Sitting of 12 November 1985

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  NEW WRIT
  For Tyne Bridge, in the room of Harry Lowes Cowans, Esquire, deceased.—[Mr. Foster.]

  AUTUMN STATEMENT 1985
  Ordered,
  That a copy of the Chancellor of the Exchequer's Autumn Statement 1985 be laid before the House.—[The Chancellor of the Exchequer.]
  Mr. Speaker: I call the First Deputy Chairman of Ways and Means to move the eight motions in his name.

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  5

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  Date when Closure claimed, and by whom

  Question before House or Committee when claimed

  Whether in House or Committee

  Whether assent given to Motion or withheld by the Chair

  Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion

  Result of Motion and, if a Division, Numbers for and against

  and (2) in the Standing Committees under the following heads:—

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  Date when Closure claimed, and by whom

  Question before Committee when claimed

  Whether assent given to Motion or withheld by the Chair

  Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion

  Result of Motion and, if a Division, Numbers for and against

  DELEGATED LEGISLATION
  Return ordered,
  of the number of Instruments considered in Session 1984–85 by the Joint Committee and the Select Committee on Statutory Instruments respectively pursuant to their orders of reference, showing in each case the numbers of Instruments subject to the different forms of parliamentary procedure and of those within the Committees' orders of reference for which no parliamentary procedure is prescribed by statute, and the numbers drawn to the special attention of the House or of both Houses distinguishing the ground in the Committees' orders of reference upon which such attention was invited; and of the numbers of Instruments considered by a Standing Committee on Statutory Instruments, &c., and by the House respectively, in Session 1984–85, showing the number where the question on the proceedings relating thereto was put forthwith under Standing Order No. 79(5).—[The First Deputy Chairman of Ways and Means.]

  PRIVATE BILLS AND PRIVATE BUSINESS
  Return ordered,

  CLOSURE OF DEBATE UNDER STANDING ORDER No.31
  Return ordered,
  respecting applications of Standing Order No. 31 (Closure of debate) during Session 1984–85, (1) in the House and in Committee of the whole House, under the following heads:—
  —[The First Deputy Chairman of ways and Means.]
  of the number of Private Bills, Hybrid Bills and Bills for confirming Provisional Orders introduced into this House and brought from the House of Lords, and of Acts passed in Session 1984–85;
  Of all Private Bills, Hybrid Bills and Bills for confirming Provisional Orders which in Session 1984–85 were reported on by Committees on Opposed Bills or by Committees nominated partly by the House and partly by the Committee of Selection, together with the names of the selected Members who served on each Committee; the first and also the last day of the sitting of each Committee; the number of days on which each Committee sat; the number of days on which each selected Member served; the number of days occupied by each Bill in Committee; the Bills of which the Preambles were reported to have been proved; the Bills of which the Preambles were reported to have been not proved; and, in the case of Bills for confirming Provisional Orders, whether the Provisional Order ought or ought not to be confirmed;
  Of all Private Bills and Bills for confirming Provisional Orders which in Session 1984–85 were referred by the Committee of Selection to the Committee on Unopposed Bills, together with

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  the names of the Members who served on the Committee; the number of days on which the Committee sat; and the number of days on which each Member attended;
  And of the number of Private Bills, Hybrid Bills and Bills for confirming Provisional Orders withdrawn or not proceeded with by the parties, those Bills being specified which were referred to Committees and dropped during the sittings of the Committee.—[The First Deputy Chairman of Ways and Means.]

  PUBLIC BILLS
  Return ordered,
  of the number of Public Bills distinguishing Government from other Bills, introduced into this House, or brought from the House of Lords, during Session 1984–85 showing:

  (1) the number which received the Royal Assent, and

  (2) the number which did not receive the Royal Assent, indicating those which were introduced into but not passed by this House, those passed by this House but not by the House of Lords, those passed by the House of Lords but not by this House, those passed by both Houses but Amendments not agreed to; and distinguishing the stages at which such Bills were dropped, postponed or rejected in either House of Parliament, or the stages which such Bills had reached by the time of Prorogation.—[The First Deputy Chairman of Ways and Means.]

  SELECT COMMITTEES
  Return ordered,
  of Select Committees, except Business Committees, in Session 1984–85, with the Sub-Committees appointed by them; the number of the meetings of each and the number of meetings each Member attended; and the number of Members who served on Select Committees; together with the total cost (estimated where necessary) in respect of each Select Committee and Sub-Committee for the financial year 1984–85 of:—the attendance of witnesses; overseas visits; visits within the United Kingdom; specialist advisers' remuneration and expenses respectively, and other work commissioned; entertainment; the preparation for publication of the Minutes of Evidence; and printing and publishing; with so much of the same information as is relevant to the Chairmen's Panel and the Court of Referees.—[The First Deputy Chairman of Ways and Means.]

  SITTINGS OF THE HOUSE
  Return ordered,
  of the days on which the House sat in Session 1984–85 stating for each day the day of the month and day of the week, the hour of the meeting, and the hour of the adjournment; and the total number of hours occupied in the sittings of the House, and the average time; and showing the number of hours on which the House sat each day, and the number of hours after the time appointed for the interruption of business.—[The First Deputy Chairman of Ways and Means.]

  STANDING COMMITTEES
  Return ordered,
  for Session 1984–85, of (1) the total number and the names of all Members (including and distinguishing Chairmen) who have been appointed to serve on one or more of the Standing Committees showing, with regard to each of such Members, the number of sittings to which he was summoned and at which he was present; (2) the number of Bills, Estimates, Matters and other items referred to Standing Committees pursuant to Standing Order No. 79 (Standing Committees on Statutory Instruments, &c.) or Standing Order No. 80 (Standing Committees on European Community documents) considered by all and by each of the Standing Committees, the number of sittings of each Committee and the titles of all Bills, Estimates, Matters and other items as above considered by a Committee, distinguishing where a Bill was a Government Bill or was brought from the House of Lords, and showing in the case of each Bill, Estimate, Matter and other item, the particular Committee by which it was considered, the number of sittings at which it was considered and the number of Members present at each of those sittings.—[The First Deputy Chairman of Ways and Means.]

  SPECIAL PROCEDURE ORDERS
  Return ordered,
  of the number of Special Procedure Orders presented in Session 1984–85; the number withdrawn; the number annulled; the number against which Petitions or copies of Petitions were deposited; the number of Petitions of General Objection and for Amendment respectively considered by the Chairmen; the number of such Petitions certified by the Chairmen as proper to be received, and the number certified by them as being Petitions of General Objection and for Amendment respectively; the number referred to a Joint Committee of both Houses; the number reported with Amendments by a Joint Committee, and the number in relation to which a Joint Committee reported that the Order be not approved and be amended respectively; and the number of Bills introduced for the confirmation of Special Procedure Orders;
  Of Special Procedure Orders which, in Session 1984–85, were referred to a Joint Committee, together with the names of the Commons Members who served on each Committee; the number of days on which each Committee sat; and the number of days on which each such Member attended.—[The First Deputy Chairman of Ways and Means.]

Oral Answers to Questions
  SOCIAL SERVICES

    Housing Benefit
    Mr. McCrindleasked the Secretary of State for Social Services how many of the representations he has received on the Green Paper on social security dealt with housing benefit.
    The Minister for Social Security (Mr. Tony Newton): About 2,300, Sir.
    Mr. McCrindle: Does my hon. Friend accept that the Green Paper proposals on housing benefit could lead to the withdrawal of housing benefit not only from many people who are on very small occupational pensions but from their widows? Does he agree that that would be a disincentive to thrift and that that is hardly the best background against which to sponsor the expansion of occupational pension schemes?
    Mr. Newton: I hope my hon. Friend recognises that the effect of the structural proposals in the Green Paper depends upon the final decisions that are taken and the rates that are set within whatever structure may be proposed, including income support rates. We shall endeavour to ensure that we produce a fair position, but we have to take account of the fact that the purpose of encouraging the development of occupational pensions is to reduce, in the long run, people's dependence on means-tested benefits.
    Mr. Carter-Jones: Will the Minister take any account at all of the representations that he receives?
    Mr. Newton: I hope the hon. Gentleman will accept that the only real answer I can give to him is wait and see. However, we are studying very carefully what he has said. If he has any representations that he would like to make to me beyond those that he has already made, I shall look at them with unusual care.
    Mr. Andrew Bowden: Will my hon. Friend bear in mind that many pensioners who now receive housing

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    benefit would not need to do so if the value of their savings had not been destroyed by inflation because of the policies of profligate Socialist Governments in the late 1970s?
    Mr. Newton: I endorse my hon. Friend's every word.
    Mr. Kirkwood: Does the Minister accept that suffering over housing benefit is being experienced by those in receipt of small occupational pensions and by widows? Does he also accept that the proposal to make a contribution towards rates is deeply worrying and distressing to many people who come within these income groups? Has he received many such representations, and will he consider them very carefully in the context of the White Paper?
    Mr. Newton: We shall consider all the representations that are made to us, but part of the rates problem is due to the irresponsibility of local authorities, which are conscious that very large numbers of their electorate do not pay rates.
    Mr. Pawsey: Can my hon. Friend say what is the current cost of housing benefit and what was its equivalent in 1979? Does he believe that this is a cost-effective way of delivering benefit to those in need?
    Mr. Newton: The housing benefit scheme can be a more cost-effective and fairer way of helping those in need. We took an important step towards that by bringing together the two systems of help with housing costs in 1982 and 1983, but that is a system upon which we can improve, and we are seeking to do so.
    Mr. Meacher: Will the Minister confirm that, under his housing benefit cuts, there will be 7 million losers, 4 million of whom will be pensioners, mostly owner-occupiers with small occupational pensions? Will the hon. Gentleman now answer the question that he has signally failed to answer: how do the Government justify their view that pensioners who are widows should now be deprived of housing benefit simply because their husbands were thrifty enough in their lifetime to save for a small private pension?
    Mr. Newton: The outcome of the review obviously depends on the rates that are set and the final decision on the structure. We must bear in mind that one of the main burdens of the people to whom the hon. Gentleman has referred is, apart from the catastrophic rate of inflation over which the Labour Government presided, the extent to which this group is paying taxation. One of our objectives is to reduce the tax burden. I believe that it would be far better to leave widows and others with their own money in their own pockets than to take it from them and return it in the form of means-tested benefits.

    Hospital Waiting Lists
    Mr. Patrick Thompsonasked the Secretary of State for Social Services if he will make a statement on action being taken to reduce hospital waiting lists in East Anglia.
    The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): The latest figures from the East Anglian region show that, in the 12 months to 30 September 1985, there was a reduction in the inpatient waiting list of 12 per cent. During 1984 the number of inpatient cases treated in the region increased
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    by 4 per cent. The regional health authority is continuing to take urgent action to reduce waiting lists and waiting times still further.
    Mr. Thompson: I thank my hon. Friend for that encouraging reply. Is he aware that, although the numbers being treated are increasing and the numbers on waiting lists are coming down, far too many people are still on waiting lists for orthopaedic surgery, especially in the Norwich area? Will my hon. Friend do what he can to expedite the appointment of an extra consultant and to bring forward plans for a second acute hospital for the Norwich area?
    Mr. Whitney: I certainly recognise that point. I understand that during the next financial year a new orthopaedic surgeon for the Norwich area will be appointed.
    Mr. Tom Cox rose—
    Mr. Speaker: Order. This question is about East Anglia.
    Mr. Cox: Is the hon. Gentleman aware that this matter is of concern not just to the Norwich area? Is he further aware that in the Peterborough area—
    Mr. Speaker: Order. That is just the point.
    Mr. Dobson: I think, Mr. Speaker, that Peterborough is in the East Anglia area.
    The Under-Secretary of State may be pleased with the improvements in hospital waiting lists in East Anglia, but can he confirm that in half of the districts in East Anglia—Cambridge, West Suffolk, West Norfolk and Huntingdon—waiting lists have increased in the last six months? Is it not a fact that in Norwich—the hon. Member for Norwich, North (Mr. Thompson) is so proud of the improvements there—of 263 women waiting for urgent gynaecological treatment, 224 have been waiting for more than a month?
    Mr. Whitney: If the hon. Gentleman consults the details put out by the East Anglia regional health authority, he will see that there has been a significant improvement. Of course, that improvement has been patchy. The regions recognise the need to concentrate on the weaker areas, and that is what they are doing. They have taken a number of steps following consultations with my hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten), who previously occupied my post, to ensure that those improvements are put in hand.
    Mr. Powley: Does my hon. Friend welcome, as I do, the appointment of a district general manager to the Norwich health authority and other district general managers in the East Anglia area? Does he agree that those appointments will undoubtedly secure the more efficient running of all the health authorities in East Anglia, and in other parts of Britain, which will result in a shortening of waiting lists and more efficient management of all the resources of the East Anglia health services?
    Mr. Whitney: I am happy to agree with my hon. Friend. The post-Griffiths management structure, which is now being put into place, will show a remarkable return in terms of patient care for the significant increase in real spending that has been put into the NHS.

    Limited List Prescribing
    Mr. Lathamasked the Secretary of State for Social Services whether he will make a statement on the operation of the limited list for prescribing drugs under the National Health Service.
    The Secretary of State for Social Services (Mr. Norman Fowler): The selected list scheme has been in operation since 1 April, and the scheme is running successfully.
    Mr. Latham: Is my right hon. Friend aware that I am still receiving letters from constituents and their general practitioners complaining that they cannot get the drug that they need and saying that the National Health Service substitute is not satisfactory? Will he have another go at trying to persuade the British Medical Association to agree to a local appeal procedure?
    Mr. Fowler: All the evidence that we have shows that the scheme has settled down. As my hon. Friend will be aware, we put forward proposals for an appeal mechanism for doctors. They were rejected by the General Medical Services Committee, which put forward no alternative. I shall, of course, bear in mind what my hon. Friend has said, but, on present evidence, I am not sure that any further action is required.
    Dr. Roger Thomas: How many drugs has the Secretary of State allowed to be included on the limited list for each month since April 1985? What has been the reduction in the amount of savings expected? I appeal to him, once more, to place the new mucolytic drugs on the list.
    Mr. Fowler: I cannot give the hon. Gentleman the detailed information that he requires. In general, we thought the savings on the drugs bill would be about £75 million a year, and that has proved to be the case. The hon. Gentleman will be aware that mucolytics were studied by the independent review committee. That committee made recommendations on two matters, but, in general, it said that they had no proven general therapeutic value in the treatment of chest conditions. We have accepted its independent advice.
    Mrs. Virginia Bottomley: Does my right hon. Friend agree that to achieve continued improved patient care it is essential that we have an efficient and effective use of resources, such as the long overdue introduction of the limited list scheme?
    Mr. Fowler: Yes. The scheme has proved to be a sensible way of saving money on the drugs bill and ensuring that extra resources go on the health services. The Government have sought to use the resources available to the National Health Service to the best effect. One of the results is that the NHS is now treating more patients that than at any time in its history.
    Mr. Meadowcroft: Why does the Secretary of State allow the GMSC unilaterally to prevent other doctors from using the appeal procedure? Will he implement his offer to the doctors to allow those general practitioners who wish to prescribe by the appeal system to do so?
    Mr. Fowler: In view of the history of the selected list and the controversy that it aroused in the medical profession, it seems rather foolhardy to seek to impose an appeal mechanism on the medical profession, which does not appear to want it.
    Mr. Boyes: The Opposition said that the limited list would be a disaster, and that was an understatement. It is causing grave anxiety to patients, constituents and doctors. The Minister keeps saying that the list is working. Why does the lady at the other end of this Corridor keep sending letters to me saying that the Minister cannot reply to the complaints in less than three months because he is receiving too many letters about them? How can it be working in that case?
    Mr. Fowler: The hon. Gentleman talks about statements that I have made. He has made a complete mis-statement of the position. Despite early controversy, the selected list has settled down, is working well and is producing sensible savings for the Health Service. I should have thought that that is what the hon. Gentleman would want to see.
    Mr. Favell: Is my right hon. Friend aware that many general practitioners are delighted with the new selected list because they now find that the patients of their weak kneed brethren are no longer doing the prescribing? Instead, those doctors are prescribing the most cost-effective drugs.
    Mr. Fowler: Opinion inside the medical profession on this issue has undoubtedly changed. Another benefit has been that some drug prices have come down appreciably as a result of the policy. Again, I should have thought that that was something that hon. Members on both sides of the House would want to see.
    Mr. Pavitt: How many members of the limited list advisory and monitoring committee still have financial interests in the manufacture of drugs being prescribed? Is the Secretary of State satisfied that, with the number of members who have a financial interest, he is receiving disinterested advice?
    Mr. Fowler: I am satisfied that it is an independent committee and that the advice being given is entirely disinterested and independent. I would not have set up the committee in any other way.

    Contraception
    Mr. Greenwayasked the Secretary of State for Social Services if he will now issue fresh guidelines to doctors regarding the prescription of oral contraceptives to girls below the age of consent.
    The Minister for Health (Mr. Barney Hayhoe): The existing guidance is being reviewed, taking into account the detail of the House of Lords judgment and the wide range of views expressed on this issue.
    Mr. Greenway: Is my right hon. Friend aware that the recent narrow Law Lords decision is highly damaging to family relationships and that it has virtually abolished the age of consent? It means that a few doctors will shell out the pill like jelly babies to very young girls. Will he issue guidelines seeking to restore the status quo ante the Law Lords decision?
    Mr. Hayhoe: I do not accept the exaggerated comments of my hon. Friend. His comment about jelly babies is a slur upon the medical profession and upon others involved. As I have said, the existing guidance is being reviewed, taking acount of the Law Lords judgment and of other views that have been expressed.
    Mrs. Renée Short: Is the Minister aware that the BMA has already issued careful guidance on this matter to all its members? We have no reason to doubt that the members of the BMA are adhering to that guidance. Bearing in mind that the overwhelming majority of girls who seek help from their general practitioner are already in a relationship, is it not better that they should get advice about how to avoid unwanted pregnancies, rather than bring into the world children they do not want and with whom they canot cope?
    Mr. Hayhoe: The fact that the existing guidance stresses the quite exceptional circumstances in which doctors or family planning clinics should act in the way described underlines the importance of obtaining parental consent whenever possible. I found considerable support for the five Fraser points, if I may so describe them, contained in the House of Lords judgment. I hope that they will be reflected in the revised guidance that will follow the review.
    Dame Jill Knight: Will my right hon. Friend resist what some may see as an automatic next step following the Law Lords decision—namely, a lowering of the age of consent? Will he bear in mind that young girls are just as much, if not more, in danger today than they were in Victorian times when the law came into effect?
    Mr. Hayhoe: Questions about the age of consent are for my right hon. Friend the Home Secretary. I know of no proposal whatever to seek changes in the law to that effect. Hon. Members on both sides of the House will be concerned to see that the figures show that there were more than 4,000 abortions for girls under 16 in 1984, and equally concerned to see from the figures of the family planning clinics that 17,000 girls received advice and help, some without parental consent. Both those figures should generate concern on both sides of the House.

    Hospital Hygiene
    Mr. Altonasked the Secretary of State for Social Services if he has any proposals to seek to improve hygiene in hospitals.
    Mr. Hayhoe: In view of the importance of hospitals maintaining a good standard of hygiene, I have called for urgent action by health authorities concerned in response to recent criticisms of hospital kitchens. The scope for further measures is under urgent consideration.
    Mr. Alton: I am grateful to the Minister for that reply. Given that 10 per cent. of patients acquire infectious diseases while resident in hospital, and in view of recent critical reports of wards and hospital kitchens, does the Minister not think that it is time hospitals were excluded from the exemption from prosecution which they currently enjoy?
    Mr. Hayhoe: I certainly recognise the concern of those who pick up infections in hospital. The first priority must be to take action to deal with dirty, bug-infested kitchens or other areas in hospitals. As I have indicated, the matter of Crown immunity is being considered.
    Mr. Cash: In view of the recent experience of legionnaire's disease in Stafford, and now again in Glasgow, will my right hon. Friend assure me that proper measures are being taken to ensure that matters of this kind are adequately covered in future?
    Mr. Hayhoe: Guidance has already been issued concerning legionnaire's disease. I think that the whole House would wish to express its concern and sympathy and condolences to the relatives of those who have been affected by the outbreak in Glasgow. This is a matter primarily for my right hon. Friend the Secretary of State for Scotland.
    Mr. Ashley: Is the Minister aware that surveys show that 60 per cent. of National Health Service hospitals have food hygiene standards below the Government's food hygiene regulations, and that 16 per cent. would warrant prosecution were it not for Crown immunity? When I took a deputation to the Minister recently asking for the abolition of Crown immunity, I gained the impression, rightly or wrongly, that he was deterred by the financial considerations. Has the Minister made any costing of the abolition of Crown immunity? If so, what costing has he made?
    Mr. Hayhoe: The right hon. Gentleman must have come to the meeting with his delegation already under that impression, because nothing that I said to him when we met at the House a while ago could have sustained such an impression in his mind. I have indicated that matters connected with Crown immunity are under consideration. A general change in Crown immunity would require primary legislation.
    Mr. Stern: Will my right hon. Friend reject the big bang theory that would be involved in the abolition of Crown immunity, and at the same time provide opportunities for those in charge of hospitals and other public buildings to reassure the public of the generally very high standards of hygiene that currently exist?
    Mr. Hayhoe: That would generally be true. I repeat that Crown immunity should not and must not be used by those responsible for deferring or postponing action to deal with unhygienic conditions.
    Mr. Craigen: With the further deaths in Glasgow from legionnaire's disease, how closely is the Minister working with his colleagues in Scotland and Wales to combat this insidious problem?
    Mr. Hayhoe: As I think the hon. Gentleman knows, there is an inquiry into the whole matter. That inquiry, which has already produced an interim report, will be looking very carefully at any lessons that can be learnt from the unfortunate and tragic occurrence in Glasgow.

    Resource Allocation
    Mr. Freemanasked the Secretary of State for Social Services what basis of population statistics is used for the calculation of allocation of resources to regional health authorities.
    Mr. Hayhoe: Resources are allocated to regional health authorities using broadly the methods recommended by the resource allocations working party. However, the basis of population statistics has been revised and from 1985–86 onwards allocations are calculated on the basis of population projections for the year of allocation, rather than on the population estimates for past years as recommended by the working party. This new approach is thus more sensitive to the needs of regions with rapidly growing or declining populations.
    Mr. Freeman: I am most grateful to my right hon. Friend for his answer. It will be good news to growing regions, such as the Oxford health region, in which my constituency, Kettering, lies.
    Will my right hon. Friend undertake to look at the morbidity rates which are used in the RAWP formula for the allocation of resources between the different regions of the country?
    Mr. Hayhoe: I gladly give that undertaking, and with my Treasury experience behind me, I add "with no commitment."
    Mr. Loyden: In addition to the criteria that the Minister uses in terms of population, what consideration is being given to the incidence of diseases in certain regions, particularly those with high unemployment and poverty?
    Mr. Hayhoe: There are several complicated matters of which account is taken in the allocation of resources. I shall write to the hon. Gentleman, giving him full details.
    Mr. Kennedy: Is the Minister basically satisfied that the RAWP formula can work at a time of economic recession, which the National Health Service is having to shoulder?
    Mr. Hayhoe: "Recession" is a curious word to use when, over the lifetime of the Government, there has been a growth in resources in real terms of over 20 per cent.

    Sick Pay
    Mr. John Mark Taylorasked the Secretary of State for Social Services if he will make a statement on the minimum hours and earnings threshold for entitlement to statutory sick pay.
    The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): The earnings threshold for entitlement to statutory sick pay is the same as that governing liability to pay national insurance contributions, currently £35·50 a week. There is no qualifying rule about a minimum number of hours.
    Mr. Taylor: I congratulate my hon. Friend on his first appearance on the Front Bench to answer questions. I thank him for his reply. Can he comment on the circumstances of an older employee in my constituency on £35 per week, but with some savings, who finds himself ineligible either for unemployment benefit or for sickness pay?
    Mr. Major: I am grateful to my hon. Friend for his kind words. In the case of the man that he mentioned, if his earnings are below £35.50 he will have no entitlement to statutory sick pay. He may, of course, have an entitlement to sickness benefit, which would depend on his previous national insurance contributions. If, however, he falls outside statutory sick pay and state sickness benefit, he may have a residual entitlement to supplementary benefit.

    "Reform of Social Security"
    Mr. Yeoasked the Secretary of State for Social Services how many representations he has received regarding his Green Paper "Reform of Social Security."
    Mr. Fowler: Over 7,000, Sir.
    Mr. Yeo: Is my right hon. Friend aware that the arguments for reforming the social security system, that is the need to simplify it and to make it more cost-effective, are just as strong today as they were when he commenced his reviews 18 months ago? Accordingly, will he undertake not to be dissuaded from achieving those twin objectives in the forthcoming White Paper by the representations that he may have received?
    Mr. Fowler: Indeed, in the responses to the consultative paper very few people are saying that social security should not be reformed. The question is not whether, but how, it should be reformed. We have set out our proposals in the Green Paper. We look forward at some stage to the hon. Member for Oldham, West (Mr. Meacher), who leads for the Opposition, having the courage to set out his proposals.
    Mr. Pike: Can the Secretary of State give the House the assurance that he will take note of the representations from people, particularly women and manual workers, who feel that they will suffer considerably when SERPS is either phased out or abolished? They are the people who stand to lose most. Will he give an assurance that he will safeguard their position?
    Mr. Fowler: I certainly give the assurance that I will consider the responses on the state earnings-related pension scheme, but again the hon. Gentleman has to accept that, with the exception of the eccentric hon. Member for Oldham, West, virtually no one outside the House says that SERPS should stay as it is at the moment.
    Sir William Clarke: Does my right hon. Friend agree that the main danger to private pension schemes would arise if, in the future, the investment in pension funds were directed into a national investment bank? Would that not jeopardise the millions of private pensioners? Surely that must lead to the conclusion that under no circumstances must the Labour party be allowed to implement that policy.
    Mr. Fowler: My hon. Friend is absolutely right. The policy put forward by the Labour party on a national investment bank and on pensions is totally against the interests of occupational pensioners. The message should go out that those proposals would damage occupational pensions and the interests of occupational pensioners.
    Mr. Hugh Brown: In the light of the volume and content of the representations so far received, when the Government produce their White Paper, will one option be to reconsider the whole process until they have a mandate from electors?
    Mr. Fowler: We shall put forward the proposals in the White Paper on the basis of what is set out in the Green Paper and the result of the consultation process. It is right to consult the public on the proposals, but we also believe strongly that now is the time to take action on reforming social security.
    Mr. Colvin: Does my right hon. Friend acknowledge, as Lord Beveridge did, the value of voluntary organisations working within the welfare state to provide services for those in need? Will he give serious consideration to continuing the "Opportunities for the Volunteering" scheme when it expires at the end of next March?
    Mr. Fowler: That has been a successful scheme. I shall want to consider it in the light of its success and of what my hon. Friend has said.
    Mrs. Beckett: Will the Secretary of State confirm that among the many representations that he has received, some of the greatest concern has been expressed at his proposals for the social fund, which—in demanding that his staff choose whom they will help from many who have proven need—not only put his staff in the firing line, but return us straight to the Victorian concept of the deserving and undeserving poor?
    Mr. Fowler: The hon. Lady is entirely wrong about that. She should read what the Social Security Advisory Committee says about that in its entirety. As I think the hon. Lady understands, the present supplementary benefit system, which employs about 40,000 staff trying to administer it, is in danger of breaking down because of the organisation and structure of supplementary benefit. We have proposed a sensible way forward, which enables the position of individual claimants to be better and properly considered.

    Economic Deprivation
    Mr. Stan Thorneasked the Secretary of State for Social Services what action he intends to take in regard to alleviating poorer people's economic deprivation in the near future.
    Mr. Major: The Government are pledged to protect the retirement pension and associated long-term benefits against rising prices, and have successfully done so. Ultimately, however, improvements in living standards depend upon economic growth and the control of inflation.
    Mr. Thorne: Does not imposing additional charges, partly through rates and mortgages, on those in receipt of supplementary benefit create further hardship for those who are already deprived?
    Mr. Major: We believe that ultimately the best way to deal with these matters is to put money in people's pockets so that they may meet the charges. The hon. Gentleman picks a curious time to raise that criticism. He will be aware that a substantial uprating of benefits of around 7 per cent. is taking effect later this month.
    Mr. Forth: Does my hon. Friend agree that the object of the review of social security is to ensure that benefits go to those most in need, and that the success of the review will be judged against that criterion?
    Mr. Major: My hon. Friend is right. The White Paper which my right hon. Friend the Secretary of State will introduce shortly will set out the system which, we believe, will direct resources to those who most need them. I think that that will be a welcome innovation.
    Mr. Alfred Morris: The Secretary of State was studiedly uncommunicative yesterday, as he has been today, about his detailed intentions for the future of SERPS. Can the Minister give a categorical assurance that there is no intention of amending SERPS so as to drop the rule under which every individual's pension is based on his or her best 20 years' earnings? Is he aware of the importance of that rule to very large numbers of severely disabled people and of the concern about its future among the organisations of the disabled?
    Mr. Major: The right hon. Gentleman says that my right hon. Friend the Secretary of State was uncommunicative yesterday. That may or may not have been so, but I have nothing to add to what he said.

    Board and Lodging Allowance
    Mr. Favellasked the Secretary of State for Social Services if he will make a statement on board and lodging allowances for under-25-year-olds.
    Mr. Newton: I refer my hon. Friend to the announcement made by my right hon. Friend the Secretary of State in his speech to the House yesterday.
    Mr. Favell: Will my hon. Friend remind the House of the amount of the allowance? Will he tell the House what happens when a young person on the allowance finds a job, which he reports to the social security office?
    Mr. Newton: The current limits on board and lodging payments range from £45 a week in some areas to £70 a week in others, to which must be added the personal expenses allowance of just under £10. The plain fact is, I am afraid, that that means that large numbers of young people could not afford to pay for the same accommodation if they were in work, which is thoroughly unsatisfactory and one reason why we have taken action.
    Mr. Frank Field: Does the Minister recall that it was a constituent of mine who took the Government to court, when the old regulations were ruled unlawful? As experts have already commented that the new regulations will probably meet a similar fate, will the Government withdraw them and come back to the House with primary legislation?
    Mr. Newton: I see no reason to withdraw the regulations that have just been laid, because, as I understand it, they meet exactly the points that were raised in the High Court case. The basis of that court case was that the board and lodging limits and the time limits, had they been specified in the regulations, would have been lawful. That is the basis on which we have acted.
    Mr. Fletcher: Is my hon. Friend aware that his swift action in investigating severe overcrowding and allegations of lodging allowance fraud in Edinburgh has been warmly welcomed by my constituents? Would it not be helpful to the recipients of lodging allowances and the taxpayer, as well as eliminating racketeering, Rachman-like landlords, if a simple form of local licensing were introduced for the premises concerned?
    Mr. Newton: My hon. Friend will understand that I cannot speak so readily for the position in Scotland, but local authorities in England and Wales have power to take steps to license houses in multiple occupation, and we encourage them to use that power. The point that concerns me is that we must ensure that the social security system does not virtually encourage the kind of exploitation and abuse about which he is rightly concerned.
    Mr. Meacher: Will the Minister recognise that it is wholly invidious to expect Members of Parliament to vote on new board and lodging regulations which are now effectively sub judice? Is it not also improper for the Government to try to presume upon the decision of the Court of Appeal, especially since they have twice now been forced to back down because of-illegalities? Will he

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    say why the Secretary of State is so obsessed with pursuing tiny amounts of alleged board and lodging fraud, which he then fails to prosecute, when at the same time the Government are so lenient about tax fraud, now running on a scale at least 100 times greater?
    Mr. Newton: The hon. Gentleman is doing both himself and his party a disservice in talking about tiny amounts of fraud, when it has been discovered in one of our local offices that over half those claiming benefit were not resident at the address for which they were claiming. If that is to be the approach of the Opposition, heaven help the social security bill which they will face if they ever get the chance to run the system.

    Local Community Hospitals
    Mr. Jesselasked the Secretary of State for Social Services if he will make a statement on Government policy towards local community hospitals.
    Mr. Whitney: Community hospitals make an important contribution to the National Health Service. Their place in the pattern of district services is primarily a matter for health authorities to decide, in consultation with others concerned at local level, including the public and medical practitioners.
    Mr. Jessel: Will my hon. Friend look sympathetically at the need to retain St. Mary's hospital, Hampton?
    Mr. Whitney: I recognise my hon. Friend's concern. I understand that the plans of the district health authority point to the possible closure of St. Mary's at some time in the next 10 years. I can assure my hon. Friend that, before any final decision is made, full cognisance will be taken of local opinion.
    Mr. Steel: Will the Minister accept the need for a little more enthusiasm towards local community hospitals? Do they not provide excellent value for money and should he not be so financing the health boards that they are able to keep these hospitals open?
    Mr. Whitney: We certainly accept the contribution that community hospitals make, but decisions of the effective deployment of local health services, including community hospitals, must be a matter in the first instance for the local health authority.
    Dr. M. S. Miller: Before the hon. Gentleman makes rash promises about local community hospitals, will he ensure that all hospitals are fully equipped to deal with situations that need to be dealth with?
    Mr. Whitney: The 20 per cent. increase in real terms in resources allocated to the National Health Service since we came to power means a steady improvement in the quality of service and equipment in our HNS hospitals.

    Drug Prescriptions
    Mr. Heathcoat-Amoryasked the Secretary of State for Social Services if he will seek reductions in the quantity of drugs prescribed by doctors.
    Mr. Hayhoe: With the support of the British Medical Association, doctors are already encouraged to restrict the amount they prescribe on any one occasion, in the interests of both economy and safety. There is no evidence that amounts prescribed are generally excessive, but,
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    following the recent successful conference on prescribing, ways in which doctors may be further encouraged to prescribe both economically and effectively are being explored with representatives of the profession.
    Mr. Heathcoat-Amory: Now that my right hon. Friend has restricted the range of drugs prescribed, will he look for the much greater savings to be made from reducing the huge quantity of drugs in circulation? Is he aware that hundreds of millions of pounds' worth of drugs a year are thrown away or wasted? Will he tell the House what practical steps he will take to make some doctors reform their wasteful prescribing habits?
    Mr. Hayhoe: The prescribing habits of doctors are monitored, and the family practitioner committees have the power to go to those doctors who appear to be prescribing excessively and discuss the matter with them.

    Blood Plasma
    Mr. Shersbyasked the Secretary of State for Social Services if he will make it his policy to ensure that the United Kingdom is self-sufficient in the supply of blood plasma.
    Mr. Hayhoe: The Government are already committed to achieving self-sufficiency in blood products. When the new plant at Elstree is fully commissioned by the end of 1986, the Department will ensure that regions collect enough blood plasma to achieve this.
    Mr. Shersby: That reply will be warmly welcomed. However, what steps is my hon. Friend taking to encourage further blood donors to give their services?
    Mr. Hayhoe: The fact of my hon. Friend having raised the matter today—which I endorse—will, we hope, help to encourage as many people as possible to come forward to offer their blood to the transfusion service.

  PRIME MINISTER

    Engagements
    Mr. Kennedyasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. I was present at Victoria station to meet the Emir of Qatar at the start of his state visit to this country, and this evening I shall attend the state banquet given by Her Majesty the Queen in honour of the Emir of Qatar.
    Mr. Kennedy: Given the welcome news this morning that Lord Davidson, in the Court of Session in Edinburgh, ruled that the assets of the Trustee Savings Bank are indeed the property of the Scottish depositors, and given that my noble Friend Lord Taylor successfully moved an amendment to the Trustee Savings Banks Bill in another place on behalf of the alliance, seeking to protect those and other interests, will the Prime Minister confirm that the Government, in the light of that ruling, will not now seek to introduce any orders to name a vesting day?
    The Prime Minister: We shall be considering the judgment very careful indeed, and will make a statement when we have done so.
    Mr. Silvester: Is it not depressing that students at Manchester university should have attacked and abused the Minister of State, Home Office, my hon. and learned Friend the Member for Ribble Valley (Mr. Waddington)? Does my right hon. Friend agree that it is about time that people inside and outside universities stood up to be counted on whether they are prepared to defend the right of free speech?
    The Prime Minister: Yes, I agree with my hon. Friend. Universities are places where, above all, free speech should be honoured, not prevented.
    Mr. Steel: Reverting to Lord Davidson's judgment, may I ask the Prime Minister to give an assurance that, in her determination to press ahead with the privatisation programme, she will seek to sell only those items to which she has a valid title? Will she also undertake, in reviewing the judgment, to abandon the attempt to deprive the depositors of the TSB of their property?
    The Prime Minister: The right hon. Gentleman seeks an instant reply to a judgment which we have not yet seen in full, but, obviously, the result of which we know. He must agree that it is better to see the judgment before commenting on it.
    Mr. Dobsonasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Dobson: Will the Prime Minister tell the House which she thinks will contribute most to improving presentations and propaganda for the Tory party, her recent appointment of Lord Young as Secretary of State for Employment, or her earlier appointment of his brother, Mr. Stuart Young, as chairman of the governors of the BBC?
    The Prime Minister: Those are excellent appointments.
    Mrs. Kellett-Bowman: Will my right hon. Friend consider changes in the way in which accident compensation is awarded, so that people such as my constituents from St. Michael's, who received appalling injuries in the explosion at Abbeystead, and their dependants, who have already been waiting for 18 months without receiving a penny compensation, do not have to go through the courts to establish negligence so as to receive compensation?
    The Prime Minister: I take note of what my hon. Friend says. I had the impression that the matter was still sub judice, but I shall consider it further.
    Mr. Kinnock: The Prime Minister sought last night to give the impression that she is a recruit to renewal. Does that mean that her White Paper plans, published earlier this year, to cut expenditure in investment on construction, vehicles, plant and industrial support by 15 per cent. over the next two years have been abandoned? If it means that, we are delighted. If not, will she admit that last night she was up to her usual tricks of fabrication?
    The Prime Minister: The right hon. Gentleman is talking nonsense. Had he listened to the replies that I have given from the Dispatch Box twice a week during almost every week the House has been sitting, he would have heard me say that, last year, investment was at a record
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    high of £55 billion, with the private sector outpacing the public sector. That is still true. I just wish that he had heard me say it about 20 times.
    Mr. Kinnock: The Prime Minister never admits that manufacturing investment this year is still 20 per cert. in real terms below what it was in 1979. Does she share her Government's lack of concern for manufacturing investment? Does she believe that our future lies, as the Secretary of State for Trade and Industry said, in tourism? Will she now answer the question? Will she abandon those policies, or will she go ahead with cuts in construction, investment, plant, vehicles and industrial support during the next two years? If so, can she explain to the country how we can possibly afford it?
    The Prime Minister: What matters is the return that one secures on investment. Because we have higher profits, we are now getting higher investment. The right hon. Gentleman always tries to ignore investment in the extractive industries, such as coal, which do not come under manufacturing industry. I also note how much he tries to disparage tourism. What matters is total investment, which is at an all-time high, and which we expect to remain high in the coming year. I am so sorry that he tries to run down tourism and other industries. We do not.
    Mr. Evennettasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Evennett: Will my right hon. Friend join me in congratulating the people of Thamesmead on their recent vote to establish a community trust to run the town after the abolition of the GLC, and their complete rejection of a takeover by Left-wing Greenwich council?
    The Prime Minister: The vote by the people of Thamesmead was very significant. They have chosen a route that gives them far more control over their futures. That is absolutely correct, and I congratulate them on their choice.
    Mr. Donald Stewart: Before the Prime Minister makes a statement on the Trustee Savings Bank, Scotland, will she bear in mind the fact that to proceed with legislation in the light of the judgment in the Court of Session would be to expropriate assets without compensation? In the light of the assurance that she gave to me on 23 July that the findings of the Scottish court would be obeyed, will she assure the House that she will not instruct an appeal to the English House of Lords?
    The Prime Minister: Of course, the law must be upheld, but one has a right to all the remedies that the law proposes. I hope that the right hon. Gentleman is not asking for instant comment. He and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) would be the first to condemn that, and would think it right to consider the judgment before reaching decisions.
    Mr. Nellistasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Nellist: Will the Prime Minister drag herself away from all these banquets to consider for a few moments that

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    a quarter of her Government's £100 million support for Johnson Matthey Bankers could provide security for tens of thousands of working people in Liverpool, who do not aspire to £400,000 retirement homes in Dulwich, but only to decent family homes with gardens? Is it not obscene that the Government should prepare for a lock-out of council workers in Liverpool, while at the same time running a gravy train for their friends in the City?
    The Prime Minister: The hon. Gentleman is trying to compare two completely different things. My right hon. Friend the Chancellor has made several statements and has answered many questions about Johnson Matthey Bankers. The matter is in the hands of the police, and it is for them to decide what to do. The people who are running Liverpool have brought it to its present disgraceful state.
    Sir William Clark: Following my right hon. Friend's excellent speech at the Mansion House yesterday evening, does she agree that, from a total public expenditure of £ 139 billion this year, about £24 billion will be spent on capital projects? That is about 17 per cent. of our total expenditure, which is not a bad record. Does my right hon. Friend agree that that percentage can be increased only in three ways: by cutting other public expenditure, by increasing the public sector borrowing requirement or by increasing taxes?
    The Prime Minister: I am grateful to my hon. Friend. I believe that, at last, people are beginning to realise the amount that is going in capital expenditure by the Government. Had they listened earlier, they might have got the message earlier. If we want more capital expenditure, it must come either by reducing current expenditure or by raising taxation, which would be most unwelcome to most people, especially those on below average earnings. Increased borrowing would increase interest rates, which also would be unwelcome to industry, which is trying to start up afresh.
    Mr. McCusker: Will the Prime Minister take this opportunity to assure my constituents, who have survived numerous terrorist attacks launched on them from the territory of the Irish Republic, that she still considers them to be as British as her constituents and that she has no intention of diminishing that status by giving the Government of the Irish Republic any rule in the internal affairs of the United Kingdom?
    The Prime Minister: Northern Ireland is a part of the United Kingdom and will remain a part of the United Kingdom unless the majority of people in Northern Ireland wish otherwise. Negotiations are still under way with the Republic. Any result will still be in accordance with the rule that decisions north of the border are taken by the United Kingdom Government, and those south of the border are taken by the Government of the Republic of Ireland.
    Mr. Andrew F. Bennettasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Bennett: Does the Prime Minister agree that, when she was Secretary of State for Education and Science, she believed that one of the best investments for
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    a nation was a first-class education system? Will she confirm that, while she has been Prime Minister, the proportion of gross domestic product spent on education has fallen from 4·3 per cent. to 3·5 per cent., which means that education has lost about £2 billion—more than enough to have saved any cuts in higher education, to have protected student grants and to have ensured that teachers could be paid a professional wage?
    The Prime Minister: But, since that time, the number of pupils in schools has fallen by about 1 million. One would therefore expect the proportion of gross domestic product to fall. However, the amount spent on each pupil has never been higher than under the present Government and the proportion of teachers to pupils has never been higher than under this Government. One is entitled to say that now, instead of spending more money, we must try to get better value out of the money that we are spending.
    Mr. Lawrence: Has my right hon. Friend seen the latest quarterly report of the Confederation of British Industry, which says that the employment prospects of small manufacturing businesses are the brightest for the past decade? Does that not show that the manufacturing sector has as great a role to play in sustaining our economic growth as the services sector?
    The Prime Minister: I have seen the CBI's latest report. I believe that employment prospects are better, especially as, in the past two years, some 650,000 jobs have been created—the highest rate of job creation since 1973. I see that the OECD is forecasting that Britain will create more jobs than other OECD countries.
    Mr. Ashleyasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Ashley: The Prime Minister spoke last night about the construction of new hospitals, but is she aware that there is a great scandal in most of our hospitals, new and old, because of dirty and unhygienic conditions, which are damaging many patients? Is she aware that those conditions are caused by negligent health authorities which are flouting the law by hiding behind Crown immunity? Will she consider abolishing Crown immunity to get rid of those conditions?
    The Prime Minister: I think that on reflection the right hon. Gentleman will see that he has made an unwarranted slur on the vast majority of our hospitals, which are extremely well run and clean. There are some problems. He has asked me before whether Crown immunity should be lifted in regard to health and safety provisions. No decision has been made. My right hon. Friend is still considering the matter.
    Mr. Sackvilleasked the Prime Minister if she will list her official engagements for Tuesday 12 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Sackville: Is my right hon. Friend aware that, despite massive regional aid, there are many parts of the north of England where there is grave concern about the low levels of private investment relative to the south-east? Will she give an assurance that all relevant Government

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    Departments will continue to take actions designed to prevent the growth of the dangerous imbalance that is developing?
    The Prime Minister: My hon. Friend will be aware that in July my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) was being quite optimistic about Bolton and saying:
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    "the success of Government policies in Bolton is evidenced by new factories and shops as well as a new road, a new railway and a new hospital to be built".—[Official Report, 11 July 1985; Vol. 82, c. 1260.]
    We are trying to increase private investment, and the north-west has received about £80 million in regional development grant in 1984–85. That is meant to help investors to go to that area and to build new factories and new commercial offices.

Questions to Ministers
3.30 pm
Mr. Speaker: Statement, Chancellor of the Exchequer.
Mr. David Steel: On a point of order, Mr. Speaker—
Mr. Speaker: Does the right hon. Gentleman's point of order arise directly from Prime Minister's Questions?
Mr. Steel: My point of order arises directly from one of the Prime Minister's replies. You will have heard the Prime Minister say, Mr. Speaker, that she wished to reflect on the judgment in the Court of Session this morning. May we take it that, because of that reflection, the Treasury press notice on the tapes announcing an appeal is incorrect?
Mr. Speaker: That is not a matter for me. We move on to the Chancellor of the Exchequer's statement.
The Chancellor of the Exchequer (Mr. Nigel Lawson)rose—
Mr. Martin Flannery: On a point of order, Mr. Speaker.
Mr. Speaker: I think that the hon. Gentleman's point of order does not arise from Prime Minister's Questions.
Mr. Flannery: It does.
Mr. Speaker: If it does, I shall take it.
Mr. Flannery: My point of order arises from Question Time a fortnight ago, Mr. Speaker—
Mr. Speaker: Order. That is a good try, but that is not what I meant.
Mr. Jim Craigen: On a point of order, Mr. Speaker. In one of her replies today, the Prime Minister said that a Minister would be making a statement on the Trustee Savings Bank—
Mr. Speaker: Order. This is an extension of Question Time.
Mr. Craigen: It is not.
Mr. Speaker: Order. We cannot have an extension of Question Time. The House does not want that and we have a busy day ahead of us. It is not a matter for me in any event.
Mr. Charles Kennedy: On a point of order, Mr. Speaker. In reply to my question the Prime Minister said clearly that the Government were reflecting on the judgment of the Court of Session. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) has made—
Mr. Speaker: Order.
Mr. Kennedy rose—
Mr. Speaker: Order. The hon. Gentleman has said that the Prime Minister or the Government are reflecting. He did not say that I was reflecting. The hon. Gentleman must raise a point of order that I can answer.
Mr. Kennedy rose—
Mr. Dennis Skinner: On a point of order, Mr. Speaker.
Mr. Speaker: If the hon. Gentleman's point of order arises directly from Questions today, I shall take it.
Mr. Skinner: The issue is quite simple for you, Mr. Speaker. If the Prime Minister has misled the House, is there not an obligation upon you, Mr. Speaker, to ensure that the right hon. Lady has an opportunity to put the facts straight?
Mr. Speaker: I cannot accept that the Prime Minister has misled the House.

Autumn Statement
3.33 pm
The Chancellor of the Exchequer (Mr. Nigel Lawson): With permission, Mr. Speaker, I should like to make a statement.
I am laying before the House today an autumn statement which brings together the Government's outline public expenditure plans, proposals for national insurance contributions next year, and the forecast of economic prospects for 1986 required by the Industry Act 1975.
This year's autumn statement contains considerably more information than its predecessors. It breaks new ground by providing a forecast of the public expenditure outturn for 1985–86 for each Department, and the plans not just for the year immediately ahead but for each of the next three years. Both these innovations meet specific requests from the Select Committee on the Treasury Civil Service and I hope that they will be welcomed by hon. Members.
The outturn for this financial year is expected to be the same as set out in the Budget, that is, £134 billion. After allowing for inflation, this is lower than last year, which bore the brunt of the public expenditure cost of the coal strike.
The Government will continue to maintain firm control over public spending. Following this year's review, the planning totals for 1986–87 and 1987–88 will be held to the levels set out in the Budget —£139 billion and £144 billion, respectively. For 1988–89 the total has been set at £149 billion. Over these three years public spending in real terms is expected to be broadly flat at very slightly below this year's level. As a percentage of national output it will continue to decline as it has since 1982–83. By 1988–89 it should be back to its lowest percentage since 1972–73.
In order to meet contingencies, the plans contain large reserves, rising from £4½ billion in 1986–87 to £8 billion in 1988–89. The reduction in the reserve for 1986–87 as compared with the provisional reserve for that year, which I announced at the time of the Budget, chiefly reflects the fact that the passage of time allows part of the reserve in any given year to be allocated to individual expenditure programmes as their costs become known more accurately. But the £4½ billion reserve for the year immediately ahead remains a substantial figure.
Although I expect the planning total for 1985–86 to be the same as I did at the time of the Budget, the public sector borrowing requirement—subject to the usual margin of uncertainty at this time of year—is forecast to be about £ 1 billion higher—some £8 billion rather than £7 billion. This is due to lower sterling oil revenues. But even at £8 billion the PSBR would be the smallest that it has been as a percentage of GDP since 1971–72.
The PSBR would, of course, have been running at a higher level than this were it not for the proceeds from privatisation, to which I will turn in a moment. But even without the privatisation proceeds, this year's forecast PSBR would still be the smallest as a percentage of GDP since 1971–72.
The Government's privatisation programme is now getting into top gear and will continue for many years to come. [Interruption.] I am glad to see that the Opposition welcome that. I cannot stress so strongly the importance of this programme—now being emulated throughout the world—as a fundamental objective of Government policy. The transfer of state-owned businesses to the free
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enterprise sector of the economy brings enormous long-term benefits to the nation as a whole in terms of greater concern for the customer and increased efficiency. It also provides the opportunity for a massive boost to wider share ownership, among both the public in general and the employees of those great enterprises in particular.
The increased pace of privatisation means that the proceeds from this programme will rise substantially from £2½ billion this year to £4¾ billion in each of the next three years. In particular, the planned flotation of the British Gas Corporation is included for the first time. At the same time, however, there have been increases in a number of public expenditure programmes, so that the overall planning totals have remained unchanged.
However, this needs to be seen in perspective. Even if the proceeds from privatisation were to be ignored altogether, the public expenditure planning total would still be broadly flat in real terms, at less than 1 per cent. above this year's total, and public spending would still be on a steadily declining path as a percentage of GDP, reaching by 1988–89 its lowest level since 1972–73.
The annual review of public spending provides an opportunity to reconsider priorities and adjust the balance between programmes. While some programmes this year have been held back, it has been possible to make significant additions to others.
There will be increased spending on the National Health Service over previous plans of £250 million in 1986–87 and £300 million in 1987–88. On top of this, health authorities are able to spend the savings from their cost improvement programmes, which are expected to amount to £150 million this year and still more in future years. This should enable health authorities to meet demographic pressures and to deliver improvements in services as well.
Total public sector provision for housing is being increased by £220 million net of receipts in 1986–87 and £200 million in 1987–88, and the housing plans now provide for some £3¼ billion of capital spending next year. Within this total, the Government believe that there should be a substantial shift in priorities in favour of renovation of the existing public sector housing stock.
An extra £54 million in 1986–87 and £71 million in 1987–88 is being made available for capital expenditure on national and local roads.
Just over £1 billion is being added to the social security programme for 1986–87, largely as a result of the 7 per cent. increase in benefits taking effect this month. Expenditure in the subsequent years of the survey period is subject to decisions on the Government's social security review, on which a White Paper will be published shortly.
Additional provision has been made under the law and order programme to allow local authorities to direct extra spending towards the police.
For defence, the provision is unchanged. After the substantial real increases in spending since 1978–79, from which the defence programme will continue to benefit, the emphasis must now switch to improving our defence capability through greater efficiency and value for money, especially in procurement.
On employment, there were large additions in the Budget to fund an expansion of the youth training scheme and the community programme. In this survey, a number of new initiatives have been agreed, but savings are to be made by a reduction in payments from the redundancy

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fund. My right hon. and learned Friend the Paymaster General will be making a statement giving further details later today.
There have been significant improvements in efficiency and value for money in many programmes. It is a great mistake to fall into the trap of measuring public expenditure programmes solely in terms of the money put into them: it is improved output that matters.
Further details of these and other changes are contained in the autumn statement itself, and of course full details, together with information on running costs and manpower, will be given in the public expenditure White Paper to be published early in the new year.
I now turn to national insurance contributions. The Government have conducted the usual autumn review of contributions in the light of advice from the Government Actuary on the prospective income and expenditure of the national insurance fund.
The lower earnings limit will be increased next April to £38 a week, in line with the single person's pension, and the upper earnings limit will be similarly increased to £285 a week, broadly in line with earnings.
I announced in the Budget reduced rates of contribution for the lower paid and their employers—5 per cent. for those earning up to £55 a week, 7 per cent. for those earning up to £90 a week and 9 per cent. for employers of workers earning up to £130 a week. These took effect at the beginning of last month and are already starting to provide welcome assistance to the low paid and their employers, and a stimulus to the employment of the young and unskilled. The limits for these reduced rate bands will also be increased from April, in line with the lower and upper earnings limits, to £60, £95 and £140 a week, respectively.
There will be no change in the main class 1 contribution rates, which will remain at 9 per cent. for employees and 10·45 per cent. for employers. This is the third year running in which national insurance contribution rates have been held constant, despite a growing number of pensioners and the substantial uprating of benefits taking effect later this month.
My right hon. Friend the Secretary of State for Social Services will this afternoon announce details of these proposals, and will lay before Parliament the necessary order and the accompanying report by the Government Actuary.
Finally, I turn to the Industry Act forecast. The economy is progressing very much as I envisaged at the time of the Budget. Inflation is falling again, after the predicted temporary rise in the spring, although I now expect inflation in the fourth quarter of this year to be slightly above the Budget forecast: 5½ per cent. rather than 5 per cent.
The overall growth of the economy this year still looks like turning out at 3½ per cent.—the highest rate of growth since 1973.
The pattern of growth, too, has been much as envisaged. Exports and business investment, as expected, were the fastest growing elements in demand in 1985. The rise in total investment is now put at 4 per cent. in 1985; within this figure business investment is expected to be up by 7 to 8 per cent., to yet another all-time record.
As a result of this steady progress, there has been a substantial growth in the number of people in work since
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1983. This has now been reflected in a levelling out in unemployment—albeit still at a sadly high level, not least because of the rapid growth in the total labour force. The prospect here is for some further improvement, assisted by the measures I announced in the Budget to help on the jobs front, which will have their main effect in 1986. But that improvement could easily be put at risk by excessive pay settlements.
The prospect for 1986 is one of continued growth and still lower inflation. The composition of growth is likely to change somewhat, with consumer spending taking up the running as exports—which had an exceptional rise of 7 per cent. this year—grow more slowly. The current account balance of payments surplus is forecast at £4 billion, compared with £3 billion in 1985. Fixed investment is expected to grow, once again, slightly faster than the economy as a whole.
Overall, the economy in 1986 is expected to grow by a further 3 per cent.—the fifth successive year of growth at an average of 3 per cent. a year, and into the sixth, the best performance since before the first oil shock. At the same time, inflation is expected to fall further, to 3¾ per cent. in the fourth quarter of 1986.
Indeed, if the forecast is correct—and I am the first to admit its inevitable fallibility—1986 promises to be the first year since the 'sixties when inflation and growth will be within one point of each other. What is beyond doubt is that we are now achieving the steady growth with low inflation which successive Governments have sought in vain for a generation.
All in all, Mr. Speaker, the progress and prospects I have described amount to the clearest possible vindication of the policies we have been following these past six years, and will continue to follow.
The autumn statement is now available from the Vote Office, and the House will no doubt wish to take it into account when we debate the economy tomorrow. The framework of public expenditure control which it sets out should allow scope for considered and justified reductions in the burden of taxation; and these in turn will further reinforce the economy's flexibility and dynamism. It is on that prospect that the future prosperity of all our people depends.
Mr. Roy Hattersley: The Chancellor, with characteristic modesty, claims an achievement which a generation of his predecessors sought but failed to obtain. The speaking note for Government Back Benchers, which has been circulated on today's subject—the economy—describes its state as a dream come true. Does the Chancellor regard the economy as a "dream come true" for the 3·5 million men and women who are unemployed, for the families whose child benefit is to be cut in real terms, for the 95 per cent. of taxpayers who are paying more now than in 1979 and for the owner-occupiers who are burdened by uniquely high interest rates?
Will the Chancellor tell us some of the details of his proposal? Why have we not this year been told the size of what is called the "fiscal adjustment"? Is it because last year the right hon. Gentleman so mismanaged and bungled his tax cut promises that he precipitated the January sterling crisis? Is it simply because, like so many other promises—especially tax cut promises—what started out as an estimate of fiscal adjustment ended with a promise that he failed to deliver? Or, more likely, has he failed to

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tell us the fiscal adjustment because he wishes to pretend that the sale of British Gas is not intended to finance the temporary tax cuts with which he hopes to solve some of the Conservatives' electoral problems?
If the Chancellor denies the connection between the sale of British Gas and the prospect of tax cuts, will he tell us whether the proposed temporary tax cuts could be financed without selling off those national assets? What other possible explanation can the right hon. Gentleman give the House for creating a private monopoly, already equipped with the power to fleece its consumers? When the Chancellor has explained the purpose of that privatisation, will he tell us about the long-term implications? What does he think should happen when the privatisation proceeds run out? Does he think that the tax cuts that they finance should be restored, or does he think that there should be more cuts in public expenditure? After British Gas is sold and that annual income to the Government is lost, how does the right hon. Gentleman recommend that it should be made up—not for one year or two years, but in perpetuity?
All that the right hon. Gentleman can buy with the proceeds of the sale of British Gas is time. I ask the Chancellor again: what happens when the privatisation proceeds run out? What happens when the oil revenues run out? What happens when the report by the House of Lords predicting a collapse in manufacturing industry is proved to be true? In short, is the Chancellor capable of thinking beyond, looking beyond and planning beyond October 1987?
Tucked away in the seventh paragraph of the Chancellor's statement was the aside that the public sector borrowing requirement had increased £1 billion above its target; yet, despite the PSBR being £1 billion out of line, the right hon. Gentleman still boasts about the economy's strength. As the Government have now been partly converted to the virtues of investing in public sector capital —a proposition that they derided and scorned last year when it was advocated by the Opposition—why does not the Chancellor at least allow the same overshoot next year which he has found tolerable this year to finance some more job creation through public sector capital expenditure? Is it because all his plans, all his intentions and everything revealed by this statement are concerned not with long-term investment but with short-term expediency?
Let me give the House an obvious example from the document. The Chancellor boasts about growth next year. Every penny of that growth will be accounted for by personal consumption. According to the right hon. Gentleman's own figures, export growth will collapse to 2 per cent. and imports will grow by twice that amount. Of his asset sales, one tenth will go on capital expenditure and nine tenths will be used to finance the election bribes.
The Chancellor of the Duchy of Lancaster (Mr. Norman Tebbit): What is the right hon. Gentleman worried about?
Mr. Hattersley: I am worried about the economy. I am not worried about the Conservative party.
Finally, since we have heard so much about growth, will the Chancellor have the grace to admit that the real figure for growth during the entire life of this Government is an annual average of 1·3 per cent.? The real growth that we have had demonstrated today is a growth of panic about the Government's future.
Mr. Lawson: It is clear that the right hon. Gentleman is in an acute state of panic about his electoral chances.
On the subject of growth, there was a world recession during the Government's early years. We went to the polls in 1983, having gone through that recession, and, of course, there was a low rate of growth. I do not know whether the right hon. Gentleman is trying to have a replay of the last general election, but I must remind him that the electorate returned the Government to office with an increased majority.
On the right hon. Gentleman's point about growth next year—I am glad that he accepts my forecast of 3 per cent. for next year—it is completely untrue to say that this is made up entirely of consumer expenditure, although I have nothing against that. There is a 3½ per cent. growth of fixed investment predicted—faster than the growth of the economy as a whole.
The right hon. Gentleman devoted a large part of his remarks to privatisation. If he had listened to my statement, he would have heard that public expenditure was declining steadily as a proportion of GDP, even if no account is taken of the proceeds of privatisation. Therefore, the scope for tax reductions is assured. To the extent that there is any relationship between the privatisation proceeds and tax rates, it enables the tax reductions which would take place in any case to be brought forward a little to the great benefit of the economy. As I have told the House on a number of occasions, the public sector borrowing requirement is always set after taking full account of the proceeds of privatisation. The privatisation programme will not merely carry on throughout this Parliament, as set out in the autumn statement; it will carry on throughout the next Parliament as well. The right hon. Gentleman asked what would happen when that programme came to an end. I am glad to learn of his confidence that we shall be in office for a further six years.
Mr. Terence Higgins: If allowance is made for the dubious accounting convention that treats the proceeds of asset sales as reductions in borrowing and public expenditure and excludes debt interest from the planning totals, does my right hon. Friend agree that domestic demand has been reflating and is planned to go on reflating?
Mr. Lawson: No; I am afraid that my right hon. Friend is wrong on both counts. He calls the accounting convention dubious, but that is the international accounting convention. It is not a convention peculiar to this country. It was followed by the Labour Government when they were in office. The figures are clearly set out so that my right hon. Friend can make the adjustment that he seeks to make. He will see that general Government expenditure, including debt interest, declines as a proportion of GDP.
Mr. Robert Sheldon: Is the Chancellor aware that the disposal of £5 billion of public assets represents sales of an exceptional magnitude and that it is essential that he does not hurriedly unload them to meet his public expenditure targets? Will he place a higher priority on this matter than he has done in the past by ensuring that, if necessary, such sales are postponed to avoid denying to the taxpayer and the British public the full worth of those assets.
Mr. Lawson: The flotations of state-owned companies have been conducted with great and acknowledged success throughout the world. As a result, there is benefit to the companies themselves, to the people employed in them and to the nation. I hope that if the right hon. Gentleman catches your eye again, Mr. Speaker, at the end of these questions he will perhaps inform the House which of the companies that we have privatised or plan to privatise, he will not, if he comes to office, renationalise.
Sir William Clark: Does my right hon. Friend agree that, despite the prophets of gloom and doom, his statement will be widely welcomed not only in the House but in the country? An encouraging aspect of his autumn statement is the continual decrease of public expenditure in relation to GDP. Obviously, that will bring forward the time when tax burdens can be reduced. Does he further agree that our competitors overseas with a low proportion of GDP vis-a-vis public expenditure and low taxation are able to create jobs?
Mr. Lawson: My hon. Friend is quite right. The two most successful economies in the world today are those of the United States and Japan. They have the lowest proportion of public expenditure in relation to GDP, and the lowest level of taxation in relation to GDP. Those are important facts to bear in mind, particularly in the context of how to create more jobs. In addition to our satisfactory record on public expenditure and the prospects there, the House will welcome the prospect of a further reduction in inflation to below 4 per cent.
Mr. David Penhaligon: Can the Chancellor tell us whether one of the programmes to be held back is overseas aid? If so, is that the Government's response to the massive lobby of this House by people of all political persuasions about the Government's reaction to Third world problems?
Can the Chancellor confirm that if, for some reason or other, the privatisation programme is delayed—and today he mentioned some of the difficulties involved—tax cuts will be put off with it?
Is the Chancellor's statement an admission by the Government that monetarism does not solve the undoubted problems of pay settlements? If he accepts that that is so in his statement, can he tell us what the Government will do about pay settlements in the next two years? Please do not say, "Appeal to the CBI."
Mr. Lawson: One question is quite enough, and I will answer the first question that the hon. Gentleman raised which I expect is closer to his heart—the matter of aid. I assure the hon. Gentleman that there is no reduction in the aid budget. The aid budget has been increased and will be maintained in real terms throughout the survey period.
Sir Peter Hordern: As my right hon. Friend is now giving more weight to interest rates and less to monetary targets, may I ask whether he now considers this to be a suitable time to apply for entry to the European monetary system?
Mr. Lawson: My hon. Friend knows that we keep this matter under continual review.
Dr. Jeremy Bray: Does the Chancellor expect manufacturing output in 1986 to recover to its 1979 level? When the right hon. Gentleman says the assumption in the forecast is that the exchange
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index will remain at about 81, is the implication that if the dollar falls, the pound will be allowed to fall, too, part way against the deutschmark?
Mr. Lawson: It is not helpful to go into details about assumptions of exchange rates. As the hon. Gentleman rightly said, the assumption is that the exchange rate, the weighted average, will remain broadly at this level. In answer to his first question, I hope he welcomes the fact that we now look like going into the sixth successive year of steady growth at around 3 per cent. a year.
Mr. John Townend: While welcoming the increase in the proceeds of asset sales, I should like to ask my right hon. Friend whether he is aware that some of his hon. Friends are disappointed that the Government have not been able to reduce public expenditure and regret that, before the deduction of asset sales, Government spending will increase by over £7 billion in the next year?
Mr. Lawson: My hon. Friend should remember that, unlike previous Governments, we are steadily reducing public expenditure as a share of gross domestic product.
Mr. Stuart Randall: What predictions has the Chancellor made about the impact of this autumn statement on the level of unemployment?
Mr. Lawson: The autumn statement in itself is but a small part of the Government's overall policies. Those policies have brought about a greater growth in the number of jobs than in all the other countries of the Common Market put together. Over the last six months we have seen a flattening out in the level of unemployment.
Mr. David Howell: Does my right hon. Friend accept that he is to be warmly congratulated on preparing the way for a series of Budgets which will reduce the level of personal and other taxation and increase public capital spending where it is needed? That will be done against a background of falling inflation and rising output. As he said, that has been an aim of Governments for many years and hitherto it has not been achieved. When he looks at the scope of tax cuts, will he consider whether there is room for returning to a lower rate of tax of, say, 25 per cent.—the kind which existed previously —so as to reduce the disincentives to those who are first going to work?
Mr. Lawson: I will certainly be happy to look into the suggestion that my right hon. Friend has made.
Mr. Jack Ashley: Is the Chancellor aware that he is not only selling off the country's silver to balance the books, but selling off some of our great national institutions? The Institute of Psychiatry is having to sell itself to private American firms in order to keep going. The Chancellor should be deeply ashamed of pimping for this financial prostitution.
Mr. Lawson: The right hon. Gentleman is a little bit confused. These enterprises are sold not to American firms, but to the British people.
Mr. Anthony Nelson: If my right hon. Friend seeks more effectively to rebut arguments such as that which has just been presented—that we are burning the seedcorn by financing current expenditure not only with the proceeds from privatisation but with the proceeds of North sea oil—is there not a compelling case for the

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Government doing what every prudent individual and company has to do, which is to account separately for the capital income and outgoings and for current income?
Mr. Lawson: I take entirely my hon. Friend's point. It is one which I have considered on a number of occasions. I have some responsibility in this matter. The different figures for current and capital expenditure are shown much more clearly in the national accounts for anybody to see. These distinctions are not always very, not very—[AN HON. MEMBER: "Helpful."]—helpful. Thank you very much. To take one example, some expenditure on education—not all, but some—which is classified as current expenditure is in fact an investment.
Mr. Dick Douglas: Will the Chancellor reflect on the consumer-led boom that he has predicted and give the House some indication about the effect of the boom on imports, and in particular on our propensity to import manufactured goods?
Mr. Lawson: I am sorry that the hon. Gentleman is so gloomy at the prospect of the consumer doing a little bit better. I can give him the answer. We expect the current account surplus of the balance of payments to rise from £3 billion this year to £4 billion next year.
Sir Kenneth Lewis: Does my right hon. Friend recall that when Noah sent the animals from the Ark two by two, he said to them, "Go forth and multiply"? Unfortunately, two of them coming out were snakes and they said, "We can't; we're adders." Some of us are a bit concerned because the adding up of the Budget in recent years has meant restriction. I am glad to know that in his statement he is adding to the amount of money spent on housing and the infrastructure. Will he continue that process for the next few months?
Mr. Lawson: I always listen carefully to the advice of my Leicestershire neighbour. I read in the papers recently that, after a long and distinguished career in this House, he is not proposing to stand at the next election. I wish him a happy retirement.
Mr. Ian Wrigglesworth: Will the Chancellor of the Exchequer come clean and tell the House that the Government have done an about-turn? Is it not true that the Government are reflating the economy by selling off public assets? Does not the flood of press releases from Government Departments this afternoon, boasting about their public expenditure increases, demonstrate that fact?
If the Chancellor has a fiscal adjustment to make later in the year, will he also ensure that that resource goes into creating jobs and helping those who have been hit by the mistaken policies of the past five or six years—those who are unemployed and need jobs and help with the poverty that they are facing?
Mr. Lawson: As I said, the employment prospect, although not as good as I should like, is clearly improving.
The only about-turn of which I am aware is by those former members of the Labour party who are now members of the SDP.
Mr. Richard Alexander: Would it create any problem for my right hon. Friend's financial strategy if, in the ensuing year, he permitted water authorities to borrow in the market rather than to implement their capital investment programmes through increased charges? Is he aware that this year the Anglian water authority has said
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that it can carry out its capital investment, if it is able to borrow in the market, with increases of only 7 per cent., but that if it has to be done by charges the figures will be 11 per cent? Farmers and business men very much resent having to pay increases that are higher than inflation and higher than the water authorities themselves would wish.
Mr. Lawson: It is not the case that the water authorities could borrow more cheaply in the market than they do from the Government.
My hon. Friend raises the very interesting question of the privatisation of the water authorities. My right hon. Friend the Secretary of State for the Environment is thinking very deeply about that.
Mr. Michael Foot: Has the Chancellor of the Exchequer any idea how deeply offensive it is for him and other members of the Government to talk of six years of steady growth in those areas which have suffered six years of 20 per cent. unemployment, particularly when they are hit by cuts in Government regional and other aid? When will the boasted prosperity reach those areas?
Mr. Lawson: I have never sought to deny the problem of unemployment in particular parts of the country. By the same token, I hope that the Opposition will not seek to deny the success in economic growth and lower inflation that the Government have achieved.
Mr. Patrick McNair-Wilson: Given my right hon. Friend's welcome commitment to infrastructural refurbishment, while at the same time keeping a firm hand on public borrowing, will he now relax the rules governing the amount of their own money that local authorities can spend? Has he heard the old adage that a stitch in time saves nine?
Mr. Lawson: The reasons for the restriction on the pace at which local authorities can use the receipts from council house sales were set out clearly in the debates in the last Session. I do not see that the position has changed at all from that time.
Mr. Jeff Rooker: Given that the Prime Minister told the House at the Dispatch Box a year ago that increased infrastructure was not a cost-effective way of increasing jobs, and that in January she said that it would cost £37,000 for an unemployed worker to go into public sector house building, is the Chancellor's statement today intended to increase or decrease unemployment?
Mr. Lawson: As I said in reply to the hon. Member for Kingston upon Hull, West (Mr. Randall), the Government's policy, among other things, is designed to do what it can to help to create new jobs. New jobs are being created faster than in the whole of the rest of the European Community put together.
Mr. John Browne: Does my right hon. Friend accept that, in the circumstances, the record he has put before the House is by any standards a measure of outstanding performance? It is the envy of all democratic Governments and beyond the wildest dreams of the Labour party, We should be very grateful to him for it.
My right hon. Friend did not mention interest rates, which are hitting British business and its prospects for growth? Will he please say something on this subject?
Mr. Lawson: I am grateful to my hon. Friend for his accurate assessment of the Government's record.
As I have said on several occasions, interest rates will be kept no higher than is necessary to ensure that there are monetary conditions sufficient to reduce inflation. I will not take any chances with inflation.
Mr. Mark Fisher: What is the Chancellor's estimate for the deficit on the balance of trade in manufactures?
Mr. Lawson: I do not think that the deficit on the balance of trade in manufactures will be very different this year from last year.
Mr. David Crouch: I also thank my right hon. Friend for his statement, in particular for the extra injection of money into the National Health Service. It comes at a critical time in the Health Service which has resulted in some contraction of services. I hope that my right hon. Friend will discuss with the Secretary of State for Social Services the need for some reappraisal at district level so that the valuable extra money may be used speedily.
Mr. Lawson: I am grateful to my hon. Friend for his remarks. The whole House knows of his concern for and the work that he has done in the Health Service—in particular, the hospitals—over many years. However, I am still concerned about the waste that takes place within the National Health Service. There is scope for achieving enormously greater value and output from the existing expenditure, in addition to what may be gained from any increase in expenditure. I hope that those responsible in the Health Service will address themselves very quickly to achieving those savings.
Mr. Tam Dalyell: I am quite relaxed about receiving an uncivil answer from a Chancellor who can be as rude to Conservative Members as he is to the Opposition. Does he understand that many people, not only in the Labour party, and not only my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore), are deeply concerned to hear what some of us did on Friday about the affair of Johnson Matthey? Why is he so coy—
Mr. Speaker: Order. I find it very difficult to know how the hon. Member will relate his question to the autumn statement.
Mr. Dalyell: It relates to the general handling of the economy. The question is simple: why is the Chancellor so coy about having an inquiry? In December 1984, was he told the extent of the alleged fraud—
Mr. Speaker: Order. I do not think that the hon. Gentleman's question has much connection with the statement.
Mr. Nigel Forman: In welcoming the Government's—
Mr. Dalyell rose—
Mr. Speaker: Order. Mr. Nigel Forman.
Mr. Forman: I welcome the Government's continuing programme of asset sales. Will my right hon. Friend take the trouble to stress not only the arguments for asset sales as an offset to increased public spending on worthy projects but those for wider share ownership and, most
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importantly, the fact that the companies concerned, when returned to the private sector, will be contributing to the revenue by way of personal and corporate taxation?
Mr. Lawson: My hon. Friend is right in thinking that the purpose of privatisation is to benefit the nation through the greater efficiency of the companies concerned. Every one of them has done better in the private sector than it did when it was owned by the state. The purpose is also to accompany it with a greater expansion of share ownership—doubling the number of individual shareholders throughout the country. That is the purpose of privatisation, and that is why it is here.
Mr. Allen McKay: Can the Chancellor be more positive about unemployment? Can he give even an assessment of how many people he expects to get work, thereby reducing unemployment, as a result of his asset-stripping and his statement?
Mr. Lawson: As the hon. Gentleman knows, it is not the custom to give forecasts of unemployment. I expect the growth in the number of people in employment, which is greater than in the whole of the rest of the European Community, to continue.
Several Hon. Members rose—
Mr. Speaker: Order. There is another statement to follow. I shall call those hon. Members who are on my list for this statement on the next statement if they wish to take part then.
Mr. Hattersley: The Chancellor told me that the sale of British Gas did no more than bring forward tax reductions. Will he, therefore, confirm that there could be no tax reduction this year or next year without the sale of British Gas?
Mr. Lawson: I said nothing of the sort. Therefore, I can confirm nothing of the sort.
Mr. Speaker: Statement—Mr. Kenneth Clarke.
Mr. Martin Flannery: On a point of order, Mr. Speaker.
Mr. Speaker: I shall take the points of order after the statements, as is usual.
Mr. Flannery: I have a point of order—
Mr. Speaker: Order. I said to the hon. Gentleman that I would take his point of order after the statement. I know what it is about, because he has kindly given me notice of it.
Later—
Mr. Dalyell: On a point of order. Some of my hon. Friends—some but not all—thought that you, Mr. Speaker, were a bit quick on the draw in ruling out of order my question to the Chancellor of the Exchequer. I asked him to reflect on the issues concerned because they were about public and private assets. At your convenience, Mr. Speaker, perhaps you will write to me about your reasons for that ruling.
Mr. Speaker: I shall not give my reasons. I do not think that the House would appreciate that. I hope that I was not quick on the draw. If the hon. Gentleman had mentioned "privatisation", or something of that sort, that might have been easier for me.
Mr. Dennis Skinner: In relation to the statement by the Chancellor of the Exchequer and the ensuing questions, especially the one that was asked by my hon. Friend the Member for Linlithgow (Mr. Dalyell), some of us find it strange and difficult to understand that when the Chancellor of the Exchequer had the opportunity to clear his name by having a public inquiry into the Johnson Matthey affair—
Mr. Speaker: Order. I must stop the hon. Gentleman. I cannot help him, because it is not a matter for me.

Enterprise and Employment
4.21 pm
The Paymaster General (Mr. Kenneth Clarke): With permission, I should like to make a statement on new enterprise and employment measures. Overall provision for the Department of Employment has increased by some £600 million in each of the years 1986–87 and 1987–88 compared with last year's autumn statement. That growth in expenditure has enabled us to increase the number of jobs available under the community programme by 100,000, to introduce the new two-year youth training programme as from April next year, which will ultimately help some 450,000 young people each year and lead to real qualifications for a working life. It will also enable us to fund a range of new measures which I am announcing today.
The cost of those new measures is, of course, included in my Department's public expenditure plans for 1986–89 which were announced a few momemts ago by my right hon. Friend the Chancellor of the Exhequer. These and other increases in our Department's spending are offset in part by a reduction in spending from the redundancy fund.
We propose to bring to an end, for all firms other than those with fewer than 10 employees, the system of sharing part of the cost of statutory redundancy payments through rebates from the redundancy fund. Our intention is that the rebate should not be payable for redundancies which take effect after 31 October 1986. We shall introduce the necessary legislation later this Session.
It is important to stress that that change does not affect employees' entitlements in any way. Employees will be entitled, as before, to redundancy payments from their employer to go to an industrial tribunal if the employer refuses to make the required payment, and, where an employer cannot pay, to receive a payment direct from the Department of Employment.
The rebate has been steadily reduced by successive Governments. It is now 35 per cent. For most employers that is no longer a significant contribution to their total redundancy costs. We believe that that public spending should no longer be used in subsidising redundancy and ought now to be put to better use.
I turn now to our further measures to stimulate enterprise and the growth of small businesses and also to help long-term unemployed people find work.
We have suffered for many years from one of the lowest rates of self-employment and new business creation in the whole of western Europe. That has now changed. We now have more self-employed people than for some 60 years. However, we can do still more to encourage the growth of self-employment and small business by ensuring that both advice and finance are available to the small business man at the right time. We are therefore announcing three measures designed to further those aims.
As far as self-employment is concerned, the enterprise allowance scheme has already helped nearly 110,000 unemployed people since August 1983 to set themselves up in business. We have therefore decided to expand the scheme to a maximum of 80,000 new entrants a year in 1986–87 at an additional cost of £17·5 million —an increase of 20 per cent.
We have already assisted over £500 million of lending to small businesses through the loan guarantee scheme. In order to provide better access to finance and business

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advice we have now decided to extend the scheme, which was due to end in December 1985, until the end of this financial year while we consider its longer-term future.
We are also increasing significantly the support given in England to local enterprise agencies, which play an important and growing role in providing business advice and practical assistance to small firms at the local level. We are making available an additional £2·5 million for that purpose in 1986–87.
Besides its new responsibility for small firms, the Department of Employment now also has responsibility for tourism. The industry estimates that it is creating over 50,000 jobs a year. Last year some 14 million people visited this country, spending over £4 billion. To ensure that that growth continues, we are increasing the funds available next year to the British Tourist Authority and the English tourist board to £40 million—an increase of about 20 per cent. in the boards' funding. We shall ensure that a substantial part of that money will benefit areas of the country which could attract more tourists and where unemployment is high.
I turn now to our measures to help the long-term unemployed. They are designed to tackle two key problems. The first is that many people who have been unemployed for a long time become demoralised about their ability to find work. The second is that the relationship of benefits to pay can reduce the attractiveness of jobs at the lower end of the wages scale. We propose therefore to introduce pilot schemes to test the effectiveness of two entirely new measures designed to combat those problems. Those pilots will operate for six months from January 1986 in seven different areas.
First, we are asking the Manpower Services Commission to ask long-term unemployed people in the pilot areas to a counselling interview at their jobcentre. The object will be to see whether they can be placed in suitable jobs —including jobs in the expanding community programme—or in existing training courses. In addition, the MSC will be able to offer places on entirely new short training courses specifically designed for those who have been out of work for more than a year. The courses will help to assess their potential and aptitudes, to brush up their basic working skills and to improve the techniques of applying for a job. We shall ask the MSC to cover as many as possible of the long-term unemployed in the pilot areas with those new arrangements so that we can assess their effectiveness.
The second new measure is a job start scheme. This is a radical new approach under which any person in the pilot area who finds a job after being unemployed for at least 12 months will be paid a weekly allowance of £20 for the first six months of employment in addition to his or her wage. The scheme aims to make lower paid jobs more attractive to people on high rates of benefit. The allowance will be available to those who take jobs with a gross income of less than £80 a week. Full details will be announced shortly.
In the improving climate for jobs, we are determined to increase our contact with those long-term unemployed people who may have been losing hope. We have already started the expansion of job clubs, which have so far achieved remarkable success in placing the majority of people who use them. We are writing to all long-term unemployed people inviting them to contact their
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jobcentres for advice and support and the two pilot measures announced today reinforce our determination to help long-term unemployed people back into jobs.
The range of measures that I have announced today also demonstrates our determination to intensify our efforts to promote enterprise and business growth. We are creating the conditions in which jobs will come and unemployment will be reduced. I believe that today's new measures should have the support of all parts of the House.
Mr. John Prescott: Any measures that contribute to a reduction in unemployment will be welcomed by all sides of the House, but there is very little in the statement that will make a real contribution to increasing jobs. The Paymaster General has not made clear how many jobs he estimates will come from the series of measures he has announced. That is what the unemployed want to know—how many jobs will be brought about by this intervention of the Government to reduce unemployment.
Does the Paymaster General accept that his proposals have more to do with massaging the unemployment figures for the coming general election than with increasing real unemployment?
Does he further accept that the community programme to which he referred pays people £65 a week? If any of those programmes are expanded, does he envisage that more will be paid to people in those jobs?
Most of the youth training schemes are not new. Announcements were made about them previously. There is a possibility of 100,000 more YTS places being provided as a result of the announcement that the Paymaster General has just made. Can he tell us whether the quality of the training that young people can expect to receive under the scheme will be more than under the skivvy schemes offered at present? [HON. MEMBERS: "Oh."] The Paymaster General has only to interview YTS people to make a judgment about that. Will compulsion be used to get youngsters into YTS by the implementation of a mechanism to report those who refuse to accept places on such schemes.
The right hon. and learned Gentleman made proposals on redundancy. As the employer will now have to pay the full cost of redundancy, what is the right hon. and learned Gentleman's estimate of the increased number of redundancies, brought about by the Government's policies? While carrying their fair share of redundancy costs, will employers now face an extra charge of £250 million, to finance the scheme that the Paymaster General announced? Does that mean that there might be changes in the national insurance contribution to redundancy payments?
With regard to his proposals on local enterprise schemes, can the Paymaster General tell us whether he is prepared to be as generous in his approach to local authorities that have local employment and enterprise schemes? They have done a better job than many of the private enterprise schemes, producing more jobs, which are often cheaper, of better quality and longer-term. Does the right hon. and learned Gentleman accept that I do not want to knock private schemes? Anything that creates jobs I quite welcome—[HON. MEMBERS: "Quite?"] Will the right hon. and learned Gentleman join me in supporting instead of attacking local authorities that use their resources to create jobs through their enterprise schemes? I hope that he will give us an assurance about that.

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Does the Paymaster General accept that his proposals to help the long-term unemployed will be welcomed in the House, but that hon. Members will recall that about 1·3 million people are long-term unemployed, which is more than the total unemployment that the Government inherited from the Labour Government? The House will welcome the right hon. and learned Gentleman's statement that he has recognised that the long-term unemployed are demoralised and not to be attacked. As often happens now, people say that such people do not want to work and are workshy. We constantly hear it from someone in another place.
The new initiative to which the Paymaster General referred is more about reducing wage levels than about meeting the need for real jobs. Does the right hon. and learned Gentleman accept that £20 added to average unemployment pay of about £50 gives a wage level of £70 for the six-month scheme? If that is so, will the scheme be compulsory? If people refuse to go on it, will they lose their benefit? At the end of the six-month period, if a person refuses to continue to work for a wage from which the £20 has been deducted, will he face the prospect of suspension of benefit?
The Paymaster General—[HON. MEMBERS: "Oh, no."] I am sorry. The Paymaster General's statement has many measures in it, and I am entitled to ask at least one question about each one.
The right hon. and learned Gentleman announced an extra £40 million of Government money to increase tourism. There may be more jobs for ice cream salesmen and so on, but does he accept that the reason why more people are visiting this country is to do with the high pound? The reason why people are visiting areas such as the west midlands is that the high pound destroyed the manufacturing base in that area. We find no comfort in thinking that now we must earn our living in the tourist industry.
If the Government's policy is to improve the business climate and create jobs, would not the community be better served with the measures that we have proposed time and again —for example, releasing the £6,000 million held by the local authorities in their housing accounts, resulting in real jobs to meet real need? The Government should be proposing such measures instead of designing policies simply to massage the unemployment figures downwards for the general election.
Mr. Clarke: The hon. Gentleman asked me for estimates of how many extra jobs the package will create. It is important to stress that the background is a rapid growth in new jobs in the economy already. As my right hon. Friend the Chancellor of the Exchequer said, it is estimated that 677,000 new jobs have been created up to March 1983. The package will help to encourage such increases, but we have pilot schemes to discover how much extra job creation will result from some of the proposals.
The idea that the package is designed to massage the figures goes back to a former argument. It is not possible for the hon. Gentleman to sweep aside the extensions to the enterprise allowance scheme and to the loan guarantee scheme, the new money for tourism and the new assistance for people moving from long-term unemployment to their first job, as massaging the figures. The measures are substantial and we believe that all of them will encourage further the process of job creation.
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The hon. Gentleman asked how much would be paid to those who go on the community programme. We keep under review the present £63 average figure. The hon. Gentleman will know, even before he leaps into free collective bargaining in this area as in others, that if we increase that average figure too rapidly, we merely reduce the total number of people whom we can assist under the scheme. We are expanding that number rapidly at the moment to 230,000 places.
I am disappointed by the hon. Gentleman's slighting remarks about the youth training scheme. The scheme now has the support of the vast majority of Labour local authorities and a growing number of trade unions up and down the country. I share his concern that we should achieve quality training and provide training that is likely to be at least a first step towards a recognised skill and vocational qualification. If the hon. Gentleman wants me to talk about consumer reaction, I can tell him that all our surveys show that a little over 80 per cent. of young people who go on YTS say that they derive value from it and are grateful for what they obtain.
The hon. Gentleman referred to compulsion in connection with YTS and other schemes. It is not our intention to go in for any compulsion in either training or jobs. We are not changing the rules on entitlement to benefit. The position remains that, as long as people can satisfy the officers that they are genuinely available for work, they are entitled to benefit. The package is concerned with making the opportunities for that work more readily available to more people.
The hon. Gentleman also referred to the effect of the change in the redundancy rebate arrangements. I am sorry, but I do not altogether understand his question. I cannot see how taking away the rebate that goes to employers who make redundancies is likely to increase the total number of redundancies. If anything, it is likely to have the reverse effect. The hon. Gentleman talked about a charge to employers. At the moment it is financed out of the redundancy fund. Therefore, the present arrangements, which we regard as obsolete, are a sharing of the pool of cost of redundancies so that the more successful businesses tend to subsidise the less successful businesses.
Any question of changes in national insurance charges will have to come much later, because the immediate impact in the coming year is negligible. My right hon. Friend the Chancellor has made clear our decision on national insurance charges for next year.
We are greatly increasing support for local enterprise agencies. They provide advice and support, and sometimes manage workshops. They intervene directly and helpfully in the business creation process. I shall reserve for a later occasion the debate about the good work of local authority enterprise boards which, compared with the hon. Gentleman's description, I find at the least variable. I am not at all sure that the policy of some of the local authority enterprise boards, of investing ratepayers' money directly in somewhat dodgy financial businesses, is altogether a good rival for our local employment agencies.
As regards the long-term unemployed, we all agree on the need to tackle the problems of over a million of these people. The fact that we now have an improving climate for jobs makes it easier for us to do so. What we are doing is re-establishing contact with them all, because some of them may well have assumed that no jobs can be found for them, and, when we have established contact, offering

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them a range of services, job experience, training and the kind of support offered by job clubs and so on that will make it much easier for many of them to find jobs. A higher level of vacancies is being notified to jobcentres than at any time since 1980. The job clubs in some difficult areas, such as the one in Middlesbrough which I visited last Friday, have had a great deal of success in placing long-term unemployed men and women in jobs.
The trouble with the long-term unemployed, as the job market improves, is that their own lack of recent work experience makes them less attractive to employers. Hence the job experience schemes, community programmes and the £20 payment that we are introducing. The latter means that the plunge from high levels of long-term benefit to income is cushioned, particularly if the job taken in the first place is a low paid one. After six months, we hope that the new employee will have so established his attractiveness to his employer that any loss in income would be made up, or that the six months' job experience will make him a much more attractive potential employee to others. Because we do not know how many new jobs it will create, we are introducing this as a pilot scheme in six or seven areas. We believe it to be a radical, new, imaginative idea to speed up the process of getting the long-term unemployed back to work.
Mr. Michael Latham: Is my right hon. and learned Friend aware of the warm welcome on the Government's side of the House for the tone and content of his statement this afternoon? Will he tell us more about the pilot areas? Are they to be geographical areas only or concentrated on particular industries—for example, textiles?
Mr. Clarke: First of all, geographical areas: one in Scotland, one in Wales and five in England. Their exact locations are to be announced shortly by my right hon. Friends the Secretaries of State in the case of the two other nations and by my hon. Friend the Under-Secretary in the case of England.
Mr. Michael Foot: If these measures are to be effective at all, both for the long-term unemployed and others, is it not the case that new training places will have to be found or existing training facilities will have to be increased? Is more money to be devoted to that? Will those training centres or skillcentres, prevented from receiving Government increases, now be able to apply for the funds for which they asked six months, 12 months, or two or three years ago, when they were attacked or closed down by the present Government?
Mr. Clarke: The total amount that we are spending on the introduction of the new youth training scheme is rising rapidly and will reach over £1 billion by the time the two-year scheme has built up to its full level. As regards skillcentres, there has recently been rationalisation of them, but the total amount of training available to adults in this country remains slightly higher than before.
Mr. Michael Grylls: Is my right hon. and learned Friend aware that there will be a very wide welcome throughout the country, and certainly among objective observers, for his increase in and expansion of the enterprise allowance scheme, which has been outstandingly successful in helping new
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entrepreneurs in the difficult first year of starting a new business? May I also welcome his announcement of a permanent place for the loan guarantee scheme in the armoury of help to growing businesses? It has been very cost-effective. Will my right hon. and learned Friend also tell the House that he will undertake a review of the detail of the scheme, particularly the fact that the money provided under it is very expensive? If he could reduce the premium, it would be a great help to the growing businesses that we all want to see expand.
Mr. Clarke: I am grateful for my hon. Friend's support in pressing for the extension of the enterprise allowance scheme. It has been remarkably successful in helping people through the first year of business. For every 100 business men helped in this way, we find at the end of a year about 65 extra jobs created as they take more people into the new business.
I am also grateful for my hon. Friend's support of the loan guarantee scheme, which will be extended to give us time to review precisely those details of the present operation of the scheme to which he drew attention. I agree that the disincentive effect of the premium and other, connected matters are something to which we shall have to give our urgent attention and reach decisions.
Mr. Richard Wainwright: Some of the palliatives that the Paymaster General has announced on behalf of his noble Friend will undoubtedly provide valuable but mostly temporary help to a relatively modest number of the unemployed. Will he say why his noble Friend has treated the 1·3 million long-term unemployed to these tiny crumbs? Will he explain why there are just seven pilot schemes when the needs and problems of this growing army of long-term unemployed are sufficiently known? Why this limiting of the scheme to a gross wage of £80 a week? Will he specifically say whether that must be a full week or whether this is a scheme to encourage the Government's favourite ploy of part-time jobs? Why six months? What magic transformation is likely to occur in six months?
On the problem of skilled men who have been unemployed so long that they worry about the decay of their skills, why are they exempt from a scheme that is so very limited in the maximum gross pay that is permitted?
Mr. Clarke: First, this is a joint statement by my right hon. and noble Friend and myself. I trust that in another place he will not find people so desperately trying to minimise the impact of the package that we have announced.
I am glad, however, that the hon. Gentleman welcomes the two new measures to the extent that he wishes them to be introduced all over the place now, rather than waiting for us to try them out in seven pilot areas. This Government like to try out the effectiveness of new schemes before we introduce them everywhere. I realise that the Liberal party finds it easy to discover new ideas and sell them instantly, overnight, like a magic cure-all.
Mr. Tony Baldry: While I welcome these measures as an indication that the Government are prepared to leave no stone unturned, will not my right hon. and learned Friend accept that the greatest contribution to be made to job creation is by private employers ensuring that there is wage restraint throughout the economy, and

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that if wages simply kept pace with inflation instead of constantly outstripping it we would see the creation of something like half a million new jobs every year?
Mr. Clarke: There has to be a relationship between wages on the one hand and inflation, productivity and performance on the other. I agree with my hon. Friend that if wages are allowed to outstrip the productivity improvement and performance of individual businesses, a great deal of this job creation programme will be put at risk. That is the message that we constantly reiterate. It is one to which the alliance parties offer the solution of some kind of inflation tax and a pay norm for everyone, and on which the Labour party remains uncannily silent when it comes to any discussion of employment.
Mr. Ron Leighton: Will the Paymaster General seriously consider putting more resources into the community programme to improve it and, in particular, to enable him to increase the allowance of £63? This would enable him to include family men who at the moment cannot be accommodated by the scheme.
Mr. Clarke: The average payment allowed under the scheme is £63. As I have explained, while we are reviewing it, the difficulty is that if we dramatically increase it we may reduce the number of places under the scheme. [HON. MEMBERS: "Why?"] Within a set total. We shall review that allowance but it is important not to allow the scheme to be diverted into spending more money on fewer recipients.
I am grateful to the hon. Member for his support for the programme and his emphasis on improving the quality of it. We are taking steps to ensure that the work done under the community programme is of distinct benefit to the previously unemployed people working on it and also of benefit to the community. We are aiming to raise the quality of the work done under that programme.
Mr. Jim Lester: I thank my right hon. and learned Friend for his statement, particularly coming after a further statement on selective investment for which many of us have pressed for some time. I congratulate him on the imagination shown in the range of measures brought forward and on trying new things such as the £20 premium. Can he assure us that, when we reach out to the long-term unemployed, an essential thing for which many of us on the Government Benches have been pressing, and which we support, the services of the Manpower Services Commission will be available in correct measure and talent to guarantee that they will be given the best possible counsel?
Mr. Clarke: I am grateful to my hon. Friend for his comments and I share his welcome for the measures in the autumn statement, which confirm our continuing commitment to a proper level of capital expenditure in our financial planning. I also confirm that the Manpower Services Commission will be greatly involved in providing the quality of advice and service that is required by long-term unemployed people. We shall be taking steps to make sure that the necessary provision is made by way of resources, staff and preparation so that that proper advice and support is forthcoming.
Mr. Harry Ewing: Is the right hon. and learned Gentleman aware that the reference in his statement to the long-term unemployed and the implications of his statement represent a calculated insult
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to the long-term unemployed? [Interruption.] Is he not aware that when it comes to being skilled in filling in job application forms, the long-term unemployed are experts; they fill in hundreds of application forms and receive the same answer all the time. That is why they are the long-term unemployed.
I invite the Minister to visit my constituency, where we have suffered the closure of Kineal colliery, the decisions by the BP refinery to pay off 300 people, by BP Chemicals at Grangemouth to shed 300 jobs, by ICI to shed jobs, by the Grangemouth Whisky company to pay off people, plus a threat to Grangemouth docks as a result of the closure of Gartcosh. Will the right hon. and learned Gentleman come to my constituency and tell the long-term unemployed where they should send the forms once they have filled them in?
Mr. Clarke: I do not underestimate the problems faced by people who live in areas that have undergone profound change in the nature of employment locally, as the hon. Gentleman described, and that is one reason why we are putting more effort into bringing back fresh jobs, even in areas such as tourism, hotels, leisure and so on, which are derided by his Front bench spokesmen—[Interruption.] Opposition Members deride it because it is not unionised. That is why they resist the growth of employment in tourism, leisure and related industries.
In relation to helping the long-term unemployed in difficult areas, I invite the hon. Gentleman as soon as possible to take the opportunity to visit one of the organisations that bear the unusual American-created title of job club, as I did on Friday, and meet some of the long-term unemployed as they settle down, with support and help, to make repeated applications for jobs with the advice that the MSC can give them. Where we have tried them so far, in difficult areas, about three-quarters of those who have gone through the organisation have found themselves in jobs. It is encouraging to find how high is the morale and to note the support that they give each other as well as the support that they derive from the jobcentres.
That all helps to enable them to get their way back into a job market that is steadily improving. I cannot understand why any steps of this kind should be dismissed by Opposition Members. Do they wish us to give advice and support to the long-term unemployed, or just leave them alone and pay benefit?
Mr. Piers Merchant: Is my right hon. and learned Friend aware that his welcome initiatives today will be applauded in areas such as the north-east of England, which have suffered particularly severe economic and unemployment problems and which historically have had a low percentage of self-employed compared with the average in Britain? Will he take a special look at the well-publicised claims of the north-east in regard to tourist potential and the growth that could be achieved in that industry with sufficient help centrally?
Mr. Clarke: I hope that through the measures that I have announced and those that we have already taken, through the city action team in Newcastle and Gateshead and the Cleveland initiative that we are taking on Teesside, we shall be giving assistance to the north-east. I agree also with my hon. Friend in the emphasis that he placed on tourism because that is an area with considerable tourist attractions but also high unemployment.

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At present, too many overseas—indeed, British—visitors tend to pass through, perhaps with a short stop at Durham, and then head north to Edinburgh from London. We must do something to detain them longer in the north-east and provide the services that will create jobs and wealth for the local economy.
Mr. Robert Litherland: Is the Minister aware that two former Tory Prime Ministers, the churches, a Select Committee of the House of Lords, chambers of commerce throughout the country, the trade unions and nearly 4 million unemployed people are telling the Government that their policies are not working, that the manufacturing base is in decline and that the economy is in tatters? Is he aware that it is pure arrogance on the part of the Prime Minister and her puppets to say that Conservative policies are working? His statement today is just another pathetic attempt to delude the unemployed.
Mr. Clarke: The hon. Gentleman extracts a simple message from a large number of people allegedly giving it. I find that a cacophany of opinions comes forth from the various bodies to which he referred. It will not do, every time the Government explain that we have had five years of sustained growth in the economy, rising output in manufacturing, record levels of fixed investment and new jobs being created, for Opposition Members to say that that is just a palliative. I suggest that the expression of the hon. Gentleman is simply an expession of his political disappointment as he sees that things appear to be getting somewhat better.
Miss Janet Fookes: May I offer a warm welcome to my right hon. and learned Friend on his initiative in supporting tourism. Will he ignore the snide remarks of Opposition Members on this important matter? Will he from this calculate how many jobs are provided through the building industry and manufacturing of various kinds in support of tourism?
Mr. Clarke: I shall try to obtain the figures that my hon. Friend describes. I am sure that she is right to say that, as soon as one goes to Plymouth in the south-west, one finds that the remarks of Opposition Members on the subject of tourism are treated with total derision, because it is already an important source of employment of all kinds throughout that locality and could be the source of many more jobs.
Mr. Ian Wrigglesworth: Welcome though many of these measures are, is the Minister aware that some of them will be regarded as dealing with the symptoms rather than with the cause of the disease? As the youth training scheme deals with one of the causes of the disease, will he agree that if its status and value are to be improved, it will have to become a recognised qualification that can be used to enable youngsters to go on and obtain further qualifications? Will he discuss the matter with the Secretary of State for Education and Science and seek to bring that about at the earliest possible opportunity?
Mr. Clarke: I can certainly say yes to the substance of that question. It must be our aim to introduce good quality youth training schemes, because youth training must become a permanent part of the preparation of many of our young people for work if we are to have a modern
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and developed economy. I look forward to contributions that press us towards attaining that quality. It is a pity that some people are still prepared to dismiss the whole idea and not see the way in which a modern economy should go.
Mr. Roger Freeman: Is my right hon. and learned Friend aware that his statement about the extension of the community programme will be warmly welcomed by my constituents? That welcome will extend in particular to one aspect of the package—the facility for voluntary organisations to take on additional staff under the community programme. Will he undertake to give the matter broader publicity?
Mr. Clarke: I shall certainly take up that invitation because there is great scope in that area—so long as we make sure that the voluntary bodies that provide places under the community programme provide places in work that will be of continuing use to the unemployed. Many of the voluntary bodies that we have in mind provide a great deal of personal service. That service requires considerable organisation, and those bodies seem to have great scope for providing places under the community programme.
Mr. A. E. P. Duffy: Is the right hon. and learned Gentleman aware that the problems of the long-term unemployed in a traditional industrial district such as south Yorkshire have been exacerbated by the emergence of a poverty equilibrium of low income, poor educational attainment, poor retraining facilities, poor public amenities and now the emigration of skilled and semi-skilled workers? Will he tell the House how even one of his measures will correct one of those conditions?
Mr. Clarke: The enormous expansion of youth training, in particular, and the training initiative, has been aimed at that very problem in the last six years. I agree that in an area such as south Yorkshire, we must ensure that the level of skills is available so that the area remains attractive to new investment and employment.
Mr. Henry Bellingham: I welcome my right hon. and learned Friend's statement and in particular that part of it dealing with local enterprise agencies and enterprise allowance schemes. Will he agree that we have the best ever climate for small businesses and the most comprehensible package to help those businesses? However, will he urge the Secretary of State for Defence to introduce a scheme of voluntary service in the armed forces to complement the community programme?
Mr. Clarke: I agree with my hon. Friend's remarks about the climate for small businesses. The creation of new small businesses has been reasonably sucessful and has provided more employment opportunities. However, there is further to go. In many economies equivalent to ours, more people are employed in small businesses in proportion to the total work force than occurs in Britian. I shall refer my hon. Friend's final point to my right hon. Friend the Secretary of State for Defence to ascertain whether there is enthusiasm in the armed forces for a voluntary service.
Mr. Paddy Ashdown: Some of the measures announced today will be welcomed by some, although too few, of the long-term unemployed. Is the Paymaster General aware that undermanning in many jobcentres

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means that the support and advice that he wishes to offer to the long-term unemployed is simply undeliverable? Jobcentres such as the one in my constituency are so undermanned that the staff are scrabbling to keep pace with the paperwork and pointing applicants towards the notice board. It is wholly out of the question for them to offer advice. Unless the Minister gives the MSC more resources, some of the measures announced today will be meaningless.
Mr. Clarke: We constantly try to make sure that the resources and staffing available to the MSC match its responsibilities. Resources available to the MSC have increased remarkably in recent years, but we have a duty to ensure that the resources are used in the best way and with the best value for money. Therefore, the staff required must be continually assessed. I hope that we get the balance right in Yeovil and elsewhere, but we must not reach the point where our main effort in creating new jobs is creating posts for the employees of the Manpower Services Commission. We shall endeavour to recruit the numbers required.
Mr. Richard Holt: My right hon. and learned Friend will know how much his visit to the Lingdale YTS centre and the job club in Middlesbrough was appreciated. His announcement about the £20 for the long-term unemployed will also be appreciated. One thing that we seek is improved facilities for those have have just become unemployed and who wish to move. Would my right hon. and learned Friend consider easing the rules and regulations to assist those who could take jobs in other parts of the country before they become long-term unemployed?
Mr. Clarke: I was impressed by the Lingdale training centre which is in a depressed area. That gives the lie to some of the comments of Opposition Members, who have said that there are no prospects in such places. Young people are acquiring skills in those centres that will greatly improve their job prospects in the neighbourhood. I welcome my hon. Friend's interest in people who wish to move about the country to obtain work. We shall review the effectiveness of our geographical mobility scheme. Mobility of labour is important; the problem lies in housing policy as much as in employment policy.
Mr. Tam Dalyell: The right hon. and learned Gentleman told my hon. Friend the Member for Falkirk, East (Mr. Ewing) to think about tourism in Grangemouth. The right hon. and learned Gentleman referred to money for the English tourist board, but there was no mention of money for the Scottish tourist board. Is this because the Secretary of State for Scotland has been making cuts, or is there no money available?
Mr. Clarke: I announced money for the British Tourist Authority and the English tourist board. That is the full extent of my responsibility. I shall pass the matter to the Secretary of State for Scotland, who I believe will make a similar statement.
Mr. Andy Stewart: My constituents will welcome the statement on tourism and especially the increased budget for the tourist boards. In addition to our famous Nottinghamshire miners, my constituency has the heritage of Sherwood forest and Robin Hood. Only recently there was an announcement about the
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development of a £25 million holiday village, which will create 300 new jobs. It is an insult for the Opposition to rubbish tourism as a job creator.
Mr. Clarke: As someone who is almost a denizen of that forest, I entirely agree with my hon. Friend's remarks. I hope that the hon. Member for Kingston upon Hull, East (Mr. Prescott) need never visit the area when the jobs are in place to repeat his remarks about ice cream salesmen. The jobs are real and valuable. The hon. Gentleman would obstruct investment.
Mr. Robin Corbett: May I remind the Minister that young blacks and Asians in inner cities such as Birmingham, are trebly disadvantaged when they try to find work, especially against the background of the inner city riots in the summer? What is in the statement to offer them hope of jobs?
Mr. Clarke: First, I rather agree with the hon. Member's analysis. As he knows, we are reviewing our policy on inner cities. A huge amount of money is expended by central Government in the inner city areas, where every possible support is needed to enable disadvantaged young people to get jobs. We must ensure that that money is spent to the best advantage to produce the maximum benefit for the residents and to get to the root of the problems the hon. Member described.
Mr. Richard Hickmet: May I mention one problem with the community programme? To be eligible for the community programme one must draw unemployment benefit or supplementary benefit. A redundant steel worker or mineworker who has invested his redundancy payment wisely and prudently cannot benefit from the community programme. I ask my right hon. and learned Friend to consider this issue. It is unacceptable to have long-term unemployment in a constituency such as mine, or in a mining constituency, just because large redundancy payments preclude people entering the community programme.
Mr. Clarke: I shall consider that question. However, I believe that recipients of unemployment benefit as well as those of supplementary benefit are eligible for the community programme. —[HON. MEMBERS: "No."] We foresee litigation about the benefit rules relating to the community programme. I shall consider the problem raised by my hon. Friend when I review the outcome of that litigation.
Mr. Allen McKay: Will the redundancy payments mentioned by the Paymaster General affect people in small firms that have gone bankrupt? Will the Minister assure the House that redundancy payments will still be made in such cases? The top-up payment of £20 will reduce the payment of supplementary benefit and housing benefit. May we have a report to the House on how the pilot schemes have worked?
Mr. Clarke: The hon. Gentleman raises an important point. The entitlement of the individual worker will not be affected. The workers in a company that has gone bankrupt, or that can no longer meet its statutory obligations on redundancy, will still be entitled to look to the redundancy fund and the Department of Employment for the payment of their legal entitlement. Details of the

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payment to be made to the long-term unemployed who go into work—those mentioned by the hon. Gentleman are all relevant—will be announced in the near future.
Mr. John Butterfill: Does my right hon. and learned Friend accept that the British tourist industry will warmly welcome the initiative that he has announced? Will he confirm that the increase in funding to the British Tourist Authority and the English tourist board is the full amount suggested by the ETB chairman? Will he also confirm that the chairman estimated that, were he to receive that and additional funding, he could create 10,000 new jobs? Can the Minister give us some idea of exactly where—he mentioned the beach resorts, which I welcome—the additional money will be deployed? Finally, will he confirm that tourism creates not only ice cream salesman jobs, but real, long-term jobs in construction, the steel industry and the linen industry?
Mr. Clarke: The sum that I mentioned was the amount for which the chairman asked. The chairman, who has considerable expertise in such matters, and no doubt with the support of his board, estimated the new jobs that would result. We are discussing with the boards the precise deployment of the moneys that we have made available. I have already mentioned the emphasis that we shall place on regions with high unemployment. My hon. Friend concluded with some perfectly valid points. I hope that today's exchanges, and the support that we have given the tourist boards, will stop people making flippant and hostile remarks about tourism.
Mr. Charles Kennedy: Will the Paymaster General acknowledge that those of us who represent constituencies with fragile rural economies will give an unqualified welcome to the added priority given to tourism—provided, as the hon. Member for Linlithgow (Mr. Dalyell) made clear, that extra cash is available for Scotland? Will the Paymaster General accept that the Labour spokesman, the hon. Member for Kingston upon Hull, East (Mr. Prescott) speaks only for himself and the Labour party, and not for the alliance, when it comes to the importance of tourism?
Mr. Clarke: I shall ensure that the Scottish position is made clear as rapidly as possible by those with more responsibility than I have for these matters. I endorse what the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) said. One need only look at the seats represented by the Liberal party and the Social Democratic party to realise that no hon. Member from either of those parties is likely to join in Labour's attack.
Several Hon. Members rose—
Mr. Speaker: Order. I will allow questions to continue for another five minutes. We have a very heavy day ahead of us. If questions are short, everyone may participate.
Mr. John Watts: In connection with the pilot areas for the operation of the new counselling service for the long-term unemployed, will my right hon. and learned Friend ensure that at least some areas of severe skill shortage are included in that scheme as they contain significant numbers of long-term unemployed people and the scope for helping people into jobs through counselling may be greater there than in some other parts of the country?
Mr. Clarke: I appreciate that extremely valid remark, which is particularly relevant to my hon. Friend's constituency, where the problem is finding sufficiently skilled people to maintain the expansion of firms.
Mr. Robert Banks: My right hon. and learned Friend is to be congratulated on his valuable statement. Will he ensure that the extra funds available to the BTA have a compensatory balance factor to allow for adverse fluctuations in sterling? Will he also ensure that attractions are stimulated in Yorkshire and the north of England to draw more tourists away from London and the south? Will my right hon. and learned Friend further ensure that the grants given under section 4 are dealt with speedily so that we can get new jobs into place as soon as possible?
Mr. Clarke: If my hon. Friend had asked my right hon. Friend the Chancellor of the Exchequer a few moments ago whether any of the public spending provision could be made subject to movement in the exchange rates, he would not have got a sympathetic answer. It is impossible in public finance to budget on that basis. I am, however, sympathetic to my hon. Friend's point about the present uneven distribution of job opportunities in tourism and leisure. The Government intend to bear that in mind when discussing how the money should be distributed.
Mr. Peter Thurnham: I am sure that these measures will be welcomed in parts of the north-west with high long-term unemployment. Is my right hon. and learned Friend aware of the good reception being given locally to a pilot scheme in Bolton to provide guaranteed jobs for those who have been out of work for three years or longer?
Mr. Clarke: I am aware of that and I am grateful to my hon. Friend for keeping me in close touch with the progress of that pilot scheme, which will have a much wider interest if its success continues.
Mr. David Maclean: Is my right hon. and learned Friend aware that in the Lake District, we realise that thousands of genuine jobs depend on tourism? Will he ensure that the extra resources available do not go to Hull but come to places such as the Lake District where we are not snide and sneering about such jobs?
Mr. Clarke: I have known Labour local authorities who disbursed their public funds according to the majorities of their members in different parts of the local authority area. The Government do not do that. They are as concerned with the unemployed people in Hull as they are with those in the Lake District. Nevertheless, we propose to make good use of the funds available.
Mr. William Cash: Will my right hon. and learned Friend accept my congratulations on the extremely interesting package he has announced today? When will he introduce legislation which is directly relevant to small businesses and to local enterprise agencies?
Mr. Clarke: We do not need primary legislation for any part of the package that I have announced today, except for the changes on redundancy rebate. The other parts will be brought into effect as soon as possible.
Mr. Rob Hayward: I too welcome my right hon. and learned Friend's announcement. Will he address himself to two problems? First, in areas such as

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Bristol, places on existing youth training schemes have not been filled. A similar point was raised by my hon. Friend the Member for Slough (Mr. Watts). Secondly, will my right hon. and learned Friend consider contacting companies that are announcing substantial expansion, to which the Opposition have not referred, such as Peugeot in Coventry, Farm Machinery in Doncaster and Nissan in the north-east, and ensure that they consider expanding the number of training places? The Government should assist with those places.
Mr. Clarke: There is a surplus of youth training scheme places in most localities. It is important to retain some surplus because it gives more choice to would-be trainees, enables us to match their individual needs and gives some flexibility. Although we must ensure that we are not financing more places than necessary, the surplus gives us an opportunity to raise the quality of the training.
I note what my hon. Friend said about new firms and agree that the Government must ensure that the many firms that are expanding should be enabled to increase their contribution towards the training effort.
Mr. John Townend: Is my right hon. and learned Friend aware that extra help for tourism and small businesses, will be very welcome in my constituency? Will the expansion of the community programme allow him to consider removing the anomaly of those who are long-term unemployed and not drawing social security benefit—often because they have a working wife—not being allowed to apply for a place on the community programme?
Mr. Clarke: I am grateful to my hon. Friend. It is important to recognise that in a modern, developed economy such as ours, positive steps must be taken to accelerate the growth of new jobs in small business, through self-employment and in new industries such as tourism and leisure. The Opposition too often look back to the traditional pattern of industry where their political base used to lie. That is why they are so resistant to developments in those areas.
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The Government continue to review the benefit rule in relation to access to the community programme. It is important that there are rules to enable the Government to target the opportunities of the community programme on those who have been unemployed principally because they have lost a previous job.
Mr. John Evans: May I warmly congratulate the Paymaster General—[HON. MEMBERS: "Hear, hear."]—on his discovery that people who have been unemployed become demoralised by their inability to find work? Will the Paymaster General ensure that that revelation is passed on to the chairman and vice-chairman of the Conservative party?
Will the Paymaster General explain to the House what he meant when he said in his statement that the job start scheme will be concentrated on people on high rates of benefit? Does this mean that those who have been unemployed for a long time will not qualify for this new scheme? Will the people who qualify for this new scheme receive family income supplement? Are not the Government simply switching resources from one area to another?
Mr. Clarke: We tested the scheme's effectiveness within pilot areas and all those who have been unemployed for more than 12 months will be eligible for this new payment. The hon. Member for St. Helens, North (Mr. Evans) mentioned the impact that will have on taxation, family income supplement and other matters affecting the beneficiary. All these matters will be dealt with in a more detailed statement as soon as possible. The Government's aim is that all those people will receive an additional £20 in their pockets to enable them to move from benefit to employment.
My "discovery" is not a new one. While looking at the Opposition during the statement by the Chancellor and during my own statement, I discovered that there is a growing sense of demoralisation among some underemployed ex-Ministers on the Opposition Benches. Perhaps they will be able to take advantage of the services offered by the Government.

Paymaster General (Reference to Member)
Mr. Martin Flannery: On a point of order, Mr. Speaker. My point of order concerns the Paymaster General, who has just been answering questions. I hope his answers to questions were not as remote from reality as his remarks about me in the House at Question Time a fortnight ago. The Minister was endeavouring to answer a question from my hon. Friend the Member for Bolsover (Mr. Skinner). I think the Minister was rather stung about it, as he got carried away. The Minister is usually a smooth operator with a fatal facility for words, but he pushed himself into a position he could not get out of. He said—
Mr. Speaker: Order. The point of order should be addressed to me and it is difficult for me to answer for the Minister.
Mr. Flannery: Mr. Speaker, what the Minister said has caused me a great deal of inconvenience. It was quoted in the press and if the Minister had said it outside the House, I would have sued him. It was quoted in the press. I will read what he said:
"I notice that the hon. Member for Sheffield, Hillsborough (Mr. Flannery) has just taken his place."
When he said that—I do not know whether his eyes are bad—I was in a school in Dusseldorf in West Germany studying primary education.
The right hon. and learned Gentleman lingered within the same idiom, to which he seems to be addicted, in the same way that I am addicted to Question Time in the House. He said:
"If he had been here sooner, instead of engaging in some part-time occupation, his earlier question could have been answered." —[Official Report, 29 October 1985; Vol. 84, c. 804.]
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That has caused me a good deal of inconvenience. It was in my local press, a very Right-wing Tory press that does not like me and which I assume likes the right hon. and learned Gentleman, although it seems to have a certain affection for my hon. Friend the Member for Bolsover (Mr. Skinner). I should like an apology from the right hon. and learned Gentleman and a confession that he was as remote from reality then as he was when he answered questions this afternoon.
The Paymaster General (Mr. Kenneth Clarke): Further to the point of order. I hoped that I had sorted out that unfortunate matter in a letter which I wrote to the hon. Gentleman last week, which I said he could use quite freely and publicly. I regret that he was caused embarrassment locally by the serious reporting by his local newspaper of a frivolous incident in the House, which was not accurately reported in Hansard. I do not blame the Hansard reporter because it was difficult to hear what was being said at the time, but the remark to which the hon. Gentleman takes particular objection was aimed at the hon. Member for Bolsover (Mr. Skinner). He had just slipped into his place and I was engaged in an exchange with him. I can tell the difference between the hon. Members for Sheffield, Hillsborough (Mr. Flannery) and for Bolsover. I can confirm, if it helps with his local newspaper, that both are most assiduous in their attendance and that both make themselves only too readily apparent when they are here at Question Time. The hon. Member for Hillsborough had not been in his place for a question earlier on but I accept that that was because he was unavoidably absent on parliamentary business with his Select Committee.
Mr. Speaker: Honour is satisfied. I think that the hon. Member for Sheffield, Hillsborough (Mr. Flannery) has received a generous apology.

TSB (Scotland) Sale (Judgment)
5.24 pm
Mr. Jim Craigen: I beg to ask leave to move the Adjournment of the House, under Standing Order 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"The Davidson Judgment in the Court of Session in the TSB (Scotland) sale
The Prime Minister, as the First Lord of the Treasury, must have known today that the Treasury is to appeal against the Trustee Savings Bank ruling by a Scottish judge that the assets of the bank belong to its depositors. I recognise that there is a difficulty, but this is a matter of considerable importance in Scotland and in the kingdom as a whole. Throughout the consideration of the Trustee Savings Banks Bill, which I followed closely, Treasury Ministers insisted on the Government's neutrality. In the absence of an adequate statement by Ministers today and the apparent contradiction in the announcement by a Treasury spokesman that the Government intend to appeal, I ask you, Mr. Speaker, earnestly to consider a debate.
Mr. Speaker: The hon. Member for Glasgow, Maryhill (Mr. Craigen) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the Davidson judgment in the Court of Session on the TSB (Scotland) sale."
I have listened with care to what the hon. Member for Maryhill has said, but I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House.

BILL PRESENTED
  DOCKYARD SERVICES
  Mr. Secretary Heseltine, supported by the Prime Minister, Mr. Secretary Britian, Mr. Secretary Younger, Mr. Secretary Baker, Mr. John Moore and Mr. Norman Lamont presented a Bill to make provision in connection with any arrangements that may be made by the Secretary of State for or with a view to the provision by contractors of certain dockyard services: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 9.]

Statutory Instruments, &c
Mr. Speaker: With the leave of the House, I propose to put together the 11 motions relating to statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &c.).
That the draft Undertaking between the Secretary of State for Scotland and Regionfields Ltd. trading as Easdale Island Shipping Line be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Pushchairs (Safety) Regulations 1985 be referred to a Standing Committee on Statutory Instruments, &c.
That the Legal Aid (Scotland) (Financial Conditions) Regulations 1985 be referred to a Standing Committee on Statutory Instruments, &c.
That the Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations 1985 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Merchant Shipping (Prevention of Oil Pollution) (Amendment) Order 1985 be referred to a Standing Committee on Statutory Instruments, &c.
That the Legal Advice and Assistance (Financial Conditions) Regulations 1985 (S.I., 1985, No. 1614) be referred to a Standing Committee on Statutory Instruments, &c.
That the Legal Aid (Financial Conditions) Regulations 1985 (S.I., 1985, No. 1615) be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Employment Subsidies Act 1978 (Renewal) (Great Britain) Order 1985 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Dental Auxiliaries (Amendment) Regulations 1985 be referred to a Standing Committee on Statutory Instruments, &c.
That the Customs Duties (ECSC) (No.2) Order 1985 i S.I., 1985, No. 1630) be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Redundancy Payments (Local Government) (Modification) (Amendment) Order 1985 be referred to a Standing Committee on Statutory Instruments, &c. —[Mr. Archie Hamilton.]
Question agreed to.

Orders of the Day

  Debate on the Address
  [FIFTH DAY]
  Order read for resuming adjourned debate on Question [6 November],
  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—[Sir Reginald Eyre]:—
  Question again proposed.

  Industry and Employment
  Mr. Speaker: May I again make an appeal for brief contributions in the Queen's Speech debate? No fewer than 33 right hon. and hon. Members have shown their interest. I have no authority to limit speeches to 10 minutes between 6 o'clock and 8 o'clock or between 7 o'clock and 9 o'clock but I hope, as was the case yesterday, that voluntary restraint will be shown so that as many right hon. and hon. Members as possible may be called to make contributions to this important debate.
  5.26 pm
  Mr. John Smith: I beg to move, at the end of the Question, to add:
  "But humbly regrets that the Gracious Speech proposes no change in policies which have caused record levels of unemployment, a growing and alarming deficit in Britain's balance of trade in manufactured goods, and a continuing erosion of Britain's industrial base, includes privatisation measures which will cause the forced sale at cheap prices of valuable national assets and increased unemployment, and seeks to remove the statutory protection afforded by Wages Councils in order to impose further cuts in the wages of the lowest paid."
  In the amendment we seek to draw attention to the facts about Britain's industry and economy, about the real nature of the Government's proposals in the Gracious Speech and about their real meaning and implication. I emphasise the need for reality because it seems that in many ways the Government have become totally disconnected from reality. The Chancellor's autumn statement has confirmed that provisional view.
  A growing body of opinion in this country—including chambers of commerce, the Select Committee of another place and distinguished economists and correspondents—emphasises what the Opposition have been saying for many years: that there is a serious crisis facing this country, particularly its manufacturing industry. It agrees that there has been what can only be called a terrible retrenchment of manufacturing industry in this country since 1979. It confirms that there is a growing and appalling deficit in the balance of trade in manufactured goods and that as more time goes by we realise with frightening clarity the missed opportunity of North sea oil and the problems that are being opened up now that North sea oil is in the peak year of its production.
  There is a curiosity in the Government's approach to manufacturing industry. No doubt we will hear this further
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  when the Secretary of State replies. All Government statistics about the economy and particularly about industry start in 1981. We are always told that there has been an increase in output or investment or whatever the criteria are. The statistics all start at what the Government call the trough of the recession in 1981. Who do they think were the Government between 1979 and 1981 when massive damage was done to Britain's industry and about 20 per cent. of our manufacturing capacity was wiped out? They cannot try, by some statistical sleight of hand, to pretend that they were not the Government for the first two years of their period of office.
  As one knows, it is very easy to show that figures are improving if one compares them with the lowest ever figures in our history. If one is taken to the bottom of the valley, it is relatively easy to make it look as though one is making steady progress up the hill. That is the substance of the Government's statistical manipulation. Manufacturing output is still 10 per cent. below the level at which it stood in 1979 when they took office. We have lost not only jobs but markets and industries and whole areas of economic endeavour.
  It was therefore remarkable to hear the Prime Minister refer last night at the Mansion house to the renewal of this country's assets. What does she see as she travels around the country? Does she see a country that is being renewed? Through some curious prejudice, the Prime Minister never travels by rail. I understand that she has never been on a British Rail train since she became Prime Minister. When one travels around the country by rail one sees with startling clarity the devastated areas. If the Prime Minister and her colleagues made a few journeys by rail, they would see clearly, as those who have been away from this country for some time tell us, how awful the devastation is. Those hon. Members who represent industrial areas do not need to be told by visitors to this country what has happened to British industry.
  Since 1979, output in Japan has increased by 20 per cent. It has increased by 10 per cent. in the United States, by 6 per cent. in France and by 4·3 per cent. in West Germany. In the United Kingdom is has increased by 3·9 per cent. However, we should look a little more carefully at the United Kingdom figures. Over half the rise in United Kingdom output is the direct result of higher North sea oil output. During that period, it increased from 1·8 per cent. to 4 per cent. of our gross domestic product.
  Can the Government claim the credit for North sea oil? The Conservative party was not in office when investment was made in the North sea oilfields. That investment created the greatest windfall that any Government have inherited in the 20th century. Apart from oil, the increase in United Kingdom output has averaged 1·3 per cent.—a pitiful figure for a Government who have been in office since 1979. None of the countries that I have mentioned has the benefit of North sea oil. We compete with European countries which do not enjoy the benefit of Government revenues in terms of the balance of trade, the balance of payments and the employment that North sea oil has brought to this country.
  Mr. Nigel Forman: Why does the right hon. and learned Gentleman insist upon the North sea oil argument? If he were applying the same logic to the American economy, would he exclude their grain exports?
  Mr. Smith: North sea oil production and the revenues to be obtained from it happened in 1979. This will not last for ever. There has been grain production in the United States for a very long time and one expects it to remain for a very long time. The hon. Gentleman does not seem to have grasped the point that North sea oil is a temporary phenomenon—sadly so for this country.
  Mr. Forman: What does the right hon. and learned Gentleman mean by "temporary"?
  Mr. Smith: The hon. Gentleman should read what he has obviously not read: the evidence given by the Treasury and the Department of Energy to the House of Lords Select Committee on Overseas Trade, which shows that 1985 represents the peak of North sea oil revenues and that from now onwards oil revenues will diminish. The Government have grossly over-produced North sea oil. They have been pushing it out of the North sea as though it were going out of style. They need North sea oil revenues to pay for the unemployment that they have created. The devastating verdict of history upon this Government's economic management will he that they have used every penny piece of our North sea oil revenues to pay for the extra unemployment that they have created since 1979.
  The figure can be easily calculated. Every person who is unemployed costs at least £6,000. The Government have to pay social security benefit to the unemployed and they lose income tax, national insurance contributions and value added tax. If only 2 million more people are unemployed—of course, more than 2 million extra people are now unemployed—the cost of their unemployment is £12 billion, which is roughly the amount of North sea oil revenues for the last year. That will not be the amount in the coming year, because of the difference in the relationship of sterling to the dollar. It can be proved beyond doubt that that is where the oil revenues have gone.
  If somebody had stood on an election platform in 1979 and said that if a Conservative Government were elected, there would be 3·5 million people unemployed, he would have been booed off that platform for exaggerating. If he had stood on the same platform and said that a Conservative Government would use the North sea oil revenues not to make tax cuts or for public expenditure investment but exclusively for the unemployment that would be created in the years to come, he would also have been booed off the platform. But that is what has happened since 1979. It is the direct result of the Government's policies. Industry has wilted under the combination of high interest rates and high exchange rates. British industry has been placed in a monetarist straitjacket which makes our goods uncompetitive abroad and deters investment in this country.
  The Government say that there has been a small increase in investment in manufacturing industry. This is because regional grants and capital allowances are coming to an end and many companies are rushing to get in their applications in time. Therefore, there will be a temporary upward blip in the figures. However, from 1987 onwards the incentives will have been removed and there will be a return to the downward trend.
  The worst feature of running high interest rates and high exchange rates at the same time is that they reinforce each other in a vicious spiral. High interest rates, which are the result of the Government's monetarist policies, contribute
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  to the high exchange rate by attracting funds from around the world, thus forcing up the value of sterling. The truth is that the Chancellor of the Exchequer runs financial policies that pay no attention to the needs of manufacturing industry. Day by day, more and more industrial managers are realising this and are saying so. In the meantime, there is a huge outflow of funds from this country to provide investment for the equipment of our competitors. We are providing them with resources so that their workers can have the equipment with which to beat us in our own markets and in Third world markets.
  Nevertheless, we are told by Government representatives that to concentrate upon manufacturing industry is a mistake—that we need to concentrate on services. But do they not know, as witness after witness from British industry told the Select Committee on Overseas Trade of another place, that to a large extent the service sector is dependent upon manufacturing industry? Do they not know that only 20 per cent. of our services are internationally tradeable? I am not against services. This country should have as lively a service sector as possible, but we shall not solve unemployment or replace the wealth-creating capacity of our disappearing industries by imagining that this country can live off North sea oil revenues, an expanding service sector and a few profitable industrial centres.
  In evidence to the Select Committee, Lord Weinstock said:
  "what will the service industries be servicing when there is no hardware, when no wealth is actually being produced? We shall be servicing, presumably, the production of wealth by others. We shall supply the Changing of the Guard, we will supply the Beefeaters around the Tower of London. We will become a curiosity. I do not think that is what Britain is about; I think that is rubbish."
  I think all hon. Members would say, "Hear, hear," to Lord Weinstock.
  Mr. John Mark Taylor: Is the right hon. and learned Gentleman referring to the Lord Weinstock who seems to be accruing cash within GEC and not investing it in manufacturing?
  Mr. Smith: I am glad that the hon. Gentleman has drawn attention to the fact that the result of the Government's policies is that Lord Weinstock can make more money by not investing in manufacturing industry. I hope that the hon. Gentleman does not think that he has helped his Government by that intervention.
  In the meantime, our trade deficit in manufactured goods increases relentlessly. From a very large surplus in 1980, we are heading in 1985 for a £5 billion deficit in the balance of trade in manufactured goods. The Government appear to be completely oblivious to this. In opening the debate on the Gracious Speech, the Prime Minister concentrated on the slight increase in manufactured exports. There was not a word about imports. How one can talk about trade without referring to exports and imports beggars belief.
  Everyone who thinks seriously about this matter is worried about what will happen when North sea oil runs out and we have an appalling deficit in our balance of trade in manufactured goods. In evidence to the House of Lords Select Committee on Overseas Trade, Treasury officials answered that question, presumably with the authority of Ministers. The witnesses said that the gradual decline in North sea oil output would automatically bring about an adjustment in the economy which will compensate for the

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  loss. As North sea oil output increased, the value of the pound would fall against the other currencies, thus making British goods and services more competitive overseas and improving our balance in non-fuel trade. The witnesses said that the services section would increase and sunrise industries would replace the so-called sunset industries. So we need not worry—the economy will change inevitably and almost automatically. There will be a compensating adjustment, so we can put our fears at rest.
  The Government say, "The only people who are asking these questions are those who are seeking to be difficult." The problem with that rosy view of Britain's future is that the connection between North sea oil and the exchange rate is not as automatic as was assumed. Those who wonder about that should look at the evidence given to the Select Committee by the Bank of England. The problem is also that there is no automaticity about replacing so-called sunset industries with sunrise industries. Almost half our balance of trade deficit in manufactured goods is in the information technology industries which are supposed to be at the forefront of the sunrise sector. We cannot necessarily look for salvation there.
  Above all, the complacent prophets do not understand that if the industrial base has been disastrously weakened and large parts of it have been destroyed, the capacity of manufacturing industry to respond to a favourable exchange rate and to create wealth on the scale required by the decline in oil will be in serious doubt. We may have all the favourable situations for an expansion in industry but, if there is no industry to expand, it will profit us little. To read the Gracious Speech is to read the words of a Government who seem to be completely unaware of that fact.
  The Gracious Speech did not mention the unemployment problem. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) will deal in detail with unemployment measures and the attempt through wages council legislation to force more people into part-time, low-paid jobs. The Government's campaign—it has been orchestrated throughout the whole establishment—to suggest that substantial numbers of the unemployed do not want to work or are not genuinely seeking work is contemptible. [Interruption.] I hear a mutter from an hon. Gentleman who has not yet identified himself. I do not know who said that, but I distinctly heard an hon. Member say, "It is true." That is typical of the Conservatives.
  Those who have had the guts to identify themselves include Michael Edwardes. He said that he thought that many people were not willing to work. He has made more money out of not working during the last month or two than anyone else in Britain. He just sits there in job after job which he has taken over, collecting large golden handshakes. He put a fair number of people into unemployment while he was involved in managing British industry.
  Best of all among those Conservatives who have identified themselves is the deputy chairman of the Conservative party—that "second among equals"—who told us in his celebrated speech that young people had to get off their butts. During the past two weeks, Labour Members, including my right hon. Friends the Leader of the Opposition and the Member for Birmingham, Sparkbrook (Mr. Hattersley), have been challenged to dissociate themselves from the remarks of various
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  members of our party. I ask the Secretary of State for Trade and Industry to dissociate himself unequivocally from the remarks of the deputy chairman of the Conservative party. The Prime Minister and other Members of Cabinet have refused to do so.
  This is a chance for the right hon. and learned Gentleman to dissociate himself from those remarks. If he does not, we shall know that all the Conservatives believe that, on the principle of collective responsibility, if on no other basis, young people should get off their butts and look for work. I hope that the right hon. and learned Gentleman will take advantage of this magnanimous opportunity to put the record straight—[Interruption.] The Secretary of State for Trade and Industry and the Paymaster General, who are both Queen's counsel, can probably give each other the advice they deserve. I shall see what the Secretary of State makes of that advice when he gets the opportunity.
  The Secretary of State has just taken office. His move was unexpected. As lawyers would say, it was not "reasonably foreseeable" that there would be a chain of events that would end up with the right hon. and learned Gentleman occupying his present position. He is being as cheerful about it as he can. He is entitled to be cheerful because he was not demoted. As he well knows, he was promoted from the Home Office to Trade and Industry.
  One of the first things the Secretary of State did on being promoted was express concern about regional development policy. He said that, as he came from a northern constituency, he knew the problems especially well, implying that there would be changes in regional development policy now that he was at the helm. There is plenty of room for change. The whole of regional development policy was being destroyed while the right hon. and learned Gentleman was at the Home Office doing damage in other directions. I hope that the right hon. and learned Gentleman will take the opportunity to announce a series of initiatives and will tell us that the Government's policy is to spread prosperity fairly, especially in his constituency.
  I hope that the Secretary of State will say something about the steel industry. No other industry in Britain in recent years has been reduced so drastically and no work force has faced such penalties. There are no greater monuments to inactivity than the deserted steelworks. I hope that the right hon. and learned Gentleman will confirm the Government's policy of maintaining the five main steel-making plants. I am sorry that the Government gives them a guarantee for only three years. I do not know why the Government cannot give a longer guarantee. [Interruption.] The Government may think that it is unreasonable to give a guarantee for longer than three years. They may be taking account of the life of a Government. I do not think that it is too much to tell an industry that it is secure for the next three years.
  Planning in the steel industry has been based on the assumption—this is clear in the rationale for the decision on the Gartcosh steelworks—that there will be no increase in demand for steel during the 1980s and 1990s. A flat projection has been put forward. If the Secretary of State agrees, let us have no more nonsense about there being no prospective revival of manufacturing industry. If the British Steel Corporation's assumptions are true, the Government's promises are false. I hope that the Secretary of State will meet that point head on and will think again about Gartcosh. He must know by now from

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  the opinion that has welled up not only in the area directly affected but throughout Scotland—many Conservative Members who share his political views feel this way—that the proposed closure of Gartcosh is a dagger aimed at the heart of the future survival of the Ravenscraig steelworks.
  The Government say that we must prove that the closure of Gartcosh will harm Ravenscraig. We say that we cannot take a cold rolling mill out of the middle of an integrated steel-making complex and expect it to be as healthy, vigorous and successful as it was before that surgical operation. One does not need a series of facts and figures to make that point—it is the simplest of points. Gartcosh is not a separate plant but an integral part of the complex. No one part of the country has suffered uniquely—steelworks in Wales, Shotton, Sheffield and the north-east have suffered because of the decline in the steel industry. The time has surely come for us to draw an EI Alamein line around those important industries and say that there will be no more retreats. This country must have a future as a manufacturing country, and without its basic industries it cannot do so.
  Mr. Tony Favell: Is it not true that much of the decline in the steel industry has been brought about by the contraction of the motor car industry, and that a great deal of that contraction is due to the wrecking tactics of trade unions involved in that industry, orchestrated by the Labour party?
  Mr. Smith: The hon. Gentleman seeks to blame everything in this country on the trade unions. That was the Government's tactic for a long time. Government apologists wondered whether they should say things were bad and the fault of the trade unions or quite good after all. We seem to be on the latter tack at the moment. I do not take the hon. Gentleman's intervention seriously, and I shall explain why when I deal with the motor car industry, which is another of our fundamental industries.
  I hope that the Secretary of State will pay attention to the report of the Select Committee on Scottish Affairs when it reports. I do not know what the report will contain, but the Committee has taken a great deal of important evidence. I hope that it will be possible for him to take note of it and for us to discuss it in the House before any irrevocable decisions are taken. On that matter, as with some others, the Government should resolve to listen to representations. This is still a democratic country, at least in form. They should listen with care and attention, especially when a broad section of opinion speaks loudly, vigorously and with obvious sincerity and tells us that the Government are wrong. It does not need a major adjustment of Government policy to make a significant change in that direction. That is not the only matter upon which I believe the Government have been negligent.
  As the hon. Gentleman reminded me, I shall deal with the motor car industry, with which we face a serious problem. I should like the Secretary of State to tell us what he will do about the continuing policy of General Motors (Vauxhall) to import cars on every conceivable occasion and import parts for those assembled in this country, so to a large extent the operations of General Motors (Vauxhall) are a mere screwdriver operation.
  I am aware that the Secretary of State has voiced his complaints, because I understand that the emissaries sent from the Department of Trade and Industry to the company
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  did not receive a happy reception. That company has decided that it will follow the policy of its own economic advantage. The Secretary of State knows perfectly well that if such a policy is allowed to continue we shall have no chance of stemming our balance of trade deficit.
  I hope that the Secretary of State will make General Motors (Vauxhall) decide to keep some of the promises that it gave the trade unions in 1983—that it would increase production at Ellesmere Port to 35 cars a day. It is now only 24 a day. I hope that the Government will take some action.
  I hope that the Government will bear in mind the fact that they are not powerless to deal with multinational companies. The Bedford vans which are supplied to the Ministry of Defence are an important contract for that company. I do not see why the Government should favour companies that follow policies inimical to our economic health by awarding them favourable contracts.
  On the subject of trade, I hope that the Government will pay close attention to ensuring that British exporters are sufficiently backed in world competitive markets. I hope that some lessons have been learned from the Bosporus bridge affair. It is widely accepted by all those involved in the sad saga of that contract that if the Government had offered at the beginning of the process the assistance to British companies which they eventually offered at the end, the contract would have been secured. One does not need to say more than that to show that the matter needs to be reviewed.
  The supply of vehicles to the Bangkok mass transit authority is another important contract for this country's vehicle industry. I read today in the Financial Times that there is a further difficulty about obtaining that contract. All sorts of problems may be involved.
  I hope that the matter will be pressed vigorously by the Government. The knowledge that an important contract, which at the beginning amounted to 4,000 single and double decker buses to be supplied by British Leyland, had been in the air for a long time as the company pursued it, makes it hard to understand why the Prime Minister did not choose to visit Bangkok on her south-east Asia visit. If it were the French Government who were seeking the contract, the French President would have been there before any decision was made by the Government. I understand that the Minister of Trade visited Bangkok the week after the Cabinet had reached its adverse decision. It might have been a little more intelligent to go the week before. If I am wrong about that, I can be corrected, but I believe that I am correct when I say that the Prime Minister did not go to Thailand during her visit to southeast Asia.
  Mr. Anthony Nelson: The right hon. and learned Gentleman may, like me, have read some press reports which suggested that the Prime Minister's recent intervention in the Ptarmigan deal was unhelpful. There is a view that in many major contracts abroad, whether public or private, the intervention of senior politicians does not help. That is an important point. What is the right hon. and learned Gentleman's view?
  Mr. Smith: What struck me as odd about the Ptarmigan deal was the way in which the Prime Minister prostrated herself in an undignified fashion to obtain it. She left herself open to the result, which was an undignified rebuff.

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  The hon. Gentleman makes a serious point. We may have a Prime Minister who is not helpful in pursuing Britain's trade. If that is so, the most palatable member of the Government should be selected to be the emissary. If I were to ask the hon. Gentleman to select the most palatable member of the Government to do that, he would be in difficulty. I find it nearly impossible. If not in the Cabinet, there must be someone in the junior ranks who could do the job with reasonable success.
  I hope that the Secretary of State will find some time to tell us what will happen in the negotiations for the renewal of the multi-fibre arrangement. Those of us who have taken part in the discussions in the House—it is almost a year since they started—about the renewal of the MFA have been staggered by the Government's laid-back approach. They have wound themselves up with great difficulty to ask for a renewal of the MFA.
  The Secretary of State must know that the British attitude is crucial to the European attitude because the United Kingdom is in a pivotal position within the European Community between the unlimited free traders and those who believe that there must be some orderly marketing for textiles. I hope that the Secretary of State will take that point seriously, because there are 250,000 jobs in the British textile and clothing industries. That is a heavy responsibility for any Government to carry when taking part in international negotiations. I hope that we shall return to that subject. The Government's discharge of their responsibilties will be monitored with great care by the Opposition.
  I have talked about what the Government have not done. Unfortunately, I must deal with some of the things that they propose to do, because one of their main themes is privatisation, especially that of the British gas industry. The Secretary of State for Energy told us some time ago that there were three reasons for the privatisation of British Gas. The first was that there should be an end to state intervention in the industry's affairs. Secondly, there should be an end to what was called "nominal public ownership", which was to be translated into what he called "real public ownership". Thirdly, there was to be an improvement in efficiency.
  It was interesting to note that there was no reference to competition. That is often used by the Government usually incorrectly as justification for privatisation. Even the Secretary of State for Energy is aware that there cannot be any competition when we are dealing with a necessary monopoly that has a pipe system running throughout the country, such as the British gas industry. We have been told that we must privatise to stop state intervention, and that is a bit too much to accept.
  Who has intervened more in the British gas industry and manipulated its finances more than the Government? Which Government forced the British Gas Corporation to increase its prices by 10 per cent. above the level of inflation for three years in succession? That was meddling in the affairs of the British Gas Corporation. We do not need to privatise to stop that happening. We need merely to enter into a self-denying ordinance not to continue those manipulations. As the Secretary of State is aware, it was a clever political game.
  By the use of the gas levy, about £1 billion a year was extracted from the gas industry. It was a tax on the gas user and identified and known as a tax, but one for which in
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  the normal way the permission of Parliament was not obtained. The Prime Minister is adept at leaving responsibility on the doorsteps of others, and the odium for the increase went to a public corporation which she dislikes intensely on ideological grounds. It was a smart but disreputable manoeuvre and one which is being perpetuated.
  Can the Secretary of State tell us whether the gas levy will be maintained after the British Gas Corporation is privatised? What will be said about that when an offer of sale is made? He knows perfectly well that if he announces the continuation of the gas levy, that will have a considerable effect on the price. He knows also that if the gas levy is not maintained the money will have to be made up by taxation from some other source. We will listen with great care to what the Secretary of State says about that.
  There are some serious questions to be asked about employees' rights and conditions, which are likely to be diminished. The notion that I find most offensive is that somehow state ownership of the British Gas Corporation is only nominal. There was an unseemly dispute between the Earl of Stockton and the Secretary of State for Energy about where the family silver was going. The noble Earl got it right, but in came the Secretary of State for Energy seeking to dissociate himself from the very man he introduced and applauded at the meeting at which the speech was made. Characteristically, it was a case of the Secretary of State for Energy appearing in two places simultaneously, urging on the Tory Reform Group and speedily dissociating himself from any remarks which might be to his political harm.
  He said that the family silver would be handed back to the family, but what was our experience with British Telecom? In that case the family was regarded as international and there were special allocations of shares in the United States and Japan; 18·6 per cent. of the shareholding of British Telecom is now in the hands of overseas investors who made £180 million in one day as the shares traded up from 50p to 94p. No Government in history have handed to overseas investors £180 million in one day's operations.
  Mr. Tony Baldry: It may interest the right hon. and learned Gentleman to know that exactly 39 years ago today, during the debate on the Loyal Address, Winston Churchill described as a preposterous fraud the intention of the then Labour Government to nationalise the gas industry. The surprise is not that we are privatising the gas industry but that it has actually taken us 39 years to denationalise it.
  Mr. Smith: I am not sure that that intervention adds much to the debate, because the hon. Gentleman knows perfectly well that in the 39 years that have passed we have created a highly successful gas industry that is a credit to the nation. It is extremely well managed. It has been monitored by all sorts of bodies, such as the Monopolies Commission, and in comparison with other companies, both public and private, it has come out extremely well. It has carried out a massive transition from being a manufacturing industry to being a processing and distribution industry. It has laid pipelines from one end of this country to the other, supplies British industry at competitive prices and provides cheap fuel for the domestic user. The British gas industry has a proud record of success and it is deeply unpatriotic to attack it for the

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  narrow ideological reasons given by the hon. Gentleman. When one scratches the so-called patriots on the Government Benches one finds that just below the Union Jack there is a hand outstretched to grab the quickest profits that can be found.
  The Government are shamelessly raiding the public treasury. It is not good enough for them to talk about handing away the silver. The truth of the matter is that it is not nominal, but crucial to public finance. What will happen to our public finances if we give away the right to profits of £1 billion every year from the British Gas Corporation? That profit and the right to earn it will be sold with the shares. As my right hon. Friend the Shadow Chancellor said earlier, the profit will not be lost for just one, two or three years; that money will be lost in perpetuity to the public exchequer. In the waste of North sea oil and in the sale of assets, we are seeing a double blow to public financing.
  It is not as if the money will be invested elsewhere in other income-producing assets, because it has been heavily signalled and is in the Gracious Speech that it is intended for tax cuts. That will build up a huge election fund for the Conservative party. That is why the British Gas Corporation, with assets of £16,000 million and profits of over £1,000 million, will be sold, for £8,000 million most likely, and if the sale is on the same scale as the sale of British Telecom, the payment to the bankers will be £300 million. It cost over £200 million to sell off British Telecom. The result of this seedy and shameful operation is that a major British asset will be handed over to who knows who. One does not know who will eventually buy it. Of course it will be said that it is going to the people, but it is going to only some of the people. All the people benefit from the profits of the British Gas Corporation.
  This is an increasingly seedy and shameful Government. They are mishandling the economy, destroying our industry and leaving a terrible inheritance for their successors. If I have one reservation about helping the next Labour Government, it is the magnitude of the task they will face as a result of the depredations of this Government. Sooner or later we will need to plan for the long-term recovery of our industry. We will need to encourage investment in real jobs, and it will be necessary to start again the process of building up our investment, our research and development, and our education and training. The time cannot come soon enough.
  6.8 pm
  The Secretary of State for Trade and Industry (Mr. Leon Brittan): We have heard a great deal from the right hon. and learned Member for Monklands, East (Mr. Smith) about the parlous state of our industry and commerce. We have also heard some flights of fancy about patriotism. My estimate is that the right hon. and learned Gentleman believes in approximately one quarter of what he has said. As ever, the Labour party seems to take enormous delight in running down the state of Britain. That relish might be forgiven if what was said gave a fair picture of the British economy. It does not. My right hon. Friend the Chancellor of the Exchequer described many aspects of what is actually happening in the country.
  The right hon. and learned Gentleman tried to make out that the successes, which he says are comparatively recent and the nature of which he does not really deny, are based purely on earnings from North sea oil. He said that will disappear and, therefore, we can claim no credit for the
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  achievements which, again, he does not really attempt to deny. He claims it is North sea oil alone which is preventing us from plunging into bankruptcy. That is simply not true. The profitability of non-North sea industrial and commercial companies, at a net real return on capital of 6·5 per cent., is at the highest level since 1978.
  Manufacturing productivity has been growing at an average rate of 6 per cent. for nearly five years. We are not talking there about North sea oil. Total fixed investments last year stood at £55 billion—an all-time high. Of course, we are all perfectly well aware of and need no reminders or lectures about what happened during the recession. We are recovering from a low point, but in the British economy today the dramatic growth in investment is the most eloquent testimony to the confidence of British business men that the current growth in output is sustainable. Business investment rose 15·5 per cent. in real terms last year, to reach an all-time high.
  An investment intention survey, carried out by the Department of Trade and Industry, forecast that business investment this year is expected to rise by a further 8 per cent. to reach a new record level. The right hon. and learned Gentleman produced all sorts of reasons for believing that will come to an end; that the past has to be ignored and the future discounted; but the present is reality and that reality is the investment that I have described. That completely belies the thesis that our current improvement depends first on North sea oil and that, as North sea oil revenues decline, our fortunes will decline in parallel.
  North sea oil has indeed provided enormous benefits for the British economy, but it is absurd to give it the role that the right hon. and learned Gentleman has given it. It has not in any sense been wasted. It has brought new prosperity to many areas in Scotland and formed the basis of an offshore supplies industry which will continue to earn money for Britain overseas long after our domestic oil reserves have run out.
  North sea oil has made a massive contribution to the balance of payments. It has provided money to the Treasury—[Interruption.] There is nothing wrong with that, as I am sure the right hon. and learned Gentleman found when he was in government. It is ludicrous to ignore the contribution of North sea oil to our economy and to our investment just because the new roads, hospitals and sewers that have been—and will be—built are not labelled "Built out of the proceeds of North sea oil." They could not have been built on anything like the present scale without it.
  Of course the oil will not last for ever—it is a finite resource; that is obvious—but to go on to claim that the economy will be unable to readjust to declining oil production is simply unwarranted. Nor is any useful purpose served by exaggerating, as the right hon. and learned Gentleman does by implication, the speed at which oil revenues will decline.
  We shall remain self-sufficient in oil until the mid to late 1990s. The rundown in the oil surplus will be gradual, giving the economy time to adjust. Moreover, as a result of North sea oil, we can look forward to a steady flow of earnings resulting from our investments abroad. Those investments will cushion the impact on our economy the decline of North sea oil and help us to adjust it. Yet it is those very investments that the Labour party says it is

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  determined to destroy by forcing individuals and institutions to repatriate their savings so that they can be squandered on Socialist schemes.
  We do not profess to forecast or propose to dictate from which sectors in the economy the main adjustments will come, but one thing is certain: when the non-oil economy arrives, it will not—it is absurd to pretend that it could—be a replica of what existed before North sea oil came on stream. The levels of investment in manufacturing industry that is taking place today makes it quite reasonable to be confident that the manufacturing sector will continue its marked recovery from recession and play a vital part in our economy in the future.
  According to the right hon. and learned Gentleman, it is impossible for manufacturing industry to grow because the base has already been destroyed. That statement is completely belied by the figures showing what people in manufacturing industry have been prepared to invest this year and last year.
  Mr. George Foulkes: Does the Secretary of State agree that, if there is to be a marked improvement in the economy, that is exactly the reason for keeping Gartcosh open, so that it will be there to provide the necessary steel?
  Mr. Brittan: I will come to Gartcosh in a few moments, if I may.
  Dealing with the oil argument, I was going on to say that, for the reasons I have given, it is entirely reasonable to believe that manufacturing industry will continue its recovery, but at the same time services will undoubtedly form an increasing part of our economic activity. The resentment about services, such as the tourist industry, that we saw earlier in the afternoon is not only distasteful but economically illiterate. We would do well to accept that a pound of output or export from the service sector is no less useful or worthwhile than that earned from manufacturing.
  The Opposition amendment refers to the level of unemployment. Nobody could dispute that it is far too high; but in this area, too, it is only the Opposition who stubbornly refuse to recognise the encouraging signs that are emerging. As has already been pointed out, in the past two and a half years the total number of people in work has increased by more than 600,000, and last year we created more jobs than the rest of the European Community put together. I believe that the measures contained in the Gracious Speech will improve the climate for job creation still further. I am not alone in my confidence.
  Mr. David Winnick: Will the right hon. and learned Gentleman take this opportunity to dissociate himself from the remarks of Mr. Jeffrey Archer, the deputy chairman of the Tory party, who, in an interview about the young, said that they are
  "quite unwilling to put in a day's work. I know what unemployment is like, and a lot of it is getting off your backside and finding a job"?
  Is the right hon. and learned Gentleman aware how offensive those remarks were to the hundreds of thousands of people who are denied the chance of working and who have no chance of finding a job?
  Mr. Brittan: The hon. Gentleman knows perfectly well that Mr. Archer has himself commented on those
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  remarks. If the hon. Gentleman is seriously interested in the questions of employment and unemployment which are concerning this House, his reference to remarks of that kind, and dwelling on them in the way that he has, must illustrate that he has reached rock bottom—[Interruption.]
  Mr. John Smith rose—
  Mr. Brittan: The Opposition are manifestly becoming restive because I am pointing out some uncomfortable facts about the good news in the economy and the increase in the number of jobs.
  I have to tell the right hon. and learned Member for Monklands, East and the Opposition that I am not alone in my confidence about British economic prospects. It is a confidence which is shared by investors the world over. Last year, inward investment into Britain was 86 per cent. up on the figure for the year before. It was the best year for inward investment since the Invest in Britain Bureau was created. Three hundred and twenty separate inward investment projects were confirmed, creating nearly 30,000 new jobs and safeguarding 19,000 others. Last year there were projects which, put together, represented capital expenditure of about £3 billion. Those are the serious points about what is happening in the economy.
  Mr. John Smith rose—
  Mr. Brittan: That level of success is being maintained this year. These figures cannot be manipulated and are entirely dependent upon voluntary decisions taken by overseas investors. Whether the Opposition like it or not, they represent a massive vote of confidence in the future of the British economy and the Government's policies.
  When I visited the United States a couple of weeks ago, I found that the only thing that worries potential investors about putting their money into Britain is the thought that one day there might be a Labour Government. Happily, I was able to reassure them that such an event was highly unlikely.
  Mr. John Smith: Before the right hon. and learned Gentleman scurries away from Mr. Jeffrey Archer, is not Mr. Archer regarded as a fairly responsible official of the Conservative party, being the deputy chairman and having been appointed by the Prime Minister? Why cannot the Secretary of State give us a simple answer? Does he agree with the disgraceful remarks of the deputy chairman of the Conservative party? If he disagrees with them, can he not dissociate himself from them? Can he not do that simply, honestly and clearly?
  Mr. Brittan: I regard it as a sign of the trivialisation of the debate by the Opposition—[Interruption.]—that the only point that has excited or interested them in a serious debate on the economy is a statement that Mr. Archer himself has explained very fully and frequently. The right hon. and learned Gentleman should learn that, if he wishes to be taken seriously as a spokesman for the Opposition, he will have to produce something a little more constructive than that. It is significant—the House will not have ignored the fact—that the Archer diversion was raised precisely at the unpalatable moment when the true facts about what is happening to the British economy were being given.
  There has been considerable progress not only in industries coming to this country—those overseas choosing to come here in a climate which exists under a

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  Conservative Government—but in those industries remaining in public ownership for which my Department is responsible.
  Let me refer, first, to the British Steel Corporation. I want to deal more generally with the progress of the corporation, but the right hon. and learned Member for Monklands, East specifically raised Gartcosh. The idea that the Government are not prepared to listen is manifestly untrue, to his knowledge, because he and others of his right hon. and hon. Friends have been to see members of the Government who, I hope, gave them a courteous hearing. Trade union representatives have done the same. It is not sufficient to say that, because we have not been able to accept the points that were made, we are not ready to listen. That is not a fair point.
  The right hon. and learned Gentleman talked about Gartcosh being a cold rolling mill which was an essential part of an integrated complex. He will be well aware that the information provided by the British Steel Corporation shows clearly and beyond peraventure that in many parts of the world there are plants doing what Gartcosh does which are much further away from the plant that they serve than Gartcosh is from Ravenscraig.
  The assurances that were given in August about Ravenscraig stand, and they are to be taken seriously. I hope that the right hon. and learned Gentleman will accept that and will not be a party to the running down of confidence in Ravenscraig caused solely by claims about the connection between Gartcosh and Ravenscraig which cannot be substantiated.
  Dr. Jeremy Bray: Can the Secretary of State give an undertaking that the British Steel Corporation will provide answers to the detailed questions put to it by the Select Committee on Scottish Affairs on the specific point about the link between Gartcosh and Ravenscraig?
  Mr. Brittan: I understand that the British Steel Corporation will provide more information. As the hon. Gentleman well knows, that must be a matter for the corporation.
  I should like to say a word more broadly about the British Steel Corporation, because the future of the steel industry in Scotland, and at Ravenscraig in particular, is dependent upon the future progress of the corporation generally. Enormous progress has been made in turning BSC into a viable and profit-making company. In 1979-80 the British Steel Corporation lost over £1·75 billion, including over £1 billion of excess capacity written off.
  Mr. Tom Clarke rose—
  Mr. Brittan: Those who are concerned about the steel industry should heed the figures. Five years later, in 1984–85, if the effects of the miners' strike and exceptional items are excluded, the British Steel Corporation would have made a profit of £40 million.
  Mr. Foulkes: On a point of order, Mr. Deputy Speaker. When I intervened earlier, the Secretary of State said that he would deal with the point later. My hon. Friend the Member for Monklands, West (Mr. Clarke), who is the constituency Member of Parliament, has not been given an opportunity to ask an important question.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that whether a Member gives way is a matter for the hon. Member who is addressing the House.
  Mr. Brittan: I was about to give way to the hon. Member for Monklands, West (Mr. Clarke).
  Mr. Tom Clarke: I am grateful to the right hon. and learned Gentleman and to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).
  The Secretary of State has referred to Gartcosh. Does he accept that he has so far failed to convince not just the overwhelming majority of the Scottish people but the overwhelming majority of the members of his own party in Scotland? Tomorrow the Minister of State will give evidence to the Select Committee on Scottish Affairs. In due course, that Committee will report to the House. Will the Secretary of State give an assurance that he will accept the findings of the Committee?
  Mr. Brittan: The hon. Gentleman knows perfectly well that no Goverment have ever said in advance that they will accept the findings of a Select Committee, whatever it may say.
  I came to the matter afresh and saw the decisions that were made in August on Ravenscraig. I felt that if I could be persuaded that the connection between Gartcosh and Ravenscraig is as Opposition Members have suggested, that would have to be taken seriously. I considered the matter carefully. I have not been persuaded that there is the link which the hon. Gentleman and others suggest. Those who insist on maintaining that it exists are doing a disservice to Ravenscraig and to the steel industry in Scotland and the United Kingdom generally.
  The efforts of the steel industry in Britain, to which I wish to pay tribute, were reflected in the outcome of the European Steel Council at the end of last month in Luxembourg, an outcome which should bring cheer to the whole of the United Kingdom steel industry, public and private. I should like to thank my hon. Friend the Minister of State for his considerable role in achieving that result.
  At that meeting, Ministers agreed a tough new regime of severely limiting state aid which should protect all United Kingdom producers against unfair competition from continental competitors. The new quota system represents a significant first step towards a free market in steel. It will be of particular benefit to the BSC. The British steel corporation has had to make use of extensive and uncertain ad hoc arrangements over the last two years to maintain its share of the United Kingdom market at a time when the United Kingdom economy was expanding faster than continental economies. That was unfair. The new quota system will give BSC an extra 360,000 tonnes of quota per year. That should consolidate the position that BSC has achieved following the acquisition of Alphasteel without the need for more ad hoc arrangements.
  I should like to pay tribute to all in the industry who have made progress possible. In particular, I greatly admire and warmly applaud the determination of thousands of steel workers to overcome the most intolerable intimidation and abuse to keep the steel works going throughout the miners' strike.
  Industry is not a homogeneous entity, nor are the problems the same or of equal gravity in different parts of the country. The right hon. and learned Member for Monklands, East was right in recalling what I said at the

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  Conservative party conference about regional policy. It has a vital part to play in our overall economic strategy. It is now almost a year since the new system for administering regional aid was announced. The right hon. and learned Gentleman was right to anticipate that my concern for regional policy would be reflected in considering the impact of that new policy.
  Often in the past, money was given to support projects which were highly capital intensive and produced few jobs. In a few cases those projects even resulted in an overall net loss of jobs, while others were certain to go ahead whether or not they received assistance. Clearly that could not be allowed to continue. Regional policy is about creating jobs in the regions. Under the new system it is targeted to ensure that it does just that.
  It is still early days to assess the full effect of the changes, but there are some signs already. As a result of the changes, the west midlands was made into an assisted area for the first time. That provided a classic example of the sort of problem that had to be tackled—a highly urbanised area dependent on industrial centres which have declined. I am pleased to say that, to the middle of last month, 538 applications for selective assistance for the west midlands had been received. Of those, 156 have been approved and 147 are being considered. As a result, grants of over £17 million have been approved to assist projects involving a total investment of over £150 million, which will lead to nearly 12,000 jobs being created or safeguarded.
  I should also like to mention one arm of our regional policy—the English Industrial Estates Corporation. Its work is an important component of regional policy. The demand for its factories has grown as we have emerged from recession. On the other hand, income from receipts is not expected to be as high as at one time seemed likely. [Interruption.] I hear a reference from the Opposition Front Bench to proposals for management buy-out. Those are still being considered, and I have no announcement to make about them today. We are increasing the public expenditure provision for the English Industrial Estates Corporation in 1986–87 to £19·3 million, an increase of over 20 per cent. on the previously announced figure in the public expenditure White Paper of this year.
  Mr. Paddy Ashdown: Is the Secretary of State aware of the great concern in the Medway towns as a result of the reduction of grants to the English Industrial Estates Corporation? Does he accept that the Government have a duty to carry through the full development project in the Medway towns? Will he undertake to make a statement on the matter in the near future? In particular, will he give an undertaking to the House that the grants to the English Industrial Estates Corporation will not be reduced to such an extent that it cannot carry through a proper development project in the Medway towns?
  Mr. Brittan: I have said what the position is with regard to the public expenditure provision for the English Industrial Estates Corporation. There is an increase of over 20 per cent. for the coming financial year on the previously announced figure in the public expenditure White Paper. The hon. Gentleman will appreciate that what has been said about the Chatham project remains the Government's policy, but I have nothing to add to that.
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  I refer now to the privatisation measures that seem less than popular to the Opposition. Since taking office we have returned 12 major state-owned companies to the private sector. That has been done not out of reasons of dogma or ideology, but because of the belief, which has been borne out by results in almost every case, that privatisation results in greater efficiency and improved performance. I shall give but one example. In British Aerospace, turnover is up by 73 per cent. compared with the year before privatisation, and profits are up by more than 200 per cent.
  However, privatisation has meant not just improved performance. In addition, one third of a million employees have taken the opportunity to become shareholders in the firms for which they work. By doing so, they have taken a stake in the future of those firms and shown a positive commitment to their success. It is for that reason that we are proceeding with privatisation.
  There is one proposal in the Gracious Speech to which I should refer because it will be the main item of legislation for the Department of Trade and Industry in the coming Session. It is the proposal to establish a new regulatory framework for the financial services sector. The Bill will be based on the proposals in the White Paper published last January. The approach set out there is designed to enhance the efficiency and competitiveness of that vital sector of the economy while at the same time providing additional safeguards for investors.
  So far I have concentrated on domestic matters, but I should like to refer briefly to international trade. It is a prime objective of the Government to seek to maintain and extend the opportunities open to British exporters in world markets. Our crucial opportunity for doing so will be the new round of multilateral trade negotiations in the general agreement on tariffs and trade. In recent years trade restrictions have multiplied and confidence that the rules of GATT will be adhered to has been weakened. It is essential that that process should be reversed. We shall strive, together with our Community partners, to revitalise GATT by negotiating reductions in trade barriers, improving the procedures for settling disputes and ensuring that the rules of the system are more widely observed.
  I should like to refer to one other aspect of our trade policy, because I know that it is of particular concern to many hon. Members. Discussions with the financial community on soft loan facilities have been successfully concluded. I should like to announce today important changes in the scope and scale of the aid and trade provision—an instrument effective both in providing aid to developing countries and in helping British companies with overseas contracts. Since its inception, some £350 million of ATP grants have been used with export credits to help British companies with 96 projects, with resulting exports worth £1,700 million. Our intention is to make ATP even more effective in future.
  First, with the full co-operation of the financial community, we are introducing a new soft loan facility. Banks will make long-term loans at low interest rates available to recipient countries for financing sound development projects agreed intergovernmentally. The Overseas Development Administration will provide ATP funds to the banks to cover the cost of softening such loans.
  Secondly, we are increasing the total level of ATP support to enable British companies to double, by

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  1988–89, the business currently won annually with ATP. The current annual provision of £66 million is at present offered mainly in 25 per cent. grants securing exports of up to £250 million a year. The new loan facility will enable potential exports won to rise to some £500 million a year. The public expenditure costs of the new facility will usually be in the form of interest top ups to the banks spread over the life of the loans. ATP funds are being increased by £3 million, £10 million and £20 million over the next three years in line with the target of doubling the business won.
  The introduction of the soft loan facility is in recognition of the preference of certain developing countries, notably China and Indonesia, for project-related financial packages to be provided in the form of single soft loans rather than in combinations of grants and export credits. The facility will be initially for five years and then reviewed. Initial discussion about a £100 million loan facility has taken place with the Chinese Government. Under such a facility, loans would be at 5 per cent. for 20 years, with a five-year grace period. We shall make suitable arrangements for loans with other developing countries where that would maximise the benefits.
  These changes will put our companies on a footing similar to that of their competitors in other countries where the Governments already have the flexibility to provide soft loans. Within the Organisation for Economic Cooperation and Development we shall continue to seek more progress towards multilateral controls over these practices, which other countries have initiated. Our facility will be operated within our international obligations. Our major exporting companies have campaigned strongly for this facility, but the projects won will also benefit the thousands of small and medium-sized companies that act as suppliers and subcontractors. I look forward to a strong response from industry to these changes.
  Mr. John Smith: The Opposition welcome the Government's acceptance of the request that has been made for a considerable time by leading British exporters for the introduction of soft loans. While I welcome the Government's conversion to that idea and putting British industry on the same footing as its competitors, why has it to be phased in over three years? The problem is here now. Why must there be a three-year delay?
  Mr. Brittan: There will not be a three-year delay. The facility is to he available immediately. The three years to which I referred are the period in which public expenditure will increase. It is not surprising that it should build up over the years. If one introduces the measure tomorrow, it is not surprising that the amount that one spends will be less in the first year than in the second or third. There will be a build-up of projects. I am sorry if the right hon. and learned Gentleman misunderstood, but it was unnecessary for him to introduce a sour note because of his regret that this Government are introducing the measure.
  Mr. Smith: It is not my intention to be sour. It was legitimate to say that the measure has been requested for some time. The Secretary of State should be grateful for the fact that I was willing immediately to recognise the advantage that would be gained by certain British exporters. I should like to clarify the point about the three years. We listen with care to what the Secretary of State says. If sufficient requests came in, would there be no cash
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  limiting of any sort and no phasing in over the three years so that, if there were enough projects in the first year, the money would be made available to them?
  Mr. Brittan: The right hon. and learned Gentleman is being unreasonable. There is no delay. The scheme is open immediately. To suggest that the amount of money available under it should be unlimited is to ask for something that is absurd. I am talking about doubling the amount that is currently available. The right hon. Gentleman really ought to recognise the magnitude of the change that is being made, rather than make remarks which, if initially not sour, certainly became so.
  Mr. Richard Hickmet: I welcome the announcement on ATP, but may I ask my right hon. and learned Friend for an assurance that applications in relation to ATP-type funding will be reviewed speedily? How many Departments will be involved in the consideration of ATP?
  Mr. Brittan: They will be looked at speedily, but, of course, there is a developmental aspect of it as well as an aspect that is important for British industry. It would be quite wrong not to look at both aspects. We will look at them as quickly as we possibly can. I look forward to a strong response from industry to these changes.
  The Gracious Speech contains a series of measures designed to build on the achievements that we have already made and to encourage further the growth of the prosperity of British industry. The contrast with the proposals emanating from the Labour party could not be greater. A few weeks ago, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had the cheek to claim that the Labour party and industry somehow had a mutual interest and that Labour was prepared to listen to industry's needs. If nothing else, he deserves full marks for sheer brass neck.
  The truth is that the Labour party's policies, in contrast to those in the Gracious Speech, would be catastrophic for industry in this country. Reckless spending policies, financed by economic irresponsibility, would soon push—[Interruption.] No, our policies are not reckless, because they are limited in amount. Hon. Members know that perfectly well. The right hon. and learned Gentleman has asked for a blank cheque. Reckless spending policies, financed by economic irresponsibility, would soon push inflation back to the crippling levels from which we have escaped. Penal taxation imposed on anyone earning over £20,000 a year would destroy incentives and drive our most talented managers and workers abroad. Repeal of the trade union legislation, for which the Opposition call, would return us to the bad old days when militant and unrepresentative union leaders called strikes at the drop of a hat, with little or no regard to their effect.
  Those industries which we had freed from state control would be taken back into public ownership, forcing them to obey the dictates of politicians rather than their customers and the market, and depriving thousands of employees of their shares. Those industries which were allowed to remain in the private sector would be so encumbered with regulation and control that any sign of enterprise or initiative would be snuffed out.
  The right hon. and learned Gentleman would certainly create jobs—jobs for hundreds of bureaucrats—but at the same time he would destroy thousands more by driving foreign investors away and choking our own domestic

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  industry in a mass of red tape and controls. This Government's policies have helped to create an outlook for business which is described in the CBI's report of today as brighter than for many years. The proposals in the Gracious Speech will improve that prospect still further. I urge the House to reject the amendment.
  6.42 pm
  Mr. Roy Jenkins: I sometimes thought that, when the right hon. and learned Gentleman did not seem wholly at home in the Home Office, it was perhaps because the Department did not suit him. However, his fluent lack of conviction is, I think, an art form which he can transfer from Department to Department.
  Mr. Brittan: Really!
  Mr. Jenkins: The right hon. and learned Gentleman must receive compliments more graciously. I congratulate him, however, on having overcome the vicissitudes of the summer and I wish him well in his new Department.
  The Government are becoming an increasingly rum Government. To try and give them close support must be an increasingly disorientating experience for those of their supporters who endeavour to do so. For years they have been taught to worship at the shrine of monetary aggregates. Sometimes the icon changed. Sometimes it was sterling M3, sometimes MO, sometimes whatever it might be. Nevertheless, this was the shrine at which they worshipped. Two months ago, the Chancellor told us that it was all mumbo jumbo and that we must have entirely new forms of measurement.
  The Prime Minister, having proclaimed herself for years the prophet of rolling back public expenditure, having re-nailed her colours to the mast at Blackpool by saying, "We will not reflate," then proceeds to regale the Lord Mayor of London with boasts of the Government's colossal programme of public expenditure. I am not surprised that more consistent economic thinkers such as Lord Stockton—[HON. MEMBERS: "Oh!"]—he has, in fact, been remarkably consistent over about 48 years—find it difficult to keep up with this whirligig. Presumably, it exemplifies the Prime Minister's expressed belief that what people dislike is not the policies but the presentation of them.
  We are now told, therefore, that everything is set fair for the economy, that steady growth is assured and that private as well as public capital projects are bounding ahead. What is the reality? The picture is not entirely bleak. It would be silly to pretend that it was. The inflation prospect is good, even though the Chancellor slipped in rather quietly this afternoon the news that it will be 0·5 per cent. for this year above his budget target. On the whole, however, the prospect is good, at least until sterling, still so foolishly left isolated outside the European monetary system, takes the full force of the double decline of oil. By double decline, I mean the decline of world prices and the beginning of the run-out of our supplies.
  There has been some modest growth for an unusual number of years in a row, but it has been modest and it has not brought back manufacturing output to anywhere near the 1979 level. All forecasts, with the exception of
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  one private forecast, expect the rate of growth to tail off in 1986 and again in 1987. That is by no means a wholly bad picture, but there is another side to the equation.
  First, there is really no sign at all of any significant reduction in unemployment without a major change in policy. I do not think that anybody, except perhaps the Chancellor and perhaps the Secretary of State, for all I know, really any longer seriously thinks the opposite. Unemployment has probably levelled out but at a totally unacceptable figure. Secondly, contrary to what the Secretary of State said, the post-oil surplus prospect—not merely the post-oil prospect, because the oil will take a long time to go, but the surplus, the big balance of payments surplus, which is beginning to decline quite quickly—still looks devastating.
  In endeavouring to engage with this argument, the Secretary of State seemed to me to be confusing the balance of payments argument with other arguments. He said that oil is not the only thing in the country that is going well, and that other industries are making big profits. Perhaps they are, but the fact remains that our balance of payments is now overwhelmingly dependent on this highly temporary and massive oil surplus. Our manufacturing industry is shrunken and what remains is uncompetitive. The Secretary of State knows this perfectly well.
  We have a manufacturing trade deficit of approximately £11 billion, all of which has built up in the past three to four years. This is containable by oil and by nothing else. Invisibles can take care of about £4 billion or £5 billion but they cannot do the whole job. As soon as oil goes into a neutral position we are in deep trouble. Should it go into a negative position, the situation would be catastrophic.
  Mr. Ivan Lawrence: What did the right hon. Gentleman achieve?
  Mr. Jenkins: Were there deficits every year when I had responsibility? I recollect that I produced quite large balance of payments surpluses and enabled us, in different circumstances, to repay some Government debt. The hon. and learned Gentleman must make better interventions or he will give lawyers a bad name.
  One would have thought that, in these circumstances, the Government might have taken seriously the report of the House of Lords Select Committee. By any standards it was a serious document, compiled by serious people of substance and great experience. Yet so hysterically do the Government resent criticism of any sort that the Chancellor of the Exchequer and the Secretary of State for Trade and Industry went into a paroxysm of denunciation of the report before it was even published.
  Those two—the Chancellor and Secretary of State for Trade and Industry—in trying to rebuke for irresponsibility the members of that Select Committee, not to mention Lord Stockton and a number of right hon. and hon. Members, were like two cabin boys trying to quell a revolt of admirals.
  On that burning deck the person for whom I felt sorry was Lt.-Commander Walker, the Secretary of State for Energy. He had been flirting a good deal with the admirals—though wishing to keep his lines open with the cabin boys as well—and it was extremely bad luck on him that when he introduced the most senior admiral to deliver a great benediction, under his chairmanship, he found that it was his own departmental policy—presumably about the only policy on which he agreed with the Government—that was under attack.

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  Even so, he would have been better advised not to deliver his statement of retraction the following morning. Apparently he had not said that it was selling the silver; it was transferring it from the bureaucrats to the people. However, that totally begged the question of what to do with the money, and on that issue the Government's behaviour has been odd indeed.
  For years, the country has been crucified on the cross of the PSBR. The fiscal stance has been too tight for our recent circumstances and we should have loosened it significantly, particularly for capital projects. But the Government have firmly resisted that, although now they are in favour of creative accounting—that is the phrase—and they are prepared to use about £5 billion from capital sales to finance current spending—namely, personal tax cuts.
  To sell off a chunk of capital assets and to use the proceeds for capital investment in the rest of the public sector might just be acceptable. However, that is not what is proposed, and what is proposed cannot be justified on any reputable theory of public finance; and when it is accompanied by a Minister using the oil—which might itself be regarded as a capital asset; certainly it is not renewable—almost entirely for current purposes, it amounts to improvident finance on a scale that makes the Prime Minister's old friend General Galtieri almost Gladstonian.
  However the money is used, I am deeply sceptical about the management and consumer benefits that flow from turning public monopolies into private ones. I hold no brief for nationalisation—[Interruption.]—and on a simple view—
  Mr. Baldry: Will the right hon. Gentleman kindly explain which policies of the Labour party—remembering that he was a member of that Cabinet of that party—he now supports? It seems that he was in favour of an incomes policy but not of nationalisation. In which Labour measures has he lost faith? Which policies has he renounced and to which is he keeping?
  Mr. Jenkins: It is probably well known that I have never been in favour of any measure of nationalisation since at least the mid-1960s—[Interruption.] I suppose that I may have voted for some of them, but I did so with about as much enthusiasm as the present Prime Minister voted for policies of the right hon. Member for Old Bexley and Sidcup (Mr. Heath).
  Mr. Brittan: Does the right hon. Gentlemen think it is credible, creditable or honourable for him to have been a member of a Government in 1974 who embarked on nationalisation measures, which he supported as one of its centre points, and now to say that he never believed in them?
  Mr. Jenkins: I said that from the early 1960s I was, on the whole, disillusioned with nationalisation. It was perfectly well known to everybody at the time that there was resistance to such measures in the Government, and it is absolute nonsense for any theory of Cabinet Government—[Interruption.] I do not think the right hon. and learned Gentleman heard the point I was making. With what degree of conviction and enthusiasm does he think the present Prime Minister voted for the policies of the right hon. Member for Old Bexley and Sidcup, all of which she now denounces, as she does those of Lord Stockton, as being all part of the bad past?
  Mr. Brittan: Will the right hon. Gentleman now answer my question?
  Mr. Jenkins: The right hon. and learned Gentleman wants to turn everybody who does not agree with him into a wild dogmatist the other way. He must learn that there is some sense in having a non-dogmatic approach to some issues.
  Although I have no faith in the denationalisation of public monopolies and turning them into private monopolies, I reject the simple view that, by doing that, there is automatically produced the splendid management performance that we want.
  The Times report from Paris last Friday on the unfortunate Ptarmigan-Rita affair was interesting, because the outcome seemed neatly to illustrate—"confound" may be a better word—both the Prime Minister's dogmatism and her diplomacy. The report said that the French firm had simply appeared to have done its homework much better than the British and to have adapted more skilfully to American requirements. So much for the assumed automatic superiority of a privately owned firm over a nationalised one. It added that
  "the crowning 'gaffe' of Mrs. Margaret Thatcher's personal intervention"
  was all that was required to complete the series of British mistakes.
  The Paymaster General (Mr. Kenneth Clarke): Has the right hon. Gentleman yet made up his mind on the way in which he will vote on the privatisation of British Gas? Having given a brief description of certain matters about which he is sceptical, will he tell us whether he will believe in his vote this time, or is he in the midst of another 10 years of votes about which he is wholly sceptical?
  Mr. Jenkins: I shall wait until the Bill is produced by the Secretary of State for Trade and Industry. That seems a sensible way to proceed.
  Mr. Lawrence rose—
  Mr. Jenkins: The hon. and learned Member for Burton (Mr. Lawrence) is again looking for dogma. He is only at home when he can reach out for dogma to tell him that something is right or wrong, sensible or foolish. He has done that for years.
  The Government's answer to the stark prospects of no reduction in unemployment and inadequate manufacturing performance to pay our way when the oil runs out is to get faster and further into the service industries. One evening last week, I listened to a Minister citing, as though it were on a tablet of gold, the fact that 86 per cent. of the employed population of New York is now in the service industries. That is hardly relevent. New York is renowned for its exuberance, even in the richest country in the world. It is absurd to say that New York carries the universal message that to turn Liverpool, Glasgow and Birmingham into little Manhattans would solve their problems.
  The relative growth of service industries is inevitable and desirable in advanced economies. A return to full employment, which should be possible, will come about through highly efficient and labour-conscious industry. Around that core we can afford to run labour-intensive service industries, both public and private. That is miles away from saying that in Britain we have not moved far or fast enough away from manufacturing and towards services.

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  It is nonsense to decry the tourist industry, or any other industry, as second-rate. All industry is valuable. We must look at the overall picture to see whether the balance is right and whether we have moved fast enough. Britain has moved further towards services than have Japan or West Germany. We have moved faster and further than nearly any country except for the United States. It is fundamentally wrong that we have run down manufacturing uniquely and dangerously quickly, not that we have gone too far into services. Until the Government realise that central fact and become willing to listen to the House of Lords Select Committee, the Confederation of British Industry, Lord Stockton, the Opposition, the alliance, the right hon. Member for Old Bexley and Sidcup and the large chorus from other Conservative Members rather than their self-congratulatory voices, their approach will be fundamentally flawed.
  7.3 pm
  Sir Ian Gilmour: The House has heard three good and contentious speeches, but I hope that I shall make one with which every hon. Member can safely agree. The right hon. and learned Member for Monklands, East (Mr. Smith) made an angry complaint about the Government's policy. However, his indignation prevented him from noticing that the policy he attacked is no longer quite there. There is a considerable element of reflation in the Government's policy. The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) said that private forecasters agreed that growth would slow down in the next two years. That is true, but the policy has altered, so their projections are all out of date.
  I warmly congratulate my right hon. Friend the Chancellor of the Exchequer on having the courage to change his fiscal policy. The right hon. and learned Member for Monklands, East attacked the Government's privatisation policy. I shall not enter the argument about silver, or even the one about the admirals—the right hon. Member for Hillhead was in naval mood this afternoon, first with rum and then with cabin boys—though I should say that in general I support privatisation. But I emphasise that the sale of existing assets does not provide resources to pay for newly produced goods and services. That is because the sale of assets does not change the net wealth of the private sector. Receipts from such sales do not withdraw purchasing power from the private sector as does, for example, the imposition of more taxation. The receipts change the structure of private wealth portfolios, but they make no significant difference to aggregate demand.
  That means that increases in public expenditure and cuts in taxation, which we are promised, are straightforward reflationary measures. Contrary to what the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said this afternoon, asset sales do not finance tax cuts. They are independent of them. The tax cuts which will apparently be made will contain a considerable element of reflation, and as such I warmly welcome them. However, I doubt whether they will be enough. Some of the reflation will go in the wrong direction. I agree with what my hon. Friend the Member for Milton Keynes (Mr. Benyon) said in this debate the other evening: that most reflation should be done differently and should not be in the form of tax cuts.
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  I do not understand why the Government say that they are not reflating when they plainly are. Presumably, they are saying one thing and doing another to gain confidence and to reassure the City. But the City is not as silly as that. Indeed, it is not silly at all. I doubt whether it will be fooled by the arbitrary and fairly absurd convention which my right hon. Friend the Member for Worthing (Mr. Higgins) and the Treasury and Civil Service Select Committee have often criticised, whereby asset sales are treated as negative expenditure which reduces the PSBR. I am sure that the City will realise that the Government are reflating. Asset sales reduce the PSBR, but they do not make its funding easier. Indeed, it is possible, in view of what has happened, that interest rates will increase rather than decrease.
  We should also realise that there has been some reflation, even while my right hon. and learned Friend the Secretary of State for Trade and Industry was at the Exchequer. The eighth report of the Treasury and Civil Service Select Committee shows that, between 1981 and 1984, there was a significant fiscal expansion equivalent to at least 1 per cent. of gross national product. Although monetary policy has been tight in the sense that real interest rates have been high, it has been generous in that it has allowed a large increase in borrowing by the personal sector. Nevertheless, the reflation that we have enjoyed has certainly been insufficient to reduce unemployment or even, until recently, to stop it increasing.
  My right hon. Friend the Chancellor said recently that British industry is healthier today than it was six years ago. Others have gone further and have painted a picture of boom-time Britain. That is rather surprising, because even with limited fiscal reflation there has been no recovery from the recession. I do not like to quote my speeches, but as I said during my speech on the Budget in 1984:
  "The relevant definition of recovery … is whether the expansion is large enough to bring down unemployment. On that criterion, the recovery has not yet started."—[Official Report, 15 March 1985; Vol. 56, c. 536.]
  What I said then remains true. Since unemployment has still not turned down, we have not yet had a recovery.
  The more that I examine the figures, the less I find grounds for satisfaction, let alone euphoria. However, in view of the admonition to speak briefly, I shall not weary the House with many statistics. Instead I shall quote from Sir Winston Churchill, who talked about the paradox of "unemployment amidst dearth." That paradox is with us again. Sir Winston Churchill said 60 years ago:
  "The community lacks goods and a million and a quarter people lack work. It is certainly one of the highest functions of national finance and credit to bridge the gulf between the two. While that unemployment exists … no-one is entitled to plume himself on the financial credit policy which we have pursued."
  That is very true today when unemployment is more than double what it was then. Collectively it would seem that we have not learned any more about how to run a modern industrial economy during the past 60 years.
  As a result of the reflation now in prospect, given a bit of luck, we should have a decent run for a short while, although I doubt whether it will be fast enough. If we could achieve a growth rate of 3·5 or 4 per cent. next year, unemployment would surely begin to fall steadily if not quickly. The current balance of payments might as a result move into deficit, but in a minor way we could follow the example of the Americans and attract enough foreign

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  capital to prevent a sterling crisis. That would be a risky venture but it might work and it would certainly be politically attractive.
  Yet on its own, such a policy would make no contribution to solving the fearsome strategic predicament we still face. This is apparent if one looks some years beyond 1986. Hon. Members should be grateful to the House of Lords Select Committee on Overseas Trade to which the right hon. Member for Hillhead referred. I was disappointed that the Secretary of State did not refer to that Committee this afternoon, but he had other things to talk about and one should not write other people's speeches for them. I hope that the Government will make a more considered response than either the Secretary of State for Trade and Industry or the Chancellor did before the report was published, or the Chancellor did at one of those City dinners.
  The essential message of that report is starkly simple. Britain's trading performance has been strongly adverse—the report does not state this, but it is true—since the early 1950s. The conflict between full employment and inflation would have occurred to a far greater extent in the late 1970s had it not been for oil.
  The rise in oil revenue should have made it possible to avoid that conflict. The bonanza should have been used to put British industry on a proper footing and to provide for its secure future. Unfortunately that has not happened and the underlying economic decline has continued. The production of oil is now at its peak and there will be problems, as the Lords Select Committee said. It is unfortunate that that report has come about five years after the moment when the appropriate strategy decisions could easily have been made.
  The report states that, unless the deeply entrenched trends in trade change quite dramatically, the recession will get worse during the next decade, with unemployment rising to much higher levels. The Lords Committee does not believe that the necessary change in competitiveness will occur spontaneously, and I agree. The adverse trends became entrenched before the oil flowed and there is no reason to suppose that they will not survive the oil drying up. Indeed, they are likely to get worse.
  The Chancellor is engaging in reflation. I greatly welcome that, despite its risks. There is no evidence, however, that the Chancellor has a strategic plan, and that is a cause of grave anxiety. The Chancellor is living from hand to mouth. He is now putting his hand to his mouth rather more often than he did before, which is welcome, but neither the Chancellor nor the nation can continue to do that for very long. The Lords report is right that market forces will not do the job on their own—the past six years have proved that if they have proved anything. There needs to be a national and international strategy to ensure that market forces work benevolently to help the country out of the economic decline and the crisis that it faces. The Chancellor and the Secretary of State for Trade and Industry are both able men and capable of devising such a strategy, but at present they are declining to do so. It is getting pretty late and I think that they ought to start now.
  7.15 pm
  Mr. Michael Cocks: In 1964 I contested the Gloucestershire, South constituency. To my numerous public meetings I took three diagrams. One illustrated the comparative decline of British coal and steel production since the war, a second showed the
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  comparative decline of our gross national product and the third showed the comparative decline in the British share of the world export market. The decline that I tried to illustrate then has gone on since, remorselessly, and the effect on employment has been devastating.
  Recent Confederation of British Industry figures show that our share of the world market for manufactures has dropped from some 16 per cent. in the early 1960s, when I was showing my diagrams, to less than 8 per cent. now. It is estimated that one percentage point drop represents some 250,000 jobs. The increase in import penetration is equally devastating. In 1970 it was some 16 per cent., and I understand that it has increased to some 28 per cent. Each percentage point of that increase represents a loss of 75,000 jobs.
  We are all preoccupied with the problems of unemployment and industrial decline. Deep philosophical differences separate the two sides of the House on how those problems should be tackled, but we ought to be able to agree that if we bought more British goods there would be an immediate benefit. We have a large market. If we talk about import controls, we get into a morass of arguments about the general agreement on tariffs and trade and other obscure matters. Most of the political discussion that I have heard revolves ultimately around the amount of resources available and how they should he disbursed.
  I recently drove behind a man with a sticker in his back window saying:
  "Say No to Ratecapping".
  There is nothing wrong with that, but he was driving a French car. Had he bought a Metro or a Maestro with some 95 per cent. British content, he would have given someone in Britain two months' work, saved the Exchequer about £1,000 in benefit payments and enabled it to receive income from tax and insurance contributions. The balance of payments would also have been eased and resources would have been generated to put into the kitty for the Government to dispose of.
  The Trades Union Congress estimates that it costs some £11,000 to have somebody out of work. That represents an appalling waste of resources. How are we to encourage people to buy British manufactures? General exhortations are no good—I know that from my previous incarnation. We have to deal with specific cases. Can we not agree on some scale of approximate work equivalent for various purchases, even if it is only for a couple of hours, so that when people spend their money they have some idea what contribution they are making to the unemployment problem by buying British goods?
  Suggestions such as this have previously led to a lot of nit-picking. I should not be at all surprised if I am reminded that the Maestro has an imported gearbox. Such virtually irrelevant arguments get me down. We usually get acrimonious attacks on trade unions as well. We had a good visual aid of that from the Member for Stockport (Mr. Favell) who introduced a note about activities of unions in the motor industry. I was reminded of young Conservatives in the 1950s who used to jump up and down at the back of meetings squeaking, "Groundnuts."
  I am sick of hearing ill-judged, uninformed and prejudiced remarks about working people. If one wants to look for blame, much of it goes to middle management. I am told that there are now production and management systems available that could go a long way towards revolutionising British industry and helping to meet Japanese and other foreign competition.

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  I shall omit a section of my speech about the secondary education syllabus, in deference to you, Mr. Speaker, but the House will suffer it another time.
  If we buy British on every possible occasion, individuals can contribute directly to the well-being of the nation and the solution of our appalling problems.
  There is a specific problem that I believe needs urgent Government attention and action. In and around the Bristol area, some 2,000 are employed by Allied-Lyons, which is the subject of an unusual takeover bid by Elders under the direction of the Australian entrepreneur, John Elliott. The world-famous wine firm of Harveys, the largest sherry company in the world, is in my constituency. It employs 450 in Bristol and generates substantial exports and income to the Exchequer through various taxes.
  As the Member for that constituency, I received a letter from John Elliott, the Australian who is masterminding the takeover. The letter is dated 9 October and reads:
  "We respect and appreciate the standard and traditions of companies such as John Harvey, and have every intention of their identity and reputation, which has been built up over several generations prior to their acquisition by Allied-Lyons, being preserved."
  Imagine my surprise when in the Financial Times of 2 November there was a report of an interview given by Geoffrey Kent, the chairman of the Imperial Group. At the end of the shareholders' meeting he said that several weeks ago the group had had talks with Elders about joining the consortium to take part in the takeover or, alternatively, buying various bits of it when it was butchered. The group was particularly interested in the wine and spirits, off-licences and restaurants.
  The bid is summed up in words of a letter that I have received from the branch secretary of a large section of Allied-Lyons at Clevedon, near Bristol, which employs about 500. The secretary of the Bakers, Food and Allied Workers Union says:
  "As you may imagine, the prospect of being sold off to whom we know not, is the cause of some grave concern to all employees of Hale-Trent Cakes. We are writing to seek your support and assistance in resisting this bid which would appear to be nothing more than asset stripping."
  The Elders literature concentrates on the Allied-Lyons shareholders. It says nothing about the 60,000 employees, who are presumably expendable if necessary. Even the offer of equity shares to public house managers turns out on inspection to be a pig in a poke, because the brewery will do the valuation.
  I believe that the bid is against the national interest for a number of reasons. Apart from employing 60,000, Allied is a heavy investor in the United Kingdom and last year its capital expenditure was about £150 million. The pieces which were sold off will probably be bought by existing competitors and if the process is repeated it could soon approach a monopoly. Allied is in international competition with north American and continental groups and carving it up will damage its ability to compete. The heavily geared Elders operation would leave the business carrying a heavy debt. That is a burden that will inhibit further investment and lead to a minimum tax return from the ex-Allied companies for some time.
  There are long-standing rules of company law that prevent a company from providing finance to acquire its own shares and it is not possible to tell whether the
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  proposed action breaches those rules. Much of the matter is shrouded in mystery and Mr. Elliott should come clean about it.
  We are told that this activity is a prelude to a political career in Australia for Mr. Elliott. It is grotesque that British workers and British industry should be jeopardised and asked to act as a finishing school for his aspirations.
  The Government claim that they believe in competition. I ask Ministers to consider that Australian legislation protects Australian businesses' insular position and that the Australian Foreign Investment Review Board precludes counter-attack. That means that Mr. Elliott can come out from his Australian stockade, like some latter-day Kerry Packer, immune to retaliation and pick off companies around the world, if he can manage it, knowing that, in effect, he is safe in his own castle.
  The bid, which is backed by foreign banks, is the first in Britain on such a scale. It can be financed only by asset stripping and the consequent destruction of many types of jobs and industries. Regrettably, this sort of bid, which involves loading business with excessive debts, is already prevalent in the United States. The Government should refer the bid to the Monopolies and Mergers Commission and consider urgently how to deal with the problem. They must surely realise the dire consequences that swathes of British industries will suffer if this sort of depredation becomes commonplace and takes off. I ask the Government to be as robust in protecting United Kingdom jobs and industries as some of our partners in the EEC are in protecting jobs and industries within their borders.
  7.26 pm
  Mr. Kenneth Warren: It is an honour to be called after the right hon. Member for Bristol, South (Mr. Cocks), who renders such service to the House. It was always a pleasure to know that he was dealing with the Opposition's affairs. Now he leaves the Labour party "coxless" and up the creek without a paddle, as has so often been the case.
  I shall contribute to the debate by taking up early-day motion 29 and making a short speech. It was a delight to hear my right hon. Friend the Secretary of State for Trade and Industry announce that soft loans would be made available, something that the Select Committee on Trade and Industry commended to the House months ago. I hope that the loans will be implemented swiftly and will be examined continually to ensure that they are relevant to the scale of demand in China and Indonesia, for example, and in other parts of the world where our competitors—not only customers—make the terms and conditions for the sale of goods, especially manufactured goods.
  I know that my right hon. Friend the Secretary of State has been exercised somewhat by the report from another place on overseas trade. It follows a report which did not exercise his predecessor so much, unfortunately. That was produced by the Select Committee on Trade and Industry and was directed to the problems surrounding the import and export of manufactured goods from and to other nations in the Common Market.
  The report on overseas trade from another place extrapolates that which many of us said in this place over a year ago. I do not disagree with the report, but we must pay attention to the way in which Britain's competitive manufacturing base is being eroded. If we are having success in service industries, that is very good, but we must ensure that that success is complemented by equal

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  competitiveness in manufactured goods. There have been so many occasions when we have believed that we can substitute when there has been no substitute for jobs that have been lost by those who have given their lives to them. These employees have often served long apprenticeships and have experienced long periods of training for particular jobs of work within areas of our economy where we should be competitive and where, for reasons which are debatable, we are not as competitive as we should be.
  The problem is not a recent one and it cannot be assigned to a certain Government or a certain party. The problem has been with us throughout the century. At the beginning of the century we were at the top of the league of success in world exports of manufactured goods. We were followed by the United States, France and Italy, and Japan was not even mentionable. We are now faced with problems that are entirely our own despite a high level of competence and a base of manufacturing capability that should be able to respond competitively to world market opportunities.
  I say to my right hon. and learned Friend the Secretary of State, who addressed himself surprisingly quickly to the report on overseas trade from another place, that we are not faced with a party political problem and that we must not talk down our manufacturing industry. I declare an interest as an industrialist and an engineer. I am conscious of the ability of the British people to succeed and we must chalk up our achievements. At the same time, it is wrong to give the impression that we do not have problems. I am aware that productivity has increased and that tremendous advances are being made in electronics and biotechnology, but there are many areas, such as the steel industry, where encouragement from the Government at a critical time, such as the present, could turn markets in our favour, especially in the EEC, as decontrol comes into being at the beginning of the next calendar year.
  As times change and industries evolve, we should examine the results that we get from contributing to various industries. In Hastings and Rye we have many employment difficulties although we have a very good farming industry and an excellent fishing industry. In general terms, the Government subsidise agriculture in this country to the tune of £3 billion when the gross domestic product achieved by that industry is about £7 billion. Manufacturing industry, which produces 10 times that output for the benefit of this country, receives only about £1 billion in support from the Department of Trade and Industry. The ratios are not sensible. That is in no way to denigrate the tremendous efforts and productivity of British farmers, but we should surely put our money on the horses that provide maximum employment and revenue for this country.
  Two industries cause me especial concern. The first is often debated in the House and is a difficult subject. I do not pretend to be an authority on the textile industry, but in the past five years that industry has gone from a deficit of about £50 million to a deficit of about £1 billion and has lost 150,000 jobs. Those two sides of the equation must be taken together. I am not saying that we could have protected the people involved because in the end the customers have the right to make the decisions, but we cannot afford to neglect a situation in which dominance in a particular home market can be eroded by Government failure to consider ways of stimulating and thus protecting the industry.
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  At the other end of the spectrum, in information technology, we now have a deficit of £1 billion per year. That is not common sense in the country that invented the computer. Having spent about 25 years in the computer industry, I am conscious of the high standards of science and technology that can be provided. The right hon. Member for Chesterfield (Mr. Benn) will recall times when he was involved in promoting that industry. The deficit of £1 billion reflects about 25,000 jobs that ought to be in this country. Strangely enough, that is also the total number of vacancies in the industry. We are not equating what Government can do with what is needed in this country in terms of the supply of people who can bring to these industries and therefore to their country output that will counteract the enormous inflow now taking place but which we do not really need at all.
  The percentage net imports of electronic products is a problem in the United Kingdom but not in the rest of the Common Market. In the past four years the percentage has risen from about 17 per cent. of our needs to about 30 per cent. of our needs while the level in the rest of the Common Market has remained roughly the same. We are tending to import equipment that we should be able to produce from our own resources as a result of investment in our education system.
  The Confederation of British Industry has produced a report which I understand is to be debated at its forthcoming conference in Harrogate. That report refers to all kinds of good and bad things in the British economy. It refers to the strong base of large companies, the strong international customer base, the fact that English is recognised as the major business language and the energy benefits already debated today. It also refers, however, to our poor investment record and the failure of our education and training systems to meet the needs of modern business. In my constituency I was horrified to find that in one of the principal comprehensive schools teachers acknowledge that business studies are taught in terms of jobs that are no longer available because the school does not have the equipment to relate its teaching to the jobs that are now available. I also came across an A-level language teacher who did not even have a blackboard.
  Responsibility for investment concerns the whole of Government. It is not just the responsibility of industry. Industry is suffering severely from problems caused by high interest rates. This is clearly shown in a recent report by the Federation of British Electrotechnical and Allied Manufacturers Associations dealing with research and development in small and medium-sized firms. I recently asked my right hon. Friend the Prime Minister whether she was aware of the growing concern in the scientific community about the erosion of our science base. This is not just important at university level but concerns the way in which the industries themselves are responding, as the report shows.
  The federation received responses from 116 companies, 67 of which indulged in no research whatever although they were involved in the electronics and electromechanical industries at the sharp end of technology. Those which invested in research did so out of revenue because they could not afford to use borrowed money. Only when gross profits were between 25 per cent. and 40 per cent. on the product sold were the companies prepared to borrow money. That creates an uncompetitive situation. The Government must realise that high interest rates are stopping people investing and thus creating the seed corn

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  fields of the future. I have said this many times before but I say it once again. I often wonder whether speeches in the House of Commons are ever actually heard.
  7.37 pm
  Mr. John Silkin: The hon. Member for Hastings and Rye (Mr. Warren) rightly stressed the need for investment in industry and I hope to follow him on that in a moment.
  The Gracious Speech states:
  "my Government will do all in their power to encourage the growth of new jobs."
  That is the sole evidence that the Government are aware that there is an unemployment problem. Even then, the Gracious Speech talks about the growth of new jobs but makes no mention of measures to prevent the destruction of existing jobs.
  Like all hon. Members, I look with anguish at the unemployment figures in my constitueny. Total registered unemployment in Deptford—this understates the real position—is 8,000 or nearly 21 per cent. That is more than 7·5 per cent. higher than it was at this time last year—so much for the new jobs that the Government talk about. Registered unemployment has been appallingly high since the last election in that area—four miles from the Palace of Westminster and from the very centre of our country. I accept that my constituency has special problems and that its unemployment figures exceed those in the rest of the country, but in the United Kingdom as a whole unemployment now stands at more than 13 per cent.
  In May 1979, when the Prime Minister was busy castigating Labour for not working, the average rate of unemployment was under 5 per cent. In the intervening years there has been a galloping decline in manufacturing, as though there were an inescapable link between the growth of unmployment and the decline of manufacturing industry. The Chancellor says that we should not worry, that there is real evidence of recovery and that everything in the garden is lovely—allowing, of course, for seasonal adjustment. The chairman of the Conservative party would add, "And subject also to the usual bicycle ride on the part of the unemployed."
  If people are to get on their bikes, it is a fair test to discover whether the bike industry is leading the recovery of which the Chancellor speaks. Britain's largest bike business is Raleigh. Five years ago it was making a 4 per cent. profit on sales. That figure is still with us, but today it is a 4 per cent. loss, and the Tube Investments Group, of which Raleigh is a part, has cut its total jobs in Britain from 50,000 five years ago to 23,000 today. Today, the Conservative party chairman's father might have to go abroad to get his bicycle, let alone to find work.
  The Chancellor's claim that investment is recovering rings hollow when one looks at the figures. During the recess the Central Statistical Office published its annual blue book showing what has been happening to the real level of manufacturing investment. Even allowing for depreciation of plant and equipment and for industry's growing preference for leasing rather than buying equipment outright, the evidence still is that net manufacturing investment has in real terms been negative for four consecutive years.
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  British manufacturing industry is still spending so little on new plant and equipment that it is failing even to replace the proportion that is wearing out, let alone to reequip and modernise so that it can keep up with our competitors. Four consecutive years of negative net investment is even worse than in the depths of the 1930s recession, when real net investment was negative for three consecutive years. That is critical evidence of Britain's continuing weakness.
  Investment is the key to modernisation, the introduction of new technology and new products. Our weakness in all the non-price areas of design, quality, service and delivery dates is losing British firms their market share at home and abroad—and all these flow from lack of investment.
  The CBI has just produced some alarming figures on British competitiveness, but being priced out of markets because of rising costs pales into insignificance compared with these non-price considerations. That is the reality behind Britain's appalling trade deficit in manufactured products. Without the revenues from North sea oil, the situation would be desperate. Whatever the Secretary of State may say, and however much the Chancellor may sing an optimistic song, the oil revenues are now passing their peak and are beginning to decline. Henceforth, it will be harder and harder for the Chancellor to disguise the truth about Britain's predicament.
  The kindest thing that can be said about this Government is that they are not trying deliberately to destroy our industry and our people's livelihoods. That is coming about not through some well rehearsed plan but out of sheer incompetence. The ship of state is not being steered by the compass or even by dead reckoning—the Government appear to be relying on Halley's comet. Yet if we are to have a chance of survival, it is planning—and imaginative planning at that—that we require.
  Three things should be set in motion immediately. First, we must reverse the squeeze on public spending and industrial investment. Secondly. we must increase total spending in the economy to give firms a reason to expand production and to create jobs. Thirdly, we must protect and maintain the core industries on which the survival of our country depends. A nation that has allowed its steel, coal, shipbuilding, shipping and heavy engineering industries to decline is as defenceless in peace as it would be in time of war.
  The place to start is with a programme of house building, road building and renewal of our sewerage systems, to put the construction and civil engineering industries back to work. We need Government action to encourage manufacturing industry to invest. Boosting total spending in the economy is critical, but direct pressure on big business through planning agreements could help to steer industrial investment and the jobs it creates to the areas where those jobs are most needed. Clearly, there would be no point in stimulating spending if that merely allowed imports to be sucked in and to create jobs abroad rather than at home. Therefore, we must be prepared to control the growth in manufactured imports to the level that we can afford.
  We can put together a coherent package that would change Britain's course from cutback and decline to modernisation and expansion if we have the imagination and courage. Nothing less will meet the crisis that we face. Unfortunately for our country, the Gracious Speech well demonstrates that the present Government have neither the capacity nor the will to achieve it.
  7.46 pm
  Mr. Charles Morrison: Explicitly or implicitly, I shall refer to some of the points made by the right hon. Member for Lewisham, Deptford (Mr. Silkin), but I hope that he will forgive me if I do not refer to them now, simply because time is short.
  In the last few days we have heard the most remarkable outpouring of optimism from the Prime Minister, the Chancellor of the Exchequer and my right hon. and learned Friend the Secretary of State for Trade and Industry. Indeed, it was welcome to hear the Prime Minister last night enumerate what was being done in terms of public expenditure, just as it was welcome to hear the Chancellor and my right hon. and learned Friend the Paymaster General today describe how they were setting about some measure of mild reflation.
  Nevertheless, I hope that that optimism remains laced with realism. If it does not, it could lead to complacency, and only too often in the past we have seen what happens to Governments who become complacent.
  Much has been done by this Government, but there is still infinitely more to do. No one should detract from their achievements and successes, but in politics as achievements are chalked up, other problems appear and develop on the blind side. Unless they are aware, alert and prepared to evolve policy to take account of those problems, the Government will be remembered for their inability to cope with them rather than for their earlier successes.
  Problems there are in plenty. We have been debating them since last Wednesday, and today we are debating the problems that are in the very capable hands of my right hon. and learned Friend the Secretary of State for Trade and Industry and my right hon. Friend the Secretary of State for Employment, ably abetted by the Paymaster General. They are also aided by tidal waves of advice from many directions. I do not intend to hold back, but shall try to reinforce some of that advice.
  The two factors most relevant to this debate are that since 1978–79 unemployment has risen by 8 percentage points—from 5 per cent. to 13 per cent.—and that since 1983 the balance of trade in manufactured goods has moved into deficit. To some extent those two factors are connected. In the last six years manufacturing industry has lost a quarter of its work force.
  When considering manufacturing, we now have the benefit of the recent comprehensive and detailed report of the House of Lords Select Committee on Overseas Trade. That report was provided with an immediate imprimatur by the Chancellor of the Exchequer, who said of it:
  "The Government … wholly rejects the mixture of special pleading dressed up as analysis and assertion masquerading as evidence which leads the Committee to its doom-laden conclusion. We equally reject its principal remedy—that British manufacturing industry should he protected by a cocoon of subsidies."
  With that recommendation from the Chancellor of the Exchequer, a mass of people, who might otherwise have disregarded it, rushed off to read, learn and digest what was contained in the report. But those who have read it have discovered that it contains no special pleading and that if there is a principal remedy it has little to do with a cocoon of subsidies.
  I cannot understand why the Government are so much on the defensive about the report. It seems to be a constructive and helpful contribution. Furthermore, it is not commenting upon just the last six years. As my right
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  hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) pointed out, it comments upon what has been happening during the last 30 years. The report could be misconceived, but when the Association of British Chambers of Commerce considers that
  "both the Chancellor of the Exchequer and the Secretary of State for Trade and Industry were rash and unwise to 'rubbish' the Lord's findings",
  and also points out that
  "Britain is unique amongst the major industrial nations in not having by 1984 regained her pre-recession level of manufacturing production",
  and when the exalted Anglophile New York Times writer, Mr. R. W. Apple, Junior, after eight and a half years in London, writes:
  "Six years after Prime Minister Margaret Thatcher took office, proud old Britain … remains a nation in decline'",
  we should sit up and take note. It is always more important for a Government to pay attention to the judgment of others about what is happening and about what they are doing than to their own.
  It is true that manufacturing production has decreased as a proportion of gross domestic product in many, if not most, of the developed countries, but in none has it declined in absolute terms, except in the United Kingdom, despite recent improvements. I find it positively frightening that United Kingdom manufacturing production was still lower, by 4·3 per cent., in 1984 than it was in 1975, whereas in Japan it was plus 61·4 per cent., in the United States plus 41·6 per cent., in West Germany plus 16 per cent., in Italy plus 22·1 per cent. and in the Netherlands plus 22·7 per cent.
  My fear is not mollified by the growth in oil output. As has already been emphasised several times today, it is ephemeral. Nor am I mollified by soothing Treasury theories, to which reference has already been made by the right hon. and learned Member for Monklands, East (Mr. Smith), about the assumed effect on the value of the pound, and therefore exports, once oil declines in importance, for that is far too hypothetical for comfort. In any case, the theory will be nonsense unless manufacturing capacity is built up now.
  Nor do I place overmuch faith in invisible exports saving our skins, for I concur with the chairman of the British Invisible Exports Council who told the House of Lords Select Committee that his organisation did
  "not see this growth of [invisible surpluses] as being to a major extent a substitute for decline in general industrial activity."
  Let us do all in our power to develop the benefits and successes of our invisible trade, of banking, insurance, shipping and tourism. What my right hon. and learned Friend the Secretary of State for Trade and Industry said today was welcome, but we still must have a thriving and expanding industrial sector if we are to maintain our standard of living, our National Health Service, our education system—all facets and foundations of our national existence.
  What is to be done? The Government alone cannot supply the answers. The House of Lords Select Committee emphasised that point. The Government alone cannot change national attitudes, but they can give a lead; nor alone can Government be responsible for changes in the education system, for the level of wage settlements, and therefore competitiveness, or for the quality, design and delivery of goods on time. However, the Government have a part to play. As the report says, they can take the initiative in formulating a national industrial policy which

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  makes for faster growth in manufacturing. What is more, the Government can and must look at and learn from the experience of our leading competitors. Why is West Germany's surplus on trade in manufactured goods so enormous? Is it simply because, according to a National Institute study, labour productivity, at least in some comparable firms, is 63 per cent. higher than it is in the United Kingdom? Or is it partly due to the extent and type of support for industry that is given in West Germany? In 1981 it totalled no fewer than 113 billion deutschmarks. That is not an inconsiderable sum for an allegedly free market Government. But there are just as many lessons to be learnt from the French, the Italians, the Japanese and the United States. None of them operates a free market. All of them rig it, to the advantage of their country, their industry and their levels of employment; so we, too, must be a little less purist in our attitude to industry.
  The Government should have as their objective that never again should a witness before a parliamentary Committee say, as did Sir Hector Laing to the Select Committee of the House of Lords:
  "The present Government has in effect made a virtue of not having a vision of the future of British industry, and a positive policy of distancing the State from the industrial sector."
  Instead, the Government should react to what he said thereafter:
  "I think the Government should acknowledge that the nation does have an industrial problem in which it has a serious policy interest. A clear indication that the Government is ready to give a strong lead by, for example, launching an industrial priorities exercise, could prove very effective."
  Lastly, apart from raising the threshold, it seems to me to be totally inappropriate to make any across-the-board cuts in income tax, at least for the time being. Not only would it draw in imports, but it would mean that less money would be available for research and development—squeezed all too much already—for export promotion, for action that the Confederation of British Industry says is required now to stop further decay in Britain's infrastructure, and also for overseas aid and, thereby, the creation of new markets.
  Furthermore, it would be politically misconceived at a time when, albeit wrongly, people believe that public services are being cut just when they are in great need of improvement and when the vast majority of people want them to be extended. In any case, I believe that to cut income tax now would be to send out the wrong signals to the British people.
  The state of the nation may be much improved, but nothing should be done to imply that we can relax. If my constituents and my own constituency Conservative association are anything to go by, there is a conviction throughout the country that, for the time being, every spare penny should be aimed directly at reducing unemployment.
  7.58 pm
  Mr. Ron Leighton: It is a great pleasure to follow the wise and constructive remarks of the hon. Member for Devizes (Mr. Morrison). The Government's attitude towards unemployment has undergone a number of changes. Six years ago they criticised the Labour Government and said that Labour was not working, although unemployment had then been
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  falling for two years. Their 1979 election manifesto promised more genuine, new jobs. The Gracious Speech, on 15 May 1979, stated:
  "My Government will give priority in economic policy … and create a climate in which commerce and industry can flourish … and increased employment in all parts of the United Kingdom."—[Official Report, 15 May 1979; Vol. 967, c. 48.]
  That was the prospectus when the monetarist experiment began. The opposite has happened.
  There began immediately a dramatic, remorseless, unremitting and continual increase in the number of men and women without work, and now that number is higher than Britain has ever known. Then the Government's attitude changed. They said that the increase in unemployment was temporary—even a sign that Government policies were working, that a leaner, fitter Thatcherite economy would take off and produce jobs, but that it would take just a little time for the policies to work.
  As the years went by, a number of optimistic statements were made, especially by such people as the present Chancellor—that unemployment had peaked and had reached a plateau and would now fall. It is now clear that all that was moonshine, that they did not know what they were talking about, that they were wrong, that monetarism was an utter failure and that the Government's policies had inflicted a disaster on Britain unparalleled in peacetime. They have completely destroyed large parts of British industry. As a result, between June 1979 and June 1983, 1,700,000 manufacturing jobs were lost. That unnecessary carnage and man-made disaster is the main cause of the present plague of unemployment.
  Manufacturing output now is less than it was in 1979. We have gone backwards. This manufacturing disaster is not just the main cause of unemployment; it is the main reason why the Government feel that they can no longer afford the welfare state or finance the public services which our people need and which would create more jobs.
  Confronted with the remorseless increase in the numbers out of work in each of the past six years, the Government's attitude changed again. Instead of repeating that the solution was around the corner, the Government, seeing that the solution was not going to come and that their policies had failed, gave up and washed their hands of the problem and, in a volte-face, declared, "Unemployment has nothing to do with us. We are only the Government." Of course, that is not what the Conservative party said at election time, but that is the new doctrine. Bankrupt of ideas, the Government say, "We can do nothing. Do not blame us; blame the unemployed."
  In recent weeks, a gloss has been put on this. In the run-up to the next election, the presentation of this matter has been put in the hands of that great philosopher, original thinker and story-teller, Jeffrey Archer. His remedy and solution to the problem is to assure us that it does not exist—that the problem is an illusion. Leading a chorus, including Sir Michael Edwardes, Mr. Archer has callously defined the problem out of existence, mocking, belittling and making fun of the jobless. He has made the brilliant discovery, and assured the rest of the population, that the unemployed are not really unemployed at all—they are work-shy, malingerers, spongers, living happily on state benefits, or fraudulently working in the black economy. That is the new line being sedulously peddled.
  Lord Young has joined in. We cannot question him in this House, but we can read his speeches. He referred to the annual labour force survey which found that 940,000

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  claiming benefit had not sought work in the previous week. We are expected to make the heroic assumption that they are not really unemployed. That is ludicrous.
  Mr. Peter Lilley: Will the hon. Gentleman give way?
  Mr. Leighton: I ask the hon. Gentleman to forgive me. I shall not give way because we do not have much time.
  If people live in depressed areas and are out of work for six months, one year or two years, is it any wonder that they become discouraged? However often they cycle around on their bikes, they learn that the jobs are not there. Those workers are being realistic. Older people, with few or redundant skills, fear that they will never get a job. The survey found that, if they were asked, "Have you looked for work in the previous month?", another 400,000 people would have to be added to the figures.
  The most important finding of the survey is the confirmation of the vast number of hidden unemployed—those who are jobless and looking for work but who do not appear in the official figures because they cannot claim benefit. About 850,000—almost another 1 million—should be added to the figures. There are also the men over 60 who no longer have to register to claim benefit; there are those who have retired early because there is no work; and there are another 600,000 on special employment measures. Instead of, as mendacious, weasel-worded Conservative propagandists pretend, the official figures overstating the tragedy, waste and misery of unemployment, they grossly under-estimate the dimension and gravity of the evil that has been inflicted on us.
  Mr. Lilley rose—
  Mr. Leighton: Any truthful and realistic measurement would give us a figure of about 5 million unemployed. It is a disgrace that the Government seek to obscure and distort the truth.
  Another myth that the Government are stooping to spread is that the unemployed are not really unemployed because they are all hard at work in the black economy. Lord Young is again to the fore, declaring:
  "By far the greatest number of long-term unemployed live in the south-east alongside employers who say they cannot get people."
  He says that the number of vacancies in the south-east is the highest in Britain. We are invited to believe that those people are not really working or looking for work but are engaged in the black economy. That is sheer confusion. Surely he must know that the explanation is perfectly straightforward—that there are more people living in the south-east. About a third of the United Kingdom's population and work force live there, yet only one fifth of those who have been out of work for more than one year. In other words, there is a larger percentage of the population and a smaller percentage of the long-term unemployed—the opposite of what Lord Young was trying to suggest.
  There is more. Why are there vacancies in the southeast? That is explained in the October issue of Employment Gazette, published by Lord Young's Department. More than half the vacancies—a higher proportion than elsewhere—are due to skill shortages. There is just no one with the skills to do those jobs. This approach is an insult to every one of the unemployed. Surely the first thing the Government owe them is the truth.
  We come to the much trumpeted 600,000 new jobs that have allegedly been created. What are the facts about the
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  Government's record? Between December 1979 and March 1983 2,125,000 jobs were destroyed. Between March 1983 and June 1985, although the employment figures continued to rise, there was an increase of 260,000 employees. The latest tally is that there are 1,865,000 fewer people employed than when the Conservative party came to office.
  How is it possible for there to be a modest increase in the number of employees without this reducing unemployment? Is this not a paradox? The explanation is that virtually all those employees are part-time. If they do just a couple of hours' work, they count as one unit. Many of those people are doing second jobs and therefore are counted twice. The 1984 labour force survey revealed that 450,000 people had second jobs and 250,000 had self-employed second jobs. The survey showed that this practice was growing. It accounts for a large part of the increase.
  Another explanation of the seeming paradox is that these part-time jobs are taken by the hidden unemployed, many of them women. The Government have fallen victim to their own trick of excluding those people genuinely seeking work but who cannot claim benefits. They may exclude them but they still exist, demonstrating again that the Government woefully underestimate the extent of Britain's unemployment.
  In addition, married women who are taking these part-time jobs are overwhelmingly the wives of employed husbands—not unemployed husbands—so the growth in the number of part-time female jobs has not helped the unemployed. In an attempt to reach the propagandist figure of 600,000, the Government have to refer to the classification "employed labour force" which includes the self-employed on whom the Government have no firm figures. They can only guess, and they make the huge assumption that since 1981 there has been an unprecedented increase of 393,000. There is no hard evidence for that. Instead, the Government make optimistic assumptions and projections which automatically add thousands to their weekly figures of the employed labour force. If these people really exist, does anyone else know about them? For example, will the Inland Revenue and national insurance branch confirm their existence from their records? Today, I tabled a written question to the Chancellor on this matter. I look forward to receiving some corroboration.
  The Government insist that many of the unemployed are not really without work but are up to their necks in the black economy. Sir Michael Edwardes has taken the estimate of the size of the black economy, deduced that 2 million people might be involved, assumed that all of them are allegedly unemployed, and simply cut the jobless figure by 2 million. If the Government succeeded in making the whole of the country believe that myth, they would solve much of their problem. The truth is that all the evidence, the studies and empirical research have shown that employed people are more likely to be involved in the black economy than those who are unemployed. It is primarily employed people who are moonlighting. Some of them may sit on the Tory Benches.
  The evidence shows that to participate in the black economy people need tools, materials, transport and a network of contacts. In other words, it is not the unemployed who are benefiting from the black economy, but those who are doing well already and who are moonlighting in addition.

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  For the future the headline figure for unemployment each month should now appear to go down because of the Government's special employment measures—an extra 100,000 people on the community programme and two years of YTS. What cannot be denied, whether by Jeffrey Archer, Sir Michael Edwardes or Lord Young, is that the Government have presided over a staggering increase in mass, multi-million, chronic long-term unemployment with all the waste, misery, heartache, despair and social breakdown that that brings.
  For that, after six years, the Government stand condemned. We have unused capacity, unused abilities, unused people and unused capital available. We have enormous unsatisfied public and private needs. Is it beyond the wit and intelligence of man to put those together? That is the challenge before us. We eliminated unemployment in the years between 1939 and 1945 to produce weapons of war. Why can we not do the same to produce the necessities of peace? Things will never be well in Britain until we do. Things can never be well while the unemployed are shut out by our society.
  To achieve a sense of one nation, one society, one community and a sense of cohesion, of national solidarity and of commonwealth for all our citizens, all must share, all must benefit, all must work and unemployment must be diminished. As this Government have not managed matters better after six years, it is time that they made way for a Government who will.
  8.12 pm
  Mr. Alistair Burt: During last year's debate on the Gracious Speech I tried to draw the attention of the House to the problems of a northern industrial constituency where the pain of unemployment was evident, not so much through the pages of the newspapers as on my doorstep. I feel that it is time to address the problem once again, this time from the point of view of trade and industry which are the cornerstones upon which employment in my constituency depends.
  The first point to make clear is that there has been a change of attitude by the Government over the past 12 months. We can refer to the speech made last night by my right hon. Friend the Prime Minister and to that made by my right hon. and learned Friend the Secretary of State in Blackpool recently, when he clearly and unmistakably put his finger on the problem of the divide between north and south. For the first time, perhaps, a member of the Government made it clear that he was not afraid to address the regional problems of changes in industry. Perhaps for too long the Government have tried not to address those problems. They thought that, in some way, if they mentioned the problems caused by the changes in industry which produced unemployment, by implication unemployment would be laid at their door. That was not my right hon. and learned Friend's attitude. The Government are not responsible for unemployment, but it is their responsibility to deal with the unemployment caused by the inevitable changes in this country's trade and industry.
  For the two years before this change in attitude, colleagues in the north of England sometimes thought that they were crying in the wilderness about the problems of the north of England. I feel that that has changed. We now think that the Front Bench have heard something of what we have said.
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  My constituents have always been open to argument and persuasion. There is no doubt that my constituency has seen changes in its industry. When my father first came to Bury as a general practitioner just after the war he could tell when it was Bury holiday week because it was the first time in the year that he could see the town. At other times, smoke from all the chimneys would cover the town. Now, the clean air legislation and fewer chimneys have ensured the Bury's beauties can be seen all the time.
  The people of Bury have recognised, therefore, as decade has followed decade, the inevitable changes in their industries. It was noticeable that the CBI's recent statement to the Select Committee of another place mentioned that Britain's manufacturing decline was not a sudden event but the product of several decades.
  Because the people of my constituency are not fools, they are unlikely to be swayed by many of the Opposition arguments. They remember Labour's unemployment record—never leaving office with unemployment lower than it was when they began. They see the futility of high-spending policies that rely on money that cannot be produced and that must eventually hit them hard in their pockets or in their jobs. They have a long memory. They remember the country's near-bankruptcy, when it went to the IMF, in the years 1974 to 1979. They remember the large public sector cuts and the winter of discontent. Matters may have been difficult and bad in my constituency from time to time, but they are never so bad that my constituents would be tempted by the arguments advanced by the Opposition.
  Over the past 12 months, Bury has seen some changes. We became an assisted area once again last November. That has resulted in a payment of £120,000 through regional selective assistance. We are also a textile closure area. I have a list of all the firms in Bury that have benefited over the past year from that scheme. Some £500,000 has been directed to Bury. It has resulted in about £3 million of investment. Those are the types of schemes that create jobs, which the Government have been bad at making much of. but they exist and are genuine. They mean jobs.
  Bury, Ramsbottom and Tottington have turned the corner. There is now a need to talk up the area. It is easy to talk somewhere down. Private investment is returning to Bury. The amount of private investment coming in is plain to see when I visit industries in the town. The town centre of my constituency is a busy, bustling shopping centre on a Saturday morning. People are possibly attracted by the free parking policies of the Conservative-controlled council, something that is rare in greater Manchester. It brings in people from miles around. The retail and services sectors have compensated for the manufacturing decline.
  The town has learned a hard lesson over the past two years. Management and work force realise that no longer are there two sides in industry. If this Administration's period of office since 1979 has done anything, it has spelled out to industry that management and work force must co-operate and work together. "Us" and "them" should now only mean "us" as British and "them" as foreign competition. For boardroom and workbenches the consequences of not co-operating are dire. That has been realised by all the better firms in my area.
  The town's work force has responded sometimes by going for years with no wage increases and at other times low wage increases in manufacturing industries suffering

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  difficulties. The work force has realised that it must play its part. Industries that survive can achieve much by management and work force coming together and realising that they have common problems.
  That change is unlikely to have been achieved without the problems and difficulties that have been suffered since 1979, without industry coming to grips with the decline that has been occurring for several decades, as mentioned by the CBI in its evidence to the Select Committee of another place. The decline was not sudden. It has been coming for a long time. If they are asked carefully, most of our constituents know that. They are not, therefore, fooled by claims that the decline has been brought about by Conservative policies followed since 1979.
  It would be unfair if I did not respond to the balance of the debate, which has been about our anxiety for British manufacturing. The retail and services sectors in my town have picked up immeasurably. Even so, by no stretch of the imagination will Bury become the pizza and hamburger capital of the north of England. It must always depend on certain elements of the manufacturing sector, and it is time to ensure that the Front Bench realises that the cries of manufacturing industry are not cries of "Wolf' but cries about views that are passionately held. The Government must listen to those cries.
  My argument is that perhaps the economy is rather stronger than the Front Bench is prepared to recognise, and some options that may be open to the Government to help employment are not as risky as they think. There is no doubt that the fight against inflation must continue. Few industries, and only a few people on the shop floor, feel any different. However, it is necessary to review some of our policies and in bringing public spending from the darkness into the light we are finding the virtue of spending money on projects that really matter rather than wasting it.
  There is certainly further work to do in manufacturing. The British Chamber of Commerce report entitled, "British Manufacture in Decline 1975–1984" showed only too clearly what has happened in recent years. The most recent Manchester chamber of commerce and industry survey showed, sadly, a decline in orders in the last quarter after an encouraging 12 months. Almost anybody one speaks to in manufacturing industry will mention the problems of unstable exchange rates and high interest rates. It is important for the Government to realise that they must take those factors into consideration. Despite the good things happening in the economy, those are two basics that they must address. They have addressed many things with confidence and certainty and produced many good things. To address those two things will be of great assistance and will improve no end the credibility of the Government in my constituency.
  The textile industry is looking for a firm stance by Government on the multi-fibre arrangement. The paper industry is looking for a firm stance on energy prices. All industries are seeking to ensure that Government play no part in increasing any of their basic costs and therefore ruining their competitiveness. In the past 12 months the record on that has been good. I thank the Government for that, but the pressure must be kept up.
  Some years ago the noble Lord Wilson of Rievaulx, on one of his many television programmes, urged people to keep a small check list of prices behind the clock. Perhaps he had to sell the clock or more likely the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan)
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  sold the clock to cover the debts that the noble Lord had left. I should like the Secretary of State for Trade and Industry to keep a small check list for industry behind his clock. He should see in his dreams a ball sitting on a football pitch about 10 yards out from the goalmouth. In his dreams he should rush towards it and, if he keeps his check list in mind, he will ensure that he is kicking the ball in the right direction and not hoofing it backwards towards his own goal.
  First, my right hon. and learned Friend should ensure that costs to industry are continually reduced and that the Government play no part in putting up costs. Secondly. he should recognise that the future of high-tech is as much in the traditional manufacturing industries as in the high-tech industries themselves. He should be alert to the need for manufacturing industries to invest in capital projects in high tech. Not all the people who wish to have capital investment are covered by the Sullom Voe complex. Capital investment is needed by manufacturing industry to retain jobs and the use of high tech in traditional manufacturing industries has been of tremendous benefit in my own constituency.
  Thirdly, my right hon. and learned Friend should ensure that the Government's current commitment to the improvement of the infrastructure continues through improvements in roads, railways, and communications. That is the lifeblood of future industry. Fourthly, and perhaps most important, he should accept the word of industry about unfair foreign competition rather more readily than his Department does at the moment. All too often there is a long period of checking to see whether the allegations made by domestic industry are true, and by the time that is done the boat has gone and unfair foreign competition has triumphed.
  I was pleased at what my right hon. and learned Friend said today about making sure we were as competitive as our foreign rivals. It is essential that he makes sure that his Department is aware of that. We cannot afford to slip up too often. He mentioned changes in the aid and trade provision programme. Some of these problems have hit my own constituency in recent years and a significant change in the Government's attitude to that would be warmly welcomed. Fifthly, he must encourage a better attitude in education towards manufacturing industry. For too long industry and trade have been looked upon as dirty, and something that clever people were not supposed to go into. Schools and universities have not emphasised trade and industry as much as they should have done, and progress towards ensuring a change in that attitude is essential.
  Lastly, my right hon. and learned Friend must ensure that industry has a real partnership with Government. Having an industrial strategy need not mean massive Government intervention. The Government should recognise that some of the most successful economies in the western world are in countries where, although free enterprise has been given a full rein, Government have kept a close check on what has gone on. They have not intervened as such, but Government and industry together have had a strategy and a vision for the future. There is no reason why we should not do that.
  I should like to return to a comment I made at the start of my speech. Speaking at Blackpool the Secretary of State said that his priority was to see the great regional divide in our country narrowed as quickly as possible. He was not afraid to say what many people have thought for

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  some time but have shied away from saying. It was a refreshing and bold statement and he knows full well he will get support from the Tory Benches as he puts into practice what he has preached so well. At last, we in the north know we have not been forgotten. The visit of his predecessor to the north of England at the start of the summer to see the new industry that was coming from the old, and the new challenges that the region was facing was a good step on the road to the Government's rehabilitation of the north of England.
  If the Secretary of State can show himself as a robust defender of British industry, a fighter for fair competition in Europe and the wider world, a responsive listener about the concern of manufacturing industry, and an active partner in the common problems that beset manufacturing industry and the Government, he will have earned the thanks and support of Bury and us all.
  8.26 pm
  Mr. Tony Benn: I should like to talk about the problems we would face if we tried to restore full employment in Britain. It has not been touched on by any Government speaker because the restoration of full employment has never even been a Government objective. [An hon. Member: "Rubbish."] It is not a Government objective and no Minister has ever spoken about the restoration of full employment. The problem of unemployment is a wide one and goes well beyond an economic debate. There is the tragedy of young people in Liverpool who have not worked since they left school and have no prospect of work, and the women who are doing part-time low-paid jobs and who will be affected for the worse by the change in Sunday trading.
  Unemployment has an impact on the amount of money available for the public services and on the amount of money available for local government. There is also the effect of unemployment on the ethnic communities. But there is another aspect of unemployment and that is the cost. It is very simply costed, because the Government spend £7·5 billion a year on unemployment pay. The loss of taxation and national insurance as a result of 4 million unemployed is another £12·5 billion. That is £20 billion basic, but then there is a loss of production by the people who are unemployed.
  If we take it as a reasonable assumption that people in work could have at least 80 per cent. of their production matched by those out of work, we are talking about another £52 billion of production if we had full employment. With so much suffering and so much cost, why have this Government abandoned the objective of full employment?
  When I first came into the House 35 years ago this month, the idea of maintaining full employment was a consensus point. Harold Macmillan has now appeared in the House of Lords commenting again, but of course all Conservative leaders—Churchill, Eden, right through to the noble Lord—accepted that the maintenance of full employment was one of the central points of policy. It is fair to say that the policies pursued by the consensus Governments that followed one another did not succeed. That is why I do not listen with enthusiasm to Harold Macmillan while others do.
  That was the objective and now that objective has been dropped. The fact that it has been dropped is not an
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  accident. I have never accepted the idea of what is sometimes called Thatcherism. I do not believe that it is about monetarism, and I do not believe that political decisions are taken by going into a room with a cold towel round one's head and looking at a calculator to find out what the PSBR will be. After looking at the experience of the consensus years, the Government decided that they needed the dole to discipline the work force. That is what it is about.
  The hon. Member for Bury, North (Mr. Burt) said how happy people are and that they are all at one. What has happened is that the fear of unemployment has given management a power that it has not had since the 1920s or Victorian times.
  Unemployment performs vital economic functions. It keeps wages down. If a worker goes to his employer and says, "I cannot live on the money," the employer will say that there are 4 million people on the dole who will be happy to do the job. For the same reason, unemployment weakens the unions. It undermines the public services, which are costly. The Government do not want to finance them. Unemployment justifies rate capping and, of course, it boosts profits. If wages are kept down, marvellous profit figures can be produced, and it is the profit figures that make the Cabinet confident, because they do not intend to go back to full employment and do not believe in doing so.
  To restore full employment, it would be necessary, with 4 million unemployed and a five-year Parliament, to create 1 million new jobs a year. That is what it would take to get back to what was the consensus of all parties in Parliament for 40 years.
  I take up the point made by my hon. Friend the Member for Newham, North-East (Mr. Leighton). Twice in my lifetime we have created 1 million new jobs a year, all funded by public expenditure. The first time was from 1938 to 1942. It was public expenditure on rearmament at the end of the 1930s that gave us 1 million new jobs a year. That was when the PSBR was 27 per cent. of the national output—10 times what it is today. If people are taken off the dole, put into armaments factories and taxed on their earnings, the project finances itself. It was done by very strong central direction and by public expenditure.
  I do not need to stress to the House that rearmament was not done by private expenditure. Granny did not buy a Bren gun, mother did not have a tank, and father did not buy a Spitfire with an A registration. It was all done by the Government. People say that Government cannot create jobs. Of course they can, if they wish to do so.
  The second example was from 1945 to 1948, when we brought 3 million service men out of the armed forces and put them back to work. It was the biggest example of defence conversion that there has ever been. Compared with it, the problems of defence conversion that an incoming Labour Government would face would be simple. In Bristol, my old constituency, the Bristol Aeroplane Company, as it used to be, stopped sending out trucks with Blenheim bombers and a few months later it was producing prefabricated houses. That was done by having a central control over the economy. The powers were there and the objective was clear. The powers were used. If we want to restore full employment, it will not be done by tinkering about with the PSBR.
  I did not hear the whole of the speech of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), but anyone who thinks that joining the European monetary system and

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  going back to an incomes policy will get us back to full employment is absolutely wrong, because those actions are simply tinkering on the margin. If we want to get back to full employment—the objective that we should set ourselves in Britain, for a range of social, political and economic reasons—we shall have to do more than that. We must re-equip and re-establish British manufacturing industry by direct methods. It is no good speaking about industry as if it is an optional extra, assuming that if it loses it can be closed down, as if manufacturing is like white side-walled tyres—one has it if one can afford it. We have got to have industry.
  One of the reasons why the Japanese are so successful is that they look ahead for 10 or 20 years. Any sensible planning of a modern society would include the planning of investment in high technology industries and in the maintenance of what are now called the smokestack industries, mainly to justify closing them.
  Next, we would have to refurbish and develop the infrastructure. I am often amazed when I see industrialists whose whole market depends on public expenditure calling for cuts in public expenditure. Hon. Members will know the old joke in the construction industry that sewage is their bread and butter. When sewers are renewed and when bridges are built, there are jobs for the construction industry, and we need a modern infrastructure, but that would involve public expenditure.
  Next, we would have to expand the public services. If it is said that now that we have the microchip there is no demand, I could take any Member of this House, as other hon. Members could, to hundreds of houses where there are old people. In the modern jargon, they are now called the psycho-geriatrics. They are simply a bit old and confused. They need homes to live in; they need 24-hours-a-day care. To meet their needs would create jobs. We need day centres. We need creches so that women can be released to go to work or to college. No one can persuade me that Britain is not full of things that need to be done. Just as rearmament brought us back to full employment, so the expansion of the public services can bring us back to full employment.
  If technology allows us to achieve the necessary national output without seven days a week of backbreaking work, let us have earlier retirement and a shorter working week. Let us raise the school-leaving age, and enable adults to go in and out of education. If we wish to do those things, we shall have to plan our trade, for if we reflate the economy when we have not a manufacturing base we shall be flooded, not with imports of the raw materials or engineering products which will be needed, but with consumer products.
  If people had to wait a little longer for a Honda but could get a hip operation a bit sooner, what would be wrong with that? That is the sort of priority we would have to set. Unemployment is a form of import control. An unemployed person cannot afford a Japanese video, French wine or American tobacco. The Government have import controls, but they apply only to the unemployed, the low-paid and the people living on supplementary benefits.
  We would have to stop the export of capital. Since the Government came to power, for every family of four, £4,300 has left Britain. The Chancellor of the Exchequer says that we must tighten our belts because that is the way to solve the problem. But if a worker tightens his belt, the employer sends the money to South Africa, where the
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  wages are lower still, because Botha's police will not allow the unions to organise. The export of capital could not continue if we wished to solve the unemployment problem.
  We would also have to ease the arms burden. I have already mentioned Japan, but people do not often talk openly of the fact that the Japanese spend only 1 per cent. of a much bigger national income on defence. We spend 6 per cent. Why are the shops in Britain full of Japanese videos, cameras and motor cycles? It is because that is what the Japanese produce. Our Government's hopes are based on tourism and selling battlefield communications systems to the Americans. We have abandoned the serious intent of being a major manufacturing nation. That policy would have to change.
  The Secretary of State for Defence comes to every household every week and takes £24 off a family of four to finance the defence burden.
  We would have to deal with the treaty of Rome. We could not solve any of the problems under a constitution which makes it illegal to intervene with market forces.
  We would have to have a major expansion of public responsibility and control over our economy.
  I do not believe that anything less than the measures I have outlined would bring us anywhere near to the achievement of full employment. The Government do not want it. The wets could not get it, although they tried. The SDP-Liberal alliance thinks that if we squeeze the wages in Whitehall, join the European monetary system and have a federal Europe, full employment will come automatically.
  The Mitterrand dash for growth came a cropper because he did not really deal with the power structure. His economy zoomed up and fell flat. Mitterrand's policy failed because, apart from anything else, he could not escape from the treaty of Rome. The treaty of Rome and the way in which it operated brought down the French economy.
  To achieve full employment, we need fundamental changes in our policy and in our thinking. If this House is to be a forum for the nation, one of its functions is to tell the people outside that we cannot have full employment simply by tinkering with the economy. If we want full employment again, we have to set the objective and take the powers to bring it about. We must have the courage to implement it. That is what the choice will be when the general election comes. It will not be much influenced by whether there are a few tax cuts, purchased by selling off public assets. The choice will be a basic one. I have a feeling that, after their experience with this Government, the British people will be ready to take it.
  8.39 pm
  Mr. David Knox: Because of the shortage of time, I hope that the right hon. Member for Chesterfield (Mr. Benn) does not mind if I do not take up the points he made, tempting as that is. He may be surprised to hear that I am concerned about a return to full employment, but my route to that objective would be different from the one he has been talking about.
  My right hon. and learned Friend the Secretary of State for Trade and Industry and my right hon. Friend the Chancellor of the Exchequer both painted a bullish picture of the British economy when they spoke earlier. That may have impressed the City and some of the national press.

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  I doubt if they impressed many others, particularly those living in the north and those engaged in manufacturing industry, far less those who are unemployed.
  It is very difficult to accept that the economy is prospering when over 3 million are out of work. It will continue to be difficult to accept that all is going well until such time as unemployment starts to fall, falls substantially and looks like continuing to fall. I see no sign of that at present.
  As an economic problem, unemployment involves a scandalous waste of resources, lost production and lost national wealth. As a social problem, unemployment is divisive and undoubtedly contributes to social unrest. That is why unemployment is the principal problem facing the Government in the current Session of Parliament, as it has been for several years. Against that problem the proposed legislative measures of the Gracious Speech pale into insignificance.
  For 30 years immediately following the war, we had full employment. Over the last 11 years, under both Labour and Conservative Governments, we have seen unemployment rise from under 500,000 to its present unacceptable level. Some choose to blame the policies that were pursued in the 30 years immediately after the war. Others try to heap all the blame on the Government headed by the Earl of Stockton, even though it is 22 years since he ceased to be Prime Minister. I think both those are absurd propositions. It is much more likely that the increase in unemployment in the last 11 years has been because of the policies pursued during those years. In a word, the increase in unemployment since 1974 has come about because of the lack of economic stability abroad and because of the pursuit of monetarist policies at home, with their consequent demand deflationary effects.
  If we are to make any impact on the level of unemployment—that should be our highest national objective—we must try to stabilise the international economic environment in which we operate as far as that is possible and we must raise the level of demand in our domestic economy. I regret that there is no mention of either in the Gracious Speech.
  In the first 25 years after the war we had relative stability in exchange rates under the terms of the Bretton Woods agreement. It provided the countries of the world with a stable international economic order in which their economies could expand. It was particularly beneficial to a country like Britain which has to export a high proportion of its national income to pay for necessary raw materials and foodstuffs. In the early 1970s unfortunately, Bretton Woods broke down, with disastrous results.
  In recent years currencies have fluctuated violently. We have seen the value of the pound rising and falling by terrifying amounts over comparatively short periods, with consequential disruption to our domestic economy. At one moment that has made our exports much too dear; at another it has made them too cheap. Again and again when I have visited manufacturing firms in my constituency I have been told of the damage that has been done to their trade by constant changes in the value of the pound.
  Although high exchange rates can be damaging to manufacturing industry, it is the constant changes in the exchange rate that do most damage. That may not be perceived by the Treasury as a problem. It may not be perceived by the City of London as a problem, because
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  money can be made in the City from currency fluctuations, but it is a problem for those whose primary functions are to design, manufacture and sell products and who rarely have an interest in high finance. The present position is therefore very unsatisfactory.
  I do not believe that it is possible to negotiate a new Bretton Woods now. It should be an objective in the long term but this country can do something to help itself immediately, and that is, to join the exchange rate mechanism of the European monetary system. That would provide us with much greater stability for 60 per cent. of our trade than we enjoy now. Once we were full members of the European monetary system we could start to play a part through the European community in trying to negotiate with the United States and Japan an even wider area of international stability. Such stability can only be in the interests of this country. I hope, therefore, that the omission of any reference to the EMS in the Gracious Speech does not mean that another year will be allowed to pass before we join the exchange rate mechanism.
  Full membership of the EMS would not in itself result in a return to full employment although it would help. A substantial increase in the level of demand in the British domestic economy would be required to take up the slack and bring people back into jobs. Without an increase in demand there can be no significant increase in employment. Without an increase in demand, the work that my right hon. and noble Friend the Secretary of State for Employment and my right hon. and learned Friend the Paymaster General are doing will have little or no effect on the level of employment. The jobs that their policies create will merely replace jobs that disappear elsewhere. If the public, individually or collectively, do not have the means to buy more goods and services, there will be no demand for more goods and services and consequently no demand for extra labour to produce them.
  Nor will demand rise automatically. The Government and only the Government can do anything about the general level of demand in the economy. They can raise demand by reducing taxation whilst not decreasing public expenditure, or by increasing public expenditure whilst not increasing taxation, or by a mixture of the two. Put more simply, the Government can increase demand by increasing the public sector borrowing requirement. It is nonsense to suggest that that would be inflationary, for there is plenty of spare capacity in the economy.
  Now that my right hon. Friend the Chancellor of the Exchequer has discarded that symbol of monetarism, M3, I hope that his next step will be to discard the medium-term financial strategy. If that is asking too much, perhaps he could take a more relaxed attitude towards it. If he does not, there can be no hope of a significant reduction in unemployment. We need reduced taxation to encourage increased private consumption and we need increased Government expenditure, particularly capital expenditure. While it would be foolish to embark on an immediately massive reflation, we should be aiming at a growth rate of 5 to 6 per cent. a year, generated by expansionist Government economic policies. Unless we get something of that order we shall not make a real impact on unemployment.
  There is urgency about taking such action for balance of payments reasons. In the years ahead North sea oil will have a diminishing effect on the balance of payments. The longer we leave off the necessary expansion of the

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  economy to reduce unemployment the more risky it becomes in balance of payments terms. So for every reason urgent action is required.
  There is one final point that I should like to make. I made it in the debate on the Gracious Speech in 1983 and again in the debate on the Gracious Speech last year. At the last general election, the electorate gave the Government the benefit of the doubt over unemployment. They were not satisfied with the Government's performance, but they did not believe that either of the other two parties would do any better. At the next general election, if unemployment is not falling, there is a great danger that the British people will conclude that the Government have had their chance and that the time has come to give one of the other parties a chance, even if they are not totally convinced that that other party can do any better. I would regret that as much as any of my right hon. and hon. Friends.
  8.50 pm
  Mr. Dick Douglas: I do not propose to comment generally on the speech of the hon. Member for Staffordshire, Moorlands (Mr. Knox) because time is short. His opposition to the Government's policy made it difficult to see why he should vote against our amendment.
  We are having an artificial debate because we have had the Chancellor's autumn statement and tomorrow it is proposed that we debate the economy, as if a debate on industry and employment was remote and detached from a debate on the economy, and as if macro-economic policy was remote and distant from micro-economic policy.
  I come from a constituency with a varied industrial base. I should like to refer to the mining industry. Last year, when we were in the middle of the mining dispute, there was harsh and brutal management in the Scottish coalfields. The managers dismissed more than 200 Scottish miners because of their activities in the dispute. Fortunately, there has been a change in personnel in the National Coal Board in Scotland and there have been moves to re-engage some of the miners who were branded as criminals by the then director. I would not place too much on the hope, but I hope that the process is accelerated and that all the 200 miners dismissed during the dispute return to work. The harshness of industrial management as exhibited by the coal board at that time should not be perpetuated into the future. I take the point made by my right hon. Friend the Member for Chesterfield (Mr. Benn). It is not right for the Government to use unemployment and harsh industrial techniques as threats against the labour force.
  Several hon. Members have referred to the importance of oil in the economy. I shall try to set my remarks in the context of the Government's view of oil. The Brown Book of 1985 gave the following figures. The total disposals of United Kingdom continental shelf oil in 1984 amounted to 125 million tonnes and 45·4 million tonnes were delivered to United Kingdom refineries, constituting 60 per cent. of the total delivery of United Kingdom refineries. A total of 24·2 million tonnes of foreign crude was imported during the year, compared with exports of United Kingdom continental shelf crude of 77 million tonnes.
  Oil has been used not so that we get a balanced fuel or energy policy but simply to provide Government revenues and, of course, to bolster the balance of payments. There
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  is no other reason for our producing oil in such excessive amounts. The Government have abandoned any thought of a depletion policy.
  Let us examine other economies with no domestic production of oil such as West Germany and Japan and how they took the shocks of 1974 and 1979. There was an impact on their balance of payments, but their strategy was different from that pursued by Governments of both political colours in this country. The Labour Government borrowed against potential oil production. The Conservative Government have used oil to bolster the balance of payments. However, West Germany and Japan did not narrow their industrial manufacturing base but broadened and deepened it. If anyone has doubts about that, he should read the report of the Select Committee on Overseas Trade in another place, which said succinctly in paragraph 23:
  "The ten countries with which the United Kingdom had either the largest surpluses or the largest deficits in 1984 are shcwn in Table 2.7. Generally speaking, with one or two exceptions, surpluses have been achieved with less developed countries and deficits incurred in more developed countries. It is perhaps worth noting that the worst trade balances in manufactures are with West Germany, Japan and Italy, and that the worst of all is with West Germany."
  West Germany is a nation without the benefit of oil.
  I do not wholly share some of the views expressed by Opposition Members. I do not think that there will be a dramatic turn-round in production. The Government's figures are reasonably secure. There will be a small slack, but the problem is like a drug addict coming out of his addiction. How should we tackle it in balance of payments and exchange terms? We must also consider what is happening to other aspects of the international oil market.
  We are in a farcical position. The production of Norway and ourselves has exceeded that of the Saudis, and on occasion ours has been more than that of the Saudis. If we move to cheap oil, nations such as Germany and Japan, having secured their industrial base, will get the benefit. If oil becomes cheaper, production in the North sea will be adversely affected, as well as Government revenues. We are in a Catch 22 situation. That would be extremely damaging particularly because we have adopted a policy of letting our manufacturing industry go. We could not recover overnight.
  If we had used the revenues from North sea oil to enhance our productive capacity in future, one area of prime concern would have been the allocation of resources to research and development expenditure in the United Kingdom. Have we done that? There is no evidence of it whatsoever. I quote from the presidential address made to the British Association in August of this year by Sir Hans Kornberg:
  "During the year 1983/84 the five Research Councils spent just over £480 million and the UGC £551 million. If one assumes that roughly one-third of the UGC's expenditure was for the support of research, the total expenditure for research from the DES was roughly £664 million."
  That is DES research expenditure which should be financing industrial innovation in the future. We did that for education-based research. But what did we spend on research and development for the Ministry of Defence? We spent £2,000 million on defence-related research and development. That is twisting and tilting the economy in terms of our expenditure in a fashion that I believe to be wrong and, in the long run, harmful to our economy.
  I turn briefly to the way in which Governments deal with Select Committee reports. We have heard the

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  disparaging remarks made by Government Ministers about the report of a Select Committee of the House of Lords. I represent a constituency which has a large number of people employed in dockyards and I am wondering how Conservative Members will vote when the Bill which has been announced today is given a Second Reading.
  Two Committees looked at the proposals relating to dockyards, the Public Accounts Committee and the Select Committee on Defence. They were not filled with Labour Back Benchers, of an extreme Left-wing persuasion or otherwise, but were dominated by Conservatives. Both Committees argued that the Government had failed to prove their case in relation to their objective of commercialisation for the dockyards. Did the Government halt? A wise and prudent manger, faced with this searching examination, would have cried, "Halt. I may have got it wrong", but not the Secretary of State for Defence. He goes on and imperils both industrial relations in the dockyards and the capability of those dockyards, which have served the Navy well for a long time.
  These policies should be opposed by a prudent House of Commons willing to evaluate the arguments. The trouble with this Government, however, is that they are not persuaded by arguments. If I were to ask the Secretary of State why he is going ahead with this foolhardy policy on the dockyards, he would say that he is doing it from a doctrinaire approach. It is not something that he can prove in terms of savings, employment, service to the Navy or strategic importance. It is something that he considers desirable and so it has to be conceded and we must go on with it. I hope that Conservative Members will weigh these points about the dockyards extremely carefully.
  Last night I switched on the television in time to hear the Prime Minister speaking at the Mansion house. From the way that she was dressed, I thought for a minute that we had Flora Robson in colour, but it was not so. She talked about jobs being important and about creating employment because it conferred a feeling of belonging. She accepts that argument, as would everyone in the House, but she does not accept the obverse.
  The most important point about having some 3 million to 4 million unemployed is the feeling of alienation that it engenders. I ask Conservative Members to acknowledge that the cost of being unemployed is a feeling of not belonging, a feeling of alienation, of being apart. Neither this Government nor any other has the right to concentrate attention on tax cuts which will benefit the 85 per cent. in employment and forget the 15 per cent. who are alienated by unemployment.
  If Conservative Members who have made so many critical speeches of the Government really examined our amendment, they would have the courage of their convictions and vote for it.
  9.2 pm
  Mr. John Stokes: Hon. Members will recall last Wednesday's brilliant autumn weather when the Queen opened Parliament in such splendour. Shortly afterwards, in the debate, I noted that the hon. Member for Falkirk, West (Mr. Canavan), after making some fairly unpleasing remarks about having to go to the House of Lords to hear the Gracious Speech, said that we on the Government side of the House knew nothing of real people—people, he said, outside the House.
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  Immediately after the Gracious Speech, I went outside the House and joined the vast and friendly throng in the street. Just in front of me was a very rough-looking man. As the Queen passed in her coach, he gave out such a cheer that it almost burst my eardrums. That, I believe, was the voice of the real people in this country, which is so different from the figment of the hon. Gentleman's imagination. In spite of our differences, we must never forget the essential, underlying unity of this kingdom.
  I welcome many of the proposals in the Gracious Speech. I am sorry that once again there appears to be too many Bills clogging our time and over-emphasising our law-making capacity, to the detriment of our duty to check the Executive and ensure as far as possible that the Government govern well and spend taxpayers' money wisely.
  The Government have a difficult political choice in deciding whether to continue with their necessary reforms —such as more privatising, which which I thoroughly agree—or to rein back on some of those measures for fear of giving the public indigestion. The British people will be led but not driven.
  In the main, the public still support the chief planks of the Government's programme, particularly on subjects such as law and order, defence and making the trade unions more democratic. However, the Government have proposed other measures—such as the new Sunday trading laws—which, I fear, may not be so popular.
  There is great public concern about law and order following the appalling riots in our cities; and the public order legislation will be widely welcomed. The most vulnerable people in society—the old and infirm, children and young women—need the most protection. People expect severe sentences for all crimes of violence, such as assault, rape and mugging, as well as rioting, arson and throwing petrol bombs. They also expect the laws of England to be applied impartially to black, brown and white people. They expect the police to have all the necessary equipment to deal with riots.
  In respect of all those matters, the nation is facing a moral crisis. Yesterday the Lord Chancellor said that this country was falling into moral decay and he warned that that could lead to anarchy and tyranny. There are also dreadful statistics for divorces, broken marriages and one-parent families.
  I sometimes wish that the Government would give more of a moral lead. The protection of the family, for instance, is vital for the stability of society. I hope that the Government will come down firmly against embryo research.
  In am not a fanatic about Sunday trading. We cannot make people good by Act of Parliament. In countries where churchgoing is greater than it is here—for example, in Scotland or France—there has been Sunday trading for many years. I realise also the anomalies in the present laws which should be put right.
  Nevertheless, I do not want Sunday to be as any other day. There is enough irreligion now not to give it any further encouragement. Nor do I want the Government to appear money-grubbing and wholly commercial in their attitude to the matter. Unless the new laws are strictly limited in their effect, I shall not be able to support them. The Government should support churchgoing and certainly not do anything to make it more difficult. Also, I should be sorry to see a head-on clash with the churches on this issue.

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  I welcome the broadening of the powers of the building societies, setting them out in an appropriate framework. They will benefit from being able to offer more services and compete more equally with other retail institutions. Consumers will benefit from the wider range of services which they will be able to give.
  I also welcome the laws proposed against the drug traffic and drug-taking, which is such an appalling menace to society and particularly to our young people.
  This debate is mainly about industry and employment. As I represent a constituency in the west midlands, which used to be the heart of the nation's industrial effort, I have seen great decline and rising unemployment in the last few years. However, the picture is not as black as some Opposition Members have painted it. For instance, there is a vast improvement in labour relations, no doubt following the defeat of Scargillism last year. Industrialists and people on the shop floor in my area seldom complain. Few of them have alternative policies to suggest to those at present being pursued.
  Unfortunately, the Government still give the impression of not being as interested in manufacturing industry as they should be. Many people believe that industry is not recruiting the best men and that salaries are woefully low compared with those paid in the City of London and the professions. The Government must take greater care to explain their policies more fully in words that ordinary people can easily understand. Too often, the Government lose their case by default. For instance, people believe that there have been cuts in public expenditure, when in some cases it has been increased.
  The steady reduction in the inflation rate is widely welcomed in my constituency, especially among pensioners. Unemployment is levelling out and will probably go down. There is a welcome increase in job vacancies and new jobs being created. I welcome the vigour shown by my right hon. and noble Friend Lord Young in his new post and the new initiatives to deal with unemployment. I am especially pleased that the armed forces will do more training. They are probably the best trainers in the country.
  The Queen's Speech does not mention immigration— a subject rarely debated in the House. We should be honest and realise that immigrants and the minority English communities in areas of high immigration wonder what the future will be for the next generation when immigrants will form perhaps one third of the total population. That serious matter must be considered now so that immigrants and English people can have confidence in their future.
  The Gracious Speech sounded a confident note on foreign affairs. For the first time for many years there is a slight possibility that some form of arms control, if not disarmament, will be possible among the great powers.
  On my visits abroad last year, I found that Britain and our Prime Minister were deeply respected. Our embassies do a splendid job in many capital cities and especially on the commercial side where great help is given to British business men. I hope that there will be no reduction in the Foreign Office Vote or in the overseas service of the BBC.
  In general, I do not believe that the picture in Britain is anything like as black as it has been painted by the Opposition. People abroad still look up enormously to this country, to our form of government, our tolerance, our way of life, our traditions and to so much for which we should be thankful. We should remember that and count
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  our blessings. The Government must remain steady on their course. If they do so, they will deserve the support of all people of good will.
  9.14 pm
  Mr. Stan Crowther: Listening to the statistics trotted out by the Secretary of State for Trade and Industry and the Chancellor of the Exchequer to prove that some great recovery is taking place, I was irresistibly reminded of the famous phrase quoted by a previous Conservative Prime Minister:
  "lies, damned lies and statistics."
  I am sure that the Ministers were not telling lies, but they were manipulating statistics to prove the existence of a non-existent recovery.
  I was pleased that my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) emphasised the importance of the steel industry. Steelmaking is the best barometer of manufacturing industry. All manufacturers use steel—as a raw material, as machinery or as both. If, as the Government say, there is a marvellous recovery, why did a representative of the British Steel Corporation tell the Select Committee on Trade and Industry as recently as June—we were told this last year and the year before—that the corporation can foresee no increase in the demand for steel in Britain? That is why the corporation wishes to close more plants after those they have already announced. Tinsley park works in Sheffield will close in three weeks' time, causing hundreds more of my constituents to lose their jobs. If there is a recovery, why is there no foreseeable increase in the demand for steel? That simple question must be answered.
  We are talking about the new high-productivity, slimline steel industry—an industry that has lost at least 120,000 jobs during the past five years, an industry in which all the alleged overmanning has been ruthlessly cut out and in which all the so-called excess capacity has already been closed. The corporation is saying that, despite the high productivity and the fact that the industry has become competitive, there will be no increase in demand. Do Ministers know what they are talking about? Do they know what is happening in British industry? Only a couple of weeks ago at Question Time, the Minister of State assured me that rumours about closures and redundancies in my constituency were "pure speculation". However, while he was telling me that, the BSC was busily announcing another substantial batch of redundancies at the Rotherham works. It is his job to know what is happening and my job to try to find out, but he certainly did not know that. Do Ministers really believe what they are telling us about a recovery? They should visit south Yorkshire to see the devastation for themselves. Let them visit the industrial wastelands, the desolate empty factories, the shut-down mills and melting shops in what used to be the biggest centre of steelmaking and heavy engineering in the world. It is heart-breaking to see that.
  I wish that Ministers would explain to my constituents, who are being made redundant in their hundreds every month, why they are losing their jobs when we are having such a marvellous recovery. They are entitled to such an explanation. I wish they would explain to the youngsters leaving school this year why they have no hope of obtaining proper jobs.
  Several hon. Members have mentioned small businesses, whose development I strongly support. I was involved in that area before I entered the House. But it

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  would take many small businesses to create the 20,000 jobs that we need in Rotherham today, not in five or 10 years' time—[Interruption.] Ministers should do something about it instead of sitting on the Front Bench laughing and chortling. It is a serious matter in my constituency.
  The overriding need today is to get our wealth-creating manufacturing industry back on its feet in our great industrial regions. Those areas created the foundations of our national prosperity and, given half a chance, they would do so again.
  9.20 pm
  Mr. John Prescott: I apologise to hon. Members if I was not here for part of the debate, although I have attended the greater part of it.
  The debate has reflected what is apparently the new tone in the unemployment debate—public expenditure is now "in". After the Prime Minister's speech last night, it appears that public expenditure can create jobs and is actually planned to achieve that objective. A good example of that principle was revealed in the Paymaster General's speech, which presented a number of proposals specifically designed to reduce the level of unemployment and to provide more employment measures although they are not what the Opposition would call real jobs.
  Following the exchanges in the House earlier this evening, I examined the autumn statement, which I see claims:
  "from the employment measures, the trend in unemployment should continue to be more favourable than over the last two years."
  As I suggested earlier, the autumn statement says that 100,000 on community schemes and possibly 100,000 on YTS will reduce unemployment by perhaps 250,000. That is a fiddling of the figures to show that, by election time, the unemployment figures have gone down.
  I welcome, and will not knock, the fact that the Government are convinced that more public expenditure can reduce unemployment. That is the heart of the argument and the alternative put forward by the Opposition. Hon. Members have tonight proposed several choices which the Government could pursue to create more employment. Both sides of the House have agreed that, while we may be critical of relying on tourism to provide jobs—I welcome jobs wherever they come from —we should not encourage tourism at the expense of our manufacturing base, which continues to decline.
  It is not satisfactory for Ministers to talk about record levels of investment when it is the level of investment in manufacturing that is important. The important area is that of manufacture and the creation of wealth. A study of investment in manufacturing reveals that there is a long way to go before either output or investment figures reach the 1979 level. The Secretary of State for Trade and Industry should be made aware of that and I address his attention to it.
  The right hon. Member for Chesham and Amersham (Sir I. Gilmour) made a sound and important point about growth. We cannot continue to rely on growth alone to create full employment. In the past two decades, each increase in growth has produced fewer and fewer jobs. Growth now has a negative effect upon jobs. We simply
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  cannot rely on growth to provide full employment. A mixture of public and private investment is crucial if the Government want to reduce unemployment.
  I welcome the Paymaster General to his first debate on employment in his new capacity, but I strongly deplore the fact that the Secretary of State for Employment should be in another place—[Interruption.] are hon. Members telling me that he is observing?—particularly as he is the architect of most of the current policies, which involve low pay, part-time work, and an awful lot of low-quality training in manpower schemes. The Secretary of State for Employment is more responsible for Government policy than the Paymaster General and he should answer for the Government.
  Mr. Baldry rose—
  Mr. Prescott: I have not time to give way.
  I hope that the Secretary of State will not lecture us about democracy in the trade unions. Before he does that he should seek election himself, be elected and come to the House.
  Nevertheless, I welcome the Paymaster General, who has, in all his jobs so far, been the best man rather than the groom. I believe that he is concerned about facts and about the argument. As the debate about unemployment is about to take place, will he agree the basic common facts so that the debate may be about truth and the facts rather than a contest on the issue? That has often been the case in the House and elsewhere, when the monthly unemployment figures are announced.
  I have been to the Library to discover the real level of unemployment. We know that 3·27 million people are registered as unemployed, but that is the Government's first fiddle. On the basis of the Labour Government's criteria, about 3·6 million people would be registered as unemployed. I am sure that we can agree on the figures produced by the Library calculated on the basis of the labour force survey. If we add to the total the number of unemployed males aged 60 to 64, the number of unemployed non-claimants, those who have temporarily stopped work and the effects of special employment and training schemes, the total comes to 4·75 million looking for work. If we add to that figure the 250,000 that the Minister is fiddling today, unemployment stands at 5 million on the basis of the Government's own figures and the labour force survey. I do not want to argue about that —[Interruption.] Provided that we can accept the Library's figures, based on the labour force survey, unemployment runs at 4·75 million. I am quite prepared to accept 3 million, which is higher than we had in the 1930s. At least we can agree on the number of people looking for work on the Department's figures.
  Mr. David Maclean: Will the hon. Gentleman give way?
  Mr. Prescott: I cannot—I do not have the time.
  I hope that the Paymaster General also agrees that unemployment in Britain has been higher than in Europe. The OECD figures show that. If I had the time, I could refer to the relevant tables. Britain's unemployment average has always been the average of European OECD countries—until 1979. As for the percentage increase in unemployment in Britain, the Library, using OECD figures says:
  "Had the United Kingdom unemployment rate worsened at the same rate as the OECD average, the current unemployment rate would be approximately 1 million lower than it actually is."

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  Can we agree, therefore, that our unemployment is higher than in our competitor countries in Europe? The evidence is clear.
  Previous Secretaries of State have often said that our working population represents a larger proportion of the total than in the rest of Europe. It has always been so. Since 1979, however, that proportion has fallen more than the average in Europe. It is therefore not correct for the Government to claim that they have been successful. Indeed, the deterioration has been accelerated by the Government's policies.
  The Opposition argue that most of the changes have been brought about by the Government's policies. An OECD report compares the public expenditure pattern in Britain with that in European OECD countries. The cuts in transport, hospitals and roads have been much deeper here than in Europe. That is given as one reason why unemployment here is higher. We should agree, therefore, that Government policy has reduced inflation and consequently thrown many more people out of work. For every 1 per cent. fall in inflation, three quarters of a million people have been thrown on the dole. The price of the Government's anti-inflation policy has been mass unemployment.
  The charge against the Government is that they have deliberately brought about mass unemployment by choosing to pursue monetary economic policies. Unemployment is therefore higher than elsewhere, it results from Government policy and it is a deliberate part of policy.
  A committee of experts in the International Labour Organisation has produced a white paper calling on all ILO countries to agree that full employment must be a major aspect of Government policy. The Government are refusing to ratify that recommendation. The committee of experts has examined the Government's policy and it says:
  "the Committee … is bound to stress that, even in an economic strategy which regards (stable prices and competitiveness) as the ultimate aim, an active employment policy must, in the terms of the Convention … be pursued as a major goal."
  The experts said:
  "the Government's present policy had not been able to give satisfactory results in this respect; the Conference considered that it was the Government which had the primary responsibility in this area".
  Even the experts from other countries who have examined Britain's economic policy have agreed that mass unemployment has arisen directly from the Government's policy and their consequent decisions, for whatever reason. It is directly induced mass unemployment, which begs the question whether the Government deliberately intend to achieve that end.
  If the committee of experts in the ILO was looking for comfort from the Queen's Speech, all it can see is further notice that the Government intend to abrogate their international obligations and conventions. They see the abrogating of the Truck Acts and wages council legislation. Britain is the only country among 92 to seek to solve its unemployment by attacking the low paid in wages council industries. That is the reality of the Queen's Speech and what the Government are now saying is the solution to unemployment.
  When we look at the Truck Acts and the reform of the wages councils, which will be opposed bitterly by the Opposition, we need to understand precisely what the Government are about to do, and why. We must begin to understand the relevance of mass unemployment from
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  their point of view and the way that they are out to discipline the labour market and workers, particularly in low-paid jobs.
  By abolishing the Truck Acts and reforming the wages councils, the Government are introducing a 19th-century solution. They are returning to Victorian values, to the sweated industries of Britain in the 19th century. They wish to remove current protections and reintroduce the 1880s to the 1980s. I can justify that assertion by analysing some of the proposed changes. What do the Government intend to do by reforming the Truck Acts and abrogating our international obligations? They apparently desire to make sure that everybody can be paid by cheque instead of cash. If that is to be the case, it removes choice from the individual.
  The Government are always talking about choice and the individual, but he will no longer be able to exercise his preference to be paid in cash rather than by cheque. The individual will now have to pay £40 or £60 a year in bank charges, which is a large sum for someone who is not earning much money each week. [Laughter.] Conservative Members laugh, but that is the reality. There is also the problem that bank opening times are not convenient for many workers.
  Why should the individual not have the right to choose whether he is paid in cash or by cheque? The Conservative party lectures us about individuals and their rights but Britain is the only country to take this course. Britain is also the only country to remove protection from the employee for deductions. What will that mean? Does it mean that the employer will have the right—unless it is written into the contract that he does not —to make deductions for disciplinary offences, tool charges, light and heat? That is what used to happen in the 19th century. By removing these controls one invites the employer, who already feels he has the whip hand, to impose adverse conditions on workers.
  What is threatened by the reform of the wages councils? The Government are threatening to remove protection for young people under 21. That will affect half a million of our youngsters who are on low wages, such as my son, who was an apprentice hairdresser. He was receiving only £23 a week. It would have affected me in the days when I was commis chef and worked under wages council regulations. I know the conditions of wages councils because I had to live under them. Not many Conservative Members could tell us about that.
  Mr. Warren: I could.
  Mr. Prescott: The hon. Gentleman will probably agree with what I am going to say, and I hope that he will vote against the Government's proposals for wages councils. If we remove the young people from their protection and fix a single rate of pay, nothing will be done for holiday provision—indeed, holiday protection will be reduced. Nothing will be done about the rate differentials, so there will be a single rate.
  All these conditions are currently protected by the wages councils. The Government's proposals seem to be designed to make conditions even more deplorable and to shift the balance even more in favour of the employer at the place of work. This will happen in areas where workers are at their weakest. We have an obligation under the ILO to ensure that workers who are in the weakest position are not subjected to the sort of legislation that the Government propose.

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  The Minister talks about the reform of the wages councils and I predict that the Government intend to channel our youngsters into wages council industries. That will enable them to ease the rate of unemployment among those who have completed YTS courses. I understand that about 50 per cent. of those who leave the courses are unable to obtain jobs. The Government intend that they should skivvy in kitchens, wait in hotels or work in shops. That sort of job is being set up for our youngsters. [HON. MEMBERS: "Disgraceful."] Perhaps I should tell Conservative Members that the right hon. member for Waveney (Mr. Prior) made a similar statement in a Cabinet paper in 1981 when he was Secretary of State for Employment. I am only repeating the words of the right hon. Gentleman.
  The Government plan to replace the women who are working in kitchens, hotels and shops for £50 or £60 a week with youngsters who have completed YTS schemes. Their intention is to pay them about £40 a week. That will reduce unemployment because many women work part time and cannot register as unemployed. Secondly, it will take more youngsters off YTS schemes. Youngsters will undertake the work that is currently performed by women but at lower rates of pay and this will produce an overall downward shift in wage levels. The Opposition believe that that is the Government's aim. They wish to reduce the wage levels of the lowest paid.
  Where is the evidence that lower rates of pay produce more employment opportunities? The Government have often made that claim but the evidence that is available seems to refute it. Over the past five years, wages have fallen the most in areas of employment that are low paid. The gap between the low-paid and the highest paid has grown considerably over that period. At the same time, unemployment has increased faster among the low-paid.
  We know that the Government have examined wage levels in the clothing industry. The evidence produced by the Department of Employment, which reflected the position of garment workers, was examined by the Cambridge department of applied economics, which claimed that the Department had used incorrect figures. It stated that some of the Department's key assumptions were false and that its analysis was inadequate. It stated that, if the Department had used the correct figures, its study would have revealed that
  "the rise in male minimum rates produced a small fall in employment, while the larger rise in female minimum rates increased employment by a greater percentage."
  The Government produced a fiddled piece of research, like their fiddled unemployment figures.
  The fiddle does not end there. The Chancellor of the Exchequer said, as did the right hon. and learned Member for Rushcliffe (Mr. Clarke) when he was appointed Paymaster General, that a 1 per cent. fall in wages would lead to 150,000 more jobs. Where is the evidence for that? That controversial claim was analysed by Warwick university's economic model group and it found that the increase in jobs would be about 15,000 instead of 150,000. It found that outcome difficult to understand, so it examined the model further. It concluded:
  "The estimates that we obtain reveal a much smaller employment response than that predicted by the Chancellor."
  I suppose that 15,000 is much less than 150,000. It continued:
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  "Part of this difference is attributable to revisions in the Treasury model".
  Even the Treasury model was got at to produce the figure of 150,000. It is clear that there are fiddles in every figure that the Government produce. We know that that is so but —[Interruption.] Conservative Members may choose to shout, but I do not hear any substantial rejection of the Warwick study.
  The Government's real purpose is to strengthen the power of the employer at the place of work, to attack those on low incomes and to encourage employers not to pay basic wages.
  The Silentnight dispute had been going on for 20 weeks when the Under-Secretary of State for Employment made a deplorable speech in the House; it was even attacked by the Lancashire Evening Telegraph—a Tory paper—on the grounds that the Minister had sided with the employer. I ask the Paymaster General in all seriousness to get the papers from ACAS and look at them, because there is a role for Government in arbitration in these matters.
  The Government's whole policy is designed to reduce low wage rates and to attack the lowest paid by removing protections from them. That is what the Queen's Speech is about. As for the Government's promised 600,000 jobs, 400,000 of those jobs are part-time. The Secretary of State talks about the European analysis. In this country, full-time jobs are being replaced by part-time jobs at a rate unparalleled anywhere else in Europe. The Government have embarked on a part-time low-paid economy. I have analysed the figures for the increase in full-time job equivalents of which the Secretary of State talks. It will take him 70 years to get back to the level of employment that he inherited from the Labour Government in 1979.
  Let there be no mistake: we know what the Government are doing. Unemployment in this country is higher and deeper than it is anywhere else. It is deliberate Government policy to impose burdens on those least able to bear them. We shall do everything that we can to oppose that policy in the coming Session.
  9.41 pm
  The Paymaster General (Mr. Kenneth Clarke): I begin by noting a remarkable event which took place in today's debate. The right hon. Member for Bristol, South (Mr. Cocks) broke 11 years of silence to intervene in the debate. I was elected at the same time as the right hon. Gentleman, although I have not as yet had the pleasure of listening to him often. I congratulate the right hon. Gentleman and assure him that the Elders IXL takeover bid for Allied-Lyons is currently being examined by Ministers and the points that he made will be carefully considered.
  The hon. Member for Kingston upon Hull, East (Mr. Prescott) wound up for the Opposition. Before plunging into the general, I will deal with one particular. I have taken on board his point about the Silentnight dispute and will look into it. As he knows, both parties to that dispute have the right of access to ACAS and I believe that ACAS officials have already been involved. I will consider what the hon. Gentleman has said. Clearly, everyone wishes the dispute to be resolved to the satisfaction of the firm and its employees.
  With regard to the Gracious Speech, the hon. Member for Kingston upon Hull, East touched on the one measure that will concern us both most particularly in this Session when he attacked our proposals—in the opinion of

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  many they are fairly modest proposals—to reform the wages councils and repeal the Truck Acts. I was amazed at the vehemence of the hon. Gentleman's opposition to those proposals. He talked about a return to Victorian values but I have never heard a more passionate and conservative—with a small "c"—defence of Edwardian England than the hon. Gentleman's comments.
  That legislation was designed for entirely different economic and social conditions albeit by a good reforming Government—the Asquith Government of 1908. With regard to wage levels, both measures applied to conditions well before the modern welfare state and to a time when sweated labour conditions were more universal and a greater fear than they are today. We must consider the modern implications of retaining old legislation in all its details.
  My credulity was strained to the limit by the hon. Gentleman's passionate defence of the Truck Acts and his root and branch opposition to the idea of payment by cheque in England in 1985 as a dangerous innovation. That appears to be based on his belief that someone without a bank account cannot cash a cheque. When the legislation comes forward, we can explain that to him and perhaps eliminate an argument about inhibiting personal choice.
  We shall obviously address ourselves to the arguments about wages councils when the legislation is reached, but the number of wages councils have over the years been steadily reduced by successive Governments. The ones that remain raise the wages bill of some employers and reduce their competitiveness in the market. As the hon. Gentleman will know, many employers within the wages councils trades are to a large extent not affected directly on most issues, as many of them pay well above wages councils rates.
  The main effects that we are seeking to reform are those resulting from the fact that some wages councils raise fringe benefits over and beyond basic rates and overtime rates and particularly from the artificial raising of the wages of younger employees. In our opinion, that sometimes raises the cost of employing younger people above the value that they can add to the business of a prospective employer, and that costs jobs.
  Mr. Ashdown rose—
  Mr. Clarke: I have only a short time left. I know that the hon. Gentleman was unlucky and was not called, but I have no time to give way to him.
  Within the wages councils trades, the rates of pay for younger workers in relation to rates of pay for adult workers are higher than is the norm in this country—much higher than the norm in some other equivalent economies abroad—which is why we are directing ourselves to the reforms that we have in hand.
  Most of the debate was devoted to the wider issues of industry and employment. The background to the debate —which I have no time to repeat, and which I do not think I need repeat after the statement by the Chancellor, the speech of my right hon. and learned Friend the Secretary of State for Trade and Industry and my own statement—is that in what I hope is not an over-exciting way the Government are presenting encouraging economic news. We have encouraging employment figures. A number of new jobs are being created, and the number of vacancies now being notified to jobcentres is, as always, only a proportion of the total number of vacancies in the
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  economy. The package of measures that I announced earlier today will, I hope, give more encouragement to all those involved in the vital search for jobs which concerns so many of the long-term unemployed.
  Like my hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox), I still reach the conclusion that employment and unemployment remain the key political and social issues. I believe that what the Government have presented today is a substantial step towards relieving that social problem.
  The hon. Member for Kingston upon Hull, East revealed that for obvious reasons his major concern, and that of many of his hon. Friends, is to minimise the exent of the improvement and, if it were possible, to make the problem of unemployment even worse. I was disappointed when he began with the enticing appeal, "Let us agree on the facts and let us get down to a sensible argument chat helps the country." He then raced into his usual diatribe about fiddled figures. He held up a list of figures from the Library, which I suspect were right, but his interpretation of them led him on to the ever-mounting heights of 4 million to 5 million total unemployed.
  We have the total of registered unemployed which the hon. Gentleman accurately quoted. That total is inflated by the hon. Gentleman and his vehement colleagues by adding the 870,000 not receiving benefit but who are seeking work. But they take no account of the 940,000 revealed by the recent labour survey who are receiving benefit but not actively looking for work. These figures are incontrovertible, but only by adding them together does one produce the figures complained about.
  Even worse, the hon. Gentleman adds to his total of unemployed those on the youth training scheme when he purports to be in favour of people being encouraged to go into good quality training and in favour of the objects of the scheme. Now that training is becoming a permanent part of the preparation for work, there is no reason at all why trainees, any more than sixth formers, people in further education or others involved directly in preparation for work, should be counted as unemployed.
  There is no reason blithely to take those who are working on the community programme, or who are engaged upon special measures and taking part in paid work which will improve their employment prospects, and add them to the total of those who are unwillingly idle.
  It is relevant to point out that no previous Government have added those who are engaged on special measures to the unemployment figures. They are people with jobs. They are getting work experience and they are being paid for it. There is clear agreement on the figures. I cannot see the slightest point in endeavouring to add every footnote that can be found and to define people as unemployed when plainly they are not. The Government are prepared to accept that it is their duty to create conditions in which more jobs can be generated and the true figure of unemployment reduced.
  The hon. Member for Kingston upon Hull, East passed up the opportunity—which was seized, rather recklessly and wildly, by his right hon. Friend the Member for Chesterfield (Mr. Benn)—to try to explain what the Opposition's response would be if they were returned to Government. The occasion of this debate upon the Gracious Speech would have been a suitable occasion to do so. They cue was given by my right hon. and learned Friend the Secretary of State for Trade and Industry. He said that on his recent visit to America one of the major

  529
  fears that was expressed by prospective investors in this country was the possibility of the return to power of a Labour Government.
  Mr. Prescott: That is not true.
  Mr. Clarke: If that is not true, the hon. Gentleman should have done something to allay those fears. Outside this House he as taken the opportunity to present his proposals. They are set out in a Labour party document of which he is the author. He has done so as the Opposition Front Bench spokesman on this subject. Its title is "Planning for Full Employment". I very much doubt whether the policies contained in "Planning for Full Employment" would hold very much attraction for prospective inward investors into this country. In the preface to the document the hon. Gentleman baldly states:
  "Only by a planned interventionist policy, working towards socialist objectives, can we hope to achieve a fundamental redistribution of power, wealth and jobs."
  No doubt the hon. Gentleman believes, together with his right hon. Friend the Member for Chesterfield, that when he tried a Socialist solution it was the treaty of Rome which prevented Mr. Mitterrand from achieving a redistribution of power and creating jobs.
  How will "Planning for Full Employment" or, to take the syntax literally, the redistribution of jobs, be carried out? First, the hon. Gentleman advocates, presumably as the official policy of the Opposition, more nationalisation. He says:
  "Expansion of the public sector and its ownership is crucial in making industry more accountable."
  Has he discussed that with his right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) who seems to express a different opinion on certain occasions? And would he discuss it with the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), who on previous occasions seemed to have difficulty in deciding how to vote on these issues? There will also be an extension of trade union control over industry.
  Mr. Prescott: The right hon. and learned Gentleman is referring to just little bits of the document.
  Mr. Clarke: I had trouble like this when the hon. Member for Oldham, West (Mr. Meacher) spoke about social services. When a document is produced by a Front Bench spokesman for the Labour party, I expect him to believe, as the author of that document, in what he says. The hon. Gentleman advocates:
  "Labour's industrial democracy policy should give workers greater control over their own activity by extending collective bargaining from purely general issues and as images into the management and organisation of production".
  The relationship between wages and jobs is entirely missed out. The repeal of all the Government's anti-trade union legislation is described in and promised by this document. A workers' rights Act is proposed. The document refers to almost everything except giving workers the right to ballot or any voice in the activities of their union. The hon. Member for Kingston upon Hull, East, in his diatribes about our policies and our encouraging progress, was putting forward policies that would not only frighten the pants off American or other overseas investors but drive up the unemployment level in Britain as the Labour party sought to extend greater control over the economy.
  Despite the fact that the hon. Member for Yeovil (Mr. Ashdown) was not lucky enough to catch your eye, Mr.
  530
  Speaker, there were contributions from the alliance, especially the right hon. Member for Hillhead. He had the opportunity to set out his reaction to the policies of the Government whom we are defending. His extraordinary speech came to no particular conclusion after his sudden confession that, for 10 years as a Labour party member, he had been a disillusioned supporter of nationalisation. He seemed surprised when we reminded him that he had voted repeatedly for it during that time. I recall that the Bill to nationalise shipbuilding was carried by one vote. Presumably it was carried by the right hon. Member for Hillhead who did not believe in what he was voting for. That puts him in a difficult position on the privatisation proposals in the Gracious Speech.
  What is the position of the right hon. Member for Hillhead and, presumably, his colleagues? Now that principle has returned and they are solemnly in the centre of British politics and know what they are doing, which way will they vote? The right hon. Gentleman does not know. He said that he was going to wait for the Bill. I have never heard a greater compliment paid to the draftsmen of parliamentary documents. The policy appears reasonably clear to me. Its merits and demerits have been argued. The right hon. Member for Hillhead has gone into the opportunism of third-party politics and has made a confession of a somewhat discreditable past.
  The main issue in the debate has been the balance between services and manufacturing. We have been pressed most cogently on that point by my hon. Friends the Members for Devizes (Mr. Morrison), for Bury, North (Mr. Burt), for Moorlands and for Halesowen and Stourbridge (Mr. Stokes) and by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour). I should make our position clear. In answering the House of Lords Select Committee, no Government Member is in any way seeking to dismiss or denigrate the contribution of manufacturing industry.
  I do not understand how anyone can conjure anything that has been said to deny the value to an economy of a strong and competitive manufacturing industry. The shift between the proportion of people employed in service industries and the proportion of people employed in manufacturing has been a continuing trend in Britain for many years, as it has been in every equivalent developed economy. It is plainly likely to happen for a variety of reasons. It is worth pointing out, before people get shattered about our position that in 1983 manufacturing output as a proportion of GDP was exactly the same in Britain as in the United States. That is a comparison not with the state of New York, which is an extreme example, but with the whole of the United States, which is the wealthiest economy in the western world. The proportion of services as a percentage of GDP provided in the United States is as great as that provided here. The proportion of people employed in service industries in the United States is higher than the proportion employed in Britain.
  When we attack the Select Committee's report, we are not dismissing the difficulties of manufacturing industry. However, the evidence chosen by that Committee was highly selective. Since the trough of the recession, manufacturing output has increased by 11 per cent., manufacturing investment by 39 per cent. and manufacturing productivity by 31 per cent. and the value of manufacturing exports is at record levels. The House of Lords Select Committee proposed solutions which no one had really supported—subsidies for manufacturing

  531
  industry, an inside track, preferential treatment for taxation and grants, compared with services. Those authors would say that. We believe that manufacturing and the rest of the economy—
  Question put, That the amendment be made:—
  The House divided: Ayes 218, Noes 354.

  Division No.2]

  [10 pm

  AYES

  Abse, Leo

  Evans, John (St. Helens N)

  Adams, Allen (Paisley N)

  Ewing, Harry

  Alton, David

  Fatchett, Derek

  Archer, Rt Hon Peter

  Faulds, Andrew

  Ashdown, Paddy

  Field, Frank (Birkenhead)

  Ashley, Rt Hon Jack

  Fields, T. (L'pool Broad Gn)

  Ashton, Joe

  Fisher, Mark

  Atkinson, N. (Tottenham)

  Flannery, Martin

  Bagier, Gordon A. T.

  Foot, Rt Hon Michael

  Banks, Tony (Newham NW)

  Forrester, John

  Barnett, Guy

  Forsythe, Clifford (S Antrim)

  Barron, Kevin

  Foster, Derek

  Beckett, Mrs Margaret

  Foulkes, George

  Beggs, Roy

  Fraser, J. (Norwood)

  Beith, A. J.

  Freeson, Rt Hon Reginald

  Bell, Stuart

  Freud, Clement

  Benn, Tony

  Garrett, W. E.

  Bennett, A. (Dent'n & Red'sh)

  George, Bruce

  Bermingham, Gerald

  Gilbert, Rt Hon Dr John

  Bidwell, Sydney

  Godman, Dr Norman

  Blair, Anthony

  Gould, Bryan

  Boothroyd, Miss Betty

  Gourlay, Harry

  Boyes, Roland

  Hamilton, James (M'well N)

  Bray, Dr Jeremy

  Hamilton, W. W. (Central Fife)

  Brown, Gordon (D'f'mline E)

  Hancock, Mr. Michael

  Brown, Hugh D. (Provan)

  Harman, Ms Harriet

  Brown, N. (N'c'tle-u-Tyne E)

  Harrison, Rt Hon Walter

  Brown, R. (N'c'tle-u-Tyne N)

  Healey, Rt Hon Denis

  Bruce, Malcolm

  Heffer, Eric S.

  Buchan, Norman

  Hogg, N. (C'nauld & Kilsyth)

  Caborn, Richard

  Howell, Rt Hon D. (S'heath)

  Callaghan, Rt Hon J.

  Howells, Geraint

  Callaghan, Jim (Heyw'd & M)

  Hoyle, Douglas

  Campbell-Savours, Dale

  Hughes, Dr. Mark (Durham)

  Canavan, Dennis

  Hughes, Robert (Aberdeen N)

  Carter-Jones, Lewis

  Hughes, Roy (Newport East)

  Cartwright, John

  Hughes, Sean (Knowsley S)

  Clark, Dr David (S Shields)

  Hughes, Simon (Southwark)

  Clarke, Thomas

  Janner, Hon Greville

  Clay, Robert

  Jenkins, Rt Hon Roy (Hillh'd)

  Clwyd, Mrs Ann

  John, Brynmor

  Cocks, Rt Hon M. (Bristol S.)

  Johnston, Sir Russell

  Cohen, Harry

  Jones, Barry (Alyn & Deeside)

  Coleman, Donald

  Kaufman, Rt Hon Gerald

  Conlan, Bernard

  Kennedy, Charles

  Cook, Frank (Stockton North)

  Kilroy-Silk, Robert

  Cook, Robin F. (Livingston)

  Kinnock, Rt Hon Neil

  Corbett, Robin

  Kirkwood, Archy

  Corbyn, Jeremy

  Lambie, David

  Cox, Thomas (Tooting)

  Lamond, James

  Craigen, J. M.

  Leadbitter, Ted

  Crowther, Stan

  Leighton, Ronald

  Cunliffe, Lawrence

  Lewis, Ron (Carlisle)

  Cunningham, Dr John

  Lewis, Terence (Worsley)

  Dalyell, Tam

  Litherland, Robert

  Davies, Rt Hon Denzil (L'lli)

  Livsey, Richard

  Davies, Ronald (Caerphilly)

  Lofthouse, Geoffrey

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

  Loyden, Edward

  Dewar, Donald

  McCartney, Hugh

  Dixon, Donald

  McCusker, Harold

  Dobson, Frank

  McDonald, Dr Oonagh

  Dormand, Jack

  McGuire, Michael

  Douglas, Dick

  McKay, Allen (Penistone)

  Dubs, Alfred

  McKelvey, William

  Duffy, A. E. P.

  MacKenzie, Rt Hon Gregor

  Dunwoody, Hon Mrs G.

  Maclennan, Robert

  Eadie, Alex

  McNamara, Kevin

  Eastham, Ken

  McTaggart, Robert

  Edwards, Bob (W'h'mpt'n SE)

  Madden, Max

  Ellis, Raymond

  Maginnis, Ken

  532

  Marek, Dr John

  Sheerman, Barry

  Marshall, David (Shettleston)

  Sheldon, Rt Hon R.

  Martin, Michael

  Shore, Rt Hon Peter

  Maxton, John

  Short, Ms Clare (Ladywood)

  Maynard, Miss Joan

  Silkin, Rt Hon J.

  Meacher, Michael

  Skinner, Dennis

  Meadowcroft, Michael

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

  Michie, William

  Smith, Rt Hon J. (M'kl'ds E)

  Mikardo, Ian

  Smyth, Rev W. M. (Belfast S)

  Millan, Rt Hon Bruce

  Snape, Peter

  Miller, Dr M. S. (E Kilbride)

  Soley, Clive

  Morris, Rt Hon A. (W'shawe)

  Spearing, Nigel

  Morris, Rt Hon J. (Aberavon)

  Stewart, Rt Hon D. (W Isles)

  Nicholson, J.

  Stott, Roger

  Oakes, Rt Hon Gordon

  Strang, Gavin

  O'Brien, William

  Straw, Jack

  O'Neill, Martin

  Taylor, Rt Hon John David

  Park, George

  Thomas, Dafydd (Merioneth)

  Parry, Robert

  Thomas, Dr R. (Carmarthen)

  Patchett, Terry

  Thompson, J. (Wansbeck)

  Pavitt, Laurie

  Thorne, Stan (Preston)

  Pendry, Tom

  Tinn, James

  Penhaligon, David

  Torney, Tom

  Pike, Peter

  Wainwright, R.

  Powell, Rt Hon J. E. (S Down)

  Walker, Cecil (Belfast N)

  Powell, Raymond (Ogmore)

  Wallace, James

  Prescott, John

  Wardell, Gareth (Gower)

  Radice, Giles

  Wareing, Robert

  Randall, Stuart

  Weetch, Ken

  Rees, Rt Hon M. (Leeds S)

  Welsh, Michael

  Richardson, Ms Jo

  White, James

  Roberts, Allan (Bootle)

  Wigley, Dafydd

  Roberts, Ernest (Hackney N)

  Williams, Rt Hon A.

  Robinson, G. (Coventry NW)

  Wilson, Gordon

  Rogers, Allan

  Winnick, David

  Rooker, J. W.

  Woodall, Alec

  Ross, Ernest (Dundee W)

  Wrigglesworth, Ian

  Ross, Stephen (Isle of Wight)

  Ross, Wm. (Londonderry)

  Tellers for the Ayes:

  Rowlands, Ted

  Mr. John McWilliam and

  Ryman, John

  Mr. Frank Haynes.

  NOES

  Adley, Robert

  Brown, M. (Brigg & CI'thpes)

  Aitken, Jonathan

  Browne, John

  Alexander, Richard

  Bruinvels, Peter

  Alison, Rt Hon Michael

  Bryan, Sir Paul

  Amery, Rt Hon Julian

  Buchanan-Smith, Rt Hon A.

  Amess, David

  Buck, Sir Antony

  Ancram, Michael

  Budgen, Nick

  Arnold, Tom

  Bulmer, Esmond

  Ashby, David

  Burt, Alistair

  Aspinwall, Jack

  Butcher, John

  Atkins, Rt Hon Sir H.

  Butler, Hon Adam

  Atkinson, David (B'm'th E)

  Butterfill, John

  Baker, Rt Hon K. (Mole Vall'y)

  Carlisle, John (Luton N)

  Baldry, Tony

  Carlisle, Kenneth (Lincoln)

  Banks, Robert (Harrogate)

  Carttiss, Michael

  Batiste, Spencer

  Cash, William

  Beaumont-Dark, Anthony

  Chalker, Mrs Lynda

  Bellingham, Henry

  Channon, Rt Hon Paul

  Bendall, Vivian

  Chapman, Sydney

  Benyon, William

  Chope, Christopher

  Best, Keith

  Churchill, W. S.

  Bevan, David Gilroy

  Clark, Hon A. (Plym'th S'n)

  Biffen, Rt Hon John

  Clark, Dr Michael (Rochford)

  Blackburn, John

  Clark, Sir W. (Croydon S)

  Blaker, Rt Hon Sir Peter

  Clarke, Rt Hon K. (Rushcliffe)

  Body, Richard

  Clegg, Sir Walter

  Bonsor, Sir Nicholas

  Cockeram, Eric

  Bottomley, Peter

  Colvin, Michael

  Bottomley, Mrs Virginia

  Conway, Derek

  Bowden, A. (Brighton K'to'n)

  Coombs, Simon

  Bowden, Gerald (Dulwich)

  Cope, John

  Boyson, Dr Rhodes

  Cormack, Patrick

  Braine, Rt Hon Sir Bernard

  Corrie, John

  Brandon-Bravo, Martin

  Couchman, James

  Brinton, Tim

  Cranborne, Viscount

  Brittan, Rt Hon Leon

  Critchley, Julian

  Brooke, Hon Peter

  Crouch, David

  533

  Currie, Mrs Edwina

  Holland, Sir Philip (Gedling)

  Dickens, Geoffrey

  Holt, Richard

  Dicks, Terry

  Hordern, Sir Peter

  Dorrell, Stephen

  Howard, Michael

  Douglas-Hamilton, Lord J.

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

  Dover, Den

  Howarth, Gerald (Cannock)

  du Cann, Rt Hon Sir Edward

  Howell, Rt Hon D. (G'ldford)

  Dunn, Robert

  Hubbard-Miles, Peter

  Durant, Tony

  Hunt, David (Wirral)

  Dykes, Hugh

  Hunter, Andrew

  Eggar, Tim

  Irving, Charles

  Emery, Sir Peter

  Jackson, Robert

  Evennett, David

  Jenkin, Rt Hon Patrick

  Eyre, Sir Reginald

  Jessel, Toby

  Fairbairn, Nicholas

  Johnson Smith, Sir Geoffrey

  Fallon, Michael

  Jones, Gwilym (Cardiff N)

  Farr, Sir John

  Jones, Robert (Herts W)

  Favell, Anthony

  Joseph, Rt Hon Sir Keith

  Finsberg, Sir Geoffrey

  Kellett-Bowman, Mrs Elaine

  Fletcher, Alexander

  Kershaw, Sir Anthony

  Fookes, Miss Janet

  Key, Robert

  Forman, Nigel

  King, Roger (B'ham N'field)

  Forsyth, Michael (Stirling)

  Knight, Greg (Derby N)

  Forth, Eric

  Knight, Dame Jill (Edgbaston)

  Fowler, Rt Hon Norman

  Knowles, Michael

  Fox, Marcus

  Knox, David

  Franks, Cecil

  Lamont, Norman

  Fraser, Peter (Angus East)

  Lang, Ian

  Freeman, Roger

  Latham, Michael

  Fry, Peter

  Lawler, Geoffrey

  Gale, Roger

  Lawrence, Ivan

  Galley, Roy

  Lawson, Rt Hon Nigel

  Gardiner, George (Reigate)

  Leigh, Edward (Gainsbor'gh)

  Gardner, Sir Edward (Fylde)

  Lennox-Boyd, Hon Mark

  Garel-Jones, Tristan

  Lester, Jim

  Gilmour, Rt Hon Sir Ian

  Lewis, Sir Kenneth (Stamf'd)

  Glyn, Dr Alan

  Lightbown, David

  Goodhart, Sir Philip

  Lilley, Peter

  Goodlad, Alastair

  Lloyd, Ian (Havant)

  Gorst, John

  Lloyd, Peter, (Fareham)

  Gow, Ian

  Lord, Michael

  Gower, Sir Raymond

  Luce, Richard

  Greenway, Harry

  Lyell, Nicholas

  Gregory, Conal

  McCrindle, Robert

  Griffiths, Sir Eldon

  McCurley, Mrs Anna

  Griffiths, Peter (Portsm'th N)

  Macfarlane, Neil

  Grist, Ian

  MacGregor, Rt Hon John

  Ground, Patrick

  MacKay, Andrew (Berkshire)

  Grylls, Michael

  MacKay, John (Argyll & Bute)

  Gummer, Rt Hon John S

  Maclean, David John

  Hamilton, Hon A. (Epsom)

  McNair-Wilson, P. (New F'st)

  Hampson, Dr Keith

  McQuarrie, Albert

  Hannam, John

  Madel, David

  Harris, David

  Major, John

  Harvey, Robert

  Malins, Humfrey

  Haselhurst, Alan

  Malone, Gerald

  Hawkins, C. (High Peak)

  Maples, John

  Hawkins, Sir Paul (N'folk SW)

  Marland, Paul

  Hawksley, Warren

  Marlow, Antony

  Hayes, J.

  Marshall, Michael (Arundel)

  Hayhoe, Rt Hon Barney

  Mates, Michael

  Hayward, Robert

  Maude, Hon Francis

  Heath, Rt Hon Edward

  Mawhinney, Dr Brian

  Heathcoat-Amory, David

  Maxwell-Hyslop, Robin

  Heddle, John

  Mayhew, Sir Patrick

  Henderson, Barry

  Mellor, David

  Hickmet, Richard

  Merchant, Piers

  Hicks, Robert

  Meyer, Sir Anthony

  Higgins, Rt Hon Terence L.

  Miller, Hal (B'grove)

  Hill, James

  Mills, Iain (Meriden)

  Hind, Kenneth

  Miscampbell, Norman

  Hirst, Michael

  Mitchell, David (NW Hants)

  Hogg, Hon Douglas (Gr'th'm)

  Moate, Roger

  534

  Monro, Sir Hector

  Speller, Tony

  Montgomery, Sir Fergus

  Spence, John

  Moore, John

  Spencer, Derek

  Morrison, Hon C. (Devizes)

  Spicer, Jim (W Dorset)

  Morrison, Hon P. (Chester)

  Spicer, Michael (Worcs S)

  Moynihan, Hon C.

  Squire, Robin

  Mudd, David

  Stanbrook, Ivor

  Murphy, Christopher

  Stanley, John

  Neale, Gerrard

  Steen, Anthony

  Needham, Richard

  Stern, Michael

  Neubert, Michael

  Stevens, Lewis (Nuneaton)

  Newton, Tony

  Stevens, Martin (Fulham)

  Nicholls, Patrick

  Stewart, Allan (Eastwood)

  Norris, Steven

  Stewart, Andrew (Sherwood)

  Onslow, Cranley

  Stewart, Ian (N Hertf'dshire)

  Oppenheim, Phillip

  Stokes, John

  Oppenheim, Rt Hon Mrs S.

  Stradling Thomas, Sir John

  Osborn, Sir John

  Sumberg, David

  Ottaway, Richard

  Tapsell, Sir Peter

  Page, Sir John (Harrow W)

  Taylor, John (Solihull)

  Page, Richard (Herts SW)

  Taylor, Teddy (S'end E)

  Parkinson, Rt Hon Cecil

  Tebbit, Rt Hon Norman

  Parris, Matthew

  Temple-Morris, Peter

  Patten, Christopher (Bath)

  Terlezki, Stefan

  Patten, J. (Oxf W & Abdgn)

  Thomas, Rt Hon Peter

  Pawsey, James

  Thompson, Donald (Calder V)

  Peacock, Mrs Elizabeth

  Thompson, Patrick (N'ich N)

  Pollock, Alexander

  Thorne, Neil (Ilford S)

  Porter, Barry

  Thornton, Malcolm

  Portillo, Michael

  Thurnham, Peter

  Powell, William (Corby)

  Townend, John (Bridlington)

  Powley, John

  Townsend, Cyril D. (B'heath)

  Prentice, Rt Hon Reg

  Tracey, Richard

  Prior, Rt Hon James

  Trippier, David

  Proctor, K. Harvey

  Trotter, Neville

  Pym, Rt Hon Francis

  Twinn, Dr Ian

  Raffan, Keith

  van Straubenzee, Sir W.

  Rathbone, Tim

  Vaughan, Sir Gerard

  Rees, Rt Hon Peter (Dover)

  Waddington, David

  Renton, Tim

  Wakeham, Rt Hon John

  Rhodes James, Robert

  Waldegrave, Hon William

  Rhys Williams, Sir Brandon

  Walden, George

  Ridley, Rt Hon Nicholas

  Walker, Bill (T'side N)

  Ridsdale, Sir Julian

  Walker, Rt Hon P. (W'cester)

  Rifkind, Malcolm

  Wall, Sir Patrick

  Rippon, Rt Hon Geoffrey

  Waller, Gary

  Roberts, Wyn (Conwy)

  Walters, Dennis

  Roe, Mrs Marion

  Ward, John

  Rossi, Sir Hugh

  Wardle, C. (Bexhill)

  Rost, Peter

  Warren, Kenneth

  Rowe, Andrew

  Watson, John

  Rumbold, Mrs Angela

  Watts, John

  Ryder, Richard

  Wells, Sir John (Maidstone)

  Sackville, Hon Thomas

  Whitfield, John

  Sainsbury, Hon Timothy

  Whitney, Raymond

  St. John-Stevas, Rt Hon N.

  Wiggin, Jerry

  Sayeed, Jonathan

  Wilkinson, John

  Shaw, Giles (Pudsey)

  Winterton, Mrs Ann

  Shaw, Sir Michael (Scarb')

  Winterton, Nicholas

  Shelton, William (Streatham)

  Wolfson, Mark

  Shepherd, Colin (Hereford)

  Wood, Timothy

  Shepherd, Richard (Aldridge)

  Woodcock, Michael

  Shersby, Michael

  Yeo, Tim

  Silvester, Fred

  Young, Sir George (Acton)

  Sims, Roger

  Younger, Rt Hon George

  Skeet, T. H. H.

  Smith, Tim (Beaconsfield)

  Tellers for the Noes:

  Soames, Hon Nicholas

  Mr. Carol Mather and

  Speed, Keith

  Mr. Robert Boscawen.

  Question accordingly negatived.
  Debate to be resumed tomorrow.

  PETITION

    British Steel
    10.15 pm
    Mr. Tom Clarke: On behalf of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and myself, I wish to present a petition which has been given to us by our constituents and others in response to the astonishing decision taken during the parliamentary recess by British Steel to announce the closure of Gartcosh works and indeed to confirm its lack of faith in the future of Ravenscraig by refusing adequate investment in that plant.
    Our constituents, the people of Scotland generally and indeed many others who see the steel industry as being essential to our manufacturing base support the petition and the cause of Gartcosh and Ravenscraig:
    Wherefore your petitioners pray that your honourable House do urge the Secretary of State for Trade and Industry and the chairman of the British Steel Corporation to reconsider the decision to close the BSC plant at Gartcosh and to make the necessary new investment to secure the long-term future of the Gartcosh-Ravenscraig complex.
    And your petitioners, as in duty bound, will ever pray.
    To lie upon the Table.

  Darfield Main Colliery
  Motion made, and Question proposed, That this House do now adjourn—[Mr. Peter Lloyd.]
  10.17 pm
  Mr. Terry Patchett: May I express my gratitude for the opportunity to raise this matter on the Floor of the House? Although I am aware that Darfield Main colliery is the subject of the review procedure between the National Coal Board and the appropriate trade unions, there are certain aspects of which the Minister should be made aware.
  Darfield Main is a mine with which I have had close associations for many years. Indeed, I was present at the negotiations when the Silkstone seam was added to the reserves of Darfield Main from Houghton Main, with assurances of at least 15 years of extended life. With the committed investment at Darfield Main of some £28 million, there opened up a potential of 1 million tonnes in the Winterbed seam where headings were already laid out. The 250,000 tonnes in the Melton Field seam took the potential life of Darfield Main to well over 20 years. However, those arguments will no doubt be put forward by the relevant trade unions in the review procedure.
  Being experienced in negotiations with the NCB, I am aware of the Government's influence over the NCB. It is to that that I wish to draw the attention of the House. During the miners' dispute, which is generally accepted by political commentators as having been perpetrated on the country by the Government, I wrote to the Secretary of State about the future of Darfield Main.
  Darfield Main's future lies with heavy investment in the Silkstone seam which connects to the Cortonwood reserves of the same seam. The then branch secretary of the union, Walter Swift, had written to me expressing concern about the future of Darfield Main in view of the fact, stated many times, that the NCB could not sell Cortonwood coal. We are all familiar with the history of Cortonwood.
  I wrote to the Secretary of State and he passed my letter on to Mr. Ian MacGregor, chairman of the National Coal Board. I expressed concern about the future of Darfield Main and Houghton Main collieries, which mine the same seam. In response, Mr. MacGregor assured me—he was writing during the strike—that
  "Darfield Main and Holton Main collieries have substantial reserves, and, unlike Cortonwood, produce coal from other seams as well as the Silkstone.
  These two pits are part of the south side washery complex, centred on Grimethorpe colliery and they have benefited substantially over recent years from the board's massive programme of capital investment under plan for coal. Both pits now have a complete new underground infrastructure, with streamlined operations for men, material and mineral handling, at low cost.
  The coal mined from these collieries (including that from the Silkstone seam) will form part of a comprehensive blend to produce a low cost product, suitable for both industry and power stations."
  That letter was written during a different climate, but given Mr. MacGregor's assurance one can readily understand my amazement when a proposal to close Darfield Main was announced within only four or five weeks of the end of the dispute, after such a glowing reference. I am aware of the dirty tactics used by the board and the Government during the dispute, which misled

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  public opinion so gravely, but an attempt to mislead a Member of the House in such a way by the chairman of a nationalised industry is intolerable behaviour.
  When I heard of the proposed closure, I immediately wrote to Mr. MacGregor requesting a meeting to discuss the matter. I was entitled to do so following the assurances that I received during the dispute. He replied by saying that his office was arranging for me to meet the area director of Barnsley area, Mr. Frank Ramsden, so that the present position could be explained, although it was Mr. MacGregor who sent the initial letter. I immediately contacted Mr. Ramsden's office by telephone. I have known Frank Ramsden personally for many years. However, his secretary told me that he was out that day and going on holiday the following day. I made that contact on my initiative—nothing came from the coal board, regardless of promises.
  That happened in the middle of July. From that time to this there has been no attempt to contact me by letter or telephone. In fact, that part of the Barnsley area of the NCB no longer exists as it is now under the auspices of the north Yorkshire area director, Mr. Albert Tuke, who has not contacted me either.
  I feel strongly that I have been treated with contempt by the chairman of a nationalised industry. Anyone treating a Member of the House in such a contemptuous manner is treating the House itself with contempt. I am satisfied in my own mind that Mr. MacGregor feels that he does not have to justify writing off £28 million of public money to a duly elected Member of the House. I wish to take up that line of thought with the Minister because I feel strongly that that attitude has been encouraged by the Government. The Government have been and are prepared to write off many millions, indeed billions, of pounds during the dispute, to pursue their political dogma. Had the Government been prepared to spend half as much money in creating markets for coal as they have spent in union bashing, I am sure that the NCB would be in a much sounder position today.
  I also regret that the Government's arrogance has infiltrated local management. Indeed, Mr. Griffin, the manager of Houghton Main, makes repeated calls to the work force for co-operation, but that is only in public. The work force are members of the National Union of Mineworkers. Away from the public eye, Mr Griffin tells union officials that he is looking for a way to sack them—that is the branch officials, of course. What a way to run an industry.
  To return to the major reason for bringing this matter to the attention of the House, I feel that the NCB is in a dilemma because the Government have no clearly defined energy policy. Is it not ironic that the coal board is turning down coking coal export orders to the tune of 2 million to 3 million tonnes to Rumania and a possible 3 million tonnes, going up to 1990, from Denmark; and I am reliably informed of Irish interests preferring British coal to American. I am speaking of coking coal which is the backbone of the Darfield Main colliery—the coking coal that the board could not sell from Cortonwood when it started this trouble.
  It is to this dilemma that the Government contribute. For example, the main argument which contributed to the costly mining dispute concerned reserves. Since the strike, this has turned into a question of economics, meaning that
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  even a pit with reserves has no guaranteed future. Darfield Main, with its 20 years' reserves, was set an economic target of £42 per tonne. It had almost achieved that aim and was suddenly told, "You cannot score goals. We are moving the net. We are dropping it to £38 per tonne." It is a ridiculous way to run a business.
  I must ask the Minister to come clean on the Goverment's policy for the energy industry. It really is time that he did so. I feel confident that the Government do not have too much of an interest in the electricity generating industry for sales because of their obvious enthusiasm for nuclear energy. It seems clear that the recent reorganisation of the coal board areas is leading up to a sale of lucrative pits such as Selby and the Vale of Belvoir, with its thick seams, not necessarily with a view to competing in the electricity generating industry but with an eye to the potential market in the gas industry. It is quite well known that by the year 2010 the gas board will require as much as 100 million tonnes of coal for conversion purposes when those wasted assets in the North sea have gone, when the Goverment have done with the easy meat.
  I ask the Minister, therefore, to give a direction to the board, indeed to the country, by declaring quite clearly and specifically their energy policy. It cannot be so difficult a task when we realise that 2010 is only 25 years away. Until the Minister comes clean on this, the work force will always face the dilemma of not knowing where its future lies. Like Darfield Main, many more pits will face apparently desperate searches for reasons to close them. The reasons vary from week to week. One used to be worked-out reserves. Now it is economics. This is what the coal board is now indulging in. It cannot even find a genuine reason for closing pits.
  I ask the Minister to do his duty to the country by spelling out his policy honestly and clearly. We want to know how many more millions of pounds the Government are prepared to write off and how much more of the coal industry will be destroyed before the Government's targets are satisfied.
  10.28 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I acknowledge that there can be few Members of the House better qualified to speak on this subject than the hon. Member for Barnsley, East (Mr. Patchett), with his background as a craftsman at Houghton Main and as a long-standing delegate for the National Union of Mineworkers. I fully appreciate the concerns which have led him to raise this matter tonight.
  Colliery closures, particularly in areas of high unemployment, must be of concern to us all. I have pointed out to the House on many occasions that the closure of individual pits is a matter for the National Coal Board in consultation with the unions. I know only too well from experience in my constituency on Merseyside the problems that are caused by high levels of unemployment. However, the hon. Gentleman has not chosen a particularly appropriate occasion to raise this matter for the first time in the House.
  The area director of what was at that time the NCB's Barnsley area first proposed the closure of Darfield Main, as the hon. Gentleman knows, at a general colliery review meeting on 16 May of this year, after the strike. Under the terms of the colliery review procedure, a reconvened

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  colliery review meeting was held on 20 June, when the unions indicated their wish to appeal against the proposal. That appeal was heard on 7 November, last week.
  As always, the NCB has assured me that it will give serious consideration to the case that has been put forward by the unions. I understand that all three major unions—the NUM, NACODS and BACM—have appealed on this occasion. The House would not want the NCB to make a quick decision on a closure which will affect about 600 of the board's employees living in or around the hon. Gentleman's constituency. I understand that a full meeting of the NCB is expected to consider the unions' appeal at a meeting on 6 December.
  The hon. Gentleman made a number of allegations, of which I had no prior notice, against the NCB and its chairman—and I mean no criticism of him for that—but the specific details of assurances given by the chairman must be a matter for the hon. Gentleman to take up with the chairman direct. [Interruption.] Naturally, I shall bring the hon. Gentleman's remarks immediately to the attention of the chairman of the NCB, but on this matter I know that the director, Albert Tuke, has every confidence in his relationship with local Members, and I hope that the hon. Gentleman has a sufficiently good relationship with Mr. Tuke to be able to approach him direct on these crucial matters.
  The hon. Gentleman will be aware that for some months the NCB and the mining unions have been discussing the implementation of the modified colliery review procedure. Following a meeting on 30 October, that procedure is at last in place. Should last week's appeal prove unsuccessful, the unions will have the option to take their case to the new final stage of the procedure. For the first time, this provides an independent element in the consideration of proposed pit closures in that a panel of eminent barristers sitting alone in rotation will consider the views of both sides of the industry and make a completely impartial recommendation.
  Mr. Geoffrey Lofthouse: Does the Minister agree that there is evidence that since the end of the strike the pit closure programme has become more rapid than before the strike appeared to be the intention? For example, in my constituency pits such as Ackton Hall and Fryston have been closed when they were originally not on the hit list. Millions of pounds had been invested in them. Indeed, at Ackton Hall just prior to the strike a brand new office block complete with canteen as built. Is it now a case of the victor taking the spoils? In other words, will the industry be run down more quickly because one side thinks it won the strike?
  Mr. Hunt: I shall be responding to that question in the context of replying to the general points that have been made.
  As the question of the possible closure of Darfield Main is still only at the stage of being considered by the board, and should the appeal prove unsuccessful it has the further stage of the independent review body still before it, it would not be right or proper for me to comment in detail tonight on the pit itself. It would be wrong for me to interfere in the process that I have described. It is a matter for the mining unions to discuss with the NCB direct.
  I shall, however, respond to the more general remarks about the coal industry. I start by reminding the House of our commitment to the coal industry and the massive
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  support that we have given in the last six years, support which, despite the longest and most damaging industrial dispute the nation has ever seen, has enabled the miners to remain as some of the highest paid in the industrial pay league. That support has ensured that during the massive and long-overdue restructuring that is now taking place no man has been forced to leave the industry, and those who have chosen to leave have done so on the most extraordinarily generous terms. Government support has led to the creation of National Coal Board Enterprise Limited, which not only brings new industry into mining areas but gives men who worked in the coal milling industry a fresh start to use their redundancy money in creative and imaginative ways.
  Mr. William O'Brien: Will the Minister tell the House what the Government and the coal board are doing to follow up and develop markets for the sale of British coal? This question was raised by my hon. Friend the Member for Barnsley, East (Mr. Patchett). What are the Government and the NCB doing to win the overseas markets which many of us are convinced are available'?
  Mr. Hunt: When the Government came to office in 1979, Britain was a net importer of coal. In the period just before the strike we had become a net exporter of coal. That does not square with the hon. Gentleman's remarks. I am trying to avoid responding to party political points because this is not the time to rehearse the old political arguments about the strike. However, because of the politically damaging dispute, we have again become a net importer of coal. I share the hon. Member's and the House's resolve to recapture the markets for coal, but it will be impossible to do so if coal is uncompetitively priced.
  Mr. Alec Woodall: It is all very well for the Minister to talk about political response. Is he aware of the colliery just two miles from my home with which the Government have had many dealings? Kinsley Drift colliery has been open for only five years and is now on the hit list to be closed. That five-year-old colliery broke records when it opened, despite the fact that it began with a fatal accident in which two men were killed. It is a brand-new pit which is now on the hit list after only five years, despite the Government's commitment. What chance have the older pits that were sunk a century ago and have been working ever since if a pit that is only five years old is on the hit list because the capital charges placed on it by the Government have forced it to close for economic reasons?
  Mr. Hunt: Any proposal for a pit closure must go through the review procedure. There is now every opportunity for the unions, if they wish to oppose the closure, not only to go through the old procedure stage by stage but to involve the independent element. The best place to argue about the future of a pit is within the procedures laid down in consultation with the NCB and the mining unions, not in the Chamber.
  My remarks about National Coal Board Enterprise Ltd. are in no way intended to establish that the Government have an immediate answer to the problems of mining communities facing pit closures. However, it has made an impressive start. In its first year of operation, the company has created 2,700 jobs and has given direct assistance to 188 projects in the service and manufacturing industries. It has taken over disused NCB properties and created

  541
  managed workshops where people are going into business for the first time. They have access to shared services and a wealth of advice and guidance on financial, administrative and marketing problems. In addition, the company is working closely with new and existing enterprise agencies, and is providing funds to the tune of £750,000 a year. Staff are being seconded to those agencies from the National Coal Board.
  Mr. Dennis Canavan: How many jobs have been destroyed in the mining industry since the Tory Government took power?
  Mr. Hunt: The direct answer to the hon. Gentleman's question is that the Government have no part in destroying jobs in the mining industry—
  Mr. Canavan: Answer the question.
  Mr. Hunt: The direct answer is that the Government have no part in destroying jobs in the mining industry.
  Mr. Canavan: It is a simple question; answer it.
  Mr. Hunt: The Government are in the business of providing a positive future for coal by putting record investment into establishing—
  Mr. Canavan: How many jobs have been destroyed in the mining industry since the Tory Government took power?
  Mr. Hunt: I am saying that the Government have destroyed no jobs in the coal industry. I cannot give the hon. Gentleman a more direct answer than that. But, of course, he will never be satisfied, because it does not accord with his political views, which paint me as someone who is trying to decimate the coal industry. On the contrary, the Government have a positive attitude to the future of coal. Of course, there will be difficulties, but I believe that those difficulties can be overcome. Provided that we can regain confidence in coal, it has a tremendous future in Britain.
  Mr. Andy Stewart: Cannot the answer to getting cheaper coal be found in my constituency, where week after week miners are breaking production records?
  Mr. Hunt: My hon. Friend paints the correct picture. I have been underground at six pits in the past few months, and I have discovered at the coal face a determination to make coal a competitive fuel. The hon. Member for Barnsley, East asked me about the Government's energy policy. It is simple. We are proud and fortunate to have all the main sources of energy: oil, gas, nuclear fuel and coal. Our energy policy is to keep each option active and developing, none more so than coal. There is a positive future for coal.
  Mr. Allen McKay: The Minister believes that to be a positive attitude, but why is Darfield Main to be closed when it conforms with the board's criteria on breaking even, which is that it should cost less than £39 a tonne to produce coal?
  Mr. Hunt: I can readily answer the hon. Gentleman. There is no solution to unemployment in keeping open pits that cannot produce coal in a manner beneficial to the industry or to the nation. I do not prejudge Darfield Main, because its proposed closure is still going through the
  542
  review procedure. It is for the coal board and the mining unions, in consultation, to determine the future of the pit. But the support of grossly uneconomic capacity has cost the taxpayer enormous sums of money in recent years. The Government refuse any longer to draw a blank cheque in support of the industry on the taxpayer. Of course, the NCB must put its house in order. To do that, and to be able to face the future as a healthy and competitive industry, it is vital that it should close capacity which cannot make a positive contribution.
  Mr. Eddie Loyden: The Minister has talked many times about his concern for the unemployed in my region, with which he is closely associated, and he will be aware of the closure of mines in his constituency. What is his view of the Lancashire mines? He has argued vociferously in the House about unemployment in the area that he represents. He does he square that with the closure of mines in Lancashire?
  Mr. Hunt: It is clear that the Government want a viable, economic coal industry. With the majority of investment going into existing rather than new pits, the industry has every opportunity to prove itself and individual pits have the chance to reach productivity targets.
  We must not lose sight of the subject of this debate. The hon. Member for Barnsley, East cannot argue, as he conceded, that the remaining reserves at Darfield Main will be lost. I understand that they are easily accessible from the neighbouring colliery, and that all those currently employed at Darfield Main will be given the opportunity to remain in the industry if they wish, or to leave on generous redundancy terms. If there are other technical or economic arguments against closure, the proper place to air them is in the colliery review procedure.
  Mr. Patchett: Is the Minister aware, when he talks about accessibility to neighbouring pits, that I have worked in the same seam and am quite familiar with it? The neighbouring seam is Houghton Main Colliery. Economic difficulties arise because of the distance men have to travel from the pit bottom to the seam. Darfield Main is closer to the pit bottom and fewer man hours are therefore required.
  Mr. Hunt: I am helpless when the hon. Gentleman makes such points because, as I have acknowledged, he knows the area better than any other hon. Member. I have listened carefully to him and I am sure that what he has said will be taken into account in the procedure.
  Mr. Woodall: It is all very well for the Minister to talk about a healthy, viable coal industry but is he aware that in Yorkshire alone, since the strike ended in April, 18,500 men have been made redundant? Viability is now so bad that every man at every pit in my area is talking about the future and the lid going on that pit. I can tell the Minister of a brand new pit—it is only five years old—which is now in danger under the review procedure. What about the other pits? It is all very well to talk about viability, but who decides what is viable?
  The break-even point started at £42 a tonne and is now down to £38 a tonne. How long will it be before it is £36 a tonne and most pits are in danger?
  Mr. Hunt: The hon. Gentleman has begun to answer his own question. The viability of these pits depends upon their ability to produce coal at a competitive price. The

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  redundancies he has spoken about are voluntary under this Government. Often under Labour, they were compulsory. Under this Government there is an enterprise company ready to breath new life into declining areas. Under Labour, there was no enterprise company.
  Mr. Lofthouse: I am sure that the Minister is not deliberately misleading the House when he speaks about redundancies under the Labour Government. I was
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  involved in the NCB's administration of pit closures under the Labour Government, when the NCB did not make men compulsorily redundant.
  Mr. Hunt rose—
  The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at thirteen minutes to Eleven o'clock.

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.
Lord Lurgan—Sat first in Parliament after the death of his kinsman.

Tourists: Destinations Outside London
Lord Gainford: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how they are encouraging dispersal of tourists to destinations outside London.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, the Government are providing £150,000 towards the costs of a new British travel centre in London which the British Tourist Authority, with British Rail and other partners, hopes to open by the start of next season. The BTA will continue, in its many marketing and advertising schemes, to encourage our overseas tourists to visit places outside London. And as announced in the White Paper on airport policy, the Government are putting increased emphasis on regional airports in international negotiations on traffic rights.
Lord Gainford: My Lords, I thank my noble friend the Minister for that Answer. Can he give any information on the policy of leisure, pleasure and jobs, with the accent particularly on training persons for the tourist trade?
Lord Young of Graffham: My Lords, yes, although the question goes a little wide of dispersal of tourists. It is under the Youth Training Scheme that I think the training for tourism has received its biggest boost, and industrial training boards and management boards are involving many young people in a professional approach towards tourism. I hope very much that, as we move towards a two-year programme, we shall find even more professionalism appearing.
Baroness Sharpies: My Lords, can my noble friend say whether it is a new office; or is it an extension of the one already in Victoria Station, which I find quite excellent?
Lord Young of Graffham: My Lords, I believe that the office is in Lower Regent Street; so it is a different office.
Baroness Fisher of Rednal: My Lords, is the noble Lord considering any facilities whereby the regional airports might be used to extend the number of visitors going north of London?
Lord Young of Graffham: My Lords, I suspect that the problem is that the majority of tourists who come
134
to this country go straight to London, and many—unfortunately perhaps too many—stay here. Our policy is to try to encourage them to go to other parts of the country. I think that is a bigger problem than their first point of landing in this country.
Lord Ponsonby of Shulbrede: My Lords, I hope the Government recognise that London is a fine attraction for first-time visitors and that they will do nothing in the measures they propose for dispersal of tourists to discourage people from coming to London in the first place.
Lord Young of Graffham: My Lords, no. This Government believe firmly in a voluntary approach to tourists.
The Earl of Selkirk: My Lords, is it possible to persuade people not to go to London in the first place? The present state of traffic in London is a major problem. It is going to cause great economic difficulty if we are not careful. There are other airports from which people can start, and from which they can visit London, but there is no need for them to come to London in the first place.
Lord Young of Graffham: My Lords, I think that our first objective should be to increase the number of overseas visitors who come to this country. Our second objective is to encourage them to see all our countryside and our great heritage outside London.
Lord Beswick: My Lords, bearing in mind these large sums that we are told we earn from the tourist industry, can the noble Lord say whether any offset is made for the quite intolerable inconvenience and the costs incurred by the natives of this country, especially in London, because of the increase in traffic?
Lord Young of Graffham: My Lords, I think it is only fair to point out that the major part of the spending on tourism in this country is by Britons going around Britain. That is a very desirable state of affairs. At the same time, I think we should make it very plain—unequivocally plain—that we welcome overseas visitors, just as we in turn hope they will welcome us to their shores.
Lord McNair: My Lords, has the noble Lord read the article on the back of The Times today which describes the problems caused by tourists who have been dispersed from London to York?
Lord Young of Graffham: My Lords, no. I find it difficult enough to keep up with articles on the front of The Times. But I shall take note.
Lord Leatherland: My Lords, if the Government wish to know how to deal with tourists will they consider sending a deputation of noble Lords to Nice, Monte Carlo and similar pleasure resorts so that they come back fully charged with knowledge?
Lord Young of Graffham: My Lords, I am sure that noble Lords are quite capable of making their own holiday arrangements.

Unemployment and Vacancy Statistics 1979/1985
2.41 p.m.
Lord Stallard: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what were the numbers of unemployed persons in the United Kingdom for 1979 and 1985 respectively; and what were the numbers of vacancies registered for the same years.
Lord Young of Graffham: My Lords, on 10th October 1985 the number of unemployed claimants in the United Kingdom was 3,227,000; and in October 1979 the number of people claiming benefit was 1,268,000.
On 4th October 1985 the number of unfilled vacancies at Jobcentres in the United Kingdom was 206,000. In October 1979 there were 246,700 unfilled vacancies.
Lord Stallard: My Lords, I am grateful to the noble Lord the Minister for that reply. Has he seen the chart in the latest bulletin published by one of his departments—the Department of Employment—which shows that unemployment is up by about 2¼ million since 1979 and vacancies registered at the Jobcentres are down by about 50,000 compared with 1979? I know that the noble Lord is giving the Government's latest and newest presentational interpretation of this situation. Will he accept that new presentations are not what we need? We need a new policy—a policy of regeneration of our manufacturing and construction industries. When will he give us some information about that?
Lord Young of Graffham: My Lords, I shall accept completely that this matter is not about presentation. However, what it demonstrates, and what the figures which I read out demonstrate, is that you cannot have an effect without a cause. I suspect that the differences which we saw in unemployment in 1979, 1980 and 1981 were more a result of the overmanning of British industry and of many years of other Governments' policies, than anything else. What we can see today is that jobs are now growing at a rate unequalled in Europe; that there is steady, real and sustained growth in the economy, and that the growth this time is going to stay.
Lord Hatch of Lusby: My Lords, in answer to a similar Question from me a week ago, the noble Lord said that there were other countries in the EEC with a higher unemployment rate, as a percentage of the workforce, than existed in this country. Will the noble Lord tell us which are those countries? He muttered something about Spain and Portugal, which are not in the EEC. Is there a single country in the EEC which, so far as the workforce is concerned, has an unemployment rate equal to that in this country?
Lord Young of Graffham: My Lords, perhaps I should inform the noble Lord, Lord Hatch, that Spain
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and Portugal have been admitted to the EEC; they take full membership from 1st January; and I meet with their Ministers when I meet the social affairs Ministers in Europe. Spain and perhaps Portugal and Ireland are countries which have a higher rate of unemployment. I am happy to provide the noble Lord with the details, but if he wishes to debate the matter then perhaps he should put down a Question.
Lord Nugent of Guildford: My Lords, will my noble friend tell the House how many people were employed in this country at the beginning of the six-year period starting 1979 and again in 1985?
Lord Young of Graffham: My Lords, mid-1979 there were 26,021,000 in the civilian labour force. Today there are 26,639,000 in the labour force. Therefore, there has been an increase of some 600,000. As regards the employed labour force, which my noble friend specifically mentioned, in the second quarter of 1979 24,775,000 people were employed, whereas the number of people employed in the second quarter of 1985 is 23,692,000. Therefore, it is absolutely true to say that there are fewer people today in the employed labour force than there were in 1979.
Lord Shinwell: My Lords, what is the use of bandying figures about in that fashion and wasting time? Even if the figure were reduced to 1 million, would not that be a disaster? Would it be anything for the Government to boast about? There ought not to be any unemployed at all. No matter which Government are in office, if there are 3 million unemployed, how do you explain it?
Lord Young of Graffham: My Lords, I wish to assure the noble Lord that I know of no other way in which to answer a question about figures than with the figures themselves. The figures which I was using did not particularly show the Government in a good light and nor have I ever claimed to hide beneath the figures as such. There is only one way in which unemployment can be cured in this country and in all the other countries in Europe where it remains the "European disease"; that is by working hard at the problem and by creating the conditions in which enterprise will flourish and real jobs will come back into existence.
Lord Stoddart of Swindon: My Lords, is not the noble Lord in danger of being fooled by his own propaganda? Is it not a fact that the reason for the sharp rise in this large pool of unemployment since 1979 is that the Government themselves, by imposing swingeing increases in taxes, increasing health charges and other charges, and cutting down on public expenditure have deliberately created it? Is not that the real reason? Will not the noble Lord accept what my noble friend Lord Stallard said—namely, that the way in which to cure unemployment, the way in which to get unemployment down below 1 million (and my noble friend Lord Shinwell is absolutely right in saying that any unemployment is unacceptable) is to increase expenditure on infrastructure, housing, roads and so on?
Lord Young of Graffham: My Lords, I totally refute any suggestion that unemployment was created

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deliberately by this Government; and I suspect that it would not be created deliberately by any Government. If I were looking for the cause and effect of unemployment, I would not look in the direction of the Government or the Government's policies. Would I not be tempted to look a little perhaps at overmanning in industry, the restrictive practices of trade unions and the sheer uncompetitiveness of British industry which, in 1979, 1980 and 1981 brought home the chickens to roost?
Lord Grimond: My Lords, am I right in thinking that the noble Lord is particularly concerned about unemployment in the inner cities? Will he say whether or not the measures so far taken have come up to his expectations as far as the inner cities are concerned? Will he further say whether the speeches reported in today's papers, indicating that the Government are apparently very willing to invest, mean that there will be bigger investment in the infrastructure, roads, buildings, drains and so forth of the inner cities?
Lord Young of Graffham: My Lords, I suspect that it would be more profitable if noble Lords were to restrain themselves until a Statement is made a little later on about the Government's future plans. However, it is safe to say that no Government can, at the moment, be pleased with the results of policies in the urban cities. I do not believe that anyone has the particular answer, but it is something which we are seeking. This Government are as determined as any Government to see that the very difficult problems of inner urban deprivation are cured.
Lord Beswick: My Lords, will the noble Lord be good enough to clarify the answer which he gave to my noble friend Lord Hatch of Lusby? Which EEC countries did he have in mind as having higher unemployment rates than our own?
Lord Young of Graffham: My Lords, I offered to send the noble Lord, Lord Hatch, a note. I shall leave a note in the Library. However, it is an entirely different Question.

Telephone Bingo Experiment
2.50 p.m.
Lord Allen of Abbeydale: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they take the view that the decision of British Telecom to experiment with telephone bingo is in accordance with the public interest.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, this decision was a matter for the commercial judgment of British Telecom.
Lord Allen of Abbeydale: My Lords, I should like to thank the noble Lord the Minister for that reply, which perhaps falls a little short of giving complete
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satisfaction. With newspaper bingo you at least get something to read for your money; but is not this experiment by British Telecom gambling, pure and simple? Is it not deplorable that this great undertaking after privatisation should go in for action which may not be strictly illegal—although I would not be too sure about that—but is certainly plainly contrary to the spirit of the Gaming Act 1968?
Lord Glenarthur: My Lords, I do not think that the noble Lord is necessarily right. He referred to newspaper bingo, and as with telephone bingo it is not essential to make a payment to take part, and the courts have not found newspaper bingo illegal.
Lord Harmar-Nicholls: My Lords, may I ask my noble friend at what point does this freedom to let other people make the decisions stop? Is it not incongruous that this communications industry and the newspapers should be free to advertise prizes for which the sky is the limit, are free from any advertising restrictions, and have no regulations to which to adhere, whereas the bona fide bingo clubs who serve a public need for people who are lonely have to be approved by the gaming board? They are restricted on advertising, and on the prizes they can give. Altogether should not the freedom be fairly distributed instead of being left to just one section, as the noble Lord's Answer seems to imply?
Lord Glenarthur: My Lords, I am aware that the gaming board will be discussing telephone bingo shortly, and no doubt they will take note of my noble friend's remarks.
Lord Mishcon: My Lords, if the experiment is tried will British Telecom make sure that it gets the numbers right?
Lord Boothby: My Lords, would the noble Lord agree that it would be better for the public to play bingo on the telephone than to watch violence on the screen?
Lord Glenarthur: My Lords, I am sure that the noble Lord is quite right in that.
Lord Shinwell: My Lords, in order that we should be fully enlightened in an important matter of this kind, can the Minister say whether this telephone bingo will be privatised or nationalised?
Lord Glenarthur: My Lords, British Telecom is already a private company. As the noble Lord will be aware, there are lots of other telephone numbers which can be rung for convenient information, including Challenge Line, which sets daily brain teasers. Unlike answers given at the Dispatch Box at Question Time, the answers are given the following day.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the broadcast by telephone of games of bingo was not contemplated when the telecommunications Bill was going through your Lordships' House? Can he state what funds are going to be available for the playing of bingo? Would he give the House an assurance that in future the principal aim

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of British Telecom should be that of reducing prices for its service to the consumer?
Lord Glenarthur: My Lords, as I said, this a matter for the commercial judgment of British Telecom. However, it seems to me that the scheme that they have devised is one which would stimulate more telephone calls, and no doubt that will do what the noble Lord wants.
Lord Tordoff: My Lords, in answer to an earlier question, I thought I heard the noble Lord the Minister say that the difference between newspaper bingo and telephone bingo was that there was no charge for telephone bingo. Can he advise the House how he makes a telephone call without paying a charge?
Lord Glenarthur: My Lords, the charge is for the telephone call, not for taking part in the activity once one makes it.
Lord Diamond: My Lords, are the Government proud of the way in which the discretion permitted by having a private monopoly has been exercised by this company since it achieved it?
Lord Glenarthur: My Lords, with respect, that question goes rather wide of the Question on the Order Paper.

International Tin Council: Funding
2.55 p.m.
Lord Bruce of Donington: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what funds are at present committed to the International Tin Council and what steps they propose to take to safeguard the United Kingdom's tin mining industry.
Lord Brabazon of Tara: My Lords, Her Majesty's Government contributed £8 million to the International Tin Council under the Sixth International Tin Agreement. The total of all members' initial contributions in the form of cash or tin metal to the agreement was equivalent to 19,666 tonnes of tin metal at £7,084 a tonne. It is not possible at this stage to assess the impact of recent developments on the United Kingdom's tin mining industry.
Lord Bruce of Donington: My Lords, I thank the noble Lord for that reply. Can he give any indication to the House as to what pressure has been exercised by the British Government's representative on the International Tin Council for the council to honour its obligations? Is the noble Lord able to confirm to the House that, as things stand at the moment, the provisions of the International Organisations Act 1968 apply notwithstanding the order that was published subsequently in 1972, and that
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consequently there is no legal redress in the event of default by the tin council? Will he give some indication, in the event of certain eventualities, as to what support the Government themselves may offer to the tin mining industry, particularly in Cornwall?
Lord Brabazon of Tara: My Lords, in answer to the first question, my right honourable friend the Secretary of State for Trade and Industry has made it clear to the International Tin Council that they should honour their legal commitments to the council up to 24th October when dealings were suspended, and we have certainly said that we shall honour ours.
Regarding the International Organisations Act, our view is that the tin council is liable on any arbitration award made against it under the arbitration clause which is found in the council's London Metal Exchange tin contracts, and there is no immunity in such a case. This is provided for in a headquarter's agreement between Her Majesty's Government and the council which is implemented by an order under the 1968 Act. It is a complicated legal position and we are studying it most carefully.
To turn to the Cornish tin mining industry, as we do not know at this stage at what price the tin may eventually end up, what assistance we might or might not be able to give to that industry is a hypothetical question.
Lord Williams of Elvel: My Lords, would the noble Lord agree that this tin council fiasco would never have taken place had the London Metal Exchange a proper, centrally-organised clearing system? The exchange has persistently refused to join the International Commodities Clearing House, which has been owned for some time by the United Kingdom clearing banks, and provides a similar system for the soft commodity markets. What does that say to the noble Lord about the virtues of self-regulation?
Lord Brabazon of Tara: My Lords, I am interested in the points that the noble Lord makes. However, I fear that the crisis could well have taken place whether or not the London Metal Exchange had had a central clearing system. The crisis has arisen through the over-production of tin over the years.
Lord Mackie of Benshie: My Lords, can the noble Lord clarify his statement that the United Kingdom is willing to stand by its obligations? Does the noble Lord mean that we would stand up to the obligations up to the limit that we said we would? How much more is the loss than the limits set by all the countries?
Lord Brabazon of Tara: My Lords, our obligation is as to 4 per cent. of the total amount of the International Tin Agreement.
Lord Bruce of Donington: My Lords, can the noble Lord give the Government's view as to how far the troubles of the countries participating in the tin council are due to their international loan position at the present time and the great burdens of interest they have to pay, which in many cases are as much as 50 per cent. of their total exports?
Lord Brabazon of Tara: My Lords, there has been no statement of reluctance by these developing countries to comply with their obligations. We as a Government have tabled firm proposals for settling the council's liabilities, and these are being studied by other member countries. It is hoped that there will be a positive outcome to the council's meeting on Thursday.
Lord Oram: My Lords, is there not a twofold lesson to be learned from the chaotic situation that has developed? Should not the prices set under the commodity agreement have been gradually and in a planned way reduced in line with the decline in the demand for tin? Should not that have been combined with an adequate compensatory financial backing for the third world producers of tin?
Lord Brabazon of Tara: My Lords, the noble Lord is right in the first part of his question. As for compensatory backing for the producing countries that is another question that I am unable to answer at this stage.

Business
Lord Skelmersdale: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Young of Graffham will, with the leave of the House, repeat the Autumn Statement that is to be made in another place by my right honourable friend the Chancellor of the Exchequer. My noble friend then, again with the leave of the House, will make a Statement on enterprise and employment measures.
I should explain that my noble friend's own Statement would normally be made now, but on this occasion it will be made after the Autumn Statement of the Chancellor of the Exchequer because it is consequential on that Statement.

Televising the Proceedings of the House: Select Committee
3.2 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of the Select Committee on Televising the Proceedings of the House:

Ardwick, L.

Aylestone, L.

Cathcart, E.

Henderson of Brompton, L.

Orr-Ewing, L.

Phillips, B.

Ponsonby of Shulbrede, L.

Stoddart of Swindon, L.

Swinton, E.

Thomas of Swynnerton, L.

Winstanley, L.

That the Committee have power to adjourn from place to place and to report from time to time;
That the Committee have power to appoint Specialist Advisers;
That the Minutes of Evidence taken before the Committee from time to time be printed and, if the Committee think fit, be delivered out:
That the Committee do meet at four o'clock this day.—(Lord Aberdare.)
On Question, Motion agreed to.

Consolidation Bills: Joint Committee
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That pursuant to Standing Order 49 the Lords following be appointed to join with a Committee of the Commons as the Joint Committee on Consolidation Bills:

Airedale, L.

Hanworth, V.

Alexander of Tunis, E.

Lloyd of Kilgerran. L.

Brightman, L.

Lockwood, B.

Campbell of Alloway, L.

Mackay of Clashfern, L.

Gisborough, L.

Milner of Leeds, L.

Grey, E.

Mishcon, L.

That the Committee have power to agree with the Committee of the Commons in the appointment of a Chairman;
That the Minutes of Evidence taken before the Committee from time to time be printed and, if the Committee think fit, be delivered out.—(The Lord Chancellor.)
On Question, Motion agreed to.

Address in Reply to Her Majesty's Most Gracious Speech
Debate resumed on the Motion moved on Wednesday last by the Lord Middleton—namely, That a humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".
3.3 p.m.
Lord Glenarthur: My Lords, perhaps I may begin my remarks by adding my congratulations to my noble friends Lord Middleton and Lady Lane-Fox who so ably moved and seconded the Motion which we continue to debate today. I well remember how nervous I was—and that is something of an understatement—when I was privileged to perform the task which this year fell to my noble friend Lady Lane-Fox. I remember also the hazards of wearing a sword, but then I did not have to do more than stand in my

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place. I can only express my admiration for the assured and confident way in which both my noble friends delivered their excellent and thoughtful speeches.
By tradition my speech should outline our legislative programme for the new Session, concentrating as I shall be on home and environmental affairs and giving a flavour of what will be our business in the months ahead. By tradition noble Lords opposite then attack that programme, ably supported in a non-controversial way by the maiden speech of the noble Lord, Lord Mellish, to which we all look forward, while my noble friends behind me merely query items in it. Finally, tradition demands that my noble friend Lord Elton answers all the points raised by our noble friends, and defeats with consummate ease the sallies made by noble Lords opposite. Tradition is one of our nation's greatest assets. Your Lordships will be happy to hear that my noble friend and I will uphold our tradition today, although we will quite understand if noble Lords opposite feel that they should break with theirs.
The subject matter I have to cover is broad, but perhaps I can best start by relating a success story which no one can deny. Since we took office in 1979, 800,000 houses and flats have been sold to their tenants by local authorities, new towns and housing associations. We shall build on this success. We propose in our Housing and Planning Bill to shorten the period during which the discount of the original sale price has to be repaid if the property is resold, and to improve the discount of flats. We shall improve the regulation of service charges and also promote the transfer of council estates to private management.
Our White Paper Lifting the Burden, published in July, put forward several proposals designed to meet the objectives of encouraging development in the right places, safeguarding the environment and removing unnecessary burdens on developers. We intend to give those ideas life.
The reform of parts of local government occupied our minds for much of the last Session—I doubt that any of us, particularly my noble friend Lord Elton, will forget that in a hurry. But we shall be introducing another Bill on local government, to deal with two important matters of local authority practice which have given rise to increasing public concern. First, the Bill will seek to clarify the present law governing local authority publicity, as the Widdicombe inquiry has recommended, so that authorities are expressly prohibited from issuing publicity that might promote the interests of a political party. The Bill will also provide for a statutory duty on all rating authorities to make their rate by 1st April each year. This is in the light of experience this year, when a number of authorities delayed rating for some months as part of a political campaign that in no way benefited ratepayers, nor improved the management of the authorities concerned.
My noble friend Lord Middleton, with his expert knowledge of the subject, referred in his speech to the Agriculture Bill, now introduced in another place. It will provide a framework for a developing partnership between the Government and agriculture and its associated industries. The Bill will help activities such
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as agricultural research and advisory services to become more sensitive to the needs of users. In addition it will enable us to implement the important new European initiative, to which my right honourable friend the Minister contributed, on environmentally sensitive areas and make provision for agreements with farmers on the use of methods of agriculture in such areas which serve environmental objectives. I am sure that this is one measure which will be welcomed on all sides of your Lordships' House.
I see that we shall soon be debating the future of the National Health Service and social security on the initiative of the noble Lord, Lord Ennals. Perhaps I may therefore be permitted to limit my remarks on this topic, and so not steal any of the thunder of my noble friend Lady Trumpington. Your Lordships will however wish to be aware that we intend to publish a White Paper in the next month or so preparatory to introducing legislation to reform social security, as promised in the gracious Speech.
One theme within that speech, which has captured the imagination of the press, and presumably the public at large, is the emphasis it places on aspects of law and order. It is to that important subject I now turn. Public order (or lack of it) is, unfortunately, one of the most pressing problems of our time. Fifty years have elapsed since the Public Order Act 1936 was passed to deal with the threat to freedom posed by the fascist use of violence and intimidation in the streets of London. Since then different problems have come to the fore, and our citizens need protection from many different kinds of threat. But our underlying approach remains the same: the rights of peaceful protest and assembly are among our most fundamental freedoms. We are determined that any limitations on those freedoms should be the minimum necessary to preserve order and to protect the rights and freedoms of others. That is the fundamental principle which has guided us throughout our review of public order; and the Public Order Bill will show no derogation from it.
The review has a long history. It began in 1979, following that year's disorders in Southall. It has considered a number of helpful reports: from the noble and learned Lord, Lord Scarman, on the Brixton riots; from the Home Affairs Committee of another place; and from the Law Commission on the public order offences. It has also taken account of the lessons to be learned from the major disorders of recent years—the inner city riots of 1981 and this year; the mass pickets at Grunwick, at Warrington and during the miners' strike; the growing menace of football hooliganism; and the continuing public order problems connected with demonstrations of all kinds. The review was no instant response to any single event; it was a distillation of the lessons to be learned from all of them, and from the many helpful comments the Government received both on the Green Paper published in 1980 and on the White Paper published earlier this year.
The Bill which your Lordships will be invited to consider will be based on the proposals in that White Paper. It will extend the preventive powers of the police to control demonstrations presently contained in the Public Order Act 1936; revise and codify the common law offences of riot, unlawful assembly and

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affray; tighten the offence of incitement to racial hatred; and introduce further measures against football hooliganism. The Government believe the Bill will provide a balanced legal framework to give the police the necessary powers to prevent and deal with disorder. It will in no way inhibit freedom of speech. The right of protest will be safeguarded. So when we come to debate this very important measure, I shall look to the party opposite to affirm unequivocally their support for the police; I shall look for their avowed rejection of those who foment disturbance by intemperate language, and clear acknowledgement from them that individual rights must be exercised reasonably and responsibly and that they must be balanced against the rights of society as a whole.
Your Lordships have frequently and rightly expressed grave concern about the danger to our society posed by drugs and suggested ways in which their spread can be halted. Those who traffick in drugs and make a profit from the misery of their fellow men are thoroughly evil. At all costs this trade must be stopped. Your Lordships approved a Bill last Session which increased the maximum penalty for trafficking in Class A drugs such as heroin and cocaine to life imprisonment. Parole for drug traffickers sentenced to more than five years' imprisonment has also been severely restricted. But even the prospect of a long sentence may not be a sufficient deterrent, if the trafficker can look forward ultimately to enjoying the proceeds of his vile crimes when he is released from prison. For this reason we will introduce legislation to provide the police, the customs and the courts with wide-ranging new powers for tracing, freezing and confiscating the proceeds of drug trafficking.
Central to our proposals will be the new concept of a confiscatory fine. This will provide the Crown Court with a flexible and effective means of stripping drug traffickers of the whole of their proceeds. It will be possible for the courts to regard all assets of a drug trafficker as representing the proceeds of drug trafficking, except to the extent that the judge is satisfied to the contrary. In effect, in an appropriate case the onus will be placed on a convicted trafficker to show which, if any, of his assets were legitimately acquired. I am aware that some may feel that this goes too far and that it should be for the prosecution to prove that the assets were illegally acquired. While acknowledging the sincerity of those who hold this view, we believe that our proposal is in these cases a very necessary one if the objective of confiscating the proceeds of such crimes is to be achieved. But perhaps I should emphasise that there is no question of changing in any way the burden of proof for the purposes of obtaining a conviction.
Once a confiscatory fine has been imposed, any of the offender's assets will be subject to immediate confiscation and disposal to secure payment of the fine in full. Thus, if the proceeds of drug trafficking have been spent or salted away outside the jurisdiction of the court, the judge will have power to deprive the offender of other legitimate assets in order to satisfy the fine.
If we are serious about attacking the proceeds of drug trafficking it is clearly essential to obtain information at an early stage about the movement or disposal of assets by the suspect. We will propose new powers
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for the police or customs to apply to a circuit judge for an order requiring banks or others to disclose information about assets held by a person who is suspected on reasonable grounds of being involved in drug trafficking. In addition, the High Court will have power to make orders freezing the assets of a person accused of drug trafficking, at or just before the time of arrest, to ensure that such assets are available to satisfy any confiscatory fine subsequently imposed.
The legislation will also create a new offence of handling the proceeds of drug trafficking. This is intended to catch those who assist the trafficker and benefit from his crimes by laundering the money.
There will be power for the Government to enter into reciprocal agreements with other countries, so that orders made by British courts following a conviction for a drug trafficking offence can be enforced against assets held overseas and vice-versa. Only by securing really effective international co-operation can we ensure that there will be no safe havens for the trafficker or his assets anywhere in the world.
These are undoubtedly strong measures; but I felt it right to dwell on them today because they are designed to address one of the most serious threats facing society. It is intolerable that convicted traffickers are able to enjoy the proceeds of their crimes after release, or use them to finance further trafficking activities at a later date. Our thrust will attack the major incentive which leads people into this horrible trade, and is an essential element in our strategy for combating drugs misuse.
I am lucky enough to have lived in Scotland for most of my life. Scotland's history shows many examples of forward-looking and enterprising attitudes. But changes to achieve these have not meant the sweeping away of customs and ideals which have stood the test of time. They still hold good.
Throughout the United Kingdom many social changes since the early part of the century have meant that people's domestic lives have become quite different. Perhaps one way in which this is exemplified is that people now want and need to be able to organise their shopping differently. Whilst weekday shopping hours restrictions have been maintained there, Scotland has been more liberal on Sundays. We propose to build on that by allowing freedom of choice—freedom for the consumer to shop at the most convenient time, and freedom for the shopkeeper to open his shop to meet that demand.
We propose to introduce legislation to remove all statutory restrictions on shopping hours North and South of the Border. It has long been recognised that the 1950 Shops Act is anomalous, impossible to enforce in a fair and efficient way, and does not reflect the needs and wishes of people today. Indeed, my noble friend Lady Lane-Fox gave us some examples of today's needs in her speech, and the House will be aware of the Bill introduced by my noble friend Lady Trumpington in 1981 and passed by your Lordships. The Auld Report stated that a growing number of stores trade outside permitted hours and that the law is widely being broken with impunity. I think there is a consensus that the law must be reformed. The question is as to what should be done, not whether legislation is needed.

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The demand for Sunday shopping has consistently grown. It can no longer be ignored. It is against this background that we propose to change the law. Some people do not wish to shop on Sunday, or to undertake any other Sunday activities. We respect that view. But we do not see why it should be imposed on those who do not share it.
Providing freedom of choice does not mean compulsion. But unnecessarily restrictive regulations should be removed. At the same time, we recognise the concern on the part of some existing shopworkers that they might be required to work on Sundays against their wishes and we propose to provide protection for them to prevent this.
Those who claim that the special nature of Sunday will be disturbed have only to look North of the Border to learn that this is no more likely to be true in England and Wales than it has been proved to be in Scotland. There can be fewer better examples of church attendance than in Scotland or better examples, taken in the round, of a more reverently observed Sunday. Any system of regulation will lead to problems of credibility and therefore to enforcement; that is why the only sensible course open to us is the course which Mr. Robin Auld and his team thought right—one of total deregulation.
Lord Graham of Edmonton: My Lords, will the noble Lord the Minister, in indicating to the House that the Government have accepted the recommendations of the Auld Committee, also bear in mind that they were in two parts: one was in respect of the hours and the other was in respect of the wages councils? Would the Minister care to tell the House how the Government intend to act to protect the interests of shop workers in respect of wages councils?
Lord Glenarthur: My Lords, I think that the noble Lord had better await the arrival of the Bill.
One subject which usually engenders more concern even than Sunday trading is animals. A legitimate concern it is; and that is why, as we foreshadowed in our manifesto of 1979, we shall introduce a Bill to provide for an entirely new system of controls over the use of living animals in scientific procedures. It will ensure the best possible protection for animals while allowing necessary and valuable research to continue. It will enable us to ratify the Council of Europe Convention for the Protection of Vertebrate Animals used for experimental or other scientific procedures, in whose preparation we have played a leading part.
For over a century the Cruelty to Animals Act 1876 has operated to prevent animals in our laboratories from being subjected to avoidable, unnecessary or excessive suffering. Since then, the development of the biomedical sciences has been truly astonishing. The 1876 Act has proved extremely adaptable to these changes. But it is now widely recognised that the time has come to start afresh. We must achieve and set out in 20th century law the right balance between the legitimate requirements of science and industry and the protection of animals from all avoidable suffering. Our proposals, set out in the two White Papers published in 1983 and earlier this year, have received a very wide measure of support.
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I shall not go into great detail on the provisions of a Bill that we hope will be before your Lordships quite soon, but the key to the proposed new system of controls is the introduction of a new, dual licensing system. The personal licence will ensure the competence of individual operators. That licence will allow nothing to be done without the authority of a separate project licence, setting out in detail for each individual programme of work what may be done to which types of animal and under what detailed conditions. The innovation of licensing individual projects will provide the key to the stricter control of pain and suffering which lies at the heart of our proposals. My right honourable friend the Home Secretary will be required to weigh the likely effect of the procedures on the animals concerned against the likely benefit of the work.
Other provisions of the Bill will include the extension of the controls to procedures not regarded as within the scope of the 1876 Act, such as the production of sera, the maintenance of tumours in animals and the breeding of animals with inherited defects. There will also be controls for the first time on the source and supply of animals to laboratories. An important feature will be the requirement on all establishments, whether breeding, supplying or using laboratory animals, to appoint a person with day-to day responsibility for the welfare of animals and a veterinary surgeon whose duties will be set out in the statute. Detailed guidance explaining how the controls under the new legislation will work in practice will be published and will be available to your Lordships when we debate this measure.
I hope and believe that the introduction of this Bill will be widely welcomed. The proposals contained in it have achieved an unusually wide measure of agreement from the scientific community, from the veterinary profession and from animal welfare bodies. They have received much support in their work from that fervent and tireless campaigner for animals, the noble Lord, Lord Houghton of Sowerby. I hope that your Lordships will support the Bill and ensure its speedy passage.
A substantial and radical programme has called for a rather substantial speech. There will inevitably be aspects of that programme which I have not had time to cover, but to which I am sure my noble friend Lord Elton will refer when he winds up. But throughout our term of office this Government have amply demonstrated their resolve to make Britain a strong, secure, decent and fair society. I look forward keenly to our debates on the measures from my own department in this Session to carry forward this very proper aim, an aim which is shared by the overwhelming body of opinion in this country.
3.25 p.m.
Lord Mishcon: My Lords after thanking the noble Lord the Minister for a lucid speech in which he included some self-comforting and very selective references to the procedure of your Lordships' House, perhaps I may make a few preliminary comments. The first is that I should like to join with the noble Lord the Minister in saying how glad we are that my noble friend Lord Mellish, with his extensive parliamentary career and very long and distinguished public life, will

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be participating in this debate with his maiden speech. Reference was also made by the Minister to the social security measures, the reform of which is heralded in the gracious Speech. Like him, I too anticipate that the sensible thing to do is to leave any debate upon that matter until 20th November, when a very full debate will be taking place, initiated by my noble friend Lord Ennals. My only other preliminary comment is to say that my noble friend Lord Underhill, when he winds up this debate for the Opposition, will be dealing with affairs relating to the environment and transport.
Very correctly, the Minister referred to the fact that there is grave public concern in regard to crime and law and order. Indeed, it is in the forefront of the public mind. It would be surprising if this were not so. The Conservative Party has put itself forward as the party which was able to reduce crime and to see to it that there was security in our land. It has signally failed to do so. Over the past six years, recorded crimes have gone up by 40 per cent. and violent crimes by 20 per cent. But to put this grave national matter into its correct and frightening perspective, may I quote to your Lordships the account of a lecture that was given by Sir Brian Cubbon, the Permanent Under-Secretary of State at the Home Office, as reported in the issue of The Times for 31 st October.
I could not believe what was in it, and the quotations that I am going to give to your Lordships I found incredible; so that I thought, as a matter of courtesy and care, that I ought to telephone the office of that very distinguished civil servant and ask whether in fact The Times has correctly reported the contents of that lecture. I was told it was thought that it had, but that I would be telephoned back in 10 minutes' time if the report was in any way inaccurate. I received no such telephone call, so I can proceed upon the basis that this is an accurate report. It states:
"Sir Brian said in London that two-thirds of convicted offenders are aged under 28. Home Office studies had shown that of all males born in 1953 nearly a third had been convicted of a criminal offence by their twenty-eighth birthday".
I was horrified by that statement, and I had three reactions. The first was, "My God! How dreadful it must be to be born under a Conservative Government"—as it was in 1953. Secondly, I thanked providence that none of my children had been born in 1953. My third reaction was to look at the headline in The Times of the report of that lecture:
"Home Office hopes of crime curb".
Therefore I hoped there would be policy statements on behalf of the Government to see that that statistic was never repeated again—instead of which the only comfort that was given was in the first paragraph:
"A chance before the year 2000 to reverse rising crime and curb public misbehaviour was foreseen yesterday by Sir Brian Cubbon, Permanent Under-Secretary at the Home Office. He sees hope lying with a huge projected reduction in the postware 'bulge' in young adults".
The only hope, presumably, referred to in the lecture for a reduction of crime, so far as this Government are concerned, is that we will have fewer young people to commit crimes in the future. My Lords, what a prospect!
There is nothing in the gracious Speech which deals with this question—the reduction of crime and the bringing about of more law and order—other than increasing some police powers and bringing forward
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certain legislation which will codify offences and add another offence. Is this the Government of law and order? Are we to look forward to a third of our youth, year by year, creating population for overcrowded prisons?
Of course there are many factors that might be leading to these terrible figures. I am not pretending that these are the only factors, but can anybody deny that youth unemployment, the condition of housing and the deprived centres of our cities have a major role in producing this melancholy aspect that we face? If we talk of law and order, have we not to see that there is order in law itself and in the enforcement of the law? Here the Government have provided a smokescreen by this brief reference in the gracious Speech to what they intend to do; and your Lordships will have heard the speech eloquently given by the noble Lord the Minister, which merely produced grand phrases and no policy at all.
The first thing one looks at when one talks about order in law is what is happening to encourage those who have fallen foul of the law, to see to it that they become good citizens and do not add to those dreadful criminal statistics. In that respect, perhaps I may read to your Lordships an excerpt from a letter in the Guardian of 4th November. I deal with our children first, before I deal with our adults. Let me quote from this letter:
"The disclosure that 52 children are held in adult prisons, together with hundreds of older teenagers, because of the excessive use of youth custody sentences, is a reminder of the effects of overcrowding in prison department establishments.
"Those children are held in Dickensian conditions of deprivation and squalor. It is a scandal which the Home Secretary should end immediately.
That is not a letter that comes from an officer of NACRO, or from a truly progressive letter writer—and that means progressive politically—but it is a letter signed by Maurice Logan-Salton, Monday Club Law and Order Committee.
Then one looks at the state of law and order and its enforcement when one looks at the population figures of our prisons. This time last year we were frightened of the figure of 43,100. It is now 47,000. We, I suppose, would hope that the Minister, when introducing a home affairs debate, would talk about the future and say that there are bound to be fewer prisoners in the future, again because of Government policy. I hope I am not wearying your Lordships, but I am only reading excerpts from newspapers of a few weeks ago. I have limited myself to that in order that they may be currently appropriate to quote.
I am reading from The Times of 6th November, from an article headed "Doubts on fewer prisoners". It states:
"Mr. Douglas Hurd, Home Secretary, yesterday said that the Government's aim of ending prison overcrowding by the end of the decade might have to be revised.
"He told prison governors that, unless the jail numbers returned to their projected path, matching decent places in jails to population 'may take longer to achieve than had been hoped'.
"Behind the change is this summer's sharp increase in population to 48,000 and 'prudent planning' on the assumption it could reach that again in the coming months or go even higher".
That is again a sombre picture. When I refer again, if I may, to the question of order in law, your Lordships will remember the debates which took place in your

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Lordships' House on the Prosecution of Offenders Bill, when we were promised that in order to counteract additional police powers, in order to see to it that prosecutions were not brought needlessly and in order to see that there was a strong and independent service, there would be a separate prosecution service set up. We all thought that the Government were taking these things very seriously, especially because of the very important advice that this new prosecution service was going to give to the police in respect of prosecutions generally.
What has happened? What has happened is this: there is a general outcry about the way in which the Government have handled the setting up of this service. Again I quote from The Times of 6th November. The heading is:
"Police solicitors join prosecution critics".
The article reads:
"Metropolitan Police solicitors have joined the growing chorus of protest about pay and career prospects proposed for the Government's new crown prosecution service.
"The poor levels of pay will not only fail to attract enough lawyers into the new service, due to start next year, they will cause and are causing prosecutors to leave the public sector, the solicitors say.
"Their concern is expressed in a letter to the Law Society's Gazette from Mr. R. M. Thorne, chairman of the Metropolitan Police branch of the First Division of Civil Servants. 'It is difficult to understand how offering less money to do a harder job with longer hours can be anything but detrimental to the prosecution service as a whole', he says.
"Mr. Thorne says it is unlikely that by October 1986 the Government will have succeeded in recruiting its target of 300 competent lawyers in the three crown prosecution areas of London, and of those who do join, many will be inexperienced, he says.
"The Government conceived the new service under its 'law and order' banner, but was 'either strangling or deforming it at birth', while at the same time 'striking hammer blows at the confidence of those in the existing service'.",
and that is repeated throughout the country by the association that represents prosecuting solicitors.
What have they done on the 24-hour duty system? There are supposed to be two tiers—this safeguard for the civilian population which was spoken of with such pride by the then Home Secretary in another place. He talked in a sentence which was not elegant, but meaningful. He said that he would see to it that his money was where his mouth was. What has happened there is that two tiers have been set up and the inclusion in the first tier is all too deficient. But I shall not go into that at this stage in your Lordships' proceedings, because I know that some regulations are to be brought before Parliament and, possibly, we shall have to deal with it then.
So one feels on the question of law and order that there is no point in issuing challenges to the Opposition Front Bench—"Are you behind the police?" Of course we are behind the police. We always have been behind the police. That does not mean that it is not the duty of Parliament to see that people are protected against the misuse of authority by the police, if and when that occurs. But our general theme is of praise for the police and encouragement of the police in the very difficult duty that they do.
So I fling back the challenge and say: Answer this. Answer the overcrowding of the prisons, and what is happening to some of the children and the young
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people who are being taught crime as a result of the wretched conditions in which so many of them are being placed in prison. See to it that when you make promises to Parliament about an adequate prosecution service, so that the wheels of justice move properly, your promises are kept. They are not being kept at the moment.
Just as grave as the matters to which I have referred is the concern in the public mind, when we talk about justice, as to how it is that huge frauds are being perpetrated, which do the greatest amount of discredit to our very fine name in the insurance world and elsewhere, and in regard to which, for some reason or other, no prosecution is brought. I am not saying that there is anything sinister in this. I am merely saying that something is wrong with the system, if that be so.
So I turn briefly to other matters. First, may I say immediately that in regard to the drug legislation—I am sure that the Minister realised it from all the questions we have asked from this side of the House—we are completely behind him and behind the Government, and so are we in regard to animal welfare. I am so glad that he referred in the very deserved terms he did to my noble friend Lord Houghton. I have previously called him not Lord Houghton of Sowerby but Lord Houghton of Assisi, which is really the title he deserves.
I turn finally to the shop legislation. It is a matter upon which people can perfectly sincerely hold divergent views. There are matters which affect the sincere religious beliefs of many people. There is the very proper demand that we live, so it is said, in 1985 and that we ought to have conditions which apply to 1985. There are also references to what happens North of the Border. Let me make perfectly clear the position of the party that I have the honour to represent at the Dispatch Box at this moment. We think it proper that at the Second Reading of such a Bill there should be a free vote. I look to the Government, and I ask that the Minister who is to wind-up will be frank with the House and will say whether the Government will let their people have a free vote. I shall look forward to the answer.
Having said that, let me make it abundantly clear that in regard to all stages of the Bill, if it is granted a Second Reading, the Opposition will be looking with the greatest care at those provisions which, as my noble friend Lord Graham mentioned, affect the employees in the shop industry and will be seeing that their rights are very strongly defended.
I end with these words. When we are looking at home affairs and environmental affairs, as we are, we are looking at the very principles upon which our social fabric is built. Those principles, if we are to continue to be a great nation and a liberty-loving nation, rest upon fair play and justice, as the Minister said. They also rely upon there being one nation and not a divided nation. Any Government failing to achieve the unity of this nation are attacking the very social fabrics upon which we depend. The Conservative Government have failed to achieve the essential unity of our people. It is my fervent belief that a Labour Government will.

Autumn Financial Statement
3.47 p.m.
Lord Young of Graffham: My Lords, with the permission of the House, I will repeat a Statement made in another place by my right honourable friend the Chancellor of the Exchequer. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement. I am laying before the House today an Autumn Statement which brings together the Government's outline public expenditure plans, proposals for National Insurance contributions next year, and the forecast of economic prospects for 1986 required by the 1975 Industry Act.
"This year's Autumn Statement contains considerably more information than its predecessors. It breaks new ground by providing a forecast of the public expenditure outturn for 1985–86 for each department, and the plans not just for the year immediately ahead but for each of the next three years. Both these innovations meet specific requests from the Treasury and Civil Service Committee and I hope they will be welcomed by honourable Members.
"The outturn for this financial year is expected to be the same as set out in the Budget, that is, £134 billion. After allowing for inflation, this is lower than last year, which bore the brunt of the public expenditure cost of the coal strike.
"The Government will continue to maintain firm control over public spending. Following this year's review, the planning totals for 1986–87 and 1987–88 will be held to the levels set out in the Budget—£139 billion and £144 billion respectively. For 1988–89 the total has been set at £149 billion. Over these three years public spending in real terms is expected to be broadly flat at very slightly below this year's level. As a percentage of national output, it will continue to decline as it has since 1982–83. By 1988–89, it should be back to its lowest percentage since 1972–73.
"In order to meet contingencies, the plans contain large reserves, rising from £4½ billion in 1986–87 to £8 billion in 1988–89. The reduction in the reserve for 1986–87 as compared with the provisional reserve for that year which I announced at the time of the Budget chiefly reflects the fact that the passage of time allows part of the reserve in any given year to be allocated to individual expenditure programmes as their costs become known more accurately. But the £4½ billion reserve for the year immediately ahead remains a substantial figure.
"Although I expect the planning total for 1985–86 to be the same as I did at the time of the Budget, the PSBR—subject to the usual margin of uncertainty at this time of year—is forecast to be about £1 billion higher: some £8 billion rather than £7 billion. This is due to lower sterling oil revenues. But even at £8 billion the PSBR would be the smallest it has been as a percentage of GDP since 1971–72.
"The PSBR would, of course, have been running at a higher level than this were it not for the proceeds from privatisation, to which I will turn in a moment. But even without the privatisation proceeds, this
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year's forecast PSBR would still be the smallest as a percentage of GDP since 1971–72.
"The Government's privatisation programme is now getting into top gear and will continue for many years to come. I cannot stress too strongly the importance of this programme—now being emulated throughout the world—as a fundamental objective of Government policy. The transfer of state-owned businesses to the free enterpise sector of the economy brings enormous long-term benefits to the nation as a whole, in terms of greater concern for the customer and increased efficiency. It also provides the opportunity for a massive boost to wider share ownership, both among the public in general and the employees of these great enterprises in particular.
"The increased pace of privatisation means that the proceeds for this programme will rise substantially from £2½ billion this year to £4¾ billion in each of the next three years. In particular, the planned flotation of the British Gas Corporation is included for the first time. At the same time, however, there have been increases in a number of public expenditure programmes, so that the o\erall planning totals have remained unchanged.
"However, this needs to be seen in perspective. Even if the proceeds from privatisation were to be ignored altogether, the public expenditure planning total would still be broadly flat in real terms, at less than 1 per cent. above this year's total; and public spending would still be on a steadily declining path as a percentage of GDP, reaching by 1988–89, its lowest level since 1972–73.
"The annual review of public spending provides an opportunity to reconsider priorities and adjust the balance between programmes. While some programmes this year have been held back, it has been possible to make significant additions to others. There will be increased spending on the National Health Service over previous plans of £250 million in 1986–87 and £300 million in 1987–88. On top of this, health authorities are able to spend the savings from their cost improvement programmes which are expected to amount to £ 150 million this year and still more in future years. This should enable health authorities to meet demographic pressures and deliver improvements in services as well.
"Total public sector provision for housing is being increased by £220 million net of receipts in 1986–87 and £200 million in 1987–88, and the housing plans now provide for some £3¼ billion of capital spending next year. Within this total, the Government believe there should be a substantial shift in priorities in favour of renovation of the existing public sector housing stock. An extra £54 million in 1986–87 and £71 million in 1987–88 is being made available for capital expenditure on national and local roads.
"Just over £ 1 billion is being added to the social security programme for 1986–87, largely as a result of the 7 per cent. increase in benefits taking effect this month. Expenditure in the subsequent years of the survey period is subject to decisions on the Government's social security review, on which a White Paper will be published shortly.

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"Additional provision has been made under the law and order programme to allow local authorities to direct extra spending towards the police. For defence, the provision is unchanged. After the substantial real increases in spending since 1978–79, from which the defence programme will continue to benefit, the emphasis must now switch to improving our defence capability through greater efficiency and value for money, especially in procurement.
"On employment, there were large additions in the Budget to fund an expansion of the youth training scheme and the community programme. In this survey, a number of new initiatives have been agreed but savings are to be made by a reduction in payments from the redundancy fund. My right honourable friend the Paymaster General will be making a statement giving further details later today.
"There have been significant improvements in efficiency and value for money in many programmes. It is a great mistake to fall into the trap of measuring public expenditure programmes solely in terms of the money put into them: it is improved output that matters. Further details of these and other changes are contained in the Autumn Statement itself, and, of course, full details, together with information on running costs and manpower, will be given in the public expenditure White Paper to be published early in the new year.
"I now turn to national insurance contributions. The Government have conducted the usual autumn review of contributions in the light of advice from the Government Actuary on the prospective income and expenditure of the National Insurance Fund. The lower earnings limit will be increased next April to £38 a week, in line with the single person's pension, and the upper earnings limit will be similarly increased to £285 a week, broadly in line with earnings.
"I announced in the Budget reduced rates of contribution for the lower paid and their employers—5 per cent. for those earning up to £5 5 a week, 7 per cent. for those earning up to £90 a week and 9 per cent. for employers of workers earning up to £ 130 a week. These took effect at the beginning of last month and are already starting to provide welcome assistance to the low paid and their employers, and a stimulus to the employment of the young and unskilled. The limits for these reduced rate bands will also be increased from April, in fine with the lower and upper earnings limits, to £60, £95 and £140 a week respectively.
"There will be no change in the main Class 1 contribution rates, which will remain at 9 per cent. for employees and 10.45 per cent. for employers. This is the third year running in which national insurance contribution rates have been held constant, despite a growing number of pensioners and the substantial uprating of benefits taking effect later this month.
"My right honourable friend the Secretary of State for Social Services will this afternoon announce details of these proposals, and will lay
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before Parliament the necessary order and the accompanying report by the Government actuary.
"Finally, I turn to the Industry Act forecast. The economy is progressing very much as I envisaged at the time of the Budget. Inflation is falling again, after the predicted temporary rise in the spring, although I now expect inflation in the fourth quarter of this year to be slightly above the Budget forecast: 5½ per cent. rather than 5 per cent.
"The overall growth of the economy this year still looks like turning out at 3½per cent.—the highest rate of growth since 1973. The pattern of growth, too, has been much as envisaged. Exports and business investment, as expected, were the fastest growing elements in demand in 1985. The rise in total investment is now put at 4 per cent. in 1985; within this figure business investment is expected to be up by 7 to 8 per cent. to yet another all-time record.
"As a result of this steady progress, there has been a substantial growth in the number of people in work since 1983. This has now been reflected in a levelling out in unemployment—albeit still at a sadly high level, not least because of the rapid growth in the total labour force. The prospect here is for some further improvement, assisted by the measures I announced in the Budget to help on the jobs front, which will have their main effect in 1986. But that improvement could easily be put at risk by excessive pay settlements.
"The prospect for 1986 is one of continued growth and still lower inflation. The composition of growth is likely to change somewhat, with consumer spending taking up the running as exports—which had an exceptional rise of 7 per cent. this year—grow more slowly. The current account balance of payments surplus is forecast at £4 billion, compared with £3 billion in 1985. Fixed investment is expected to grow, once again, slightly faster than the economy as a whole.
"Overall, the economy in 1986 is expected to grow at a further 3 per cent. the fifth successive year of growth at an average of 3 per cent. a year, and into the sixth; the best performance since before the first oil shock. At the same time, inflation is expected to fall further, to 3¾ per cent. in the fourth quarter of 1986.
"Indeed, if the forecast is correct—and I am the first to admit its inevitable fallibility—1986 promises to be the first year since the 1960s when inflation and growth will be within one point of each other. What is beyond doubt is that we are now achieving the steady growth with low inflation which successive Governments have sought in vain for a generation.
"All in all, Mr. Speaker, the progress and prospects I have described amount to the clearest possible vindication of the policies we have been following these past six years, and will continue to follow.
"The Autumn Statement is now available from the Vote Office, and the House will no doubt wish to take it into account when we debate the economy tomorrow. The framework of public expenditure control which it sets out should allow scope for

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considered and justified reductions in the burden of taxation. And these in turn will further reinforce the economy's flexibility and dynamism. It is on that prospect that the future prosperity of all our people depends".
My Lords, that concludes the Statement.
4.p.m.
Lord Barnett: My Lords, the House will wish to thank the noble Lord the Minister for repeating the Statement made by the Chancellor but perhaps will regret that he has to be saddled with defending it; for whatever the Chancellor says, a record level of unemployment is hardly a vindication of his policies. Indeed, one can only note with astonishment the briefest of references to unemployment in such a lengthy Statement.
Clearly one needs a little time to consider how the Chancellor has arrived at the figure he first thought of as regards public expenditure. One can only note with fascination his arguments as to why he reduced the contingency reserve. I for my part personally regret that spending Ministers, including the noble Lord himself, have allowed the Chancellor to get away with such high contingency reserves in the following years. I hope that he will do better in the months ahead.
Perhaps the Minister will clarify the Government's somewhat confused position on public expenditure. Following the Prime Minister's speech last night, we now have the Chancellor boasting of significant public expenditure increases. May we take it that public expenditure is now considered by the Government to be a good thing? If so, why does the Chancellor go on to claim with some pride that he will keep public expenditure flat for the succeeding three years?
On the central economic issue, does the noble Lord the Secretary of State for Employment share the Chancellor's view that the economy is booming? If he does, will he tell the House when he expects the 3½ million unemployed—or whatever is the figure he has first thought of, or thought of secondly—to share in the boom we hear so much about? Given the record unemployment figures, how can the Minister justify the Chancellor's pride in claiming the lowest borrowing requirement as a percentage of GDP since 1971–72? Is not that something to be ashamed of, given the record levels of unemployment and the requirements of the public sector?
In view of the noble Lord's own responsibility for employment, does he not accept that increasing capital expenditure would do more for job creation than tax cuts? Will he therefore urge the Chancellor at least to use the surplus that he has artificially created by the sale of public assets in ways more beneficial to the social and economic stability of the nation?
Lord Diamond: My Lords, I should like to follow the noble Lord, Lord Barnett, by first expressing the thanks of these Benches to the noble Lord the Minister for repeating the Statement made by the Chancellor in another place. We are of course aware of the fact that we are to debate the economic situation tomorrow, but noble Lords may not be aware that the Autumn Statement, which gives all the detail anybody in my position might want to have, will, it is hoped, be
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available in about three-quarters of an hour. It is certainly not yet available because the Chancellor has not finished making his comments in another place. We all understand that situation, but we are as a result in some difficulty. In those circumstances, and having regard to the general wish of the House that comments at this time should be as brief as possible, I am driven to the conclusion that one should reserve much of what one has to say for tomorrow's debate, rather than comment immediately, and off the cuff, today
However, I will comment now on the Government's policy in respect of public expenditure. Clearly the Government are determined not only to keep public expenditure flat in real terms but also to keep it as a continually reducing percentage of our income; that is to say, to avoid redistributing the income of the nation in favour of those who need it most. Let us be quite clear. The figures are absolutely incontrovertible. It is the redistribution of social services under public expenditure which acts as a measure of fairness towards those who want to see a fairer society and which of course goes against the desires of those who want to see a less fair society. I am bound to say that the figures of reducing public expenditure as a percentage of our income are consistent with the Government's and the Prime Minister's declared policy and the policy of creating two nations.
The other main point to which I want to draw attention is the increasing rush to sell off the family silver in order to pay for the groceries. Noble Lords have heard that phrase used by me many times before, and no doubt they were delighted to hear it being picked up by no less a distinguished Member of your Lordships' House than the noble Earl, Lord Stockton, who apparently shares the view that such is a suitable simile in helping to make the situation understood.
The Government will now have to reconsider, and I put this question to the noble Lord: what will the Government do now that they have been prevented in their attempt to sell not merely their own family silver but also family silver which does not belong to them? That is going a bit far, is it not? At the moment, there is the family silver which we know of as the Trustee Savings Bank capital, which the Government are seeking to claw into their own pockets and sell to the nation—property which does not belong to the Government. However, I understand that because of the wisdom of the Scottish courts the Government have been prevented from pursuing that course. In those circumstances, I am bound to ask the noble Lord this question: to what extent will the figures in the Statement which the Chancellor has just made be altered as a result of that development?
A further question I should like to put to the noble Lord concerns information regarding extra spending on the police. We all heard exactly the promise which the Prime Minister made to the Conservative Party Conference, because we all watched that conference with great interest and were educated. The Prime Minister was able to promise that conference, off-the-cuff, any amount of money which was required by the police. We saw and heard that promise being made.
However, it now turns out that additional provision has been made under the law and order programme to

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allow local authorities to direct extra spending towards the police. Presumably it means that the proportion of expenditure falling on central Government funds will be the normal percentage, or rather, the percentage which the present Conservative Government allow. Can the Minister therefore give some indication of how much additional funding is expected to fall on central funds in order to meet the Prime Minister's promise of additional expenditure by the police in maintaining law and order?
A further question I am bound to ask is: what is meant in the Statement by,
"savings are to be made by a reduction in payments from the redundancy fund"?
The redundancy fund was set up by statute—I had a little to do with it in the early days—and I should have thought it was safe from raids by the Government. Perhaps the noble Lord will tell us to what extent these reductions in payments from the redundancy fund are to be made.
Perhaps I may echo—I know I am merely echoing, but it is a matter of supreme importance—what has just been said about the lowest percentage of GDP reached by the public sector borrowing requirement. It is perfectly true, as the Statement makes clear, that it is at an extraordinarily low—shall we say, an extraordinarily safe level: that is to say, the Government could borrow a great deal more without affecting inflationary pressures if they wanted to boost the economy. Why do the Government take such pride in getting the level of expenditure and public sector total borrowing at a lower figure than it has ever been before?
May I finally ask for some information about the reference to amounts of additional money being spent in the coming year on the National Health Service and on housing? Is it still the case that we are being fed with figures of cash expenditure for the two following years which mean absolutely nothing? Can we please be told what are the figures in real terms and what they represent as a percentage of the total expenditure on national health and the total expenditure on housing? That will mean something where the present figures mean absolutely nothing. As regards the National Health Service, if in addition the noble Lord can adjust his figures in relation to the demographic changes, that would really be giving the information to which the House is, in my view, entitled.
Lord Young of Graffham: My Lords, I am grateful to the noble Lord, Lord Barnett, as I relish the task of explaining the Autumn Statement. I do not need to defend it because I regard it as a Statement which is full of hope and confidence for the future of our nation. The noble Lord, of all noble Lords, asks me to undermine the Treasury's attitude to contingencies and he, of all people, suggests that I take a happy-go-lucky attitude to contingencies. Let me assure him that I adopt the attitude he would himself have adopted when he was in the Treasury, as no doubt he would expect me to.
There is great misunderstanding about the level of the PSBR, because a low level of PSBR is the one certain way back towards a world of fuller
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employment. Surely, what we are concerned about is increased capital expenditure. This year, fixed capital expenditure in this country reached a record level of £55 billion. Next year it will be £60 billion and in 1986–87 it will reach £64 billion. That is good news indeed for investment in this country. It is good news also for public sector investment, which, at over £22 billion, continues at a substantial level. But, at long last, the main growth is happening in the private sector. It is happening because inflation is under control and because those who make the investment and wish to see the outcome of that investment have confidence as to how much it will cost.
Within the public sector there is an additional housing provision of £220 million in 1986–87 and £200 million in 1987–88 intended for council house renovation. In the next three years we will spend no less than £ 10 billion of capital for housing—I repeat, £10 billion—and we very much hope that it will be spent on renovation. I should point out that between 75 per cent. and 80 per cent. of our public housing stock is post-war. Is that not a salutary thought? In view of all we have heard about the state of housing, is it not salutary that 75 per cent. to 80 per cent. should be post-war and yet in the condition in which it appears to be?
Capital spending on the roads is up. Capital spending on repairs and maintenance is up. There are no cuts at all in local authorities' capital spending this year, which remains constant through the survey period at £5.8 billion a year. On that, therefore, I think we are quite sound. Indeed, during the previous Government—although that is going back into dim and distant history—there was a 20 per cent. cut in construction expenditure and cuts in the basic infrastructure; but that is in the past and, I am sure, is no way ahead.
The Government are concerned about unemployment and we believe we are on the right path to defeat it, which is by seeking employment increase. I very much hope that we would not look towards capital expenditure as a way of redistributing wealth, or to many of the points which the noble Lord, Lord Diamond, made about the family silver. It is years since we talked about the commanding heights of the economy. I confess that by 1979 the family silver had become a little tarnished. What we have done is to polish and burnish it bright and it is now sitting in the hands of those to whom it rightly belongs—the shareholders. That is the way that I believe we should deal with the silver. Who could disagree that the service we get today from British Telecom, when 1.25 million of our people are shareholders, is an improvement? It is an improvement on the treatment we received many years ago when the only telephone available was a trimphone, or nothing, and there was a long waiting list for lines, which has now disappeared.
I hope to give an explanation on the redundancy payments when I make a Statement shortly on those measures. Of course, the Prime Minister said that we would hope to make provision for what was required by the police. That is now being considered and I hope that when we can see what is required we shall be able to make an announcement.

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Unfortunately, I am not in a position to give the specific figures and detailed breakdown of expenditure on housing and national health at this stage in the expenditure plans. It is a matter which I shall look into and place the information in the Library shortly. However, what the Statement shows as a whole is that for the past five years and into the future we are on the sound road to recovery in economic health. It is a road from which the Government will not be diverted and it is a road on which we can all travel with confidence.
Lord Hylton: My Lords, the noble Lord the Minister twice referred to housing expenditure. Can he confirm that the Minister of Housing obtained only one-third of the amount that he was asking for? Will the Minister put himself in the place of an unemployed person living in a system-built dwelling which is suffering from both damp and condensation?
Lord Young of Graffham: My Lords, I cannot confirm that the Minister of Housing received one-third of what he was asking for. It is my understanding that he now has money to deal with the problems which he has to deal with. However, I put it to your Lordships that if it is so difficult for an unemployed person to live in a system-built house is it prudent to give more money to the same type of authority which built those houses in the first place? What we must do is find the best possible way to get the best housing. So far the records show that the private sector has much to say for itself. In the next three years £ 10 billion will be spent on public sector housing. That is something we should all be proud of.
Lord Diamond: My Lords, may I make a complaint? The noble Lord has not answered a single one of the questions which I put to him. May I ask him, once again, one question only? What are the Government proposing to do about the Trustee Savings Bank—for the sale of which the prospectus is, I understand, ready for distribution—in view of the latest court decision?
Lord Young of Graffham: My Lords, I apologise to the noble Lord, Lord Diamond, for not referring to that. However, since I understand the court judgment was only made today, it would surely be a little premature if I were to make an official statement on that matter. I am sure the noble Lord will understand that matters such as this require a little reflection.

Enterprise and Employment
4.20 p.m.
Lord Young of Graffham: My Lords, with the leave of the House, I should like to make a Statement on new enterprise and employment measures.
Overall provision for the Department of Employment has increased by some £600 million in each of the years 1986–87 and 1987–88 compared with last year's Autumn Statement. This growth in expenditure has enabled us to increase the number of jobs available under the community programme by 100,000; to introduce the new two-year youth training programme as from April next year, which will ultimately help some 450,000 young people each year
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and lead to real qualifications for a working life. It will also enable us to fund a range of new measures which I am announcing today.
The cost of these new measures is of course included in my department's public expenditure plans for 1986–89 which were announced earlier today by my right honourable friend the Chancellor of the Exchequer. These and other increases in our department's spending are offset in part by a reduction in spending from the redundancy fund.
We propose to bring to an end, for all firms other than those with fewer than 10 employees, the system of sharing part of the cost of statutory redundancy payments through rebates from the redundancy fund. Our intention is that the rebate should not be payable for redundancies which take effect after 31st October 1986. We shall introduce the necessary legislation later this Session.
It is important to stress that this change does not affect employees' entitlements in any way. Employees will be entitled, as before, to redundancy payments from their employer; to go to an industrial tribunal if the employer refuses to make the required payment, and, where an employer cannot pay, to receive a payment direct from the Department of Employment.
The rebate has been steadily reduced by successive governments. It is now 35 per cent. For most employers this is no longer a significant contribution to their total redundancy costs. We believe that this public spending should no longer be used in subsidising redundancy and ought now to be put to better use.
I turn now to our further measures to stimulate enterprise and the growth of small businesses and to help long-term unemployed people find work. We have suffered in this country for many years from one of the lowest rates of self-employment and new business creation in the whole of Western Europe. That has now changed. We now have more self-employed people than for some 60 years. However, we can do still more to encourage the growth of self-employment and small business by ensuring that both advice and finance are available to the small businessman at the right time. We are therefore announcing three measures designed to further these aims.
As far as self-employment is concerned, the enterprise allowance scheme has already helped nearly 110,000 unemployed people since August 1983 to set themselves up in business. We have therefore decided to expand the scheme to a maximum of 80,000 new entrants a year in 1986–87 at an additional cost of £17·5 million—an increase of 20 per cent.
We have already assisted over £500 million of lending to small businesses through the loan guarantee scheme. In order to provide better access to finance and business advice we have now decided to extend this scheme, which was due to end in December 1985, until the end of this financial year while we consider its longer term future.
We are also increasing significantly the support given in England to local enterprise agencies, which play an important and growing role in providing

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business advice and practical assistance to small firms at the local level. We are making available an additional £2½ million for this purpose in 1986–87.
Besides its new responsibility for small firms, the Department of Employment now also has responsibility for tourism. The industry estimates that it is creating over 50,000 jobs a year. Last year some 14 million people visited this country, spending over £4 billion. To ensure that this growth continues we are increasing the funds available next year to the British Tourist Authority and the English Tourist Board to £40 million—an increase of about 20 per cent. in their funding. We will ensure that a substantial part of this money will benefit areas of the country which could attract more tourists and where unemployment is high.
I turn now to our measures to help the long-term unemployed. These are designed to tackle two key problems. The first is that many people who have been unemployed for a long time become demoralised about their ability to find work. The second is that the relationship of benefits to pay can reduce the attractiveness of jobs at the lower end of the wages scale. We propose therefore to introduce pilot schemes to test the effectiveness of two entirely new measures designed to combat these problems. These "pilots" will operate for six months from January 1986 in seven different areas.
First, we are asking the Manpower Services Commission to ask long-term unemployed people in the pilot areas to a counselling interview at their Jobcentre. The object will be to see whether they can be placed in suitable jobs—including jobs in the expanding community programme—or in existing training courses. In addition the MSC will be able to offer places on entirely new short training courses specifically designed for those who have been out of work for more than a year. These courses will help to assess their potential and aptitudes; to brush up their basic working skills and to improve the techniques of applying for a job. We shall ask the Manpower Services Commission to cover as many as possible of the long-term unemployed in the pilot areas with these new arrangements so that we can assess their effectiveness.
The second new measure is a job start scheme. This is a radical new approach under which any person in the pilot areas who finds a job after being unemployed for at least 12 months will be paid a weekly allowance of £20 for the first six months of employment in addition to his or her wage. The scheme aims to make lower paid jobs more attractive to people on high rates of benefit. The allowance will be available to those who take jobs with a gross income of less than £80 a week. Full details will be announced shortly.
In the improving climate for jobs, we are determined to increase our contact with those long-term unemployed people who may have been losing hope. We have already started the expansion of job clubs, which have so far achieved remarkable success in placing the majority of people who use them. We are writing to all long-term unemployed people, inviting them to contact their Jobcentres for advice and support, and the two pilot measures announced
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today reinforce our determination to help long-term unemployed people back into jobs.
The range of measures that I have announced today also demonstrates our determination to intensify our efforts to promote enterprise and business growth. We are creating the conditions in which jobs will come and unemployment will be reduced. I believe that today's new measures should have the support of all parts of the House.
Lord Stoddart of Swindon: My Lords, perhaps I may first of all thank the noble Lord for making his Statement to the House today. I suppose he should really be congratulated on making two very long and major Statements in quick succession. In actual fact the Government are making him do two jobs instead of one. They are not helping the unemployment position very much by that and I hope that the noble Lord is not becoming a Jack-of-all-trades. We had expected him to bring forth a lion in his Statement but in fact he has produced a mouse. I have to say that the Opposition is very disappointed and indeed very worried about some of the measures which he has proposed today.
First of all, I should like to ask him about the changes to the redundancy payments scheme. Is the noble Lord aware that this will undoubtedly cause unease and perhaps real fear among the workforce in that people will feel far less secure about the redundancy payments scheme without proper Government backing and may very well feel that in future they will have to fight hard for their redundancy payments. Will the noble Lord say what will be the additional cost to employers? I understand that the figure could be as high as £250 million a year. If that figure is correct, will that not impose a further burden on employers and industry and push up unit costs, which is the last thing that we want at the present time; or do the Government intend to give some relief by reducing employers' national insurance contribution by an appropriate amount?
4.30 p.m.
In his Statement the Minister mentioned the self-employed. I do not know whether there really has been a growth in the number of self-employed people. I say that advisedly because I notice from the MSC labour market quarterly report that the increase in jobs includes an assumption that self-employment rose by 33,000 in the quarter from January to March 1985. Are the figures for self-employment based on assumptions or facts? I think that this House and Parliament are interested in the facts. If there has been a growth, has it been due to a lower level of training and therefore of skills? I should like the noble Lord to comment on that.
Does not the Government's total economic policy militate against small businesses through the prohibitive cost of borrowing, high interest rates and the bank loan guarantee scheme? Are not the Government by their total economic policy discouraging the growth of small businesses?
I turn to the question of counselling interviews. It all sounds very nice but it sounds to me also as though it could be sinister. Is it to be real counselling, or will

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pressure be put on the unemployed to take low paid, unsatisfactory and uncongenial jobs? Will they be under the threat of having benefits withdrawn or reduced at the interviews? I think that we are entitled to have an absolute assurance from the noble Lord that that will not be so and that improper pressure will not be brought to bear on the long-term unemployed in that way.
Perhaps I may now turn to the job start scheme. It is certainly a radical measure; nobody will deny that. But in my view it is designed to subsidise and encourage low wages. As the CBI pointed out in its report which we had dropped through our letterboxes last week, it wants a high-wage, high-productivity country and not a low-wage economy. What will be the position after six months when the worker loses his £20 a week if he then leaves the employment? Will he immediately revert to his original benefit, or will there be a penalty for him leaving his job after six months? Can the Minister also say whether the £20 allowance will be free of all tax or whether it will be taxable? What will there be in the scheme to stop employers taking advantage of it not to improve employment prospects and opportunities but to lower the wages bill and increase profits? Can he give us an answer on that? What safeguards will be built into the scheme to prevent fraud?
I think those are all relevant questions which need answers, and I hope that the noble Lord will be prepared to answer them. These measures fall far short of what is needed to make a real impression on unemployment. They are too little, completely irrelevant and much too late.
Lord Rochester: My Lords, from these Benches I should like to join in thanking the noble Lord, Lord Young, for having made the Statement, but, like the noble Lord, Lord Stoddart, I must say that we regard it as a little thin compared with the enormity of the problem that it seeks to address. It is quite a long Statement and it is not possible now for me to do more than comment on its main features.
I, too, regret the Government's decision to bring to an end for all except the smallest firms the system under which part of the costs of statutory redundancy payments is shared between the Government and employers through the redundancy fund. As the Minister will know, companies are still having to make employees redundant in considerable numbers. May I therefore ask him how he reconciles that move on the part of the Government with the need emphasised most recently by your Lordships' Select Committee on Overseas Trade for this country to remain internationally competitive?
We welcome the decision to expand the enterprise allowance scheme. That will be especially helpful to the enterprise agencies which are giving advice to people not only on how to establish new businesses but on how to extend existing ones. Can the Minister say what the increase of £2½ million to be allocated to the scheme in 1986–87 will mean in terms of the weekly allowance payable to individuals eligible for it?
The plight of the long-term unemployed is perhaps the worst of all. We shall therefore watch with the closest interest the outcome of the pilot schemes which
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are to operate from the beginning of next year. I wonder whether the noble Lord can tell us about the location of the areas where the interviews to which he referred are to take place.
Finally, I should like to wish the proposed new job start scheme well in its aim, as I understand it, to encourage more of the long-term unemployed to find jobs. But in the light of these two new schemes do the Government propose to increase the number of people in jobcentres who are in a position to act as counsellors; and is the Minister satisfied that they will be adequately trained for that task?
Lord Young of Graffham: My Lords, I am grateful to the noble Lord, Lord Stoddart. Let me assure him at the outset that our changes in the rules relating to redundancy payment will not affect in one single way any rights of workers. Those who, alas, are made redundant will be entitled to get the same statutory redundancy payments from their employer. In the event that the employer cannot pay, they will come to the Government as before. What we are talking about is the rebate that an employer can get from the Government—35 per cent. of the cost of redundancy. Indeed, that rebate was introduced by another Government many years ago, and we have seen it eroded and reduced. I think that the time has come when we should perhaps help employees a little more by not making it quite so easy perhaps to make them redundant.
As I said from the outset of my Statement, the expenditure of my department will be increasing by some £600 million a year over the next two years. The bulk of the department's money now goes very much towards the community programme, the youth training scheme, training programmes and helping positive employment.
We have seen a considerable growth in self-employment. The planned enhancement to the enterprise allowance scheme of some £17½ million, which will increase the number of people starting under that scheme to 80,000 a year, is good news for those individuals and others. Our surveys show that 86 per cent. of those who start under the enterprise allowance scheme are still trading 15 months after starting, and that an average of 68 new jobs are created for every 100 businesses—that is, those that have completed a year. This year we shall be spending £111 million and next year £142 million, and part of that vast increase in the growth of self-employment, which is up by 700,000 this decade, has been due to this programme.
I must tell your Lordships that I cannot in all seriousness imagine that any person who has been out of work for more than a year would seriously wish to give up the opportunity of a counselling interview or the opportunity of our giving help and assistance in finding new employment. The same applies to the programmes—which I have long wished to see the Manpower Services Commission introduce—which will restore to those who have been out of work for all this time the help and encouragement and the spark to go out and look afresh.
I hope that the short training courses we shall offer will revitalise them and give them confidence again

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and will help with interviewing techniques. I hope that there will be places on the community programme, and I very much hope that no person who has been out of work for a long time will voluntarily refuse any opportunity of coming for an interview. But if they were to do so, the position would be no different from that with any other person who is long-term unemployed: he is entitled to his benefit as long as he is available for work. The standard tests will apply. There is no new coercion—far from it. This is something that we are introducing to help the long-term unemployed, nothing else. Indeed, the job start scheme, which is there in a pilot form, is something for the Jobcentre staff to offer.
If I may deal with some of the points which the noble Lord, Lord Rochester has made, if six people apply for a job and one has been out of work for more than a year, I am afraid, human nature being what it is, that employers will tend to overlook that one individual. We have seen that the longer anybody is out of work the harder it is for them to get back into work. We have also seen that the number of long-term unemployed, at about 1.4 million, is becoming a fairly firm figure. There are many who are unemployed for shorter periods—the difference between that 1.4 and the 3.2 million fluctuates—but I am greatly affeared that we shall continue to see too many people being unemployed for too long.
The job start scheme will help those who have been out of work for a long time to come back into employment. It is true that it gives an inducement to employers to take them on, but I hope very much that during the six months those employers will discover their abilities. They will be back in work and I hope that the employer's will make up the difference in their income. Even if that does not happen, those long-term unemployed will have current work experience, an up-to-date reference, and they will be back in the labour market. That is surely something we will all want.
The noble Lord, Lord Rochester, referred to the £2½ million for local enterprise agencies. This is an amount of money which we shall give and details will be announced to help this new phenomena, over 300 of which are now open up and down the land. We are devising ways in which we can give support to help them flourish in order to encourage many new businesses to start. It is important that we help this activity, with which I have been concerned for some time, and I hope very much that this department will be playing a positive role.
Lord Somers: My Lords, I shall not keep your Lordships long because we want to get on with the debate. But I wonder whether the noble Lord will answer one question. I have no doubt that the noble Lord is aware of the tendency of urban local governments today to invite enormous supermarkets into their areas and that that has a very deleterious effect on employment. I do not know whether the noble Lord has ever penetrated one of these ghastly places, but if he has he will realise that the chief feature about them is that there is never anybody about if one wants to ask a question or get what one wants. That is very bad for employment. They are also driving out the small shopkeepers who provide a very much better
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service. I hope that local government authorities will be dissuaded from encouraging that kind of tendency.
Lord Young of Graffham: My Lords, I wish at the moment I had on occasion the opportunity to investigate the new supermarkets. However, I know that if they continue to provide a worse service than the local shop the local shop will prosper and they will not. That is the law, I am afraid, of shops. I suspect that we are seeing the spread of many of these supermarkets because they offer services and conditions with which some local shops cannot compete. But the evidence on employment is not perhaps as clear as it may be. They might even be the source of increased employment.
Lord Cledwyn of Penrhos: My Lords, the Statement of the noble Lord refers to increased funding for the British Tourist Authority and the English Tourist Board. Can the House assume that a share of this funding will go to the Welsh Tourist Board and the Scottish Tourist Authority?
Lord Young of Graffham: My Lords, I am dealing with the English Tourist Board and the British Tourist Agency. But I shall hopefully get correction of that if I am wrong.
Lord Cledwyn of Penrhos: My Lords, I am very grateful to the noble Lord. It is important in view of the fact that he directs our attention to the needs of areas of high unemployment, and both Scotland and Wales are included in these areas.
Lord Young of Graffham: My Lords, I appreciate that I have an expanded department with increased responsibilities. But those two particular matters are matters for the Secretary of State for Wales and the Secretary of State for Scotland, and over those borders I dare not march.
Lord Cledwyn of Penrhos: My Lords, then can we expect statements from them on this subject?
Lord Young of Graffham: My Lords, I have little doubt.
Lord Lloyd of Kilgerran: My Lords, may I also welcome, as did my noble friend Lord Rochester, that part of the Minister's Statement dealing with small businesses, in relation to the financial aspects. We welcome very much indeed an increase in the financial allowance schemes and in the setting up of enterprise agencies. I find that very welcome. Part of my activities is as chairman of an advisory panel in relation to inventors. It is the duty of this panel to try to seek places for exploiting inventions, thereby creating more employment. I should like to ask the Minister this specific question. I am referring to small businesses. I define small businesses as those that do not employ more than 10 or 12 people. Has the Minister in mind any steps to reduce the bureaucratic stranglehold upon these small businesses arising out of the necessity for dealing with audits and such matters? Has he any assurances to give to small businesses that

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the bureaucratic necessities for filling in forms, and the usual things which one would expect from very large firms but not from small firms, will be reduced?
Lord Young of Graffham: My Lords, I am grateful to the noble Lord. It is my dearest wish that we reduce bureaucratic pressures on all businesses. We must do it with safety. We must reduce the bureaucracy without taking away the necessary protection. To my knowledge there is a consultative process which is looking at the needs for independent audits for small businesses. I suspect that the small businesses in question are mostly the ones which are owned by the directors. It is a complex point. It is one of which we are apprised. It is one on which I suspect that we have a long way further to go. And it is a matter on which I, for one, will not give up.
Lord Pitt of Hampstead: My Lords, with regard to this question of small businesses, members of the black community have great difficulty starting up in business. Can the Minister say what plans the Government have for helping that section of the community to start up in business?
Lord Young of Graffham: My Lords, yes. I am aware that it is even more difficult for a member of the black community to start a small business. It is often said that it is far more difficult to obtain credit from our financial institutions. I am concerned, as I think are many of my colleagues, with some of the occurrences in the urban areas. I am looking at ways in which we can revitalise the urban areas. These are areas in which the black, Asian and many ethnic communities live, and I hope work. We shall be looking at that. At the moment I cannot give any immediate conclusion.
Lord Silkin of Dulwich: My Lords, the noble Lord in reply to my noble friend on the Front Bench explained the job start scheme as an inducement to employers to take on the long-term unemployed. If that is the function of the job start scheme, does it not necessarily follow that employers will be induced by paying less than the going rate for the job? Is that the intention of the job start scheme? Is it not odd that that should be put into effect at the very time when the Government are proposing to castrate the powers of the wages councils?
Lord Young of Graffham: No, my Lords. The job start scheme is a pilot scheme which is to take place in seven areas. The purpose of a pilot scheme is to determine what the effects of the scheme will be. The purpose of the scheme is to assist the long-term unemployed back into employment. The pilot scheme is to determine whether or not the scheme will succeed. I think that it will do so; I hope that it will, but we shall only learn from experience. I hope that your Lordships will not see this as any part of an effort to undermine the rights of individuals; it is an effort to bring back into employment those who have been out of work for some time and those whom, if we are not careful, any increase in employment may leave behind.
Lord Stoddart of Swindon: My Lords, I am sorry to come back on this matter but I shall be very brief. I
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thank the noble Lord for his absolute assurance that there will be no coercion in relation to the job counselling scheme. I appreciate that I asked the noble Lord a large number of questions about the job start scheme which I suppose he could not be expected to answer today. However, will the noble Lord write to me with some answers? The questions which I asked were relevant and important. Finally, will he also let me have an answer to the question about the cost to employers of the revised job redundancy arrangements? Will it be £250 million, which is the estimate that I have received? Will there be any rebate to them at all?
Lord Young of Graffham: My Lords, the withdrawal of redundancy rebates does not come into effect, subject to legislation, until October 1986. However, within the accounting period the figure will amount to in excess of £200 million. The levels of national insurance charges have yet to be set for that corresponding period, but no doubt it will all come through in due course. I shall certainly let the noble Lord have details of the job start scheme when the details are finally issued, and of the areas in which the pilot schemes are to be established. Of the seven areas, I very much hope that one will be in Wales, one in Scotland and five in England. I should hate to think that our Welsh and Scottish friends would not wish to take part in the experiment.
As regards the counselling service, I repeat that there is no question of any undue coercion. The normal rules applying to benefit will apply—just the normal rules.

Address in Reply to Her Majesty's Most Gracious Speech
4.53 p.m.
Debate resumed.
Lord Harris of Greenwich: My Lords, I should like to agree with one point made by the noble Lord, Lord Glenarthur, and the noble Lord, Lord Mishcon; that is, how much we welcome the prospect of the maiden speech of the noble Lord, Lord Mellish. The noble Lord had a distinguished career in the House of Commons and since then he has been particularly active with the London Docklands Development Corporation which has done some remarkable work in docklands and illustrates, if I may say so, how much advantage is to be gained from having a constructive relationship between the public and private sectors.
While on the subject of forthcoming speeches, I should like to refer to one speech which will be made a little later in the week; that is the speech which we shall be looking forward to hearing from the noble Earl, Lord Stockton. Our appetite for his speech has been whetted as a result of the many—to say critical observations, would be to understate the case—abusive attacks made on the noble Earl by a number of Conservative newspapers. Attacks have already been made on the noble Earl from a wide range of journalistic opinion extending from Mr. Paul Johnson to Sir John Junor. In my view it is perhaps wise for the critics of some Members of this House to be a little mort restrained. Exactly the same technique

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was used a few weeks ago when we had a report from the noble Lord, Lord Aldington, and his colleagues, which was savagely attacked in the press even before the report itself was published. I think that the noble Earl, Lord Stockton, can look after himself, but all that such action guarantees is that there will be even more public attention focused on what the noble Earl will say to us on Thursday.
Having made those preliminary observations, I now turn to the questions involved in the debate today; namely, the area of responsibility of the Home Office and the Department of the Environment. The noble Lord, Lord Glenarthur, referred to one particular Bill which the Government have already introduced in the House of Commons although, strangely enough, there is no reference to that Bill in the gracious Speech itself. I am referring to the Bill based on the interim report of the Widdicombe Committee dealing with the problem—and it is a problem—of propaganda on the rates. Undoubtedly there is an abuse of power in this connection. We have had CND propaganda on the rates; we have had thinly-disguised party newpapers on the rates; sometimes nominaly independent newspapers have received support through ratepayers' money with, in my view, serious consequences.
The noble Lord, Lord Elton, referred to one such example when he spoke on, I think, the last day of our proceedings on the Bill to abolish the Greater London Council and the metropolitan authorities. He mentioned what I may refer to as the "Islington Gazette affair". It involved a decision taken by the local authority in Islington to try to put the Islington Gazette out of business because it had published a number of articles which it did not like. It decided to sponsor a free sheet and made substantial sums of money available for that purpose.
In July 1983 my noble friend Lord Kilmarnock and I raised this question during the Third Reading of the Local Authorities (Expenditure Powers) Bill. We pointed out that a large sum of public money was going to be committed for what were clearly political purposes and that that money could only be spent if the Bill—the Government Bill—was passed in its then form. My noble friend and I put down an amendment which would have prevented the Islington local authority from behaving in that way. What happened? The Government voted against that proposal. I have looked through the list of noble Lords opposite who voted against it. The noble Lord, Lord Denham, was a teller for the "No's". The noble Viscount, Lord Whitelaw, and the noble Lord, Lord Beloff—a well known hammer of the Left—went into the Lobby against an amendment which would have prevented £ 100,000 of public money from being spent for those particular purposes. Your Lordships may ask, what happened to the newspaper? Within a few months it went bankrupt.
I must say to noble Lords opposite that I hope that when they criticise Left-wing councils in the future they will use slightly more restrained language, bearing in mind that this particular item of expenditure was committed only because of votes by noble Lords in this House.
We are now to have the Bill which the noble Lord, Lord Glenarthur, has foreshadowed. Obviously, I do
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not intend to discuss its precise contents today because it is being introduced in the House of Commons and, therefore, we shall have plenty of opportunity later to debate its content here. The Bill is directed at a growing abuse of power by a limited number of local authorities. It will inevitably give rise to an almost endless series of legal challenges. I have absolutely no doubt about that, having already looked at the contents of the Bill. Many of us believe that firmer action in this particular respect is indeed required. However, at the same time, we on these Benches recoil from the increasing interventionism in the affairs of local government, of which rate capping, with all its tortuous procedures, is yet another example.
But of course the central problem to which the noble Lord, Lord Glenarthur, referred—and I believe he was right—is created by what, 30 or 40 local authorities? These are dominated by the hard Left, as in Liverpool and in Lambeth, or where more moderate councillors weakly play to the gallery in order to achieve reselection by their ward parties. But these local authorities, although they talk as though they have a mighty mandate from the electorate, rarely do so.
Not only does only a fraction of the electorate vote, but the majority parties on these authorities normally represent only a minority of that minority. Let me take just three examples: Lambeth, Liverpool, and another local authority which has earned the censure of Ministers, Edinburgh. In Lambeth Mr. Ted Knight, who tried, as we all recall, to do a Liverpool and was forestalled by only one vote, had the support of just 33 per cent. of those who voted at the last local elections, yet he has an absolute majority on that council. In Liverpool, Mr. Hatton has an overwhelming majority on the council, yet in not one of the last three years has he secured a majority of the votes. In Edinburgh the majority party secured the support of just over 38 per cent. of those who voted, yet it obtained 54 per cent. of the seats.
None of these authorities has a real mandate for anything, yet this does not prevent them indulging in unending and remorseless confrontation with central Government. In Liverpool we are now seeing the inevitable results of a local authority which has deliberately attempted to secure its own bankruptcy. Yet the majority on all these authorities is kept there only because we have an electoral system in local government which ensures their own gross over-representation.
In the last Session I believe that the House recognised this by passing the Bill sponsored by the noble Lord, Lord Blake, to deal with this problem. It was blocked in the House of Commons, as we knew it would be, because of the agreement there between the Government and Opposition Front Benches. Yet I believe that we shall see the introduction of PR in local government in the political lifetime of many in this House today: not only because it is a fair and honest system but also because, without it, we are likely to get central Government taking more and more powers away from local government. That is the real issue before us and there is no way at all in which we can disguise the truth of that.
Now may I turn to legislation involving the Home Office. I should like to say at the outset that I do not propose to become involved in the argument about

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Sunday trading laws. This is pre-eminently a matter for Private Members, and on this I agreed with what the noble Lord, Lord Mishcon, said. It is a pity that the Government have apparently decided in the House of Commons to impose some sort of Whip on that Bill.
I should like to discuss briefly the remainder of the Home Office legislation including, as it does, a new and important public order Bill and a Bill relating to drugs. Perhaps I could say by way of introduction that I hope that Parliament is going to be able to discuss these grave issues without involving itself in the shrill party point scoring which has so far characterised debate on this issue outside Parliament. I do not believe that debate of this character in any way helps the police, who have to rely on a spirit of co-operation and tolerance from the public, when central issues of law and order become the playthings of party politics.
Mr. Enoch Powell, a gentleman with whom I rarely find myself in agreement, said some wise words on this matter only this weekend. He said:
"I do not believe that a political party, or government, or Parliament can appreciably alter those very deep-seated factors which cause the fluctuations in public tranquility and public disorder."
I believe that to be absolutely right. Of course Governments, and for that matter Oppositions, can, and often should, be criticised for their policies relating to the criminal law, or the police, or indeed the prison system. But to suggest that the return at an election of one party rather than another will lead to a massive increase, or a massive reduction, in the level of crime is palpable nonsense, and we all know that to be a fact.
Having said that, I should like to turn to two issues of importance that I want to raise. They are to some extent interrelated: they are the steadily worsening position so far as drugs are concerned, on which we are going to have a Government Bill, and secondly, the current problems facing the police service.
First, the drug situation. I believe it is the gravest single problem we are facing in the whole area of criminal justice policy. It is getting worse, and rapidly worse. We have now at least 60,000 addicts in this country, and the number is increasing the whole time.
Earlier this year, as the noble Lord, Lord Elton, will recall, we had a debate, and we passed a Motion on that occasion calling on the Government to take more urgent steps to deal with this situation. Certainly with the serious problem that we face I think that the Government are right to introduce this Bill involving, as it does, some of the issues thrown up by the Operation Julie case.
As Members of the House will recall this was a major lsd criminal conspiracy for which, after some distinguished work done by a number of police officers of different forces, a number of dangerous criminals were brought to book and convicted. However, as a result of the decision in your Lordships' Appeal Committee in the case of R. v. Cuthbertson, it proved impossible to forfeit the assets of those involved. The sums involved were formidable. I was told by the police at the time that probably some £6 million to £7 million were involved in that conspiracy, and clearly in a situation of the sort with which we are now confronted it is right to introduce legislation, as the Government are going to do.
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However, I should like to ask two specific questions particularly relating to the laundering of money. First, will the banks be compelled to inform the Bank of England when very large sums of money are passed over the counter in normal trading hours? As the Government will be aware, this is the position in the United States. Any bank which receives more than 10,000 United States dollars has to inform the Inland Revenue service, the Federal Reserve system, and various other Federal agencies. In the United States this is regarded by the authorities as a most important protection. Are we going to get it in this Bill or not? Secondly, given the increasing concern as to v. hat is going on in the Channel Islands, will this Bill cover the Channel Islands, or not? Certainly it should, but no doubt we can be told whether that will be done.
Next, there is the question of resources for the law enforcement agencies. I take the Customs and Excise as an example. In the lifetime of the present Government, as I reminded the noble Lord. Lord Elton, when we had this debate earlier this year, the Government have slashed the number of officers in the Customs and Excise. They have taken great credit for this. They say that they are making major efforts to reduce the number of public servants. In some areas that may be justified, but carrying through this doctrinaire objective so far as the Customs and Excise are concerned is deeply damaging. Twenty five per cent. of uniformed Customs officers have been cut in the lifetime of this Government. Certainly there has been an increase of somewhere in the region of 250 in the plain clothes investigation branch of Customs and Excise, but there has been a major net reduction in the size of the Customs. I think that is a grave error of judgment and I hope it will be rectified.
In August, after a visit to Heathrow, the Prime Minister announced that the Customs would be given all the resources they needed. This prompted a vigorously critical editorial in the Daily Telegraph which asked: why, in that case, had they been denied the resources in the past and, in particular, why had there been this cut in the size of the Customs and Excise? Can we be told? Will the Prime Minister's words at London Airport lead to a rethinking of Government policy on this question?
Then there is the inter-related problem of the police. The last Home Secretary announced that 200 more officers would be seconded to work in regional crime squads, but what is the position in the police forces where the drug problem is at its most acute? In particular, what will be done for the Metropolitan Police? The Comissioner, Sir Kenneth Newman has made it quite clear that he needs 3,000 more officers. Again, I ask the question put by my noble friend Lord Diamond a few minutes ago: what will be done as far as the Prime Minister's pledge at the Conservative Party conference is concerned on police resources? Will the Commissioner get these resources or not? The question is important.
I do not argue that every police force in the country must have its establishment reviewed. Of course not. Every police officer costs about £20,000 or more. It would be quite irresponsible, at a time like that, to suggest that that would be the right way in which to proceed. But in London the problem is extremely serious. There are major public order commitments,

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large-scale demonstrations that lead to divisions in the outskirts of London being stripped of their resources so that those large demonstrations can be policed. We have the constant problem of IRA and Middle East terrorism. Today, we have had yet another example of this at Chelsea Barracks: again manpower-intensive in the highest degree for the Metropolitan Police.
Then there is the diplomatic protection group and the need to defend foreign embassies in London. Again, that is a major commitment for resources. Then there is jury protection duty. Attempts have been made to tamper with juries at the Central Criminal Court. Some juries have to be protected. Each time, 72 Metropolitan Police officers are involved in protecting the jury. It is a major call on resources. Then there is the demand for more policemen in the streets. There is also the manpower implications of the passage of the Police and Criminal Evidence Act which will lead to heavy additional burdens on the police; and, finally, there is the drugs situation itself. I hope that we shall have an early unequivocal statement from the Government that there is to be a review of the Metropolitan Police establishment.
Finally, there is the very serious problem which has been alluded to already: the inner city disturbances that we have had in Brixton, Handsworth and subsequently in Tottenham, which put many people in the communities concerned in fear of their lives. Let me say at the outset that I accept at once that there are some racially prejudiced policemen. Of course there are. I also have no doubt that in some cases they misuse their authority to the disadvantage of members of ethnic minorities. I believe that exactly the same criticism can be directed at some teachers, some social workers, some local government housing administrators and, yes, some politicians as well. This does not in any way whatever make the position of the racialist policeman any more justifiable. We have to accept, however, that we live in a society that remains, tragically, significantly prejudiced. We have to recognise that reality. That is why this House thought it right to write into the Police and Criminal Evidence Act, at the prompting of the noble and learned Lord, Lord Scarman, a requirement that any such conduct of a police officer would constitute a disciplinary offence.
However, having said that, I must make it equally clear that I do not accept that every time the cry goes up that the police are guilty of harassment, that that charge is justified. In some cases allegations of just such a character are made by professional criminals, particularly those involved in the trafficking of cocaine and heroin, when the police succeed in interfering with their operations. I hope that those who are most anxious, as are all on these Benches and in the rest of the House too, I am sure, to ensure better relations between the ethnic minorities and the police, will maintain at least some element of scepticism when this charge is made.
I now turn to my final point. I do not intend today to discuss at any length the conduct of Mr. Bernie Grant and his statement after the death of a police officer and the serious injury to many others, that the police have received a "bloody good hiding". The
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feelings of the people of Tottenham were made clear when 1,000 local government workers went on strike in protest at this statement. But this incident was, unhappily, not an isolated episode. We have had a campaign of denigration financed with public money by a network of so-called police monitoring groups and police support units, which support the police in much the same way that a rope does a hanging man. We also had that video financed by Mr. Paul Boateng and the Greater London Council. I saw it. It was a vicious piece of propaganda directed at proving that the police were for the rich and against the poor, and for the whites and against the blacks. Surely we must recognise the consequences of this flood of poisonous propaganda. If it continues at its present pace and is directed, as it is, at the ethnic minorities in our cities and the youth in our youth clubs, it will only succeed in worsening the tensions that already exist.
Surely it is the aim of all of us who cherish our democratic institutions and the liberal values of our society to do everything we can to bring to an end this destructive campaign. We must surely have one central objective: to maintain the cohesion of our society. If we fail, the price that our children will pay will be high indeed.
5.17 p.m.
Lord Mellish: My Lords, this will be the second time that I have made a maiden speech in this House. The first was so lousy that this can only be an improvement.
I am proud to say that in the past four years I have been associated with the regeneration of a vast city area and have learnt a number of lessons. I want to pass them on, because we can learn from what has already been achieved. Mistakes have been made, I have no doubt, but what we have done is to the credit of the present Government and the results are there for the world to see. If there is anyone here who thinks that the story I am about to tell is just a lot of propaganda and all the rest, I beg your Lordships to come down and see for yourselves. We can certainly lay on the necessary transport so that your Lordships can come back.
Having said that, I should say that the regeneration of London docklands came about because of the decline in the London dock industry and is all part and parcel of the results of the last war. It is also part of the economic problems of our country. We have to face the fact that though Hitler bombed us fairly often, he did not bomb us all that well. When the war was over, most of our equipment was still there. Our quays were still there. Much of everything that took place in dockland was still around. A perfect example is Tooley Street, which I know so well. When it was built many years ago, it was built for one horse and cart; and here we were in the 20th century, after the war, dealing with juggernauts and trying to load and discharge ships.
The Port of London Authority in those days saw quite vividly that docklands in London, as they then were, could not compete with the outside world. It spent vast sums of money, I think some £22 million, on building up the new port at Tilbury, because of the new system that was introduced, called contain erisation. The result was that area after area of dockland fell desolate. I was an MP at the time. I had

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been the MP for the local area for some 34 years. I felt sick at heart, because I am a Londoner and I could see not only that this dock industry was being destroyed but also that there was no future for it and that we would never return to the days when large ships came into our London ports.
Therefore, what should be done about the lands? I argued then that we should have a development corporation that would develop the whole of the entity of docklands that had fallen into disuse. That was the London docks, St. Katharine's Docks, Surrey docks and the upper pool, and later of course the Millwall docks. Coincidentally, that speech was well received. The Conservative Party, who were in power, said that that was fine. The Labour Party, who were as ever in opposition, said it was fine, too. Left and right said it was fine. Then of course the Government of the day introduced a Royal Commission. If one wants something to be stopped dead in its tracks, introduce a Royal Commission. It took three years. Perhaps I may tell your Lordships that one of the proposals it made was that the whole of the area should be a safari park. What about that from the Royal Commission?—they took years to do it! I said at the time that it was not good enough and that there were enough wild elephants where I came from without creating the need for nature conservancy.
However, they finally brought in a docklands joint committee. The committee, which was representative of the boroughs, did a fair job of work. I do not deny that; I have always said it publicly. However, it had no money and it had no real planning powers. Then Michael Heseltine brought in the London Docklands Development Corporation. It is there that I come into the picture, as it were. He offered me the vice-chairmanship. I do not know why he did that. I suppose there was a political implication, but he knew I was very keen on docklands. I took the vice-chairmanship. It was sneered at, jeered at and all the rest. However, I speak here to people I know are anxious to listen. It seemed to me that we had long passed the day of resolution-passing; we have long passed that day. People judge one for what one does. Anyone can pass a resolution; it is the easiest thing in the world. However, I was determined to get inside and try to make things happen, try to do a job of work. That is why I went in.
By the way, it came before your Lordships' House. You had a hybridity committee, as I think it is called. Lord Cross was the chairman and my noble friend Lord Underhill was a member. It took months and months to consider all the democratic objections—I suppose they were democratic. Anyway, after the committee had heard everything, it unanimously resolved that the Docklands Development Corporation should be established. It was approved in this House and in the House of Commons. I was appointed deputy chairman. From that moment onwards there was bitterness by some because I had done what I did. I had actually joined what was called the enemy. I had joined the enemy because I wanted to do a job of work. I wanted to do things inside and not pass resolutions outside. In the result, I took this job.
Let me put it to your Lordships that the first thing I was determined to do was to take control of housing. Having been an MP for 37 years, I knew that there was
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a burning desire among people I then represented to own their own houses. Why in heaven's name we have not made that part of the Labour Party programme I shall never know. Just under the surface, the people are crying out to buy their own homes, provided that the amount they pay for the houses is reasonable and that they can obtain a 100 per cent. mortage. I came from an area where there was 97 per cent. of borough council housing. There cannot be much more than that, can there? The young couples in the borough had no hope at all, other than going on a waiting list I am making a maiden speech so I shall say nothing about the local authority except that there is no house building of any kind that is private, for people to buy. So I decided to introduce this policy of building homes for sale.
I have to say to your Lordships that I have never known a policy to be so successful. We started in Beckton, and people queued up to buy. We insisted—I personally insisted—that houses should be built at a price of not more than £40,000 and that a 100 per cent. mortgage should be available where possible. I shall give one illustration. In Rotherhithe, the area from which I came—many of your Lordships will know it is a very deprived area—there was a site for 60 houses to be built below £40,000. The builders were instructed that for the first month priority for sale should be given to local people. If people produced a borough council rent book, that would be the entree for them to buy their own homes. The builders jumped the gun. They actually put an advertisement in the newspaper saying that they were going to build these houses. They did not have any house; all they had was a mobile on the site. That advertisement was in the local press on a Friday. They said to borough council tenants on Friday night, "If you come on Saturday morning with your rent book, and if you wish to have one of the houses that we are to build months ahead, then your name will be recorded". That was on Friday, and they said, "Come tomorrow morning, on Saturday". On the Friday evening I had a telephone call from the police. They said, "You had better come down to the site. There is a lot of trouble down there". I said, "What kind of trouble?" I got into my car and went. About 380 families had queued up all night to buy their own homes in their own borough. What about that? Are we turning our back on that? This is the key, this is what our people want. I pushed forward with that policy with everything that I had.
Today I have to tell the House with some pride that we have built over 7,000 homes. The vast majority have been built for sale and have been bought. With everything that we have built, we have tried desperately hard to ensure that the price is right. That is the key. I read in the press, including another article in the Guardian this morning, about penthouses for £100,000 in dockland. That is far out of the range of ordinary people who live there. Of course there are one or two penthouses there, but we did not build them; they have nothing to do with us. The press know that and the BBC know it. They have never troubled to ask us. Oh no; they went to the entrepreneurs who had the land themselves and built their own places. They went there but they never came to us to find out that the vast majority of housing that we have built is, as I say, under £40,000. That really is the key. Thus, over 7,000 houses have been built.

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Remember what we inherited, my Lords. We bought it from the PLA because after all we are good democrats: we do not confiscate, we compensate. We took over this property. I can tell your Lordships that this was the magnitude of the task. There were 8½ square miles of desolation and 52 miles of river. There were no roads, no sewers, no electricity and no gas of any kind. We had the guts to face up and do it. After years and years, all people had ever done was to pass resolutions.
Thus we can say this today with a little pride. We paid vast sums of money, Government money which we used in the first instance—and I pay public tribute to Michael Heseltine for the fact that he made sure that we had the money to start it off. We have spent something in the region of £140 million of Government money in making this land possible for redevelopment. However, you know what private enterprise has done. It has spent, eight, nine or 10 times that amount of its money. Here is the key. If you open the door with Government money, you make private enterprise spend its own cash and produce the very state of society for which we are crying out.
I live in a world where resolutions, as I say, have been the key in the past. However, I have always tried for years to be sensible and say that the fact is that we live in a mixed economy. There are two sectors: the public sector and the private sector. The most important sector of all, whether we like it or not, is the private sector. If it fails, then Britain fails. If it fails, we do not get any taxes from which we can pay the dole, social welfare benefits and the rest. One taxes their profits, and one has a measure of control over them.
Thus from the very beginning I saw that Docklands could be the place where private enterprise could develop in such a form that private enterprise would gain from it, and so would the nation. And now we are gaining. Land values have gone up five, six, seven times. What was £58,000 an acre is now £380,000 an acre and private enterprise firms are paying it. They are paying it willingly and gladly. It has a big impact, of course, on our rent position for the houses that are built; but one can say that it was determined and I had no trouble at all, for the board readily agreed to the proposal that we should plough the profits that we had made out of the sale of land back into the public housing. It is very simple; there is nothing very difficult about it. All you do is to give an interest-free loan up to £10,000 on the sale of a house, which is not repayable until the house is resold, so, in the case of a £40,000 house, for instance, its sale value is £50,000 and you let the customers have £10,000 on loan and do not ask for that back unless they sell. You have given them that £10,000 out of your profit. So you see what you can do! And they are cute enough to take advantage of it.
Leverage is the point that I want to stres—the leverage of Government money being spent to make private enterprise spend its money. On housing, something in the region of £5 millions of private-enterprise money is being spent for every £1 million that the Government have spent. On the commercial front, it is between £10 million and £14 million. For every £1 million that we have spent, private firms have spent £14 million or £15 million of their money. I can
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only say that from that we have got a sports arena and the noble Lord, Lord Selsdon, a Member of this distinguished House, is the chairman of the body that set it up. It is going to be the finest sports arena in the whole of Europe. We have a light railway that is going to come from every Underground station into the heart of Docklands.
We have—though this is outside my ambit; I am no longer there; I left them in June—the £l½ million scheme of the Canary Wharf. What have we learned from this story? What are the Government going to do to continue stories of this kind? This is surely the right way to spend money: to spend money to encourage private enterprise to spend their money and eventually you make a profit out of private enterprise in the land that you sell them in the increased prices. So I ask the House to ensure that in whatever deliberations we may have—and I am certainly not making a party political speech here—
Several noble Lords: Oh!
Lord Mellish: Well, my Lords, I am not. Believe it or not, I am not. If I wanted to make a party political speech, you watch me go! And not necessarily the same party, either.
I say to your Lordships that, of course, there have been mistakes made. We are accused often that we do not have the relationship with the local people, the people who live there, that we might have had. We set up a liaison office and a liaison team and we have spent a great deal of money ensuring that these people are in daily contact with the Church leaders, with the community associations and the like; and it is working.
The people who get the publicity, of course, are those people you cannot satisfy anyway. Whatever you do, they sneer and jeer at you. They are called professionals. I would not buy their goods! They are professional moaners and groaners, the people who pass resolutions. If you want an increase in the old age pension, ask that lot! They will get it for you overnight simply by moving it, seconding it and agreeing it—finished! The fact is that if you say to them, "Where are you going to get the money from to do it", they reply, "There he goes. He's a right-wing fascist".
I say to your Lordships that we have learned from what we have experienced and there is much to be done. I beg those of your Lordships who do not believe this story that I have told of what is going on there to believe it to be the jewel in the crown not only of this Government but of future governments. If we can get our control, get our hands, on the Royal Docks, as I think we shall, then that will be an even bigger jewel. And if this stupid Treasury does not make it possible quickly for the London Docklands Development Corporation to take it over lock, stock and barrel, they are even sillier than I give them credit for. So I end on this note and thank your Lordships for being so kind as to have listened to me.
5.34 p.m.
Baroness Macleod of Borve: My Lords, I have nobody jealous of me this afternoon, for I think I have the most difficult job of all in endeavouring adequately to congratulate the noble Lord, Lord Mellish, on his

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fascinating speech. I congratulate him on this because I happen to know, and recently have been to, the area that he has been telling us about. I should like to congratulate him not only on his imagination as the vice-chairman of the London Docklands Development Corporation but also on the sound common sense of his speech this afternoon, I should like perhaps to encourage any noble Lord who has not been down to Docklands to go to see for himself what is happening because it is now a different world altogether. I was enormously impressed when I took my grandson there last summer to go windsurfing on one of those stretches of water. I hope that we shall hear from the noble Lord many' times in the future.
I should like also to congratulate my noble friends Lord Middleton and Lady Lane-Fox on their speeches on the gracious Speech. Perhaps they will forgive me if I do not elaborate because we have a long list of speakers this afternoon and I want to say only a few words. The gracious Speech I welcome almost in its entirety. I will not, as I should have liked to do, speak about law and order or about drugs, although, as perhaps some noble Lords will know, those subjects are rather dear to me.
However, I should like to refer to two other subjects which were briefly mentioned in the gracious Speech—unemployment and housing. This is because I maintain that these two subjects are very closely related. I should like to congratulate my noble friend Lord Young on the efforts that he is making and has made in the past on training for young people and now, as we hear in his statement today, for the older people, efforts which in the future will lead to better unemployment figures.
The gracious Speech talked about creating new jobs which, of course, we would all welcome; but we must fill the present vacancies. In answer to a supplementary question of mine, the noble Lord told us that only one-third of the job vacancies are advertised in the Jobcentres. This is where young people normally go to try to find employment. If only one-third of the vacancies are advertised in the Jobcentres, then how are they to find, other than perhaps through the local press, the remainder of the job vacancies? I am hoping that the noble Lord will use his persuasion on employers to advertise their future vacancies at the Jobcentres.
We hear that young people do not want jobs and do not want to work. If the media say that often enough, the young people will believe that it is true. It is not true. But my fear is that many young people today will never have the satisfaction of working and earning money; and the habit of being unemployed will, unfortunately, be part of their lives. I have three illustrations to give to your Lordships and I hope that I shall not take long; but within the last fortnight, I have heard of them and know of them personally. The first concerns an area of high employment where some specialised people were required to work in a factory. They could not be recruited so the employers advertised in the north. Many people came down for the few vacancies that were available. The employers welcomed them with open arms and almost signed their contacts. But the people concerned went to try to find somewhere to live; and there was nowhere at all to live. Therefore they had to go back to the north
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without jobs, and back on to the unemployment register. One involved a family with two small children.
The second case concerned a man who until recently—six weeks ago to be exact—had been in custody in one of Her Majesty's prisons, and had been released in the north. He had of course been given a small amount of money to tide him over, but he was a rolling stone. He had been married and divorced; he had no parents and had never stayed long in any particular part of the country; and so he came south to try to find work. He was given a job at once—this is a man of 47—with a very good salary. It was very good work although he had very little experience in that particular type of work. He then went to try to find somewhere to live, and he could not. He could not find anywhere at all; and so he had to tell the employer that there was nowhere available in the vicinity.
The third example concerns two young people who came down two nights ago from the north, hoping to find work. They had very little money; they were not able to go on supplementary benefit; and they are of course living in very, very temporary and not very nice accommodation. They cannot get work because they have no fixed abode.
The two last cases do not qualify for supplementary benefit at all. Both are caught in the single homeless trap, because without a job or money they cannot secure accommodation. Money is demanded in advance for accommodation and payment for work, as we all know, is made in arrears. Supplementary benefit is not enough, and I think I must say that advisedly. It is not really enough to keep young people, and certainly not older people, in any kind of living such as perhaps most of your Lordships know. The average paid by the state is £5 per day for bed and breakfast. The average for living expenses is £4.50. Living expenses have to cover all food except a very "mingy" breakfast. What happens when they have to go to the launderette, or when they need a new pair of shoes? What happens when, occasionally, they need to get a warmer coat for the winter? They have to save up out of the £4.50 a day.
The accommodation that is offered varies enormously from so-called hotels—and how people have the nerve to call them hotels, I do not know—hostels, bed-and-breakfast accommodation to dosshouses. The great variety of cleanliness has to be seen to be believed, apart from often having to share accommodation with strangers. One has to agree, I think, that sometimes a cardboard box underneath a station arch is at least your own and it is private.
However, I should like to congratulate the Government on encouraging home ownership, as the noble Lord, Lord Mellish, has reminded us. That is right thinking and it is everybody's dream; but our world at this present time is not Utopia. My noble friend Lord Glenarthur told us that 870,000 council homes have been sold since 1979. But local authorities can keep only 20 per cent. of the purchase price. I should like to see that 20 per cent. kept by the local authorities, with a proviso that it should be used for housing. There are 376,000 single people on the council waiting lists, and many boroughs have restrictions against single people. Only 26 authorities have purpose-built accomodation for young single people, or indeed for single people of any age. Of those

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needing homes, 20 per cent. need rented accommodation for various reasons. Although Utopia might well be owning your own house, people need rented accommodation because they are changing their jobs or trying to find a job and, unless the job is secure surely nobody is going in for a mortgage. Therefore rented accommodation is what is needed. In my view, the Rent Act needs revision because it does not seem to be working adequately and it is often unfair to both landlord and tenant.
Some noble Lords may know that I have a particular interest in the voluntary side of trying to help those who have no homes. I should like to pay a very sincere tribute to so many of the agencies in our inner cities, and certainly in London, who go out of their way voluntarily to help those who are without homes. Those of us who try in this field were enormously heartened and encouraged when we learned that His Royal Highness the Prince of Wales has been on, I gather, a clandestine visit to some parts and some of the agencies who look after these people. His encouragement and interest will, I know, be of enormous benefit to those who are working in this field and also to those who have the benefit of their help. There are so many of them that I will mention only the Piccadilly Advice Centre, Shelter and CHAR. That is just a few.
I should like to close by saying that in my view—and I hope that perhaps my noble friend the Minister will agree with me—unemployment is related to housing and that the jobless are prepared to get on their bikes if adequate housing in available. I hope the Government will see that there is a rapid improvement in the effort to meet this vital need.
5.47 p.m.
The Lord Bishop of London: My Lords, I am very glad to be able to add my congratulations to those of the noble Baroness to the noble Lord, Lord Mellish, for his maiden speech. Other have already spoken of the experience that he brings to your Lordships' House. Like the noble Baroness, Lady Macleod, I have seen at first hand something of what he has achieved in the docklands area; and it is very remarkable. His speech today has shown that the House will benefit greatly from that experience, and will enjoy doing so. We shall listen to his wisdom, and may I say his enthusiasm, with attention and respect on future occasions, which I hope will be frequent.
I should like to have been able to speak today about housing needs, the urgency of which is borne in upon me every day. But I must confine myself this evening to speaking briefly on one matter: namely, the intention of the Government, as stated in the gracious Speech, to introduce a Bill to remove statutory restrictions on shop opening hours. As your Lordships know, that innocuous-sounding phrase covers action on a very controversial subject of great common concern not merely to Christians but to society as a whole: namely, Sunday trading.
I do not propose today to go into detail. The time for that will come when the Bill is before us. I want to say something at this stage about the kind of legislation which is proposed and the background against which
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it will take place. I take it for granted that the Bill will follow the recommendations of the Auld Committee. That body was set up,
"to consider what changes are needed in the Shops Act."
However, instead of proposed changes which would improve the law, the committee recommended the abolition of all restrictions on trading hours—Sunday trading included.
No one would, I believe, dispute the need for the present law to be amended. It is ambiguous, illogical and at times ridiculous; as for example when it allows a Cathedral shop to open on Sunday but not to sell a Bible. It is often stated that it is widely broken, but I would question whether the facts bear that out. A survey of 12,000 shops in 44 town and city centres revealed that only 8 per cent. were open on Sunday mornings and of those only 2·1 per cent. were open to sell items not permitted by the law. I do not think that can be called evidence of widespread infringement or failure of enforcement.
It is the judgment of many, which I share, that the evidence submitted to the committee did not warrant its recommendation of total abolition. The examination of other possibilities was not adequately considered. In 10 countries there is legislation restricting Sunday trading where it is demonstrably shown that such legislation is possible, can be enacted and enforced. The main argument against a reform of the law seems to be that it would be complex. The administration and enforcement of, say, VAT or income tax is complex; but I have not heard of any proposal of this Government to abolish either of them on those grounds.
It is the proposal for total abolition which is particularly disturbing and against which the great majority of opposition is directed. A leader in a newspaper last Sunday referred to opposition by Sabbatarians and trade unionists. I am not a Sabbatarian and I am not a trade unionist. The opposition is not confined to them. The list of those who oppose total abolition—and I want to emphasise that it is the total abolition of all restrictions which I am opposing—is impressive. Why?
It covers a large cross-section of society. Within the churches, as your Lordships might expect, there is a remarkable degree of unanimity on this matter. There is the British Council of Churches, the British Evangelical Council and the Roman Catholic Bishops' Conference of England and Wales. The Church of England, by an almost unanimous vote—miraculous, I suppose—has stated its opposition to total abolition. Then there is the Evangelical Alliance, the Free Church Federal Council and the Salvation Army. Those bodies cover the widest spectrum of Christian opinion in this country.
I shall not bore your Lordships by reading out the whole list of bodies which have opposed total abolition, but some of them are: the Retail Consortium, the National Chamber of Trade, the Association of Independent Retailers, the co-operative movement, the John Lewis Partnership, Marks and Spencer, the House of Fraser, Boots, Spar and Bejam. One could go on. These are not irresponsible, small concerns. I believe that the list of those who oppose this proposal is impressive.

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Those who support the proposals often seek to discount the opposition by saying that it represents doctrinaire or vested interests, to which I reply, first, that such a charge is not made against those who are pressing for the change. It is difficult to discern just where the pressure comes from, but it seems that the greatest pressure comes from out-of-town, super-store traders who cannot themselves be regarded as disinterested. They are not doing it for the fun of it. Secondly, I would say that an interest gives a right to speak. If those who have no interest seek to intervene, they will properly be told that they do not possess the experience or expertise to do so.
As I say, my main concern is the proposal for total abolition which would, I believe, have a profound, far-reaching and irreversible effect upon our society. As I have said on other occasions in this House, the effect of liberalising legislation is seldom, if ever, what its initiators imagine it will be or desire. For example, one has only to look at the legislation on divorce.
Those introducing the Bill have professed the most laudable intentions, such as to encourage the stability of marriage, only to lament after some years, as some have done to me personally, at the result which the legislation has, in fact, had. In that case it has resulted, in effect, in divorce by post on demand; a steep rise in the divorce rate; the unnecessary break-up of many marriages and untold misery to thousands of children. The way in which the abortion law has come to be used is another example. Liberalising legislation is often necessary, but a little at a time is the best policy so that its effects can be assessed and mistakes avoided, and I believe that that is the right solution in this case.
When the Minister spoke of freedoms, I could only reflect on the truth that one person's freedom often involves another person's oppression. I believe that great care is needed in this matter to consider the way in which the rights—the proper rights—of people would be infringed by freedom being given in particular respects to others.
Members of the Government have spoken about the need to restore and retain values and standards over the years. The Prime Minister herself, in her foreword to the Conservative Party manifesto in 1983, said:
"How to defend our traditional liberties and distinctive way of life is the most vital decision that faces the people at this election".
Frankly, my Lords, some of us do not feel that those words are matched by this proposed legislation. I believe that its effect would be incalculable and cannot be wholly foreseen.
As a Christian, I believe, of course, that Sunday should be preserved as a distinctive and special day. It is not right for Christians to seek to impose their views on others who do not share their belief—that is not God's way—but when they believe that a Christian position embodies something which reflects a fundamental need for men and women, and for society, they have a duty to try to persuade others.
I believe that, in addition to its Christian meaning and significance, the observance of Sunday as a day different from the rest reflects a basic need for individuals and society to have a rhythm of fife, a rhythm which is corporately recognised by a day primarily set apart for rest, recreation, leisure and worship—a day set apart for reflection and the deepening of personal
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relationships within families. To abolish that rhythm would, I believe, be but another step in the process of replacing the traditional Judaeo-Christian world view, which has undergirded our civilisation, by one which is essentially materialistic.
I hope that the debate on this matter may serve to emphasise that the Christian understanding of Sunday is traditionally positive and life-affirming, and is not to be identified with a negative and restricted Sabbatarianism—an attitude which I might also add, as I know from my Jewish friends, does not reflect the Jewish view of the Sabbath.
There are many sound reasons against total deregulation which I shall want to develop at the appropriate time: theological, economic, social and ideological. There are also practical reasons which, I believe, have not yet been appreciated. Yesterday, for example, I was talking to the Commissioner of the Metropolitan Police. We were discussing his problems of resources and staffing. I should like very much to support what the noble Lord, Lord Harris of Greenwich, said a few moments ago about the needs of the Metropolitan Police. The Commissioner said to me—I asked if I might repeat these words today—that Sunday gives him valuable relief in the use of his resources and staff, enabling them to be used more effectively during the rest of the week. It is relief that would no longer be available if Sunday were to become like any other day. There are practical issues such as this which, I believe, have not yet been considered.
The noble Lord, the Minister, argued from Scotland's experience in favour of total deregulation. But he has, on his own admission, accepted, by and large, the Auld report. I would remind him that the Auld Committee states that Scotland is an unreliable guide for illustrating what may happen here. There are, I believe, viable alternatives to total abolition. These might include a turnover ceiling such as operates for VAT to limit the size of businesses which can open on a Sunday, a revised list of exempt goods, simpler and more effective enforcement procedures, the retention of special provision for holiday resorts and an extension of the provision for ethnic minorities. I do not believe that those have been adequately or properly considered.
I understand that the Bill is likely to be introduced into this House. I much hope that the Government will not make it a party issue subject to the Whips, and I would wish to endorse most warmly what the noble Lord, Lord Mishcon, said in that respect. I hope that your Lordships will be able to debate the Bill on its merits and judge what is in the best interests of our country as a whole.
6.1 p.m.
The Earl of Longford: My Lords, I join in the tributes paid to the noble Lord, Lord Mellish. He has rendered immense service to the Labour Party in past years, whatever the angle from which he now approaches politics. He is sitting in a fairly equivocal position this afternoon, in a seat usually occupied by the noble Lord, Lord Shinwell. So there is plenty of hope for him yet.
Lord Mellish: My Lords, I am not as old as he is.
The Earl of Longford: My Lords, whatever the angle from which the noble Lord, Lord Mellish, approaches matters, he will always be revered in the Labour Party in view of all that he has done for the party and, may I add, within his own religious communion, although it will perhaps not help him if I say too much about that. Certainly, he has delighted everyone this afternoon.
I should like to support the right reverend Prelate the Bishop of London in what he said about Sunday trading. It was an immensely weighty speech, intended to reach far and wide. I am sure that it will be studied very carefully. In the absence of any direct instructions from the Pope, which are perhaps not very likely, I feel free to follow my own conscience. My conscience will lead me into any Lobby that is, on this occasion, promoted by the right reverend Prelate.
I should like to deal with certain penal matters, following up what was said very cogently, as so often, by my noble friend Lord Mishcon. We are told that the Conservative Party hopes to make a great deal of play with the law and order issue. That party's opponents do not hesitate to point out that the words should stick in its mouth as, in the last six years, under Conservative rule, crime has increased by 40 per cent. I shall, however, leave over those debating issues for the moment, and look at matters with the perspective of someone who has been involved with prisoners for close on 50 years.
There are two points that I should make in advance. I agree entirely with what was said by my noble friend Lord Mishcon, by the Minister, by Lord Harris, and, really, by everyone, that we must all be behind the police. I hope that that is taken for granted. In case, however, anyone has any doubts about whether you can be friendly or sympathetic towards convicted persons and also a firm supporter of the police, I want to disabuse them of the idea that there could be such a conflict.
I should also like to call the attention of noble Lords, more for the record than for anything else, to the fact that Home Office research has proved beyond question that long sentences are not an effective deterrent. They are no more an effective deterrent than short sentences. I hope therefore that when we talk about law and order, we shall not begin to say that, in view of increased crime, all we have to do is to increase sentences. That has been the policy, I am afraid, promulgated by the last Home Secretary, Mr. Leon Brittan. And look where that has got us. Let us look at the last two years of that policy. I am not saying that it is post hoc propter hoc but, at any rate, you have had stiffer sentences and you have an unprecedented increase in crime.
About 25 years ago, I wrote a small book about the idea of punishment. I shall not weary your Lordships by repeating any of it, except to say that I distinguished the well-known elements in a just sentence—deterrence, prevention, which people now call containment, reform and retribution. That is all very well in an academic kind of way. Since then—in the last 25 years—we have seen important developments. On the one hand, criminology in this country has expanded out of all recognition. If I remember rightly, at the time of my book, or just before then, there were only three criminologists in this country, all of them,
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as it happens, refugees. Now you can hardly move a yard in any university without running into a criminologist, and possibly more than one. I hope that we have benefited from their wisdom.
There has been a great development in the attempt to understand the criminal mind. I would think that Christians, with their traditional approach to love of their neighbour, will have benefited from those discoveries. At the same time, however, crime has more than doubled, and public hostility towards criminals has undoubtedly and understandably expanded. No one can deny that; it is a fact. The press, or, at any rate, certain elements in the popular press, have exploited that potential hostility among the public in a most evil fashion. I do not think that anything can be said that is too nasty and too censorious about the behaviour of certain elements of the press in discussing these matters.
However, be that as it may, we have now a new Home Secretary. He has a very grim task. I heard him speak the other day when he gave the annual lecture to the New Bridge for Ex-Prisoners, the association of which my noble friend Lady Ewart-Biggs is chairman and I am president. He made a very able speech. His speech was so able that I thought he must be a Wykehamist. I looked up the details and found that he was at Eton. I speak as a lapsed old Etonian who sent four sons elsewhere. He is a scholar, of course, but still an old Etonian. What impressed me even more was that he won the highest academic distinction that one can win at Eton—the Newcastle Scholaship which, among public men, is a feat only achieved, I believe, by the noble and learned Lord, Lord Hailsham. At any rate, there he is—a very distinguished old Etonian facing this herculean task. I was very much impressed.
What is it reasonable to expect of him? He is surely well aware of all the familiar arguments which have been deployed many times in this House, not least by the noble Lord, Lord Donaldson, and also by the noble Lord, Lord Harris, sitting so close to me at the moment. The arguments have been deployed for making far less use of imprisonment and far more use of alternative remedies which are far more economic, far more humane and far more constructive. The United Kingdom has sent more people to prison this year, both in absolute numbers and relative to population, than has any other major west European country. Our readiness to gaol offenders has increased over the past decade, and keeping someone in prison for three weeks costs more than supervising him on probation or community service for a whole year. In fact, it costs around £12,000 to keep a person in prison for one year.
Points of that kind have been made often in this House but they have so far fallen on deaf ears. The two very able ministers who have the task of replying to debates on this subject—the noble Lords, Lord Elton and Lord Glenarthur—never have been able to refute such contentions. They do the best they can, however, and I am sure that the noble Lord, Lord Elton, will do so again today. In fact, the Government are pursuing the opposite policy. Dependence on the prison service in real terms will be nearly 7 per cent. more in 1986–87 than it was three years ago. Dependence on the probation service will be less in real terms by 1.2 per cent. Thus we are expanding expenditure on prison

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building and cutting down in real terms expenditure on the probation service. If one is to go in for alternative remedies of any kind, it means work in the community under supervision, which in turn requires expansion of this probation service. I submit that the Government are pursuing exactly the wrong course and have been doing so for some years. That is the situation which the new Home Secretary finds in front of him.
I hope and pray that the Home Secretary, with his fine intellect and integrity, will say to himself, "We're moving along the wrong lines". Of course he will not say anything as blunt as that or reverse the engines as quickly as one might wish. However, I hope that during his tenure of office, which may last two years or so, he will go down in history as someone who, at the eleventh hour, saw the wisdom of reversing the policy of his immediate predecessors.
The right honourable gentleman the Home Secretary, in a fine speech the other day in another place, pointed to the long-term answer: an improvement in public morals and particularly a strengthening of the family and a greater sense of self-discipline. With those sentiments I entirely agree, and I am sure that, coming from him, they are the genuine aspirations of the Government. However, whatever may happen in the future, this Government will remain in power for a further two or three years. In that time, they must either decide whether they will pursue the appalling course which they have been pursuing hitherto or realise that there can be no justification for treating thousands of human beings as they are being treated at the present time in our prison system.
6.13 p.m.
Lord Mackie of Benshie: My Lords, I too will begin by congratulating the noble Lord, Lord Mellish, on a typical speech. It was practical—not modest, but very much to the point. I am certain that we will hear very much more from him. I liked his speech. The broad grins on the faces of noble Lords on the Front Bench opposite showed that they were paying particular attention to the noble Lord's praise for private enterprise. We on these Benches shared in their appreciation of those remarks, but I must point out that the noble Lord, Lord Mellish, was praising co operation between the Government and private enterprise in a mixed economy. The Government may slowly be learning a lesson. I noticed that the noble Lord, Lord Young, is to give an extra few million pounds to the tourist industry to prime the pump, which is something he steadfastly refused to do when asked by me in a debate some time ago. Perhaps the Government are improving; goodness knows, they have plenty of room for improvement.
I was a little worried by the description of today's debate on the gracious Speech as, home and environmental affairs: I was told that agriculture comes into that category. It may well do so. I am very glad that the noble Lord, Lord Elton, is here, because he has seen my farm and therefore knows what good farming is like. However, I hope that the Government do not intend to write off agriculture as an environmental matter. In this country, agriculture still produces 70 per cent. of our food and has saved Britain, since we
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joined the Common Market, some £2,000 million a year in imports. Agriculture is very much an economic matter.
I know that we are now producing too much in the EC, but agriculture is still not an industry to write off as an environmental matter. It is of enormous importance to the economy, and together with its directly-related industries, employs more than 1 million people. It makes a big contribution to the economy. I hope that agriculture will not be regarded as an industry which, without any encouragement, can produce the food required and therefore be thought of as an environmental body to improve the whole of the countryside, not for economic benefit but for the enjoyment of people from the towns—though that is of course a factor in the countryside and it is a role that farming welcomes and always has done.
A large part of the Government's work during this Session will be concerned with improving the CAP. It was highly significant that in his excellent maiden speech the noble Lord, Lord Forres, who came to your Lordships' House all the way from Australia, described the harm which the export of surpluses is causing to Australia. It is doing even more harm to New Zealand, which is much more dependent upon agriculture. When we joined the Community, we were careful to give assurances of entry into this country of certain tonnages of butter from New Zealand, and that has been continued. The same is true of lamb.
However, we told New Zealand at the time that it should go away and find fresh markets in all the growing communities throughout the world, and it has done so. But we in the CAP are now undermining those markets. New Zealand has a free economy and there can be no subsidy to agriculture in New Zealand, which is a major exporter. We are now undermining the efforts which New Zealand made at our behest when we joined the EC. This is a serious situation and it is one that we should do more about.
In reply to the noble Lord, Lord Forres, the Minister said that the Government believed it was wrong for agriculture to swallow more than 70 per cent. of the fund and that they had been working to reduce costs and surpluses. The Government will have to work a great deal harder to do so and to win more sympathy from the other countries in the EC. Our major preoccupation—and we fought like a tiger, or tigress, for it—has been to reduce our contribution. That has been the main aim of this Government over the past four or five years. However, the aim should really be at co-operation and at pointing out to the farming populations and farming ministers in the other countries of the Community that if they continue filling the stalls with grain and butter that no one wants, and then exporting it and ruining other people's markets, both the costs and the storage of those surpluses will bust the whole system and may well bust the EC itself.
We need to make a much greater effort than that which we have put in to try to achieve a solution to this problem. And, for goodness sake, let it not be a quota solution. I know that my noble friend Lord Walston, who happily is not in his place, is for quotas, but the lesson of quotas can surely be seen in the milk quotas which we have just now. They have so depressed

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production in this country that the import of German cheddar has risen by 40 per cent. since quotas were introduced. Factories belonging to the Milk Marketing Board are lying empty or are under-used because not enough milk is being produced. There is no question but that a sensible price policy is what the Government must strive to achieve. It cannot be done all at once, and certainly the subsidies must continue for a while. They may even get worse, with a certain amount of price reduction; but if we do strive for a price policy then at least we shall have a sensible agricultural industry instead of an ossified system, which is what one has with quotas. On our present experience quotas do great harm to the ancillary industries and to the take-up of food on our home market.
The Government's main task—because the CAP is what matters most to agriculture—is to introduce a Bill to make agriculture pay for advice and for research, and to make the industry pay for the bulk, or a large part, of the money spent. I have no objection to that. I do not think anyone in the industry has any objection. I am glad to see that in the Bill the Government say that a charge for advice may, or may not, be made. However, I believe that we must end the uncertainty; so I am glad the Bill has been brought forward.
The Government must consider what they are to do in the upland areas. If the surpluses make us take out of production 20 per cent. of the land—that is the possible figure—then one must do something with it. If one lets it become a desert then the environment suffers. One must consider the people for whom the countryside is enjoyable. Most people who think about it are agreed that we must give extra help to the less favoured areas. The places where farmers must have advice and research are the less favoured areas.
If one takes a body like the North of Scotland College of Agriculture—indeed, the East and the West colleges; all three colleges which are concerned with advice in the Highlands—then the present uncertainty and feeling of malaise is doing enormous harm. The professor of agriculture at Aberdeen is going to another job. I know that two or three good people in the East of Scotland College have gone into commerce. The sooner we realise that advice and research is essential, and that long-term advice and research is essential, the better. I believe that the report of the Agricultural Research Council has done a great deal of good; and we cannot let things go on being ossified in research, as in anything else. The Government must make up their mind on what to do and should inform people of their future so as to end the uncertainty.
We talk about paying for improving the environment and giving grants of, for example, 30 per cent. for building stone walls, planting shelter belts and hedges, and up to 50 per cent. or 60 per cent. in the less favoured areas. If you want to get anything done in a poverty-stricken agricultural area in the Highlands—which I mention because it is the area I know best—it is no good reducing commercial income and paying a third of the cost of building a stone wall. What you need to do is what the Crofters Commission does and pay 99.9 per cent. You will then get environmental improvement. You cannot expect a man with
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a small income to spend two-thirds of his own money on improving the environment.
As regards forestry, at present the Treasury loses a great deal of money by encouraging people who pay a lot of tax to plant trees. They plant trees, but not in the best possible way. The noble Lord, Lord Taylor of Gryfe, is not in his place so I can say that I do not think that the Economic Forestry Group is, for example, as good for the countryside as it could be. A lot of planting has been done and it is good at it, but why should only rich men in large groups plant trees? They do so in order to avoid tax, and it is a good thing for the country that we have trees; but surely we should be encouraging the farmers in those areas to plant the trees which we desperately need. After all, we are shorter of wood than we are of any of our imports.
The Forestry Commission grants are enormously helpful but they do not provide any income. It should be possible to work out some form of loan scheme so that a small farmer planting trees and looking after them could have an income. The Government would have the security of the trees. That sort of scheme is needed to give a positive, not a negative, incentive, if one is to get the hard-hit farmers in the upland areas or the less favoured areas to assist in improving and maintaining the environment.
There are many other agricultural factors which will come up in this Session, but I think that the main tasks are to see that we obtain a practical improvement in the CAP, to ensure that the CAP lasts and does not blow up, and that we have a much more practical approach to environmental planting and improvement by the farming community.
6.26 p.m.
Lord Mancroft: My Lords, time marches on and there are 27 names on the list of speakers so I shall be brief and confine myself to one subject only; that is, the proposed Bill to prohibit outrageous fortunes being made on the profits from drugs and their associated evils. I was glad to hear my noble friend Lord Glenarthur touch upon this subject in such positive terms when introducing the debate today. I also congratulate the Government on the vigour with which they have been trying to cope with this problem during the past years.
Five years ago it would have been unthinkable to hear drugs mentioned in the gracious Speech; but this has now trickled into an enormous danger, one of which the Government and the public are becoming fully aware. It is a Bill which would be very well introduced into your Lordships' House where the subject is all too painfully familiar. To say that one welcomes such a horrible subject is a misuse in terms, but it is obviously time that we tackled it as strongly as we possibly can.
I congratulate the Government on what they have already done. I do not think they have been given full credit. The work done by the police, Customs, the coastguard service and Interpol (it is an international matter), the airlines and, most of all, the public—because it is something with which the public are concerned—has been considerable. Some of the successes have been spectacular. Unfortunately, we are always told that this is only the tip of the iceberg.

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If we have greater success and a greater tip of the iceberg it is inevitable that the iceberg is getting bigger. That, alas, is the case; hence the need for this Bill.
We have only a rough idea of what the Bill will contain but it will require very careful drafting. I hope that my noble friend and his colleagues will realise the trouble that other countries have run into in trying to deal with this problem. As I said, it is an international problem. I know that Government Ministers and their advisers have been abroad and studied the problem elsewhere. I hope they will continue that good work and study the trouble which other countries have met. For example, in America the Mafia has driven a coach and horses through similar legislation. We have heard the word "laundering" mentioned. It is the easiest thing possible, once you realise the police are on your trail, for your evil money to be laundered, passed down the line until it gets into the hands of Uncle Tom Cobbleigh, who is harmless, and then to some foreign offshore island.
We shall hear more complaints, too, about the shifting of the burden of proof and that a man has to prove that he has come by his money innocently before the state proves that he came by it guiltily. That is stiff talking but it has been done in other legislation, and in other countries. We have survived to tell the tale. I hope that my noble friend and his colleagues will not be put off. We have been told also that these are draconian measures. I wish that people who talk about draconian measures would have a look at what the unspeakable Draco did in Athens in 612 BC. He makes our own beloved Judge Jeffreys look like a sloppy do-gooder. Pretty well everything he introduced was followed by the death penalty.
I am not one of those who propose that that should be the case—I observe that the noble Earl, Lord Longford, has left his place but I am certain that he would join me in that sentiment—but we do require what are called draconian measures. We have become a little anxious about some of the odd things that juries have been doing of late; we have become anxious about some of the very slack sentences that appear to have been given and the ease with which people get off on appeal. The public are getting worried about this and the Government are well aware of it. I am not suggesting that we should in any way upset the jury system, in which I have great belief, but people are becoming a little worried.
Your Lordships will have noticed the sentences meted out by Judge Argyll in the recent horrible case involving the Henry J. Bean public house in the King's Road. I regard with slightly mixed feelings the fact that the back door of that public house is next door to my own back door—but the sentences meted out by Judge Argyll would have been greeted with a howl of abuse some 5 years ago, whereas now they have received almost complete and universal approval.
The next point that I hope the noble Lord will look at abroad is the damage which may be done to people who are eventually found innocent after perhaps a year's investigation and who then find that during the course of that year they have not won many friends, nor influenced many people and that their career is ruined. That is the price you have to pay if you move in this world—perhaps I should not say "you" but "one"—because you are judged nowadays not just by
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the company you keep but by the company you keep away from. I think that is something which those who wish to get mixed up in this hideous market should remember. So I welcome this Bill.
I ask your Lordships to remember that there is another completely different side to the problem, which is the police side, and that there is also the remedial and rehabilitation side. Here we have some confusion because there are two government departments concerned: one is the Home Office and the other is the DHSS. They have taken this matter very seriously. I hope that they will continue to do so and that they will look at what other countries are doing.
Your Lordships will notice that I do not use the word "cure". One must not use the word "cure" for this dreadful evil of drugs. People are helped to live with it and are pointed in the right direction, but the word "cure" is not used. I am very glad that the Minister in charge of co-ordinating the work in both departments, Mr. Mellor, who I think has done an excellent job of work, has been abroad and looked at what has been done there. I ask your Lordships to send him abroad again quickly because he is doing a valuable job.
There has been a great deal of activity since we last debated this question some months ago on the Motion of the noble Lord, Lord Pitt. Hospitals now are much more prepared to deal with the problem of drug addiction and rehabilitation centres are being set up. Every police station you enter has instructions on where you can refer someone who is in trouble. The social services have been improved and so have schools and education. Most of all, the public have started to realise that they have a part to play. There is a part to play in comforting families who are suddenly faced with this problem, which shakes them to the core, ruins the family and about which they had no knowledge until it hit them.
I leave to the last one person who has not hitherto worried me, and that is the GP, the family doctor, who has probably had no contact with drugs since he was a student. Too often in the past he has said, "Look, I have 24 hours in the day and only two hands. I am trying to help Mrs. Smith who has been run over by a bus and to help Mr. Brown who suffers from multiple sclerosis. Why should I waste time in trying to help somebody who is suffering from a self-inflicted wound?" A self-inflicted wound it may be; that is easy to say but not of much help. Alcohol addiction is also a self-inflicted wound and so is nicotine. I drink a gin and tonic now and then and I smoke a pipe. They are self-inflicted wounds, I suppose. The trouble with heroin and drugs is that the wound goes deeper, it hurts more people and it takes far longer to cure. I am glad to see that doctors are beginning to realise this.
To conclude, there are two points to consider: we hope that this Bill will bring about the discouragement and the punishment of villains who are succeeding in making their fortunes from this hideous and appalling crime; and there is the question of rehabilitation, which I regard as of equal importance. If we give these two measures serious support, we shall chip further away at the tip of the iceberg and, with luck, one day we shall eventually reach its base. I hope to live to see that day.
6.35 p.m.
Lord Allen of Abbeydale: My Lords, as tends to happen on such an occasion, we are having a very wide-ranging debate, to which it must be extraordinarily difficult to reply. Today we have been fortunate enough to have had our debate illuminated by an outstanding maiden speech.
For my part, I should like to spend a short time on a topic which was not covered in the gracious Speech but about which we are likely to hear quite a lot in the coming Session; that is, the European Convention on Human Rights. Though it may seem slightly odd to introduce Strasbourg into a debate on home affairs, the functioning of the Court of Human Rights is having an impact on our domestic affairs which is increasing in importance rather than diminishing.
Tucked away in the Answers to Questions for Written Answer on the 24th October, at col. 1373, the noble Lord, Lord Glenarthur, in reply to a Question from the noble Viscount, Lord Dilhorne, stated that:
"The Government have decided to renew, for a period of five years from January 1986, their acceptance of the right of individual petition to the European Commission of Human Rights and the jurisdiction of the European Court".
That seems to me to be a remarkable statement, for the following reason: as long ago as 1966 we accepted the right of individual petition and the compulsory jurisdiction of the court, in the first instance for five years. Since then this acceptance has been renewed from time to time for various periods, the last of them being due to run out in January next; but, so far as I can ascertain, that Written Answer was the very first time that information of any kind was given to this House about acceptance or renewal, other than the laying of the original formal declarations of acceptance, and in neither House has this issue ever been debated.
This is rather striking, given that decisions by the court have led to fresh legislation here, new statutory instruments and various changes in administrative practices. I recognise that it may well have been unacceptable to have brought to an end this right of individual petition. We are probably too far down the road for this. All the same, I think that with some advantage we might have discussed some of the considerations involved. However, the decision has been taken and we shall have to live with it. Yet I think it means that we shall not be able to excape a related issue, which is whether the convention to which we are now so fully committed should be made part of our domestic law.
This is a topic which we have debated in the past and from all that one hears we are likely to be debating it again before very long. It certainly seems regrettable that this country, the cradle of individual freedom, the home of Magna Carta, the originator of habeus corpus, should, on a number of occasions, be found to have gone counter to the convention. At first sight it is an attractive proposition that instead of making the Strasbourg court the court of first instance, as it were, for our aggrieved citizens, the convention should be made part of our law so that it will be possible first to look to our courts for remedies. That proposition is argued and will continue to be argued in Parliament, in the press and elsewhere with very much greater eloquence that I can ever aspire to.
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But it seems to me that the issue is not entirely a straightforward one, and I thought it worth while to put on record today, as it were, before we get embroiled in further discussions, that there is indeed another point of view. If the noble Lord the Minister in winding up were able to give some indication of the Government's present view, that would be an extra bonus, but I shall quite understand if he feels unable to say anything on the point today.
This is certainly not an occasion for a detailed review of all the arguments. Suffice it to say that we are up against the problem that to embody the convention in our law would mean superimposing declarations of principle drawn in the most general terms on top of our existing domestic law, which from Magna Carta on has consisted of detailed and specific provisions. Our tradition, to over-simplify a little, is that on the whole the citizen can do anything he likes unless Parliament has passed a law saying he cannot. The convention starts the other way round by laying down general rights to which it then attaches limitations; and the role of the Strasbourg judges is to assess whether what we have done in a particular case falls short of those general provisions. If they do so decide, they do not tell us how to put things right. That is for us. Sometimes we do it well and sometimes not so well. We seem to have particular problems about decisions concerning corporal punishment when one thinks of the Isle of Man and the schools. But that is by the way.
Some of these judicial decisions must be difficult enough in all conscience for the judges from Iceland, Turkey, Italy, Malta, France and elsewhere who make up the court and sometimes find themselves having to balance principles of a semi-political nature; and who sometimes, incidentally, find acceptable action taken in other countries which we certainly would not find acceptable here.
Be that as it may, their role is essentially different from that which would fall to our courts if the convention were part of our domestic law. In that event it would fall to the judges and not to Parliament to decide on the accident of the cases coming before them just what impact those general principles about the right of life, freedom of expression and all the rest would have on the previously existing law. There would be bound at the very least to be uncertainty, since for a time no one would know whether the judges were or were not going to alter what had previously been accepted as the law over a whole range of activities from compulsory purchase orders to race relations and from bail to defamation.
Just to take one short example, Article 8 of the convention makes it legitimate for a public authority to interfere with the right to respect for private life if, among other things, that is necessary in a democratic society in the interests of the economic well-being of the country. I suspect that we might have to wait for more than one decision of the courts before we know just what the judicial interpretation of that provision amounts to. Nor would the decisions of our courts necessarily be final. The case could still go to Strasbourg after they had pronounced here.
I am not arguing that the decision on embodiment in our law is clear-cut either way. What I am trying to say is that not all the arguments point clearly to

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embodiment and that there is a real dilemma for this country. We are parties to a Council of Europe agreement drafted in a way which runs counter to our own traditions (even though we had a hand in drafting it) and we are in difficulties whichever way we go. If we embody the convention, we shall be up against the sort of questions that I touched on a few moments ago. If we do not, we may well have more embarrassing decisions against us at Strasbourg and more problems in conforming to the rulings of the judges there. I myself would still on balance go for the second course and leave things as they are. But either way it is a pretty uncomfortable position to be in.
The only gleam of comfort that I can see is that in the end the importance of this decision is not quite so great as is sometimes represented. Even more important to my mind is the depth of society's commitment to human rights and values and the vigilance of Parliament, the press and the courts in protecting those rights. A society which is contemptuous of them will not be made virtuous merely by legislation. After all, the Americans did not find the splendid provisions of their classic Bill of Rights all that much of a protection against MacCarthyism. My real concern, I am bound to confess, is not whether we should gain by embodying the convention in our law but rather whether our modern society is beginning to forget some of the traditions of compassion and tolerance of which this country has hitherto been proud.
6.47 p.m.
Lord Soper: My Lords, I add my congratulations to those that have already been offered to the noble Lord, Lord Mellish, on his maiden speech. I think he will understand me if I say that, knowing him, I am not at all surprised that it was such a very good one.
I propose to say something in detail on the question of Sunday observance and particularly in relation to shops and their opening. I have two reasons. The first is that it gives me great pleasure to support my right reverend friend the Bishop of London. He is high church and I am high chapel, but we are together in our distaste of this measure as it is promulgated. There is perhaps even a rather better reason. After all, this is not the most vital question to which your Lordships have addressed your thoughts this afternoon. There are the questions of law and order, of the degradation of our society (to which the Lord Chancellor made reference, I thought quite truly, last night) and the increasing evidence of a kind of nihilism which I think is unprecedented and which demands that such problems should take priority. But at the same time I think it is significant that to approach the question of the deregulating of shop opening hours raises issues which belong to all those other matters, and it is on that proposition that I would venture to detain your Lordships for a short time.
I have one thing in common with the Prime Minister. We were both reared in a Sabbatarian atmosphere. I have often pondered on what would have been the result had she not forsaken the Methodist Church. Had she remained within it, I am quite sure that she would have appreciated the reasons why today we are heartily in support of those who oppose this measure as being dangerous, quite
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unnecessary and in many cases an affront to that Christian faith to which we are committed. At the same time, it is a Christian faith to which you, my Lords, are also committed in your loyalty in the defence of the faith. Under such a deregulation of shopping hours I believe that there are many who will be prevented from exercising their religious rites and ceremonies by the very fact that the more freedom is offerred for the shops to open, the more people (and many of them Christians) will be required to work on Sunday and prevented thereby from going to church.
But I would not deploy religious arguments in front of your Lordships. I think there are two other arguments which are quite sufficient. The first is that there is an increasing disposition on the part of those who have their ears to the ground and know what is going on that the conformity and regularity of behaviour patterns which are possible and as advertised in the modern world are a very dangerous precedent. I reflect that when the French Revolution decided to abolish the seventh day of the week, they got into an awful mess and had to bring it back quite soon. Your Lordships who have read the evidence will know that the Russians endeavoured to abolish Sunday, or the one day of the week which could be regarded as different, but they very soon discovered that it is necessary.
I believe in the rhythm of life, which is a very different thing from the cultivation of every day of the week as if it is the same kind of day and as if one does exactly the same kind of thing as on any other day, or refrains from doing those things. I believe that this is wrong. The accumulated evidence seems to me to be that unless one can take the rhythmic basis of life and reflect on that one day, periodically, upon what one is doing on the rest of the days, one is failing to recognise not necessarily a religious conviction but one of the supportable laws about the kind of world in which we live.
I believe very heartily that if there is no day upon which there is a marked difference in atmosphere there will be a deterioration, even more rapid than at present, in the ideas of what belongs to the nature and substance of our human life. I hope I do not say that pompously. I certainly say it out of a great deal of experience, recognising as I do that the conduct on Sunday, or on any other day of the week, for that matter—provided that it becomes regular and rhythmic—is something which demands standing back a title & the heat and noise and endeavouring to survey what it is all about.
From an experience which is now long if not profound, it is interesting to me that if one stands about in open spaces and talks about religion one will find the extent to which people today are inquiring about matters of which they apparently have no background of knowledge and no accumulation of doctrine or of teaching. It is a sufficient argument, in my judgment, for the retention of that difference on Sunday that it should not be recognised necessarily as the invitation or the requirement of people to go to church—because a lot of them will not go, anyhow—but the recognition that unless one can pulse one's life one is failing to understand its meaning and one is likely to make a mess of its procedures.

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I believe that one of the supreme reasons for the breakdown of the right kind of law and order—and there is an inclination towards nihilism—is the breakdown of family life. Perhaps your Lordships will permit a personal reference. I would have cherished the opportunity on Sunday of meeting with my children, of having fellowship with my wife, and going together to places of worship, and enjoying games as well. That has been denied me because, whatever I do on other days of the week, I work on Sundays. It is no good telling me that I can have Tuesday as a day off, because the kids are at school or at work. That is not necessarily the same thing. But it is the kind of realisation which I believe makes a great deal of difference to my own appreciation of the fact that unless one is aware of the binding and cumulative effect of family devotion and family life one is missing one of the most imperishable of all the virtues that belong to our society. There is no doubt at all that to make Sunday a day on which one can take the kids to the local fair or the local shop, and do the very same things that one does on other days of the week, is no compliment to those who want to feel that they belong to a community and are not merely privatised in a world in which the community is regularly, and I think desparingly, neglecting that fact.
If people are not convinced by those arguments, then let me refer briefly to the Auld Report. It was Martin Luther who described one of the epistles in the New Testament as the "thing of straw". I think that had he known about this report he would have been equally condemnatory of it. It is a very bad report indeed. It contradicts itself. The evidence the report produces is in contradiction to the conclusion to which it comes. The report is almost comic in some of the comments it makes. For instance, it talks about the virtues of the deregulation of hours in Scotland and goes on to say that the House of Fraser is now witnessing a large-scale dislike of the new provisions whereby they have to work on Sundays. The report talks about the consumer committee and mentions—here once again with bravura, but not with conviction—the evidence that only one out of ten of those who were canvassed as to whether they would like to see Sunday opening for the sake of the opportunities for shopping on Sunday said that they would not.
Having read the report I would confidently, though I hope not arrogantly, commend it to your Lordships as a waste of time. If the Government are prepared to venture their Bill on the deliverances of that report they are in for a very great deal of difficulty. Contrary to what I believe to be a sensible attitude to Sunday observance and the general resetting of a world on Sunday, I think that they would be very wise to recognise that the evidence of the Auld Report does not support their case in any degree.
I am well aware of the fact that there are anomalies. I am not impressed by the fact that one cannot buy a bible on Sunday. Any number of people would give you one quite gladly. I am not at all impressed by the fact that one can buy some items but cannot buy others on Sunday. I know very well that the idea that one can produce a logical world out of the booming, bustling confusion of our modern life is a ridiculous
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fallacy. I know that more people than I could count, and certainly those with whom I have had quite continuous contact—and not only very pious people—are quite sure that we had better leave this business alone for the time being.
We are at the moment in a state of ecclesiastical flux, to say nothing of spiritual flux. In those regards I think that the situation is very dangerous, because decreasing numbers of people are committed to the kind of faith in which I was reared. That faith can be called in dispute, but I do not think it is. I am committed to that which I find in the New Testament. I am committed to the church of the Kingdom of God, not for a privatisation of society, but for the community. I believe that that Kingdom of God is very far from the general tenor of this Government's programme. That is hardly mentioned. I therefore would offer this comment to the Government. One of the ways in which I believe they can retrench in this matter, and come to a clearer understanding of what is the purpose of government is not to release the individual but to bind the individual in that true liberty which is orderly restraint and to give him the opportunity of living in a community in which he understands what it is all about and by the grace of God can make his own contribution to the fulfilment of those purposes. It is for that reason that I hope the Government, whatever else they do, will not go forward with this enterprise.
Baroness Burton of Coventry: My Lords, I drew considerable comfort from a remark made by the noble Lord, Lord Allen of Abbeydale, when he said that we were having a wide-ranging debate, because I would not have wished to find myself unreasonably outside the mainstream of speakers. What I want to say today could have been said equally under either home or economic affairs. It is something on which I have been trying to make headway ever since 1950 in another place, and progress has been slow. During the past five years it has seemed impossible to obtain a definite answer from ministers. I have reached the conclusion that either I must have explained matters most inadequately or the Government just do not wish to know.
We have in the nationalised industries a series of monopolies which are often in control of essential services that people cannot do without. The prices charged are a crucial part of everyone's budget and there is no choice of taking our custom elsewhere. No Government have yet succeeded in creating a system whereby consumers can influence public policy continuously: first, where it begins; then, as it develops; and finally, at the top where it becomes law. I hope that the House will be, as it has been on previous occasions, most patient and will bear with me again today.
Obviously I am concerned about consumer affairs which seem to me to be an entirely non-party subject and one affecting every home in the country. I was very glad that my noble friend—and I shall call him my noble friend—Lord Soper, touched on the consumers in the remarks which he has just made. Apart from anything else, the proposed privatisation of the gas industry opens up my problem in a way which must force an answer from the Government.

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In the past, those of us interested in consumer affairs have tried to find out whether or not Ministers wish consumer councils really to be effective in nationalised industries and outside industry. However, now in the gracious Speech we have reached the problem of what is to be their position when these nationalised industries are privatised, especially where the industry concerned—public or private—is a monopoly.
I shall return to the subject of gas later in my remarks because I think that it is here that the Government will have to be definite. However, before doing so I should like to try once more to explain to the Government why in the consumer world we are sceptical about any protestations coming from Ministers about their attitude to consumers in general and to consumer councils in nationalised industry.
At one time it appeared that a little progress might be made. The Department of Trade and Industry put forward proposals for reform of the consumer councils in nationalised industry. I recall the noble Lord, Lord Lucas, on 23rd May (at col. 404 of Hansard) speaking of the 1982 Strategy for Reform paper, saying:
"The Government will continue to seek a suitable opportunity to implement those outstanding proposals which require primary legislation".
Those of us in Parliament and outside who had studied closely the efforts of the Department of Trade and Industry, were afraid that their proposals would be abandoned following the decision by the Government not to proceed with general nationalised industry legislation in the 1985–86 Session. This was announced by Mr. Peter Rees, Chief Secretary to the Treasury, on 9th May (at col. 474 of Commons Hansard) by means of a Written Answer.
The House will recall that those Treasury proposals made to the chairmen of nationalised industries on 20th December 1984, had been fiercely opposed by them because they feared that those proposals would increase enormously the powers of the Treasury over their industries. As a matter of fact, those consultative proposals sent by the Treasury were kept very quiet and were slipped through on 20th December last, by means of a Written Answer—yes, my Lords, another one—in another place. As that House rose on 21st December for the Christmas Recess, it would mean that that particular Hansard did not appear until 21st December which was of course a most convenient timing for the Government as it avoided any questioning. Members of another place knew nothing about it until Mr. Jeff Rooker discovered it in the Library and raised the matter by means of a Question for Written Answer on 11th February. The chairmen of the consumer councils knew nothing about it until Mr. Rooker raised the matter and they then asked for the consultative proposals to be sent to them. As these proposals raised the whole matter of the future position of consumer councils in nationalised industry, surely the paper should have gone also to their chairmen?
On 18th April I raised the matter with the noble Earl, Lord Gowrie, and told him that it seemed incredible that the Government did not realise that we found it difficult to believe that they really wished to give authority to the consumer councils if they persisted in ignoring them in this way. I asked him what the Government intended to do.
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I was not the only one worried about this matter and in discussion with the relevant consumer groups I found concern that the proposals for reform of the consumer councils—to which I have already referred as the 1982 Strategy for Reform paper—might be lost in view of the strong and stormy opposition to the Treasury proposals and any consequent legislation. We wondered if there was any possibility that the proposals of the Department of Trade and Industry could be dealt with separately. Pursuing that line of inquiry as best I could, it seemed worthwhile approaching the department with such a suggestion. Then—alas!—the blow fell. As I said a moment ago, the Treasury announced the death of the Treasury proposals on 9th May.
I believe that the Department of Trade and Industry were taken by surprise as much as anyone else, and I also believe that had they been able to attach their own proposals for reform, which required primary legislation, to another parliamentary "vehicle", they would have done so. But that did not appear to them to be possible.
So, my Lords, where have we reached? I have three specific questions to put to the Government today. The first concerns the nationalised industry consumer councils. Ever since October 1983, as the House well knows, I have been pursuing the Government on their original draft guidelines as well as the subsequent proposals sent by the Department of Trade and Industry to these councils on 22nd February this year. On 17th October last, which noble Lords may remember—two years from the first Question—I was still trying to find out how far we had got and what action the Government now propose to take. And I still do not know. Can we be told whether the Government propose any action at all, legislative or otherwise, arising from these matters, or are we to drift on for another two years engulfed in bureaucracy?
The second specific question which I put to the Government is this: do they not understand that treating consumer councils in this way makes the councils, their members and the general public believe that really and truly consumers do not rate very high with this Government? Important proposals were sent out from the Treasury surreptitiously to chairmen of nationalised industries. Although these concerned consumer council matters in these industries and chairmen were asked for their opinions on them, nothing went to the people concerned—the chairmen of the consumer councils—until, by accident, they learned that such proposals were even in existence. Then, upon demand, the Treasury proposals were sent to them.
Following that deliberate slight—because it could be nothing else—we then had this delay of two years on the suggestions from the Department of Trade and Industry. Yet still we are nowhere. Do the Government really not understand that consumers feel that they and their affairs are always relegated to the back of the queue except—and I repeat the word "except"—for paying price increases justified not by necessity but politically?
That brings me to my third question. What is to be the position of the consumer councils in nationalised industry when industries are privatised? We shall have

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full opportunity for discussing that when we come to the matter of the gas industry; but perhaps I could try once more to explain to the Government what consumers feel in this respect.
Some 18 months ago the chiefs of the gas and electricity industries complained that the Treasury was forcing them to raise their prices higher than was necessary, which of course had the same effect as raising taxes, but with less political embarrassment.
We all know the story of water, or at least some of us do, and this brings me to the field of the noble Lord, Lord Elton, the field of environment. We recall how Mr. Roy Watts fought a vigorous campaign and refused to increase Thames Water charges beyond 3 per cent. without an order from Parliament. On 7th February Parliament ordered him to do so.
Just before he was ordered to make these increases I remember Mr. Watts saying that the current cost convention and other arguments used by the Government were a smokescreen for the real intention, which was to raise money for non-water purposes from water customers. Mr. Watts went on to say if that was what the Government wanted, it should be overt and not covert. Mr. Watts may have lost the battle, but he certainly won the argument. After all, who could quarrel with his statement that the Thames Water Authority would generate at its proposed charges—and here I quote actual words—
"good and possibly excessive profits. We want to give customers the benefit of it."
In the issue dated 19th October the Economist published an article headed, Industry is no Tax Collector, stating underneath:
"Britain's state energy suppliers need to be profitable and private—not secret tax collectors for the Government."
The article went on to say:
"Like any indirect tax on sales, higher gas prices are regressive: they hit the poorer harder than the richer. If the Chancellor is in favour of raising more indirect tax, he should do so openly, not in this covert way."
I have taken gas, my Lords, because there is a feeling that to ensure a successful flotation of British Gas the Government are considering a large rise in gas prices; and, furthermore, that electricity prices also will probably have to rise, for competitive reasons. All of us, and most homes in this country (certainly all those who use gas or electricity) wonder how long we shall have to wait for Government reaction to such fears. My concern is, where will consumers be when they do?
On 2nd July, at col. 1044, the noble Lord, Lord Gray of Contin, said, referring to gas:
"It is the Government's firm intention that the regulatory arrangements to be established will adequately protect the consumer as regards prices and the terms and conditions of supply."
We have heard it many times. Ministers are always firm in their statements about protecting the consumer, but less than firm about doing so. I would put it to the House: if the Government will not take any notice of what is said by the chairmen of the gas, water and electricity industries concerning prices and value for money, are we really expected to believe that consumer councils in public or private industries, as at present constituted, will count for anything? My answer is that of course they will not. So what are the Government proposing to do?
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Will the National Gas Consumers' Council, for example, continue as at present? If so, will its powers be strengthened so that, to quote the noble Lord, Lord Gray, the consumer will be adequately protected as regards prices? If it is not so strengthened then even the Government must admit that something will either have to replace it or exist alongside it.
It would seem to me that some regulatory body must be set up; furthermore, that this must be independent both of the gas industry and of the Government. It should be accountable both to the public and to Parliament. Obviously it must have the power to monitor what is going on in the industry, to make such information public and, above all, be seen to take action on the consumers' behalf.
If we look at the past 18 months, my Lords, I would have expected any such genuine regulatory body, taking account of the public outcry, to have investigated the price increases forced by the Government on the gas, electricity and water industries and to have found these to be unacceptable, and to have so reported to Parliament. I ask the noble Lord, Lord Elton, do the Government intend to give such powers to any regulatory body? I would advise him that, from the consumer point of view, nothing less will do.
Although I have spoken of the gas industry, what I say covers all the nationalised industries upon privatisation, all the nationalised industries prior to privatisation, all consumer councils connected with industry and also, I should like to stress, those which are not—for example, the Citizen's Advice Bureaux and the National Consumer Council.
In short, my Lords, I raise tonight the whole attitude of the Government towards consumers in general. I want to know if they really care. Do they care enough to do something about it? I can assure the Minister that all households will await with much anxiety the answers to the questions that I have put today; questions which are simple but which affect their future and their fears concerning the prices which are coming to every household in the country arising from the changes in nationalised industries.
7.17 p.m.
The Lord Bishop of Manchester: My Lords, I am glad to have been able to come down from Manchester today to attend this debate, and not least for hearing the maiden speech of the noble Lord, Lord Mellish, which I greatly enjoyed, as did the rest of your Lordships. I have problems in getting back tonight, and I crave the indulgence of your Lordships, and particularly the noble Lord the Minister who will reply, if I am not present at the end of this long debate.
I have appreciated greatly hearing my right reverend friend the Bishop of London, and also the noble Lord, Lord Soper, explaining to the House the reasons for the opposition of the Churches to the proposed deregulation of Sunday. We have difficulties among the leadership of the Churches in taking a stand on this issue, as your Lordships will readily appreciate.
We lay ourselves open to a paraphrase of the famous reply by, I believe, Mandy Rice-Davies, "They would, wouldn't they?" That presumably is what some would say we were paid for, but the quality of those speeches

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has shown your Lordships that the opposition is not in any sense on a narrow self-interest on the part of the Churches which have achieved a remarkable unanimity, although there may be some sections of the Churches which are primarily concerned with church attendance or which take a narrow Sabbatarian view. They are much more concerned with quality of life. I hope that as time goes on all those concerned—hopefully with a free vote in front of them—will listen to what is said in the debate and take account of this argument about the great dangers to the quality of life in this country if we abandon one of the things which gives it shape.
We all recognise that some people have to work on Sunday, that is readily agreed, but it ought to be as few as possible and the emphasis ought to be put on recreation, leisure, and worship in the ways described. I noticed that in opening this debate the noble Lord, Lord Glenarthur, spoke about customs and ideals which have stood the test of time. It would be a sad matter if this Government were to push through against a very considerable degree of opposition a measure of this kind which will profoundly affect life in this country.
As the noble Lord, Lord Soper, pointed out, there are more important matters facing us, and I want to spend a moment or two speaking about the law and order side of things, which has been a main feature of this wide-ranging debate. All of us realise that with the dangerous situation which faces us on a number of fronts, and particularly over drugs, tough measures are necessary. But warning lights always flash in my mind when I hear made in the debate a reference to drug traffickers as "thoroughly evil".
This raises problems for those of us brought up in the Christian tradition, because we are taught to distinguish between the sin and the sinner. While it is legitimate to refer in the strongest possible terms to the actual evil of trafficking in drugs, when one speaks about the men involved it becomes more complex, because within the Christian tradition good and evil are mixed up in individuals in ways in which it is quite inappropriate to refer to people as "wholly evil" in that way. I readily recognise that there are cases in history which give us great and terrible problems when one considers the psychopathic behaviour of people who have been in positions of great power over others. But the point is that we must combat the sin and the evil in society and at the same time retain a sense of compassion and attempt to understand those who fall into these great evils and very sinful actions.
The Christian tradition in recent years has been under attack from two sides. On the one hand, there are those who maintain that people are wholly conditioned in what they do by their character, the way in which their genes have come to them and so they are not responsible at all. There are others who maintain that they are not responsible because of the environment in which they have been brought up and who lay all the emphasis on our terrible social conditions which would deny any free will to the people who are tempted to crime. This simply will not do. There must be an element of free will always in the way in which we consider people who fall into crime and into sin. But how large is that area of free will? That is a much more difficult question, and those
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brought up in a religious tradition would say that the amount of free will which people have to behave in the way that they do, to choose good rather than evil, is something which is known only to God.
This becomes an important question. The way we consider law and order becomes important when seen in this light, particularly at times of mass disorder such as we have seen recently in our inner cities or, as during the miners' strike when passions ran high. Speaking on behalf of the diocese of Manchester as I am today, I should say how distressed I was, along with everybody else, at the quite appalling behaviour displayed by a crowd of students at Manchester University when a Government Minister was assaulted recently. It was impossible for him to continue his speech. I was also very concerned at the reported police conduct in a similar incident some weeks before. These are matters of deep and grave concern in our society.
It is a puzzle why people often behave so much worse in the mass than they do as individuals. This is something with which we constantly have to grapple. However of one thing I am convinced: we have to realise the enormous pressures on young people today, particularly in our inner cities, or urban priority areas as they are called. It does not help to have Government spokesmen (or anyone else for that matter) saying that when terrible things take place in these areas it is sheer wickedness and that social conditions, unemployment and bad housing have nothing to do with it. That does not help at all. I cannot seriously believe that those who take that view do not, deep down in their hearts, recognise the pressures which are on people in those areas. They are major factors in the resultant behaviour. This is not in any way to excuse that behaviour, but to point to how it must be seen in context.
We have heard some talk recently about the weakening of moral restraints in society. This is an area in which the Churches are quite obviously deeply and intimately concerned. We have to accept that there has been a weakening of moral restraints. The Churches and other religious bodies are not as influential as they once were. It is interesting to hear leaders from ethnic minorities in our country now bemoaning the fact that the cultural norms which have shaped the behaviour of their young people are now beginning to be loosened. But the Churches and other religious bodies continue to be at work with individuals in trying to encourage good standards of behaviour, even in difficult inner city and urban priority areas.
I was told, sadly, by one of our priests working in one such inner city area the other day that he knew well that small numbers of young people who come to his church are engaged in the same kinds of criminal activity as go on in other areas; the stealing of cars, the theft of handbags or whatever it may be, all kinds of crime. He said the only difference between those who come to church and those who do not come near the church is that those who attend have something of a guilty conscience about it. Your Lordships may consider that to be an advance and it helps to show that in some way this struggle about individual behaviour is being fought at that level by religious bodies in these difficult circumstances in our society today.

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But this is not enough. There is another side, apart from individual behaviour. It is no good simply relying on the police with whatever resources they can be given, however important that is; there is also the context in which crime flourishes. Proper attention must continue to be given to social conditions.
What also comes from this is that thinking of the mixture of good and bad in any individual brings us straight to the point made earlier by the noble Earl, Lord Longford, that punishment and imprisonment, necessary though they may be, must also be seen from a reformative angle as well. It is one of the sadnesses of my life that almost daily I drive past that great grim 19th century building, Strangeways prison in Manchester. I go in there from time to time and I have seen empty workshops and nothing going on such as would help people in those conditions, because of the pressures on the prison system, such as overcrowding and other factors of that kind. Whatever law and order measures are proposed, I hope that the Government and all of us concerned will always bear in mind the importance of the reformative element and not make it simply a punitive exercise. If it were seen from that point of view our society would be heading for even graver difficulties than we are in today.
7.27 p.m.
Lord Dean of Beswick: My Lords, I join with the right reverend Prelate in congratulating my old friend and colleague Lord Mellish on his maiden speech. For a few moments I should like to refer to part of that speech and what it was about. For my part I have no fond memories of what the past Secretary of State, Mr. Heseltine, has done for housing in parts of the country other than the London docklands. In my opinion all that has happened was that it was a good policy and well worth trying, but where did this money come from? The other major cities in the hinterland, the Midlands, the North and also the London boroughs have seen their housing resources savagely cut, ruptured beyond belief. The sums of money that were made available to the London Development Agency for its exercise is but a small pittance from that money taken in a global sense.
During my period in local government in Manchester I was one of those privileged to lead probably the largest slum clearance drive in a city outside London. We set about the task of clearing 82,000 slums. By the time I left, with the support of my colleagues, we were almost out of the tunnel and talking about developing a housing policy other than clearing slums. However under the present Government the tunnel has been bricked up and there is no light showing through because municipal housing featured as a development has come almost to a stop. While it might have been good for London docklands, the removal of the financial subsidies from cities such as Manchester and Leeds has been an unmitigated disaster.
I listened with absolute disbelief to part of the Prime Minister's speech last night in the cosy atmosphere of the installation of the new Lord Mayor of London. It may well be that her speech was well received by an audience that I should think was packed with people
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who follow her political philosophy. However, that is where the Government are making an appalling blunder because it is not the world outisde. It is not only myself and my political party who are saying it but I have to remind Peers that there has been a succession of non-political organisations, all with an expertise second to none on the question of housing, which have declared on this subject. It began 12 months ago with the Institute for Policy Studies, which I think quoted figures of spending over the next 10 years of £3½ billion a year in order to prevent the serious and dangerous deterioration in our housing and public building stock.
That was shortly followed by a report from NEDO on behalf of NEDDY which underlined this picture. I was quite fortunate in that I managed to raise a debate in your Lordships' House in which I quoted all these figures. I am sorry to say that the reply that I received from the Government on that occasion was such a misuse of figures that it was quite openly challenged by people in the building industry on whom the Government can normally count as some of their most avid supporters.
However, since the NEDDY report, there have been other bodies that have also declared on this matter. I think the next one was the Audit Commission on Local Government, which found the same—that there was a serious deterioration in the nation's housing stock, mostly in the public sector, which had reached a dangerous level. We have also received representations, or it has been made known from other organisations such as the Building Employers Confederation and the Institute of Maintenance and Building and Management, which are agencies which deal with housing stock in a general sense, that that is the position.
However, what was the Government's response under their previous Minister of Housing, Mr. Gow? He did not want to believe independent organisations that had no political axe to grind, albeit the CBI, the Institute of Directors (who of course normally support the Government), followed by the TUC and the Building Workers Trade Union, came to the same conclusion: that with 400,000 people on the dole who could be gainfully used in the interest of retaining or improving our social fabric, it is nonsense for the policies that the Government are presently pursuing to be earned through.
What was the Government's answer to all this? What was Mr. Gow's answer? I think he made only a blocking move. He called for a report for the Ministry itself. I understand that the report was placed on the Minister's desk almost at the time of the change of portfolios when he left the office. I understand that this report calls for an expansion or a spending of £20 billion to deal with the situation in a reasonable manner. That is not taking account of the monstrosities that, with industrialised housing, were foisted on local authorities in approximately 20 years, between 1950 and 1970. Nobody has yet quantified what that will cost but I think there has been a conservative (with a small "c") figure arrived at of at least £5 billion. People better advised than I are now talking in terms of a global sum of £30 billion being required to deal with the housing stock.

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What has been the Government's answer? With two of our major cities with which I have had associations, Manchester and Leeds, the position was this. Manchester asked for a housing investment programme allocation of £90 million for the current year. It received £36 million. Leeds was more modest: it asked for £60 million and received £24 million. I can tell your Lordships from my personal knowledge that those bids were by no means extravagant, bearing in mind the job that the people controlling those cities were trying to do.
I know statistics on housing have been bandied about but I think it is as well to remind people of some of the statistics when the Prime Minister starts talking as though everything is all right and suggesting that in the inner cities it is merely a case of needing to deal with lawbreakers by means of better laws and more police. Maybe that is part of it but I can tell your Lordships that unless something is done about the inner cities, in the sense of providing an increasingly better environment, no Government will win the battle—I am not talking in terms of a physical battle, I do not believe in that—but no Government will win the battle to create the kind of society that we want.
For a moment I shall digress and give some of the present figures in an era when the Prime Minister appears completely satisfied with her own Government's housing performance. The only successes about which we have heard so far are in the area of the sale of council houses. That has halved within the last 12 months, as some of us said it would, because the best houses have now been sold off and people will not buy the second best or third best. They are not interested in them, even at almost give-away prices.
The figure for new starts in the current year is 27,900—a third of that for 1979–80. It is the lowest figure for over 50 years. Waiting lists have now increased to 1million. There are 1,207,000 dwellings classed as unfit. There are 994,000 houses lacking one or more of the basic amenities. It is calculated that five million people live in unfit homes. Four million houses in England alone require reports costing over £2,500. It is calculated that over 1¼ million families live in overcrowded or shared accommodation.
I do not intent to speak for too long because it is not that kind of debate. I think housing such as it is is such a vital subject that it demands a better case than I can make in 10 or 11 minutes. However, I say this. Housing patterns are also changing. One of the best things we were able to do in a local sense was to start building and adapting for disabled and underprivileged people. The signs are now that that is no longer an option. It is coming to an end because there are no finances with which to do it.
We have a Prime Minister, as I said, indulging in the cosy atmosphere of the Guildhall in self-congratulation among her own supporters while this is going on in the provinces. The noble Lord, Lord Mellish, talked about the Dockland being a desert' when he went there. I can assure him that if the Government carry on with their present policy, the areas of the inner cities that I know and was brought up in will very quickly become the deserts of the future.
7.39 p.m.
Viscount Thurso: My Lords, I hope that I may be allowed to add my congratulations and thanks to the noble Lord, Lord Mellish, on a truly magnificent maiden speech. I think if all of us were allowed to make two, the standard of debate in your Lordships' House would rise enormously if that is a measure of making a second maiden speech in this Chamber.
I shall not detain your Lordships for long tonight. I wish simply to take this opportunity of sincerely and unreservedly congratulating the Government on having the courage at last to bring forward legislation to modernise and restructure the management of the Scottish salmon fishing industry. I offer them my congratulations unreservedly although I feel that they must have been helped a little bythe amount of pressure that has been kept on them over some quarter of a century by all those in Scotland interested in the salmon industry, and in particular the organisation of which I have the honour and privilege to be president, the Association of Scottish District Salmon Fishery Boards.
As long as I can remember being on the council of that organisation, we have been in constant discussion with St. Andrew's House and in constant discussion with the department of agriculture and fisheries for Scotland pressing for modernisation of the legislation which controlled us. I have taken part in debates in your Lordships' House on Green Papers, on White Papers and on every sort and kind of proposal to try to bring foward some kind of action on this question. Now at last we have it promised.
I hope that when the Government take the plunge they will not find the waters too cold or too stormy. I shall certainly try not to muddy them for the Government in their task. However, just because somebody is going to do something at long last about a subject which needs reform does not mean to say that each individual is necessarily in a position to accept everything that they propose. Although I offer the Government every support in getting a measure through, I do not guarantee that I shall not make attempts as it comes before your Lordships' House to modify their proposals.
The difficulty with the gracious Speech is to try to read the true meaning into the words used. We have first of all the expression, "to modify". I think that the expression,
"to modify…the management structure of salmon fisheries
means that the district fishery boards are going to be changed. They are going to be changed, I would imagine, by the inclusion of new persons in their number. I sincerely hope that this is true, and I hope that what is going to happen is that the interests of anglers will be directly represented on district salmon fishery boards. I hope that this is what is meant by this expression.
If indeed the Government are proposing to include the voice of anglers in the deliberations on the management of Scottish salmon rivers, then I hope that they will try to ensure that those anglers whom they choose to represent interests in any district will be the anglers who know that district and not merely representatives of national or other bodies. I feel that one of the great strengths of the district fishery boards'

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system in the past—which, after all, has kept the salmon fishing industry both as a sport fishery and as a sea fishery going for 100 or more years against great odds but with considerable success—has been the local interest which has been involved, the local knowledge which has been involved, in their deliberations. I sincerely hope that in bringing anglers into the position of the management of rivers, they make certain that these are people who have local knowledge and local interests.
Then they go on to say that they
"intend to extend the management structure of the salmon fisheries".
By that, I am guessing—totally guessing, as one always has to in dealing with matters in the gracious Speech—that extension means that we shall lose the principle of the individual river having its individual district fishery board and that we shall end up with larger districts, with several rivers represented in these larger districts, and that we shall now see more area boards than actual river boards.
This of course I have to welcome because one of the weaknesses of the present situation is that some rivers are too small to be able to carry a viable district fishery board. But again I hope that when the legislation comes before us these boards will be small enough to be truly local to the area and will be at least within day-to-day travelling distance of the officers who have to administer them. One of the lessons which I think we must have all learned from local government reorganisation is that it is hopeless to set up too big an area where the higher officials can never travel to the other end of their district and back in one day and do a day's work at the same time. I hope that we shall avoid this mistake.
The final thing which I want to mention, in my wondering about what is in the mind of the Government, is the phrase:
"including further measures to combat illegal salmon fishing throughout Great Britain".
I do not think that the illegal salmon fishing is nearly as harmful as the legal salmon fishing. Certainly from the Scottish point of view the Northumberland drift-net fishery is the biggest poacher of Scottish salmon in the whole wide world, including the Danish fisheries and everybody else. Practically the whole of the catch of the Northumberland drift-net fishery, certainly the whole of the increase in the catch of the Northumberland drift-net fishery, comes out of the Tweed, which is classed as a Scottish river. And a good deal of it comes from rivers up the East coast. So I hope that this phrase includes grasping this nettle.
I know that I have colleagues who heartily disagree with me about this. My honourable friend in another place who represents Berwick-upon-Tweed would slay me for my views on what the Northumberland drift-net fishery does. But I think that the whole of the salmon industry would be on my side and would agree that this is really the biggest menace to the Scottish salmon fisheries.
Furthermore, I fear that this phrase may include the tagging of salmon. I urge upon the Government to beware of tagging as a panacea. We thought at one time of tagging venison. I am very glad that that
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measure never went ahead. I think that they might look at the venison Acts and consider the licensing of dealers as being a better measure to go for, and perhaps with the wise counsels that they have now on their Front Bench this possibility may have been thought of. These are all the thoughts which I have on the salmon proposals at the moment. I shall look forward with enormous interest to seeing the Bill when it comes before your Lordships in this House.
7.49 p.m.
Lord Hylton: My Lords, after Scottish salmon fishing, I am very happy indeed to widen the debate still further by referring to affairs in Northern Ireland. In the fog that we have today of rumour, speculation and apprehension about the British-Irish talks and the search for a positive agreement, I should just like to describe two very encouraging developments of which I have personal experience. Here I follow on from what I said in your Lordships' House on 8th July in attempting to give just one or two items of good news. I think it is very important that we should discuss Northern Ireland in a general debate and not give the impression that it is a strange place, far away and full of extraordinary people whose affairs can be discussed only by specialists and experts.
It is well known that terrorism and political violence have resulted in over 2,500 deaths in Northern Ireland since 1969, as well as many injuries. I suggest that the really remarkable thing is the absence of bitterness among many of those who have suffered personal injury or the loss of close friends or family. The distinguished Belfast journalist, Mr. Alf McCreery, some years ago was among the first people to draw attention to this in The Survivors, a book based on interviews with people who had lived through bombings and shootings. A friend of mine is among those. During the worst of the troubles he was blinded by a shotgun, fired directly into his face. Instead of yielding to hatred or the desire for revenge, he has devoted himself to very constructive community work. Although blind, he took up photography as a hobby, to such good effect that his work has been exhibited here in London.
For the bereaved, the initiative of one women led to the forming of a special organisation which brings together those who have lost relatives or friends, and they come together from all sides of the political and sectarian divide. They find themselves able to share their grief, to support each other and to return to normal living, free from incurable bitterness and hate. This is an important way in which the impact of violence and terror is blunted. It is one for which I think we can only express admiration and deep gratitude.
Of equal, and possibly of even greater, importance is the move away from violence by a number of people who were once deeply involved in terrorism and paramilitary activity. I mentioned this in your Lordships' House on 3rd April and I make no apology for coming back to the subject which by now has been recorded in at least two published books and is thus becoming fairly widely known. Many of the men and women I refer to have turned against killing under the influence of the gospel and because they have found personal faith in Jesus Christ. As in the previous

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example, they come from both sides of the divided community and they make common cause in their new life. Some experienced a change of heart while in prison, some after release; and others have broken with violence without passing through any prison doors.
Such is the genius for organisation and mutual help in Northern Ireland that there is now a specific group whose members include those people and are all ex-paramilitaries. Those who have rejected violence as a way forward may perhaps not yet have discovered what their precise contribution will be towards a better future. I believe, however, that they are cutting the ground away from underneath terrorism and counter-terrorism. They and the bereaved are giving a powerful example to all in Britain and Ireland, and are teaching us to recognise the evils and injustices of the past. They are encouraging us to accept responsibility and to abandon our personal and party prejudices and partial affections.
This is the widespread new start that is needed. This is how fear, mistrust and hatred will in the end be overcome. Let us not imagine, however, that this will be at all easy; 16 years of violence coming at the end of four centuries of embittered history should be enough warning. "Reconciliation" is a word that sometimes comes all too easily to the lips; yet in Northern Ireland it is to some extent an overworked word. The reason is that there can be little compromise between those who want a united Ireland and those who seek to integrate Ulster and Great Britain. On the religious plane, there can be little accord between those who say, "Outside the Roman Catholic Church there is no salvation" or, on the other hand, "We are the only ones to possess complete biblical truth".
I do not advocate the minimising of real differences or the fudging of divisive issues. On the contrary, I think that all of us, whether we are politicians, churchmen, or both, have to change our minds and admit that we have sometimes been wrong and that the other tradition does have some portion of truth and goodness, which is worthy of respect. We could, I think, recall what Cromwell wrote in 1650:
"I beseech you, in the bowels of Christ, think it possible you may be mistaken".
Each tradition could become more aware that it has produced its own caricature—a false image obscuring the real common ground which does exist and which is seen when former opponents begin to work together for common purposes, however limited those may be.
Next year is the 70th anniversary of the 1916 Easter rising in Dublin. Such anniversaries can be deeply symbolic and deeply divisive. Let us therefore try to see, as the Scandinavians and other west Europeans have seen in recent years, that there are higher loyalties than mere nationalism. Can we not recognise that the republicans were wrong to grasp by violence what could have been obtained by agreement, just as we British were wrong to take reprisals on prisoners taken in open fight? That would represent a first small step in mutual forgiveness—a change of mind and heart that would accept our interdependence and help to build common ground both between Britain and Ireland and within Northern Ireland itself.
7.58 p.m.
Viscount Massereene and Ferrard: My Lords. I will not follow the noble Lord who has just spoken into the question of Northern Ireland, in spite of the fact that my family had over 400 years of experience on both sides of the border. Of course, in those days it was one country. In my early years I was brought up there, but I will not go further than that.
I should like just to mention a point raised by the noble Lord, Lord Mishcon. I thought he was lather unfair to the Government and to the Tory Party generally when he appeared to blame them for the present crime wave. Perhaps I have misunderstood him, but I thought he blamed the Conservative Party. I had always thought that when it comes to liberalism the Socialist Party was far more inclined in that direction than the Conservative Party. I think one must blame some of the great rise in crime on the party opposite, because certainly some of the crime must be due to a great extension of liberalism. I am all for liberalism, provided it does not cause crime, but the party opposite must be somewhat to blame, through too much liberalism, for a great increase in crime. However, when it comes to prisons, I rather agree with the noble Lord, Lord Mishcon.
Lord Mishcon: My Lords, I wonder whether the noble Viscount will forgive my interruption, which is not to conduct an argument, I promise him. but merely to explain what I was trying to say. In at least one Conservative manifesto, but possibly two, credit has been taken for the reduction in crime as a result of their policy. I was merely saying what the present figures are and how false, unfortunately, that forecast appears to have been.
Viscount Massereene and Ferrard: My Lords, I am glad to hear that. I think the noble Lord also said that 42 per cent. of male children born in 1953 have committed some crime by the age of 28. That may be correct, but it is an astounding figure. I do not agree that unemployment is the cause of crime though it has a certain effect. According to a TV programme, which I did not myself see, the most burgled village is my village down in Kent. That may or may not be true; what is seen on TV is not always right. It is true that there was a gang there which has now been apprehended and dealt with, but those people were not at all unemployed and were, in fact, in very good jobs. Where unemployment may in some measure be a slight cause of crime is where unemployed youths today are mobile and have enough money to buy motor-bicycles. In the old days, the local bobby could have dealt with them, because they were not mobile.
As an amateur biologist, I know that there is no doubt that overpopulation leads to crime. We in this country are about 90 per cent. urban and are one of the most highly populated countries per acre or per hectare in the world. Apart from Belgium, we are the most highly populated country in Europe. If you take away the Scottish Highlands, where there are only 270,000 people, although they are two-thirds of the land mass of Scotland, we are by far the most highly populated—far higher than India and most other countries in the East. I am not sure about Japan, but we are running very close to their figure.

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There is no doubt that overpopulation in an urban society causes crime. If you experiment with rats and overcrowd them, they tend to attack each other and become unpleasant. When I was a boy, the population of the United Kingdom was only 37 million; today it is about 56 million. That has a great bearing on unemployment, as the Government have to keep on finding more and more jobs for an increasing population, without necessarily decreasing the number of unemployed.
I should now like to congratulate the Government on the Queen's Speech and on the new Bill dealing with animal welfare. I am sure that that will have a great bearing, not only on vivisection but on all other aspects of animal welfare, and will lead to far better treatment of live animals. In relation to their use in producing cosmetics for beautifying women, I should like to see experiments on animals stopped. I am all for beautiful women, but to experiment on animals in order to test cosmetics, whether lipstick or eye lotion, is extremely immoral. In regard to thalidomide, the experiments were done on rabbits and look what happened! The answer is that animal vivisection is not always the way to find out how to prevent disease and so on.
I should like for a moment to turn to the land, because everything comes from the land and I have a lot to do with the land. As I have said before, I am getting increasingly worried about certain of the more beautiful and remote areas. I am all for tourists going to see beautiful country, but there must be some control. For example, there are some small islands off the north of Mull called The Treshnish, which are an absolute paradise for birds such as puffins in the nesting season. A lot of motor boats now go out there with tourists and they land on the islands causing a lot of the birds to fly away. Puffins, in particular, come in with their bills full of fish in order to feed their young, and when they see the tourists, presumably they say "Good heavens!" and fly out to sea again, dropping all the fish and their young starve. There will have to be some form of control over tourists when they come in their thousands, so as to not to drive away the wild life nor to destroy the plant life. Tourists do not realise that they are doing this and they cannot be blamed, but there must be some control exercised.
Another matter that I am worried about is the over-planting of Sitka spruce. There is a firm in Scotland—there may be one or two others—called Fountain Forestry. There are quite a few of these big forestry syndicates. They find some very rich man or men, such as an industrialist, or a "pop" group. They are extremely keen on finding "pop" groups, because they have a lot of money. If you plant a lot of spruce, you avoid a good deal of tax. For example, Fountain Forestry have planted a whole area of the Rossal estate, on the southern boundary opposite my estate, with Sitka spruce. It is a large area, amounting to thousands of acres. They have destroyed all the wildlife and have increased the acidity so much that the river in the valley is now pretty well dead and useless, so that it cannot be fished by tourists.
When these big forestry syndicates buy estates, the local people do not have a land owner who takes an interest in them. For example, I understand that the
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Genesis "pop" group who own this large estate have never been there, though I think they have had it for six years. That is extremely bad for the local people. It is an unfortunate way of life that we have got into.
My Lords, I have spoken for too long. I should, however, like to welcome the fact, although I do not believe it is contained in the Queen's Speech, that we are to have a Bill on the Norfolk Broads. At one time, I knew the Norfolk Broads quite well. This will be a very important Bill dealing with a unique part of Britain. It is one of the biggest wetlands in Europe. It is enjoyed greatly by 250,000 tourists who go there each year for boating and sailing. However, again, there is need for some stronger controls than now exist.
Since my youth, the Norfolk Broads have deteriorated appallingly. I believe that of the 52 Broads only four are now really as they were. I hope therefore that the Bill will appear soon. If the Broads are to be saved, they must come under one authority. It is amazing to realise that the reed beds are now down to only 8 per cent. of the area they once occupied. The banks have been washed away by motorboats. It is therefore very important to save the Broads before it is too late. I am sorry, my Lords, to have spoken for so long.
8.11 p.m.
Lord Pitt of Hampstead: My Lords, I must apologise for keeping the House for a while, but I wish to comment on a few items in the gracious Speech. It contains a promise to amend the law on sex discrimination in employment but there is no mention of amending the Race Relations Act. I know that amendments to the Act have been requested by the Commission for Racial Equality. These are aimed at strengthening the enforcement powers and generally at making the present Act work better.
The need for effective legislation to promote racial equality is perhaps greater now than when the Race Relations Act was passed in 1976. The degree of racial discrimination and racial disadvantage that exists in society is well known and has been well documented. Racial discrimination is a cancer that undermines the fabric of society. If allowed to grow and flourish, it can destroy the society. Every effort must be made to control it and turn back the tide.
In this effort, the Government have a very important role to play. Supporting the Commission for Racial Equality, which is entrusted with the task of enforcing the Act, is one of those roles. But they also need to set a good example themselves. An important way in which the Government can set that example is by making their own activities subject to the ambit of the legislation and also by being an equal opportunities employer and ensuring that other agencies over which they have some control do likewise. Those are all things that the Government can and should be doing.
It is particularly important that a community should see that the Government are prepared to be bound by the same rules as the rest of the community. I say this because one of the amendments recommended by the commission is related to the exemptions that exist in the Act for Government activities. It may well be that these amendments to the Race Relations Act are being actively considered with a view to early legislation. If so, I hope that the Minister will reassure us on the point.

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The gracious Speech has also promised legislation to improve the management of schools and to promote the professional effectiveness of teachers. The Swann Committee, in its report entitled Education for All, said this:
"The response of schools both multi-racial and all-white to cultural diversity has to be seen as a central feature of the current debate on the balance and breadth of the school curriculum. The Secretary of State should focus on this issue when considering responses to DES circular 8/83 and in further statements that he may make and any agreements that he may seek about the curriculum".
I would be grateful if the Minister, in his reply, can focus on this matter and indicate to what extent the recommendations of the Swann Committee in Education for All are incorporated in the programme of the Secretary of State in his endeavours to improve education standards. This is an issue of the utmost importance. I hope that the Government will give it the greatest attention.
The Earl of Longford: My Lords, as this is a matter that has always interested me very much, does my noble friend believe that, in the case of the ethnic minorities, special steps have to be taken in view of the fact that the culture of this country does not come so naturally to them?
Lord Pitt of Hampstead: Yes, my Lords. If my noble friend had read Education for All he would see that the Swann Committee came to the conclusion that the concentration should be on all the children who are being educated, that they should be educated to live in a multi-cultural society and that this should be part of the curriculum. The stress should be on all the children understanding how all the children live and the culture of all the children. This is the point that I was making. My hope is that the Secretary of State, who I know is busily concerned with trying to improve the curriculum, should take into account the standard of education and the value and substance of education. It is on that matter that I hope the Minister will give me some reassurance.
The gracious Speech also promises measures to strengthen the power of the police in combating disorder. One issue occasioning great concern at present is racial harassment. The Home Office report on racial harassment pointed out that, proportionately, the incidence of victimisation for Asians was 50 times higher than that for white people, and that for Afro-Caribbeans it was over 36 times higher. Although the police are frequently criticised on this issue, I know that they are very concerned about it. The Metropolitan Police Commissioner has indicated that it is one of the priority issues. Since we will be amending the Public Order Act, it seems to me that careful consideration should be given to the creation of an offence which will cover that particular activity and so help the police to eradicate this evil. I do not expect the Minister to give an answer tonight but I hope that he will draw the attention of his right honourable friend to my comments and that this matter will receive careful consideration. Indeed, it should receive very careful consideration.
I shall devote the rest of my speech to the subject of housing. I am the chairman of Shelter, the national campaign for the homeless. That organisation is
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alarmed at the continuing rise in homelessness and the deterioration of our housing stock. More than 4500 households, the majority of them families, were accepted as homeless by local authorities in England in the first six months of 1985. That is equivalent to an increase of 70 per cent. compared with 1978, which was the year in which the Housing (Homeless Persons) Act came into force.
Shelter estimates that in Britain—that is, including Scotland and Wales—the official number of homeless will this year top 100,000 households for the first time. This is a serious matter. Most single people and childless couples are not covered by the homeless persons Act. Government statistics indicate that more than 50,000 homeless people will be turned away by local authorities this year with only advice and assistance—and that often means merely the provison of a list of local bed-and breakfast hotels.
Families accepted by local authorities under the homeless persons Act are increasingly being placed in temporary accommodation; that is, hostels or bed and-breakfast hotels. More than 8,200 families were in temporary accommodation at the end of June 1985; that is more than double the figure for June 1978. Bed-and-breakfast hotels can be overcrowded and insanitary, and they are often fire risks. Thus they place at risk the health and sometimes the lives of the homeless families housed in them. For children, education can be disrupted and their emotional and psychological development retarded.
The noble Lord, Lord Dean of Beswick, has dealt effectively with the state of the housing stock and so I do not need to cover that aspect. All I need say is that I hope the Government will take this particular issue seriously, too. I will deal with the need for more homes. There is said to be a crude surplus of homes in Britain. That means that there are more houses than households when a simple count of the two is made. However, such a calculation makes no allowance for houses which are derelict, for second homes or for houses which are empty while being repaired or renovated. Nor does it allow for the fact that some households consist of two families doubling up together.
Shelter has calculated, on the basis of statistics provided by the census, that in 1981 we suffered from a real shortage of 800,000 homes. Growing homelessness is one sign of that shortage. Another is overcrowding. The census showed that more than 600,000 people in England and Wales were living at a density of more than 1.5 persons to a room, and that a further 2.8 million were living with more than one person to a room. The number of households continues to rise. The Government estimate that the number of households in England will rise by 2.3 million between 1981 and 2001. That is an increase of 14 per cent. It has been estimated also that 200,000 new homes are needed each year to cope with the increase in the population alone. Yet since 1979 house construction in Britain has only once exceeded that figure; that was in 1983. On the basis of half-year figures, Shelter estimates that housebuilding will fall below that level in 1985 as well.
The figure of 200,000 new homes a year would only deal with the population increase. The last Labour Government estimated in 1977 that, to allow for the

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relief of overcrowding and poor housing conditions, around 300,000 new homes a year would be required, of which 120,000 should be in the public sector. However, in 1979 public sector starts fell below 100,000 for the first time since the Second World War. Since then, the figure has on average been only one-third of the number needed. The noble Lord, Lord Dean of Beswick, mentioned a figure of 30,000 new homes this year.
What are the Government doing? To understand that we need to consider their housing proposals in the gracious Speech together with the decisions on public housing expenditure taken by the Cabinet the day after. According to newspaper reports, councils in England will be allowed to spend an extra £300 million in housing investment next year, compared with previous plans. However, they will be expected to raise £100 million themselves by selling more houses and land. Thus the amount they can borrow has been raised by only £200 million. I wrote my speech before hearing the Statement repeated earlier today, in which the Minister indicated that councils will be allowed to borrow £220 million. Therefore they now have £20 million more.
Following the long series of cuts made in previous years, any increase in the resources available for building new homes and for repairing and building old ones must be welcome. Certainly I welcome that increase. However, we must ask ourselves what it really amounts to. According to the Association of Metropolitan Authorities, the new money does not represent an increase but rather a small cut. The association says that next year councils will be allowed to borrow £1,820 million compared with £1,853 million this year. I culled that information from the Guardian of 8th November. If I add the extra £20 million which the Minister mentioned today, the sum will be £1,840 million rather than £1,820 million which will still be less than last year's figure of £1,853 million.
The figure of £300 million gained compares with the £600 million for which the Secretary of State for the Environment is reported to have asked. Had he received that, it would have been an increase. The figure must also be compared with the size of the problem and with previous cuts. The Department of the Environment has recently received a report putting the bill for council house repairs alone at £20 billion. It must be remembered that housing investment budgets have been cut by over 40 per cent. in real terms since 1979. The housing investment budget is the budget which has received the largest cuts during the past six years. Shelter estimates that the housing investment programme would have to be increased by £2,000 million to bring it back to the level it was at in 1979–80.
The gracious Speech made promises of further incentives for public sector tenants to purchase their homes under the right to buy, and that they would encourage councils to sell estates to private developers, usually for refurbishment. Frankly, I do not know just to what extent the Government think they can go on with these incentives in order to sell council houses. I am particularly alarmed at the suggestion that people in council houses will be allowed to take their
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discounts and buy houses on the open market, using the money they have received. That is blatantly unfair. It will mean that someone in a council house will have money which he can invest in a new home, whereas someone else who might be living just across the road in a privately-rented dwelling, probably in worse condition, will not have it. Clearly that is blatantly unfair. Therefore I do not know to what extent the Government think they can go on with these financial incentives in order to sell houses.
I am also a little concerned about the grants available to private landlords who buy council homes. The councils are being severely limited in the funds available for carrying out repairs, but these landlords, through the urban development grant scheme, can obtain the same money that the councils are being denied in order that they may develop the properties after they have purchased them. The noble Lord, Lord Young, this afternoon explained to some extent how the Government see this; that is, he thought that the councils had used the money badly in the past and that it was therefore preferable that someone who could use the money better should have it, if I understood correctly the noble Lord's reply to the question put to him. Well, there may be something in that, but I am still not convinced that it is the right approach.
I am worried that in fact the Government are subsidising by these means the transfer of homes from the public sector to home ownership. Many people who are homeless or living in overcrowded or poor conditions are unable to afford home ownership. Therefore the result of this transfer is to help those who can afford to buy a home at the expense of those who cannot. The loss of local authority housing stock is particularly worrying as councils are mainly dependent on the use of their own homes for rehousing families accepted as homeless under the homeless persons Act.
I have spoken for so long that I shall not go on to other points. I merely point out that the gracious Speech could have expressed the Government's determination to reduce the number of homeless and to improve housing conditions in Britain. It was not in the gracious Speech, but that of course does not prevent the Government from doing that and I sincerely hope they will.
8.35 p.m.
The Countess of Mar: My Lords, the noble Lord, Lord Pitt, has already quoted the paragraph from the gracious Speech which dealt with education. Perhaps I may say that I heartily endorse his words. I found it interesting that the noble Lord, Lord Glenarthur, dwelt for some time in his opening speech on the Government's proposals for animal experiments but made no mention of the proposals for schools and teachers. Despite the noble Lord's apology, is the omission warranted or is the subject too contentious at this time?
I have an interest to the extent that I am the wife of a teacher who is employed by a local authority and I am a parent governor of an independent school. There must be thousands of husbands and wives who, though not directly involved in the profession, are inextricably bound up in it and are most anxious that the present difficulties should be resolved. Your Lordships will no

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doubt be pleased to hear that I have no intention of leading myself on to the thorny ground of the politics of the present dispute.
There has never been in recent years such a high demand for places for children within the independent school sector. During the summer term I was asked to interview a number of children whose parents had put them in for the few scholarships provided by the school of which I am a governor. These 15 children had attained the best marks in tests for mathematics and English in competition with more than 200 other 10-year-olds. They came from independent preparatory schools and from state junior schools, with the majority of applicants coming from the state system.
It was a revelation to me. Both groups of children obviously came from families whose parents cared about them and who had done quite a lot to prepare them for the interview. The children from prep schools were altogether more self-assured and articulate than their rivals. They had obviously read the books they said they had read and they had a wide range of outside school activities and interests. Almost without exception the children educated in state schools said they either watched television or played computer games in their spare time. Their lack of general knowledge was most marked. Only one took part in any sporting activity.
I know that this was only a small sample but it prompted me to inquire further. I have discovered that there are many parents who, unhappy with the state schools, are stinting themselves to provide an independent school education for their children. Others, who cannot find the means, try to force their children to obtain scholarships and bursaries. These parents are not the rich who have traditionally sent their children to independent schools. They seem to be parents who themselves had a grammar school background and wish for their children a broadly based, traditional education which inculcates a sense of civic pride and responsibility, as was provided by the grammar schools until the 1970s. I do not hanker after the return of grammar schools, for the comprehensive schools are now well established in most local authority areas and it would be absurd to create yet another upheaval.
When the system was first set up I understood that the objective was to provide a high standard of education for all children, to give them all the same opportunities to become high achievers without the divisive competition at 11-plus. I think all parents would approve of those objectives but something seems to have gone terribly wrong. At the root of the trouble must be the lack of funding. This has affected the building and maintenance of premises, the provision of teaching materials, the range of subjects which can be taught, the support for extra curricula activities as well as the salaries of teachers. The recent reports of Her Majesty's Inspectors confirm that many of the deficiencies exist, though their severity varies between local authority areas.
In addition to these difficulties the children are different. Many are no longer brought up by their parents to respect authority—whether that authority be parent, policeman, doctor, parson or teacher; and I wrote this speech before I heard the right honourable lady the Prime Minister's speech last night. The
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gradual increase in the school-leaving age has kept those young people, who have little academic aptitude and who have a great antipathy to the school environment in the classroom, and to all intents and purposes they are expected to stay in full-time education until they are 18 unless they can get a job.
Falling rolls there are; an overall improvement in pupil-teacher ratios there may well be; but the figures need to be looked at more closely. They are calculated on the basis of the total number of pupils in a local authority area divided by the number of teachers in that area. What is not taken into account is that one teacher of a basic subject such as English or mathematics may be teaching 35 children, while in the next room another teaching, say, Latin, has only four children in his class. It is hardly surprising that, given these circumstances, few men and women of the calibre that we would wish of our teachers enter the profession, and that 60 per cent. of those in it now would leave if they could find a suitable alternative job.
H. G. Wells wrote in 1920 that:
"human history becomes more and more a race between education and catastrophe".
This man, who left school at the age of 14 with a very sketchy education, pulled himself up by his own bootlaces. He won a scholarship and obtained a degree from London University by the time he was 22. He was obviously exceptional, but he saw the value of education and tried to impart his knowledge to others, both as a writer and a teacher. Education was the gateway to a better job and thus to a position in society.
It was also a means of broadening the mind and of making life more rewarding. When I was young I remember meeting many men and women whose schooling had stopped when they were 12 but they had such a thirst for knowledge—whether inspired by parents, teachers or both I know not—that even in old age they never stopped in their quest for it. I meet and talk with quite a number of young people, and rarely do I find much enthusiasm for school or for further education. They see no future in it. This may be the fault of some teachers. Certainly it is the fault of many parents. My generation and that which followed mine must be held responsible for abnegating our duty to instil moral values in our children. We are too busy with our own lives to talk with our children and to teach them such things as simple courtesy, respect for people and their property and the myriads of other little things such as those which I learned from my parents.
We have handed that responsibility over to the teachers and we are the first to criticise them when things go wrong. "Standards" and "discipline" are almost dirty words nowadays, but without them children and young people can be all too easily manipulated. Mammon is our god. Those with a vocation who are prepared to accept a lower salary for the service which they provide to the community are no longer respected. Every one of us feels the need to be appreciated and to feel that what we do is of some worth. Teachers used to be respected and valued members of society. The fact that this is no longer so may be partly their own fault, but we also have a responsibility for the deterioration in their status. How

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can a teacher who is on pay scale 2 with a wife at home with two young children and who must claim Family Income Supplement to make ends meet, feel that he is of value to the community? I know such a teacher. Is this really the way to treat a professional person? Can we expect him to maintain professional standards when he ranks among the lower paid?
What are the solutions? Nothing can be done overnight. I know that. We cannot provide instant jobs to give young people the incentive to learn, but we can try to ensure that their waking hours are used more fruitfully than they seem to be now. If we have a mind to, we can put right the most glaring deficiencies. The environment in which a child learns and the teacher teaches is important. Buildings, if not inspiring, should be at least clean and well maintained. There should be an adequate supply of books and other learning materials. Computers have their place but they are not the be-all and end-all of learning. Many children will probably never touch a computer after they have left school.
The terms and conditions of employment of teachers must be improved to encourage cultured men and women of wide knowledge and education as well as vocation to enter the profession. These need to be recruited in numbers sufficient to give children a broad base of learning so that they can face the world with flexible and inventive minds which are easily adapted to rapidly changing circumstances. There is plenty of time for them to specialise after school. Parents should be involved in the running of their children's schools as part of the community; though as a parent-governor myself I would strongly resist their involvement in day-to-day teaching matters. I think that these are best left to the professionals. I hope that the Government will bear these factors in mind when they draft the proposed Bill. I also most sincerely hope that it will be done in an atmosphere of consultation away from the attitude of confrontation which presently prevails.
I know that it all comes down to money—money for building, money for books and equipment, money for salaries. This year Her Majesty's Government expect to spend £18,000 million on defence; on education they expect to spend only £13,000 million. In 1978–79 the gap was only £39 million; now it is £5,000 million. I believe that we should defend our nation from foes who may or may not attack us at some time in the future. But what about the foes of ignorance and want, which are attacking the very heart of our nation? They provide, at the very least, a breeding-ground for the vandal and the drug abuser, the bigot and the subversive, and at worst the material for violent revolution.
A good education will not prevent all these crimes but I am convinced that it will go a long way towards it. H. G. Wells had the uncanny knack of being right in so many of his theories. Must we go down in history as the generation which created the conditions which enable catastrophe to triumph over education? I wonder whether the Minister in his reply would briefly summarise the objectives of his party's education policy, or, if there is no time, perhaps he would write to me?
8.47 p.m.
Lord Donaldson of Kingsbridge: My Lords, I hope that the noble Baroness will forgive me if I do not follow up in detail her very interesting speech about education, though I shall be interested to hear later on the elucidation of the Government's policy at some length. In this House I have answered for education for some time but, as I have never believed that anybody knows anything about it at all except that the one thing you want for education is good teachers and no one knows how to train them, I had better say no more on the subject.
My noble friend Lord Harris of Greenwich said that crime and everything to do with crime should be treated as a non-party issue. That seems to me to be absolutely clear and I shall do exactly that in what I shall say tonight. The noble Lord, Lord Mellish, made a brilliant speech, but as he is not here I need not go on about it. In fact I shall refer to him later on because what he has been doing in the docks area is something that is not altogether dissimilar to what I am going to talk about, which is going on in America. I thought it was a particularly brilliant speech. We have one ex-Labour Chief Whip on our Benches and we should actually welcome another.
The right reverend Prelate the Bishop of London started me thinking about Sunday trading. My first view is the liberal view: who the hell cares, and anyway why should people not do what they want to do? He suggested that there were deeper reasons and I shall follow this very carefully in the debate when the Bill comes forward. I found some of the anti-liberal arguments rather old-fashioned and the sort of thing which was used in the 18th and 19th centuries against hanging, but perhaps that is unfair. I do not believe that my hero, Samuel Butler, would have agreed with the right reverend Prelate, so I reserve my vote for when the time comes.
Lastly on the debate, I want to thank my noble friend Lady Burton for a splendid philippic in favour of the consumer. I must say that the poor Minister will have a rough job if he is to answer one third of the unanswerable questions that she asked. As a one-time chairman of the Consumer Council, which was destroyed by the Tory Government and within two years had to be recreated, I just want to say that I do not know what we would do without my noble friend.
To turn to what I wanted to say, I think that the most important issue in this debate on home affairs is riots: how they happen, how we control them and how we can stop them happening. I shall spend what little time I have on that subject. As to controlling them, what I wanted to say was said by my noble friend Lord Harris. He was strong in his support of the police and in stating what he believed to be the Government's duty and I totally support his views. Most people in this House and certainly all members of the Alliance parties accept that every British citizen must and shall have equal rights and duties irrespective of race or colour or sex. Those rights include protection by the full strength of the law of one's home and person from attack whether the attack be on Asians by blacks, on blacks by whites, on working miners by striking miners, or any other combination.
The duties include support of the police in difficult situations and especially exclude the throwing of

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bricks or petrol bombs at them. Anyone who has a brick thrown at him which can seriously injure or kill him is entitled to hit back good and hard, still more against the petrol bomb—so cheap and easy to make and so potentially cruel in its effects. Unless the police throw the first brick—and there is no instance of that having happened in any of the riots and rows that we have seen—the police are to be absolutely excused for responding sometimes rather violently. CS gas and plastic bullets are not too strong an answer to attacks of that kind and they are at least better than live rounds. Those facts are not altered by the further fact that there is irrefutable evidence that some individual police in some cases have behaved very badly indeed. We employ the police to protect us and we have to give them the weapons, even if they sometimes exceed what is required.
It must not be thought that the people who support the Government in their determination to reinforce the police and equip them to deal with any level of rioting (which I have shown that I do, and my noble friend Lord Harris has shown that he does) are in any way opposed to putting right the wrongs which have led to the unrest. We must not let a false party rhetoric suggest that the Government are committed to law and order and are not interested in the underlying causes; or that the Opposition who tend to concentrate on the underlying causes are not interested in strengthening the police. The two things must go together.
There was a particularly half-baked letter in The Times last week by a gentleman whose name I have conveniently forgotten, asking:
"Will the criminal minority who cause the inner-city riots become reformed characters? Petrol-bombers are not ideal self help material … Misguided compassion will not alleviate the quasi-revolutionary festering and may well exacerbate it".
It is that attitude in particular which I want to attack and attack in some detail from current experience in the United States of America.
I want to ask the Government to look very carefully at what has happened there over the past 20 years. Their problem was on a larger and more dangerous scale than ours and they seem to have dealt with it effectively. I shall quote only one example. Watts is a suburb of Los Angeles much like our inner-city areas. It is 80 per cent. black, unattractive and 20 years ago it was a proper slum. Noble Lords will remember the Watts riots in 1965, the first and perhaps the worst black riots in the States. The whole place was burnt out—devasted. But it has since been transformed by the inhabitants themselves into a place in which they are proud and happy to live.
A powerful leader showed up and gathered people round him to get something done. He began with a few fellow trade unionists in 1965 with the determination to change the area into a place where anyone of any background or life style would want to live, and the intention of kindling the fire of pride and self-respect in its people. The association began with five people and five dollars and has grown to a staff of 120. It is called the Watts Labour Community Action Committee and its founder and leader, who is a most remarkable black American called Ted Watkins, told me last week in this House something about his achievements.
I cannot go into too much detail—and here we begin to remember what the noble Lord, Lord Mellish, was
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telling us in entirely different English circumstances—but, roughly, they persuaded several unions to club together and put up about 2 million dollars. They bought local land, and on the security they borrowed money to build themselves modest houses for Watts people to rent with the unusual guarantee—again referred to by the noble Lord, Lord Mellish—of ownership after 20 years, the rent covering the mortgage payments. It is almost an exact copy of what the noble Lord was telling us. They have now built a splendid hospital on their land and developed a number of successful enterprises—a grocery store, several petrol stations, a poultry ranch, work training schemes, remedial education, counselling activities and so on. They have organised the young into maintenance groups to keep the place tidy, do local repairs and keep order.
What Mr. Watkins stressed is their independence. They do everything themselves. Blacks from the area are always ploughing back any surpluses into the community purse. That again is exactly what the noble Lord, Lord Mellish, said. The state paid for 36,000 trees, all of which they planted themselves. That would please my noble friend Lord Mackie of Benshie! It illustrates their invariable approach to any improvement.
Next to independence, Mr. Watkins stressed flexibility of funding. They have been able to mix state and federal funds with craft union support and other sources in a way which, I am afraid, our officialdom would find very hard to countenance. But, as a result, their housing schemes not only provide homes but also train Watts youngsters in carpentry, plastering and bricklaying and, above all, generate local employment, unlike outside contractors, who spend their earnings elsewhere.
The city police co-operate in a way that I am sure our police would be happy to join in. The young local residents, mostly black, are employed as a security force, unarmed, but patrolling housing schemes and shopping precincts, and they are able to call up police help on their personal radios. Thus those young people become part of the solution and not part of the problem. By careful management and by doing things themselves they now have a number of successful enterprises, and these are growing all the time.
All that sounds too good to be true, but Mrs. Hoodless, who is the Director of Community Service Volunteers in England was actually there on the streets of Watts in 1981 after our Brixton riots and saw for herself what had been achieved. She saw the blacks who had rioted and thrown petrol bombs active in their restoration work, and she saw the new generation of young blacks growing up not to throw bricks at the police but formed, as I have just said, into a residential security force, unarmed, but in touch with the police at any time necessary.
As a result of her visit Mr. Watkins came over here at the end of 1981 and a London base of his Watts committee was established at the headquarters of CSV in the Pentonville Road with the help of the GLC and (I say this to the Minister) the Department of the Environment. Advice and help have already been forthcoming from that London base for projects in Brent, Hammersmith, Islington, Haringey and Hackney. The Government know all about that, but I

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thought that most noble Lords would not and that it deserved an airing. Such a scheme seems to me to be the right and practical way to put money into these ghetto-like areas, giving the people languishing in them exciting and constructive work to put their own home ground in order. Ted Watkins went to look round Handsworth a couple of weeks ago and noticed that the restoration work seemed to be done by large firms and not locals, and he saw no blacks at the work, for what it is worth.
Mr. Watkins has seen the Secretary of State, and I expect that the right honourable gentleman will have been as impressed with him as I was. I beg the Government to channel at least a substantial part of the increased help that they are promising in this sort of direction.
In discussion Mr. Watkins agreed that our conditions are very different from those in the United States. To begin with he said that our blacks are 20 years behind the American blacks socially, economically and educationally. He said that proportionately we may not have as many multimillionaires but that he thought we had as many millionaires, which was rather an interesting thing to hear. It may have been exaggerated. He thought that our unions would be a harder touch than theirs had proved, and of that I am quite certain. He thought that we had a special problem over lessening distrust of the police because we had so few black police, and while the tension remained it would obviously be difficult to recruit them. He made what seemed to me an interesting suggestion—that we should ask for help from our old Commonwealth, where there are many trained black police who could not be accused of being disloyal to their community and could quickly establish good relations with the public. I pass that on for what it is worth.
I want to back up this—to me—exciting story of the Watts achievement with evidence from home. NACRO, the organisation for helping offenders of which I am proud to be the president, has for 10 years been involved in what it calls neighbourhood approaches to crime prevention, work which brings it into close touch not only with potential and actual offenders but also with the surrounding community. It is involved in no less than 60 housing estates in 30 different local authorities all over England and Wales. The NACRO analysis of inner city problems tallies very closely with the Watts experience but so far their involvement has been on too small a scale to show comparable results. Once again, the Government know all about this. Our premises were burnt down in Handsworth and we are producing Response to the Handsworth Disturbances, a document which I hope the Government will study very carefully when we send it to them, but we have not yet done so because it is not quite agreed.
Watts has shown that its methods can work. We in NACRO, with other social work organisations, have begun here. What is required is a determined act of co-ordination, area by area, to see that different estates are properly, flexibly and generously funded, never forgetting the cardinal rule that they must be persuaded to do things for themselves and to be independent. I believe that we have to try to follow the
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Watts initiative of self-help in each deprived housing estate and I believe that in this way we can remove the underlying causes of riots. I do not believe that we can do it in any other way.
Perhaps I may end by quoting a very moving speech made in 1971 in your Lordships' House by a much loved colleague. He said:
"The West Indian is different from any other colonial in the world … In essence he is a black Englishman, because when slavery took the African into the West Indies the owners destroyed everything that was Africa. They have not got original names. My grandfather was a Nigerian, but I am named Constan tine. That name was collected in the West Indies".
He said that he was brought up to use English pots and pans, to an English school curriculum, to English games—and paused to point out that pupils sometimes defeated the teacher. He knew no other language and no other customs than English. He said:
"It was very easy for me to come and live in England".
It has not proved so easy for some of his fellow blacks from the West Indies. Nor will it until they can be proud to live where they live and can show by helping themselves that they really belong to this country.
9.3 p.m.
Baroness Nicol: My Lords, I too offer the Minister sympathy in advance because I am about to introduce yet another facet although I have tried not to put my remarks in the form of questions, so he may get away with not spending too long on my speech.
Those of us who are concerned with environmental matters have every reason to look closely at the proposals in the gracious Speech. We have the recent example of the Wildlife and Countryside (Amendment) Act in which vitally needed measures—which the Government apparently supported in principle—were included in the last Session only by virtue of a Private Member's Bill introduced by my honourable friend Dr. David Clark in another place. We have the current conflict over the Okehampton by-pass, where the Government are prepared even to override the recommendation of a Joint Select Committee in their determination to drive a motorway through a national park. We have a Bill pending to try to rationalise the management of the Broads—the noble Viscount, Lord Massereene and Ferrard, was very eloquent on this—to ensure the survival of one of our most important remaining wetlands, and although there seemed to be Government support at the beginning, rumour has it that that support is now wavering. I hope that this is not true. Perhaps I could make that the single question that I put to the Minister. Are the Government still supporting this Bill?
We have encountered stiff resistance to our efforts to persuade the Government that the Ministry of Agriculture, Fisheries and Food and the Forestry Commission should have a greater responsibility to further conservation in all their activities. Again, the noble Viscount drew our attention to the problems of absentee landlords and to the fact that the Forestry Commission has been and is being persuaded to sell off parcels of forestry to private ownership. That some of these parcels of forestry are being taken up in the way the noble Viscount said must give us all cause for concern.

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We are enduring long delays in negotiations on the establishment of marine reserves. So far as I know, none has yet been established and we are now into our third—possibly our fourth—year. We have observed Government resistance to EC directives on certain aspects of pollution control. None of these examples gives us any confidence that the Government are responsive to the growing public awareness and concern over conservation methods.
On a slightly brighter note, the proposals for environmentally-sensitive areas in the forthcoming Agriculture Bill are welcome and will go some way to meet criticism from environmental groups and from Members of both Houses. In line with the remarks of the noble Lord, Lord Mackie of Benshie, the new grant arrangements to farmers in ESAs could pave the way for more widespread future support for environmentally-sensitive farming, especially when there is a growing EC concern for over production.
Now is not the time for a detailed examination of that Bill, but I take this opportunity to ask the Government to look again at the desirability of placing a duty on agricultural Ministers to balance the needs of food production and forestry with those of conservation. I am very delighted to see the noble Lord, Lord Belstead, has appeared. He knows this song very well. There was wide support for this approach during the debates on the wildlife Bill and I take this opportunity of reminding the Government of that.
The opportunity could also be taken to examine more ways of realigning agricultural support to assist environmental policy. Again the noble Lord, Lord Mackie of Benshie, made some common sense suggestions which I think could well be taken up. The Council for the Protection of Rural England, the Council for National Parks, and the World Wildlife Fund have produced an excellent report which I recommend to the Minister if he has not already read it. The ESA provisions could be extended and used experimentally in varying areas of countryside. Is the Minister aware that the Countryside Commission and the Nature Conservancy Council have a preliminary short list of 46 appropriate ESA areas in England and Wales? We shall return to all those issues during the passage of the Agriculture Bill. However, meanwhile I urge the Government to take the initiative and to make imaginative use of this opportunity.
I turn now to the proposal to "improve the planning systems", which is also mentioned in the gracious Speech. The details are contained in the White Paper entitled Lifting the Burden and they refer to the fairly sweeping changes which are proposed in planning procedures. It is encouraging to find a commitment to green belt protection and to the preservation of our historic buildings and the rural landscape. It seems to me that there may well be a contradiction between those particular commitments and what comes afterwards. Nevertheless, we welcome them.
The indiscriminate sweeping away of controls proposed for certain urban areas gives cause for concern. There is room to improve procedures. I think that there has been considerable improvement over the last few years in the time taken to agree planning applications, and that is to be welcomed. We all want to make planning departments more efficient.
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However, the removal of safeguards against undesirable developments cannot be welcomed The content of paragraph 3.8 of Lifting the Burden is particularly worrying and I shall quote it in order to give your Lordships the flavour of the chapter. It says:
"Where serious environmental problems may be expected, it may still be possible for permission to be given but subject to suitable conditions to protect the environment. Where it is less certain that there will be problems the development should normally be allowed to proceed without onerous conditions. If subsequently there are shown to be serious environmental problems, the local authority could take action against nuisance under the public health and control of pollution legislation".
I shall not weary your Lordships by reading any more, but the whole of that particular chapter is couched in those terms and it is, indeed, very worrying. It reveals an antagonism towards existing planning procedures which is not justified by the results. In general, we have enjoyed a degree of protection from exploitation which should not lightly be dismissed. Long before we may reach the expensive stage of having to apply public health and all the other safeguards, local residents will have suffered a considerable degree of nuisance, annoyance and possibly loss of property values. I do not think that that is a road along which the Government should go, and I ask the Minister to look carefully at the proposals and to listen to the many objections which I am sure he has already received along these lines. For all the reasons which I have given, we can only view the Government's environment proposals generally with caution and with some anxiety.
9.11 p.m.
Lord Auckland: My Lords, although the noble Lord, Lord Mellish, is not in his place, I should like to associate myself with the congratulations which have been expressed to him on his notable maiden speech. I do so for one particular reason; that is, I happen to be an associate director of a company situated in Rotherhithe and I have seen it grow considerably over the few years in which the noble Lord, Lord Mellish—who once so admirably represented that part of London in the other place—has been responsible for it.
As always, the gracious Speech is a formidable mixed grill of legislation. Any Minister who has to wind up a gracious Speech debate has a formidable task ahead of him. I wish to refer briefly to that part of the gracious Speech which deals with the reorganisation of our social services. Whatever views may be held on the proposed legislation, the Government are to be congratulated on at last grasping the nettle and reorganising something which was first set up as far back as 1944 under the aegis of that very distinguished reformer Sir William Beveridge. We must of course await the legislation before we can comment in any detail on the matter. However, we are now faced with a substantially larger population than in 1944. Therefore the task facing any Government when they come to administering the social services equitably and to those who really need help from the social services becomes increasingly formidable.
I hope, as I am sure the House does, that particular attention will be paid to those who are on pension. Your Lordships' attention will have been drawn to the alarming plight of a number of members of our armed services who have been injured in recent affrays; and I

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think particularly of the Regent's Park bombing outrage. I hope that in a general review not only of the social services but of pensions as a whole, those matters will be looked into.
I realise of course that looking into specific matters is the prerequisite of Members of the other place, but I believe that the general, as opposed to the particular, needs consideration. Therefore the whole aegis of social services, particularly the increased training of social workers, is important. We have read of some particularly disturbing cases of ill-treatment of children living in very substandard conditions. I hope that the Government, when they review the social services, will look into the need for retraining, or increasing the training, of social workers. A lot of juvenile crime today is not so much the result of unemployment but the result of ill-treatment when young. They become embittered and they turn to crime. This is a field which needs looking into.
I want to say just a word about the Sunday trading laws. Again of course we have not seen the legislation, but there is undoubtedly strong feeling on this matter. I urge the Government to think twice about whipping too hard on this. Obviously we cannot give directions to the other place, but this is a matter which provokes consciences. I believe that the Government are to be commended on at last bringing in legislation of some kind. Whatever else may be said, the present laws are a complete anomaly. Instance after instance can be given of certain things that can or cannot be purchased in a chemist's shop—toothbrushes but not toothpaste, or vice versa. Obviously all this kind of thing in 1985 needs looking into carefully.
There is a genuine desire among many people to preserve Sunday as a special day, and it is open to question whether there is a real need for the general opening of shops. Of course it can be said that garages and public houses open, so why not shops? I hope that before the legislation is finally framed there will be a far more comprehensive examination of whether there is a real need for a general directive to be given for shops to open as is envisaged by the Auld committee.
My final word is about education legislation. Of course the present teachers' dispute is regretted by everyone. This is not the occasion to make detailed comments on this dispute, but I hope that any legislation envisaged with regard to the teaching profession looks carefully into the general salary structure for school teachers. There are obvious anomalies here, and I speak as one whose elder daughter went to training college up in Nottingham and taught for some years before having a family of her own, but who is now likely to return to supply teaching. She feels strongly about this, though she would never strike. A close look into the whole question of teachers' pay and the conditions of employment is necessary.
My noble friend the Minister already has a formidable task ahead of him. I do not propose to add to his burden because, due to the exigencies of British Rail, I may have to leave before his winding-up speech. But one thing is quite certain: we have a very challenging Session ahead.
9.20 p.m.
Lord Crawshaw of Aintree: My Lords, I hope that the noble Lord, Lord Auckland, will forgive me if I do not follow his theme. As a person associated with Toxteth for 27 years and having had the honour of representing it in the other place for 19 of those years, I wish to take the opportunity of making a contribution concerned with inner city troubles. One thing that has concerned me during this debate is the assumption that people are either for the police or against them. What do we mean by are we for the police? As a person who has been a member of the Bar for 37 years it is unlikely that I should be against the police, but if being for the police means that one is never entitled to be critical of them, I am afraid that your Lordships must count me out from the word "go". I have not found a political party I have belonged to that I have not been critical of. I have been critical of my Church but I hope constructively. What I shall say today I hope will be constructive even though it bears criticism.
Of course I support the police. I wish to say here and now that rioting on our streets is not justified in any circumstances in a democracy. Those who riot must accept the punishment which is meted out. But there are certain causes for riots. Not all people who take part in riots are criminals in the accepted sense of the word. Desperation can drive people on. If that were not accepted it seems most peculiar that the Government are going to give their name to certain sanctions in the future if apartheid is not dismantled in South Africa. But those people we are seeking to help in South Africa have themselves been rioting on the streets and killing police. But we say in that case they are not in a democratic state. Of course they are not in a democratic state, but people in a democratic state can reach a level of frustration which can bring about riots. We have heard about black people rioting on the streets.
Much of what I shall say today I said in the other place in July 1981 in the week following the Toxteth riots when everybody thought it was most convenient to say that it was a black riot. The police knew that it was not a black riot on the first night: it was a black and white riot. I had to say that because it was only fair to say it. Following that riot, I was asked on the following Sunday to address the congregation at a local church after the service. When I got there they had moved into the hall. There were between 120 and 140 people there, probably about a dozen to 20 faces among them were black and all the rest were white. I said "I have not come here to speak to you, I want you to speak to me", hoping against hope that they would change my mind on some of the things that I had learned during the 27 years that I had been there. After the church service, one white parishioner after another said, "If you were subjected to some of the things to which we are subjected, you might be tempted to do the same".
What kind of matters are we talking about? It was very easy to be critical. I support the police to the extent that if a riot starts they must be in a position to protect themselves. I can never understand the argument that they must not have certain weapons. Anybody sitting in this Chamber or in the comfort of his own lounge can pontificate on these matters.

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However when one has spent three nights behind the police line, with petrol bombs flying all over the place and shields on fire, saying that they should not be adequately protected is not living in a world of reality. I say here and now that they deserve that protection and I, for one, should insist that they have that protection.
As has been said today, of course there are bad apples in barrels, and there are bad apples in the police force. That does not make them all bad apples. However, because we know that they are there, and they merely reflect the kind of prejudices that any other organisation or profession projects, we have to be doubly careful when we put weapons into their hands and that when we say that they must be used only in extreme circumstances, they are not used at the first opportunity.
One of the criticisms I have and where I believe things have gone wrong, is the lack of discipline. There is not sufficient supervision over the individual officers. I do not know anything about the Brixton riots, but I do not know whether any of your Lordships saw a programme called The Human Factor a week or so ago, when seven Church of England clergymen from Brixton were interviewed and each one talked about the matter of being out of touch and the "over-force" that was being used. These are unpleasant things for a person who is a Member of the Bar to have to say; but if I cannot say them here, and if I am not prepared to say them, I should not be here. I am saying them because these are the facts that I have found over the years.
What is the reason for the breakdown? Perhaps I may tell you what an ex-police officer, who held a very high rank, said to me a matter of only four nights ago. he said, "When I was a constable, I was sent to patrol a crossing near a school. The children used to fight to hold my hand to go across the road. They would give me their sweets when they were going into school because they could not take them in, and when they came out they collected them. I knew them by name. I saw them grow up. When I saw they were doing things wrong when they were in their teens, I would tell them and they took it from me like a father because they knew and respected me". I do not know whether I dare ask whether anyone in this House knows the name of the local policeman. I have asked several whether they can put a name to a policeman. They would not know him if they fell over him! Then we wonder why there has been a breakdown in relations between the police and the civilian population. In Toxteth, the only time we see them is when a Land Rover draws up and a sergeant and three officers jump out.
I shall not tell your Lordships what I have seen; it does not take the matter any further. However, I can understand why, after that church service, those people were telling me that if I had to put up with it I might be rioting as well.
I do not make a criticism unless I try to make a positive suggestion. I made a positive suggestion to the Home Office a number of years ago. It did not seem to have any effect. I was chairman of the Committee on the Police Complaints Board Bill. I was so concerned at the loopholes in it that if I had been a person making a complaint under it, I should not have had the
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slightest confidence in it. The answer that I received was that the police would not wear what I wanted to do. Anyway, we now have another one. I shall not say anything about that. Anyway, it is probably about eight years too late. I hope that this one will work. In the legal profession there is a well-known saying that justice must be seen to be done. If we operate in a system in which people make complaints and where the people who are being investigated are the ones who have to produce the evidence, is there any satisfaction for the person who is making those complaints? I would not have it, and I do not blame anybody else who says the same.
So how do we set about rectifying this situation? I think that this breakdown in relationships amounts in many cases to one particular thing which the police have put on them and on which they cannot win. 1 am talking about motoring offences. I do not know whether your Lordships saw a letter from the Chief Constable of Liverpool in The Times about three days ago. He was seeking to put figures on searching into their proper perspective; and quite rightly so because a report said that on Merseyside last year there were 167,000 incidents of stop and search. He rightly pointed out in his letter that 74,000 of these involved stopping people that the police thought were criminals. All right; I am not making any complaint about that at all. Another 40,500 were of people who were spoken to in order to find witnesses to accidents and so on. I am not making any complaints about that.
But an ordinary citizen who does 35 miles an hour in a 30 m.p.h. area is not a criminal in the accepted sense in which you and I talk about criminals Of course, he comes under the criminal law, but if 52.000 people are stopped by Merseyside police in the course of a year, how often do those people get spoken to perhaps in a way in which you and I have heard officers speak to other people? This is what is causing the breakdown. They cannot win on that particular situation.
That was one of the suggestions that I made some eight or ten years ago. It does not matter what we think of a traffic warden or of any other organisation that is not the police force; but it is vital that we have a respect for the police force. It is vital that we have that association with one another. I know the difficulty: the police will not wear it. But I thought that we and the other House made the legislation for this country. There is another branch which looks after the regulations in so far as heavy goods vehicles are concerned. Why could it not be put on to another department that was not the police force so that when people come into contact with the police they did not come into contact with them in these adverse circumstances? I say this to your Lordships. I know members of the legal profession and doctors and other people who, because of these encounters in a position where the police cannot win, have said, "If they want my help in the future, they've had it".
I was discussing this matter the other day with a lady Member of Parliament. She said, "I was spoken to in a most abusive way a couple of weeks ago when I was coming out of Hyde Park in a car". No, she was not one of these red women from the other Chamber. She was a Conservative Member of the other House. These are the things which have got to be said. I do not

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believe that we put the police in a situation which is fair to them when we are expecting them to see the ordinary citizen, who is not a criminal in the accepted sense of the word, in those circumstances. I ask the Minister, even eight years later, to consider whether this job could be done by somebody else.
The other thing I want to see, of course, is the policeman brought back on to his beat and kept on his beat so that people get to know him. There is also the matter of black police. People talk about making special privileges for the black people. They do not want privileges: they want to be treated the same as you or I are treated, not given privileges. So far as black police are concerned, I have heard people say: "Why not just have black policemen patrolling the black areas?" Nothing could be more counter productive. But if, in that Land Rover I have seen flying round with policemen jumping out and going into a crowd of youngsters playing on a street corner—doing the things that I did when I was a kid—there was a black policeman with them, it would have a salutary effect on the other three white ones. In our society we normally try to consider other people's feelings. If you are in a Catholic gathering you do not start making jokes about them. In the same way, if a black policeman was in that group, they would think twice before they started heavy-handed treatment of anybody, whether black or white.
I am sorry I have had to say this. I am not a police "basher". I believe that the police force in this country can show many in the world what a police force ought to be. But, as in any other aspect of life, there are people who overstep the mark, and when that happens we antagonise a community so that they do not wish to co-operate. We ask why there is so much crime. In a country area they know the local bobby. Where does he get his information about crime?—probably from having a sly drink at the back of the pub at night.
When I last spoke on this issue in the other Chamber, I said that while it may be against police regulations, I should like to feel that every policeman in Toxteth could knock on a door and say, "Are you thinking of brewing up? It's blooming cold out here". That is the sort of relationship we want between the public and the police; and when we hear that in Liverpool a police officer was removed from community policing because people called him by his first name, does it not make one wonder where we are going?
These are the things that have cause the trouble. The black community in Toxteth live in terror in case these things break out again. On the second night of the riots four years ago, of course, as when riots break out anywhere, the criminals got hold of it. It is odd: of the shops which were broken into all had television sets in, and so on. But what must it have been like for the black community in the Lodge Lane area, where they lived in flats above the shops and they saw the fire coming along that road, and they dared not go out because of the violence outside?
What is it like for the black community living in those circumstances? It is not all one way: but it is important that we call a spade "a spade" and not make party points about whether you are for or against the
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police. I am for peace; peace in our cities. I hope everybody else in this House is for peace in our cities, but we do not get it by being unduly critical of people who raise objections to certain things. We ought to discuss them.
There is so much that can be done; there is so much I could have said, but I have already spoken for too long. We talk about the militants who are now commanding the Town Hall in Liverpool. After the first riot they issued leaflets to the public saying, "Demand the release of the people who have been arrested". To the credit of the people of Toxteth, they told them to get lost—and I think they got lost in the Town Hall at Liverpool, but we keep hearing about them every so often. It is not the militants who will destroy our society; it is not the fascists and it is not the communists. What will destroy our society is if people in this Chamber, or in the other Chamber, sit down and think that they should not say anything, because it is not done. I hope that what I have said may make some noble Lords realise that there is another side to this coin.
9.40 p.m.
Lord Hughes: My Lords, I do not feel it necessary to apologise to the noble Lord, Lord Crawshaw of Aintree, for not following him, though I found what he had to say both interesting and informative. But coming as I do from a small community far off in Scotland where if during the summer we saw a black man or a yellow man our thought would be that the holidaymakers are coming from far away this year, I could not talk with any knowledge at all on that subject.
I have only one main subject on which to speak, but before getting on to it I want to refer to one point which the noble Lord, Lord Glenarthur, made in his opening remarks when he was talking about Sunday trading. He is a young man, and he was talking about a reform of legislation which came into being at a time when, I am quite certain, he had no interest at all in politics; and because of that he may well have unwittingly misled the House. There have been a number of occasions in recent years when legislation for England and Wales has been patterned on legislation which was already in operation in Scotland, on the basis that it had worked there and therefore the Government were prepared to try it south of the border.
If he has given the impression that Parliament is now being asked, once again, to follow a good Scottish example on legislation, that is not the case. When the legislation was passed for England—I think that Wales was also included—the people of Scotland would never have dreamt of having shops open on Sunday, they would never have dreamt of having football matches played on Sundays and they even looked with a considerable amount of disfavour on those who played golf on Sundays. So it would then have been regarded as an insult to Scotland to impose on them restrictions against doing something that they had no intention of doing. The Minister pointed out that since that legislation was passed there have been considerable changes in public attitudes, and because restrictions were not considered to be necessary in Scotland all those years ago it was so easy for Scotland

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to change with the times. So you are not getting back to what we have done; you are trying to get back to where you were before.
My main subject tonight is drugs, drug abuse and drug trafficking. A few weeks ago this matter was raised in the House and I asked a supplementary question, to which the noble Lord, Lord Glenarthur, replied that perhaps I should wait and see the legislation. I now accept that that was useful information and was absolutely correct, because I listened with real enthusiasm to what he had to say about action to deal with drug traffickers.
As some of your Lordships know, for nearly 10 years I have been one of the British delegates to the Council of Europe and for nearly four years I have been chairman of its social health committee. It is a committee which is very much involved with matters of this kind, and it is because of that that I intervene tonight. I have in my hand a copy of a recommendation which was passed by the parliamentary assembly in September last year. It gave unanimous approval to a document which had been prepared in my committee in June and July of that year. It is recommendation No. 989 on the fight against drug abuse and trafficking. Of course the Bill which will be coming before us in due course deals with trafficking. I shall therefore not make other than passing reference to other parts of the document that would be more appropriate on another occasion when we perhaps get down to the aspect of seeking to deal with the abuse of drugs by people who may or may not want to be helped to get rid of them.
In the Council of Europe, we have a procedure of doing first what is called the considerings and then the action. The document starts off in typical fashion by saying:
"Considering with dismay that the use of drugs, both narcotics and psychotropic substances, is still on the increase in the majority of member countries;
Noting that in the member states of the Council of Europe over the last few years there has been a major rise in the sale of cocaine, wider availability of heroin, the price of which has fallen, and an unprecedented increase in the use of cannabis which has benefited from the laxity of public opinion in some countries"—
even, for instance, in Holland, where the sale of it is legal—
"alarmed by the fact that the average age of users is continuing to fall and ranges often from 13 to 16".
I am sure that most of us thought that it was only in the United States that this position had been reached. It is, in fact, becoming quite common in Europe.
There are some paragraphs that I shall omit. If, however, Ministers are not aware of the document, I will be happy to have copies made available for them. I think that they must know about it, in view of a remark that I shall make later. The document continues:
"Considering that the Committee of Ministers' decision of 1980 to integrate the 'Pompidou Group' (Co-operation Group to combat drug abuse and illicit trafficking in drugs)—set up in 1971 to enable close multidisciplinary co-operation—into the Council of Europe, as the Assembly had asked in Recommendation 843"
I would mention that the present chairman of the Pompidou Group is Mr. David Mellor, one of the Ministers at the Home Office. I had the pleasure of meeting him this afternoon. On the unanimous decision of my committee, I invited him to come to
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either Paris or Strasbourg to talk to the committee about the legislation that the Government are proposing.
The document goes on:
"Welcoming the final declaration of the 7th Ministerial Conference of the Pompidou Group Ministers and its positive outcome;
Noting with satisfaction the recent decision of the Spanish Government to join in the Pompidou Group, thus bringing up the number of members to fourteen"—
that is, out of 21 members in the Council of Europe—
"Recommends that the Committee of Ministers draw up. as part of its medium-term plan, a consistent multidisciplinary strategy for the fight against drug abuse and trafficking, using all the resources of the Council of Europe and paying particular attention to the following proposals"
I shall confine myself to those dealing with trafficking:
"To reaffirm that it should be a punishable offence to traffic in both 'hard' and 'soft' drugs, seeing that whilst the former certainly have a more devastating effect, the latter, because they are easier to obtain and to use, considerably increase the number of users and lower their average age, thus adding a quantitative dimension to the problem; each country's legislation should differentiate between both types of trafficking and provide for the punishment of the offenders in both cases;
To step up measures to combat large-scale drug trafficking, in particular:
by stressing the international dimension of this trafficking and the proven links with the networks of arms trafficking and terrorism and, being extremely concerned by the evidence that large sums of money made by selling drugs illegally are being used to finance international terrorism, by taking steps to encourage strong international efforts to stop the destabilising effects of this traffic; by intensifying the co-operation between the national authorities by improving the exchange of information on the How of international capital associated with drugs and, more generally, on detecting, freezing and confiscating drug traffickers' financial assets".
On that point, I wish to draw attention to the fact that what the noble Lord, Lord Glenarthur, had to say goes even further than we had asked. The noble Lord spoke about confiscating their assets, not, as we have said, their financial assets. I believe that the Government are right to extend this over the whole range.
In conclusion, I should like to impress upon the Government that they should follow up the activities of their colleague Mr. Mellor in the Pompidou Group and take a leading part. I regret to say that to do so is rather unusual for this Government in the Council of Europe. We tend far too often to be following rather than leading the council. However, this seems to be a case where pre-eminently the Government are in a position to take a lead in what is taking place in Europe and to use any power which they have to persuade others to do the same. No matter how effective the legislation may be in this country, it will be only partly effective if it is just a small minority who are taking action. Action by the whole of Europe is needed.
I said earlier that I did not believe the Government would be unaware of the recommendations. After I heard what the noble Lord, Lord Glenarthur, had to say when he opened this debate, and having refreshed my memory by re-reading the recommendations, I almost thought that we had given our document the wrong heading and that instead of calling them recommendations we should have entitled them. "A I White Paper for the production of legislation". If the

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Government had written a White Paper on this matter in September last year, it would not have differed very much from the recommendations.
The noble Lord, Lord Glenarthur, rather generalised when he said the noble Lords on his side of the House were being helpful, whereas those on this side were acting only to find fault and to oppose. I am sorry therefore if in agreeing so wholeheartedly with the noble Lord the Minister I have disapointed him in one respect.
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I do not expect the noble Lord, Lord Elton, to say anything to me. Of course if he does not wish to say anything to anybody else, that is their business. At the beginning of my remarks I omitted to say, as a number of other noble Lords did, that I would not add to his difficulties. When I sat on the Front Bench and had to do what the noble Lord must do tonight, I always welcomed the remark, "I will not add to the Minister's difficulties". However, I so often found that by the time the speaker finished, he had. I hope that I have not done so.
9.53 p.m.
Lord Wigoder: My Lords, every year this debate covers a vast range of topics. So far as I can see, half of them are chosen because they have been mentioned in the gracious Speech and are therefore worthy of comment. The other half are chosen because they have not been mentioned in the gracious Speech but are equally worthy of comment. If there is any general theme underlying many of the contributions that your Lordships have made this afternoon and this evening, each speaking with his or her own particular expertise on a specific topic, it is a deep concern with the lack of cohesion in our society.
That is nothing new. I suppose that 10, 15 or 20 years ago speeches would have been made in your Lordships' House on that same theme but blaming the class basis of our society as the cause of all our troubles. One hears very little about class distinction these days, though no doubt it still exists. Instead, we hear about, as the cause of the gradual fracturing of our society, the distinctions and differences between those who work and those who are out of work; between those who are racially disadvantaged and those who are not; and between those who suffer from inner city deprivation and those who do not. They have taken over as the major causes of the turmoil in our society.
Some years ago, it would not have needed a particularly wise man to point out that it would be unlikely, with some 3 million unemployed, that any society would be able to live indefinitely in a state where it was both democratic and peaceful. In some ways, it is remarkable that our society has survived for so long despite the fact that it has had that number of unemployed in its midst. I suppose that is due to the level of social security now as against in the 1920s and 1930s, which many of your Lordships will remember, when there were also periods of high unemployment. I have no doubt that those are the fundamental causes of the disorders that we have seen in our society in recent years and recent months.
I accept at once that there are in our cities a number of people who are criminal by nature and who are only too happy to take advantage of any disturbance once it starts; but I think the Government are deceiving themselves if they believe it is that criminal fraternity which is responsible for starting the civil disorders. Action clearly must be taken on this, apart from a public order Bill which itself, in a sense, is only playing at the fringes.
Something must be done about the problem, particularly of unemployment. I know of course that it would be boastful for any political party to claim that it had a complete cure but something must be done to persuade those 3 million people that some action can be taken, that some money can be spent without being unduly inflationary, that some public works on the infrastructure can be begun to give work to some people. That, at least, would give them some hope.
I believe in even more reform than that. The Government must somehow get over to those 3 million people that they do care about the problem. I find this the most extraordinary phenomenon of
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recent years. There are sitting on the Government Front Bench at this moment—or there were until a moment ago—three noble Lords who care just as passionately about the problems of the unemployed as any other Members of your Lordships' House and who are deeply aware of the frustrations, the squalor, the despondency and the hopelessness to which long term unemployment gives cause.
They are not alone. I believe that that is the feeling of the overwhelming majority of the members of the Government, and it may well be of every member of the Government. However, in some extraordinary way although the Government have had the advantage—I suppose it is an advantage—of a favourable press over the years that they have been in office the impression has been allowed to grow in this country that not only can the Government not do anything about unemployment but that they do not want to do anything about unemployment. They appear to have given the impression that they revel in wearing a hair shirt, a hair blouse, or whatever the appropriate garment is.
I do not suppose for a moment that that is the true state of their feelings, but it is the impression gained by the great British public as a result of the words and the actions of the Government as reported in the media. If the noble Lord, Lord Young of Graffham, makes any substantial contribution in the short run to the problem of unemployment, as I am sure he will it is not only in producing the kind of measures that he produced in your Lordships' House a little earlier this afternoon; it is even more in gradually being able to create the impression that he is a member of a Government which really do care about the problems of the unemployed. I believe that would do much to rid our inner city areas in particular of the disillusion which has given rise to the recent troubles.
In looking at the problems of public order we await with interest of course the Government's proposals. I do not think we can await them with any particular optimism and I say that for a very simple reason. I believe that almost every single form of public misbehaviour which ought to be a criminal offence is in fact already a criminal offence. You can change the names of some of the more obsolete forms of criminal offences: riots, routs, unlawful assemblies and so forth; perhaps you can look at the problem particularly of processions that insist on marching through areas where they will cause the maximum provocation. There are these borderline areas, but I myself do not believe that a public order Bill will do much more than tidy up a number of loose ends. Certainly it will not cure the fundamental, underlying problem of the civil disorders that we have seen in recent months.
I welcome the fact, and I remind the Government of it, that they undertook that, when the public order legislation was considered, we should have a chance of looking again at the football ground legislation which we passed in the last Session, because I must confess that I still feel that much of it was very mistaken. I still feel that in concentrating on the amount of drinking that took place inside the grounds instead of the amount of drinking that took place outside the grounds, the Government did nothing to attack the

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real causes of disorder at football matches and simply struck a very substantial financial blow at our leading football clubs.
If the Government did that, then the football authorities appear to have followed with a will, because I am bound to say—though it has nothing to do with the Government—that the recent absurdities of the discussions between them and the television authorities appear to create the impression that both the Government and the football authorities are determined to destroy our leading football clubs.
Having mentioned the question of disorder both during inner city riots and at football grounds, perhaps just one word will be permitted on the subject of the police, about whom we have heard so much during today. I agree entirely with what has been said by the noble Lords, Lord Mishcon and Lord Harris of Greenwich. I believe it is the duty of every responsible citizen to seek openly and publicly to support the police on every possible occasion. By that, I do not mean that we should deliberately overlook those cases where the police err, but I do mean that we should not go nit-picking or get involved in anecdotal evidence such as, "I knew someone who knew someone whose sister was stopped for speeding and the policeman was not very polite", or whatever nonsense it may be.
I believe that when we talk about "the police" we should realise it is not an amorphous expression. In fact "the police" almost invariably means a very young policeman on the beat, perhaps without the advantages of the education which many in your Lordships' House have had, who is constantly faced with a series of extremely difficult decisions in circumstances of very great danger and has to make those decisions in a split second. I do not believe it is right, appropriate or sensible that in those circumstances people should criticise too closely the actions of an individual police officer. I believe that out of this debate there will go a message of great support to the police for what they are doing to carry out their very, very dangerous task.
They are of course one arm for the enforcement of the law. The second arm is obviously the courts, and, if I may, I want again to support what the noble Lord, Lord Mishcon, said about one aspect of our courts in the future. When increased powers were given to the police recently in the Prosecution of Offences Bill and the Police and Criminal Evidence Bill—they went together—it was really done on the basis that at the same time there would be set up a powerful, independent prosecuting authority. I am bound to say that at the moment I think the Government are failing in their duty in achieving that. They are not offering appropriate salary scales to persuade prosecuting solicitors of real ability to enter the new service as a career, and I believe that, unless they very quickly look again at their total lack of generosity in this matter, the result will be that the attempt to establish a really independent, weighty, impartial Crown prosecuting service will fall flat on its face before it starts.
The very last matter that I shall mention this evening relates to the Crown Prosecuting Service. It has been mentioned in another place recently that to
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that service will be given the task of looking at the question of jury selection and whether the right of the defence to peremptory challenge, which was recently reduced from seven to three jurors, should now be removed altogether. I speak personally on this. I do not think that it is a matter of party policy in any way. I believe entirely in trial by randomly selected jury; and I believe that, provided the panel is selected at random and not from one area, one street or one neighbourhood, and provided that from the panel the individuals are then selected at random, it is difficult to make out a case for giving any defending counsel the right to challenge without cause any of the individuals who are called into the jury box.
However, I stress that if that is right for the defence, it is right for the prosecution. The prosecution at the moment has a right of peremptory challenge—it is not called that but that is what it comes to—which is unlimited in number. The prosecution is entitled to object just as much as the defence because it does not like a person's face, the newspaper that he is carrying or whatever it may be. I should think that there is a great deal to be said for abolishing the right of peremptory challenge by the defence and abolishing the right for the Crown to stand by jurors indefinitely, and saying to both sides, "If you want to challenge a juror, you give your reasons and the judge will decide whether the juror should serve".
I think that perhaps on a somewhat lengthy evening those are more than enough comments about some of the issues that have been raised during the discussions in this debate. When I look at the home affairs legislation that is promised, it seems to me, if I may say so, to be very weighty; I am not absolutely sure that it is very nutritious. If we on these Benches can assist during the course of that legislation in improving it so that we can unite our society and make it more cohesive, we shall be happy to do so.
10.7 p.m.
Lord Underhill: My Lords, my first pleasant duty is to congratulate my noble friend Lord Mellish on his maiden speech. I think that we all welcomed the enthusiasm with which he spoke about his work with the docklands corporation. He has asked me to apologise to your Lordships. He has been called away urgently and could not stay. I believe that he has conveyed that apology to the Minister.
This has been a wide-ranging debate, and many noble Lords would have liked to cover a number of other subjects. I should have liked to follow the observations of the noble Lord, Lord Hylton, on Northern Ireland. But I content myself by saying that we welcome the continued efforts at co-operation with the Republic of Ireland in the discussions on Northern Ireland, and express the hope that there will be no injudicious remarks by anyone which may imperil the possibility of progress towards, not necessarily a settlement but movement in Northern Ireland.
My noble friend Lord Mishcon, who a long time ago opened the debate from this Despatch Box, said that I should deal with a number of matters concerning the environment and transport, and we said that we

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should leave the social security matters in the gracious Speech for the debate on 20th November. That debate will also cover the National Health Service, and it is with deep regret that I find that there is not a single reference to it in the gracious Speech. I do not know whether that means that the Government have no proposals at all to deal with the problems that are prevalent in the NHS in all parts of the country. Perhaps the Minister can tell us.
The noble Lord, Lord Wigoder, rightly said that observations are often made about items not in the gracious Speech. That is one. There is also no reference to rates. 1 hope that that means that the Government have dropped some of the foolish ideas mooted on the subject.
Nor is there anything in the gracious Speech referring to any steps to improve the relationships between central and local government. That is a matter to which the noble Lord, Lord Harris of Greenwich, referred, and I think there is general concern in the House about this tension between central and local government. There are still complaints of inadequacy concerning real consultations.
The Association of Metropolitan Authorities stated only recently that the local authority association views at the consultative council on local government finance are regarded with little respect by Government. We are aware that the rate support grant—the block grant—has been drastically reduced from 1980–81 when the figure was 61 per cent. to around 49 per cent. in the current year. I have not yet heard the figure for the following year but I believe that there may be a further reduction. This will not assist in the work of local government. Local government cannot do the job which is expected of it with all the tensions and the penalties unless it has the necessary finance.
One measure not mentioned in the gracious Speech has already been laid before the other House. The noble Lord, Lord Harris of Greenwich, referred to the local government legislation. That Bill is presumably based upon the Widdicombe Report. I believe that we must be extremely careful when this Bill comes to this House, to watch it with considerable care and interest. It seeks to introduce controls over what local authorities can say publicly about their activities. We must remember that members of local authorities are subject to accountability by facing democratic election. They are part of the political process. A local authority must have the right to voice criticism of central Government policies which it thinks adversely affects its area and its community. We must be aware that there is nothing in this Bill that will make such comments illegal.
From a review of the Government proposals in the Bill which has been published already it would appear that they go far beyond the recommendations made by the Widdicombe Committee in its interim report, published only on 31st July. We believe that some of the measures proposed in the Bill will go far beyond the recommendations of the Widdicombe Report and could be a blow to local democracy. The Widdicombe Report considered that it is right for local authorities to be able to explain their views on controversial
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matters affecting them, and it says quite clearly in paragraph 221 that this includes abolition and rate capping. Those are items which the Widdicombe Report says are quite appropriate for a local authority to comment upon and give publicity about. I would go further. With regard to the recent debates that we had on buses, these are surely matters upon which local authorities should be able to pass their comments, to publicise them and get support for their views, if they believe that central Government policy would be harmful to their area and to their own people.
The only distinction is that which may be issued in the interests of a local authority itself and that which is issued in furtherance of a political party. At present it is unlawful to use local authority funds to promote the cause of a political party, and there would appear to be no need for a new law to deal with that matter. The Widdicombe Committee's view is that statements on contentious issues are likely to heighten public awareness and contribute to informed democratic debate. The Bill seeks changes which go far beyond, or cut across, or misinterpret the Widdicombe interim report. The final report is still to come out, and I believe is expected in the spring.
I am pleased to note that there are to be consultations with the local authority associations on the question of presentation of publicity material. That may be helpful. However, the Bill seeks that local authorities shall engage in publicity activities relating only to their specific statutory function. That contradicts the recommendation of the Widdicombe Report.
As the noble Lord, Lord Harris, commented, apart from the principles in the Bill, which I think we must watch very carefully, the drafting at present—and I am not a legal man and must rely upon my legal friends and others—so far as I can see will create a veritable legal nightmare. When, if it still continues, the Bill comes from the other place, I hope that we shall watch out not only for the principles but for the actual drafting, because otherwise there will be created a glorious paradise for the legal profession.
As regards education, the gracious Speech refers only to improving the management of schools and the promotion of professional effectiveness of teachers. Naturally we shall await those proposals with interest. I hope that we can see improving relationships with our teachers without which our education system will be in some peril. There has been an atmosphere of confrontation and provocation from the Secretary of State. There is low morale and the teachers feel that they are getting an unfair deal. Frankly, that situation cannot continue. There is nothing about that matter in the gracious Speech, but I hope that the Minister will be able to say something about it because there needs to be a settlement which commands the confidence of both the teaching profession and also the public
The noble Countess, Lady Mar, referred to the 1984 report of HM Inspectorate of Schools. What are the Government proposing to do about some of the strong criticisms made in that report? Only 11 of the 97 education authorities satisfy all the criteria of the inspectors. I shall not go into all the other details, but the report of the inspectors has been backed up

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recently by the report of the National Confederation of Parent-Teacher Associations which refers particularly to the fact that in four or five secondary schools pupils have to share text books, and 58 per cent. of those schools require that parents help to purchase learning materials.
The Building Employers' Confederation estimates that the modernisation of pre-war schools will cost at least £1·5 billion. That is supported by the Audit Commission which says that local education authorities already have a backlog of £500 million as regards school repairs. There is no reference to that matter in the gracious Speech, but maybe the Minister can tell us what is to be done.
The reference to housing is also limited. Naturally we shall await with interest the proposals on the two points mentioned in the gracious Speech. I was pleased that my noble friend Lady Nicol brought in some of the environmental considerations because they will be of importance. We shall want to know exactly what are the planning changes and the other points contained in the gracious Speech.
My noble friend Lord Dean and other noble Lords dealt in some detail with the figures in respect of the building construction industry and the problems which it faces, the seriousness of the housing problem and the degree of action needed. They referred to report after report. I hope noble Lords have read with some interest in particular the reports of the Building Employers' Confederation, which has sent out some excellent material. I shall not go through all the figures again because other noble Lords have stressed them, but they are frightening figures. The Audit Commission referred to the backlog on routine maintenance at the rate of £900 million per annum. Also, the Association of Metropolitan Authorities has issued two reports, the last of which estimated that something like £62 billion is required to bring our housing stock—both public and private—up to a satisfactory standard.
The Building Employers' Confederation emphasised on capital allocations that for every £100 allocated in 1977–78, there is now, in the year 1985–86, only £32 allocated in real terns. Yet there is the problem of lack of maintenance, lack of adequate housing, to which these reports draw our attention. The British Employers' Confederation also states—and this is serious—that the United Kingdom expenditure on residential construction is the lowest percentage of GDP of all the EC countries, and that that position is still falling.
The statements made in these reports have not been challenged previously by Ministers. If they are to be challenged tonight then we shall be able to take up the matter with the organisations concerned. As other noble Lords have stated, we await with interest the report of the DoE which, various political commentators have said, will show that there is a need for £20 billion for urgent local authority housing.
The noble Lord, Lord Young of Graffham, seemed a little cynical in referring to the fact that 75 per cent. of the housing stock is local authority, and what is the use of giving them further money in the light of the fact that we have all this backlog of maintenance? May I
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refer to an observation of the noble Lord, Lord Mellish, in referring to one authority in the Docklands area—Tower Hamlets—which has over 90 per cent. public housing. The only way that one could eradicate the slums in the past 20, 30, 40 years has been by public housing. In no other way would Tower Hamlets have got rid of the frightful slums in that area.
The AMA report not only refers in its figure of £62 billion to public housing but it refers to the £22 billion which is required if we are to bring all private housing up to the standard that is desirable. We note again that there is reference in the employers' confederation report to the fact that 2·2 million private owners are on housing benefit and finding great difficulty in keeping their housing property up to the standard desired.
Interlocking with tomorrow's debate, I want to refer to the question of the British Airports Authority and the proposal in the gracious Speech referring to local authority airports. One continually gets Ministers referring to the extension of wider share ownership. I have complained before, and I complain again, that the Government have stolen my share in quite a number of important public industries in which I, as a taxpayer, was a shareholder.
My noble friend Lord Cledwyn referred again from these Benches to our belief in a mixed economy. I reiterate that tonight. I make the challenge tonight, which I have made before and to which I have never had an answer: do the Government believe in a mixed economy? If they do, where do they draw the parameters of privatisation? They seek privatisation irrespective of the merits of a particular industry, but just where they can possibly get money in order to carry through with other tax relief policies.
Many of the publicly-owned industries which have been privatised were among some of the most efficient industries in this country. Could anybody deny that of British Telecom? Could anybody deny that of Cable and Wireless? Could anybody deny that of British Oil? Gas will undoubtedly feature in the debate tomorrow. Would anybody deny that of the gas industry? I am old enough to remember the state that the gas industry was in before it was brought into public ownership. Only one word can describe it and that is a "mess". We must remember that some of the big commercial companies collapsed under private ownership, such as British Leyland and Rolls-Royce, only helped by public intervention; and now there is even talk about disposing of those also.
Some of the best examples of integrated transport systems in the public transport authorities are in danger as a result of the Transport Act which we passed only a few weeks ago. The National Bus Company is generally regarded as an efficient undertaking. That is to be carved up and disposed of. Concerning the British Airports Authority the gracious Speech states that a Bill will be proposed,
"to introduce private capital".
I wish the Government would be honest because Michael Spicer, the Minister for Aviation, was more honest. In a press notice of 4th November, No. 496 from the Department of Transport, he makes it clear:
"We aim to sell all the shares in the British Airports Authority to the private sector."

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There is no question just of the introduction of private capital. The intention is to dispose of all the shares.
In another press notice, No. 503 of 6th November, it is stated that reporting accountants have been appointed (again I use the words of the document):
"in connection with the proposed privatisation of the British Airports Authority".
We already have a very interesting document, the Grieveson Grant company's Investment Research report on the British Airports Authority. Before they have their own accountants' report I hope the Government will read that as well because what do I find? First, on the buses side the Government are going into uncharted territory. They are going into deregulation which they admit no other industrial nation has attempted. Grieveson Grant states that when the British Airports Authority is privatised it will become the only privately-run international airport system in the world. I quote again:
"The British Airports Authority will be the world's only privately run airport system".
I quote again from Grieveson Grant, not from a Labour Party document:
"The British Airports Authority is one of the most successful of nationalised industries. In the 19 years since its formation, profits have risen on all but three occasions. In that time the authority has financed massive investment almost entirely from its own resources".
Again we find that Grieveson Grant states:
"Airports around the world are generally owned and operated by public authorities".
Why are the Government interfering with that kind of successful undertaking? Not on merit; it can only be on political dogma or desire to assist their tax relief plans.
Not content with that, the Government are prepared to deal also with the largest local authority airports. I saw what I thought was a disgraceful comment the other day where it was stated that this would enable these airports possibly to secure better managers. That is an insult to those running the Manchester and the Birmingham airports particularly—leaving out the others—which are regarded as successful airports.
We await with interest to hear what the Government's proposals are for the local authority airports. There are 50 of them. All of them have municipal pride, and many of them are fast becoming areas to which we hope more and more routes will be allocated. The Government are reflecting in this policy a typical dogmatic attitude, irrespective of the merits of the industry.
10.29 p.m.
The Minister of State, Department of the Environment (Lord Elton): My Lords, I have an impossible task. I have to reply to 25 speeches, stretching over 7½ hours, and your Lordships expect me to do it in 25 minutes. What is more, you have been led by my noble friend to believe that I shall do it without effort and with total success. That is a Government promise which will be broken very quickly.
Lord Elwyn-Jones: Every jot and tittle!
Lord Elton: I should like to start by adding my congratulations to those of the rest of your Lordships to the noble Lord, Lord Mellish, on a most—I shall not say "provocative" because that will put him in the wrong, but a most stimulating and interesting maiden speech. I look forward to hearing much more from him in similar vein in future.
It is a great pleasure to be debating again with the noble Lord, Lord Mishcon. It is like old times. Your Lordships will know that this Dispatch-Box is more exposed than that in another place because here one answers for all departments of Government. Therefore, it was particularly kind of the noble Lord to start off with one of those very rare matters to which I can give the comfortable answer that it has nothing whatever to do with me. Whipping on the Shops Bill is entirely a matter for the Chief Whip and convention forbids me to say anything else whatsoever.
While we are on the subject of such matters, I should mention that there is a similar consideration with the Broads Bill. I can tell the noble Baroness, Lady Nicol, that the Speaker's Council has ruled that it is not suitable for a private Bill, but I understand that the promotors are examining ways of making it acceptable as such, and we must await the result.
The noble Lord, Lord Wigoder, posed me something of a problem by opening his case by saying that everything hinges upon levels of unemployment and that of course is a subject reserved for tomorrow's debate, as also are the matters of economics and employment that the noble Lord, Lord Underhill, spoke of in part of his speech. I shall commend those parts of those speeches to my noble friend Lord Young of Graffham, who no doubt, if he has more time than I to wind up, will take them into his cognizance when he replies.
The noble Lord, Lord Wigoder, went on to refer to the Crown Prosecution Service. With my right honourable friend the Solicitor General, I can say that we agree that we all want an independent prosecution service which will operate upon terms and conditions that will attract, retain and motivate people of the high quality that is needed. He said this in another place yesterday and went on to say,
"I note the expressions of anxiety … I shall be seeing the trade union group again tomorrow". [Official Report, Commons, 11/11/85; col. 207.]
I believe therefore that the matters with which the noble Lord is concerned are in progress. The noble Lord, Lord Mishcon, said in his speech that he would like to see fewer people in prison, as indeed would the noble Earl, Lord Longford, the noble Lord, Lord Donaldson, and many others, including the whole of Her Majesty's Government. The noble Lords in question will not forget the reduction of the minimum qualifying period for parole which we implemented for this purpose. I gratefully acknowledge the help of the noble Lord, Lord Donaldson, in actually making the power available in statute at a rather earlier stage in our Parliamentary proceedings. Nor will they forget our promotion of intermediate treatment as an alternative to custody. That is cheaper than a custodial treatment, as the noble Earl, Lord Longford, knows, and we provided an extra £15 million for it over the years 1983–85 and £6 million for this year alone.

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The noble Lord, Lord Mishcon, went on to say that he would wish that those who are in prison should be in better, less crowded conditions. So of course do we. He could usefully have added to his quotations from the media a comment on the fact that the Government have launched and are carrying through a programme of prison modernisation and building that is by far the biggest of this century.
As to the net number of prisoners, I should only add this. I certainly accept that unemployment, poverty and bad housing—upon all of which I shall have more to say—have a bearing on crime. But let us start by being clear, as the noble Lord, Lord Harris of Greenwich, himself made clear, that there must be a framework of law under which we live if we are to live in peace.
The noble Lord, Lord Soper, in another context, referred to binding the individual into his true liberty, which is ordered restraint. He will know exactly what I am talking about, and it chimes in, I believe, with the thoughts of the noble Countess, Lady Mar, about the basis of all education. I refer her for the rather sweeping comments on education that she required beyond that to the White Paper, Better Schools; and where that does not cover her remit, I shall try to arrange to write to the noble Countess. But I believe we are at one in thinking that the whole of society and the basis of society, the whole of education, does depend on having a recognised framework of acceptable conduct which, in adult life, is sustained by the law.
Any breach of such a framework will always be a crime. It is true that Secretaries of State of any party have discretion over all cases of parole. They may have opinions about guilt and about the proper length of sentences, but decisions about guilt and decisions about sentences are, under any Government, for the courts; and the decision to commit a crime rests neither with government nor with the courts but, as the right reverend Prelate the Bishop of Manchester reminded us. with the offender himself. And that is what attracts punishment. Those whom the noble Lord, Lord Harris, rightly accused of actually persuading people that it is right to commit serious crimes against the police and incite disorder carry a very heavy burden of responsibility.
The part of the framework of law that most interested the right reverend Prelate the Bishop of London is that part which says what can and what cannot be bought and sold on a Sunday. In a trenchant speech, he listed a formidable body of opposition to the Shops Bill. I noted with great care his repeated statement that this opposition was not to all change but to the wholesale change proposed in the Bill. That suggests that there will be extensive and informative debate on the Bill itself when it is introduced into your Lordships' House.
I also noted the great weight that he placed on preserving the accustomed rhythm of the seven-day cycle of work and rest. Again, I must not anticipate debate, but I want to ask him something in spite of the Auld Report, and indeed in the light of the information given by the noble Lord, Lord Hughes, who is older than my noble friend and older than me. I learnt much in opposition listening to how he struggled on elegantly at this Box when in difficulty, as he knew I
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would be eventually. I ask him, in the light of those considerations, to see the effect of the present state of the Scottish law upon the Scots. In Scotland, the first day of the week is different from the others.
A framework of law is essential in every part of the United Kingdom, including Northern Ireland. The noble Lord, Lord Hylton, suggests a route to reconciliation there at an interesting time. We must all respect those who take real risks for reconciliation, just as we honour those who take real risks in upholding the law. Since we are on the subject of human rights, perhaps I may say that the noble Lord, Lord Allen of Abbeydale, raised a matter which is outside the gracious Speech and kindly said that I may write to him; and so I shall. Had the noble Baroness, Lady Burton of Coventry, given me a little notice I could have done more than assure her, as I unreservedly do, that the failure of communication with the consumer councils to which she referred was entirely accidental and carried no signals or intention of discourtesy. I have no general answer on denationalised industries, since they must be taken case by case, other than that we believe in continuing the system of consultations. On other specific matters, my noble friend will write to her direct. The issues raised by my noble friend Lord Auckland on the social services will be debated, I hope with the benefit of his contribution, next week; and he will forgive me if I simply say that I will draw them to my right honourable friend's attention.
I now come to that one of your Lordships—I forget which it was—who said, half-way through his speech, what it was I was intending to say. I welcome your Lordships' growing interest in the countryside and ecological matters generally. It chimes in with a perception which this party has held for over a hundred years, ever since a Conservative Government brought in the first Act to control environmental pollution in 1875. It is always, as a party, well supplied with enlightened members such as my noble friend Lord Massereene and Ferrard. But, my Lords, we live in an island. Dry land is for us very obviously a finite resource. The Government have a duty to conserve it and we are aware that the rural countryside in particular is an essential part of that resource. But we are also a manufacturing and a commercial nation, whose population continues to increase. That means that we also have a duty to promote the development of land both to give work to our people and to provide the homes that the noble Lord, Lord Mellish, in an outstanding maiden speech, made it so clear that they are desperate to live in and to own, and the economic need for which was so clearly demonstrated by my noble friend Lady Macleod of Borve.
These two priorities—to conserve land and to develop resources—are, it is true, often in competition, as the noble Baroness, Lady Nicol, has pointed out. But not always. It is possible to minimise the pressure of development on greenfield sites. That is why we have increased the Derelict Land Programme from £23 million a year, as it was when we came to office, to £82 million this year. Derelict land grant is now reclaiming 1,300 hectares of land a year. All that land would otherwise have had to be found from the agricultural fields in the rural landscape. The interesting policy proposals for those fields made by the noble Lord, Lord Mackie of Benshie, are proper

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reading matter for my right honourable friend the Secretary of State for Scotland, and I hope that he, having shown me not only the inside of his farm but the inside of his whisky glass, will not feel I am short changing him with that answer. I tell him that the comments will be read with care and I assure the noble Lord only that we will continue to press for price restraint, for which he has a marked enthusiasm.
In spite of the derelict land grant, far too much public sector land is still lying idle for no good reason. My right honourable friend is therefore now making increased use of his powers under the Land Register system to require public sector landowners to dispose of unused land. No matter how successful he is, though, there will always be a need for substantial new developments of greenfield sites. These must be chosen and their extent must be decided upon up-to-date criteria, and I have reminded planning authorities that old structure plans, based upon information that was old even when they were agreed, must not be regarded as immutable. But our object in adjusting the planning system is not to unleash the bulldozers on to the countryside: it is to ensure that where development is desirable and permissible, it is permitted more swiftly than at present. I hope that will reassure the noble Baroness.
However, it is with the cities that your Lordships have been chiefly concerned. Perhaps I may start by dismissing as misleading and harmful stories that your Lordships may have seen about some sort of rivalry between my right honourable friend the Secretary of State for the Environment and my noble friend Lord Young of Graffham which achieved the front page of one newspaper. The true facts are doubtless disappointing for journalists, but they ought to be recorded. The final public expenditure survey allocation was made as a team decision, and my noble and right honourable friends faced this problem in the inner cities, as any other, as a team; and not in any sense as rivals.
The riots earlier this year focused our attention on the inner cities, tragically. They were not a simple phenomenon. The popular stereotype has, I think, largely been exploded this evening already. It is of large numbers of blacks committing mayhem and doing so because they were unemployed. Many of those charged with offences were in fact white, and many who disapproved most strongly of the outbreaks were in fact black. I acknowledge the pungent contribution made by the noble Lord, Lord Crawshaw of Aintree, in that context. Many of those charged with offences, I would add, were also in work. The causes of law breaking are, as the noble Lord, Lord Mishcon, said, many and complex. That is true of these disorders. I am not aware that any member of Her Majesty's Government has ever said that this was not so.
Drug trafficking was, for instance, an element in the circumstances that led up to major disturbances. Having seen, with an increase of both rage and pity, the horrific things that drugs can do to young people, your Lordships will, I am sure, welcome, as did my noble friend Lord Mancroft in a powerful and well-informed speech, our proposal to take from convicted drug traffickers not merely their liberty, but the proceeds of their filthy trade. They are not wholly evil, but I must tell the right reverend Prelate the Bishop of
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Manchester that their trade most certainly seems to us to be wholly evil and we have to try to stop it.
I must remind the noble Lord, Lord Harris of Greenwich, that there is, in fact, a deliberate switching away from static to mobile tactics in dealing with this threat. The number of specialist drugs investigators has more than doubled since 1979 and we shall appoint a further 150 customs officer specialists next year. I will pass the commendation of the noble Lord, Lord Hughes, to my honourable friend David Mellor. I myself think it is very justly earned.
These riots were not, I repeat, born simply or indeed chiefly, of drug abuse, of bad housing or of poor education. There was a complex web of causation and some, no doubt, who had a motive to exploit it. On the tactical aspects of the matter, I return briefly to the noble Lord, Lord Pitt of Hampstead, to say that the Government did, in fact, undertake, in their response to the Swann Report, that they would consult with the local authorities on the inclusion of a new priority area on ethnic diversity.
I shall not comment on the stony road, as I have been invited to do, down which the teachers' unions have decided to take themselves and their pupils from now to Christmas. But I would just, thinking of education, wonder how the noble Lord, lord Underhill, in his thoughts about the propriety of advertising or information paid for out of the rates, would have felt if his local borough had been plastered with anti-abolition propaganda by Conservative authorities when his Government were abolishing the grammar schools. I daresay he would have had a different view then.
I come now to the central theme of finance in local government. First, let us be clear that, though the proportions of Government and local authority funding have changed over the years, there has been no shift in the share of rate support grant that has gone to the inner cities. Secondly, grant calculations recognise their greater needs. In London, for instance, GREs, excluding education for the inner boroughs, are almost double those for the outer. Or take the individual services level. The GRE for personal social services averages out across the country at about £50 per head. In inner London, it is over double that at £ 111 per head, and in Hackney it is the highest in England at £142 per head. So the grant system does respond to local need, and no Government of whatever party can leave the total of local authority expenditure completely unrestrained without grave risks to the economy. We are talking of capital expenditure of £5 billion and current expenditure of £35 billion a year, and that has an effect on the economy.
Some authorities, regrettably, have not recognised this duty of Government and have ignored our attempts to rein back expenditure, to their great loss and that of their ratepayers. If the levels that we set were really so unreasonable, as has been suggested, how is it that Birmingham, a city where inner city needs are greater in scale than in any other local authority in England, could budget right through to the present financial year at a level that incurred no grant hold-back whatever? Birmingham made sensible economies. They maintained the standard of services while cutting costs. They used public expenditure to lever substantial additional investment from the

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private sector while the voluntary sector is making an important contribution. Unmet need does still exist. The Government and my department are fully committed to a substantial effort to help the city tackle those needs.
Your Lordships are interested in capital as well as current expenditure. I looked carefully at your Lordships' faces to make sure that you are. I think that it is a paragraph I cannot drop. Certainly, local authority capital spending has reduced. The deepest cuts, I would remind your Lordships, took place in the 1970s under an Administration I will not name. Gross capital spending this year is likely to be roughly the same in real terms as in 1981–82. Provision for local authority gross capital expenditure in England this year is just over £4,000 million—no small figure.
Like the mechanism for grant-related expenditure assessment, the distribution of housing capital expenditure recognises the particular needs of the inner city authorities. Housing conditions have certainly featured as contributing factors to inner city tensions. I note the view of the noble Lord, Lord Dean of Beswick, on Tory housing policy. We do not in fact need help in finding out the condition of local authority housing stock because we have commissioned our own inquiry to see how local authorities of all parties, under Governments of all parties, have looked after that stock. The answer—and it is an answer to the noble Lord, Lord Underhill—is that over 30 years or so, since the main building boom of the 1950s, a backlog of some £19 billion has built up. That is an all-party legacy. I ask your Lordships generally to compare the £220 million net increase in the year's programme with the 46 per cent. real terms cut which the Labour Party achieved between 1974 and 1979.
Lord Dean of Beswick: My Lords, I am grateful that the noble Lord gives way. He has brought me back into the debate. Is it not a fact that, in real terms, the total money spent on housing in the public sector by the Government this year is less than one-third of what the last Labour Government spent in 1979? Where does he get his arithmetic from?
Lord Elton: My Lords, I got my arithmetic from the published statistics which I commend to the noble Lord. He was right, I think, to intervene. We have tried not to be too provocative to each other in political terms, but he was a little provocative himself and I rose to his bait.
The four objectives of our urban policy are to generate economic activity and jobs in inner city areas, to deal with the problems of dereliction and decay left behind by economic change, to relieve housing stress, and to strengthen the social fabric, please note! They involve many departments. They go far beyond the urban programme and add up to a national attack on inner city problems to which the Government collectively give a high priority.
Out of this collective commitment were born the city action teams set up earlier this year that co ordinate and target Government programmes in the
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partnership areas. They relate national programmes to local needs and see that opportunities for joint action are exploited vigorously.
The Department of Employment and the Manpower Services Commission are spending some £ 140 million in the partnership areas on programmes of training, on the encouragement of enterprise through the enterprise allowance schemes, and on help for the long-term unemployed through the community programme. The social departments are becoming increasingly involved in the work of the city action teams, as is the Home Office with its programmes of support for the voluntary sector and for ethnic minorities.
The urban programme is a programme of support for local government spending, but the voluntary sector is involved in many projects, and accounts for some £78 million this year alone. Since 1978–79, the programme has more than trebled in cash terms. In that time, more than £1,900 million has been allocated in support of local authorities' programmes for urban renewal within the programme, and measures specially targeted at ethnic minorities have risen from £6 million in 1980–81 to £39 million in 1985–6, an increase of over six-fold.
Urban development grant—derived, I should tell the noble Lord, Lord Donaldson, from American experience, as indeed were the priority estates projects and community refurbishment schemes—provides a lever for getting additional private sector investment to difficult inner city sites. In England as a whole, by the end of last month 165 urban development grant schemes had been approved. They involved grant offers of £74 million and private sector investment of no less than £325 million. About £60 million of the approved grants will enable industrial and commercial projects creating 16,000 jobs to go ahead. The remainder is concentrated on housing development, leading to the provision of nearly 4,000 homes.
The two docklands development corporations have also proved outstandingly successful as a means of stimulating private investment and buying land forward for development. Both corporations have been outstandingly effective in tackling disused and severely derelict land. In London docklands the public sector investment so far has attracted £860 million of private investment. By 1990,9,750 private houses will have been built in the docklands where there was previously very little opportunity for home ownership at all. Greater housing choice and more opportunities for low-cost home ownership are also being promoted by the urban housing renewal unit.
There are one or two other matters on which I had intended to speak but I shall instead write to noble Lords. I will conclude by saying that your Lordships are a judicial House and occasionally you judge us. Your interest this evening, rightly, has been largely focused on the inner cities. Your Lordships will wish to share in this judgment. I have tried to show in small compass that the mechanism by which Government funds local authorities is responsive to need, but it must be finite; that within the finite amount, inner cities have a marked priority; that we are rapidly developing new methods to get departments to work effectively together, that we are increasingly bringing in private investment to support

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the public effort; that we are increasingly involving public sector tenants in the management of their own affairs; that we are sharpening the focus of our efforts to where it matters most; that we have involved very large sums of private money and cut a great deal of red tape. The work is not finished but it is begun, and it is well begun. The case rests.
Lord Pitt of Hampstead: My Lords, before the noble Lord the Minister sits down, may I remind him that I asked two questions which were of some importance to me. The first was: what is the Government's attitude towards the recommendations from the Commission for Racial Equality concerning amendments to the Race Relations Act? Secondly, I asked the Minister whether he would request his right honourable friend carefully to consider introducing the offence of racial harassment when dealing with the amendments to the Public Order Act. I am sorry to have delayed the House, but I regard these as important matters.
Lord Elton: My Lords, the noble Lord has braved the wrath of his Chief Whip. My Chief Whip is not here, so I am quite safe in answering his questions. The answer to his first question is that an amendment is at the moment under consideration by the Secretary of State. In answer to the noble Lord's second question, I certainly will draw the point to the attention of my right honourable friend.
Lord Skelmersdale: My Lords, on behalf of my noble friend Lord Young of Graffham, I beg to move that this debate be adjourned until tomorrow.
Moved, That this debate be adjourned until tomorrow.—(Lord Skelmersdale.)
On Question, Motion agreed to, and debate adjourned accordingly.

Bishops (Retirement) Measure
Measure and Report thereon of the Ecclesiastical Committee (189th Report) laid before the House (pursuant to Section 4 of the Church of England Assembly (Powers) Act 1919) and ordered to be printed.
Essex Bill [H.L.]
The Chairman of Committees acquainted the House, That (pursuant to the Resolution of 23rd October last) the Bill had been deposited in the Private Bill Office together with the declaration of the agent; the Bill was presented, read a first time, read a second time pro forma with the instruction of 25th March last, and recommitted to an Unopposed Bill Committee.

Greater Manchester (Light Rapid Transit System) Bill [H.L.]
The Chairman of Committees acquainted the House, That (pursuant to the Resolution of 23rd October last) the Bill had been deposited in the Private
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Bill Office together with the declaration of the agent; the Bill was presented, read a first time, read a second time pro forma, and committed to a Select Committee.

Swansea City Council (Tawe Barrage) Bill [H.L.]
The Chairman of Committees acquainted the House, That (pursuant to the resolution of 23rd October last) the Bill had been deposited in the Private Bill Office together with the declaration of the agent; the Bill was presented, read a first time, read a second time pro forma, and reported from the Committee.
West Glamorgan Bill [H.L.]
The Chairman of Committees acquainted the House, That (pursuant to the Resolution of 23rd October last) the Bill had been deposited in the Private Bill Office together with the declaration of the agent; the Bill was presented, read a first time, read a second time pro forma, and committed to an Unopposed Bill Committee.
Sonia Ann Billington and Norbury Billington (Marriage Enabling) Bill [H.L.]
The Chairman of Committees acquainted he House, That (pursuant to the resolution of 23rd October last) the Bill had been deposited in the Private Bill Office together with the declaration of the agent; the Bill was presented, read a first time, read a second time pro forma, and committed to a Select Committee.

Berkshire Bill [H.L.] Poole Borough Council Bill [H.L.]
The Chairman of Committees acquainted the House, That (pursuant to the Resolutions of 21st October last) the Bills had been deposited in the Private Bill Office together with the declarations of the agents; the Bills were presented, read a first time, passed through all their remaining stages pro forma, and sent to the Commons.
House adjourned at one minute before eleven o'clock.

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