruddock, Alex
Liddell, Mrs Helen	Salmond, Alex
Livingstone, Ken	Sedgemore, Brian
Lloyd, Tony (Stretford)	Sheerman, Barry
Llwyd, Elfyn	Sheldon, Rt Hon Robert
Loyden, Eddie	Shore, Rt Hon Peter
Lynne, Ms Liz	Short, Clare
McAllion, John	Simpson, Alan
McCartney, Ian	Skinner, Dennis
McCartney, Robert	Smith, Chris (Isl'ton S & F'sbury)

Smith, Llew (Blaenau Gwent)	Walker, Rt Hon Sir Harold
Spearing, Nigel	Walley, Joan
Spellar, John	Wardell, Gareth (Gower)
Squire, Rachel (Dunfermline W)	Wareing, Robert N
Steinberg, Gerry	Welsh, Andrew
Stevenson, George	Wicks, Malcolm
Stott, Roger	Williams, Rt Hon Alan (Sw'n W)
Strang, Dr. Gavin	Williams, Alan W (Carmarthen)
Straw, Jack	Wilson, Brian
Sutcliffe, Gerry	Winnick, David
	Wise, Audrey
Taylor, Mrs Ann (Dewsbury)	Worthington, Tony
Taylor, Matthew (Truro)	Wray, Jimmy
Thompson, Jack (Wansbeck)	Wright, Dr Tony
Timms, Stephen	Young, David (Bolton SE)
Tipping, Paddy
Touhig, Don	Tellers for the Ayes:
Tyler, Paul	Ms Ann Coffey and
Vaz, Keith	Mr. Dennis Turner.

NOES
Ainsworth, Peter (East Surrey)	Congdon, David
Aitken, Rt Hon Jonathan	Coombs, Anthony (Wyre For'st)
Alexander, Richard	Coombs, Simon (Swindon)
Alison, Rt Hon Michael (Selby)	Cope, Rt Hon Sir John
Allason, Rupert (Torbay)	Cormack, Sir Patrick
Amess, David	Couchman, James
Arbuthnot, James	Cran, James
Arnold, Jacques (Gravesham)	Currie, Mrs Edwina (S D'by'ire)
Arnold, Sir Thomas (Hazel Grv)	Curry, David (Skipton & Ripon)
Ashby, David	Davies, Quentin (Stamford)
Atkins, Rt Hon Robert	Davis, David (Boothferry)
Atkinson, David (Bour'mouth E)	Day, Stephen
Atkinson, Peter (Hexham)	Deva, Nirj Joseph
Baker, Rt Hon Kenneth (Mole V)	Devlin, Tim
Baker, Nicholas (North Dorset)	Dorrell, Rt Hon Stephen
Baldry, Tony	Douglas-Hamilton, Lord James
Banks, Matthew (Southport)	Dover, Den
Banks, Robert (Harrogate)	Duncan, Alan
Batiste, Spencer	Duncan-Smith, Iain
Bellingham, Henry	Dunn, Bob
Bendall, Vivian	Durant, Sir Anthony
Beresford, Sir Paul	Dykes, Hugh
Biffen, Rt Hon John	Eggar, Rt Hon Tim
Bonsor, Sir Nicholas	Elletson, Harold
Booth, Hartley	Emery, Rt Hon Sir Peter
Boswell, Tim	Evans, David (Welwyn Hatfield)
Bottomley, Peter (Eltham)	Evans, Jonathan (Brecon)
Bottomley, Rt Hon Virginia	Evans, Nigel (Ribble Valley)
Bowis, John	Evans, Roger (Monmouth)
Boyson, Rt Hon Sir Rhodes	Evennett, David
Brandreth, Gyles	Faber, David
Brazier, Julian	Fabricant, Michael
Bright, Sir Graham	Fenner, Dame Peggy
Brooke, Rt Hon Peter	Field, Barry (Isle of Wight)
Brown, M (Brigg & Cl'thorpes)	Fishburn, Dudley
Browning, Mrs Angela	Forman, Nigel
Bruce, Ian (Dorset)	Forsyth, Rt Hon Michael (Stirling)
Budgen, Nicholas	Forth, Eric
Burns, Simon	Fowler, Rt Hon Sir Norman
Burt, Alistair	Fox, Dr Liam (Woodspring)
Butcher, John	Fox, Sir Marcus (Shipley)
Butler, Peter	Freeman, Rt Hon Roger
Butterfill, John	French, Douglas
Carlisle, John (Luton North)	Fry, Sir Peter
Carlisle, Sir Kenneth (Lincoln)	Gale, Roger
Carrington, Matthew	Gallie, Phil
Carttiss, Michael	Garel-Jones, Rt Hon Tristan
Cash, William	Garnier, Edward
Channon, Rt Hon Paul	Gill, Christopher
Chapman, Sir Sydney	Gillan, Cheryl
Churchill, Mr	Goodlad, Rt Hon Alastair
Clark, Dr Michael (Rochford)	Goodson-Wickes, Dr Charles
Clarke, Rt Hon Kenneth (Ru'clif)	Gorman, Mrs Teresa
Clifton-Brown, Geoffrey	Gorst, Sir John
Coe, Sebastian	Grant, Sir A (SW Cambs)

Greenway, Harry (Ealing N)	Mawhinney, Rt Hon Dr Brian
Greenway, John (Ryedale)	Mellor, Rt Hon David
Griffiths, Peter (Portsmouth, N)	Merchant, Piers
Grylls, Sir Michael	Mills, Iain
Gummer, Rt Hon John Selwyn	Mitchell, Andrew (Gedling)
Hague, Rt Hon William	Mitchell, Sir David (NW Hants)
Hamilton, Sir Archibald	Moate, Sir Roger
Hamilton, Neil (Tatton)	Molyneaux, Rt Hon James
Hampson, Dr Keith	Monro, Rt Hon Sir Hector
Hanley, Rt Hon Jeremy	Montgomery, Sir Fergus
Hannam, Sir John	Needham, Rt Hon Richard
Hargreaves, Andrew	Neubert, Sir Michael
Harris, David	Newton, Rt Hon Tony
Haselhurst, Sir Alan	Nicholls, Patrick
Hawkins, Nick	Nicholson, David (Taunton)
Hawksley, Warren	Nicholson, Emma (Devon West)
Hayes, Jerry	Norris, Steve
Heald, Oliver	Onslow, Rt Hon Sir Cranley
Heath, Rt Hon Sir Edward	Oppenheim, Phillip
Heathcoat-Amory, David	Ottaway, Richard
Hendry, Charles	Page, Richard
Hicks, Robert	Paice, James
Higgins, Rt Hon Sir Terence	Patnick, Sir Irvine
Hill, James (Southampton Test)	Patten, Rt Hon John
Hogg, Rt Hon Douglas (G'tham)	Pattie, Rt Hon Sir Geoffrey
Horam, John	Pawsey, James
Hordern, Rt Hon Sir Peter	Peacock, Mrs Elizabeth
Howell, Rt Hon David (G'dford)	Pickles, Eric
Howell, Sir Ralph (N Norfolk)	Porter, Barry (Wirral S)
Hughes, Robert G (Harrow W)	Porter, David (Waveney)
Hunt, Rt Hon David (Wirral W)	Portillo, Rt Hon Michael
Hunt, Sir John (Ravensbourne)	Powell, William (Corby)
Hunter, Andrew	Rathbone, Tim
Hurd, Rt Hon Douglas	Redwood, Rt Hon John
Jack, Michael	Renton, Rt Hon Tim
Jackson, Robert (Wantage)	Riddick, Graham
Jenkin, Bernard	Robathan, Andrew
Jessel, Toby	Roberts, Rt Hon Sir Wyn
Johnson Smith, Sir Geoffrey	Robertson, Raymond (Ab'd'n S)
Jones, Gwilym (Cardiff N)	Robinson, Mark (Somerton)
Jones, Robert B (W Hertfdshr)	Roe, Mrs Marion (Broxbourne)
Jopling, Rt Hon Michael	Rowe, Andrew (Mid Kent)
Kellett-Bowman, Dame Elaine	Rumbold, Rt Hon Dame Angela
King, Rt Hon Tom	Sackville, Tom
Kirkhope, Timothy	Sainsbury, Rt Hon Sir Timothy
Knapman, Roger	Scott, Rt Hon Sir Nicholas
Knight, Mrs Angela (Erewash)	Shaw, Sir Giles (Pudsey)
Knight, Rt Hon Greg (Derby N)	Shephard, Rt Hon Gillian
Knight, Dame Jill (Bir'm E'st'n)	Shepherd, Colin (Hereford)
Knox, Sir David	Shepherd, Richard (Aldridge)
Kynoch, George (Kincardine)	Shersby, Sir Michael
Lait, Mrs Jacqui	Sims, Roger
Lang, Rt Hon Ian	Skeet, Sir Trevor
Lawrence, Sir Ivan	Smith, Sir Dudley (Warwick)
Legg, Barry	Smith, Tim (Beaconsfield)
Lennox-Boyd, Sir Mark	Smyth, The Reverend Martin
Lester, Jim (Broxtowe)	Soames, Nicholas
Lidington, David	Speed, Sir Keith
Lightbown, Sir David	Spencer, Sir Derek
Lloyd, Rt Hon Sir Peter (Fareham)	Spicer, Sir James (W Dorset)
Lord, Michael	Spicer, Michael (S Worcs)
Luff, Peter	Spink, Dr Robert
MacKay, Andrew	Spring, Richard
Maclean, Rt Hon David	Sproat, Iain
McLoughlin, Patrick	Squire, Robin (Hornchurch)
McNair-Wilson, Sir Patrick	Stanley, Rt Hon Sir John
Madel, Sir David	Steen, Anthony
Maitland, Lady Olga	Stephen, Michael
Malone, Gerald	Stem, Michael
Mans, Keith	Stewart, Allan
Marland, Paul	Streeter, Gary
Marlow, Tony	Sumberg, David
Marshall, John (Hendon S)	Sweeney, Walter
Marshall, Sir Michael (Arundel)	Sykes, John
Martin, David (Portsmouth S)	Tapsell, Sir Peter
Mates, Michael	Taylor, Ian (Esher)

Taylor, John M (Solihull)	Waterson, Nigel
Temple-Morris, Peter	Watts, John
Thomason, Roy	Wells, Bowen
Thompson, Patrick (Norwich N)	Wheeler, Rt Hon Sir John
Thornton, Sir Malcolm	Whitney, Ray
Thurnham, Peter	Whittingdale, John
Townend, John (Bridlington)	Widdecombe, Ann
Townsend, Cyril D (Bexl'yh'th)	Wiggin, Sir Jerry
Tracey, Richard	Wilkinson, John
Tredinnick, David	Willetts, David
Trend, Michael	Wilshire, David
Twinn, Dr Ian	Winterton, Mrs Ann (Congleton)
Vaughan, Sir Gerard	Winterton, Nicholas (Macc'f'ld)
Viggers, Peter	Wolfson, Mark
Waldegrave, Rt Hon William	Wood, Timothy
Walden, George	Yeo, Tim
Walker, Bill (N Tayside)
Waller, Gary	Tellers for the Noes:
Ward, John	Mr. Derek Conway and
Wardle, Charles (Bexhill)	Mr. Michael Bates.

Question accordingly negatived.

Amendment proposed, at the end of the Question, to add,

But humbly regret that the Gracious Speech fails to set out adequate proposals to secure investment in people through education, to reform Britain's discredited system of government or to build for the country's long-term future through investment in housing and transport; and further regret that measures outlined in the Gracious Speech on housing and immigration risk adding to the divisions in society.—[Mr. Ashdown.]

Question put forthwith, pursuant to Standing Order No. 32 (Calling of amendments at end of debate), That the amendment be made:—

The House divided: Ayes 32, Noes 297.

Division No. 3]	[10.16 pm
AYES
Alton, David	Maddock, Diana
Ashdown, Rt Hon Paddy	Mahon, Alice
Barnes, Harry	Marek, Dr John
Beith, Rt Hon A J	Michie, Bill (Sheffield Heeley)
Bruce, Malcolm (Gordon)	Michie, Mrs Ray (Argyll & Bute)
Campbell, Menzies (Fife NE)	Rendel, David
Carlile, Alexander (Montgomery)	Salmond, Alex
Chidgey, David	Skinner, Dennis
Corbyn, Jeremy	Steel, Rt Hon Sir David
Cunningham, Roseanna	Taylor, Matthew (Truro)
Davies, Chris (L'Boro & S'worth)	Tyler, Paul
Ewing, Mrs Margaret	Wallace, James
Foster, Don (Bath)	Welsh, Andrew
Harvey, Nick	Wise, Audrey
Johnston, Sir Russell
Jones, Nigel (Cheltenham)	Tellers for the Ayes:
Kennedy, Charles (Ross,C&S)	Mr. Archy Kirkwood and
Lynne, Ms Liz	Mr. Simon Hughes.

NOES
Ainsworth, Peter (East Surrey)	Baldry, Tony
Aitken, Rt Hon Jonathan	Banks, Matthew (Southport)
Alexander, Richard	Banks, Robert (Harrogate)
Alison, Rt Hon Michael (Selby)	Batiste, Spencer
Amess, David	Bellingham, Henry
Arbuthnot, James	Bendall, Vivian
Arnold, Jacques (Gravesham)	Beresford, Sir Paul
Arnold, Sir Thomas (Hazel Grv)	Biffen, Rt Hon John
Ashby, David	Bonsor, Sir Nicholas
Atkins, Rt Hon Robert	Booth, Hartley
Atkinson, David (Bour'mouth E)	Boswell, Tim
Atkinson, Peter (Hexham)	Bottomley, Peter (Eltham)
Baker, Rt Hon Kenneth (Mole V)	Bottomley, Rt Hon Virginia
Baker, Nicholas (North Dorset)	Bowis, John

Boyson, Rt Hon Sir Rhodes	Gorst Sir John
Brandreth, Gyles	Grant, Sir A (SW Cambs)
Brazier, Julian	Greenway, Harry (Ealing N)
Bright, Sir Graham	Greenway, John (Ryedale)
Brooke, Rt Hon Peter	Griffiths, Peter (Portsmouth, N)
Brown, M (Brigg & Cl'thorpes)	Grylls, Sir Michael
Browning, Mrs Angela	Gummer, Rt Hon John Selwyn
Bruce, Ian (Dorset)	Hague, Rt Hon William
Budgen, Nicholas	Hamilton, Sir Archibald
Burns, Simon	Hamilton, Neil (Tatton)
Burt, Alistair	Hampson, Dr Keith
Butcher, John	Hanley, Rt Hon Jeremy
Butler, Peter	Hannam, Sir John
Butterfill, John	Hargreaves, Andrew
Carlisle, John (Luton North)	Harris, David
Carlisle, Sir Kenneth (Lincoln)	Haselhurst, Sir Alan
Carrington, Matthew	Hawkins, Nick
Carttiss, Michael	Hawksley, Warren
Cash, William	Hayes, Jerry
Channon, Rt Hon Paul	Heald, Oliver
Chapman, Sir Sydney	Heath, Rt Hon Sir Edward
Churchill, Mr	Heathcoat-Amory, David
Clark, Dr Michael (Rochford)	Hendry, Charles
Clarke, Rt Hon Kenneth (Ru'clif)	Hicks, Robert
Clifton-Brown, Geoffrey	Higgins, Rt Hon Sir Terence
Coe, Sebastian	Hill, James (Southampton Test)
Congdon, David	Hogg, Rt Hon Douglas (G'tham)
Coombs, Anthony (Wyre For'st)	Horam, John
Coombs, Simon (Swindon)	Hordern, Rt Hon Sir Peter
Cope, Rt Hon Sir John	Howell, Rt Hon David (G'dford)
Cormack, Sir Patrick	Howell, Sir Ralph (N Norfolk)
Couchman, James	Hughes, Robert G (Harrow W)
Cran, James	Hunt, Rt Hon David (Wirral W)
Currie, Mrs Edwina (S D'by'ire)	Hunt, Sir John (Ravensbourne)
Curry, David (Skipton & Ripon)	Hunter, Andrew
Davies, Quentin (Stamford)	Hurd, Rt Hon Douglas
Day, Stephen	Jack, Michael
Deva, Nirj Joseph	Jackson, Robert (Wantage)
Devlin, Tim	Jenkin, Bernard
Dorrell, Rt Hon Stephen	Jessel, Toby
Douglas-Hamilton, Lord James	Johnson Smith, Sir Geoffrey
Dover, Den	Jones, Gwilym (Cardiff N)
Duncan-Smith, Iain	Jones, Robert B (W Hertfdshr)
Dunn, Bob	Jopling, Rt Hon Michael
Durant, Sir Anthony	Kellett-Bowman, Dame Elaine
Eggar, Rt Hon Tim	King, Rt Hon Tom
Elletson, Harold	Kirkhope, Timothy
Emery, Rt Hon Sir Peter	Knapman, Roger
Evans, David (Welwyn Hatfield)	Knight, Mrs Angela (Erewash)
Evans, Jonathan (Brecon)	Knight, Rt Hon Greg (Derby N)
Evans, Nigel (Ribble Valley)	Knight, Dame Jill (Bir'm E'st'n)
Evans, Roger (Monmouth)	Knox, Sir David
Evennett, David	Kynoch, George (Kincardine)
Faber, David	Lait, Mrs Jacqui
Fabricant, Michael	Lang, Rt Hon Ian
Fenner, Dame Peggy	Lawrence, Sir Ivan
Field, Barry (Isle of Wight)	Legg, Barry
Fishburn, Dudley	Leigh, Edward
Forman, Nigel	Lennox-Boyd, Sir Mark
Forsyth, Rt Hon Michael (Stirling)	Lester, Jim (Broxtowe)
Forth, Eric	Lidington, David
Fowler, Rt Hon Sir Norman	Lightbown, Sir David
Fox, Dr Liam (Woodspring)	Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Sir Marcus (Shipley)	Lord, Michael
Freeman, Rt Hon Roger	Luff, Peter
French, Douglas	McCrea, The Reverend William
Fry, Sir Peter	MacKay, Andrew
Gale, Roger	Maclean, Rt Hon David
Gallie, Phil	McLoughlin, Patrick
Garel-Jones, Rt Hon Tristan	McNair-Wilson, Sir Patrick
Garnier, Edward	Madel, Sir David
Gill, Christopher	Maitland, Lady Olga
Gillan, Cheryl	Malone, Gerald
Goodlad, Rt Hon Alastair	Mans, Keith
Goodson-Wickes, Dr Charles	Marland, Paul
Gorman, Mrs Teresa	Marlow, Tony

Marshall, John (Hendon S)	Smyth, The Reverend Martin
Marshall, Sir Michael (Arundel)	Soames, Nicholas
Martin, David (Portsmouth S)	Speed, Sir Keith
Mates, Michael	Spencer, Sir Derek
Mawhinney, Rt Hon Dr Brian	Spicer, Sir James (W Dorset)
Mellor, Rt Hon David	Spicer, Michael (S Worcs)
Merchant, Piers	Spink, Dr Robert
Mills, Iain	Spring, Richard
Mitchell, Andrew (Gedling)	Sproat, Iain
Mitchell, Sir David (NW Hants)	Squire, Robin (Hornchurch)
Moate, Sir Roger	Stanley, Rt Hon Sir John
Molyneaux, Rt Hon James	Steen, Anthony
Monro, Rt Hon Sir Hector	Stephen, Michael
Montgomery, Sir Fergus	Stern, Michael
Neednam, Rt Hon Richard	Stewart, Allan
Neubert, Sir Michael	Streeter, Gary
Newton, Rt Hon Tony	Sumberg, David
Nicholls, Patrick	Sweeney, Walter
Nicholson, David (Taunton)	Sykes, John
Nicholson, Emma (Devon West)	Tapsell, Sir Peter
Norris, Steve	Taylor, Ian (Esher)
Onslow, Rt Hon Sir Cranley	Taylor, John M (Solihull)
Oppenheim, Phillip	Temple-Morris, Peter
Ottaway, Richard	Thomason, Roy
Page, Richard	Thompson, Patrick (Norwich N)
Paice, James	Thornton, Sir Malcolm
Patrick, Sir Irvine	Thurnham, Peter
Patten, Rt Hon John	Townend, John (Bridlington)
Pattie, Rt Hon Sir Geoffrey	Townsend, Cyril D (Bexl'yh'th)
Pawsey, James	Tracey, Richard
Peacock, Mrs Elizabeth	Tredinnick, David
Pickles, Eric	Trend, Michael
Porter, Barry (Wirral S)	Twinn, Dr Ian
Porter, David (Waveney)	Vaughan, Sir Gerard
Portillo, Rt Hon Michael	Viggers, Peter
Powell, William (Corby)	Waldegrave, Rt Hon William
	Walden, George
Rathbone, Tim	Walker Bill (N Tayside)
Redwood, Rt Hon John	Waller, Gary
Renton, Rt Hon Tim	Ward, John
Richards, Rod	Wardle, Charles (Bexhill)
Riddick, Graham	Waterson, Nigel
Robathan, Andrew	Watts, John
Roberts, Rt Hon Sir Wyn	Wells, Bowen
Robertson, Raymond (Ab'd'n S)	Wheeler, Rt Hon Sir John
Robinson, Mark (Somerton)	Whitney, Ray
Roe, Mrs Marion (Broxbourne)	Whittingdale, John
Rowe, Andrew (Mid Kent)	Widdecombe, Ann
Rumbold, Rt Hon Dame Angela	Wiggin, Sir Jerry
Sackville, Tom	Wilkinson, John
Sainsbury, Rt Hon Sir Timothy	Willetts, David
Scott, Rt Hon Sir Nicholas	Wilshire, David
Shaw, Sir Giles (Pudsey)	Winterton, Mrs Ann (Congleton)
Shephard, Rt Hon Gillian	Winterton, Nicholas (Macc'fld)
Shepherd, Colin (Hereford)	Wolfson, Mark
Shepherd, Richard (Aldridge)	Wood, Timothy
Shersby, Sir Michael	Yeo, Tim
Sims, Roger
Skeet, Sir Trevor	Tellers for the Noes:
Smith, Sir Dudley (Warwick)	Mr. Derek Conway and
Smith, Tim (Beaconsfield)	Mr. Michael Bates.

Question accordingly negatived.

Main Question put and agreed to.

Resolved,

That an humble Address be presented to Her Majesty, as follows:—

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.