Sitting of 22 November 1990

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS

    BRITISH RAILWAYS (No. 2) BILL (By Order)
    Order for consideration, as amended, read.
    To be considered on Thursday 29 November.

    HEATHROW EXPRESS RAILWAY BILL [Lords] (By Order)
    Order for Second Reading read.
    To be read a Second time on Thursday 29 November.

Oral Answers to Questions
  NORTHERN IRELAND

    Anglo-Irish Agreement
    Mrs. Mahon: To ask the Secretary of State for Northern Ireland when he will be meeting the Irish Prime Minister to discuss the Anglo-Irish Agreement.
    The Secretary of State for Northern Ireland (Mr. Peter Brooke): I expect to meet Mr. Haughey shortly.
    Mrs. Mahon: Will the Secretary of State confirm to the Irish Prime Minister that whoever is successful in the forthcoming election of the Prime Minister of this country will support the Anglo-Irish Agreement? Does he agree that it is a good thing for Britain that a Prime Minister who has thrived on conflict has gone and that that gives hope for future peace in not only Ireland but the Gulf?
    Mr. Brooke: On the basis of my previous conversations with the Taoiseach, I have no doubt that we shall discuss, among other things, the political situation in the United Kingdom. The British Government signed the Anglo-Irish Agreement and will continue it. I entirely repudiate the hon. Lady's latter remark.
    Mr. Peter Robinson: Will the Secretary of State tell the House whether in previous meetings Mr. Haughey raised the cause of the UDR Four? Or has he raised only the so-called injustice in the Birmingham and Guildford cases? If Mr. Haughey raised the case of the UDR Four, did he ask for any details about the delay in announcing the results of the ESDA—electrostatic data analysis—tests? If Mr. Haughey has not asked about it, will the Secretary of State tell the House what the delay is?
    Mr. Brooke: I do not recall discussing any of the matters that the hon. Gentleman mentioned with Mr. Haughey, so he has not asked me the questions that the
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    hon. Gentleman asked. The hon. Gentleman takes his supplementary question a little wide of the original question.
    Mr. John D. Taylor: As both the Prime Ministers who initiated the Anglo-Irish Agreement will soon be out of office, as most people throughout Northern Ireland remain opposed to the agreement, and as the agreement has maintained a political stalemate in Northern Ireland, would not the Secretary of State do better to concentrate on talking to the political parties in Northern Ireland rather than negotiating with Dublin? Last week the Dublin Minister for Foreign Affairs revealed that the Anglo-Irish Agreement is not operating and that he was not consulted before the presentation of the emergency provisions legislation.
    Mr. Brooke: As to the right hon. Gentleman's suggestion that we should proceed without the Irish Government, it would be necessary to establish whether others would be content with the restricted agenda that would apply. On his question about the Minister for Foreign Affairs and the emergency provisions Bill, we had an opportunity to discuss it in advance of the Bill's introduction.
    Mr. Stanbrook: Will my right hon. Friend tell the Prime Minister of the Irish Republic that if he wants to help to promote peace, stability and reconciliation in Northern Ireland, he should take steps to remove from the constitution of the Irish Republic the constitutional claim over Northern Ireland and, therefore, United Kingdom territory?
    Mr. Brooke: My views on articles 2 and 3 of the Irish constitution are already on record in the House, but the provisions of the constitution make no difference to the fact that in United Kingdom domestic law and in international law Northern Ireland is part of the United Kingdom. Successive Irish Governments have acknowledged the words of article 1 of the agreement that any change in the status of Northern Ireland would come about only with the consent of a majority of the people of Northern Ireland.
    Mr. McNamara: Is the Secretary of State aware that although there are many areas where we in the Labour party have opposed the Government's policy on Northern Ireland over the past 11 years, we recognise the importance of the present Prime Minister's brave efforts in seeking to resolve some of the problems of Northern Ireland by signing and upholding the Anglo-Irish Agreement, and that that is to her credit? Will he assure us that he and Mr. Haughey will be determined to impress on all the parties to the negotiations the urgent necessity of serious political talks?
    Mr. Brooke: I am grateful to the hon. Gentleman for what he said about my right hon. Friend the Prime Minister and her contribution to the affairs of Northern Ireland during her most distinguished premiership. I do not know exactly how wide my conversations with Mr. Haughey will range, but we and the Irish Government remain united in our desire to see talks move forward.
    Mr. Hunter: Since the Anglo-Irish Agreement has not brought peace, stability or reconciliation to Northern Ireland, would not it be better for my right hon. Friend to

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    devote his energies to establishing a meaningful dialogue with the mainstream of Northern Ireland politics, the Ulster Unionists, who are our natural allies?
    Mr. Brooke: I speak for myself and for the Government as a whole when I say that a benefit of the conversations that we have had in the past year has been the widening ripple of dialogue and I hope that that will continue into 1992.

    Castle Court, Belfast
    Mr. Harry Barnes: To ask the Secretary of State for Northern Ireland if he has received any representations from traders and shopkeepers in the Castle Court area of west Belfast for compensation for lost trade and disruption due to current redevelopments; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): Representations have been received, but there is no provision for owners of property adjacent to private developments to receive such compensation.
    Mr. Barnes: As you know, Mr. Speaker, I am not the Member for Belfast, West and this is a constituency case which I took up only because the elected representative refuses to take his seat in Parliament, which he should do, especially to deal with cases such as this. The Castle Court development has led to problems for shopkeepers in the area who have suffered considerable damage, loss and near-bankruptcy and who face prosecution for accidents that occur outside their shops. If the Minister can sort out the Prime Minister, why cannot he sort out this problem?
    Mr. Needham: I am grateful to the hon. Gentleman for raising the issue. As he knows, both rates and rents were reduced by one third. The fact is that Castle Court is now up and running and proving to be a real success is bringing tens of thousands of people to the city centre. The best way to increase trade for the Belfast traders is to get the terrorists out.
    Rev. Martin Smyth: Although I am aware of the positive points to which the Minister referred, and that shopkeepers and traders can have some compensation, is not it a fact that those who have looked for employment in the Castle Court complex have been told that it is only for people from north and west Belfast? Is not it a tragedy that people who have been forced out of north and west Belfast cannot get employment at Castle Court?
    Mr. Needham: That just is not true. Thousands of people are employed in Castle Court by a large number of retailers. Anybody who wants work there will be treated under the fair employment legislation which exists throughout the Province.

    Community Groups
    Mr. Parry: To ask the Secretary of State for Northern Ireland if he will make a statement on his Department's policy on vetting of community groups.
    Mr. Corbett: To ask the Secretary of State for Northern Ireland if he will make a statement on vetting of community groups by his Department.
    The Minister of State, Northern Ireland Office (Mr. John Cope): The policy remains as set out on 27 June 1985 by my right hon. Friend the then Secretary of State.
    Mr. Parry: Will the Minister set up a proper system of appeals so that groups that have their funding withdrawn can defend themselves against specific accusations rather than be subject to anonymous and unspecific denunciations? Is the Minister aware that many bodies in the Province are dissatisfied with the present position?
    Mr. Cope: Further representations can be made, and often are, on individual cases. We keep them under review.
    Mr. Corbett: If the Minister was right in his decision to remove funding from Glor na Gael, why did the Royal Ulster Constabulary permit it to carry out a street collection in Belfast at almost the same time? Will he think again about some form of appeal system so that when the Government decide either to withdraw or to refuse funding from such organisations at least they know the accusations against them and have a chance to comment on them?
    Mr. Cope: The case concerning the committee of the west Belfast organisation mentioned by the hon. Gentleman is now before the courts and it would be improper for me to comment.
    Rev. Ian Paisley: Will the right hon. Gentleman assure the House that he will continue to look carefully at all community grants and that he will ensure that no money is given to any that have links with terrorist organisations?
    Mr. Cope: That is what we seek to do and what the policy sets out.
    Mr. Molyneaux: Is not there a need for much stricter control of grants to community bodies of all hues, given that there is reason to believe that much of the money is siphoned off by paramilitary organisations?
    Mr. Cope: The control is as strict as we can make it, but if the right hon. Gentleman has specific suggestions or information about particular grants, of course, we are always willing to listen.
    Mr. Hume: Will the Minister join me in welcoming the new-found interest in the Province of Northern Ireland represented by the attendance here today?
    Does the Minister agree that, if we face up to reality, it is the Government's policy to promote the preservation and development of cultural diversity in Northern Ireland? Does he agree that the Glor na Gael organisation does outstanding work to protect and promote the Irish language? Does he also agree that Conway mill in west Belfast provides community-based jobs? Does he further agree that it is impossible for any community-based organisation in Northern Ireland not to have some members who are supporters of paramilitary organisations, but that that does not mean that the funding goes to them? Does he agree that one cannot go to church in Northern Ireland without the presence of some people who support paramilitary organisations, but that that does not make the churches subversive organisations?
    Mr. Cope: On the first part of the question, I welcome the interest in Northern Ireland affairs; we always do.
    The main part of the hon. Gentleman's question emphasises the difficulties that we face when making such

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    decisions—which we recognise. Each decision is reached independently and, although it is extremely difficult, we do our best to take it judged on the best information we have.
    Mr. Stott: In view of the widespread concern about the arbitary use of power associated with the removal of funding from community £groups, the use of section 42 of the Fair Employment (Northern Ireland) Act 1976 and the widespread belief that decisions are sometimes based on mistaken information—a concern which has emerged today in the Northern Ireland press—will the Minister take action to ensure that the security advice on which he acts is accurate?
    Mr. Cope: We do our best to ensure that all the advice we receive on that and on other matters is accurate. It is not easy to make such difficult decisions. I have seen the accusations that appeared this morning in some newspapers in Northern Ireland, but those newspapers are wrong to suggest that this is some sort of blanket affair. The decisions are reached on individual cases and the Secretary of State in particular takes great care to ensure not only that the information is accurate but that public money does not benefit paramilitary groups.

    Local Government
    Sir Hal Miller: To ask the Secretary of State for Northern Ireland what progress is being made towards devolving local government in Ulster.
    The Parliamentary Under-Secretary of State for Northern Ireland (Dr. Brian Mawhinney): The Government have no present plans for giving more powers to local authorities in Northern Ireland, but would not rule out any workable proposal here, provided that such a proposal guaranteed fair and equitable treatment for everyone in the local authority area and seemed likely to receive widespread acceptance.
    Sir Hal Miller: If we are having difficulties with the Anglo-Irish Agreement or its successor, should not we make a much more determined effort at local level?
    Dr. Mawhinney: We are not having difficulties with the Anglo-Irish Agreement—[Interruption.] I pay tribute to the determination of my right hon. Friend to bring all the political parties together round the table. He has made considerable progress in that regard, although deep difficulties remain. But my hon. Friend should be in no doubt that when we say that we are determined to seek ways to give locally elected representatives a greater say in the decisions that affect the lives of their constituents, we mean it.
    Mr. Clifford Forsythe: Does the Minister agree that councillors should have more input into road and planning decisions in their areas? Is he aware that if councillors had that greater input, it might stop planners allowing industrial estates to be built, for example, on top of hills in the middle of areas of special control? Is he further aware that it might even persuade the public to accept that it is not true that if one has money, one can build wherever and whatever one likes and then take the matter to court and fight it, but that someone who has no money will face the full majesty of the law that is ranged against him?
    Dr. Mawhinney: The hon. Gentleman knows that I have started an undertaking to meet local authorities in
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    Northern Ireland to hear their views, as has the Under-Secretary of State, my hon. Friend the Member for Wiltshire, North (Mr. Needham). We listen to what locally elected representatives tell us and I refer the hon. Gentleman to earlier remarks that I made on the issue. A necessary precondition for the return of greater powers to local authorities would be a system of ensuring fair and equitable treatment to everyone in all local authority areas.
    Rev. William McCrea: Will the Minister announce to the House and the people of Northern Ireland when the Government intend to bring to an end the despicable and disgraceful situation in which Sinn Fein mouthpieces for terrorists are allowed to sit as elected representatives in councils in Northern Ireland?
    Dr. Mawhinney: The hon. Gentleman knows that we have already taken steps in that matter. Although I have some sympathy with his position, the issue goes much wider than the question.
    Mr. Jim Marshall: Does the Minister agree that tinkering with local government powers in the Province offers no long-term solution to the problems there? Does he further agree that the only way forward is to have agreed political structures for the Province as a whole?
    Dr. Mawhinney: The hon. Gentleman knows that we have been seeking with great dedication—again, I pay tribute to my right hon. Friend—ways to put in place some sort of structures. I suspect that the hon. Gentleman agrees that it is vital for locally elected representatives to have a greater say in the decisions that govern the lives of their electors. That principle will have to guide us in the days ahead, not least if we are unable to overcome the difficulties that presently confront us.

    Food Safety
    Mr. Colvin: To ask the Secretary of State for Northern Ireland when he intends to introduce the Food Safety (Northern Ireland) Order; and if he will make a statement.
    Mr. Needham: Consultation on the proposal for the draft Food Safety (Northern Ireland) Order was completed on 31 October. Arrangements are now being made for the draft order to be laid before Parliament early in 1991.
    Mr. Colvin: As my hon. Friend will be aware, that order requires, among other things, the compulsory training of staff handling food. Is he aware that that requirement could bear heavily on pubs, restaurants and hotels where there is a high turnover of staff? Will the Government be giving help towards the cost of that training, bearing in mind the fact that those places, in which people can meet and socialise on a totally non-sectarian basis, should be encouraged rather than overburdened with unnecessary bureaucratic rules?
    When the Minister gets back to Belfast, will he be visiting a local pub and drinking a toast to Britain's longest-serving and most successful Prime Minister?
    Mr. Needham: I agree with my hon. Friend that it is of great importance to make sure that more people go to pubs and fewer go to the wrong sort of clubs. It takes about six hours for a person to be trained to reach the

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    standard of the hygiene certificate that is required. It is not expensive and I hope that all employers, pubs and hotels already undertake proper hygiene training, anyway.
    Mr. Maginnis: Is not the Minister seized of the urgency of the need to deal with the unfit meat trade, in which meat from fallen and diseased animals is still regularly entering the human food chain? Will he commit more resources and give better powers to local government to deal with the unscrupulous traders who sell meat unfit for human consumption?
    Mr. Needham: As the hon. Gentleman knows, the Government are to make available extra funds to environmental health officers—[Interruption.] I shall, of course, pass the hon. Gentleman's comments to my noble Friend Lord Skelmersdale, who is responsible for the relevant legislation.
    Mr. Speaker: Order. May I ask hon. Members below the Gangway to desist from holding private conversations? The trouble is that I can hear snatches of those conversations, which on some occasions are quite interesting and amusing, but not today.

    Farm Subsidies
    Mr. McGrady: To ask the Secretary of State for Northern Ireland what special financial assistance the Government will allocate to the agricultural industry in Northern Ireland, in the light of the general agreement on tariffs and trade negotiations and the Council of Ministers' proposed reductions in farm subsidies.
    Mr. Brooke: Any assistance to the agricultural industry will be a matter for consideration by the Council of Ministers in light of the result of the GATT negotiations.
    Mr. McGrady: Does the Secretary of State agree that farmers in Northern Ireland are now facing the worst potential financial crisis since the agricultural depression that occurred between the two world wars? In that context, I found his answer disappointing. Will the right hon. Gentleman join me in condemning the decision to withdraw grants from co-operatives in Northern Ireland which market beef, sheep, cereals and potatoes because Northern Ireland is an objective 1 area in the EEC and we shall remain in competition with other objective 1 areas which will receive those grants? Will the Secretary of State condemn that decision?
    Mr. Brooke: I share the hon. Gentleman's concern about farming in Northern Ireland because of the circumstances confronting its farmers in the current year. I shall draw the hon. Gentleman's proposition to the attention of my noble Friend Lord Skelmersdale, who is responsible for agriculture in the Province, and will discuss it with him.
    Mr. Latham: Is it my right hon. Friend's position, not only for Northern Ireland but for the whole of the United Kingdom, that the GATT agreement can be accepted by the British Government as part of the EEC position only if it represents a satisfactory deal for our farming industry and, incidentally, for the textile industry, which is also important in Northern Ireland?
    Mr. Brooke: I wholly agree with my hon. Friend, not only about our attitude towards the negotiations conducted within the Community framework, but about the extreme importance of the Uruguay round.
    Mr. William Ross: Did not the Commissioner, Mr. MacSharry, say when the 30 per cent. cut in the subsidy was announced that no farmer would be worse off? How on earth can the Commission and Her Majesty's Government live up to that commitment? The people of Northern Ireland, and especially those in the farming community, are most anxious to hear what extra money is to be made available.
    Mr. Brooke: I am conscious that statements were made in the aftermath of the Agriculture Council, which agreed on the Community's negotiating position in the GATT round. We must wait until that GATT round is concluded before deciding precisely what we can do, especially in relation to farmers.
    Rev. Ian Paisley: In view of the Secretary of State's answer to the hon. Member for South Down (Mr. McGrady) and his affirmation that he understands the seriousness of the position of farmers in Northern Ireland, will he outline the proposals that he has suggested to the Minister of Agriculture, Fisheries and Food should be put before the Council of Ministers so that this financial difficulty can be alleviated?
    Mr. Brooke: No proposals have yet been made about how farmers might be compensated. In the negotiations, the United Kingdom argued—and it was agreed—that detailed decisions would be premature. The possibilities include production neutral income aid to the most vulnerable producers and measures with environmental or conservation objectives. I very much enjoyed the opportunity of meeting farmers from the glens of Antrim earlier this month when we discussed this matter.
    Mr. Cryer: May I assure you, Mr. Speaker, of my support in trying to keep some of these noisy people subdued? Their behaviour is quite disgraceful.
    Will the Minister assure the House that textiles will not be used as a bargaining counter in respect of agriculture in the GATT negotiations, because not only would that damage Northern Ireland, where textiles still provide some jobs, but, as the Minister recognises, it would damage the textile and clothing industry of the United Kingdom which employs 500,000 people in all and is an important source of jobs in cities such as Bradford which I help to represent?
    Mr. Brooke: I am, of course, familiar with the importance of the textile industry to Northern Ireland, but overall responsibility for the GATT negotiations lies with my right hon. Friend the Secretary of State for Trade and Industry. The matter is not specifically related to this question about Northern Ireland farmers.

    Doctors, Bangor
    Mr. Kilfedder: To ask the Secretary of State for Northern Ireland if he will give doctors in the Bangor health clinic the right of referral of patients to Bangor hospital.
    Mr. Needham: The arrangements for the admission and care of patients in Bangor hospital are, as with all other hospitals in the board's area, under the control of

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    individual hospital consultants. GPs from throughout the area have the right to refer patients to any consultant via out-patients, domiciliary visit or direct contact.
    Mr. Kilfedder: Is the Minister aware that all the doctors share my view that the length of time that patients have to wait for hospital appointments is scandalous in the Bangor area, which has an enormous and increasing population? Is not it equally disgraceful that there is no casualty department in the Bangor hospital and that 18 surgical beds are to be closed? [Interruption.] I regret to say that the Official Unionists are making a mockery of this question.
    Mr. Needham: The consultants, who are, after all, the people most concerned with referrals to the hospital, are in favour of the temporary closure of the ward. It was very underused and there was no acute care in the hospital after 5 pm. I can assure the hon. Gentleman that health care in his area is of the highest order— [Interruption.]
    Mr. Speaker: Order. I ask the House to listen to Northern Ireland questions. This is a rare opportunity to ask questions about the Province.
    I am grateful to the hon. Member for Bradford, South (Mr. Cryer) for his help. He might help me even more if he came and sat up here.

    Political Parties (Discussions)
    Mr. Andrew MacKay: To ask the Secretary of State for Northern Ireland if he will make a statement on his discussions with political parties in the Province during the last month.
    Mr. Brooke: Since the summer recess, I have had a number of meetings with the leaders of the main constitutional political parties in Northern Ireland and the Foreign Minister of the Republic of Ireland. All have expressed support for the view that formal talks should be launched soon which would address all relevant dimensions to the political problems of Northern Ireland, including the prospects for transferring substantial power, authority and responsibility to locally elected representatives in Northern Ireland on a widely acceptable basis.
    Mr. MacKay: Does my right hon. Friend agree that even though those talks might not reach a positive conclusion, the fact that they have been going on for so long offers the first positive hope to come out of the Province, in political terms, for a long time?
    Mr. Brooke: I am grateful for my hon. Friend's comment. I hope that his view is shared by Members of Parliament from the other constitutional parties in the Province. I certainly found the dialogue extremely fruitful.
    Sir Russell Johnston: Will the Secretary of State advise his Cabinet colleague the Secretary of State for Scotland to follow his example in respect of consulting other political parties about devolution?
    Mr. Brooke: My right hon. and learned Friend the Secretary of State for Scotland and I are agreed that different constitutional arrangements may be needed for different parts of the kingdom. It is important that appropriate arrangements be available for those parts.
    Mr. Mallon: Will the Secretary of State confirm that during his discussions with the Northern Ireland parties
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    and with the Government of the Republic of Ireland there is genuine concern to ensure that we make political progress? During those discussions, did he see any traces of the terminal disease called creeping integration?
    Mr. Brooke: The fact that the talks have been going on for a long time has proved an opportunity for almost every subject to be discussed. I dare say that the subject mentioned by the hon. Gentleman has been raised at some stage during the past 10 months.
    Mr. McNamara: In his speech in the Low Countries the Secretary of State identified a number of areas where the main difficulties now arise. Does he now feel that he will be able to make positive progress in those two areas?
    Mr. Brooke: It may well become necessary to pause and take stock, but we have not yet reached that point. As I have indicated elsewhere, I currently await a response from the Irish Government to certain proposals that I have put to them. Thereafter, I would expect to have a further round with the Northern Ireland parties. I continue to find constructive my experience with all my interlocutors.

    Irish Republic (Political Progress)
    Mr. Winnick: To ask the Secretary of State for Northern Ireland if he will make a statement on recent discussions over political progress he has had with the authorities in the Republic.
    Mr. Brooke: My discussions with the Irish Government have produced a significant measure of agreement on a basis for talks which would address the various relationships relevant to the political situation in Northern Ireland. The Irish Government are, at present, considering proposals which I put forward at the last intergovernmental conference for resolving the main outstanding issues.
    Mr. Winnick: Does the Secretary of State agree that it is absolutely essential to have the closest possible co-operation between the Irish Republic and this country?
    Mr. Brooke: Over almost 16 months I have obtained great value from the discussions that I have had with the Irish Government through the Anglo-Irish Agreement. [Interruption.]
    Mr. Speaker: Order. I again appeal to the House and reiterate that these are important questions and it is a rare opportunity to put questions to the Secretary of State for Northern Ireland.
    Rev. Ian Paisley: Will the Secretary of State inform the House whether it is still the Government's policy of the Government to consider an alternative to and a replacement of the Anglo-Irish Agreement?
    Mr. Brooke: I am delighted to confirm to the hon. Gentleman the words that I have used to reply to him on previous occasions when he quite rightly made sure that I repeated myself accurately each time.

    Local Health Committees
    Rev. Martin Smyth: To ask the Secretary of State for Northern Ireland if he will make it his policy to maintain local health committees in the reorganisation of the national health service.
    Mr. Needham: It remains our policy to secure effective local advice.
    Rev. Martin Smyth: Will the Minister ensure that that effective local advice will be to retain the 16 local committees rather than reducing them to four area councils, bearing in mind that the Welsh Office gave that pattern to Wales?
    Mr. Needham: I will, of course, pass on the hon. Gentleman's views to my noble Friend the Under-Secretary of State, Lord Skelmersdale. All I can say is that I think that four councils will do a much better job than the 16 district committees which were fragmented and powerless under the existing system.

    Motorways
    Mr. Stern: To ask the Secretary of State for Northern Ireland how many miles of motorway are to be built in the next 10 years in the Province.
    Mr. Needham: Approximately 2 km.
    Mr. Stern: I am grateful to my hon. Friend for that reply. Does he agree that the additional communications resulting from motorway construction are frequently an aid to keeping down terrorism? Will he look at his programme in that light?
    Mr. Needham: We shall look at the programme in the light of what is the best road system for Northern Ireland. We have a good system, but it is getting fairly elderly and will need to be looked at again to see whether funds can be found to uprate it.
    Mr. Beggs: Yet another of my constituents has died as a result of an accident on the Larne-Belfast road. Will the Minister assure me that he recognises the importance of Larne harbour to the Northern Ireland economy, to those passengers who use that port for access to the mainland, and will he ensure that the Larne-Belfast route—[Interruption.]
    Mr. Speaker: Order. This is very unseemly indeed.
    Mr. Beggs: Can the Minister give us an assurance that the Larne-Belfast route will have the highest priority and motorway status? At the risk of getting a bullish answer, may I ask the Minister to tell us whether he has had any feelings of remorse for the remarks attributed to him regarding the Prime Minister, in view of her dignified resignation?
    Mr. Needham: The hon. Gentleman is as aware of the importance of the Larne road as I am. If funds become available, we shall look at upgrading it. As to his second point, I am astonished that the hon. Gentleman should make use of a private call that was tapped by terrorists to make such a complaint.

    Security
    Mr. Thurnham: To ask the Secretary of State for Northern Ireland what discussions he has had with his counterpart in the Republic of Ireland about the security situation; and if he will make a statement.
    Mr. Brooke: Matters relating to the security situation are regularly discussed within the forum of the Anglo-Irish intergovernmental conference. The last meeting of the conference took place on 25 October 1990.
    Mr. Thurnham: Will my right hon. Friend bring the maximum pressure to bear on his counterparts in southern Ireland to ensure that the maximum possible efforts are made to control security in all parts of the United Kingdom?
    Mr. Brooke: What my hon. Friend refers to is a standard part of our agenda whenever the conference meets. [Interruption.]
    Dr. Kim Howells: Is the Secretary of State aware that in that brief intercepted phone call to his wife, the Under-Secretary of State was speaking on behalf of a large number of his colleagues——
    Mr. Speaker: Order. That has nothing to do with the previous question.

    Right to Silence
    Mr. Andrew F. Bennett: To ask the Secretary of State for Northern Ireland if he will make a statement about the removal of the right to silence.
    Mr. Cope: The right of silence has not been removed in Northern Ireland.
    Mr. Bennett: I am sure that the Minister will agree that the use of the right to silence is not always an admission of guilt, as has been suggested. Is he aware that many of his hon. Friends did not want to declare how they voted during the week and that that was not necessarily an admission of guilt on their part? Will he ensure that the right to silence is not withdrawn in criminal proceedings in Northern Ireland?
    Mr. Cope: All that we have done is to make sure that inferences can be drawn from silence in certain circumstances. That is as far as we have gone.

    Security
    Mr. Molyneaux: To ask the Secretary of State for Northern Ireland if he will make a statement on the security situation.
    Mr. Brooke: Since I answered a similar question on 19 July 1990, there have been 40 deaths arising from the security situation in Northern Ireland, 27 of which have occurred since 1 October 1990.
    The tragic events of recent weeks have provided further evidence of the threat which terrorists continue to pose in Northern Ireland, and of their inhuman cruelty. The overriding priority of the Government will, therefore, remain the defeat of terrorism, from whichever section of the community it comes, through the even-handed and energetic enforcement of the criminal law.
    Mr. Molyneaux: Will the Secretary of State be good enough to accede to my request of some months ago that he should consider publishing, in a written report, the outcome of the Stevens inquiry, given the virtual collapse of the unfounded charges against members of the Ulster Defence Regiment?
    Mr. Brooke: I shall certainly look into the matter that the right hon. Gentleman has raised.
    Rev. William McCrea: Bearing in mind that my constituency is a constant hive of IRA terrorist activity, will the Secretary of State tell the House and my constituents when they, the constituents of mid-Ulster, will have their basic right—the right to live?
    Mr. Brooke: The hon. Gentleman expresses a point of view which will evoke the widest possible echo in the Province and throughout the United Kingdom. I pledge to him the support of the security forces in the suppression of terrorism.

    Labour Statistics
    Mr. William Ross: To ask the Secretary of State for Northern Ireland what is the present level of unemployment in Northern Ireland.
    Mr. Needham: At 11 October 1990, there were 94,758 unemployed claimants in the Province. Figures show that the underlying downward trend is continuing and seasonally adjusted unemployment is now at its lowest level for over eight years.
    Mr. Ross: Anyone who studies a table of travel-to-work areas in the United Kingdom will find that nine of the top 11 in terms of unemployment are to be found in Northern Ireland. What failure of Government policy has brought about that state of affairs after so many years of direct rule and how long does the Minister expect that it will be before the level of unemployment in Northern Ireland reduces to the United Kingdom average?
    Mr. Needham: The hon. Gentleman knows that the level of unemployment in Northern Ireland last month continued to decline although it is rising in the rest of the United Kingdom. The economy of Northern Ireland is expanding at a time when the economy is not doing as well elsewhere in the United Kingdom. We should welcome the fact that it is expanding in Northern Ireland and realise that it is terrorism which does so much damage to our chances of further economic success.

  PRIME MINISTER

    South Belfast
    Ql. Rev. Martin Smyth: To ask the Prime Minister when she will next visit Belfast, South.
    The Prime Minister (Mrs. Margaret Thatcher): I had a very successful visit to Northern Ireland on 16 November, but I have no plans to visit the hon. Gentleman's constituency in the immediate future.
    Rev. Martin Smyth: You will understand, Mr. Speaker, that Ulster Unionist Members will have empathy with the Prime Minister because we know what betrayal means. May I assure the Prime Minister that if she visits south Belfast she will discover among the majority of my constituents sympathy for her views on Europe? Having suffered from centralised bureaucracy, we do not wish to have Brussels bureaucracy.
    The Prime Minister: I hope to visit the Province many times in the future, perhaps in a slightly different capacity,
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    and I may then come to visit the hon. Gentleman's constituency. I believe that our policy on Europe appeals to most people in this country and I believe that it is right.

    Engagements
    Mr. Marlow: To ask the Prime Minister if she will list her official engagements for Thursday 22 November.
    The Prime Minister: This morning I chaired a meeting of the Cabinet. At 12.45 pm I had an audience of Her Majesty the Queen. Later this afternoon I shall lead for the Government against the motion tabled in the name of the Leader of the Opposition.
    Mr. Marlow: Does my right hon. Friend accept that those of us on the Government side of the House who share her objectives, whatever our roles may have been in recent weeks, believe that this is a time of sadness and happiness? It is a time of sadness for my right hon. Friend, bearing in mind the great well of affection for her that exists throughout the House, and a time of happiness in celebration of what has been, is and will remain the greatest peacetime political reign of this century. This will be a day of dedication to sustain and build on the achievements of the Prime Minister, Margaret Thatcher.
    The Prime Minister: I thank my hon. Friend. The same person, in a slightly different capacity, will be available to serve Britain in whatsoever way it happens.
    Mr. Kinnock: May I pay tribute to the Prime Minister, and to the decision that she made this morning? By that, she showed that she amounts to more than those who have turned on her in recent days.
    The right hon. Lady, I know, considers the principle of choice extremely important, and rightly so. Does she agree that the people of Britain should now be given the power of choice in a general election?
    The Prime Minister: I thank the right hon. Gentleman for his earlier comments. The reply to his later question is no—no more than we had a general election when Mr. Wilson was replaced by Mr. Callaghan.
    Mr. Churchill: Is my right hon. Friend aware that she deserves the gratitude of the entire nation for her role in bringing to an end the Soviet part in the arms race, and burying once and for all the cold war between the super-powers? It is in that capacity that she will be remembered as the greatest peacetime Prime Minister this country has ever had.
    The Prime Minister: I am grateful to my hon. Friend both for his staunchness in defence and for his remarks. It was a great privilege to attend the CSCE conference in Paris and to sign some of the disarmament agreements. The new CSCE really ushers in a new order in Europe—and, I hope, a very successful, peaceful one.
    Mr. Ashdown: May I say to the Prime Minister that many of us recognise that she had to make a very tough decision this morning? We believe that she made the right decision and made it with great dignity. May I also say to her that, however wide our political divisions—and they are, of course, very wide—no one can doubt the special style that she brought to the Dispatch Box or the courage, conviction and determination that she brought to her premiership?

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    May I perhaps ask the Prime Minister to use this opportunity to offer the House any advice that she may have for a successor?
    The Prime Minister: Apart from the last bit, I thank the right hon. Gentleman for his kindness. May I remind the House that I expect to be here on Tuesday afternoon, and possibly even on Thursday afternoon, so I hope that the House will be as kind then as it is today.

    Agriculture Reform
    Mr. Teddy Taylor: To ask the Prime Minister if she will raise at the next meeting of the European Council the implications of the agricultural reform plans agreed by the Agriculture Council on 6 November.
    The Prime Minister: I raised this matter at the last European Council meeting. The Government have played a central role in supporting the European Commission's proposals and enabling the Community to table its offer at the talks in Geneva.
    Mr. Taylor: Will the Prime Minister confirm that jobs and prosperity in Britain and throughout Europe may be seriously affected by an international trade war unless the EEC produces a meaningful reform of the absurd and costly common agricultural policy? Will she remind the bright chaps now standing for election that the average cost per household of the CAP is now £5·20 per week more than the total net cost per household of the poll tax?
    Finally, will the Prime Minister accept the good wishes and gratitude of all Conservatives in Southend, East for the fantastic job that she has done for common sense, freedom and democracy?
    The Prime Minister: I very much agree with my hon. Friend. Jobs and prosperity depend on obtaining freer trade and we played a prominent part in that recently at the last meeting of the European Council and in the tabling of proposals to GATT.
    I will, of course, respond to my hon. Friend's invitation to remind my colleagues who are standing for election, but let me say this to him: I shall remind them whether they are standing for election or not.
    Dr. Godman: With regard to the decisions made at that meeting, does the Prime Minister agree that it is essential for our hill farmers to be given the protection that they so manifestly deserve? In the light of assurances that she has given me in the past, does she also agree that those decisions contain an awful, serious warning for our fishermen vis-a-vis the changes that the Spanish and others wish to inflict on the common fisheries policy? If she will not be here to defend our fishermen, will she urge her successor also to be worthy of our defence?
    The Prime Minister: I think that, for once, I can agree with the hon. Gentleman. Our hill farmers are vital to the health and the whole structure of those areas. We have tried to increase the grants available to them because we have recognised their importance not only to farming but to the rural areas.
    The fisheries question has always been one of the most difficult in the Community. So far, we have had a pretty good deal for our fishermen and we shall continue to work
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    for that. As the hon. Gentleman knows, the vital question of fishing boats is pending and many people will be happier when that has been resolved, preferably to our advantage.
    Dame Elaine Kellett-Bowman: Will my right hon. Friend accept from me the love and affection of millions of people in my part of the world who over the years have looked to her with the greatest admiration and delight?
    The Prime Minister: I am especially grateful to receive that message from my hon. Friend. We were at college together, and I think that we have been together ever since.

    Engagements
    Mr. Janner: To ask the Prime Minister is she will list her official engagements for Thursday 22 November.
    The Prime Minister: I refer the hon. and learned Gentleman to the reply that I gave some moments ago.
    Mr. Janner: May I be permitted to thank the Prime Minister for the many personal kindnesses that, over many years, she has shown to Back Benchers on both sides of the House? At the same time, however, I must say that my constituents are deeply concerned that she has left the place in such a shambles. Is she aware that they are desperately worried about the poll tax, the deepening recession, the health service, the education system, and the whole shambles——
    Mr. Speaker: Order. Question please.
    Mr. Janner: Will the Prime Minister say who she thinks should share the blame for what is, after all, a Conservative mess?
    The Prime Minister: The hon. and learned Gentleman was always a good advocate and he can speak to any brief, but I do not believe that he believes a word of that.
    Sir John Stokes: Does my right hon. Friend agree that the age of chivalry has gone and been succeeded by economists and calculators? Does not she look back with pride and satisfaction on all those years when she was leader of this country and a world statesman?
    The Prime Minister: The age of chivalry will not have gone while my hon. Friend is a Member of this House. I certainly look back with some pride and some satisfaction on our achievements for our country over the past eleven and a half years.
    Mr. Maginnis: To ask the Prime Minister if she will list her official engagements for Thursday, 22 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Maginnis: May I convey to the Prime Minister the gratitude of my constituents for her visit last Friday to Enniskillen and their admiration for her courage as she visited the frontier post at Derryadd, where sadly two of our soldiers were killed a short time ago? Is she convinced of the need to maintain such permanent patrol bases for the welfare of the community and also of the foolishness that it would be if they were removed and, therefore, more territory surrendered to the terrorists?
    The Prime Minister: I am grateful to the hon. Gentleman. Those vehicle crossing checkpoints are obviously important to the confidence of those who live in

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    the area. That checkpoint is an example of the dangers faced by the Army personnel who man them. As the hon. Gentleman knows, we are taking every possible precaution to learn lessons from that attack. As I went around the border areas, once again I could only be very impressed by the courage and bravery both of our soldiers and of our policemen who work in such areas.
    Mr. Aitken: Has my right hon. Friend considered that the voice of a great former Prime Minister could be extremely influential on great issues of state such as our future role in Europe? [Interruption.]
    Mr. Speaker: Order.
    Mr. Aitken: My question was directed to a great former Prime Minister.
    Will my right hon. Friend assure her many friends in the House and the country that she will continue to champion the causes for which she has fought so valiantly, and will she continue to raise her voice in favour of a referendum on some of the great constitutional issues that may confront us?
    The Prime Minister: What my hon. Friend says had in fact secretly occurred to me—that one's voice might be listened to after. I believe that we now have a policy for the future of Europe behind which we can all unite and I believe that many people in other countries in Europe believe in a Europe of nation states and in co-operation between those nation states.

The Gulf (Troop Deployments)
3.31 pm
The Secretary of State for Defence (Mr. Tom King): With permission, Mr. Speaker, I should like to make a statement on further deployments of British forces to the Gulf.
It is now three and a half months since Iraq invaded Kuwait and it has continued to defy the United Nations demand to withdraw. Sanctions have left Iraq increasingly isolated; the Royal Navy has played an important part in this embargo. But Saddam Hussein shows no sign yet of complying with United Nations resolutions and ending his barbaric treatment of the Kuwaiti people and the hostages whom he has detained illegally. Moreover, there are now more than 400,000 Iraqi troops in and near Kuwait.
It remains the Government's firm objective to resolve this crisis as soon as possible and by peaceful means. To do this, it is essential to establish a credible offensive military option. Saddam Hussein must be made to realise that he is faced with a military force which will otherwise compel him to withdraw.
The House will be aware that there are now 30 countries involved in this multinational effort by land, sea and air, and of the significant increases in forces now in Saudi Arabia and neighbouring countries. In particular, President Bush has announced very substantial increases in United States forces.
The Government believe that it is right to make a further significant contribution to this multinational effort. My hon. Friend the Minister of State for the Armed Forces announced last week that we were reducing the notice to move of Army units to allow prompt deployment once the final decision was taken. The Government have today decided to deploy an extra brigade, a divisional HQ and supporting arms. They will join 7 Armoured Brigade in Saudi Arabia to form the 1st Armoured Division.
The additional brigade will be the 4th Brigade from Germany, with an armoured regiment of Challenger tanks, two armoured infantry battalions equipped with Warrior fighting vehicles, an armoured reconnaissance squadron, a field regiment Royal Artillery, together with engineers and other supporting services.
Additional equipment deploying with the division will include M109 and M110 self-propelled guns, tracked and towed Rapier and two multiple-launch batteries. Lynx anti-tank helicopters and additional support helicopters will be sent. In all, some 14,000 additional Army personnel will be deployed, which will bring the strength of 1st Armoured Division to some 25,000, and the total number of United Kingdom forces committed to more than 30,000.
The command arrangements that we have agreed provide for United Kingdom forces to be placed under the tactical control of a United States commander for specific actions where this makes military sense. On the same basis, 1st Armoured Division may have a United States brigade assigned to its tactical control.
Certain key skills required for this deployment will need to be offset by the selective use of reservists. I hope that this can be met by asking individual members of the reserve, particularly those with medical training and experience, to rejoin on short-term engagements and I would be grateful if employers would take a sympathetic view of any such requests.
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The Government have also decided to send two more mine counter-measures vessels to the Gulf. These force increases will raise the operating cost of the deployment by £10 million per week and there will be substantial initial costs, too.
The formation of a United Kingdom armoured division will represent a potent increase in the fighting capability of British forces in Saudi Arabia. With the further major American deployments, and the continued build-up of units from 30 other countries in the multinational force, the deployment that I have announced today is the clearest possible message to Saddam Hussein that there is a credible military option and that he must now observe resolution 660, end his aggression, release the hostages, and leave Kuwait.
Mr. Gerald Kaufman: I am grateful to the right hon. Gentleman for notifying the House of the Government's decision. Will he confirm that these troops, like the United Kingdom service men who have already been sent to Saudi Arabia, are going to Saudi Arabia at the invitation of the Saudi Arabian Government, under the provisions of article 51 of the United Nations charter, on which basis Labour Members and our party conference accepted that the sending of such troops is necessary and justifiable?
The Secretary of State gave details of the additional cost. How much of that cost will be met by the Saudi Arabian Government, who already make some contribution to the cost of British troops in that country? Will he confirm that it is the wish of the British Government that the 10 United Nations Security Council resolutions demanding the unconditional withdrawal of Iraq from Kuwait should be implemented by the sanctions policy, reinforced by the air and sea blockades in which the Royal Navy and Royal Air Force participate? Does he agree that those sanctions should be given maximum time to work?
Will the right hon. Gentleman assure the House that the United Kingdom Government actively support moves in the United Nations for Security Council authority for any use of force that may be considered? Do the Government agree with President Gorbachev that the Security Council should meet without delay to consider the Kuwait issue? Mr.Gorbachev said yesterday:
"There is a need to act and get Iraq out of Kuwait. We must be resolute."
The whole House will agree with his words.
Mr. King: I am very grateful for the right hon. Gentleman's welcome for my statement. We wish sanctions to be pursued as effectively as possible and look to achieve the maximum possible agreement and support through the Security Council in support of the sanctions and of the resolutions to ensure the ending of the aggression against Kuwait. When I was in Saudi Arabia, I received confirmation that the host Government would provide free food, fuel, water, transport and accommodation for our forces, which we much appreciate. We have had offers, through the Western European Union, from Germany, which is offering us help with medical supplies, the fitting out of a complete field hospital and substantial amounts, we believe, of cash support. We appreciate that, and other countries in the Western European Union are helping.
I can also confirm that these further forces follow on from the original invitation that my right hon. Friend received from his Majesty King Fahd. When I was in Saudi

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Arabia last week, I discussed the possibility of reinforcement. Both King Fahd and Prince Sultan made it clear that that would be very welcome. I am pleased to say that Opposition spokesmen and the Select Committee are on their way to see our forces there tomorrow. They are due to meet King Fahd, as we have arranged for a meeting with him, and I think that they will hear how welcome our forces are, and how much the Saudi Government appreciate our response to their invitation.
Several Hon. Members rose——
Mr. Speaker: Order. I know that the House appreciates the importance of the debate that follows this important statement. There is also a business statement today. I propose not to allow questions on this statement to run beyond 4 o'clock. I ask hon. Members who feel that they could put a question on another occasion to do so.
Mr. Michael Heseltine: Will my right hon. Friend understand that, once the Government had taken the right and proper decision to support the international force in the Gulf, it was essential that the military capability of that force had total credibility? Will he therefore recognise that the announcement that he has made this afternoon carries the wholehearted and unanimous support of all hon. Members on this side of the House?
Mr. King: May I say to my right hon. Friend how much I appreciate his making that position absolutely clear, and that we stand together? I appreciate, and I have never doubted, that we have the total support of Conservative Members and I am grateful for the support of all responsible Members from both sides of the House for our position.
Mr. David Lambie: Is the Minister not being slightly hypocritical when he says that he is sending a credible military force to the Gulf'? Will he confirm that the tanks in the Gulf at present are using spares—including engines and guns—supplied from tanks that he is now going to send to the Gulf? When they have no spares, how can they be a credible military force?
Mr. King: I do not know where the hon. Gentleman got that information from. I can assure him that it is absolute rubbish.
Sir Michael Marshall: My right hon. Friend has spoken about the commitment of Britain as one of 30 countries involved in the Gulf. Will he take the opportunity to assure the House that he feels confident that the process is mirrored in other participating countries and say whether other Arab countries—given their significance—will continue to play a part, just as we are doing?
Mr. King: Obviously, the contributions vary. I have announced forces which amount to a British division and can confirm that Egypt has already sent one division and is likely to send another. Syria already has a brigade there and is likely to build it up to a division.
Mr. Menzies Campbell: May I tell the Secretary of State that his announcement has our support as part of the international effort to persuade Saddam Hussein to withdraw peacefully from Kuwait? There is no doubt that, if that effort is to be successful, it must be backed by a credible military option. Will he
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confirm that, even if express United Nations authority is not obtained, it will still be the policy of her Majesty's Government not to participate in any military operation, unless it is as the result of an international decision to do so?
Mr. King: We have always made it plain that the legal position is quite clear, if we are invited by Kuwait and Saudi Arabia, exercising their legitimate right of self-defence. None the less, we want the widest possible international support for this. Everyone must take great encouragement from the discussions that my right hon. Friend the Prime Minister and my right hon. Friend the Foreign Secretary had in Paris and their outcome, and from all the signs that there is a real sense of unanimity informing the actions of the Security Council, in a way that we have perhaps never seen before.
Sir Geoffrey Johnson SmithIn warmly supporting my right hon. Friend's statement, which recognises that we must have a credible military option, may I ask when these troops are likely to arrive in the Gulf?
Mr. King: The reconnaissance party will leave this afternoon and the first logistic movements will start at the weekend, perhaps on Friday. The forces will fly there and arrive progressively after Christmas and at the very beginning of the new year.
Mr. A. E. P. Duffy: Is the Secretary of State aware that there is a growing feeling in the United States Congress that the only United States NATO ally whose contribution in the Gulf can be taken seriously is the United Kingdom? In view of the Secretary of State's statement, is not it clear that Britain needs to do nothing further to remove the impression that American youth is once more being called on to die in defence of Europe's interests?
Mr. King: We have made no secret of the fact that we would like to see the widest possible international contribution. It is true that Germany has a problem with its constitution and its legal position, but it has made it clear that it wishes to give assistance. I pay tribute to the very real assistance that the German authorities have given to the British Army of the Rhine and our other forces in Germany, with special extra training needs. We seek the greatest contribution from all countries. France is making significant contributions. I hope that those contributions can be properly knitted into an effective allied multinational effort.
Sir Antony Buck: Does my right hon. Friend agree that it is gratifying that his announcement has all-party support? As the build-up of the forces progresses, what air support will the additional forces have, whether on an international or Royal Air Force basis?
Mr. King: We are not adding to the air resources in this announcement. There are, of course, substantial air resources in Saudi Arabia and neighbouring states. There is good co-operation between the United States, Saudi Arabian, United Kingdom and other air forces in the area. It is proving to be an area of effective co-operation.
Mr. Tam Dalyell: The Secretary of State talked about key skills among reservists. How about the

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skill of putting out raging oil fires? As there is only one Red Adair team, would someone on either Front Bench like to explain what will happen if a series of oilfields goes on fire in Iraq and Saudi Arabia? That is the reality and someone somewhere had better answer that question pretty soon before we talk about further deployment.
Mr. King: If we respond in that way to every threat from Baghdad, what message shall I, or the hon. Gentleman, give our hostages in Kuwait and Iraq? Shall we tell them that the aggression will not be ended because we are not prepared to face the challenge?
Mr. David Tredinnick: Given the large increase in the numbers of troops who are to go to the Gulf and the importance of morale, will my right hon. Friend reconsider telephone facilities for troops who want to call home? During a visit to the Falklands garrison, I was told that the special concessionary rates for troops were of crucial importance in maintaining morale there. Will he apply the same principle to our garrison in the Gulf?
Mr. King: Very considerable efforts are being made to establish effective telephone communications for our service men at, we hope, a welfare rate. My hon. Friend will be aware that the ability to call not only the United Kingdom but Germany is important, because many of our soldiers' families live there.
Mr. Ken Maginnis: On behalf of the Ulster Unionist party, may I welcome the Secretary of State's statement? While many of us hoped and prayed that sanctions would be effective, we did not believe that they would be. As Saddam Hussein is in the process of moving another 250,000 troops into Kuwait, we feel that the time for action is perhaps upon us. Does the Secretary of State feel confident that, with the transitional state of our Government today, he has the scope to take the crucial decision that may have to be taken at any moment?
Mr. King: I am grateful to the hon. Gentleman for his support. It is probably the first time that I have had it, even in my earlier incarnations. I certainly appreciate what he has said on behalf of his party. I hope that he agrees that, as some of the important exchanges have shown, there is no question about the Government's authority and ability to take decisions in the national interest. I am aware of the support of the House in recognising that, if our service men are to be asked to go forward in this way, they must have time for acclimatisation, be properly trained in the theatre and have our support. I am grateful to both sides of the House for their support and recognition of that fact.
Sir Hector Monro: Does my right hon. Friend agree that our reserves, the Territorial Army, the Royal Auxiliary Air Force and the naval reserves, are only too keen to support our forces in the Gulf? Would it not be easier to introduce legislation under Order in Council so that their jobs are guaranteed while they are away?
Mr. King: I certainly recognise that. This afternoon, my office had a call from another Government Department about a civil servant who has asked permission to go. I look to the Government to set a good example to employers to take a sympathetic view. There is no
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doubting the willingness of many reservists to play their part if possible. I shall certainly consider my hon. Friend's important point.
Ms. Dawn Primarolo: Will the Secretary of State explain why the increased deployment of troops is occurring now, when sanctions have not been given enough time to work and the United Nations Security Council is being urged to meet again to consider the situation? Is it because the Americans are preparing to take us into a bloody war in the Gulf?
Mr. King: The hon. Lady will understand that it will take time for our forces to reach the Gulf. That gives an opportunity for UN action which we hope will be successful and it sends a clear warning. I do not know how long she is prepared to allow the atrocities and outrages in Kuwait to continue. I am sure that she is not seeking to defend them but is looking for the earliest possible end to the aggression. Many hon. Members on both sides of the House believe that this aggression will not end peacefully until Saddam Hussein is convinced that, otherwise, he faces the certainty of military action.
Mr. Jonathan Sayeed: Following my right hon. Friend's visit to the Gulf, will he confirm that the morale of the service men remains high? Does he agree that they are fully aware that, whoever leads this great party of ours, the party will continue firmly to support service men in the Gulf?
Mr. King: I can confirm that morale is extremely high. I delivered precisely that message standing in the sand in Saudi Arabia a week ago. I said that, whoever led the Government in future, there was no questioning the total commitment of the Government and the party. I confirmed that to Sir Peter de la Billiere this morning.
Mr. John McWilliam: Will the Secretary of State take this opportunity to congratulate the employees of Vickers in Leeds and, particularly, in Newcastle for producing conversion kits for tanks so quickly? Will he also take this opportunity to say a word about the arrangements that he has put in train for paying at least assistance towards additional insurance premiums for service men stationed in the Gulf?
Mr. King: On the latter point, we are paying 90 per cent. of any additonal premium. I am grateful to the hon. Gentleman for giving me the opportunity to pay a tribute to British industry. Some amazing things are happening in factories throughout the country in support of our forces in the Gulf. I am extremely grateful to the many people whose work is enabling the achievement of delivery dates which in normal circumstances would be thought quite impossible.
Mr. Ian Bruce: My right hon. Friend knows that a large number of people are now being thrown out of Kuwait or are leaving under their own steam. I am sure that all the able-bodied Kuwaiti citizens would like to go back to fight, if necessary, to recover their country. Are we giving them the opportunity to enlist, to be armed and organised and even to perform jobs behind the scenes in support of the armed forces in the area?
Mr. King: I can confirm that a significant number of Kuwaitis have enlisted. We are willing to give any assistance we can, as is Saudi Arabia. Those people are training at this time.
Mr. Dave Nellist: If the Secretary of State will not accept it from me, as the Prime Minister would not accept yesterday, that it is possible for the Ministry of Defence to estimate casualties were a war to take place, what does he say to Colonel David Hackworth, the most decorated American soldier in Vietnam? He has estimated that there will be 50,000 casualties in the first two weeks of the war—only 7,000 less than the total of American dead in 12 years in Vietnam. At what level would the Government decide that the casualty rate was too high for thousands of young men and women to lose their lives for a feudal autocracy that happens to have a couple of oil wells?
Mr. King: I have not seen that forecast, but the hon. Gentleman may understand that the precise reason for the enlargement of the American deployment and part of the reason for my announcement today is to ensure that our military force is totally credible. That gives us the best possible opportunity for this matter to be solved by peaceful means—by the threat of force without the use of it. If there were to be conflict, that enlarged deployment would also give us the best possible chance of minimising casualties.
Mr. Derek Conway: As a reservist, may I ask my right hon. Friend to have a word for me with the pairing Whip?
On a serious note, will my right hon. Friend pay tribute to those civilian personnel in Saudi Arabia, such as those from Perkins Engines in Shrewsbury, which builds the engines for the Challenger tanks, for the part that they are playing in supporting our service men? Will he also pay tribute to their families who are backing them from home?
Mr. King: I am grateful for my hon. Friend's offer, which I shall certainly consider. On the latter point, it is true that there are a number of companies whose employees are out in Saudi Arabia. They are giving direct support to our troops through their work on the equipment and I am very grateful for that.
Mr. Gavin Strang: While I welcome the Secretary of State's reference in his previous answer to the need to solve this crisis by peaceful means, does he accept that, when sanctions were introduced, no one seriously suggested that they would work within four months or so? It was never supposed that those sanctions would be effective on food supplies; rather that they would affect Iraq's earnings from oil and spares. We would need at least a year before anyone could reasonably suggest that the sanctions have not worked. Will he bear that in mind?
Mr. King: And will the hon. Member or I tell our hostages in Kuwait and Iraq that they have the certainty of no further effort being made to achieve their liberation? Are we to allow the total destruction of a country before our eyes for a further year while the Security Council sits paralysed, making no contribution to its resolution?
Mr. John Browne: Will my right hon. Friend accept that Saddam Hussein and other enemies of our country, wherever they may lie, must have heaved a huge sigh of relief at the news of our Prime Minister's resignation this morning?
Mr. King: There is no doubt that my right hon. Friend has given outstanding leadership to the free world on this issue, as she has on so many other matters. She would be the first to say that there is no question but that we stand united as a Government, and I believe as a country, to see the aggression ended, the removal of Iraqi troops from Kuwait and the restoration of the legitimate Government.
Mr. Dick Douglas: Will the Secretary of State please explain to the House why Japan, which must obtain the majority of its energy supplies from the middle east, is making such a sparse contribution to the Gulf effort? Can he also give me some explanation about communications from the Gulf back home, which I can pass on to my constituents? I raised this matter earlier. I do not want people to have to sell blood to pay for telephone calls home. What steps is the right hon. Gentleman taking to make cheap and effective communications available to my constituents so that they may communicate with their loved ones?
Mr. King: We are keen to improve communications. I am told that the mail has improved considerably and I hope that that is true. I shall be interested to receive from hon. Members who are going out there tomorrow any reports showing whether that is the case.
The answer to the hon. Gentleman's question about the contribution of Japan is that, obviously, we would welcome the maximum contribution. I know that the hon. Gentleman appreciates the constitutional situation that Japan faces. So far, that country has given $2 billion towards some of the costs involved. Obviously, we are anxious to see the maximum contribution being made, in terms of military help and financial resources, from wherever such contributions may come.
Mr. Rupert Allason: Is my right hon. Friend satisfied with the arrangements that have been made for the control of the media in respect of the sensitivity of information relating to the deployment of our troops? Is he satisfied that there will be no repetition of the incident during the Falklands campaign, when troops deployed on a clandestine operation in San Carlos water switched on the world service of the BBC to hear all about their deployment?
Mr. King: There are memories of events in the Falklands from which we all, including the broadcasting authorities, have sought to learn. Matters will be more difficult if we come to conflict in the Gulf because of the difference between a seaborne force and a large country with many accesses. I believe that the broadcasting and other media authorities are conscious of some exceptionally difficult problems that could arise.

Business of the House
4.1 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): With permission, Mr. Speaker, I will make a statement about the business for next week.
MONDAY 26 NOVEMBER—Second Reading of the Statutory Sick Pay Bill.
Motion on the Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 1990.
TUESDAY 27 NOVEMBER—Second Reading of the School Teachers' Pay and Conditions Bill.
Motion on the Teachers' Pay and Conditions Act 1987 (Continuation) Order 1990.
WEDNESDAY 28 NOVEMBER—Until about seven o'clock Committee and remaining stages of the Statutory Sick Pay Bill.
Second Reading of the Development Board for Rural Wales Bill.
Motion to take note of EC document relating to authorised tobacco advertising. Details will be given in the Official Report.
THURSDAY 29 NOVEMBER—Committee and remaining stages of the Development Board for Rural Wales Bill.
Proceedings on the Import and Export Control Bill.
Motion to take note of EC document relating to controls on the acquisition and possession of weapons. Details will be given in the Official Report.
FRIDAY 30 NOVEMBER—Private Members' motions.
MONDAY 3 DECEMBER—Second Reading of the Community Charges (Substitute Setting) Bill, followed by proceedings on the Caravans (Standard Community Charge and Rating) Bill.
[Wednesday 28 November
Relevant European Community Document:
6071/90 Advertising of tobacco products
Relevant Reports of European Legislation Committee: HC 11–xxxiii (1989–90) and HC 29–ii (1990–91).
Thursday 29 November
Relevant European Community Documents:

(a) 10074/89

Control of Acquisition and possession of weapons

(b) 8836/90

Control of Acquisition and possession of weapons.

Relevant Reports of European Legislation Committee:

(a) HC 11-vii (1989–90)

(b) HC 29-ii (1990–91).]

Dr. John Cunningham: What purpose can be served by pursuing the programme of a Prime Minister who has just been forced from office? What value is there in asking the House of Commons to deal with the business of a Government who are in total disarray? Is not it obvious from the events of this week that even Members on the Government Benches have no confidence in the programme of a Prime Minister whom they have signally failed to support? Why should the House be burdened next week with legislation that is irrelevant to an economy once again sliding dangerously into recession? Is not it a fact
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that, as Britain needs a new agenda for the 1990s from a new Labour Government, the case for the dissolution of Parliament and a general election is now overwhelming?
Mr. MacGregor: The hon. Gentleman has wasted his opportunity to ask questions about business. The vote tonight at the end of the debate will give him the clear answer to his questions. We shall then get on with the important legislation that we are taking through the House, next week and beyond.
Mr. Andrew Rowe: Is my right hon. Friend aware that the way in which the national health service reforms are being implemented in their first year is making even worse the burden that the London teaching hospitals are placing on health authorities outside London? Will he ask the Secretary of State for Health whether we can have an early debate on this important matter? It is high time that London's over-hospitalling ceased to lay an unfair burden on health authorities in the rest of the country.
Mr. MacGregor: I shall draw that point to the attention of my right hon. Friend, but my hon. Friend knows that there are other opportunities to raise that matter in the House. I cannot see any opportunity next week.
Mrs. Ray Michie: The Leader of the House may not be aware of a report of what is believed to be the tragic loss of a fishing vessel from Carradale in my constituency at about 2.15 this morning, involving a submerged submarine. Will the right hon. Gentleman ask the Secretary of State for Defence to come to the House tonight to make a statement about this appalling tragedy?
Mr. MacGregor: I am sure that the whole House will be sorry to hear that sad news. I shall draw that point to my right hon. Friend's attention, but, in view of today's debate, I am not sure whether it will be possible for him to make a statement. Nevertheless, I shall see whether something can be done.
Mr. Michael Latham: Will my right hon. Friend accept my congratulations to him, to his predecessor and to his predecessor but one who, between them, have at long last achieved a result so that our constituents can go round the Line of Route without having to queue in the rain? At long last, facilities are in place in the House of Lords, under the Norman Tower so that our constituents can queue in the dry. I thank my right hon. Friend for that.
Mr. MacGregor: I am grateful to my right hon. Friend and shall certainly convey his thanks to my predecessors. In all honesty, I do not think that I played a very big part in it.
Mr. Jack Ashley: Is the Leader of the House aware that the closure of hospital wards has now become the equivalent of a national epidemic? We have the bizarre spectacle of hospital waiting lists rising, while hospital wards are closing. May we have a debate on this next week so that the three candidates for the Tory leadership are made aware of the chaotic consequences of present Conservative policies?
Mr. MacGregor: I do not think that there is an opportunity for a debate on that point next week. The right hon. Gentleman knows that there has been a massive increase in health service funds under the Government, not least in the current autumn statement, and that in-patient

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waiting lists are now 50 per cent. lower than 10 years ago. The waiting list fund is making a big contribution to reducing waiting lists.
Mr. Richard Tracey: Is my right hon. Friend aware that a motion of no confidence in the Labour council in Hackney was debated yesterday? Is there a chance of an early debate on government in London so that we can discuss maladministration by Labour councils, and especially the number of empty council houses and the millions of pounds of unpaid rent?
Mr. MacGregor: I should be very happy to find an opportunity to debate these matters and to put the spotlight on that sort of performance. However, in view of what looks like a fairly busy programme before Christmas, I do not think that there will be an opportunity for such a debate in Government time before Christmas.
Miss Joan Lestor: Bearing in mind the lobby of children and young people on Monday in defence of the UN convention on the rights of the child, the various local authority activities taking place this week to celebrate that event, and the fact that 57 countries have now ratified that convention, when does the Leader of the House intend to bring the convention to the House to be ratified? Why are we dragging our heels?
Mr. MacGregor: I think that my right hon. Friend the Foreign Secretary made a statement about that recently. I shall certainly check that point and perhaps write to the hon. Lady about it, as well as considering the point that she has made.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that now is the time to get on with today's business so that we can have a resounding vote of confidence in Her Majesty's Government and, in due course, a resounding vote of confidence from the British people? The Labour party could not produce three candidates as good as we have produced to lead our party.
Mr. MacGregor: I very much agree with my hon. Friend's point about the vote of confidence in Her Majesty's Government. I have no doubt that as soon as we get to the debate the position of Conservative Members and of the vote tonight will be made very clear.
Mr. Nigel Spearing: Will the Leader of the House arrange for a statement next week by the Secretary of State for Social Security on the urgent need to uprate the grant from the DSS to residential homes for the elderly? Is he aware that York house, Plaistow will have to close next month because of the Government's policies? Does he recognise that rolling back the frontiers of the state can sometimes roll back the moral obligations of society which some politicians believe do not exist?
Mr. MacGregor: I think that my right hon. Friend has recently made an announcement about these matters. There has been an increase. The amount of taxpayers' money going into support for the elderly, particularly in respect of residential homes, has increased substantially in recent years.
Mr. Roger King: Is my right hon. Friend aware of the widespread support that Labour
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Members give to the qualities of the French education system? Could we debate the English system versus the French system, given the lessons being learnt in France?
Mr. MacGregor: My hon. Friend makes a good point. When I was Secretary of State for Education and Science I looked into these matters, as the Leader of the Opposition had made comparisons with the French system and suggested that it was the prototype for us to follow. It is not only the recent revolts in Paris, showing concern about the French educational system, which are relevant. In this country we spend more per pupil than do the French; we pay our teachers better and we have less crowded classrooms; and the same applies to higher education. I should be happy to hold a debate to make these comparisons, since the Opposition have highlighted them, but I cannot promise a debate next week.
Mr. Gerald Bermingham: Will the Leader of the House find time in the near future for a debate on energy in so far as it relates to the assistance given on the continent to glass industries? He may be aware of the increasing international acclaim for our packaging industry—especially for glass and ceramics—and perhaps with the assistance given to our French competitors the industry might be able to advance worldwide.
Mr. MacGregor: I shall draw that point to the attention of my right hon. Friend, but I certainly do not think that there will be an opportunity to debate these matters next week.
Mr. Jacques Arnold: Will my right hon. Friend give some thought to holding a debate on the situation in Iraq? Is not it becoming clear that Opposition Members are losing their nerve over facing up to Saddam Hussein?
Mr. MacGregor: I suspect that there are certainly divisions among the Opposition, but from the support that the official Opposition gave to my right hon. Friend's statement today it was clear what their position is—and I am grateful for it.
Mr. Jim Sillars: Will the Leader of the House confirm that the tabling of the motion of no confidence has had a consequential effect on this week's agenda in so far as the debate on the Scottish economy, with reference to the crisis in the Scottish steel industry, has been taken off the agenda and for some reason is not on next week's? Is he aware that the Scottish steel workers will find it incomprehensible that the leader of the Labour party was more concerned to save Thatcher than he was about the Scottish steel industry?
Mr. MacGregor: I seem to recall that the hon. Gentleman made the same point the other night, when I told him that it was not a matter for me. No doubt the Leader of the Opposition will speak for himself. It was necessary to make a day available this week for the motion which the Opposition wished to table. The timing of the next Supply day debate will be a matter for discussion in the usual channels.
Mr. Michael Colvin: Is my right hon. Friend aware of the concern felt by users of oil products about the possibility of oil companies making windfall profits out of the increases in oil prices as a result

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of the crisis in the Gulf? May we have an early opportunity to debate this, because evidence taken by the Select Committee on Energy this morning suggested that the oil companies are not making such windfall profits, although the countries producing the oil could be in receipt of considerable additional revenues which they would not have received had the crisis not taken place.
Mr. MacGregor: I think that the profits recently announced by Shell and BP were heavily influenced by stock appreciation. As my hon. Friend will know, the oil companies' pricing policies were examined by the Monopolies and Mergers Commission in February and again by the Office of Fair Trading in August, and the industry was found to be competitive and not operating against the public interest. I know that there has been discussion about recent prices and I was interested to hear what my hon. Friend said. I cannot find an opportunity for a debate, but I am grateful to him for raising the matter.
Mr. George Foulkes: May I underline what was said by the hon. Member for Argyll and Bute (Mrs. Michie) about the sad incident this morning involving the fishing vessel Antares and a Royal Navy submarine? I and some hon. Members from fishing constituencies in the west of Scotland have been warning for some time that such a thing could happen. We made a number of suggestions over 18 months to the Department of Transport about how such incidents might be avoided, but the Department has taken no action on those suggestions. When will a statement be made to the House about this tragic incident and about what is being done to avoid a repetition?
Mr. MacGregor: I do not think that I can add much to what I said earlier. I shall look at the question of an early statement. As the House will realise, it would be difficult to have such a statement today because of the business that we have in front of us. I shall draw to my right hon. Friend's attention what the hon. Members for Argyll and Bute (Mrs. Michie) and for Carrick, Cumnock and Doon Valley (Mr. Foulkes) have said.
Several Hon. Members rose——
Mr. Speaker: Order. Again, I have to say that it is with regret that I have to end business questions. I shall call two more hon. Members from each side and then we must move on.
Mr. Michael Morris: May I draw my right hon. Friend's attention to early-day motion 61 on an EC birds directive on pest species?
[That this House notes with deep concern the Government's intention to bow to European Community pressure demanding amendments to United Kingdom legislation, concerning pest birds; that this concerns the necessity for general licences for the killing and taking of the 13 pest species, including crows, magpies and woodpigeons, and which cause serious damage to property, crops and livestock as well as to the eggs and nests of song and game birds; and urges the Government to bring pressure to bear on
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the European Commission and Council to amend the European Community Birds Directive to permit the killing and taking of the 13 pest species throughout the year in the United Kingdom as at present.]
I understand that there have been some developments in the EEC in terms of withdrawing the restrictions on the shooting of wood pigeons and other pest species. Will my right hon. Friend arrange for an early statement by the Minister of Agriculture, Fisheries and Food so that this matter may be totally clarified?
Mr. MacGregor: I understand the concern about this matter and, like some of my hon. Friends, I have received a good deal of correspondence on it. I refer my hon. Friend to the answer given yesterday by my right hon. Friend the Secretary of State for the Environment to my hon. Friend the Member for Ryedale (Mr. Greenway).
Rev. Martin Smyth: I should like to be able to join the hon. Member for Rutland and Melton (Mr. Latham) in thanking the Leader of the House for something accomplished. When is the Leader of the House likely to announce a Select Committee for Northern Ireland because, like visitors to the House, this question will not go away?
Mr. MacGregor: Yes, I am aware of a number of questions on Select Committees, but I am not in a position to say anything at this time.
Mr. Richard Holt: Does my right hon. Friend accept that the one body in which no one has any faith is Cleveland county council? It is always pleading for more and more money and has now come up with its latest intellectual wheeze of changing the colour of all its fire engines from red to vermilion.
Mr. MacGregor: My hon. Friend makes his point very well.
Mr. Stuart Randall: Will the Leader of the House also seriously consider a debate on the national health service? Not only is there the problem of underfunding in the health service, about which every hon. Member knows, but the book-balancing policy at the end of the financial year is causing massive problems in Hull health district. This deterioration of service is unacceptable. It is causing serious problems and we must have a debate on the whole question of the Government's book-balancing policy at year end resulting from their reforms in the NHS.
Mr. MacGregor: There may be an opportunity to refer to such matters in the debate that follows and which I think the House is keen to move to. I cannot promise anything for next week.
Mr. Bob Cryer: On a point of order, Mr. Speaker. You normally say when you curtail business questions, which, as you know, are important, that you will bear in mind the people who have been standing throughout and whose names are on the list. Perhaps you will do that in the usual way at next Thursday's business questions.
Mr. Speaker: I will certainly do that.

Confidence in Her Majesty's Government
Mr. Speaker: I must announce to the House that I have not selected any of the amendments.
4.19 pm
Mr. Neil Kinnock: I beg to move,
That this House has no confidence in Her Majesty's Government.
In the present circumstances, there is not much of a Government in which to have no confidence. For a long time, the British people have recognised that the Government have failed comprehensively. Political pressures have been building up over many months and they have culminated today in the departure of the Prime Minister. I and my party are delighted to have played our full and proper part in bringing this about.
As the months have passed, we have seen all the signs of division and decay within the Government. As ex-Ministers have testified, the Government are riddled with distrust, just as the Conservative party is racked by disagreement—disagreement that cannot be healed under any leader at any time. The British people know that. That is why they have rejected the Conservative party in every political test—and will go on doing so—from the beginning of last year, in the south Wales by-elections of Pontypridd and Vale of Glamorgan, through the 1989 local elections, through the European elections, through the Mid-Staffordshire by-election, through this year's local elections and through the Bootle and Bradford by-elections. Next week, in Paisley, the results will be the same. [HON. MEMBERS: "What about Eastbourne?"] There was an excellent result in Eastbourne, which caused immense grief to the Conservative party, as did the lost deposits in the many cases when it was fighting against the Labour party and failing to hold seats.
The tale has gone on and will continue. It is a tale of continual rejection of the Government every time the British people get an opportunity. The Government have tried to take evasive action as the tide has risen. We have had shuffles and shifts in ministerial jobs—musicial chairs to the tune of the dead march—but there was, and is, no escape for the Conservatives. Their whole record is against them. The Conservative party has suddenly discovered that the Prime Minister's conduct of government has been wrong, yet the same party only a few weeks ago was prepared to adore that system, falling in behind the Prime Minister and chanting at its conference, "Ten more years." It did not even mean 10 more weeks.
With such duplicity, who can trust such a party? Who can ever trust it again? The people on the Government Benches—Front and Back—supported and still support the freezing of child benefit, the breaking of the link between pensions and earnings, the reduction of housing benefit, the cutting of training budgets and the freezing of care in the community. Those and many other policies were supported heartily by the Conservative party and they brought disadvantage and despair to millions of their fellow citizens across all parts of Britain.
The Government have been undeviating in the application of those policies. Goodness knows, there were plenty of causes for rebellion, but there were few rebels. There was no panic, no demand for the Prime Minister to go when hospital wards were closing and schools crumbling. The Conservatives were not striving to topple the Prime Minister when unemployment went over 3
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million or crushing mortgages were imposed and poverty was spreading. There were no rebellions, no panickings, no demands for the Prime Minister to go then. The Conservative party summoned the strength of self-interest to take action only when its members saw that their political careers were in danger of being terminated.
The lack of trust felt by the British people in the Government comes as a result of 11 years of misrule. When they reflect on those 11 years, the British people ask how it can be that our standards of pensions, child care, training, transport and much else are lower than those of our neighbours in the European Community.
How can that have happened when Britain has had the oil wealth that no one else in Europe has had? It is true that other countries in Europe did not have the oil wealth, but nor did they have this Government and this Conservative party. All the policies that have so directly touched people's lives have emanated from the head of the Government, but they were applauded, supported, voted for and implemented by the entire Government, not only by the poor woman who has been chosen for ejection today. There are no innocents on the Government Benches. Conservative Members are all members of a guilty party which is supporting a guilty Government. There are some Conservative Members who will say that there is a great exception to that rule. There are some——
Mr. John Marshall: Tell us about your policies.
Mr. Kinnock: Perhaps I am hearing pleas of not guilty from the hon. Gentleman and other Conservative Members. Plea bargaining will do them no good. Guilty they are, the whole lot of them.
There are some who will claim that they have always been against the poll tax. I do not blame them for that. It is certain that among all the Tory policies there is not one that is more detested by a greater majority of the British people than the poll tax. They do not just hate——
Mr. Dick Douglas: Will the right hon. Gentleman tell us what advice he is giving, in his authoritative position as Leader of the Opposition, to Labour councillors in Scotland who are pursuing people with poinding notices and warrant sales in implementing a tax which has no majority in the House and which he will abolish if he becomes Prime Minister? Is it not about time the right hon. Gentleman said, "Call off the warrant sales and let us have no more poinding notices—the poll tax is ended"?
Mr. Kinnock: I shall give the hon. Gentleman the advice that I gave him clearly before he defected from my party. As a legislator, he cannot come to the House and pass legislation and then refuse to accept that legislation outside this place. The advice that I offer to all those who can pay is that they should pay. To those who cannot pay, I say that I hope that within such an infamous law every possible sympathy will be extended to them. I say with no fear and no favour that the rule is absolute. Those who make the law cannot break the law. It is as simple as that.
The British people hate the very idea of the poll tax, and not only the level at which it is being applied. As it comes as such a menace to the Government politically, they have tried manipulation. Instead of providing a safety net for

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the victims of the poll tax, they have provided a sort of lifebelt to Tory Members in marginal seats whose careers were in jeopardy. Even in that, they have failed.
The Secretary of State for Education and Science has said, "The poll tax is a major problem on our plate." The Secretary of State for the Environment has said, generous as ever, "We are always prepared to look at new proposals." Now there is a new bid in the great poll tax auction. It is called the immediate and fundamental review. At least that is what it was called on 15 November when the right hon. Member for Henley (Mr. Hesletine) proposed it. In the week since then it has gone through many changes in shape and meaning. I suppose that that is like the right hon. Gentleman himself, who at about quarter past nine this morning reverted to being a stalking horse. The week for the right hon. Gentleman has been a long time in Parliament. I understand, of course, the changes that have taken place for him. After all, like all his right hon. and hon. Friends the right hon. Gentleman voted for the poll tax in Scotland. Indeed, he did not vote against the poll tax legislation for England and Wales. There is some unsteadiness in his position.
Mr. Jonathan Sayeed: The right hon. Gentleman is advocating consistency. Is his membership of CND consistent with the Labour party's defence policy?
Mr. Kinnock: We heard a welcome statement yesterday about progress that the Prime Minister has played her full part in securing. It was the most comprehensive statement of arms reduction, with the promise of a new common security policy for Europe and the prospect of future nuclear arms reduction. The answer to the hon. Gentleman's question is yes, yes, yes.
Mr. Alex Salmond: Many of us remember the right hon. Gentleman's speech last year, when he spoke about the idiocy of targeting nuclear weapons on the great cities of eastern Europe at a time when they were moving towards democracy. In the light of that, can the right hon. Gentleman explain how he, as a socialist, can justify spending £9,000 million on placing three Trident submarines on the Clyde estuary?
Mr. Kinnock: I am grateful to the hon. Gentleman. He has drawn attention to the fact that there is total consistency in the position that I put to the Prime Minister last year about the targeting of medium and short-range weapons on the rest of Europe. I am delighted to see how much progress is being made, with the active involvement of Governments of the east and west.
As for Trident, the hon. Gentleman will be familiar with our programme—to ensure that, by every conceivable means, comprehensive nuclear arms reduction and withdrawal are achieved. Of course, for that purpose, the effective use of our armament will absolutely come into play. [Interruption.] The hon. Gentleman is very familiar with that position. Of course, the puniness of his party and its influence means that he cannot be expected to play any significant role in the great moves forward that are taking place right across the world.
I was speaking about the variety of poll tax reviews that have been on offer. What is common to all of the reviews——
Mr. Jim Sillars: Will the right hon. Gentleman give way?
Mr. Speaker: Order. The right hon. Gentleman has already given way to two hon. Members from those Benches. If the right hon. Gentleman will not give way, the hon. Member for Glasgow, Govan (Mr. Sillars) must resume his seat.
Mr. Sillars: On a point of order, Mr. Speaker. May I draw your attention to last year's Queen's Speech, in which I tried to intervene on the right hon. Gentleman. He said—[Interruption.]
Mr. Speaker: Order. I must hear the point of order, but the hon. Gentleman has been here long enough to know that if the right hon. Gentleman will not give way he must resume his seat.
Mr. Kinnock: I see that, with the hon. Gentleman, history is repeating itself. It was his party that, on 28 March 1979, ushered in a Tory Government; he is trying the same old tricks now.
Mr. Sillars rose——
Mr. Speaker: Order. The right hon. Gentleman is not giving way, so the hon. Gentleman must resume his seat.
Mr. Kinnock: I was referring to the variety of poll tax reviews currently on offer. Common to all of them, whatever their original concept or the motive in offering them is that, whatever else they profess to do, there is one thing that they will not do—they will not touch the fundamentals of the poll tax. They will not deal with the most basic of the evils of the poll tax—the fact that it is a head tax. That most fundamental feature will not go under any Tory Government or any Tory leader, but go it must, because the poll tax cannot be improved by tinkering or by reviewing. It must be abolished and a Labour Government will abolish it lock, stock and uniform business rate.
The Government's social policies have inflicted disadvantage on millions of people. Their poll tax policies have generated despair and fury. Their economic policies have brought this country into recession once again. It is a central cause of the lack of confidence felt by British people in this Government. The Administration began 11 years ago with policies which provoked recession, eradicated 20 per cent. of British manufacturing capacity——
Mr. Roger King: On a point of order, Mr. Speaker. Has the right hon. Gentleman missed a page in his speech? I clearly heard—[Interruption.]
Mr. Speaker: Order. Points of order of that nature are not at all helpful and tend to disrupt our proceedings.
Mr. Kinnock: I can understand why the hon. Member for Birmingham, Northfield (Mr. King) is so reluctant to hear the history of the disaster of the past eleven and a half years.
The Conservative Administration began with a recession, which they provoked, and which eradicated 20 per cent. of British manufacturing capacity. I should have thought that that, at least, would be of interest to the hon. Gentleman, coming from the part of the world that he does. The recession created a huge rise in unemployment and brought the first-ever manufacturing trade deficit in

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the history of this country, which in turn established the basis for the massive balance of payments deficit in more recent years. Incidentally, today the month-on-month figure again amounted to more than £1 billion.
It is worth recalling, and fair to recall, that when the right hon. Lady first went to Downing street, she inherited from the previous Labour Administration a £46 million a month balance of payments surplus. The deficit this month is £1·1 billion. That is the reason why Conservative Members should have been protesting. That is the reason why they should have been against this Administration—but the trade position of our country never bothered them. This month is just another in the calendar of loss of markets and increases in deficit.
We are told that the early years of this Government are remembered with pride by all who served in or supported the Government, from Surrey, East to Blaby, from Huntingdon to Witney and, of course, Henley. In subsequent years, especially during periods leading up to general elections, they let a deregulated, credit-financed economy rip. They called those years, "the transformation, the great recovery, the economic miracle"—some miracle, when they pushed the economy back into recession again this year. In this recession, not only is there rising unemployment again, increasing numbers of bankruptcies again, declining output again and falling investment again, but there is increased inflation under a Government who promised zero inflation. What a record—11 oil-rich years with a recession at each end and a miracle in between.
In Britain we need a different way. We must give the same primacy as our competitors do to building and strengthening a modern manufacturing industrial economy. We must put at the centre of our economic policy commitments to education, training, transport and investment in science and technology, research and development, as others do, as our neighbours do. We must create modern employment opportunities and give our young people the means of building a proud and confident future—a future of success. The British people know that that must be done. Our people know that that is the best means of ensuring that Britain does not go on falling further behind the other major economies of the EC.
In 11 years, the Government have never seriously tried to build the productive economy, and they will never do it under any leader. Under no leader can they resolve the fundamental conflicts inside the Conservative party about Britain's future in the EC. [Interruption.] That laughter is about 55 per cent. embarrassment.
Mr. Tim Devlin: Have not the right hon. Gentleman and his party changed their attitude on whether they wish to be in the Community no fewer than six times in the past 10 years?
Mr. Kinnock: I only wish that the Conservative party would change its attitude so that it could obtain benefit and advantage for the people of Britain from the EC.
Mr. James Wallace: Does the right hon. Gentleman believe that Britain will gain advantage from a single currency?
Mr. Kinnock: First, we would have to define the possibility of obtaining a single currency. By a huge majority, the Labour party warmly embraced closer monetary co-operation in the EC as inevitable and
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desirable. We have further said, as the hon. Gentleman would know if he had listened to the debates of recent weeks, that in the process of movement it will be essential to achieve three objectives. One is to ensure that there is in that Community, in that development of greater cohesion, in that integration, in that union—[Interruption.] Conservative Members do not like it because they do not have a policy—[Interruption.]
Mr. Speaker: Order.
Mr. Kinnock: There will have to be firm policies for the convergence of economic performance across the Community, firm policies—[Interruption.] If Conservative Members will not listen to this, it is no wonder that they go unprepared into the intergovernmental conference chamber.
Secondly, we must ensure that there is a growth orientation because the alternative—[Interruption.]
Mr. Speaker: Order. This kind of behaviour does not add credit to debate in the House of Commons.
Mr. Kinnock: The alterative to that strategy is the very same stagflation that the Government have brought to Britain.
Thirdly, in any form of union there must be proper arrangements for the transfer of resources between regions, without which there will definitely be a two or even three-speed Europe. It is also essential—I am sure that there must be agreement on this in the House—that there is no question of an unaccountable central monetary institution, because that would be as improper as to surrender fiscal powers to a non-accountable body.
Mr. Nigel Lawson: The right hon. Gentleman owes it to the House to answer the question that was put to him. Assuming that there is a single European central bank which is accountable, is he saying that he and his party favour a single currency issued by a single European bank responsible for a single monetary policy—yes or no?
Mr. Kinnock: As the right hon. Gentleman will know, there is no yes or no answer now. [Interruption.]
Mr. Speaker: Order. I hope that we can proceed in an orderly way.
Mr. Kinnock: The right hon. Gentleman has spent much of his career systematically refusing to give yes or no answers to hypothetical questions. That is the only fitting answer.
Mr. Barry Field rose——
Mr. Speaker: Order. The hon. Gentleman is one of those seeking to participate in the debate.
Mr. Field: On a point of order, Mr. Speaker.
Mr. Speaker: Order. Nothing disorderly has taken place that I know about.
Mr. Field: On a point of order, Mr. Speaker. Is the Leader of the Opposition trying to unite his party or just make us laugh?
Mr. Speaker: Order. It does not help to make that sort of remark in the middle of a speech.
Mr. Kinnock: Everything that I have heard from the Conservative party in recent weeks shows that it has a surfeit of comedians.
The intergovernmental conferences approaching in a few weeks' time are clearly vital to Britain. The party of government is locked in civil war over the issue. That is one of the reasons for what we are hearing today. During recent weeks the Foreign Secretary and the Prime Minister have sent very different signals about the political process. We also know that during recent weeks the Chancellor and the Prime Minister have differed greatly on economic union. We can only assume that in the wake of the Prime Minister's departure there will be a degree of similarity between the views of the Foreign Secretary and the Chancellor. What is certain, however, is that a substantial body of opinion in the Tory party strongly disagrees with the Chancellor and the Foreign Secretary. That division is basic and unbridgeable.
All that Conservative Members have in common is their opposition to the social charter and the standards that it sets for youth training, social security, health and safety at work, and much else. All that unites them is their opposition to the opportunities for improvement that could be afforded to the British people by that charter. They are also against the extension of majority voting to secure greater protection for the environment.
The Labour party is for the social charter. We are for extending majority voting for proposals to improve social and environmental standards. We are for them because they are a means of gaining advantage for the British people; a means of ensuring that we are part of a community as well as part of a market.
I could not really care less what Conservative Members do to themselves and their party, but I do care about the damage that they have done, are doing and will do to the interests of our country. How can anyone have confidence in a Government whose former deputy Prime Minister admits that they have been pursuing the wrong policies for half a decade? Who can have confidence in a Government with Cabinet Ministers who in the past week have been privately telling the press that the Prime Minister is finished and minutes later in the television studio supporting her position, before going off to a private meeting to contrive a coup against her? What confidence can there be in a Government headed by anyone who has sworn allegiance to Thatcherism, as every one of the contestants in the leadership contest has? Who can have confidence in a Government split from top to bottom? If they have no confidence in one another, how can the country have confidence in them? Conservative Members on the Back Benches and on the Government Front Bench have no confidence in one another, as they have shown in everything that they have said about one another in recent weeks and everything that they have done about one another in recent weeks. They are unfit to govern and should go now.
In a democracy, there should be one fitting conclusion to today's dramatic events—a general election. Let the people decide and let Britain have a fresh chance with a Labour Government.
4.50 pm
The Prime Minister (Mrs. Margaret Thatcher): It is, of course, the right and duty of Her Majesty's Opposition to challenge the position of the Government of the day. It is
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also their right to test the confidence of the House in the Government if they think that the circumstances warrant it. I make no complaint about that. But when the windy rhetoric of the right hon. Member for Islwyn (Mr. Kinnock) has blown away, what are their real reasons for bringing this motion before the House? There were no alternative policies—just a lot of disjointed, opaque words.
It cannot be a complaint about Britain's standing in the world. That is deservedly high, not least because of our contribution to ending the cold war and to the spread of democracy through eastern Europe and the Soviet Union —achievements that were celebrated at the historic meeting in Paris from which I returned yesterday.
It cannot be the nation's finances. We are repaying debts, including the debts run up by the Labour party. It cannot be the Government's inability to carry forward their programme for the year ahead, which was announced in the Gracious Speech on 7 November. We carried that debate by a majority of 108.
The Opposition's real reason is the leadership election for the Conservative party, which is a democratic election according to rules which have been public knowledge for many years—one member, one vote. That is a far cry from the way in which the Labour party does these things. Two in every five votes for its leader are cast by the trade union block votes, which have a bigger say than Labour Members in that decision: precious little democracy there.
The real issue to be decided by my right hon. and hon. Friends is how best to build on the achievements of the 1980s, how to carry Conservative policies forward through the 1990s and how to add to three general election victories a fourth, which we shall surely win.
Eleven years ago, we rescued Britain from the parlous state to which socialism had brought it. I remind the House that, under socialism, this country had come to such a pass that one of our most able and distinguished ambassadors felt compelled to write in a famous dispatch, a copy of which found its way into The Economist, the following words:
"We talk of ourselves without shame as being one of the less prosperous countries of Europe. The prognosis for the foreseeable future",
he said in 1979, was
"discouraging".
Conservative government has changed all that. Once again, Britain stands tall in the councils of Europe and of the world, and our policies have brought unparalleled prosperity to our citizens at home.
In the past decade, we have given power back to the people on an unprecedented scale. We have given back control to people over their own lives and over their livelihood—over the decisions that matter most to them and their families. We have done it by curbing the monopoly power of trade unions to control, even to victimise, the individual worker. Labour would return us to conflict, confrontation and government by the consent of the TUC. We have done it by enabling families to own their homes, not least through the sale of 1·25 million council houses. Labour opposes our new rents-to-mortgage initiative, which will spread the benefits of ownership wider still. We have done it by giving people choice in public services—which school is right for their children, which training course is best for the school leaver, which doctor they choose to look after their health and which hospital they want for their treatment.

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Labour is against spreading those freedoms and choice to all our people. It is against us giving power back to the people by privatising nationalised industries. Eleven million people now own shares, and 7·5 million people have registered an interest in buying electricity shares. Labour wants to renationalise electricity, water and British Telecom. It wants to take power back to the state and back into its own grasp— a fitful and debilitating grasp.
Mr. Martin Flannery: The right hon. Lady says that she has given power back to the people, but more than 2 million of them are unemployed. Has she given power back to them? Inflation is 10·9 per cent. Is that giving power back to the people, compared with rates throughout the rest of Europe? Is the frittering away of £100 billion-worth of North sea oil, which no other country has had, giving power back to the people? Will she kindly explain that—and how pushing many people into cardboard boxes and taking power away from them is somehow giving power back to them?
The Prime Minister: Two million more jobs since 1979 represent a great deal more opportunity for people. Yes, 10·9 per cent. inflation is much higher than it should be, but it is a lot lower than 26·9 per cent. under the last Labour Government. Yes, we have benefited from North sea oil. The Government have made great investments abroad that will give this country an income long after North sea oil has ceased. We have provided colossal investment for future generations. Labour Members ran up debts, which we have repaid. We are providing investment for the future; we do not believe in living at the expense of the future.
Mr. Dave Nellist: If things are as good as the Prime Minister is outlining, why are her colleagues not happy for her to continue in the job of defending that record?
The Prime Minister: These are the reasons why we shall win a fourth general election. We have been down in the polls before when we have taken difficult decisions. The essence of a good Government is that they are prepared to take difficult decisions to achieve long-term prosperity. That is what we have achieved and why we shall handsomely win the next general election.
I was speaking of the Labour party wanting to renationalise privatised industry. Four of the industries that we have privatised are in the top 10 British businesses, but at the very bottom of the list of 1,000 British businesses lie four nationalised industries. Labour's industries consume the wealth that others create and give nothing back.
Because individuals and families have more power and more choice, they have more opportunities to succeed—2 million more jobs than in 1979, better rewards for hard work, income tax down from 33p in the pound to 25p in the pound and no surcharge on savings income. Living standards are up by a third and 400,000 new businesses have been set up since 1979—more than 700 every week. There is a better future for our children, thanks to our hard work, success and enterprise. Our people are better off than ever before. The average pensioner——
Mr. Simon Hughes: Will the right hon. Lady give way?
The Prime Minister: If the hon. Gentleman will just listen, he might hear something that he did not know. The average pensioner now has twice as much to hand on to his children as he did 11 years ago. They are thinking about the future. This massive rise in our living standards reflects the extraordinary transformation of the private sector.
Mr. Hughes: There is no doubt that the Prime Minister, in many ways, has achieved substantial success. There is one statistic, however, that I understand is not challenged, and that is that, during her 11 years as Prime Minister, the gap between the richest 10 per cent. and the poorest 10 per cent. in this country has widened substantially. At the end of her chapter of British politics, how can she say that she can justify the fact that many people in a constituency such as mine are relatively much poorer, much less well housed and much less well provided for than they were in 1979? Surely she accepts that that is not a record that she or any Prime Minister can be proud of.
The Prime Minister: People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.
Mr. Hughes: No.
The Prime Minister: Yes, it came out. The hon. Member did not intend it to, but it did.
The extraordinary transformation of the private sector has created the wealth for better social services and better pensions—it enables pensioners to have twice as much as they did 10 years ago to leave to their children.
We are no longer the sick man of Europe—our output and investment grew faster during the 1980s than that of any of our major competitors.
Several Hon. Members rose——
The Prime Minister: If hon. Members would be a little patient, it would allow me to get a little further.
No longer a doubtful prospect, when American and Japanese companies invest in Europe, we are their first choice. Britain no longer has an overmanned, inefficient, backward manufacturing sector, but modern, dynamic industries.
The right hon. Gentleman referred to the level of inflation. Yes, in 1987 and 1988, the economy did expand too fast. There was too much borrowing, and inflation rose. That is why we had to take the tough, unpopular, measures to bring the growth of money supply within target. Inflation has now peaked and will soon be coming down. Inevitably, the economy has slowed, but we firmly expect growth to resume next year. For the fundamentals are right. Our industry is now enterprising. It has been modernised and restructured. In sector after sector, it is our companies which lead the world—in pharmaceuticals, in telecommunications and in aerospace. Our companies have the freedom and talent to succeed—and the will to compete.
Mr. Sillars: The Prime Minister is aware that I detest every single one of her domestic policies, and I have never hidden that fact. [Interruption.]
Mr. Speaker: Order.
Mr. Sillars: However, it is always a greater pleasure to tackle a political heavyweight opponent than a lightweight Leader of the Opposition—[Interruption]—who is afraid to explain why, after a lifetime of campaigning to get rid of nuclear weapons, he is going to plant three Trident missiles in my country.
Can I take the Prime Minister back to the question of the poor getting poorer? Does she not realize—even at this point, five minutes after midnight for her—that, because of the transfer of resources from the poor to the wealthy, the poll tax was unacceptable, and that it was because of the poll tax that she has fallen?
The Prime Minister: I think that the hon. Gentleman knows that I have the same contempt for his socialist policies as the people of east Europe, who have experienced them, have for theirs. I think that I must have hit the right nail on the head when I pointed out that the logic of those policies is that they would rather the poor were poorer. Once they start to talk about the gap, they would rather that the gap were that—[indicating]—down here, not this—[indicating]—but that—[indicating]. So long as the gap is smaller, they would rather have the poor poorer. One does not create wealth and opportunity that way. One does not create a property-owning democracy that way.
Can I now get back to the subject of industry and an industrial policy from which Scotland has benefited so much, and from which it could never have benefited under the Government that the hon. Member for Glasgow, Govan (Mr. Sillars) used to support, and under the political policy that he espouses now?
Yes, our companies have the freedom and talent to succeed, and the will to compete. And compete we must. Our competitors will not be taking a break. There must be no hankering after soft options and no going back to the disastrous economic policies of Labour Governments. No amount of distance lends enchantment to the lean years of Labour, which gave us the lowest growth rate in Europe, the highest strike record and, for the average family, virtually no increase in take-home pay. Labour's policies are a vote of no confidence in the ability of British people to manage their own affairs. We have that confidence. Confidence in freedom and confidence in enterprise. That is what divides Conservatives from socialists.
Our stewardship of the public finances has been better than that of any Government for nearly 50 years. It has enabled us to repay debt and cut taxes. The resulting success of the private sector has generated the wealth and revenues which pay for better social services—to double the amount being spent to help the disabled, to give extra help to war widows, and vastly to increase spending on the national health service. More than 1 million more patients are being treated each year and there are 8,000 more doctors and 53,000 more nurses to treat them.
Mr. Jack Ashley rose——
The Prime Minister: That is the record of eleven and a half years of Conservative Government and Conservative principles. All these are grounds for congratulation, not censure, least of all from the Leader of the Opposition, who has no alternative policies.
Mr. Ashley rose——
The Prime Minister: I shall give way to the right hon. Gentleman, but then I should like to move on to say something about Europe, because what the Leader of the Opposition said about it was, to say the least, opaque.
Mr. Ashley: The Prime Minister mentioned disabled people, and as she is always anxious to be honest with the House, would she care to give a wider perspective about what has happened to disabled people under her Government? Would she care to confirm the official figures, which show that, in the first 10 years of her reign, average male earnings rose by 20 per cent. in real terms, whereas benefits for disabled people in that period rose 1 per cent. in real terms? How well did disabled people do out of that?
The Prime Minister: The right hon. Gentleman is very selective indeed. He knows full well that, in the past 11 years, we have spent twice as much on the disabled, over and above inflation—not twice as much in cash terms, but twice as much in terms of what the benefits will buy—especially in the mobility allowance and the Motability scheme. This has been quite outstanding and has been brought about because, under our policies, we have been able to create the wealth which created the resources to do that, among other things.
During the past 11 years, this Government have had a clear and unwavering vision of the future of Europe and Britain's role in it. It is a vision which stems from our deep-seated attachment to parliamentary democracy and commitment to economic liberty, enterprise, competition and a free market economy. No Government in Europe have fought more resolutely against subsidies, state aids to industry and protectionism; unnecessary regulation and bureaucracy and increasing unaccountable central power at the expense of national Parliaments. No Government have fought more against that in Europe than we have.
We have fought attempts to put new burdens and constraints on industry, such as the social charter which would take away jobs, in particular part-time jobs. For us part of the purpose of the Community is to demolish trade barriers and eliminate unfair subsidies, so that we can all benefit from a great expansion of trade both within Europe and with the outside world.
The fact is that Britain has done more to shape the Community over the past 11 years than any other member state. Britain is leading the reform of the common agricultural policy, getting surpluses down, putting a ceiling on agricultural spending. We have been the driving force towards the single market which, when it is completed, will be the most significant advance in the Community since the treaty of Rome itself. We have done more than any other Government to resist protectionism, keep Europe's market open to trade with the rest of the world, and make a success of the GATT negotiations.
We have worked for our vision of a Europe which is free and open to the rest of the world, and above all to the countries of eastern Europe as they emerge from the shadows of socialism. It would not help them if Europe became a tight-knit little club, tied up in regulations and restrictions. They deserve a Europe where there is room for their rediscovered sense of nationhood and a place to decide their own destiny after decades of repression.
With all this, we have never hesitated to stand up for Britain's interests. The people of Britain want a fair deal in Europe, particularly over our budget contribution. We

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have got back nearly £10 billion which would otherwise have been paid over to the EC under the arrangements negotiated by the Labour party when it was in power.
Indeed, what sort of vision does the Labour party have? None, according to the Leader of the Opposition. Labour Members want a Europe of subsidies, a Europe of socialist restrictions, a Europe of protectionism. They want it because that is how they would like to run—or is it ruin?—this country.
Every time that we have stood up and fought for Britain and British interests, Labour Front Bench spokesmen have carped, criticised and moaned. On the central issues of Europe's future, they will not tell us where they stand. Do they want a single currency? The right hon. Gentleman does not even know what it means, so how can he know? —[Laughter.]
Mr. Kinnock: It is a hypothetical question.
The Prime Minister: Absolute nonsense. It is appalling. He says that it is a hypothetical question. It will not be a hypothetical question. Someone must go to Europe and argue knowing what it means.
Are Labour Members prepared to defend the rights of this United Kingdom Parliament? No, for all that the right hon. Gentleman said. For them, it is all compromise, "sweep it under the carpet", "leave it for another day", and "it might sort itself out", in the hope that the people of Britain will not notice what is happening to them, and how the powers would gradually slip away.
The Government will continue to take a positive and constructive approach to the future of Europe. We welcome economic and monetary co-operation: indeed, no other member state has gone further than Britain in tabling proposals for the next stage, including the hard ecu. But our proposals would work with the market and give people and Governments real choice.
We want the Community to move forward as twelve: and from my talks in Paris with other European leaders over the past few days, I am convinced that that is their aim too. Europe is strongest when it grows through willing co-operation and practical measures, not compulsion or bureaucratic dreams.
Mr. Alan Beith: Will the Prime Minister tell us whether she intends to continue her personal fight against a single currency and an independent central bank when she leaves office?
Mr. Dennis Skinner: No. She is going to be the governor. [Laughter.]
The Prime Minister: What a good idea. I had not thought of that. But if I were, there would be no European central bank accountable to no one, least of all national Parliaments. The point of that kind of Europe with a central bank is no democracy, taking powers away from every single Parliament, and having a single currency, a monetary policy and interest rates which take all political power away from us. As my right hon. Friend the Member for Blaby (Mr. Lawson) said in his first speech after the proposal for a single currency was made, a single currency is about the politics of Europe, it is about a federal Europe by the back door. So I shall consider the proposal of the hon. Member for Bolsover (Mr. Skinner). Now where were we? I am enjoying this.
Mr. Michael Carttiss: Cancel it. You can wipe the floor with these people.
The Prime Minister: Yes, indeed—I was talking about Europe and the socialist ideal of Europe. Not for us the corporatism, socialism and central control. We leave those to the Opposition. Ours is a larger vision of a Community whose member states co-operate with one another more and more closely to the benefit of all.
Are we then to be censured for standing up for a free and open Britain in a free and open Europe? No. Our policies are in tune with the deepest instincts of the British people. We shall win the censure motion, so we shall not be censured for what is thoroughly right.
Under our leadership, Britain has been just as influential in shaping the wider Europe and the relations between East and West. Ten years ago, the eastern part of Europe lay under totalitarian rule, its people knowing neither rights nor liberties. Today, we have a Europe in which democracy, the rule of law and basic human rights are spreading ever more widely, where the threat to our security from the overwhelming conventional forces of the Warsaw pact has been removed: where the Berlin wall has been torn down and the cold war is at an end.
These immense changes did not come about by chance. They have been achieved by strength and resolution in defence, and by a refusal ever to be intimidated. No one in eastern Europe believes that their countries would be free had it not been for those western Governments who were prepared to defend liberty, and who kept alive their hope that one day east Europe too would enjoy freedom.
But it was no thanks to the Labour party, or to the Campaign for Nuclear Disarmament of which the right hon. Gentleman is still a member. It is this Government who kept the nuclear weapons which ensured that we could never be blackmailed or threatened. When Brezhnev deployed the SS20s, Britain deployed the cruise missiles and was the first to do so. And all these things were done in the teeth of the opposition of the hon. Gentlemen opposite—and their ladies. [Laughter.] The SS20s could never have been negotiated away without the bargaining strength which cruise and Pershing gave to the west.
Should we be censured for our strength? Or should the Labour party be censured for its weakness? I have no doubt that the people of Britain will willingly entrust Britain's security in future to a Conservative Government who defend them, rather than to socialists who put expediency before principle.
Sir Eldon Griffiths: May I offer my right hon. Friend one measurement of the immense international respect and affection that she enjoys as a result of her policies of peace through strength? An opinion poll published on the west coast of America last month—[Laughter.]
Mr. Speaker: Order. This takes up a great deal of time. The hon. Gentleman is seeking to participate in the debate. Will he please ask a question?
Sir Eldon Griffiths: The figures are Gorbachev 74 per cent., Bush 75 per cent. and Thatcher 94 per cent.
The Prime Minister: I am sure that they were quite right, too.

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I wish to say a word or two about the situation in the Gulf, because it will dominate politics until the matter is resolved. It is principle which is at stake, as well as the rule of international law.
In my discussions with other Heads of Government at the CSCE summit in Paris, I found a unanimous and impressive determination that Iraq's aggression must not succeed. The resolutions of the United Nations must be implemented in full. That is the peaceful option, Mr. Speaker, and it is there to be taken, if Saddam Hussein so chooses. There was also a widespread recognition among my colleagues in Paris that the time was fast approaching when the world community would have to take more decisive action to uphold international law and compel Saddam Hussein to leave Kuwait.
No one can doubt the dangers which lie ahead. Saddam Hussein has many times shown his contempt for human life, not least for the lives of his own people. He has large armed forces. They are equipped with peculiarly evil weapons, both chemical and biological.
Mr. Tam Dalyell: Will the Prime Minister give way?
The Prime Minister: No, not now.
Twice in my time as Prime Minister we have had to send our forces across the world to defend a small country against ruthless aggression: first to our own people in the Falklands and now to the borders of Kuwait. To those who have never had to take such decisions, I say that they are taken with a heavy heart and in the knowledge of the manifold dangers, but with tremendous pride in the professionalism and courage of our armed forces.
There is something else which one feels. That is a sense of this country's destiny: the centuries of history and experience which ensure that, when principles have to be defended, when good has to be upheld and when evil has to be overcome, Britain will take up arms. It is because we on this side have never flinched from difficult decisions that this House and this country can have confidence in this Government today.
Mr. Speaker: Before I call hon. Members to speak in this important debate, I must say that I have no authority to limit speeches in a debate of this sort, nor would it be right to do so. Nevertheless, this is a day on which right hon. and hon. Members should exercise self-restraint. I ask hon. Members who are not remaining to leave quietly, please.
5.24 pm
Mr. Paddy Ashdown: It is impossible to follow the Prime Minister without soberly reflecting for a moment that we have just heard what is probably the last of her important and considerable speeches from the Government Dispatch Box. It was a bravura performance of the sort which she has made her own. I cannot with honesty say that I shall miss it, but I shall certainly remember it and, as time intervenes, remember it with ever greater affection.
We have just heard a catalogue of the Prime Minister's achievements and to some extent a political will and testament to her party. I must warn whoever is successful in the leadership election to watch out for that one on the Back Benches. Whatever the right hon. Member for Old
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Bexley and Sidcup (Mr. Heath) did to her, she will be a powerful voice in months to come. We shall be interested to see how much that voice will be used to unite her party or, on the issue of Europe, to divide it.
It is impossible to have lived through last week without feeling that one is participating in a moment of history.
Mr. David Winnick: Will the right hon. Gentleman give way?
Mr. Ashdown: If the hon. Gentleman will let me get further into my speech, I shall happily consider his intervention later.
In the past week we have seen the end of one era—the end of a decade to which the Prime Minister has in many senses given her name—and the beginning of another. What struck me as remarkable about the two speeches was that neither was about the future and both were about the past. Both were about what has happened in the past decade. If there is a reason to have a lack of confidence in this Government it is much more that they are not addressing the real agenda of the 1990s—a new agenda is opening up—than their terrible failures in the past.
I recognise that the Prime Minister's decision today was a difficult one. She took it in a way which was right for her remarkable reputation, right for her party's unity and right for the country. We can all understand what she went through. She is a fighter and must have been considerably tempted to stay on and battle it out—to go down like the Fighting Temeraire with all guns blazing. That would undoubtedly be a noble end for a great captain, but not best calculated to encourage enthusiasm in the crew, as we have seen during the past week.
The Prime Minister has opened the way for the new politics that Britain so badly needs. It is impossible to let the moment pass without having the smallest tinge of sadness about the end of an era. I do not want to underestimate her considerable achievements. I have never agreed with her politics. I have always felt that they are bad and wrong for Britain. I have never agreed with her style. I have not denied—nor can we deny—some of her achievements or the courage and skill with which she has done her job. Indeed, she has achievements.
Mr. Bob Cryer: What achievements? Name one.
Mr. Ashdown: The Prime Minister's pre-eminent achievement, which is not welcome to Labour Members, and the one for which she will be remembered, is the democratisation of the trade union movement.
In 1979 we debated whether Britain would be run by the trade unions or the elected Government of the day—it is hard to remember that now. The Prime Minister, to her credit, answered that challenge. [HON. MEMBERS: "Get on with it."] I hear Opposition Members baying behind me; no doubt they do not like to hear that. It is important, however, to mark up what the Prime Minister has done. She is right to say that she has given this country a standing abroad that it did not have in the 1970s. The right hon. Lady has also given us some sense of the value of sound money, which is important. She has also highlighted the importance of the market in our economy.
Sir Jim Spicer: Will the right hon. Gentleman say just a word of thanks to the Prime Minister on behalf of his constituents and mine who work——
Mr. Cryer:The right hon. Gentleman is grovelling anyway.
Sir Jim Spicer: Will you keep quiet? [Interruption.] I apologise, Mr. Speaker. The right hon. Gentleman should give a word of thanks to the Prime Minister for all that she has done to change the climate for Westland in the past 10 years. Those changes made it possible to retain jobs which otherwise would have been lost.
Mr. Ashdown: Of course, I pay that tribute, but I should have thought that Westland was not a subject that the Prime Minister would necessarily want to be brought up today. It is important to remember, however, that all the indecision about Westland cost my constituency and the hon. Gentleman's constituency 1,000 jobs. I pay a two-edged compliment.
I believe that the Prime Minister can claim to have been the spirit of the 1980s. he failure of the right hon. Lady and her party is that they are unable to address what is needed for Britain in the 1990s.
The censure motion was a flat-footed blunder on the part of the Labour party——
Mr. Cryer: The right hon. Gentleman put down a motion three weeks ago. What was clever about that?
Mr. Ashdown: Exactly so. If the Labour party had supported that motion or tabled one on Europe, it would have divided the Government. We well know that the Labour party could not table a motion on Europe for reasons that became patently obvious when the Leader of the Opposition spoke. The Labour party is profoundly divided on Europe—as divided as the Government are.
The Labour party tabled the motion to support the Prime Minister—what strange nonsense.
Mr. Robert N. Wareing: Will the right hon. Gentleman give way?
Mr. Ashdown: If that is true—Opposition Members have just said it—the Labour party's last-ditch attempt to save the Prime Minister has signally failed. The truth of the matter is that the Labour party is now left without a policy. It intended to present to Britain the simple message, "Please vote for us because we are the 'Not the Mrs. Thatcher party'." That is the single policy of the Labour party.
Mr. Wareing rose——
Mr. Ashdown: The Labour party's fox has been shot. It must now address the agenda of the future and the policies it has so far ignored.
Mr. Wareing rose——
Mr. Ashdown: The hon. Gentleman must accept that if I have not given way to him by now, I do not intend to.
It is not without significance that the Leader of the Opposition's entire speech was concentrated on attacking the Government. That is perfectly reasonable in a censure motion, but he said nothing about the poll tax, Europe, the economy or anything else relating to Labour party policy.
Mrs. Alice Mahon: Will the right hon. Gentleman give way?
Mr. Ashdown: No.
Mrs. Mahon rose——
Mr. Wareing rose——
Mr. Speaker: Order. If the right hon. Gentleman does not give way, the hon. Lady and other hon. Gentlemen must resume their seats. The right hon. Gentleman has already said that he does not intend to give way.
Mr. Ashdown: No doubt it will be interesting to all observers of this debate to note that the hooligans on this side of the House——
Mr. Wareing: On a point of order, Mr. Speaker. The right hon. Gentleman's party voted for the Government on the previous censure motion, but that Government are now in trouble.
Mr. Speaker: Order. I think that that is a debating point.
Mr. Wareing: No, it is not. The right hon. Gentleman referred to my hon. Friend the Member for Halifax (Mrs. Mahon) and me as hooligans. Is that a party expression?
Mr. Speaker: I did not hear it, but if the hon. Gentleman and his hon. Friends persist in interrupting, things are sometimes said that are not always meant. If the hon. Gentleman resumed his seat, he might have some chance to take part in the debate.
Mr. Ashdown: The motion is not one of no confidence in the Prime Minister—we do not need one because Conservative Members have kindly provided us with one in duplicate. It is, however, a motion of no confidence in the Government. The fundamental reason why we shall vote for this motion—[HON. MEMBERS: "Ah!"] Oh yes. Given that the Labour party has followed, three weeks late, what we did, we shall naturally vote for the motion. The reason is simple: the Government are now terminally divided. They are divided on all the key issues that confront Britain. The losers are not the right hon. Gentlemen who are candidates for the leadership of the Conservative party—one will win and no doubt two will lose. [HON. MEMBERS: "Brilliant!"] The real losers are the people of Britain because the Government are divided on Europe, the poll tax and all the other key issues before us.
The country is passing through a deep economic recession, but the Government are in crisis. In the future this country must decide on Europe—that decision is as important as any of those reached since the second world war—but the Government are divided on that crucial matter. As a consequence, the ordinary people will have to pay higher mortgages for longer, the recession will go on for longer, more jobs will be lost and the poll tax will go on for longer. Those facts mean that the Government are no longer fit to govern. No future leader of the Conservative party will be able to paper over those deep cracks—mortal divisions—that divide that party.
The right hon. Member for Henley (Mr. Heseltine), who is not in the Chamber, has identified four of the five key areas in which the Government have failed. He ignored the environment, however, which is vital. Britain must have a political party that is prepared to address what needs to be done to change our lifestyle so as to save our environment. Unless that happens we shall fail the crucial test that lies ahead in the last decade of the century. The right hon. Member for Henley has asked the questions, but, in so far as he has provided the answers,

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they are answers upon which his party is divided. The Liberal Democrats ask many of the same questions, but we provide the answers and our party is united on them.
The right hon. Member for Henley rightly raised the issue of the poll tax. He identifies the poll tax as a major problem for the Government, but he does not propose any alternative. He retreats to the old refuge of politicians who do not have an answer, which is to call for a review.
We in the House will not forget that the right hon. Gentleman has never voted against the poll tax. Indeed, the people of Scotland will not forget that he voted for it. When the right hon. Member for Henley was asked why he voted for the poll tax in Scotland, he gave the curious answer that he thought the Scottish people were in favour of it. Any candidate for the premiership of Britain who is so out of touch with the people does not deserve the position.
We in my party are united on what must happen to the poll tax. It should be replaced by a local income tax. We need a sensible, fair, just, cheap, efficient and easy-to-raise tax, just as accountable for local government as the accountability that is enjoyed by the Prime Minister.
Ms. Dawn Primarolo: Does the right hon. Gentleman believe that our present national taxation system is fair? If not, why does he propose that local authority taxes should be levied in the same way?
Mr. Ashdown: The national taxation system is a hell of a lot fairer than the poll tax. Also, that system has lasted through the lifetime of a number of Labour Governments, and it is for the Government of the day to change it in any way they wish to make it fair—if the hon. Lady thinks that it is not fair.
I come to the issue of Europe——
Mr. Cryer rose——
Mr. Ashdown: I will give way to the hon. Gentleman, but I make it clear that it is the last time that I shall give way. I do not wish to prolong my speech, because many other hon. Members wish to take part in the debate.
Mr. Cryer: The right hon. Gentleman gave way on precisely the same point in a previous speech. Others make the same error when talking about Europe. I assume that he is talking about the European Economic Community. I should be grateful if the right hon. Gentleman would not assume the arrogant attitude that Europe is covered by the EEC, when it is only a tiny proportion of western Europe.
Mr. Ashdown: The hon. Gentleman intervened at the point when I had simply used the word "Europe". He is out of date, for there is no such thing as the European Economic Community. It is now the European Community, so perhaps he should get his terminology right.
I come to the question of Europe and the European Community. The right hon. Member for Henley is right to say that it is a key issue, for the Government and the nation, but his policy—he has stated it publicly—is not to change the Prime Minister's policy but to argue it better. We would simply bring the problem back to the House. We would remain left behind, isolated and on the outer ring of a two-speed Europe.
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My party is not divided on the issue of Europe as the Conservative and Labour parties are divided. We are not confused on it. We know precisely where we stand—[Interruption.]—for we are in favour of European monetary union, of a central bank for Europe, of political integration and of being part of the mainstream of Europe moving towards European unity. That is our clear and united position.
The next matter raised by the right hon. Member for Henley was the economy, and he was right to say that the economic policies of the Government have not succeeded. There is evidence all around us of that. But the right hon. Gentleman, putting himself forward for the leadership of the Conservative party, proposes that we should return to a 1970s dirigisme which, frankly, failed.
The Prime Minister is right to draw a parallel between the economic proposals of the right hon. Member for Henley and those of the Labour Shadow Chancellor because they have a great deal of similarity. We in my party know and understand the importance of the market and of competition, but we also know and understand, and are united on, the role of Government in those circumstances.
We say that the Government's role is to tackle monopolies; to promote real competition, not the sham competition promoted by the present Government by the privatisation of the utilities; and to let the power of the market have its effect. But the Government of the day have a duty to invest where the market will not invest, especially in education and training. That is why we say that that is the pre-eminent role of the economic policies of a future Government. We are clear and united on that issue.
The right hon. Member for Henley is right to identify the fact that there is a constitutional problem with the way in which the Prime Minister has handled her office. It is right for him to point out that the Prime Minister has—as many would say, and I would agree with them—overstepped the conventions of her office in the past 11 years.
The difference between us is that the right hon. Member for Henley would replace the Prime Minister with himself. We would replace the system. That is the fundamental difference because we say that no Prime Minister—not the right hon. Member for Henley nor any of the other contenders, and certainly not the leader of the Labour party—should enjoy the powers that the present Prime Minister has created for that office. It is not healthy in a democracy.
What separates my party from any other in this Parliament is that we do not want to inherit that office. We want to change it. We want for our country a written constitution which does not allow the Prime Minister or any other politician to overstep the bounds of their power. Marching hand in hand with that constitution, we want a Bill of Rights that will enshrine the inalienable freedoms of every citizen in a way that cannot be tampered with by the Prime Minister, by the bureaucrats, by trade unions or by big business. That is the way to begin to tackle the fundamental constitutional issues.
On the constitutional side, my party is alone in the House, among the major parties, in saying that there must be a reform of the voting system. We must have a fair voting system in Britain——
Mrs. Margaret Ewing: The Scottish Nationalists want the same.
Mr. Ashdown: I accept that the Scottish Nationalists adduce the same argument. The people of Britain are entitled to ask how a 55 per cent. vote is not sufficient to elect a Conservative leader, when a 40 per cent. vote is sufficient to elect a whole Government.
When, in due course, as I predict will happen, the Conservatives go to a third ballot and must use proportional representation with a single transferable vote, we shall be entitled to ask the new Prime Minister who will have been elected by that mechanism why he is prepared for himself to be elected by that means but denies it to the people of Britain. We cannot have a stable Government unless we are prepared to have a reformed and fair voting system.
There is a sense that we are passing through a period of change. The Liberal Democrats now stand united on the agenda for the 1990s, the agenda to which other parties will have to come. We are united, while the two other main parties are divided. The great moment of change has arrived. The difference between us is that they fear change while we welcome it.
I say to the new leader of the Conservative party, whoever he may be, that it will not be sufficient for him simply to be elected by a caucus of Conservative Members of Parliament in secret in a Committee Room of the House of Commons. If he is to put the good of his country before the good of his party, he must do what must be done, and that is to seek the mandate of the British people in a general election. Until that happens, he will not be able to lead the Conservative party or the Government.
5.48 pm
Mr. Cranley Onslow: You and I were elected to the House on the same day, Mr. Speaker, and I cannot presume to speak for you, but this is the saddest day of my political life. Nor can I pretend that I find it easy to speak without emotion. I hope that you and the House will forgive me for that.
I know that many people outside the House heard the news of the resignation of my right hon. Friend the Prime Minister with the greatest sorrow, as I did—and with anger, too, because of the events which brought it about. Those emotions are real and will be slow to fade.
In her truly remarkable speech today and by her answers at Question Time, my right hon. Friend reminded us once again of those qualities in herself which must not be obscured by tears of rage. Above all, she showed us her enormous courage, her self-possession and her dignity. In that, she should have taken the House back to the statement that she made here earlier this week and from which I shall quote. In her report on the Paris summit, my right hon. Friend told the House, among other things, that
"The steady resolve of the United Kingdom and the United States to maintain strong defence during the years when the Warsaw pact represented a direct challenge to our way of life, and our refusal to give way to military threats, was crucial in securing this excellent agreement … I believe that this summit was an historic gathering. It marked the end of the cold war in Europe and the triumph of democracy, freedom and the rule of law …
Britain has throughout been in the forefront of those who supported the struggle for human rights in those dark days".
My right hon. Friend concluded:
"I believe that the outcome of the summit is one of which this Government, this House and this country can be proud."—[Official Report, 21 November 1990; Vol. 181, c.292.]
As one who remembers the start of the cold war, I say to my right hon. Friend the Prime Minister how much we
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all know that it was her steady resolve, her refusal to give way and her support for the struggle for human rights that made the outcome of that summit something of which she can be proud. And there are so many other things in which my right hon. Friend can take pride.
I should like to quote also from the statement that the Lord Chancellor made this morning on behalf of the whole Cabinet, in which he said to my right hon. Friend the Prime Minister:
"You have served as Leader of the Conservative Party for nearly 16 years and as Prime Minister for the past 11 years, the longest serving Prime Minister this century. You led the Government through a time of severe economic difficulty in the early years of the decade to a period of sustained economic growth unparalleled since the Second World War. Your fortitude sustained the effort to recover the Falkland Islands and showed a resolve which many thought had been lost to Britain …
Your place in our country's history is already assured … We thank you most warmly for your leadership and we extend to both you and your husband, who has supported you so marvellously, all our best wishes for the future."
Those words should be recorded and reaffirmed in the House.
When I proposed you for re-election to the Chair at the start of this Parliament, Mr. Speaker, it never occurred to me that one of the great advantages of your high office was that you did not need to know anything about the rules for the election of the leader of the Conservative party. Others may realise the constraints under which they have placed me. This means that I can say little about the events of the coming week—much as I might like to speak out—save to say that I am confident that my colleagues can elect a successor who will respond to the challenges which face the people of this country in the years ahead and that he will prove worthy of the support of all my colleagues. That, I believe, is the one sure way in which we can work together towards the twin objectives that my right hon. Friend the Prime Minister set us today—the unity of this party and victory in a general election.
5.53 pm
Mr. Michael Foot: I hope that the Prime Minister will not depart immediately. I know that she has many other pressing engagements. She has to listen to those who will follow her, which I am sure must be a great strain. If she has to go, then she must, but I was about to comment on her speech. There seemed to be a great mystery about it. If her record and that of her Government is as plain and as good as she claimed, and if the figures uphold all the doctrines that she has announced and all the achievements that she listed, if it is all so plain and so obvious, I cannot understand why the Prime Minister did not respond to the speech of my right hon. Friend the Leader of the Opposition and call a general election. If the evidence is so clear, so plain, so obvious and so comprehensive, surely she should be the one to take those great accomplishments to the British public and persuade them. So something else must have occurred. One possibility is that the achievements are perhaps not so great as the right hon. Lady has claimed. Another is that others think that they can present the case better than she can. Either way, it does not seem as though the right hon. Lady is upholding the case which she put to the House.
The truth is that, as so often, the right hon. Lady has failed to face the reality of what is happening in the country. She does not seem to understand what has happened in so many constituencies, including my own

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and many others, in the past 10 years. She does not seem to understand the real consequences of so many of her policies. Because of the way in which she has presented the case to date, it is not only Opposition Members and my right hon. Friend the Leader of the Opposition who are protesting about what she has done—some leading Conservative Members are doing so as well. I notice that the right hon. Member for Blaby (Mr. Lawson), the former Chancellor of the Exchequer, is in his place. I shall come to him in a moment. I am sorry that the candidates are not present. The right hon. Member for Henley (Mr. Heseltine) might have turned up for the whole debate. Not that he comes to our debates often, of course—when he closed the Devonport dockyard, he did not trouble to come to the House himself but sent one of his underlings. That is the way in which the right hon. Gentleman has often treated the House of Commons and, so far as I can see, his party as well.
I listened to the funeral oration given by the right hon. Member for Henley this morning when he commented on the announcement from No. 10 Downing street. That must have been the first assassination scene in which the envious Casca tried to pass himself off as Mark Antony. If it was such a good performance—we all know that the right hon. Gentleman often repeats himself—perhaps he should have come along to the House to join in and to give us that delight on this occasion.
We have some recollections of the right hon. Gentleman. Some people think that some of us object to him because of the way in which he waved the Mace. I think that it is the best thing that he has done. By the way, he apologised for that and I thought that he might be happy to proffer an apology again.
The right hon. Member for Henley has recently sought to make some capital out of the poll tax, although he has not yet apologised to the Scots for voting to impose the poll tax on them. Apparently, he says that he was told that the people of Scotland were in favour of it. However, he did not raise the matter when he went up there. Again, I am sorry that the right hon. Gentleman has not graced us with his presence. We know that he likes to listen to the Prime Minister, but we would have valued his evidence and presence now.
The charge that the right hon. Member for Henley has made against the Prime Minister over many years in which, at one stage, he was supported by the right hon. Member for Blaby, who is present, is a serious charge and one of which the House should take some cognition. The charge is that over a long period—the right hon. Member for Henley would say over five years—the Prime Minister was guilty of refusing to sustain proper collective Cabinet responsibility. I should have preferred to say this to the right hon. Lady's face rather than behind her back, but that is not my fault. Some of us made that accusation on earlier occasions because we thought that that was her nature. One of the reasons why we became involved in the Falklands war was that the right hon. Lady refused proper collective Cabinet responsibility to settle those issues, and there have been numerous other examples of such refusal.
The right hon. Member for Henley was so outraged by the right hon. Lady's refusal to follow the normal Cabinet system that he resigned from the Government. Her nature was confirmed again the other day by no less a person than
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the deputy Prime Minister, who had been in the Government for 10 years and who claimed that she had persisted in such action throughout that time. The right hon. Member for Blaby resigned for the same reason, too. He said that he thought it wrong that the Prime Minister of this country should take advice from someone outside the Cabinet on major matters of economic policy while refusing to take proper advice from her Cabinet. We were told the other day that so serious was the problem that the right hon. Member for Blaby and the deputy Prime Minister went to the Prime Minister three or four years ago, put a pistol to her head and told her that if she persisted in refusing to abide by proper collective Cabinet responsibility, they would resign. Only by that threat was the Prime Minister brought to heel on that occasion.
I must tell supporters of the right hon. Member for Henley that if he thought for five years that the Government was being conducted in a manner in which Cabinet responsibility was breached persistently—he quoted in his support the right hon. Member for Blaby and the deputy Prime Minister—how was he able to go up and down the country, recalling how he had been treated in Cabinet, saying that he could not imagine circumstances in which he would ever stand for election against the Prime Minister? Conservative associations throughout the country have been subjected to a gross deception. I do not have to worry about that, but some of the public may have overheard what the right hon. Gentleman said. Perhaps he wanted the country to believe what he said.
When I heard the sophistical lamentations of the right hon. Member for Henley this morning, I found it hard to suppress my outrage at his bursting hypocrisy, but when I had overcome that I was reminded of the saying of Halifax —"Trimmer" Halifax, not the Halifax who used to be one of the mischievous leaders of the Conservative party. Halifax the trimmer was a much more eminent man and Leader of the House of Commons in years gone by. He said that a known liar should be outlawed in any good Government. I hope that Conservative voters in the House of Commons will think about that when they come to vote.
The Opposition agree with another charge that has been laid against the Prime Minister by the right hon. Member for Henley and others. It was heard in its earliest and strongest form—I and many of my hon. Friends remember the speech vividly—from the right hon. Member for Old Bexley and Sidcup (Mr. Heath). Thinking of her conduct over a whole series of matters, he was commenting on the relationship between 10 Downing street, Bernard Ingham and the Murdoch press. The right hon. Gentleman, were he here, could confirm what I say. He said that the relations between 10 Downing street, by which he meant the Prime Minister, and the rich man's millionaire press baron, Murdoch, and Bernard Ingham, who was carrying on these machinations, was corrupt—and that is what it was, and so it has been throughout. It is one of the reasons why the Prime Minister is being brought down. She substituted for proper collective Cabinet Government the operations of her kitchen Cabinet.
Previous Prime Ministers and better Prime Ministers than the present one have been guilty of this, too. Lloyd George was charged with having a kitchen Cabinet and got thrown out by the 1922 Committee almost as brutally as the right hon. Lady has been. At least there was a meeting to throw him out. He was thrown out because the Conservative party of the day was not prepared to put up

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with a kitchen Cabinet instead of proper Cabinet responsibility. Yet the right hon. Lady has been doing the same thing: in each succeeding crisis, instead of taking the matter to the Cabinet and discussing it there, she has taken it to her kitchen Cabinet. Had she behaved otherwise, she might have saved herself some catastrophes. Her kitchen Cabinet has had exorbitant, dangerous powers during all these years. That is one reason why she has fallen.
When first I heard that the right hon. Lady was to come here and make her speech I was reminded of the occasion—perhaps I am the only person who remembers it—when, from the Press Gallery, I heard a speech by a previous Conservative leader who came here to try to defend his record. I refer to Neville Chamberlain in the famous Norway debate. There were many likenesses between him and the present Prime Minister. He, too, had a huge Tory majority behind him and thought that he could do anything. He, too, thought that he could ignore pressures. He, too, had his kitchen Cabinet advising him so much more wisely than the Foreign Office. And by such methods he brought this country near to utter destruction.
No one who witnessed that debate can ever forget it. Chamberlain still thought that he could get away with it. The Whips Department set up the debate for him; they still had support for the Chamberlain policy, they thought, and he came and appealed for support from his friends. It was when he made his appeal that the outrage of others— especially Lloyd George, who spoke from the Opposition Front Bench—exploded. The whole wretched Chamberlain Government, who thought that with their huge Tory majority they could do anything, were swept away after the motion moved by the leader of the Labour party of the time, and a decent Government were installed and saved the country after the most critical moment in about 1,000 years. Chamberlain's sense of rectitude, the feeling that he was always right and that nobody else was, and that he had to be listened to, closely resembles the way in which the present Prime Minister has sought to conduct the affairs of the country over the past 10 years. It is for the way she has done it, as well as for what she has done, that she will not be forgiven by my constituents. Again, I would prefer to say that to the right hon. Lady's face rather than behind her back.
The story that there has been a wonderful increase in our people's standard of living and that each section of the new community has been properly treated and has had its position improved is a lie—a lie of which the right hon. Lady constantly persuades herself. I do not imagine for a moment that she does not believe her own absurd statistics. Of course she does—that is one of the problems, and why she has had to be removed in this fashion. I give the right hon. Lady credit for the dignity with which she has stood down, but it would have been better still if she had the courage to say, here and now, "The only people entitled to judge my record are the British people, and not another hour will elapse before they get that chance."
6.10 pm
Mr. Nicholas Ridley: I shall shortly deal with the speech by the right hon. Member for Blaenau Gwent (Mr. Foot), but I should first like to thank the Leader of the Opposition for one thing only. I thank him for giving us in this debate the opportunity to pay tribute to my right hon. Friend the Prime Minister. The three Opposition speeches that we
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have heard so far were disgraceful and shameful in their return to party doctrine. The hon. Members who delivered them were unrepentant and unable to recognise that this is an historic and sad moment in the history of our country.
I pay tribute to my right hon. Friend the Prime Minister for her courage, stamina and determination over the last eleven and a half years. Her speech today and her answers to parliamentary questions showed a fortitude and strength which I defy any other right hon. or hon. Member to show in similar circumstances. I pay tribute to her for her work in flying back and forth across the world and in staying up late at night to assist this country, sometimes limiting herself to three hours sleep a night. I admire her resolution to fight for her beliefs, however long the odds against her.
The right hon. Member for Blaenau Gwent spoke about Cabinet responsibility. The two examples that he cited fit ill with his case. He talked about the resignation of my right hon. Friend the Member for Henley (Mr. Heseltine). I was present at that Cabinet meeting, and the opinion was 20:1 against my right hon. Friend. Now, who is it who does not accept Cabinet government?
That was part of the foundation of the flimsy case presented by the right hon. Member for Blaenau Gwent. He spoke about the event revealed by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), when he and my right hon. Friend the Member for Blaby (Mr. Lawson) apparently formed up on the Prime Minister and said that they would resign if a certain policy was not adopted. That, again, was the right hon. Gentleman's only evidence for his charge.
I, too, was a member of the Cabinet at that time, and I do not remember my two right hon. Friends coming before the Cabinet and saying what we should do. They never cleared their point of view with their colleagues, and never ever raised it in Cabinet. They tried to fight my right hon. Friend the Prime Minister: it was not the other way round. That must be recorded, because it is the truth about that matter. My right hon. Friend the Prime Minister has never failed to consult colleagues whose inputs to Cabinet were right, and this myth about her seeking to govern from outside the Cabinet is promoted by those who could not get their way in Cabinet.
We should go further in paying tribute to my right hon. Friend. We should remember her remarkable loyalty and generosity of spirit to people who were ill or unfortunate. We should remember the time that she took to look after people who had suffered misfortune, her support for colleagues when they were in trouble or going through a rough patch, and her ability to forgive. [Interruption.] I know that the Opposition do not like that, but I shall not use this occasion to attack them, because they are not worthy of it. I am trying to use it to support my right hon. Friend the Prime Minister.
Lastly, we must remember her integrity. She could not say what she did not believe. She hated fudging. She put her purpose above her personal interest and never said or did a mean thing. It was because of those qualities that she achieved so much. She transformed this nation's economy and spread wealth both wider and more evenly geographically over the nation. She improved the public services, because we have earned the wealth to pay for that, and she increased the standard of living of the average person in Britain by 35 per cent. Those are great achievements.

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On the political front, my right hon. and hon. Friends know that she won three general elections in a row and gave us eleven and a half socialist-free years. She never lost an election. Over the years, she exhibited a resolute defence of this country's interests, and we pay tribute to her efforts to make sure that the Community did not become a centralised, closed, exclusive club but moved towards wider membership and freer trade, thus allowing it to be a group of co-operating member states rather than a federal Europe. That is the sort of Community that the vast majority of hon. Members want. It was the Prime Minister who pushed the Community further in that direction than any other European statesman
Mr. Nigel Spearing: The right hon. Gentleman would not expect me to agree with the part of his speech that he has just concluded. It is quite clear from experience that what he says about centralisation in the European Community is just not true. Does he not agree that the terms, implications and practice of the Single European Act treaty, which did much more than even those who closely examined it realised, have taken away from the House, by a majority vote in the Council of Ministers, enormous areas of legislation? The right hon. Gentleman, many of his hon. Friends, perhaps even the Prime Minister, and many Opposition Members did not understand that. What the right hon. Gentleman has just claimed is, alas, untrue.
Mr. Ridley: I do not agree with the hon. Gentleman, because I am not anti-Community or anti-European per se. I believe that it is necessary to have a free trading area and the central powers to insist on fair and free trading inside that area. I do not see anything wrong with that. However, that is where I stop, and perhaps in that way the hon. Gentleman and I are in the same company.
On the international scene, my right hon. Friend has played no small part in ending the Russian threat, freeing the countries of east Europe, maintaining the Atlantic alliance and bringing continuing peace to the world. How did we on the Government Benches reward her? The very day that she finished the cold war in Europe, we started the hot war here.
I deeply regret that the deed was done, and the manner of its doing. The deed was to enact a sort of shameless mediaeval betrayal, whipped up by the media. The manner of its doing was through the electoral device that we have for the leadership. Do we really want to have such a crude device for ever in our party? It is like saying that we will grant the Leader of the Opposition the right to call a general election any time that he feels that the Government might be weak. It is a crazy part of my party's constitution that we lay ourselves open to such a self-inflicted wound.
Those who use this device will not be at peace within their souls over the years to come. Were any of those who have used this device to inherit the crown, uneasy would lie his head. The consequences are yet to come. The backlash is starting in the constituencies. The Conservative party association offices have had their switchboards jammed with protest calls. Jacques Delors is laughing all the way to the Eurofed.
I am reminded of the ballad of the battle of Chevy Chace, where it is written:
"The child may rue that is unborne,
The hunting of that day".
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I fear that that is the case. Nevertheless, we must forget the past. We must bind up our wounds and bury our dead. We must look to the future. We must reunite and, above all, let us behave over the next few days with dignity. It would be a fitting tribute to my right hon. Friend the Prime Minister for us to behave with the same dignity with which she has behaved today.
6.22 pm
Mr. Terry Rooney: I understand that it is rare for a maiden speech to be made in a debate such as this, but I feel that it is not inappropriate to make mine now in that the Bradford, North by-election result partly precipitated the crisis of confidence of many members of the Government and thus the resignation of the Prime Minister. I also understand that, while my share of the vote was 52 per cent., under current electoral law there will be no second or third ballot.
I must at this stage pay tribute to my predecessor, Pat Wall. All those who came to know Pat found him to be a man of the highest integrity, a thoroughly nice person, with a wry sense of humour and deeply held political convictions. In his all-too-short period of office, he gained the respect of friend and foe alike for his diligence, tenacity and compassion, and, despite his birthplace, an unwavering commitment to his constituency.
The people of my constituency have very little regard for the Government's record. For over a decade, Bradford has been a test bed for an alphabet soup of experiments, with a TEC, a CAT, a UDG, a TVEI, a CPVE, a LMS and, most recently and disgracefully, a CTC. The Conservative party's commitment to education was exposed under the Pickles regime, which cut £13 million from school budgets in 18 months, increased school meal prices by 78 per cent. and diverted scarce capital money into prestige city centre projects, despite Bradford being acknowledged as the crumbling schools capital of Britain.
The final insult to over 15,000 school children in Bradford, North is the recently opened city technology college, blessed with a capital investment from the taxpayer of £7,033 per pupil, while for local education authority schools the figure is a paltry £127·18.
On the housing front, we have seen homelessness double, the council waiting list increase by 18 per cent., and a 75 per cent. reduction in moneys for improvement grants. The 1980 housing capital allocation was £26 million. By 1990, this had reduced to £9 million—a fall in real terms of £47 million. This would finance the building of an additional 1,200 houses, or 11,000 improvement grants to maintain and retain the older housing stock of Bradford. The prospect of slum clearance once more looms on the horizon because of lack of investment and of Government commitment. The ultimate insult is the Government's latest foray into housing finance, which saw Bradford's housing revenue account robbed of £8 million of subsidy, in one fell swoop slashing repair programmes for public sector housing and losing some 120 jobs in the local construction industry.
The record is no better in employment generally. The 1980s have seen the loss of 32,000 manufacturing jobs in Bradford because of Government policies. Our once proud textile industry has seen 12,000 jobs disappear, which highlights the Government's disgraceful prevarication on the future of the multi-fibre arrangement.

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Unemployment in Bradford, North is now 17 per cent. and rising, with over 2,000 people having suffered unemployment for more than 12 months.
The health service in Bradford will shed no tears at the departure from office of the right hon. and learned Member for Rushcliffe (Mr. Clarke). It remains to be seen whether his successor, the right hon. Member for Bristol, West (Mr. Waldegrave), has any greater commitment to patients and staff. He should be aware of the opt-out proposals for four hospitals in Bradford—the Royal Infirmary, Bierley Hall, Woodlands and St. Luke's. I ask him to take note of the various ballots on this issue, which show that, of the nursing staff, 93 per cent. are against, of consultants 86 per cent. are against, of general practitioners 88 per cent. are against and of the general public 97 per cent. are against.
The proposed general manager of the hospital trust has described these ballots as unrepresentative, which equates with Joe Stalin being the father of democracy. I sincerely hope that the new Secretary of State will take account of the strong feelings in Bradford against this experimentation and instead offer the prospect of early treatment to the 9,000-plus on the waiting lists, 20 per cent. of whom have been waiting over a year.
Poll tax is the albatross of this Government, to which none of the contenders in next week's ballot have offered the only solution—its repeal and replacement with a modern property tax based on fairness and ability to pay. Some 93 per cent. of my constituents in Bradford, North are losers under the poll tax. This figure will rise to 98 per cent. when safety nets and transitional relief disappear. It is no good Conservative Members complaining about the impact of the implementation of the poll tax. Every one of them trooped through the Government Lobby to support the legislation that has produced it, and every one of them stands equally condemned and carries equal guilt. To cry foul now is the equivalent of Christie asking for a retrial on the ground that he was not aware that arsenic was poisonous.
Despite my love for and devotion to my constituency, I seek no special favours for its population. On 8 November, my constituents were given the opportunity to pass judgment on the Government. Being magnanimous in victory, I think that it is only right and proper that the rest of the country be offered the same opportunity as the people of Bradford, North—in a general election, and the sooner the better. I am certain that the majority of those in this place share the same sentiment.
6.30 pm
Sir Bernard Braine: One of the nicer features of our practice in this place is for the Member who is called immediately after someone has made his maiden speech to congratulate that Member on what for most of us—I imagine this goes for the hon. Member for Bradford, North (Mr. Rooney)—is the overcoming of somewhat of an ordeal. I preface my remarks by congratulating the hon. Gentleman on his speech. He spoke quietly and with confidence. He is young and I have no doubt that if he looks after his constituency—that is the first requirement—he will be with us for many years. We look forward to hearing his future contributions.
This has been one of the most remarkable debates to which I have ever listened. I have no doubt that it was designed to pillory my right hon. Friend the Prime
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Minister, but it has turned out quite differently. I do not think that I have ever heard my right hon. Friend speak more brilliantly from the Government Front Bench. I do not think that I have ever heard her speak with greater confidence either in the Chamber or anywhere else. It was the Opposition who were lambasted. I say that with sadness because at the end of the day this is not a place for hurling brickbats at one another. This House is the grand council of the nation. Thousands of our fighting men are in the Gulf and the assumption that we are all making is that there will be no fighting; this then is a moment for choosing words carefully.
Mr. Giles Radice: So what has the Conservative party been doing over the past week?
Sir Bernard Braine: If the hon. Gentleman wishes to make a remark, let him stand up.
Sir. Radice: It is true that we need to choose our words carefully, but what has the Conservative party been doing over the past week?
Sir Bernard Braine: I am speaking as the Father of the House. I am speaking for myself and I shall express my own views. I am not here to engage in attacks upon the Opposition or on one part of the House or the other. I wish merely to draw the attention of some hon. Members to the gravity of what has been said and what may lie ahead for our people. That is my purpose and I shall not take too long in carrying it out.
Dr. Norman A. Godman: The right hon. Gentleman has referred to our soldiers and other service men who are stationed in the middle east. Given the growing threat of war in that troubled part of the world, does he agree that the House should debate the Gulf crisis in the very near future?
Sir Bernard Braine: We have already debated it, and I hope that we shall debate it again. I agree entirely with the hon. Gentleman about that.
I have been in Parliament for a long time. I have sat in this place under Mr. Speaker and five of his predecessors and also nine Prime Ministers. They were all good men who did their duty in their own way and left their mark on our national life. Some were struck down by illness before the time came to leave. Some lost an election and did not return. The truth is that ours is a hazardous calling. Looking back over the whole of my 40 years as a Member, this has to be—I speak solely for myself—the saddest day that I can recall. I did not think that what has happened over the past few days was inevitable. It has happened, however, and listening to my right hon. Friend the Prime Minister earlier, it is my judgment that it should not have happened.
Given my great love for this place and its central role in our national life, in my experience my right hon. Friend, by any standard that one cares to apply, has been the greatest Prime Minister in peacetime this century. Neither David Lloyd George nor Winston Churchill, who provided such superb leadership after the beginning of two devastating world wars, would ever have been elected to their high office in peacetime. The historians among us know why and it is no part of my purpose to go into the details.
In the past decade my right hon. Friend the Prime Minister has steered the United Kingdom from a state of

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relative decline—there is no argument about that—at the bottom of the European league to where we are today near the top. It is—[Interruption.] There is no need to jeer. We know the facts. There is always imperfection in our society and in what we do. There are some occasions when we do not succeed, but if we compare the situation in which we found ourselves when my right hon. Friend became Prime Minister and that in which the vast majority of our people live today, there is no doubt that a transformation has taken place and that we owe a great deal to her achievements.
I think that the House knows that I have tended to be a specialist in foreign affairs. I have been to eastern Europe on many occasions. I have been also to the United States, Africa and Asia. In my travels I have become aware of the countless occasions on which my right hon. Friend the Prime Minister has earned respect for herself and enhanced the reputation of our country to a greater extent than I have known anyone else to do during all the years that I have sat in this place. Never let that be forgotten.
These are not my views alone. One would not have succeeded in remaining in the House after 12 general elections, in most of which my majority has increased and in some of which there was a swing to my party locally when the country elected a Labour Government, without knowing, or trying to know, what ordinary people think. One would not have otherwise been allowed the honour of representing the constituency without doing so. I have made myself aware of the thinking of ordinary people because in what we do here, and in the leaders that we choose, we have a distinct responsibility to those whom we represent.
I shall not speak for too long because I am aware that only a few of us will be able to speak our minds in this debate. All of us, however, have our private thoughts. I should like to say publicly, here in this Chamber, that despite what has happened in the Conservative party in recent weeks most of us are grateful to my right hon. Friend the Prime Minister for her achievements at home and abroad, and for her untiring energy in the service of the nation. We are also grateful for her candour—an unexpected quality in politics—and her courage. In that context, let us remember what the young Winston Churchill said when he was asked, "What, Winston, is the greatest of the Christian virtues?". He replied, "Courage." When asked, "Why do you say that?", he answered, "Because it is the only one that guarantees the rest."
The verdict rests not with us but with history. My right hon. Friend need not fear what history will say about her.
6.40 pm
Mr. Denis Healey: It is always a pleasure to follow the right hon. Member for Castle Point (Sir B. Braine). I fear that he and I are much of an age, and we have both been in the House for a fair time. I follow him in at least one of his comments. I have been privileged to be drawn in debate against the Prime Minister for some 16 years now, since she was a junior Treasury spokesman—and, if I may say so, a very able one. For anyone who has watched her for so long, it is a moving experience to see her leaving her position in such circumstances. I must confess that, during Prime Minister's Question Time and much of her speech in this debate, I thought that she
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showed her finest qualities, and I listened to her with sympathy and admiration. She has guts, and she has a degree of determination to which I fear that none of those who are now challenging her can lay claim. I agree very much with the right hon. Member for Castle Point on that point: she is a leader.
It is a little sad to find the Prime Minister compelled to leave office against her will, not because the country has been given a chance to express its views about her—as I believe that it should—but by colleagues—some sychophants, some hypocrites—who up to 24 hours ago were publicly professing their undying loyalty to her. I think that the right hon. Member for Castle Point will agree that is somewhat distasteful to witness. They have decided to throw her out because at the moment she is the best and most convenient scapegoat for the failure of the Government's collective policies. I shall miss her, as I think we all will, whether she goes to Brussels as the first chairman of the European central bank—which seems to be her preference—or, as suggested by one of her hon. Friends, to Pasadena as the governor of California.
However, I am bound to say that the Prime Minister leaves behind her a very sad legacy. I must comment a little on some of the claims that she made in her speech about that legacy. The fact is that even the Chancellor has admitted that our economy is now in deep recession. Unemployment has been rising for the past six months, and we are told by the Chancellor that it will rise faster for at least another 12. Inflation has been rising for more than 12 months, and—according to the Government's preferred measure—is now running at twice the level achieved by our partners in the exchange rate mechanism which we have just joined.
Dame Elaine Kellett-Bowman: Is the right hon. Gentleman aware that he is entirely mistaken in saying that the Chancellor said that we were in deep recession? He said no such thing; he said that, if there was a recession, it would be shallow, not deep.
Mr. Healey: "Shallow" is a word that I am quite prepared to use about the Chancellor of the Exchequer. Perhaps it would have been fairer to say that the phrase "deep recession" was used a fortnight ago by the Association of British Chambers of Commerce, which works at the coalface and, I suspect, knows a little bit more about what is happening than some of the Chancellor's advisers in the Treasury.
Bankruptcies are now at a 10-year high, and only this week the Government published figures showing that the decline in output in the last quarter had been the steepest for the past 10 years. Meanwhile, our social and economic infrastructure is collapsing. Anyone who meets teachers, nurses, consultants or university lecturers knows that demoralisation in the professions connected with education and health has never been so serious, and it will take many years to repair.
The CBI has pointed out that we have the worst transport system in Europe, and anyone who—unlike Conservative Members—travels on London tube trains or buses will know how true that is. I never thought that I would live to see the day when Britain would be performing worse than Italy on output, inflation and balance of payments, and when London—to the disgrace of this Government—would be a dirtier city than Milan.

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Moreover, all that has happened in a decade when Britain has had the once-in-a-lifetime—in fact, once-in-history—advantages of North sea oil, which gave the Government an extra £70,000 million in revenue in their first 10 years and £100,000 million in assistance to the balance of payments. In spite of that, we now have the biggest balance of payments deficit among the larger countries in the developed world.
Mr. Sayeed: Will the right hon. Gentleman give way?
Mr. Healey: I shall give way in a moment. I always enjoy giving way to the hon. Gentleman because he is so helpful.
The Government have also enjoyed £27 billion in extra revenue as a result of cuts in public benefits. Now I give way, with pleasure, to the hon. Member for Bristol, East (Mr. Sayeed).
Mr. Sayeed: When the right hon. Gentleman gave way last, he admitted that he had made a mistake. [Laughter.] Perhaps I should rephrase that.
Does the right hon. Gentleman feel, even now, a sense of shame about the time when, as Chancellor, he had to go cap in hand to the International Monetary Fund?
Mr. Healey: To be quite honest, I do not. I am often criticised for having gone to the IMF, but let me give the hon. Gentleman the facts. In 1976, I borrowed £2·5 billion from the IMF at an interest rate of between 4 and 5 per cent.; I paid it all back by 1979. Last year alone, this Government borrowed £19 billion from the financial markets at interest rates four or five times as high. According to the Chancellor, this year they will be borrowing £15 billion from the financial markets at interest rates 3·5 times higher than the rates that I incurred. I thank the hon. Gentleman for giving me an opportunity to say that. However, I confess that I did slip the hon. Gentleman a pony, and he has performed the necessary service with exquisite aplomb.
The Prime Minister came to office with one slogan on her flag—we must not live on tick. Conservative Members are looking at me with bemused fascination, and I do not blame them. The increase in living standards enjoyed by some people, especially during 1988 and last year, was entirely financed by borrowing. Personal borrowing has been higher than at any time in our history, and as a result of the Chancellor's necessary measures, a number of families now face the possibility of dispossession because they can no longer pay their mortgages on the houses which, thanks to the Government, they have bought.
Company borrowing has never been so high. It has doubled during the past year, as the Leader of the House, who was a distinguished—or at any rate a junior—Treasury Minister must recall. Even the public sector borrowing requirement is mounting month by month, despite the fact that the Government's revenues have enjoyed colossal and unprecedented assistance from North sea oil.
One consequence of that excessive borrowing is not only that we must finance our deficit from the financial markets at mediaeval interest rates, but—according to The Economist—40 per cent. of British industry will be owned by foreigners by 1995 if we continue in that way. That is only another five years. I do not believe that the record that I have described is one of which any Conservative Member could be proud.
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I have concentrated on issues on which the whole of the Conservative party has been united since it took office. I have not mentioned the poll tax—although I could have had a great deal of fun with that—and I have not mentioned its divisions on Europe. The economic and social policies that have resulted in the disaster that I have described were supported by every challenger to the Prime Minister, including the right hon. Member for Henley (Mr. Heseltine)——
Mr. Skinner: Gary Glitter.
Mr. Healey: With great respect to my hon. Friend, whom I dearly love, he is not right—the right hon. Gentleman is Flash Gordon.
Many of us remember with affection the late Lord Kilmuir—previously Sir David Maxwell Fyfe—of whom it was once said, "There is nothing more like death in life than Sir David Maxwell Fyfe." When he went to the Lords, he told a wondering world that loyalty was the Conservative party's secret weapon. The trouble is that, as has been shown during recent weeks, the loyalty of the Tory party is similar to that of Colonel Nasser's generals, of whom it was said that they would be 1,000 per cent. loyal until the day for treachery arrived. Now, it could more fairly be said that disloyalty is the Conservative party's public weapon. It has been a distasteful fight during the past few days.
I must tell Conservative Members that gutless opportunists have every right to choose an appropriate representative, and they may well exercise that right next Tuesday. However, they have no right to foist their choice on the people of this country as Prime Minister. Our people must be given their right to choose their Prime Minister, and the sooner the better.
6.56 pm
Mr. William Cash: Today, we have heard one of the most magnificent speeches from a Prime Minister that has been heard in decades. At the end of my right hon. Friend's speech, I was tempted to remind the House of the events of 1938–39, and to say to my right hon. Friend, "In the name of God, stay." Unfortunately, that is not to be. Nevertheless, it is within our grasp and our ability to pay tribute to her work during the past 11 years, and before that as Leader of the Opposition. She outlined in her speech her many achievements, which I do not need to repeat because the points have been well made and they are true. It is also true that, as Disraeli said:
"The Tory party, unless it is a national party, is nothing."
On the question of Europe, for which my right hon. Friend suffered so much, there is no doubt that she has been proved right and that she will be proved right again. She has done the right thing for the right reasons.
For 20 years, first by stealth and then by sleight of hand, a web has been woven over the subject of Europe. It was a web of deceit to cover what was actually being done. I make no bones about the fact that I want the European Community to work. I voted for the Single European Act and I want the House to preserve the maximum influence possible over the conduct of our affairs in the European Community. That is precisely what my right hon. Friend sought. That is the true position. She wanted to ensure that we played an active part in the Community, but that we did not lose the essential sovereignty of the House in the bargain.

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The reason is simple. Underneath all the paraphernalia about the central bank, the technicalities of which we need not go into, the fact is that such a bank would prevent hon. Members and those whom they represent from forming a proper judgment about the economic and social priorities that they wish for themselves and their children.
My right hon. Friend was right in the view that she took because at the intergovernmental conference that is about to take place the amendments, which would have effect in 1994 or 2000—the date is less important than the content—are what matter. I challenge any contender to say before the House that he would have agreed to a date without the policy or programme attached to it. To pre-empt the intergovernmental conference at the Rome summit was unthinkable.
Furthermore, if the alleged goals were accepted by Parliament—a sort of automatic progression or historical inevitability—why are we to be presented with treaty amendments? The fact is that those matters have not been settled and that is what the future debate is all about.
My right hon. Friend, with her integrity, set out that case and she has paid a heavy price for doing so. She told people the truth and, as Churchill said, when the British people are told the truth they will respond. My right hon. Friend has paid the penalty for telling the truth which in this context was regarded as unforgiveable.
The Conservative party must find the centre of gravity on the European question. There is a centre of gravity and we will find it. We will have our debates and we will make our decisions about the next leader. Of one thing I am sure, and that is that we will reunite, put all these tragedies behind us and discover a policy on Europe which the Conservative party will be able to endorse.
7.2 pm
Mrs. Margaret Ewing: I speak on behalf not only of my colleagues in the Scottish National party but of my hon. Friends in Plaid Cymru. We shall all be in the Lobby tonight supporting the motion of no confidence. That will come as no surprise to hon. Members as our parties have a clear ideological dispute with the Conservative party and its Government, not the least aspect of which has been the Government's resolute determination to turn their face against the possibility of a constitutional change which recognises the rights and sovereignty of the people of Scotland and Wales. Scotland is perhaps unique in Europe in that it has two Parliament buildings but no Government of its own.
During the "Thatcher years", as they will be described, we have seen the results of the Tory party's policies in Scotland—policies which are alien to our tradition of social justice and caring. We see the national health service in crisis, with disillusioned doctors and disappointed nurses wondering whether they will have job opportunities in the careers that they have chosen.
We see our proud universities, with their ancient traditions, facing a real cash crisis, wondering whether they will be able to continue to offer the courses that they wish to our young people and to those who wish to return to education later in life.
We see our steel industry, its workers and its dependent communities, being sold down the river on the altar of privatisation so dearly loved by the Prime Minister.
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Scotland has been earmarked as a possible site for a nuclear dump. Yet in the area chosen in the highlands and islands of Scotland, the democratically elected Members of Parliament have made it clear at all levels of government—in the district and regions, and in this Parliament and the European Parliament—that we are clearly opposed to such a project going ahead because it would result in the destruction of the area's basic industries, which depend on the perception of a clean environment—fishing, agriculture, tourism and the whisky industry. The people of that area clearly do not want a nuclear dump at Dounreay, yet the Government are wishing it upon us.
We also continue to see the loss of Scotland's life blood as our youngest, brightest and best leave Scotland to seek opportunities elsewhere. No nation can face the prospect of losing its life blood, which has continued under the Thatcher Administration.
I could spend the rest of the evening embroidering a tapestry of the devastation, despair, despondency and disillusionment wrought in the past 11 years in my nation of Scotland, but my colleagues and I wish to concentrate on one particular issue.
Our amendment, which has not been selected, draws attention to the poll tax, which is surely germane to the situation in which we find ourselves. It has always been seen as one of the most socially unjust taxes, and it is one which I would describe as immoral. The Prime Minister must recognise that her stubborn insistence on implementation of the poll tax has become her domestic Belgrano. Only now are people beginning to address the key issue of the poll tax. We in Scotland have been warning for several years of the implications of that tax and how it would affect us.
One of the great sadnesses must be that not only the Prime Minister but the Leader of the Opposition have judged the poll tax only on how it will affect their personal and political futures. The Prime Minister has realised that her adherence to the policy has cost not only 11 seats in Scotland at the last general election and more at the next general election, but the support of those English Members of Parliament who so happily voted for the poll tax in Scotland but are now realising its implications for their own constituencies. It has taken a long time for democratic reality to dawn on those people.
Meanwhile, the Leader of the Opposition and his colleagues have not fought against the poll tax with the adherence that they should have. They clearly saw it as the key to No. 10. The "stop it" campaign, so gladly launched by the Labour party in Scotland and endorsed by the Leader of the Opposition, soon became the "stump up" campaign.
Mr. George Foulkes: Does the hon. Lady recall the Second Reading of the poll tax Bill for Scotland, against which both she and I voted? Will she explain why she was not present?
Mrs. Ewing: I do not want to launch into a history lesson, but I was not present. Throughout the year, my colleagues had clearly stated our opposition to the poll tax. I am glad that the hon. Gentleman has attended this debate——
Mr. Foulkes rose——
Mrs. Ewing: With my natural courtesy, I give way to him again.
Mr. Foulkes: The hon. Lady, who is indeed naturally courteous, will recall that the person who is now her hon. Friend the Member for Dunfermline, West (Mr. Douglas) was supposed to be here on Second Reading, but for all his ranting and raving about the poll tax subsequently was not present to vote against the Second Reading of the poll tax Bill for Scotland. Does that not show him for the hypocrite that he is?
Mr. Speaker: Order. Policies can be hypocritical, but not individual Members.
Mr. Foulkes: In that case, does it not expose him?
Mr. Speaker: No—the hon. Gentleman must withdraw the word "hypocrite".
Mr. Foulkes: Absolutely.
Mr. Douglas: On a point of order, Mr. Speaker. I was absent because I was a member of the Select Committee on Defence and was paired.
Mr. Speaker: Order. No point of order arises.
Mrs. Ewing: The record of my hon. Friend the Member for Dunfermline, West (Mr. Douglas) in opposing the poll tax is beyond dispute. I am surprised that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is taking that stance.
The reality is that Labour Members have guilty consciences. Only those of us who have taken a strong, principled stance—in Scotland for an extra year—have sought to protect the poor and to offer a shield for the most vulnerable in our society. Our actions struck the hole in the bows of the flagship of the Prime Minister's third term and began the inevitable sinking of it, taking her with it.
Mrs. Maria Fyfe rose——
Mrs. Ewing: I will give way when I have finished this point. Whatever the candidates for the leadership of the Conservative party—none of whom is present tonight—may say, we have made it clear that we do not want any amendment of the poll tax; we want it abandoned, and replaced by a local income tax, to which my party has adhered for more than 20 years.
Mrs. Fyfe: Given the hon. Lady's entirely justified criticisms of the Tory Government and her reference to the launching of the poll tax flagship, do she and her colleagues not regret voting the Tory Government in 11 years ago?
Mrs. Ewing: The hon. Lady, who was not a Member in 1979, may not be aware that the then Labour Administration—this can be confirmed by senior Labour Members who have written about it in their memoris—were not prepared to make constitutional change for Scotland a matter of confidence. They would not exercise a three-line Whip and broke their election manifesto. I have no regret about bringing down a Government who did not fulfil their manifesto commitments. Perhaps the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) has more regrets about the failure of the committee of 100, of which she was a member, to stand up for the poor people of Scotland. I salute the people of Scotland for their dignity, their pride and their determination. By their principled stance, they have brought about the Tory leadership crisis and exposed Labour's weakness.
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By resigning now, the Prime Minister may have salvaged some of her reputation, but nothing can hide the abysmal judgment and disgraceful role of the Leader of the Opposition and the Labour party in trying to throw her the lifebelt of their motion, which was tabled before voting had finished on Tuesday when it was evident even to the most junior Member that the Prime Minister was finished. It is a sign of the Labour party's desperation that it tried to keep her in office and provided the Conservative party with an opportunity not to show unity but at least to show some solidarity.
I will highlight the Labour party's desperation by quoting comments given by three Labour Members in the past few weeks. In the West Highland Free Press on 9 November, the hon. Member for Cunninghame, North (Mr. Wilson) said:
"It is more certain than ever that it is in the Labour Party's interests that the lady should stay exactly where she is—for a few months!"
Appearing on "Behind the Lines" on 19 November, the hon. Member for Great Grimsby (Mr. Mitchell) said:
"It is in the Labour party's interests for Thatcher to stay. I am praying for Thatcher to win."
The hon. Member for Sunderland, South (Mr. Mullin) said at Prime Minister's Question Time:
"May I wish the Prime Minister well in her current difficulty? Although I cannot speak for Conservative Members, many Opposition Members are rooting for her." [Official Report, 14 November 1990; Vol. 180, c. 447.]
In the light of that, one must query whether the Leader of the Opposition is serious. Today, he rightly called for a general election—a view which I endorse. The general technique of the Labour party, particularly during by-elections and because of the abysmal standards of its candidates, is to have media hype and to hide its candidate. After today's pathetic performance, the right hon. Gentleman should be taken away and hidden from the electorate. He should be hiding, because if he cannot do better than that he will be in for a hiding.
7.16 pm
Sir Patrick McNair-Wilson: The resigniation of my right hon. Friend the Prime Minister is a sad occasion for many Conservative Members. Perhaps more than any other Conservative Prime Minister since the war, she has achieved fundamental and radical changes and did more to dismantle the socialist edifice.
Between 1945 and 1979, Britain was governed for 17 years by socialists and for 17 years by Conservatives. During those 17 socialist years—I became an hon. Member in 1964—we had the capture of the commanding heights and the establishment of a socialist state. Sadly, during the 17 years of Conservative rule, we tried to manage a socialist economy.
When my right hon. Friend the Prime Minister came on the scene in 1979, many of us who had longed to see it before began to see the dismantlement of that edifice and the rolling back of the socialist frontier. She may be remembered by my party for all the things that she did, but she will be remembered by the Labour party because as a result of her changes it has decided to run away from socialism. It knows that it is unelectable on the policies that it used to regard as sacrosanct. If it is any consolation to my right hon. Friend, she has been fatally wounded by a flash in the pan. Conservative Members and the country will miss her because we shall not see her like again in the foreseeable future.

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Two great issues are facing Britain. The first is the economy, which is coming right. There is no doubt that had the Opposition had to face the 1987 crash, they would have poured money into the economy, too.
I was born in 1929, when the American banking system immediately responded to the great crash by reducing available liquidity by one quarter. Everyone in the House at the time of the 1987 crash declared—as did all the opinion-formers outside—that we should fill the hole in the world economy with credit. It is perfectly true that the British economy was stronger than many might have imagined, and that by filling the hole with credit we overheated the system. However, fine-tuning an economy —as the Opposition know better than anyone else—is extremely difficult. The economy had to be controlled and cooled down. During the next 12 months we shall see the fruits of those policies. My sadness is that my right hon. Friend the Prime Minister will not be leading the party to benefit from those successful policies.
Dr. Norman A. Godman: The hon. Gentleman is absolutely right. The Prime Minister will be remembered for many things, but, above all, she will be remembered for the ignominious defeat that she has suffered in the past two days.
Sir Patrick McNair-Wilson: I would not quarrel with that description of what has happened to my right hon. Friend. I am deeply saddened that something has been manufactured to take her away from the world stage and the stage here.
The second issue is our relationship with Europe. I regard it as more important than management of the domestic economy, as mistakes in the domestic economy can be corrected, but the mistakes that we could make in our relationship with Europe could be irreparable.
When I came into the House in 1964, the Opposition were lamenting the existence of what they laughingly called the gnomes of Zurich, who were destroying their ability to manage their affairs. I remember Lord Wilson standing at the Dispatch Box explaining to the House that, although Britain's economy had underlying strength, a crisis of confidence was affecting our currency. That terrible crisis dogged the Labour Government until they were eventually put out of office in 1970. One of the problems which made that crisis so difficult to solve was the effect of a tightly fixed exchange rate, under the Bretton Woods system, and our subsequent problems with expanding the economy. I remember many occasions on which the Labour Government had to cut hospital and other welfare programmes because of those financial constraints.
If we are not careful we shall be on the threshold of a situation where the gnomes of Zurich will look like pixies—we shall be run by a central bank which is effectively beyond our control, and we shall have surrendered our money supply. My right hon. Friend has fought passionately, throughout her period in office, to get a relationship with Europe which gives us, and the other nations, the freedom to manage our affairs without such constraints.
We are now members of the European exchange rate mechanism. Thank goodness sterling can operate within a
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12 per cent. band. If anyone believes that we can solve our problems by bringing the band down to 4·5 per cent., I can assure them that they are 100 per cent. wrong.
Next month, after the German elections, hon. Members will witness one of the most significant economic events—the German economy bearing the full brunt of the cost of repairing the east. German interest rates will begin to move up, and we shall witness their effect upon the entire Community economy. My prediction is that the standard of living in the Community will start to fall during the next five years.
If, as a nation, we are not free to manage our domestic economy, we will fall along with other European nations. I am convinced that my right hon. Friend was correct to be prudent and careful. In the future there will be two super states—the United States and Germany. Many of the other European countries are scrambling about, trying to lock Germany into institutions in the belief that that will control her ambitions and power. I very much doubt it.
My family have had a home in continental Europe for many years. Anyone who believes that Europe is some glorious, united Utopia knows nothing about it. Going to Europe and living the gilded life in huge hotels, attending conferences, is not the same as talking to ordinary people.
I am convinced that my right hon. Friend's greatest contribution to the nation—quite apart from what she may have done for the domestic economy—was putting the brake on any rash moves across Europe and European monetary union. To some extent, we lose in the translation. The French call the single currency "monnaie unique"—something completely unique. They do not want it and will probably fight against it. The only difference between the French and ourselves is that they have the happy habit of joining things, and, if they do not like them, starting to sabotage them. Sadly, we play by different rules.
Mr. Thomas Graham rose——
Sir Patrick McNair-Wilson: I am coming to the end of my remarks.
My right hon. Friend has played a significant role in maintaining our ability to manage our economy, and therefore our national state. To lose that now—to give it away—would be a tragedy after such a brilliant career.
7.26 pm
Mr. Merlyn Rees: I have always wanted to write a novel.
Mr. Donald Anderson: Why not?
Mr. Rees: My hon. Friend is right. I have been sitting here since the beginning of the debate. Successive Conservative Members have said that the Prime Minister is brilliant and that today is the saddest day of their lives. I understand that, but what they all forget is that more than 40 per cent. of them voted in the first ballot to ensure that the Prime Minister could not last. If that is true, I think that I have a title for my novel—"The Strange Death of the Thatcher Government." The realities have not been accepted by the bit players in the event.
Mr. Robert Litherland: Is it a whodunnit?
Mr. Rees: I will tell hon. Members "whodunnit". It happened yesterday afternoon, when it was made clear to the Prime Minister that she would not win the next ballot. If Opposition Members and Scottish nationalists have been saying that we wanted the Prime Minister to stay, it was not because we loved her policies but because, in the past year, from by-elections, local elections and Euro-elections, we realised that the electorate did not think her policies brilliant. The electorate, not hon. Members, decide who forms the Government. That is what the system is all about. That is why I have to tell the Scottish nationalists what I said on local radio this morning—that I do not know what will happen, but that I shall be sorry that the Prime Minister will not lead the Conservative party at the next general election, because that would be good for us, at least in Yorkshire.
I want to speak of some of the myths which arise in "The Strange Death of the Thatcher Government"—the socialist economy and the welfare state. Decaying industry was taken over in 1945. The coal industry was out of date and non-technological, and had been in private hands. Nearly every hon. Member agreed that that was the reality. The Churchill and Macmillan Governments made no attempt to alter the situation. Indeed, Macmillan had advocated that arrangement in the 1930s. To equate the 1987 crash with the 1929 crash is really stretching the truth.
I remind the hon. Member for New Forest (Sir P. McNair-Wilson) that in 1973 the Conservative Government were defeated because of the oil crisis. There was another oil crisis in 1979. If events in the Gulf develop as many people suggest, there will be another oil crisis soon. That cannot be ignored. The Government would have to take steps to deal with it.
I am glad that we have had this debate today. I would have been more glad if I could see more Government supporters in the House. I would much prefer to have a debate in the House than on television on programmes such as "Newsnight", in the press and in editorials. The House is the place which decides what happens and it is where the debate should take place. I am glad that the Prime Minister spoke, although on several occasions this morning I thought that she would not. It was in this House, if not in the Chamber, that the coup de grace took place. I am sorry that there are not many Conservative Members present.
Hon. Members: Where are they?
Mr. Rees: Perhaps they will pass through during the evening.
During my almost 30 years in the House, many changes have taken place in the Labour party. I heard a story that we in the Labour party were the creatures of our constituency parties, and that our constituencies told us what to do. I tell the few Conservative Members here why the Thatcher Government fell. It was because 70, 80 or 90 youngsters in the House knew that they would lose their seats at the next election. At the same time, one reads that two Conservative Members will be carpeted, or perhaps worse, by their local constituency associations.
Is that democracy? It is exactly the point that they put to us. It is absolutely right to take the views of our constituency parties. I have been in the Labour party for over 50 years but, at the end of the day, a Member of
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Parliament must do what he wants and face the consequences later. If not, this place will not work. Deselection is a problem.
It is a pity that the case of the right hon. Member for Henley (Mr. Heseltine) was not put in the House. I have watched him on so many television shows. I have read about him in newspapers, but I have not heard it on the Floor of the House. I wish that he had been here to hear the arguments and the venom of the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley). We have heard the views of the right hon. and learned Member for Surrey, East (Sir G. Howe). He put forward a vicious argument. He should have been in the Chamber today.
Mr. Dalyell: He was here.
Mr. Rees: I did not see him. Perhaps he was standing at the gate of paradise.
I should like to see one thing changed. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) referred to it. A sordid matter has been much talked about in the past three or four years. It is the way in which civil servant press officers and others at No. 10 have not only briefed the press, quite properly, about Government policy, but have issued briefings against Cabinet Ministers. There was a straight briefing by civil servants that the then Leader of the House was whatever he was said to be.
Mr. Peter Shore: Semi-detached. And he was knifed.
Mr. Rees: Indeed, he was said to be semi-detached and he was knifed. There were other such cases. I hope that, when the Labour party comes to power, the press department at No. 10 will be divided into the straight civil service side and the political side. The political side should not be inside No. 10. There is plenty of room just across the road, in what was the Home Office. There must be a distinction between the two. Rumours are running around that two members of the kitchen Cabinet have been given peerages. Someone whispered to me that that is the only way in which the story of Westland will be kept quiet.
The major reason why the Government are electorally unpopular in my constituency is not Europe. That is not at the forefront of people's minds. For many of them, it is the bank rate and its effect on purchasing houses. But the poll tax is the reason why the Government are in disarray. It is not simply the tax in itself. It is a bad tax—even Adam Smith could see that. There is no relationship with the ability to pay. It is bureaucratic and expensive. But in my novel, "The Strange Death of the Thatcher Government", it will be shown that the way in which it was conceived was its problem. There was no consultation with local treasurers or local authorities.
Sir Eldon Griffiths indicated dissent.
Mr. Rees: Well, I have made my inquiries for my novel. It will be based not on fiction but on reality. It will be a new sort of novel. I know others have written such novels.
Mr. Graham: I am sure that my right hon. Friend's novel will place on record the fact that schools in Scotland can no longer give the school kids eye tests. The kids have to go elsewhere. Is that not an appalling indictment of any Government?
Mr. Rees: That is one of the effects of the poll tax. Certainly, local authority finance will have to be carefully

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examined in the wide sense. However, the poll tax must be scrapped. There can be no pussyfooting with the poll tax. It is a bad tax, and the Government have learnt the effect of it. A new Government would have to end it.
I could raise many other points, but many were raised earlier and I wish to be as brief as I promised. However, I feel that I must mention the crime rate. I am interested in the crime rate because, in 1979, the Conservative party issued many familiar pamphlets saying that the Conservative party was the party of law and order. They said that it would solve the problem of law and order.
The latest statistics of recorded crime published in July this year show that the rise of 15 per cent. in the first quarter of 1990 was the largest increase since 1857. The crime rate in Britain has gone up and up. There are two points to be made about that. It is said that the statistics on recorded crime do not tell the full story, but they did not tell the full story in 1979 either. If there are more policemen, there will be more recorded crime. One must also take into account the changed nature of society. For my money, I should like to see the causes of crime investigated and analysed more objectively than they are at the time of a general election.
Whatever else this brilliant Government did, they failed miserably on the crime rate. By surprise, they have fallen even though no Conservative Member who has spoken today seemed to believe that they did anything wrong. That is another story which people in our constituencies know.
Another intriguing matter will come into my novel. In the 1970s, documents were drawn up, copies of which have now been passed to me. Certain people said that the country was ungovernable. It is alleged that there were plots to deal with that position. The crime rate was said to be so high that something had to be done. My hon. Friend the Member for Linlithgow (Mr. Dalyell) also knows about the matter. People with no political nous believed that all the problems were due to the wicked Labour Government. It was not so. The crime rate is worse now than it was then.
I hope that in the present—to use the phrase used then—ungovernable state of the country the same dirty tricks will not be used against this Government. Dirty tricks may have been the reason for the strange death of the Thatcher Government, but they did not come from the lower end of the security services or from dissident politicians. The reason why the Government have fallen is the Conservative party itself and the behaviour in the past week of many people in the Government.
Many Conservative Members and members of the Government know what the last chapter of my book on why the Government fell will contain. The Prime Minister was stabbed in her political back by her own party, by members of her own Government. That should not be allowed to happen with a new leader. We must have a general election. I believe that we will have an election sooner rather than later as a result of what has happened. For my money, the sooner the better.
7.39 pm
Rev. Ian Paisley: Of all the speeches that I have heard in this House, only one stands out in my memory. It was made by the then right hon. Member for
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Ebbw Vale—now the right hon. Member for Blaenau Gwent (Mr. Foot)—on the night the Labour Government fell, and it was one of the usual brilliant performances of that great orator. I remember particularly his remark that Lady Margaret was going out to battle with the Scotch armour bearer going before and her hand was in the hand of the boy David. I have found out that the greatest speeches in this House are usually made by the losers, and on that night the Labour Government fell.
Today, we heard a brilliant speech. No matter what anyone thinks of the Prime Minister, she was at her best today. She spoke with passion and with power. The cut and thrust was excellent. She replied to her critics. It was undoubtedly a difficult time for her, but she got full marks for her performance. I have many differences with the Prime Minister, but I pay tribute to her brilliance today. When history is written and all is revealed, as it will eventually be, her name will undoubtedly be embedded in it because she has been, in her own way, an outstanding Prime Minister. She has won three general elections and made a great change in this United Kingdom. That will never be forgotten.
Alas, Northern Ireland has had a sad history with the Prime Minister. We expected her to be a staunch, loyal Unionist who would never do what she did in the Anglo-Irish Agreement. It was unthinkable, especially as when the Irish Forum produced its report the previous year, she said, "Out, out, out." Yet she took her pen and signed away part of the sovereignty of Northern Ireland in that iniquitous diktat without any consultation whatever with the ordinary people of Northern Ireland. We were not consulted.
From that day, Margaret Thatcher was on the down hill. After that, she had trouble with her Cabinet and trouble on all sides. Day by day she adopted the attitude that she had adopted in Northern Ireland—that she could ignore the people and get away with it. But we cannot ignore the people.
Today, all those who were so strong in putting forward the Anglo-Irish Agreement have disappeared from politics, except one who is running for office. In the south of Ireland, the initiator of the agreement has gone and his replacement says that the agreement needs to be replaced and that articles 2 and 3 of the constitution need to be changed. We have a new President in the south of Ireland who resigned from the Irish Labour party on the issue of the agreement. Slowly but surely, the right of the people to express themselves will prevail. That is what is happening to the Anglo-Irish Agreement.
How can I, at the end of tonight's debate, go into a Lobby and say that I have confidence in the Government? My conscience would not allow me to do so, because I should be flying in the face of the cries of orphans and widows from an agonised Ulster which would never be in its present plight but for that agreement. We have only to look at the figures. The Anglo-Irish Agreement was signed five years ago. That year, there were 54 killings. I remind the House that the number of killings was spiralling downwards before the agreement was signed. The following year, the number of killings increased to 61 and the next year to 93. The year after that, it was 93 again. Then it fell to 62, but this year, even before we are into December, there have been 71 killings.
The Secretary of State for Northern Ireland (Mr. Peter Brooke): I will ask the hon. Gentleman the same question

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that I asked the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis), who made a similar point in our debate on Monday night. Has the hon. Gentleman also noted the coincidence between the years to which he has referred and the years when the Provisional IRA received massive armaments from Gaddafi of Libya?
Rev. Ian Paisley: There may be some connection. I have great respect for the right hon. Gentleman as I have been in a series of talks with him and found him open and forthcoming, but it was claimed that the agreement would bring about peace, stability and reconciliation. The right hon. Gentleman stays in the Province, continually goes about it, meets the bereaved people and sees the security forces, so he knows that we do not have peace, stability or reconciliation. People are at loggerheads with each other. Five years ago we were told that peace would break out, but it has not. What is more, we were promised proper extradition from the Irish Republic and that those who committed atrocities would be brought back and judged properly. The right hon. Gentleman knows what a fiasco that promise has been.
It was interesting that when the Prime Minister recounted her past achievements she did not mention the Anglo-Irish Agreement. Today, the right hon. Gentleman has said that the Government will consider a replacement for the agreement if it is possible. I trust that that policy will be pursued with great eagerness and dedication by all concerned because from the Province there comes today a cry for help.
Some hon. Members may think that Protestant paramilitaries, so called and wrongly called so, and the security forces are responsible in large measure for those who are killed. That is not so. Of all the murders of the past five years, 74·5 per cent. were slaughtered by the Irish Republican Army. One hundred and nineteen—41 per cent.—were Roman Catholics. At a recent conference, the hon. Member for Foyle (Mr. Hume), who is not present, pointed out that the IRA was responsible for killing more of its own people and co-religionists than anyone else in Northern Ireland. Those are the facts.
The Unionists disagreed greatly with the Prime Minister on the further issue that Sunday should be a special day. The House knows what happened on that. The votes from Northern Ireland stopped the legislation going through the House. There was a division between the Prime Minister and the Ulster Unionists—a division which united my party and the Ulster Unionist party. We fought on a common manifesto and pledged to the people that we had no other option but to go against the Government on that policy. Tonight my hon. Friends and I will do so again because of our convictions.
I largely agree with the Prime Minister about Europe. I have not sat in all the elected Parliaments of Europe, with the largest vote recorded for any member of any party in Europe, not to understand what is going on in Europe. I do not want this House to become a county council with Mr. Delors telling us that 80 per cent. of our Acts of Parliament will be passed by bureaucrats in Brussels. That is not British democracy. The hon. Member for Newham, South (Mr. Spearing) should be heeded when he tells us to find out what 1992 is really about—the single market. There are many things over which the House will have no power. Tonight the House must reconsider that issue. The Prime Minister has been right in her attitude. In Europe, I find that it is all right to be a Frenchman and fight for
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France, it is all right to be a German and fight for Germany, but to be a Britisher and fight for this United Kingdom is apparently wrong.
7.50 pm
Mr. Tony Benn: This debate is long overdue. It gives the House an opportunity to look back over a decade of Conservative Government. What has emerged—I am not sure whether Conservative Members realise this—is that the Conservatives have had strong messages from their supporters and from the electors suggesting that they cannot win with the leader who they have so loyally supported. We shall vote for a motion of no confidence, but the Conservative party has already had its motion of no confidence.
I do not believe that we should attach that motion to the personality of the Prime Minister because it is the policies that she has pursued, not her style, which have led to the message from the British people. I do not believe in scapegoats and it is important that we should understand that every present and former member of the Cabinet, every Conservative Member of Parliament who has trooped through the Lobby night after night after night in support of those policies, every newspaper that has supported the Government and every voter who voted for them share responsibility for the current situation.
So much has been said about the past that I want to speak about the future, but it would be wrong to let the motion of censure go by without touching on some of the damage that has been done in the past decade. I must admit that the mechanical recitation of statistics does not get near the real world.
One important point about which we rarely hear is that Britain has spent far too much money on defence and not enough on its industrial development. There is the illusion that the only reason for change in eastern Europe is Britain's possession of a nuclear weapon. Is it honestly believed by any serious person that there would have been no demand for liberty in Poland, Hungary and the Soviet Union unless we had had a nuclear weapon from the United States? But the price we paid for that high defence expenditure has crippled our capacity to make and sell what is needed.
Despite the fact that we have been told that this is an entrepreneurial society, Britain has an utter contempt for skill. If one talks to people who dig coal and drive trains, or to doctors, nurses, dentists or toolmakers, one discovers that no one in Britain is interested in them. The whole of the so-called entrepreneurial society is focused on the City news that we get in every bulletin which tells us what has happened to £ sterling to three decimal points against the basket of European currencies. Skill is what built this country's strength, but it has been treated with contempt.
I must confess that the auctioning of public assets, particularly the latest disgusting Frankenstein advertisement, told me more about the mentality of the Ministers who devised those schemes than the sales themselves. Those assets were built up by the labour of those who work in the electricity industry and by the taxpayer who invested in the equipment. Those assets are now to be auctioned at half their value to make a profit for a tax cut for the rich before the next general election. If Ministers were local councillors they would be before the courts for wilful misconduct, but because they are Ministers and because some of them later go on to the boards of the companies

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they privatised, they are treated as business men who know better how to handle those companies as members of the board of directors than allegedly they did as the Ministers responsible.
Local government has been crippled. Across the river is the county hall of London county council—the seat of government of the greatest city in the world. It is empty and is to be sold because the Government wanted to cripple local government, and they have. The poll tax, the centralisation of the business rate and the punishment of Liverpool and Lambeth councillors were designed to take all power from local government and to put it in the hands of the Government who claimed that they did not believe in the role of the state.
Many people—I am one of them—feel strongly about the undermining of the trade unions, who now have fewer rights than their counterparts in eastern Europe, the tax cuts for the rich and the benefit cuts for the poor, the censorship of the media, the abuse practised by the security services, the restriction on civil liberties, the Falklands war and now the Government's readiness to send more troops, announced today, to the middle east to die for the control of oil. We are not alone in our concern about those issues because the message reaching Conservative Members has come from those who share that concern.
When we look back at the 1980s we see many victims of market forces. I do not share the general view that market forces are the basis of political liberty. Every time I see a homeless person living in a cardboard box in London I see that person as a victim of market forces. Every time I see a pensioner who cannot manage, I know that he is a victim of market forces. The sick who are waiting for medical treatment that they could receive quicker through private insurance are victims of those same market forces.
The Prime Minister is a great ideologue. Her strength was that she understood a certain view of life, and when she goes there will be a great ideological vacuum. It is no good saying that we shall run market forces better than she did because her whole philosophy was that one should measure the price of everything, but the value of nothing. We must replace that philosophy.
Mr. Gorbachev and Mr. Walesa must be more worried than anyone to discover that the Prime Minister on whom they have modelled their economic policy has collapsed at the very moment she had persuaded them that that was the way forward to political success. To put it crudely, the Berlin wall has fallen in London today and changes will be made which will go further than the Conservative party yet realises.
It is important to put on the record all those people who have been denounced in the past 10 years as loonies, extremists and as the "enemy within". They saw earlier than others the meaning behind the Government's policies. They include the miners and the miners' wives who fought against the injustice of closing pits and going for nuclear power and imported coal——
Mr. Nicholas Bennett rose——
Mr. Benn: I shall not give way for the moment. They include the Greenham common women. I was in court when those women were charged with action likely to cause a breach of the peace. They were outside the camp
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while inside were enough nuclear weapons to destroy humanity. They were the pioneers of the defeat of the Prime Minister.
Mr. Bennett rose——
Mr. Benn: Let me finish my list, then the hon. Gentleman can intervene and make a fool of himself.
What about the ambulance workers and the print workers at Wapping, the single-parent mothers, the greens and the people who came to Trafalgar square on 31 March for the poll tax demonstration? They reflect what the Henley candidate picked up and tried to use at a later stage to his advantage. The teachers and those who tried to defend the national health service were all grouped together as the enemy within. In fact, they were the first carriers of the message that the Tory party has finally got.
To put it in language that will be familiar to Conservative Members, the Labour party believes in the traditional values of society—in the idea that we have responsibilities one to another and that we are not just greedy all the time, looking out only for ourselves. Without being personal, the philosophy that has been propagated over the past 10 years has been wicked and evil. I am not talking about the qualities of the people who advocated those policies. But to set man against man, woman against woman and country against country and to build on nationalism and racism—we remember the warning about how we would be "swamped" by immigrants—and all the damage that has been done by the Conservatives has been disgraceful.
All that will have to be dealt with. It would be easy to repeal all their legislation. I have a measure called the Margaret Thatcher (Global Repeal) Bill which, if we got a majority, could go through both Houses in 24 hours. It would be easy to reverse the policies and replace the personalities—the process has begun—but the rotten values that have been propagated from the platform of political power in Britain during the past 10 years will be an infection—a virulent strain of right-wing capitalist thinking which it will take time to overcome.
I had an experience the other day which confirmed my view that the Prime Minister has not really changed the thinking or culture of the British people. I do not know how many hon. Members travel, as I do, on trains. I travel regularly on them and I see all the little business men with their calculators working out their cash flow forecasts and I see frowning people glaring at each other. They are Thatcherite trains—the trains of the competitive society.
On the way from Chesterfield the other day the train broke down and suddenly everything seemed to change. Somebody came into the carriage and said, "Would you like a cup of tea from my thermos?" People looked after each other's children, and after a young couple had been speaking to me for perhaps half an hour, I asked them, "Have you been married long?" They replied, "We met on the train." Another woman asked somebody, "Will you get off at Derby and phone my son in Swansea, because he will be worried?" By the time we got to London we were a socialist train.
One cannot change human nature. There is good and bad in everybody, and for 10 years the bad has been stimulated and the good denounced as lunatic, out of touch, cloud-cuckoo-land, extremist and militant. The Conservatives in power have been the cause of that. They do not quite yet know what has happened. They think that

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they are witnessing the retirement of a popular headmistress under circumstances that some might regret. In fact, they have killed the source of their own philosophy and opened the way for different ideas.
We must now look to the 1990s and beyond. Most people have modest aspirations. They want useful work and a home to live in, and they would like good education for themselves and their children, with proper health care, decent pensions and peace and dignity when they are old. In a rich country—we are often told how rich we are—that should be available if the distribution of wealth were correct.
With that in mind, let us look at the world today. America, which has 2 per cent. of the world's population, uses 25 per cent. of the world's resources. For how long can that last? One does not need a Saddam Hussein or a Gaddafi to point out that maldistribution of wealth is the greatest source of international conflict. So we must look to a United Nations that is not just there to launch a war under American auspices, but is there to solve the problems that lead to war. It must help to redistribute the resources of the world.
I must speak about Europe because, after all, we are all Europeans. But I will not give up the right of the people whom I represent to decide the laws under which we are governed. I will not do that, and I have no right to do so. I only borrowed my powers from Chesterfield, and at the end of five years I must hand them back. It will be no good my saying, "I am handing back some of them. The rest I gave to Europe". I was going to say that I had given them to Jacques Delors, although I do not know why we always refer to him. I could say that I had given them to Leon Brittan or Bruce Millan. Why must we always concentrate on Frenchmen? I am not giving Leon Brittan, Helmut Kohl, Mr. Pöhl or anyone else those powers because they are not mine to give away.
In saying that, I am not being a nationalist. I am an internationalist. I believe in a Europe that co-operates in harmony. But we have no right to destroy democracy in Britain to build greater power for the bankers or anybody else in Europe. If people suggest that that argument does not spread across the Floor of the House, they must be living in a strange world.
We must shift the money from weapons to development. We must protect the planet from the dangers that are associated with nationalism, fundamentalism, particularism and racism, for those, combined with nuclear and chemical weapons, could destroy the human race. During this century, since the year 1900, humanity has been re-equipped with a new set of tools and, as a result, our institutions have been outdated.
There is the No Turning Back group—I believe that that was the battle cry of the Gadarene swine—but what has changed it all is a factor that cannot be measured on a "Newsnight" computer. With the events of today, there is a great influx of hope. People who saw no chance of a home, of a better pension or of decent health care have seen the light at the end of the tunnel. It is not the light of the little flickering candles of the three candidates. It is a different sort of light.
When I campaigned in the 1945 election, we never thought that we could win. Churchill, after all, was far more popular than the present Prime Minister. He had won the war single-handed smoking a big cigar and wearing a siren suit. Although we did not think that we
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could beat him, we did. Mr. Attlee was a modest man—Churchill described him contemptuously as a modest man with a lot to be modest about—but we won.
I was at Transport house in London when the results came in. In those days there was no television, no computers and no polls to mislead us. The news was shown on an epidiascope; we wrote the results on a bit of smoked glass and flashed them up. Ministers fell like ninepins and out of the darkness from Northolt came the little man, Clement Attlee, and he became Prime Minister. That was achieved by hope.
My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) referred to the Norway debate on 7 and 8 May 1940. Chamberlain was the victor and two days later Churchill became Prime Minister. That was the verdict of Parliament on the 1930s. Five years later, after the war, when the people had a chance to decide, Churchill was out, there was a Labour Government and an attempt to build a better society.
We are going through that sequence again. Tonight the Government will win an overwhelming majority and in a few days from now, whoever of the three pygmies wins the leadership, he will not be able to deny the British people the hope that will be released by the defeat of the present Prime Minister. That hope will carry into power a Government who will face such massive problems that their radicalism will far exceed that to be found, at present, in our printed policy reviews.
Several Hon. Members rose——
Mr. Deputy Speaker (Sir Paul Dean): Order. The wind-up speeches are expected to begin at 9 o'clock. Many hon. Members still wish to take part in the debate. I appeal once more for brief speeches, please.
8.7 pm
Sir Eldon Griffiths: An agreeable feature of the House is that, despite the cataclysmic events of the last 72 hours, certain things remain the same.
In the 27 years that I have had the privilege to be here, I have heard an endless series of speeches from some of the heavyweights on the Opposition Benches. Today, the right hon. Member for Blaenau Gwent (Mr. Foot) made a vintage Foot speech; the worst Chancellor of the Exchequer that the country has had since the war, the right hon. Member for Leeds, East (Mr. Healey), told us all about economic policy; and the right hon. Member for Chesterfield (Mr. Benn) made one of his speeches telling us about the future while dwelling on the achievements of Mr. Attlee in 1945.
An interesting feature has been that, with all those heavyweight speeches, there has been from the Opposition Benches only one lightweight, lousy speech that did not rise to the occasion, and that was the one made by the Leader of the Opposition. From what we heard today, it is clear that the Leader of the Opposition does not know what he is talking about.
I have been involved in four Conservative leadership contests. The first was when Harold Macmillan was replaced by Lord Home. I was in Blackpool and travelled down on a train—not a socialist train—with Mr. and Mrs. Rab Butler, Reggie Manningham-Buller, and a detective. When we set off from Blackpool, Rab was quite certain that, on his arrival in London, he would go on to become Prime Minister. Shortly after we arrived in London, I

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heard from certain members of the then 1922 Executive Committee that he was not going to be Prime Minister—and nor was he.
One lesson that I learned from those events is that not only is a week a long time in politics, but 24 hours can be a very long time too. The second lesson that I have learnt from the various leadership contests in which I have been involved is that, although at the time they seem damaging, as well as fascinating and engage all our interests, in the long run they do nothing to damage the essential integrity of purpose and character or the electoral fortunes of the Conservative party.
The best demonstration of that is that, although we have had four leadership problems in the 27 years that I have been a Member of this House—with the exception of the two aberrant periods when Labour Governments were in power—the British people have chosen freely to install Conservative Governments. I believe that they will continue to do so.
Of my right hon. Friend the Prime Minister, I say only three things. First, I believe her to be and to have been the best and the finest thing that has happened to this country over the past 50 years.
Mr. Terry Lewis: You came back from America to stab her in the back.
Sir Eldon Griffiths: I did not.
In my period in the House, I have formed the conclusion that we shall not, in my lifetime, see my right hon. Friend's equal again.
Mr. Skinner rose——
Sir Eldon Griffiths: No, I shall not give way. You, Mr. Deputy Speaker, have asked us to be brief.
Mr. Skinner: The hon. Gentleman stabbed the Prime Minister in the back this morning in a letter to The Times.
Sir Eldon Griffiths: Perhaps the hon. Gentleman will allow me to follow the request of the Chair and to be brief.
Secondly, I believe that my right hon. Friend the Prime Minister, characteristically, did the right thing at the right time. After the speech of my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and after the withholding of support in the first round of the ballot by 152 members of the 1922 Committee, it was inevitable that my right hon. Friend should make room at the top so that someone else could emerge. She did the right thing, the inevitable thing, and she did it with grace, courage and dignity.
We now have the prospect of three of my right hon. Friends being candidates to follow my right hon. Friend the Prime Minister. Each of them is well equipped to achieve the two priorities that my right hon. Friend mentioned in her statement of resignation. She spoke first of the need for unity in our party and secondly of the need to win the next election. Any of my three right hon. Friends whose names are now in contention could reunite our party quickly. I believe that they will review and improve the poll tax and get on top of inflation. I make this prediction too—they will put our party in a position to win the next election.
The primary reason for the motion of no confidence is that, deep down, the Leader of the Opposition——
Mr. Lewis rose——
Sir Eldon Griffiths: If the hon. Gentleman does not mind, I shall not give way, because I have given an undertaking to conclude shortly.
Deep down, the Leader of the Opposition knows in his bones that he is not going to win.
I should like to touch briefly on two matters that are high on the Government's agenda. The first is the Gulf. I have a stepson who is on HMS Cardiff in the Gulf. It is his third trip, and I am proud of him. I also represent the constituency from which much of the Tornado force and many of the American F111s left for Saudi Arabia. Obviously, therefore, I have an interest. I very much welcome the statement today by my right hon. Friend the Secretary of State for Defence, but I should like to ask a couple of questions which require a response.
First, why, so far, has no British aircraft carrier been deployed in that area when we have citizens at risk and smaller vessels that require air cover? Although the United States fleet is well able to provide all that, I should like to know why the Royal Navy has not so far seen fit to deploy one of its aircraft carriers. I cannot think what else these ships are doing or where else in the world there is a more important place for one of them to be.
Secondly, it is important that our troops out there have better access to telephones so that they can speak to their dependants back home. The American army out there is strong—it numbers between 300,000 and 400,000 people—but the United States is providing free telephone calls, not only for the troops to call home, but for the dependants at home to telephone the troops in Saudi Arabia. We should do no less for our own service men.
Thirdly, it cannot be right that so many of our troops out there are worried about the community charge which continues to be levied on their dependent families back home. I am well aware of the six-month rule, but, because many of our troops hope not to be out there for as long as that, I hope that the Government will do more to remove the community charge that is levied on our service men, and will do so as a matter of morale.
The most important point about the Gulf is that we are now standing shoulder to shoulder with our American and other allies to achieve the result that the United Nations has demanded of Saddam Hussein. To those Opposition Members who have said today that we should not deploy those troops, I say that one clear lesson has emerged from the cold war. In Europe, we prepared for war in order to secure peace. That strategy has paid off. The Soviet Union has come to the conference table. We now have a new security situation in Europe and a new prospect of peace because of the strength of the alliance. Surely that strategy must also apply in the Gulf. It is the strength of the allied forces that have been sent there and their ability to wage war, if need be, on which we can pin most of our hopes for a peaceful settlement.
I turn in conclusion to the economy. I believe that across the world we are about to see an economic blizzard. We can see the signs developing in parts of the United States, with the failure of the President and Congress to achieve a settled budget, the inability of the United States to overcome the overhang of its deficits, and the downward turn in American investment and production. For the first time, the great economic machine in Japan is

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also beginning to pause and perhaps to move backwards. There is great nervousness about the fall in real estate prices in Tokyo and the falls on the Tokyo stock exchange.
Germany, too, has the beginnings of economic problems. The right hon. Member for Chesterfield and one of my hon. Friends have referred to the problems in the German economy, which is overstretched by the need to refurbish, rewire and rebuild the economies of eastern Europe.
All these are signs that an economic blizzard could confront the entire world, including this country.
There has seldom been a time when we had greater need for effective and modern government at the centre of our affairs. It is the duty of our party, first and foremost and as rapidly as possible, to agree a new leader, to install a new and effective Cabinet, to set out policies and to proceed to manage our national affairs and our part in the emerging world order so that we can safeguard our people from the ultimate disaster, which would be the return of a Labour Government.
8.19 pm
Mr. Giles Radice: The circumstances that have led to the resignation of the Prime Minister have been rather like the unrolling of a Greek tragedy. Ever since that fateful Tuesday when the right hon. Lady went ape in the House on her return from Rome, events have led almost inexorably to her political demise. The resignation and then the powerful resignation statement to this House by the right hon. and learned Member for Surrey, East (Sir G. Howe); the astonishing result—very bad for the Conservatives—of the Bradford by-election—I pay tribute in passing to my hon. Friend the Member for Bradford, North (Mr. Rooney) for his excellent maiden speech; then the official announcement by the right hon. Member for Henley (Mr. Heseltine) that he would stand against the Prime Minister; then the evasive reply last weekend by the Foreign Secretary about whether he would stand in the second ballot; and then the result on Tuesday in which the Prime Minister failed to win a first ballot victory; and finally yesterday, the coup de grace, a palace coup by the majority of the Cabinet against the Prime Minister—this was the sequence of events. I knew something was up last night when I heard two members of the Cabinet, ostensibly the Prime Minister's loyalist supporters, openly discussing in the No Lobby how best to remove her—[HON. MEMBERS: "Name them."] I shall not. Surely this was a classic example of
"where two or three are gathered together in my name".
If I had not heard or seen this, I would not have believed it.
It has all been more extraordinary than any soap opera. The right hon. Lady was brought down for her refusal to consult her colleagues and because of the way in which she ran her Cabinet. She was brought down because of her views on Europe, and above all she was brought down because of her Government's unpopularity. The Tory party wanted to save its skin, so it ditched the Prime Minister. There is nothing so disloyal as the Tory party in a funk, as we have clearly seen today.
Whatever one feels about the Prime Minister, she is undoubtedly one of the biggest trees in the Westminster jungle. She is rumoured to have said that she is the only man in her Cabinet. I see her point. She has certainly
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dominated and often ignored her colleagues over a great many years. We have the testimony of the right hon. and learned Member for Surrey, East on that point.
After the career of the right hon. Lady no one will ever be able to say again that a woman is not capable of holding the top job in politics. We all, whatever our views, owe her that debt. I hope to see another lady as Prime Minister, but a lady from the Opposition this time, and I hope that it will happen before my political career is over.
Mr. Malcolm Bruce: Is the hon. Gentleman mounting a coup?
Mr. Radice: There may be a vacancy in the hon. Gentleman's party: there is none in ours.
Future historians will give the right hon. Lady credit for her personal success. I suspect, however, that they will be much less impressed by her achievements or by the enduring nature of her legacy. For all its political success in the 1980s, a success which owed as much to divisions among the Opposition as to the merits of the Thatcherite approach, the truth is that Thatcherism is a remarkably limited political approach.
Let us consider the record. On the economic front, it is true that North sea oil permitted a number of years of economic growth, but the massive current account deficit, the big trade imbalance in manufactured goods, high inflation, rising unemployment and the approach of recession all underline the fact that we have severe economic and industrial difficulties. What is more, after 11 years, the right hon. Lady and the Government do not begin to have convincing solutions to crucial problems for Britain's future, such as the weakness of our high-technology industries, our poor performance in civil research and development and, above all, our wholly inadequate system of education and training.
The Prime Minister's approach to welfare and public services is deeply flawed. It is one thing, and perfectly correct, to stress the need for value for money; it is quite another to argue, as the right hon. Lady consistently has, for reducing public spending whatever the circumstances, to attack welfare benefits as encouraging dependency and to support market solutions, opting out and privatisation as a matter of principle. The rundown of our health and education services, the cuts in welfare benefits and the deterioriation in our public services all demonstrate the paucity of social Thatcherism.
Perhaps the most glaring indictment of Thatcherite Conservatism is its failure to create one nation. Throughout her years in power, the right hon. Lady has shown little concern for bringing people together. In part, that is because of her temperament—she has little magnanimity in her make-up. To the Prime Minister, anyone who is not for her is against her. She barely recognises the right of the Opposition to oppose her, and she certainly does not recognise the right of anyone in her Cabinet or in Europe to a point of view different from her own.
It is not only a question of personal attributes, however. There is a more fundamental philosophical flaw in the Thatcherite approach. The competitive individualism that has been so characteristic of Thatcherism is so unbalanced that it hardly recognises one person's obligation to another, or the existence of society. So it is not surprising

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that it has nothing to say to the unemployed or the sick, to the inner cities or the ethnic minorities, or to the whole northern part of the British Isles.
Thatcherism has proved wholly incapable of uniting the country, yet strangely it is Thatcherism which all the candidates in the second round propose to carry on. Even the right hon. Member for Henley, who has tried skilfully to distance himself from many aspects of the Tory record, assures us—as he did on Sunday in the "On the Record" programme—that he is building on Thatcherism and carrying it on into the next decade.
This country needs not the continuation of Thatcherism but its demise. That is why we need a new, Labour Government who, inspired by a more generous, humane and creative approach, will start to address the agenda of the 1990s.
8.28 pm
Mr. Richard Alexander: It is a privilege to take part in this historic debate. None of us who serve in Parliament, regardless of our party, will ever forget how we learned of today's announcement with shock. Tory Members learned of it with sadness because a distinguished parliamentarian has told us of her intention to give up her high office. It would be unfortunate, however, if we treated today's debate as though it were an obituary. Most hon. Members were in the House for my right hon. Friend the Prime Minister's speech. They know that if she had not given up her intention to stay on she would probably have been successful in the next round. Even though my right hon. Friend has resigned, a great politician is still available to give great service to this country.
Some Opposition Members have given us a slanted view of history. Some have said that on Tuesday she was defeated by her own party, but those of us who saw the figures know that that is not so—she won the election by a handsome majority.
Mr. Skinner: Who did the hon. Gentleman vote for?
Mr. Alexander: I proudly voted for the Prime Minister. I am quite happy to answer oafish challenges by Opposition Members who are trying to upstage me by suggesting that I was disloyal.
I have referred to the Opposition's version of history. We heard a version of the history of the last 11 years in the speech of the right hon. Member for Chesterfield (Mr. Benn), who presented a completely slanted view and then promptly left the House, leaving hon. Members to chew over his speech. There is another view of those 11 years, and that is why the motion should be rejected.
In the past 11 years Britain's economy has been transformed, as those of us who were adults in 1979 will appreciate. Even our strong critic in the CBI, the director-general, said recently that the 1970s was an era of relative economic decline and social disintegration and that we were entering the 1990s with the economy in incomparably better shape than at any time in our history.
Let us look at some of the Government's achievements. Almost 400,000 new businesses have been created and every week more new businesses are created than those which fail. There are fewer strikes than at any time in our history, and many fewer than in the halcyon days of the
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Labour Government portrayed by some Opposition Members. There are more people in work than ever before and more investment by Japanese, American and German companies. They do not invest here because they can buy us up at knockdown prices. They cannot and are not doing that. They are investing not because of more Government handouts, such as those that were available under the Labour Government, but because over the past 11 years Britain has become wedded to free enterprise and now has sensible industrial relations. Britain has been transformed and people find it worth coming here, being part of Britain and investing in it.
When we start our new era, as we are bound to do, whichever leader of my party takes office, we shall have a firm look at the policy that has caused our constituents and the Opposition most distress—some aspects of the community charge. I voted for the community charge and I think that I would vote for it again because an element of personal responsibility for the services that one uses is important. The concept is right. However, over the past few months I have talked to constituents and have seen the results of the community charge. I have seen that for an older, perhaps retired couple with a small amount of capital and a small income, and for a young couple where the wife cannot go out to work because of the ages of the children, the charge is a burden. It is unfortunate that in their declining years people find that education is part of their community charge burden. I know that there is a down side to removing the cost of education from the community charge and transferring responsibility and direction from county hall to the Department of Education and Science, but it is the price that we shall have to pay if we are to make more sense, create more fairness and make the charge relate more to ability to pay.
The exaggerated comments of Opposition Members did not contribute much to our debate. The Leader of the Opposition said that my party was riddled with dissent. That is not so. We have disagreements about the speed of integration with Europe, but I cannot think of many major items of policy on which we are riddled with dissent. If that were so, we would have heard about it and we would be talking about it in the Lobby . We shall be united on the vote at the end of this debate.
The Opposition need a policy if they are to appear credible but they have not outlined one in the debate. We have heard whining and have been given a distorted view of history and nothing else. The motion is the Opposition's fox and my right hon. Friend the Prime Minister's announcement has been instrumental in shooting it. The motion is bogus and unwanted and I urge my hon. Friends to reject it.
8.37 pm
Mr. Denis Howell: My right hon. Friends the Members for Blaenau Gwent (Mr. Foot) and for Leeds, East (Mr. Healey) made brilliant speeches and it is a privilege to speak in a debate in which they have participated. It was said of Charles I that nothing so became him in this life as the manner of his passing. If I am wrong on that, I am sure that my right hon. Friend the Member for Blaenau Gwent will correct me. The same can certainly be said of the Prime Minister because she has also lost her head. Charles I lost his cause,

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which was the destruction of Parliament. After the Prime Minister has gone, we may perhaps re-establish the democratic virtues of Parliament.
Whoever wins the Conservative contest should make a move to end the corruption of public life from which Britain has suffered for the past 10 years. The most corrupt question in that time was, "Is he one of us?" That question has got rid of people on sports councils, water authorities, countryside commissions, nature conservancy boards and health authorities. I hope that we shall see principle re-established and that people who have a contribution to make to the great institutions of the nation will be allowed to do so, even if we do not agree with their views. That is one of my great hopes.
I was appalled to hear the Prime Minister defending the Government's record on pensions, saying that everyone is better off and that she wanted the poor to be poorer. We should take a few minutes in this debate to discuss the morality and ethics of the Government. Any Government who take pleasure in impoverishing the worst off are a Government with no claim to decency or morality. I represent the centre of the city of Birmingham and I see acute poverty. After 10 years of Conservative government, my constituency has the highest infant mortality in Europe—23 deaths per 1,000 live births. That is a disgrace to us all, but especially to the Government who have presided over such a situation.
The official measurement of poverty is those on 100 per cent. of benefit levels. In the past 10 years, the number of people living at or below that level has increased by nearly 10 per cent.—from 22 to 30 per cent. Worst off of all are the pensioners. I am glad that my right hon. Friend the Leader of the Opposition mentioned a factor which I hope will become part of our general election campaign—that if we had signed the social contract and then observed it, every married pensioner couple would be £,13·50 per week better off and every single pensioner £10 per week better off. Breaking the link between earnings and pensions was a dastardly thing to do, as these figures show. Figures such as those must be given in this debate.
The poll tax is a great evil. It is a bureaucratic nightmare which costs an enormous amount to administer. Even if the poll tax itself decreases, that cost will remain. We all know that local authorities cannot get the software to administer the charge, and we know that collection charges have doubled. In Birmingham alone, the staff of 250 needed to collect the rates has increased to 550 for collecting the poll tax. Other aspects of the poll tax are equally nonsensical. People move, from Bradford to Birmingham or from Birmingham to other places, and we do not have the facilities to trace them and ensure that they meet their obligations. That it is both a lunatic and immoral tax is shown by the fact that pensioners, single parents and other poor people have to pay the same as those who are affluent.
Another example of the Government's attitude is their treatment of the health service. Birmingham is almost completely united against plans to reorganise hospital provision in the city. Yet the 10 out of 12 Birmingham Members of Parliament, the entire city council, the 250,000 or more who have signed the petition against the closing of some of our hospitals, particularly the general hospital, have all been ignored. When I spoke to the new Secretary of State yesterday to ask whether he intended to confirm plans to close the general hospitals as such a move would be disgraceful and result in some of his colleagues
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losing their seats because the closure would be a major general election issue, he told me that he had either to approve it now or to postpone approval until after the general election. That is another example of corruption in Government. The case has not been decided on its merits.
In their attempts to rebuild the hospital on the Queen Elizabeth site, the Government have forgotten that the trustees for the site have given Birmingham city council the right of veto over any building on the site that would be left if the Queen Elizabeth hospital were knocked down. The leader of the council, Councillor Sir Richard Knowles, has authorised me to say that in no circumstances would a Labour council—nor, I trust, would a Conservative council—agree to any plans for buildings on that site. The Conservative party may not like it, but I predict that Birmingham Members will lose their seats on that issue.
There has been a downturn in the economy of the west midlands. I am fed up with hearing Ministers say that the Government will get inflation down because they have done it before. Who put it up? Who has presided over a high rate of inflation? Who put up gas, electricity and water charges? Who imposed the poll tax? Who is responsible for those policies, which have led to increased costs and inevitably to increased mortgage charges?
We are locked into a ridiculous situation which worries hon. Members representing midlands constituencies. We went into the ERM too late and, as the chamber of commerce and the Engineering Employers Federation have told me, at a rate which is far too high and will affect future orders. I will not bore the House, but I have all the statistics here about the future of export orders, about which we should all be concerned. They show a downturn in orders and deliveries, not just for the construction and manufacturing industries—we are used to that—but for a whole range of goods.
In terms of morality and practicality, the day the Government go to the next election, which will be not a day to soon, they will be replaced by a Government with higher standards of ethics and business practice. That is what the nation needs.
8.48 pm
Mr. John Wilkinson: As a former Member for the great city of Bradford, I congratulate the newly elected Member for Bradford, North (Mr. Rooney) on an excellent maiden speech. He is honoured to serve in the House for the Bradford, North constituency, and I am sure that Conservative Members will have taken the lessons that are to be learned from his election. I am sure that the hon. Member will recall the outstanding public service of his predecessors—Geoffrey Lawler and Sir William Taylor from the Conservative party, and my friend Ben Ford from the Labour party. We all mourn the recent passing of Pat Wall.
The Leader of the Opposition said that there were no innocents on the Government Benches. No one on these Benches who has endured the political agony of these past days would wish ever to go through them again. My right hon. Friend the Prime Minister has demonstrated for years an example of courage, indomitable endurance and rigorous intellectual self-discipline which few of us could even emulate, let alone match. All of us and our constituents owe my right hon. Friend a debt of gratitude. She has entrusted us, her right hon. and hon. Friends, with the challenge of how best we can build on her

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Government's manifold achievements of the 1980s. It will be a formidable task, but I believe that her party will be worthy of the torch which she has passed on.
To be worthy, we must not fight yesterday's battles or indulge in recriminations over the past. In recent years, the Government, with the support of the British people, have overcome the abuse of monopoly trade union power. I do not believe that any reasonable person would like to see the clock put back to closed shops and intimidatory mass picketing. Even the right to buy council houses is accepted now by the Labour party, albeit with some reluctance, perhaps, in some quarters. I suspect that most Opposition Members of the more pragmatic Labour party of today realise that the British people will not readily accept the reimposition of a clause 4 nationalisation programme. The Labour party's policy pronouncements, such as they are, seem to demonstrate that.
The Leader of the Opposition asked, "Who could ever trust the Tory party again?" If we could not adapt our policies to the issues which confront us now, we would not be worthy of public confidence. We all recognise in our hearts of hearts what they are—the despoiling of the environment, the continued and lamentable decay of our inner cities and the detested and often flouted system of local government finance, a political albatross if ever there was one. We all know to what I am referring—the dreaded poll tax.
There is a need to find a better and more efficient way of funding an increasingly centralised pattern of state education. Above all, there is the necessity to translate our vision of Europe, constructively and positively, into one which is understood and eventually shared by our Community partners. This will require give and take, effort and imagination and much political sensitivity on our part.
The process of making our continent more prosperous, secure and universally democratic and free is a many-faceted one. The breakdown of the inhumane, ideological and physical divisions of our continent has undoubtedly owed much to a strong western defence. I hope that we in the United Kingdom will imaginatively help to forge through the Western European Union a stronger European element in our Atlantic alliance as the arms control process and Gulf commitments will necessarily diminish the American military presence in Europe, upon which we have relied for so long.
We should not forget that the European Community has proved a powerful magnet for the democratising countries of central and eastern Europe, which badly need the prosperity which perhaps we have come to take for granted here and elsewhere in the EEC.
There are other aspects of European policy that are important. The Council of Europe is an invaluable bridge between east and west. I hope, now that Hungary has joined as a full member, the other countries of central and eastern Europe will follow suit, and that the successor to my right hon. Friend the Prime Minister will take the earliest opportunity to address the parliamentary assembly of the Council of Europe.
The European Community's economic and monetary union is an objective worth pursuing. If we wish the British means of securing it to carry conviction, however, we cannot always be the wet blanket, the little Johnnie
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permanently out of step. I am sure that my right hon. Friend the Chancellor of the Exchequer understands this, as does my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. I hope that they will continue their good work in their present positions as avoiding isolation must surely be a prime objective of British diplomacy. Continuity of purpose too will be essential if the Government are to carry credibility in future. I urge the House to reject the motion.
8.56 pm
Mr. Stuart Bell: In the three minutes available to me, I wish to place on record a personal appreciation of the Prime Minister. At the height of the Cleveland child abuse crisis, the right hon. Lady agreed with the then Minister for Health that there should be a judicial inquiry. She was kind enough to raise with me the progress of that inquiry when she visited Middlesbrough in the autumn of 1987. She raised it again with me on another occasion when we met. Along with my right hon. Friend the Leader of the Opposition, the Prime Minister at all times took an interest in what was happening at the inquiry. She came to the House to support the then Minister for Health when he announced the findings of the inquiry. She was instrumental in ensuring that the Children Bill was part of the legislative programme for 1989, and that measure is now on the statute book.
We now have legislation that seeks to achieve the right balance between children under threat and families which may be involved in allegations. We have appropriate guidelines for doctors, social workers and police officers. We have multi-disciplinary proceedings and a more rapid family court procedure to ensure that the interests of children do not suffer as a result of legal proceedings. The Prime Minister's role should not go unsung and I place on record my appreciation, that of the parents who were caught up in the dispute and that of the children for her interest and role in these matters.
We should not, however, allow to enter into the political folklore the sentiment that the Prime Minister was the greatest peacetime Prime Minister this century. That role falls to Clement Attlee in the years from 1945 to 1951. The Prime Minister was never a "One Nation" Tory; she was a "Two Nations" Tory. She could never reconcile the variety of interests, pressures and demands of society.
In one of the asides for which she became famous—referred to by my right hon. Friend the Member for Chesterfield (Mr. Benn)—she said in 1976, as Leader of the Opposition, that this country would be swamped by members of a foreign culture.
In 1979, the right hon. Lady discarded the policy that had guided all the western nations throughout the 1970s—that of trying to keep down inflation and unemployment—by making the attack on inflation the only attack. Consequently, unemployment rose beyond 2 million to 3 million. Although we got inflation down, the unemployed saw their prospects and those of their families sadly diminish. Inflation has not been defeated; it is returning, because the Prime Minister did not follow the advice of her Chancellor and her Foreign Secretary when they asked her to enter the exchange rate mechanism. History will not be kind to the Prime Minister; it will be more cruel than it looks now.

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I commend the motion to the House. As was said by the Evening Standard—a Conservative paper—there should be an immediate election on the basis of the Government's policies and their politics.
9 pm
Mr. Roy Hattersley: I begin by offering my sincere congratulations to my hon. Friend the Member for Bradford, North (Mr. Rooney), who made a maiden speech of amazing confidence, admirable lucidity and enviable certainty. When I briefly worked for him in Bradford a month ago, I knew that he was good, although I must confess that I did not realise that he was that good. It is the habit of Front-Bench spokesmen to tell maiden speakers how much the House looks forward to hearing them in the future. I not only look forward to hearing my hon. Friend many times, but have no doubt that we will hear from him many times—and, as far as I am concerned, the more often the better.
I have disagreed with most of what the Prime Minister has done since I shadowed her when she was Secretary of State for Education and Science nearly 20 years ago. Notwithstanding that—and notwithstanding her absence from the wind-up tonight—I gladly acknowledge her extraordinary achievement, that of leading her party to victory in three consecutive general elections. Nothing that happens now, and nothing that has happened today, can tarnish that record.
Nothing, moreover, can tarnish the other element in the Prime Minister's conduct, which we saw when she first led her party, and have seen again today. The Prime Minister remained in character to the last. Indeed, she was so much in character when she spoke this afternoon that many hon. Members on both sides of the House will be forced to ask themselves what went wrong. After 11 years of such unqualified success, unique popularity and achievement piled on achievement, why did her own party remove her from leadership?
One possible explanation is that some of her colleagues—perhaps some Cabinet members as well as some Back Benchers—began to examine the Prime Minister's statistics and check up on the claims that she makes about her record, her achievements and the years of unmitigated success.
Today she said that, during her 11 years, the tax bill had fallen. That is wrong: it has risen from 34 to 37 per cent. of national income. Today she said that everyone was better off than in 1979; that too is wrong. The least well-paid 10 per cent. of the population are, in real terms, 5·7 per cent. worse off than they were when she came to power. Today she said that, during her eleven and a half years, Britain had moved up the European growth league. That is wrong. We have moved down. In 1978, in the last year of a Labour Government, we stood second, with 3·7 per cent. annual growth; today after eleven and a half years of her Administration, we stand fourth with 0·9 per cent.
I could give other examples of how the right hon. Lady, during 11 years at the Dispatch Box, has been at best selective in her choice of figures, and at worst has simply given the House the wrong information. That is what happened today, and it is right that her valedictory address should contain all the flaws and blemishes that we have
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come to expect—too much certainty, not enough fact and a reckless disregard for the evidence that everyone knows to be the truth.
The other characteristic that we saw again today, and which we constantly and regularly witnessed during the past 11 years, was the Prime Minister's propensity for blaming everybody except herself. I well remember that, when the economy was set back and turned back, the Prime Minister extraordinarily announced that it was the Chancellor who had made the errors of shadowing the deutschmark and of overestimating the disadvantages of the stock exchange collapse. The idea that the right hon. Lady had any part in that, that she had anything to do with it, that she had even known that it was happening, apparently never passed through her mind.
I do not complain tonight about the Prime Minister blaming everyone except herself, because I want to talk not about the Prime Minister, but about the Administration that she led and has now left. Tonight, we shall vote on a motion of no confidence in the Government as a whole. That motion carries with it our condemnation of those Back Benchers who have supported and sustained the Government for so long. I have absolutely no doubt that next week those same Back Benchers will be whispering that they never really supported the Prime Minister, that they never really agreed with her policies, and that they had never wanted her to stay for so long. The Prime Minister was popular with Members from marginal constituencies only for as long as they believed that she would help them to hold their seats.
This week, we have witnessed a mass evacuation from a sinking ship with, appropriately enough, the hon. Member for Derbyshire, South (Mrs. Currie) the first over the side and swimming for the shore. It is enormously important that we put into perspective the reason why the 1922 Committee originally and, we are told, the Cabinet this morning turned against the Prime Minister. She has not been rejected because of the record balance of trade deficit or the astronomical interest rates. She has not been removed from office for the freezing of child benefit or the failing to link increases in pension to national earnings. She was not told to go because of the young unemployed sleeping in shop doorways, or the damage that the Government have done to the national health service. She was not even destroyed by the poll tax—which was reasonable, because every Conservative Member believes in it. Even the right hon. Member for Henley (Mr. Heseltine) voted for a poll tax in Scotland.
One of the things to which I look forward during the next week or so is the right hon. Gentleman, in one of his numerous—some would say endless—television broadcasts, explaining exactly when he changed his mind and why. He will go down in history as the senior politician who changed his mind most often in one year. As he explains to his hon. Friends, as he will no doubt try to do, why there have been conceivable circumstances in which he would stand against the Prime Minister, he must also explain when the great conversion against the poll tax came about. My view is that it was at the time that the right hon. Gentleman decided that he had a real chance of a decent vote in the Conservative leadership stakes.
It is important to remember—and it is the object and the purpose of our no-confidence motion tonight—that Conservative Members still support the discredited policies on which the Prime Minister led them, and on which she would have had them fight the next general

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election. Of course Conservative Members will vote against our motion tonight, but by doing so they will demonstrate their continued affection for the poll tax, their agreement to the freezing of child benefit, and their belief that pensions should not be increased in line with national earnings. They will be voting for the policies that produced the highest interest rates and the worst balance of payments figures in our history.
What the Conservative party really wants is a new leader who can save its skin without changing the discredited policies, but that cannot happen. The wrapping may be changed but the contents of the package will be the same garbage as before. Whether it is tied up with Finchley barbed wire or tarnished Henley tinsel, or for that matter with an old Etonian tie, nobody will believe that it has changed. With one possible exception, Europe, to which I shall turn in a moment, the old discredited policies will remain.
Only one thing about the Tory party has radically changed during the past 11 years. When I first entered the House 25 years ago, the Conservative party did its dirty work in private. Now it is bleeding to death in public. It has been mortally wounded in a civil war fought not over great principles but over personalities and a greed for power.
We have been told time after time during this debate, and by Tories who commented on this debate before it began, that Conservative Members will all be in the same Lobby at 10 o'clock tonight. I am sure that they will.
Mr. Skinner: They will be in the same Lobby tonight, because, unlike on Tuesday when it was a private vote and they stabbed the Prime Minister in the back, tonight there will be a recorded vote. That is why they will turn back to the Prime Minister tonight.
Mr. Hattersley: My hon. Friend—I do not begrudge him it—takes the words out of my mouth. Conservative Members will be slapping each other on the back tonight and stabbing each other in the back tomorrow. I think, on reflection, that that is a rather better formulation of my hon. Friend's point.
Of course, if Conservatives do so, there will be the usual heavy helping of mass hypocrisy. At 10.33 am precisely, on London Broadcasting Company's radio, the Prime Minister was mourned with this comment:
"I am very sad to see such a distinguished career come to an end."
Believe it or not, those were the words of the right hon. Member for Henley. The uninitiated listener would not know that he had been devoting his time and considerable fortune during the past four years to bringing that career to a dead stop at the first opportunity. Yet when it seemed expedient, the right hon. Member for Henley—I use the words again because it is difficult to imagine that he really said them, but I assure the House that he did—said :
"I am very sad to see such a distinguished career come to an end."
There is a man to trust. There is a man on whom the nation can rely. There is a man on whom I at least am not prepared to turn my back.
Many of the Prime Minister's supporters have been franker about their attitudes to her future. They have described her critics as "misanthropists and malcontents". They have described her opponents as "junk". They have
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described her opponents and critics as "sickeningly disloyal". Today, the hon. Member for Maidstone (Miss Widdecombe) called the Tory party "Mad, quite mad." The Minister of State for Defence Procurement denounced the 150 people who turned out a Prime Minister elected by 3 million. The hon. Member for Macclesfield (Mr. Winterton) was "disgusted" and "horrified" and spoke of "political suicide". That was just on one programme.
In this debate, the right hon. Member for Woking (Mr. Onslow), the chairman of the 1922 Committee, said that the anger will be very slow to fade. The right hon. Member for—[HON. MEMBERS: "Cirencester and Tewkesbury."] The right hon. Member for Cirencester and Tewkesbury (Mr. Ridley)——
Mr. Peter Bottomley: It is the joined-up writing of the right hon. Member for Birmingham, Sparkbrook, (Mr. Hattersley).
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): Somebody else wrote his speech.
Mr. Hattersley: If the Leader of the House would like a souvenir of this occasion, he may have a page of my notes with the greatest of pleasure.
The right hon. Member for Cirencester and Tewkesbury spoke of "shameful betrayal", a backlash already being felt in the constituencies and wounds that will not wound easily. [HON. MEMBERS: "Heal". I can see that, between us, we are determined to make these words memorable.
A comment on that attitude was made by the Chief Secretary to the Treasury the day before yesterday:
"We won't deserve to win unless we have got ourselves together."
That was before some of the comments on the Prime Minister's passing that I have just reported to the House. The Chief Secretary insists that the Tory party will not deserve to win until it gets itself together. He is right in every detail: it will not get its act together, it will not deserve to win and it will not win.
It will not win because it is bound together only by hope of office and dislike of the Labour party. Great political parties must have something in which they want to believe, rather than the hope of their members hanging on to individual seats. [Interruption.] I notice that the main derision of that point is coming from an hon. Gentleman who was elected as a Labour Member of Parliament.
Mr. Douglas: Does the right hon. Gentleman recall that he was one of 69 Labour Members who voted for Britain's entry into the Common Market? Does he recall the unity of the Labour party then?
Mr. Hattersley: My ex-hon. Friend reminds me that I was one of the Labour Members who broke the Whip on our entry into the European Community. I was going to confess to that in a moment, but I am glad that the hon. Gentleman has established that my record on Europe and my enthusiasm for Community membership goes back a long time.
Before dealing with that, I want to express, still in her absence, my regrets about the feelings that the Prime Minister must have had when she was sitting in the palace of Versailles on Monday night. No doubt she was thinking, "Apres moi le deluge," which when translated means, "One of my successors will almost certainly be a

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wet." She must have known, as Conservative Members know, that the Administration that she bequeaths, and which will be inherited by I do not know whom, will be torn apart by personal animosities and one real issue, which, for reasons that I do not pretend to understand, has destroyed and damaged party after party—Britain's place in Europe.
The battle within the Tory party will be between two types of extremists—the little Englanders and those who have a fanatical enthusiasm for the drive towards European integration. In my view, that is an irrational and damaging enthusiasm that should be balanced against the practicalities of Britain's position in the Community. Meanwhile, the sensible, practical and moderate course will be followed by the Labour party.
Mr. Cash: Does the right hon. Gentleman agree that the Labour party has changed its position on Europe six times in the past 10 years?
Mr. Hattersley: I would not agree for a moment, although the figure of six times is clearly being issued by Conservative central office, as it has been quoted by weaker-minded Conservative Members in this debate.
I have held a view on Europe not simply since the treaty of Rome but going back to the treaty of Messina: I believe that Britain should be one of the foundation members of the Community. I have held those views consistently, and I hold them still. I offer my opinions on where the Labour party should be, and is, in my capacity as a European of unshakeable conviction and unshakeable certainty.
Mr. Peter Bottomley rose—
Mr. Hattersley: No, I am going to continue with my speech.
I make our position absolutely clear—not my position, but that of the Labour party: we shall neither slavishly support every European initiative, nor oppose every proposed improvement merely because it comes from the Community. We shall consider our future in Europe without the ideological blinkers which have prejudiced every reaction by the Government. We shall pursue those policies that are beneficial to Britain. That is bound to mean that we shall seek co-operation, rather than conflict, with our partners.
I shall give an example. It is absurd that we have stood out against the social charter and its action programme, with the enormous benefits that they offer to all employees, especially to working women. It is equally absurd—I want to meet this argument head on, as best I can—to suggest that the test for Europe is whether a party or an individual is in favour of an immediate single currency and an immediate central bank——
Mr. Cash: The right hon. Gentleman is generating nothing but marshmallow.
Mr. Hattersley: The hon. Gentleman has been on the losing side so often this week that I should have thought he would have shown a little humility.
Mr. Cash rose——
Mr. Hattersley: I repeat that I have never wavered in my view that Britain's future ought to lie in the Community, and in co-operation with it. I also repeat that the idea that we should say yes to a single currency or to a central bank is preposterous. All those Conservative
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Members who want an instant answer to that question had better not vote for the right hon. Member for Henley next Tuesday——
Mr. Cartiss: We are not going to.
Mr. Hattersley: I hope, Mr. Speaker, that you will accept my assurance that I did not put the hon. Member up to that.
On television on Sunday, the right hon. Member for Henley said:
"The major issues—like the creation of a powerful Central European bank, like the issue of a single currency—are not on the agenda today—"
Very sensible. It is preposterous that the argument should centre around that. What it centres around is whether we work with our partners and the other countries in Europe in Britain's best interests, or if, to pursue a cricketing metaphor—perhaps the last of this era—every time we are not allowed to be captain, opening bowler and wicket keeper, we take our bat away. That is no way to treat the Community.
Sir Russell Johnston rose——
Mr. Hattersley: I want to repeat that, when we come to office—as we soon shall—we will take a pragmatic, practical and sensible view of the best interests of this country in Europe. I also want to make it clear that, when we come to office, we shall abolish the poll tax. We shall replace it with a property-based tax, which also takes account of a family's ability to pay.
On Tuesday, The Times supported the Prime Minister. It supported her yesterday, but was not quite so sure this morning—there was some doubt about who Mr. Murdoch will have to do business with in future, and therefore a little hedging of the bets, as deals were still on the table. The Times on Tuesday described the poll tax as
"the single most stupid act of the present Government".
It went on to say of the right hon. Member for Henley:
"His weakness—and it is a core weakness—is that he has shown neither intellectual rigour nor political courage in showing his colleagues a way out."
The leader article continued:
"To its credit, the Labour party has done so".
Mrs. Margaret Ewing: Will the right hon. Gentleman give way?
Mr. Hattersley: No, I shall not give way again. I have six minutes left and I propose to take every one.
At least we know that the right hon. Member for Henley is sort of thinking about the poll tax.
Mrs. Ewing: Will the right hon. Gentleman give way?
Mr. Hattersley: He has written some half-thought-out ideas on the back of an envelope. We know that he is thinking of a possible review——
Mrs. Ewing: Will the right hon. Gentleman give way?
Mr. Speaker: Order. The hon. Lady knows that, if the right hon. Gentleman does not give way, she must resume her seat.
Mr. Hattersley: We recorded and noted that the right hon. Member for Henley promised a review and a re-examination. He then promised to switch some local government expenditure to national Government, without thinking about whether it would increase the tax bill.

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When I shadowed him at the Department of the Environment, his obsession was with switching national expenditure to local government. In the past month or two, he has changed his mind.
At least the right hon. Gentleman has given us half-thought-out ideas on where he stands on the crucial domestic political issue. I hope that, in the next four or five days, we shall hear where the other contenders for high office stand on the issue. What does the Foreign Secretary think about the poll tax? If he were here, I would offer to give way to him so that he could reveal to an anxious nation how he would alter it.
Mrs. Ewing: Will the right hon. Gentleman give way to me then?
Mr. Hattersley: No. The hon. Lady is not Foreign Secretary and nor is she likely to be, so I shall not give way.
Mrs. Ewing rose——
Mr. Speaker: Order. I ask the hon. Lady to sit down.
Mr. Hattersley: I chose the poll tax as one of my examples because it epitomises all that is wrong with the Government. It takes from the poor and gives to the rich. It divides the nation. Its collection costs make it inefficient as well as callous. It has come to symbolise all that was worst in the past 11 years, and it will go on to typify all that is bad in the dying months of the Government.
The same pattern appears time after time. In education, funds are diverted to and concentrated on the city technology colleges, the contracted-out schools and the independent schools, while the generality of education, on which most families rely, is neglected. The same applies to the health service. Tax concessions are given to elderly people who want to take up private medicine but in the general health service, on which most families rely, wards and hospitals are closed.
The same applies to policies affecting black and Asian Britons. We hear great protestations about the need to support the family and endorse family virtues, as long as those families are not black or Asian families who are divided and kept permanently apart.
The philosophy of the past 11 years has divided the country. It has been the philosophy of the weakest to the wall, the devil take the hindmost and every man for himself. The country has grown tired of that philosophy and contemptuous of the people who advocate it. That is why whoever leads the Tory party at the next election will lead it to defeat. What the nation wants now is not conflict but co-operation. What the British people want now is not confrontation but concessions. They want a kinder, gentler and more understanding Government. They want the nation to work together. That is one thing that the Prime Minister has never been able to propose because she is incapable of understanding it.
My final word is this. At the beginning of the policy document which the Labour party put to the nation six months ago, we talked about an Administration who crushed dissent, were intolerant of criticism, bribed newspapers and bullied broadcasters and by every criterion were exactly the elective dictatorship against which Lord Hailsham warned us before he became the right hon. Lady's Lord Chancellor and a member of such an elective dictatorship. Belatedly, a few members of the
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Cabinet have realised the parliamentary tyranny for which the right hon. Lady was responsible. They have overturned her for that reason, and we shall overturn them for supporting her for so long.
9.29 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): We reject this motion outright, not just because everyone on this side of the House has confidence in the policies which have produced the very many successes for this country of the past decade—and will go on doing so—but because we wish to underline, as did my right hon. and hon. Friends who have spoken today, and to record our gratitude to my right hon. Friend the Prime Minister for her immense achievements during her outstanding 11 years of leadership.
During those 11 years, our economy has been transformed from being what was widely known as the sick man of Europe to one of substantial growth, prosperity, investment and underlying economic strength. It has been my right hon. Friend's unwavering consistency of approach and belief which has taken us away from the dark days of the late 1970s and away, too, from the constant emphasis on state intervention, subsidy and control, and has restored a spirit of intitiative, self-reliance and enterprise in this country.
As everyone recognises, my right hon. Friend has made a remarkable and powerfully positive contribution internationally, from the development of the European Community to the ending of the cold war and the rebirth of freedom and democracy in eastern Europe and elsewhere, and in many other ways. My right hon. Friend's world status and reputation are immediately obvious to anyone who travels beyond our shores. As we as colleagues have so often seen, in tackling all the many difficult issues which confront a Prime Minister on a day-to-day and even an hour-to-hour basis, my right hon. Friend has always shown courage, generosity, clear-sightedness and a great capacity to grasp and make decisions on the most complex issues, but above and through it all a clear vision of the way ahead for this country and its people, and of the values and principles that she most sought to advance.
Mr. Winnick: Will the right hon. Gentleman give way?
Mr. MacGregor: I ask the hon. Gentleman to let me finish this passage, please.
This morning my noble and learned Friend the Lord Chancellor said of the Prime Minister:
"Your place in our country's history is already assured."
There can be no doubt about that. Her place will be that of one of the great Prime Ministers. I should like to add that not only has she been a great Prime Minister but, as the House has seen again this afternoon, she is a great lady.
Several Hon. Members rose——
Mr. MacGregor: In a minute.
Mr. Healey: We are all impressed by the glowing encomium that the right hon. Gentleman is offering to the Prime Minister. If she really is such a paragon of political, moral and national virtue, why the hell has he ditched her?
Mr. MacGregor: I want to come back later—[Laughter.] because—[Laughter.]
Mr. Speaker: Order John MacGregor.
Mr. MacGregor: I am coming to the right hon. Gentleman's point. I was only going to say that I wanted to return to the point that he made in his speech this afternoon, and I shall do so. We have invented for ourselves a complex electoral system which requires re-examination, at least for when we are in government. I do not wish to elaborate on that point now, but we must ask ourselves whether we are not setting the leader of our party a test in mid-term which is more severe than any Prime Minister should be subjected to. We need to address that point.
I know that the Prime Minister likes us to get down to business, so I will get down to the debate. However, I know that all Conservative Members—and, I suspect, many other Members—would want me to pay that tribute to my right hon. Friend and would support it wholeheartedly.
I congratulate the hon. Member for Bradford, North (Mr. Rooney) on making his maiden speech so soon. As my right hon. Friend the Member for Castle Point (Sir B. Braine) said, it is always a daunting experience, but the hon. Gentleman overcame it calmly. His speech was a little contentious and he will therefore understand why I cannot agree with much of it. He will also understand why I take issue with him on the city technology college, which I am sure will be an important contribution to raising educational standards in Bradford's inner-city area and will also prove extremely popular with parents.
I shall make just three comments on the opening speech of the Leader of the Opposition. He criticised the Government for not building and strengthening our economy—at a time when employment is at an all-time high, private sector investment has increased by 45 per cent. in the three years to 1989, capital investment is running at £30 billion this year and increasing next year and private sector investment on training amounts to more than £20 billion. The facts simply belie his criticism, but the right hon. Gentleman has never been interested in facts.
The right hon. Gentleman talked about the so-called fundamental conflicts in our party about Britain's position in Europe, but the real conflict is in his own party, where there is even a conflict as to whether Britain should be a member of the Community. The right hon. Gentleman had the gall to argue that we do not have the policies to enable us to receive benefit from the Community. I remind him that my right hon. Friend the Prime Minister renegotiated the repayment of nearly £10 billion to this country to put right the results of the deals that the Labour Government had done. That repayment is an obvious example of benefit to this country.
The two most entertaining and listened-to Opposition speeches today were made by right hon. Gentlemen who, if they will forgive my saying so, are both over the age of 70. That speaks volumes for the future of the Labour party.
Ms. Clare Short: How old is the right hon. Gentleman?
Mr. MacGregor: A good deal younger.
As a number of my right hon. and hon. Friends have already said, the conventional forces in Europe treaty signed on Monday and the CSCE final document signed by my right hon. Friend the Prime Minister yesterday are
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eloquent witness to the success of the Government's conduct of foreign affairs. The prospects for peace and for human rights in Europe are now better than at any time for generations. For the first time, through the CFE treaty, there will be a balance of forces in Europe, and massive numbers of Soviet tanks, planes and artillery will be scrapped. The countries of NATO have joined with the Soviet Union and eastern Europe to make it clear that we no longer regard each other as adversaries.
Anyone who reads the full text of the charter for a new Europe will find that it is not only an eloquent summary of the principles of a free and democratic society, but a notable acceptance of the benefits of free market economies and an outright rejection of socialist ones. That is a triumph, for this country and for our children, and the Government are proud to have played our part, under the courageous and clear-sighted leadership of my right hon. Friend the Prime Minister.
Ms. Hilary Armstrong: If foreign affairs are so important, why is not the Foreign Secretary or neither of the two other people seeking to lead the Government present in the Chamber to defend that Government?
Mr. MacGregor: I assure the hon. Lady that we shall all be defending the Government in the Lobby later. It is interesting to note how the triumph came about, first, because in the 1980s we and others in the west maintained strong defences and the nuclear deterrent. The Soviet Union realised that military domination was impossible. Secondly, the spectacular success of free enterprise economies in the west acted as a beacon for the oppressed peoples of eastern Europe, and persuaded the Soviet Union that it could not compete economically, still less dominate, on the basis of centralised, totalitarian planning. Thirdly, as my right hon. Friend has made clear many times, that triumph was attained because of the courage and vision of President Gorbachev. Against the odds, the Soviet Union produced a leader to meet the moment. The country will remember, however, as do our friends and allies throughout the world, that it was our Government and our Prime Minister who first recognised that, in my right hon. Friend's memorable words, President Gorbachev was a man "with whom we can do business".
Fourthly, because of the united support of Governments and people in the west, in accordance with the Helsinki agreements, it was a triumph for all those in the Soviet Union and eastern European countries who stood up for basic human rights and freedoms long before it was safe, let alone acceptable, to do so.
We are today defending the record of the Government. We have stood consistently for strong defence, for the cause of freedom and for individual liberty. There is not a shred of justification for censure of the Government's record on defence and international affairs. The Labour party has welcomed the successful outcome of the CSCE summit. Even Opposition Members realised that they could do no other, but let us examine their record——
Ms. Short rose——
Mr. MacGregor: Let us examine the record of Labour Members on the policies that helped to make that possible. First, they consistently opposed our staunch and resolute stand on nuclear weapons. They were wrong. The response

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of the Leader of the Opposition to the question from my hon. Friend the Member for Bristol, East (Mr. Sayeed) about the right hon. Gentleman's membership of CND had the merit of being short, but it showed how wrong he has been throughout on that matter.
Sir Jim Spicer: Might it be possible at some point to place on record the names of those who spoke at the CND rally in Trafalgar square in October 1983, calling for no deployment of Polaris weapons and saying that if Polaris came it would be the end of peace?
Mr. MacGregor: My hon. Friend is right. It is worth recalling that it was, in part, our determination to have cruise and Pershing missiles which enabled us to get to the point of the treaty this week.
Ms. Short rose——
Mr. MacGregor: I will not give way again. The hon. Member for Sparkbrook gave way about as many times as I have.
In their hearts, Opposition Members dislike, distrust and sometimes despise the free enterprise economy for which my hon. Friends and I stand. In that, too, they have been wrong. [Interruption.]
Mr. Speaker: Order. I think that the hon. Member for Newham, North-West (Mr. Banks) is indicating that he cannot hear what the Minister is saying. That is largely because there is so much chatter going on. I appeal to the House to listen in silence.
Mr. MacGregor: Consider the criticisms of Opposition Members of our privatisation policies in that respect. The leaders of the emerging free market economies in eastern Europe think differently. Above all, privatisation is seen throughout the world as the symbol of the successful economic policy that the British Government have pursued. If imitation is the sincerest form of flattery, we know the judgment of the rest of the world on our record.
Next—I believe this to be the most important point in that context—in the words of the Opposition defence spokesman, the Opposition condemned my right hon. Friend's proposals for a continuing NATO out-of-area role as "post-imperialist fantasy". That was just six weeks before Saddam Hussein invaded the Gulf. They were wrong again—blindly and dangerously wrong.
Ms. Short rose——
Mr. MacGregor: No, I will not give way again.
Ms. Short rose——
Mr. MacGregor: I give way for the last time.
Ms. Short: We understand that the Prime Minister's strengths are also her weaknesses. Her arrogance and strength are part and parcel of her problem. In this period of history, when we are talking about the Soviet Union and eastern Europe, it is tasteless for the Prime Minister to claim this historic change or for the right hon. Gentleman to claim it for her. Stalin created an indefensible system which had to crumble. It is not her work but history working through Europe and Mr. Gorbachev. It is no creation of the Prime Minister.
Mr. MacGregor: The hon. Lady is a bad reader of history. She should understand that it was because of the strength of our defences that we reached the position of dialogue. It was because of the discussions with President Gorbachev that my right hon. Friend and many others were able to establish a dialogue, which saw the changes taking place in the Soviet Union and elsewhere. The insistence that we placed on human rights and freedoms, and on the principles and benefits of a free economy, led to the charter for a new Europe being signed this week. History will show that it is the policies that we have pursued consistently as a Government which have brought about this week's notable achievement.
Much has been said about social policies. I should like to say a word about that issue now because there has not yet been an opportunity to respond to those points. The first and most important point is that the economic success and, yes, the economic growth which the Government's policies have made possible have provided a sound basis for the social policies that we have pursued. The right hon. Member for Sparkbrook talked about economic growth and economic growth leagues. As he knows, he was selective in choosing one year and comparing it with just one other——
Mr. Hattersley: On the contrary, I took the period that the Prime Minister took and simply corrected her figures.
Mr. MacGregor: The right hon. Gentleman took two years, but we should take a period as a whole. Taking a five-year period, in real terms the economic growth under the last Labour Government was about 10 per cent., whereas in the past five years of this Government economic growth has been running at over 20 per cent. That is a clear illustration that economic growth is much better now than in the second half of the 1970s. That economic success has made possible the social policies that we have pursued. I ask the House to look at the emphasis that we have consistently placed when determining our priorities for public spending on protecting the most vulnerable groups in our society.
Next year, £32 billion will be spent on the national health service—50 per cent. more in real terms than the Labour Government spent in their last year in office. Let us also consider our policies on social security, which is the front line in protecting those least able to care for themselves without help. Again, the ability to help effectively comes only from a strong economy. From next year, we shall be spending £63 billion per year on social security—41 per cent. more in real terms than when Labour left office. Those are big numbers, and they represent an even bigger achievement. Furthermore, support for people in residential care and nursing homes has trebled per head in real terms since 1979, from £20 million in 1979 to £1·1 billion in 1989–90.
We have also protected pensioners, not only by increasing the old age pension, but by extending freedom of choice to pensioners. Personal pensions give people power to save for retirement in whichever way suits them best. More than 4 million people have taken out personal pensions in the past two years. Our economic policies have enabled pensioners' incomes from savings to more than double. Under Labour, the value of their savings fell.
One of the most important points to note is that spending on benefits for long-term sick and disabled people has doubled in real terms since 1979. We are

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introducing new benefits and making improvements in existing benefits specifically to help disabled people further. Yesterday the House gave a Second Reading to the Disability Living Allowance and Disability Working Allowance Bill. Those new allowances will help to provide help for more than 300,000 people at a cost of £325 million by 1993–94.
Our record on social policies and on caring is second to none. It has been achieved by successful economic policies. That is why, on every front, it is right to say that we should be regarded more favourably than the Labour party when it was in power.
Mr. Spearing rose——
Mr. MacGregor: No, I have said that I shall riot give way again.
The right hon. Member for Sparkbrook also referred to Europe. No one who looks at the facts can be in any doubt that the Conservative party is the party that is united on Europe—[Interruption.]
Mr. Speaker: Order.
Mr. MacGregor: I have no doubt about that whatsoever. The vast majority of Conservative Members have always been wholeheartedly committed to our full participation in the European Community. We have long recognised, as my right hon. Friend the Prime Minister said in her Guildhall speech, that our destiny lies in Europe. The Labour party continues to duck a straight question: how many Opposition Members would unite behind the new pro-European facade erected by the Leader of the Opposition?
Let us examine the record. The right hon. Member for Sparkbrook fairly said that he has always been strongly in favour of Britain's membership of the Community——as I have been from my earliest days in politics. I grant the right hon. Gentleman that, but he knows the difficulties that he has always faced in the Labour party. The Labour party has changed its mind no fewer than six times in the past 30 years—six times in the political lifetime of the right hon. Gentleman. The Labour party supported membership of the Community in 1962 and opposed it in 1964. It was for membership again in 1966, and against it in 1971, for membership in 1975, and against it in 1983. Now, to judge from the facade, it is for membership again in 1990. With that track record the Labour party is likely to be against Europe in time for 1992, for it in 1994, against it in 1999 and for it again in 2003 when the Labour party will celebrate 20 years in opposition.
In debates on the European Community the Opposition have never wanted to go into detail about their policies because there are grave divisions not only of principle but also of detail within the party.
Mr. Richard Tracey: My right hon. Friend and I have challenged the Leader of the Opposition several times over the speech that he made three years ago when he said that the single market would be an abdication of responsibility and an apology for action. We have not yet received an answer. Will my right hon. Friend challenge him again?
Mr. MacGregor: I made exactly the same point in my speech on the Queen's Speech, but we have still not had an answer from the right hon. Gentleman. That is because he does not understand that it has been this Government and
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this party who have led the way in the European Community on the single market and his party which has opposed what we have been doing, just as his party supports the social charter which will do so much harm to jobs and our economic strength while it is we who have drawn attention to its deficiencies.
The Labour party has made it clear that it believes in the European monetary system, although it says:
"We believe that the European Monetary System, as at present constituted, suffers from too great an emphasis on deflationary measures as a means of achieving monetary targets and that it imposes obligations which are not symmetrical."
So much for the Opposition's claim to support sensible fiscal and monetary policies. They would support entry to the ERM on the very basis which would destroy the benefits that we shall gain from it.
In a previous no-confidence debate, the speech by the proposer of the motion contained the following passage:
"The Government have doubled prices, doubled dole queues, doubled debt, diminished our defences and undermined public respect and confidence in the law. There has been a failure not only of policies but of the whole philosophy on which they are based—the philosophy which elevates the State, dwarfs the individual and enlarges the bureaucracy. Across the Western world the tide is turning against that, and soon the same thing will happen here."— [Official Report, 28 March 1979; Vol. 965, c. 740.]
The speaker was my right hon. Friend the Member for Finchley (Mrs. Thatcher). It was that speech which led to the end of those policies and that catalogue of disasters. There will be a wholly different outcome to tonight's debate, for we are determined never to see those Labour policies foisted on our nation again.
It is this Government who have secured sustained economic growth in the 1980s greater in sum than that of nearly all other major European countries. It is this Government who have enabled net income for the average family to rise by two-thirds after inflation, compared with a real fall of nearly a fifth in the five years before we took office. It is this Government who have revived private enterprise and respect for success and profits, through privatisation and our fiscal, economic and industrial policies—in contrast to the emphasis on interference, re-nationalisation and new state controls peddled by the Labour party.
It is this Government who have restored international confidence in our economy, so that emergency recourse to the International Monetary Fund is now only a sad and unlamented memory. The right hon. Member for Leeds, East (Mr. Healey) did not have a distinguished career as Chancellor or as a Treasury Minister. By making an entertaining speech today he managed to indulge in a shameless piece of bluff about that episode in response to a question from my hon. Friend the Member for Bristol, East. The right hon. Gentleman compared the £2·5 billion that he had to borrow from the International Monetary Fund with the £19 billion that he said we borrowed on capital markets about a year ago. He forgot to mention that the PSBR had to be financed at that time, thus causing him to go for additional borrowing from the IMF. That borrowing caused the collapse and the savage reductions in expenditure to enable him to repay the IMF money and caused great damage to our economy.
Mr. Healey: The House will recall that the right hon. Gentleman said that before he finished his winding-up speech he would tell us why he and his colleagues have ditched the Prime Minister. He has only five minutes to go.

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Before he is completely drowned in the entrails of his word processor, perhaps he will deal with the question that he promised to answer.
Mr. MacGregor: I told the right hon. Gentleman that I would respond to a point that he made. I shall continue with the interesting issue of the state into which the right hon. Gentleman got our economy. Taking account of the growth in GDP, the public sector borrowing requirement in that year was equivalent as a proportion of GDP to about £50 billion today. The Government have pursued good financial and spending policies, thus enabling national debt to be repaid rather than being massively increased as it was during the right hon. Gentleman's time in office.
Through the creation of extra wealth, the Government have enabled spending on the priority areas to increase substantially after inflation. Spending on health has increased by nearly 50 per cent. and on schools by more than 40 per cent. per pupil. We have doubled spending on the disabled and on law and order, including the police and dealing with crime, and it is this Government who have seen the total income of pensioners increase by 31 per cent. in real terms since 1979. We have spread ownership on a substantially wider scale than ever before. More than 1·5 million council tenants have been enabled to buy their own homes, increasing home ownership——
Mr. Bell: On a point of order, Mr. Speaker. In the interests of the Chair, the House and the Prime Minister, the Prime Minister is entitled to know why she has been dismissed.
Mr. Speaker: That is not a point of order.
Mr. MacGregor: I am making it clear why it is right to reject the motion. The Government have increased home ownership by a quarter, so that over two thirds of homes in Great Britain are now owner-occupied. We have more than trebled the number of shareholders since 1979 and have revolutionised the extent to which so many of our citizens now have substantial personal or occupational pensions.
The Government have seen the creation of 400,000 new businesses and many more people in self-employment. We have done all of that in the face, usually, of outright hostility from the Opposition. We have extended personal choice and have given power back to the people in the choice and variety of schools, medical treatment and income tax, so that people can choose to spend what they have earned rather than have the state spend it for them. All of that is in contrast with the Labour party's usually total opposition to such measures or, in some cases, half-baked skin-deep conversion to them. We have created the conditions for employment to be at an all-time high—3·75 million new jobs since 1983—and we have one of the lowest unemployment rates in the European Community. We have introduced the toughest controls on industrial pollution anywhere in Europe, and have put in place the biggest ever investment programme in water quality. We are keeping our defences strong, and that has helped to bring about the collapse of communism.—[HON. MEMBERS: "Why has she gone?"] It is this Government who have so changed the map of political ideas and attitudes in this country that the Labour party has had to
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abandon practically all of its previous baggage—[HON. MEMBERS: "Why?"] This is a party united on all these great issues and policies, as the Opposition are not—[HON.
MEMBERS: "Why?"]
Mr. Derek Foster rose in his place, and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly:—
The House divided: Ayes 247, Noes 367.

Division No. 9]

[10 pm

AYES

Abbott, Ms Diane

Dobson, Frank

Allen, Graham

Doran, Frank

Anderson, Donald

Douglas, Dick

Archer, Rt Hon Peter

Duffy, A. E. P.

Armstrong, Hilary

Dunnachie, Jimmy

Ashdown, Rt Hon Paddy

Eadie, Alexander

Ashley, Rt Hon Jack

Eastham, Ken

Ashton, Joe

Evans, John (St Helens N)

Banks, Tony (Newham NW)

Ewing, Harry (Falkirk E)

Barnes, Harry (Derbyshire NE)

Ewing, Mrs Margaret (Moray)

Barnes, Mrs Rosie (Greenwich)

Fatchett, Derek

Barron, Kevin

Field, Frank (Birkenhead)

Battle, John

Fisher, Mark

Beckett, Margaret

Flannery, Martin

Beith, A. J.

Flynn, Paul

Bell, Stuart

Foot, Rt Hon Michael

Bellotti, David

Foster, Derek

Benn, Rt Hon Tony

Foulkes, George

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

Fraser, John

Benton, Joseph

Fyfe, Maria

Bermingham, Gerald

Galbraith, Sam

Bidwell, Sydney

Galloway, George

Blair, Tony

Garrett, John (Norwich South)

Blunkett, David

Garrett, Ted (Wallsend)

Boateng, Paul

George, Bruce

Boyes, Roland

Gilbert, Rt Hon Dr John

Bradley, Keith

Godman, Dr Norman A.

Bray, Dr Jeremy

Gordon, Mildred

Brown, Gordon (D'mline E)

Gould, Bryan

Brown, Nicholas (Newcastle E)

Graham, Thomas

Bruce, Malcolm (Gordon)

Grant, Bernie (Tottenham)

Buckley, George J.

Griffiths, Win (Bridgend)

Caborn, Richard

Grocott, Bruce

Callaghan, Jim

Hardy, Peter

Campbell, Menzies (Fife NE)

Harman, Ms Harriet

Campbell, Ron (Blyth Valley)

Hattersley, Rt Hon Roy

Campbell-Savours, D. N.

Heal, Mrs Sylvia

Canavan, Dennis

Healey, Rt Hon Denis

Carlile, Alex (Mont'g)

Henderson, Doug

Cartwright, John

Hinchliffe, David

Clark, Dr David (S Shields)

Hoey, Ms Kate (Vauxhall)

Clarke, Tom (Monklands W)

Hogg, N. (C'nauld & Kilsyth)

Clay, Bob

Home Robertson, John

Clelland, David

Hood, Jimmy

Clwyd, Mrs Ann

Howarth, George (Knowsley N)

Cohen, Harry

Howell, Rt Hon D. (S'heath)

Coleman, Donald

Howells, Geraint

Cook, Robin (Livingston)

Howells, Dr. Kim (Pontypridd)

Corbett, Robin

Hoyle, Doug

Corbyn, Jeremy

Hughes, John (Coventry NE)

Cousins, Jim

Hughes, Robert (Aberdeen N)

Cox, Tom

Hughes, Roy (Newport E)

Crowther, Stan

Hughes, Simon (Southwark)

Cryer, Bob

Hume, John

Cummings, John

Illsley, Eric

Cunliffe, Lawrence

Ingram, Adam

Cunningham, Dr John

Janner, Greville

Dalyell, Tam

Johnston, Sir Russell

Darling, Alistair

Jones, Barry (Alyn & Deeside)

Davies, Rt Hon Denzil (Llanelli)

Jones, Ieuan (Ynys Môn)

Davies, Ron (Caerphilly)

Jones, Martyn (Clwyd S W)

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

Kaufman, Rt Hon Gerald

Dewar, Donald

Kennedy, Charles

Dixon, Don

Kinnock, Rt Hon Neil

515

Kirkwood, Archy

Quin, Ms Joyce

Lambie, David

Radice, Giles

Lamond, James

Randall, Stuart

Leadbitter, Ted

Redmond, Martin

Leighton, Ron

Rees, Rt Hon Merlyn

Lestor, Joan (Eccles)

Reid, Dr John

Lewis, Terry

Richardson, Jo

Litherland, Robert

Robertson, George

Livingstone, Ken

Robinson, Geoffrey

Livsey, Richard

Robinson, Peter (Belfast E)

Lloyd, Tony (Stretford)

Rogers, Allan

Lofthouse, Geoffrey

Rooker, Jeff

Loyden, Eddie

Rooney, Terence

McAllion, John

Ross, Ernie (Dundee W)

McAvoy, Thomas

Rowlands, Ted

McCartney, Ian

Ruddock, Joan

Macdonald, Calum A.

Salmond, Alex

McFall, John

Sedgemore, Brian

McGrady, Eddie

Sheerman, Barry

McKay, Allen (Barnsley West)

Sheldon, Rt Hon Robert

McKelvey, William

Shore, Rt Hon Peter

McLeish, Henry

Short, Clare

Maclennan, Robert

Sillars, Jim

McNamara, Kevin

Skinner, Dennis

McWilliam, John

Smith, Andrew (Oxford E)

Madden, Max

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

Mahon, Mrs Alice

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

Mallon, Seamus

Smith, J. P. (Vale of Glam)

Marek, Dr John

Snape, Peter

Marshall, David (Shettleston)

Soley, Clive

Marshall, Jim (Leicester S)

Spearing, Nigel

Martin, Michael J. (Springburn)

Steel, Rt Hon Sir David

Martlew, Eric

Steinberg, Gerry

Maxton, John

Stott, Roger

Meacher, Michael

Strang, Gavin

Meale, Alan

Straw, Jack

Michael, Alun

Taylor, Mrs Ann (Dewsbury)

Michie, Bill (Sheffield Heeley)

Taylor, Matthew (Truro)

Michie, Mrs Ray (Arg'l & Bute)

Thompson, Jack (Wansbeck)

Mitchell, Austin (G't Grimsby)

Turner, Dennis

Moonie, Dr Lewis

Vaz, Keith

Morgan, Rhodri

Wallace, James

Morley, Elliot

Walley, Joan

Morris, Rt Hon A. (W'shawe)

Wardell, Gareth (Gower)

Morris, Rt Hon J. (Aberavon)

Wareing, Robert N.

Mowlam, Marjorie

Watson, Mike (Glasgow, C)

Mullin, Chris

Welsh, Andrew (Angus E)

Murphy, Paul

Welsh, Michael (Doncaster N)

Nellist, Dave

Wigley, Dafydd

Oakes, Rt Hon Gordon

Williams, Rt Hon Alan

O'Brien, William

Williams, Alan W. (Carm'then)

O'Hara, Edward

Wilson, Brian

O'Neill, Martin

Winnick, David

Orme, Rt Hon Stanley

Wise, Mrs Audrey

Paisley, Rev Ian

Worthington, Tony

Parry, Robert

Wray, Jimmy

Patchett, Terry

Young, David (Bolton SE)

Pendry, Tom

Pike, Peter L.

Tellers for the Ayes:

Powell, Ray (Ogmore)

Mr. Frank Haynes and

Prescott, John

Mrs. Llin Golding.

Primarolo, Dawn

NOES

Adley, Robert

Baker, Nicholas (Dorset N)

Aitken, Jonathan

Baldry, Tony

Alexander, Richard

Banks, Robert (Harrogate)

Alison, Rt Hon Michael

Batiste, Spencer

Allason, Rupert

Beaumont-Dark, Anthony

Amery, Rt Hon Julian

Bellingham, Henry

Amess, David

Bendall, Vivian

Amos, Alan

Bennett, Nicholas (Pembroke)

Arbuthnot, James

Benyon, W.

Arnold, Jacques (Gravesham)

Bevan, David Gilroy

Arnold, Sir Thomas

Biffen, Rt Hon John

Ashby, David

Blackburn, Dr John G.

Aspinwall, Jack

Blaker, Rt Hon Sir Peter

Atkins, Robert

Body, Sir Richard

Atkinson, David

Bonsor, Sir Nicholas

Baker, Rt Hon K. (Mole Valley)

Boscawen, Hon Robert

516

Boswell, Tim

Fry, Peter

Bottomley, Peter

Gale, Roger

Bottomley, Mrs Virginia

Gardiner, George

Bowden, A (Brighton K'pto'n)

Garel-Jones, Tristan

Bowden, Gerald (Dulwich)

Gill, Christopher

Bowis, John

Gilmour, Rt Hon Sir Ian

Boyson, Rt Hon Dr Sir Rhodes

Glyn, Dr Sir Alan

Braine, Rt Hon Sir Bernard

Goodhart, Sir Philip

Brandon-Bravo, Martin

Goodlad, Alastair

Brazier, Julian

Goodson-Wickes, Dr Charles

Bright, Graham

Gorman, Mrs Teresa

Brooke, Rt Hon Peter

Gorst, John

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

Grant, Sir Anthony (CambsSW)

Browne, John (Winchester)

Greenway, Harry (Ealing N)

Bruce, Ian (Dorset South)

Greenway, John (Ryedale)

Buchanan-Smith, Rt Hon Alick

Gregory, Conal

Buck, Sir Antony

Griffiths, Sir Eldon (Bury St E')

Budgen, Nicholas

Griffiths, Peter (Portsmouth N)

Burns, Simon

Grist, Ian

Burt, Alistair

Ground, Patrick

Butcher, John

Grylls, Michael

Butler, Chris

Gummer, Rt Hon John Selwyn

Butterfill, John

Hague, William

Carlisle, John, (Luton N)

Hamilton, Hon Archie (Epsom)

Carlisle, Kenneth (Lincoln)

Hamilton, Neil (Tatton)

Carrington, Matthew

Hampson, Dr Keith

Carttiss, Michael

Hanley, Jeremy

Cash, William

Hannam, John

Chalker, Rt Hon Mrs Lynda

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

Channon, Rt Hon Paul

Hargreaves, Ken (Hyndburn)

Chapman, Sydney

Harris, David

Chope, Christopher

Haselhurst, Alan

Churchill, Mr

Hawkins, Christopher

Clark, Hon Alan (Plym'th S'n)

Hayes, Jerry

Clark, Dr Michael (Rochford)

Hayhoe, Rt Hon Sir Barney

Clark, Sir W. (Croydon S)

Hayward, Robert

Clarke, Rt Hon K. (Rushcliffe)

Heath, Rt Hon Edward

Colvin, Michael

Heathcoat-Amory, David

Conway, Derek

Heseltine, Rt Hon Michael

Coombs, Anthony (Wyre F'rest)

Hicks, Mrs Maureen (Wolv' NE)

Coombs, Simon (Swindon)

Hicks, Robert (Cornwall SE)

Cope, Rt Hon John

Higgins, Rt Hon Terence L.

Cormack, Patrick

Hill, James

Couchman, James

Hind, Kenneth

Cran, James

Hogg, Hon Douglas (Gr'th'm)

Critchley, Julian

Holt, Richard

Currie, Mrs Edwina

Hordern, Sir Peter

Curry, David

Howard, Rt Hon Michael

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

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

Davis, David (Boothferry)

Howarth, G. (Cannock & B'wd)

Day, Stephen

Howe, Rt Hon Sir Geoffrey

Devlin, Tim

Howell, Rt Hon David (G'dford)

Dickens, Geoffrey

Howell, Ralph (North Norfolk)

Dicks, Terry

Hughes, Robert G. (Harrow W)

Dorrell, Stephen

Hunt, David (Wirral W)

Douglas-Hamilton, Lord James

Hunt, Sir John (Ravensbourne)

Dover, Den

Hunter, Andrew

Dunn, Bob

Hurd, Rt Hon Douglas

Durant, Tony

Irvine, Michael

Dykes, Hugh

Irving, Sir Charles

Eggar, Tim

Jack, Michael

Emery, Sir Peter

Jackson, Robert

Evans, David (Welwyn Hatf'd)

Janman, Tim

Evennett, David

Jessel, Toby

Fairbairn, Sir Nicholas

Johnson Smith, Sir Geoffrey

Fallon, Michael

Jones, Gwilym (Cardiff N)

Favell, Tony

Jones, Robert B (Herts W)

Fenner, Dame Peggy

Jopling, Rt Hon Michael

Field, Barry (Isle of Wight)

Kellett-Bowman, Dame Elaine

Finsberg, Sir Geoffrey

Key, Robert

Fishburn, John Dudley

Kilfedder, James

Fookes, Dame Janet

King, Roger (B'ham N'thfield)

Forman, Nigel

King, Rt Hon Tom (Bridgwater)

Forsyth, Michael (Stirling)

Kirkhope, Timothy

Forth, Eric

Knapman, Roger

Fowler, Rt Hon Sir Norman

Knight, Greg (Derby North)

Fox, Sir Marcus

Knight, Dame Jill (Edgbaston)

Franks, Cecil

Knowles, Michael

Freeman, Roger

Knox, David

French, Douglas

Lamont, Rt Hon Norman

517

Lang, Ian

Moore, Rt Hon John

Latham, Michael

Morris, M (N'hampton S)

Lawrence, Ivan

Morrison, Sir Charles

Lawson, Rt Hon Nigel

Morrison, Rt Hon P (Chester)

Lee, John (Pendle)

Moss, Malcolm

Leigh, Edward (Gainsbor'gh)

Mudd, David

Lennox-Boyd, Hon Mark

Neale, Gerrard

Lester, Jim (Broxtowe)

Needham, Richard

Lilley, Peter

Nelson, Anthony

Lloyd, Sir Ian (Havant)

Neubert, Michael

Lloyd, Peter (Fareham)

Newton, Rt Hon Tony

Lord, Michael

Nicholls, Patrick

Luce, Rt Hon Richard

Nicholson, David (Taunton)

Lyell, Rt Hon Sir Nicholas

Nicholson, Emma (Devon West)

McCrindle, Sir Robert

Norris, Steve

Macfarlane, Sir Neil

Onslow, Rt Hon Cranley

MacGregor, Rt Hon John

Oppenheim, Phillip

MacKay, Andrew (E Berkshire)

Page, Richard

Maclean, David

Paice, James

McLoughlin, Patrick

Parkinson, Rt Hon Cecil

McNair-Wilson, Sir Patrick

Patnick, Irvine

Madel, David

Patten, Rt Hon Chris (Bath)

Major, Rt Hon John

Patten, Rt Hon John

Malins, Humfrey

Pattie, Rt Hon Sir Geoffrey

Mans, Keith

Pawsey, James

Maples, John

Peacock, Mrs Elizabeth

Marland, Paul

Porter, Barry (Wirral S)

Marlow, Tony

Porter, David (Waveney)

Marshall, John (Hendon S)

Portillo, Michael

Marshall, Sir Michael (Arundel)

Powell, William (Corby)

Martin, David (Portsmouth S)

Price, Sir David

Mates, Michael

Raffan, Keith

Maude, Hon Francis

Raison, Rt Hon Timothy

Mawhinney, Dr Brian

Rathbone, Tim

Maxwell-Hyslop, Robin

Redwood, John

Mayhew, Rt Hon Sir Patrick

Renton, Rt Hon Tim

Mellor, David

Rhodes James, Robert

Meyer, Sir Anthony

Riddick, Graham

Miller, Sir Hal

Ridley, Rt Hon Nicholas

Mills, Iain

Ridsdale, Sir Julian

Miscampbell, Norman

Rifkind, Rt Hon Malcolm

Mitchell, Andrew (Gedling)

Roberts, Sir Wyn (Conwy)

Mitchell, Sir David

Roe, Mrs Marion

Moate, Roger

Rossi, Sir Hugh

Monro, Sir Hector

Rost, Peter

Montgomery, Sir Fergus

Rowe, Andrew

518

Rumbold, Mrs Angela

Thompson, Patrick (Norwich N)

Ryder, Richard

Thorne, Neil

Sackville, Hon Tom

Thornton, Malcolm

Sainsbury, Hon Tim

Thurnham, Peter

Sayeed, Jonathan

Townend, John (Bridlington)

Scott, Rt Hon Nicholas

Townsend, Cyril D. (B'heath)

Shaw, David (Dover)

Tracey, Richard

Shaw, Sir Giles (Pudsey)

Tredinnick, David

Shaw, Sir Michael (Scarb')

Trippier, David

Shelton, Sir William

Trotter, Neville

Shephard, Mrs G. (Norfolk SW)

Twinn, Dr Ian

Shepherd, Colin (Hereford)

Vaughan, Sir Gerard

Shepherd, Richard (Aldridge)

Viggers, Peter

Shersby, Michael

Waddington, Rt Hon David

Sims, Roger

Wakeham, Rt Hon John

Skeet, Sir Trevor

Waldegrave, Rt Hon William

Smith, Sir Dudley (Warwick)

Walden, George

Smith, Tim (Beaconsfield)

Walker, Bill (T'side North)

Soames, Hon Nicholas

Walker, Rt Hon P. (W'cester)

Speed, Keith

Waller, Gary

Speller, Tony

Walters, Sir Dennis

Spicer, Sir Jim (Dorset W)

Ward, John

Spicer, Michael (S Worcs)

Wardle, Charles (Bexhill)

Squire, Robin

Warren, Kenneth

Stanbrook, Ivor

Watts, John

Stanley, Rt Hon Sir John

Wells, Bowen

Steen, Anthony

Wheeler, Sir John

Stern, Michael

Whitney, Ray

Stevens, Lewis

Widdecombe, Ann

Stewart, Allan (Eastwood)

Wiggin, Jerry

Stewart, Andy (Sherwood)

Wilkinson, John

Stewart, Rt Hon Ian (Herts N)

Wilshire, David

Stokes, Sir John

Winterton, Mrs Ann

Stradling Thomas, Sir John

Winterton, Nicholas

Sumberg, David

Wolfson, Mark

Summerson, Hugo

Wood, Timothy

Tapsell, Sir Peter

Woodcock, Dr. Mike

Taylor, Ian (Esher)

Yeo, Tim

Taylor, John M (Solihull)

Younger, Rt Hon George

Taylor, Teddy (S'end E)

Tebbit, Rt Hon Norman

Tellers for the Noes:

Temple-Morris, Peter

Sir George Young and

Thatcher, Rt Hon Margaret

Mr. David Lightbown.

Thompson, D. (Calder Valley)

Questions accordingly negatived

Matthew Brown Brewery, Blackburn
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Nicholas Baker.]
10.18 pm
Mr. Jack Straw: I am most grateful to Mr. Speaker for deciding to select for debate this important issue—the implications for competition policy of the closure of Matthew Brown Brewery, Blackburn, by Scottish and Newcastle Breweries. The House will know that it is most unusual for members of the shadow Cabinet to seek an Adjournment debate, even on a matter of grave constituency importance. When I discussed the matter with Mr. Speaker about 10 days ago, he said that he thought that he could fit it in the following Thursday because 22 November looked like a very quiet day. We can all be wrong. None the less, I am most grateful for the opportunity.
On Friday 9 November Scottish and Newcastle, the owner of Matthew Brown, announced without notice the complete closure of the Matthew Brown brewery in Blackburn from early next year with a loss of a minimum of 150 jobs. The closure decision was in flagrant breach of categorical undertakings to keep open the Blackburn brewery given by Scottish and Newcastle to the Monopolies and Mergers Commission in 1985 and repeated on many subsequent occasions in 1987, 1988 and 1989.
The question raised by Scottish and Newcastle's conduct is identical to that which arose in the takeover of Distillers by Guinness—whether undertakings freely given by directors of companies in pursuit of a takeover of another company should be enforceable, or whether the Government are to stand idly by and allow company directors recklessly to make undertakings about the future conduct of a business and then breach them with impunity.
I shall briefly state the facts. The Matthew Brown brewery was established in 1875, and moved to its present site of the Lion brewery in the Little Harwood area of Blackburn in 1927. I first got to know the company in the mid-1970s. From then until the final takeover by Scottish and Newcastle in 1987 Matthew Brown was a prosperous and profitable regional brewery highly regarded by many City analysts, as my files make clear.
In 1985, Scottish and Newcastle launched a bid for Matthew Brown, valuing the company at about £100 million. The bid was strongly contested by the company, by consumers, by trade unions and by the whole east Lancashire area. It was seen as an attempt by Scottish and Newcastle not to extend consumer choice but to cut out part of its competition.
From the beginning, there was the gravest suspicion about Scottish and Newcastle's integrity and intentions, and the belief, confirmed by events, that it wanted Matthew Brown's pubs but not its brewery.
The 1985 bid was referred to the MMC, to which I gave written and oral evidence. It reported in November 1985 in Cmnd. 9645. The commission concluded that the bid was not against the public interest, but it did so in negative terms, saying:
"We discern no material advantages to the public interest arising from the proposed merger; but the question before us is whether the merger may be expected to operate against the public interest, and in our view there are not sufficient grounds for such an expectation."
520
It was a finely balanced judgment and, as was made clear in paragraph 7·25, one critical matter that was taken into account was an undertaking by Scottish and Newcastle about the future of the Blackburn and, as it happens, the Masham breweries.
Mr. Peter L. Pike: Does my hon. Friend accept that one of the concerns in the wider Lancashire area is that, in view of what has gone before, not only will we see the tragic loss of jobs in the brewery to which he referred but that the administrative and office jobs which the brewery at the moment says will remain will also be lost? Previous experience has led to great suspicion about what will happen.
Mr. Straw: I agree entirely. There are two reasons for our expecting that those jobs will be moved. First, one cannot trust anything that the senior directors of Scottish and Newcastle now say. I am sorry to have to make that statement, but I am afraid that that is the reality. Secondly, it made sense to have the administrative headquarters of Scottish and Newcastle at Matthew Brown only while it was a going concern, and every other aspect of the brewery operation has been run down.
The MMC's report includes an undertaking from Scottish and Newcastle which says:
"We"—
that is, Scottish and Newcastle—
"have stated categorically, publicly, and in writing that without any question whatsoever the Blackburn and Masham breweries are sacrosanct for continued brewing purposes."
There could not be a more clear, categorical, copper-bottomed, 24-carat gold undertaking for all time about the future of the Blackburn brewery.
Mr. Chris Butler: The hon. Gentleman may know that we are facing the closure of Greenall in my constituency, with the loss of some 500 jobs. Its capacity will be transferred to a major brewer —Allied. Does he believe that the brewing industry may be a developing structure with less competition and diversity, which is completely at odds with what the Monopolies and Mergers Commission would want? Will he call for the Office of Fair Trading to investigate this developing lack of competitiveness?
Mr. Straw: I entirely accept what the hon. Gentleman says. I am glad to acknowledge that the hon. Member for Hyndburn (Mr. Hargreaves), who is sitting next to the hon. Gentleman, is, like me, concerned about the employment prospects of some of his constituents who work for the brewery. I accept what the hon. Member for Warrington, South says, but although the arrangements of the Monopolies and Mergers Commission may be a reason for closing Greenall Witney, they certainly are no justification for the closure of Matthew Brown, as I hope to make clear in a moment.
The 1985 bid was cleared by the Monopolies and Mergers Commission, albeit reluctantly. Not only did Scottish and Newcastle give an undertaking to the Monopolies and Mergers Commission, but Alick Rankin, the then chief executive of Scottish and Newcastle, wrote to me on 20 March 1985, in anticipation of the report, saying:
"I believe therefore that our proposals will bring growing benefits both to Matthew Brown and to Blackburn."
Scottish and Newcastle gave another material undertaking not to acquire another brewery. Paragraph

521
531 of the report states that when Scottish and Newcastle was asked whether it would seek to acquire further brewery companies, it said that
"it had no further plans for any takeover of breweries at the present time. If it achieved what it set out to achieve in acquiring Matthew Brown, it would conclude that development of other parts of its business was its prime priority."
The first breach of the undertakings occurred in September 1986 when, contrary to that promise not to acquire another brewery—one should bear in mind the fact that once it had clearance from the Monopolies and Mergers Commission it continued to seek to purchase Matthew Brown—it purchased the Home Brewery, Nottingham. That is a material fact in this saga of disreputable conduct by Scottish and Newcastle, because part of the capacity that is being closed at Matthew Brown in Blackburn is being transferred to Home Brewery, Nottingham, which was purchased contrary to its undertaking.
Although it was cleared in 1985, the original bid failed marginally. In 1987, Scottish and Newcastle upped its bid to £186 million. By then, I and others had better informed ourselves of its true intentions. It had made some poor management decisions which had led to overcapacity in its Manchester brewery, its Chorley distribution centre and the additional capacity at Home Brewery, Nottingham. As it was paying almost twice as much as it had offered two years before, it could make a return on that amount of capital only if it closed Matthew Brown's brewery and distribution and substituted its products for Matthew Brown products.
I put those points to Mr. Gavin Reed, who is now Scottish and Newcastle's group managing director, at a meeting on 18 October 1987, but he categorically denied them. I was not convinced, but he said that Blackburn would be the main producing part of the group for Matthew Brown beers and its main north-west headquarters. He said, and I have this in my contemporaneous note:
"I don't believe the risk to employment exists at all."
When asked how Scottish and Newcastle would get its money back, he said that it would expand take-home trade, that the Manchester brewery mainly brewed lager, that it would not close the Blackburn lager brewery and that it would keep Blackburn as a distribution centre.
The undertakings given in 1985 were repeated in the offer document that was issued in 1987. It said:
"The Blackburn and Masham breweries are important to the success of Matthew Brown's business and have an assured future under S and N's long-term plans for the combined business."
In 1988, Elders IXL tried to take over Scottish and Newcastle. The boot was on the other foot, and Scottish and Newcastle came to see east Lancashire Members of Parliament, including my hon. Friend the Member for Burnley (Mr. Pike) and the hon. Member for Hyndburn (Mr. Hargreaves).
Mr. Ken Hargreaves: I am sad that, when Scottish and Newcastle were being taken over, we were consulted and used. On this occasion, the decision was taken before we were told.
Mr. Straw: The hon. Gentleman is right to use the word, "used". We have been used. Scottish and Newcastle
522
has taken us for a ride and acted in a dishonest and underhand way. When it came to seek our protection against the bid from Elders IXL, it said that it had made "categorical and repeated undertakings" about the continuation of the brewery business in Blackburn. It repeated those pledges again in 1989—less than a year ago—after the Monopolies and Mergers Commission report on the future supply of beer and gave an undertaking to implement it. The company said that brewing would continue in Blackburn. Now, some months later, the brewery is to go.
As the hon. Member for Hyndburn made clear, the announcement was made in a most brutal way. In the letters that were sent out the work force were not even thanked for their efforts. Instead the company sought to blame them for alleged inefficiencies.
All hon. Members understand that undertakings can be given quite honourably and reasonably in the course of acquisitions and takeovers as to the future intentions of a company, but that there can be a genuine, and unanticipated, change in market conditions which makes it impossible to fulfill those undertakings. On the evidence, I do not believe that Scottish and Newcastle can possibly plead that that is the case.
Let me explain why. First, there is the clearest evidence —it has been present all the way through, as I have said —that Scottish and Newcastle could not make a return on the capital that it had invested in purchasing Matthew Brown unless it shut the brewery and transferred production to its other breweries in Manchester, Nottingham and Newcastle. Secondly, the reason offered by Scottish and Newcastle for closure is, in my judgment, a fabrication. Thirdly, there is clear evidence that since 1988 Scottish and Newcastle had followed a secret, but deliberate, strategy to engineer a rundown in the marketing, sales and production of Matthew Brown brewery and products so as to justify closure.
I have already dealt with the first point about the financial imperatives on Scottish and Newcastle. As to the second, the principal excuse used by Scottish and Newcastle, when it issued its closure notice on 9 November, was that the Monopolies and Mergers Commission report on the supply of beer had forced it to sell 300 of its 2,300 public houses, and that that had wholly changed market conditions. That excuse is bogus. Most of Scottish and Newcastle's trade is free; it sold the 300 least profitable public houses; and it has done deals with a large number of those 300 public houses under which it would continue to supply them under the free trade. What Scottish and Newcastle is now saying is wholly contrary to what Mr. Alick Rankin, chairman of the company, said on 2 July in his annual report—that the Monopolies and Mergers Commission report was "an opportunity" for Scottish and Newcastle, not a disaster. He said:
"I anticipate that the Company will obtain significant trading benefits from this current preferred situation and from the further loosening of the tie in 1992."
My third allegation is that Scottish and Newcastle engineered a rundown, contrary to specific undertakings in the offer document to support and develop Matthew Brown's sales of lager and to develop sales of draught beer. How has it done that? It stopped advertising Slalom lager on television. If one is going to sell lager, it is crucial to advertise it on television. Matthew Brown were advertising, but Scottish and Newcastle stopped. Instead, it increased the advertising of McEwan's lager and

523
instructed its representatives to push Scottish and Newcastle products, rather than Matthew Brown products. It downgraded Matthew Brown pumps and bar advertising in some outlets, and took their products out of other outlets. It offered publicans better prices on McEwan's lager than on Matthew Brown products. Having done that, and therefore deliberately secured a slump in Matthew Brown demand to only 32 per cent. of capacity and only four or five brews a week—four years ago it was running at between 18 and 22 brews a week—it said that the brewery was working inefficiently, and that closure was justified. Of course, if one runs down a fixed asset and operates it at only 30 per cent. of capacity, it is bound to work inefficiently. That does not mean that it was not working efficiently before. Distribution, wines and spirits, cellars and estates have been moved to Chorley and brewing is to be moved to Manchester, Newcastle and Nottingham.
I put all those allegations to Scottish and Newcastle in a detailed letter on Tuesday. I sent it to each and every one of the directors. Scottish and Newcastle replied earlier today with a couple of pages of waffle giving the excuse that much of the information was commercial in confidence, which it is not. It attached press notices which I have already seen and do not answer the point. So I am not making allegations that I have not put to Scottish and Newcastle. The fact that it cannot answer them shows its understanding of its guilt in the matter.
The conclusion from this disreputable story seems to be inescapable. Scottish and Newcastle directors, including Mr. Alick Rankin, Mr. Gavin Reed and others, entered into undertakings which from the beginning they never intended to keep. They acted dishonestly. They gave undertakings to the MMC, shareholders and the work force. They offered those undertakings freely in free, contested takeovers and to the MMC. In my judgment, undertakings freely offered in such circumstances must be capable of enforcement. What enforcement can there be? One cannot put the clock back, of course, but where such undertakings are made to the MMC—"sacrosanct and for ever" were the words—and are broken in such circumstances, it should be possible for the company to have the matter referred back to the MMC. I ask the Minister to consider that. Alternatively, the matter could be referred to the Office of Fair Trading. There should be a power to require disinvestment of the assets to someone else who will keep the brewery going.
The takeover of Matthew Brown by Scottish and Newcastle was pursued in the name of extending consumer choice. It has resulted in cuts in consumer choice, cuts in jobs and the shutdown of a brewery which otherwise had a good future. It is a disgraceful story. The shutdown was wholly unnecessary. The people who have been adversely affected by the closure want justice.
10.36 pm
The Minister for Corporate Affairs (Mr. John Redwood): I understand the worries that the hon. Member for Blackburn (Mr. Straw) has expressed about the brewing industry and those of my hon. Friends the Members for Warrington, South (Mr. Butler) and for Hyndburn (Mr. Hargreaves), who are also present for this important debate. Like the hon. Member for Blackburn, I should be sorry to see those jobs threatened at the Lion brewery.
Mr. Doug Hoyle: And in Burnley.
Mr. Redwood: Yes, indeed. I understand the impact that the closure could have on the families concerned. I should like to see a thriving brewing industry offering secure employment. So I shall add to the hon. Gentleman's account of the sequence of bids and events and comment on whether undertakings can mean something and what action it is possible to take on them.
Scottish and Newcastle Breweries' first bid for Matthew Brown was referred to the MMC in 1985. The MMC concluded that it would not operate against the public interest. This meant that the then Secretary of State could take no action to block the bid, or impose conditions on Scottish and Newcastle, as he cannot in such a case overturn the MMC's finding, if he wanted to. Even though Scottish and Newcastle told the MMC that the future of Matthew Brown's breweries at Blackburn and Masham was sacrosanct, the MMC did not conclude that closure, if it occurred, would be against the public interest. There was therefore no basis in that case for holding the company to its promise.
Tonight we are considering the closure of one of these two breweries. The third, ultimately successful bid was not referred to the MMC. I have little doubt that, in taking that decision, my right hon. and noble Friend Lord Young, who was then Secretary of State, would have been influenced by the MMC's earlier report and by the similarity between the two bids. On that occasion, there were no powers to attach conditions to a decision not to refer a bid to the MMC.
I listened carefully to the hon. Gentleman's recommendations about how the treatment of undertakings could be tightened up. I am sure that he will be pleased to know that matters have been tightened up considerably since those days. Under the Companies Act 1989, provision is made for undertakings to be given in place of a reference to the MMC. Certain types of promise made by a company as a condition for the merger being allowed to proceed are now enforceable. It is now an offence to give false or misleading information about a merger to the Secretary of State, the Director General of Fair Trading, or the MMC. Of course, in each case it would have to be demonstrated that the information was known to be misleading, or that it was false and given recklessly at the point where it was so given.
There is another way of looking at the matter. The conduct of takeover bids is regulated by the City code on takeovers and mergers, which is administered by the takeover panel. The bidding company must state its intentions for the future of the business and its employees. The code requires that all statements made in offer documents meet the same high standards of accuracy as prospectuses.
It is the job of the takeover panel to ensure that high standards are maintained. If it has reason to believe that an offeror company has made statements in bad faith, it can investigate and take whatever steps it feels are necessary. I will ensure that the panel receives a copy of the transcript of the hon. Gentleman's remarks.
Mr. Straw: I am grateful to the Minister for saying that he will draw my remarks to the attention of the takeover panel. What might follow from that, if the panel believes that this raises a serious matter?
Mr. Redwood: There are several issues which the takeover panel can pursue with the adviser or the company making the bid, if it feels that there were improprieties. It could impose several penalties on either party if a wrong had been committed.
The common law, notably the law of misrepresentation, also applies to statements made during takeover bids. If a shareholder suffers financial loss as a result of a misrepresentation in the document, he may be able to sue for compensation in the courts. Employees are protected by the general provisions of employment law, but there are no job guarantees.
Section 47 of the Financial Services Act 1986 makes it an offence to make misleading or false statements, in this case to induce a person to sell shares. Similar provisions existed in the predecessor legislation, the Prevention of Fraud (Investments) Act 1958, which was in force at the time of the successful Scottish and Newcastle bid. Under that legislation evidence would have to be presented showing that the promises made at the time of the bid were made recklessly or in bad faith. If the hon. Gentleman has any more such evidence, I will consider it carefully, alongside the points that he has put to us tonight which I should like to consider further with advice.
Scottish and Newcastle has suggested that any job losses at the Lion brewery will be the result of the Government's measures to promote competition in the supply of beer. I believe that the hon. Gentleman does not agree with that, and I certainly do not accept it. I would expect Scottish and Newcastle to benefit in trading terms from the Government's measures. As a company with traditional strengths in the free trade, it has everything to gain from a liberalisation and expansion of the market. We have seen something of this since 1 May, when tenants of the five national brewers have been free to take a guest beer.
In his statement on 2 July this year, on publication of Scottish and Newcastle's annual report, the chairman said:
"It is possible for the Company to take advantage of these provisions of the Beer Orders which enable it to sell guest beers and other drinks into the tied estates of the major brewers. I anticipate that the Company will obtain significant trading benefit from this current preferred situation and from the further loosening of the tie in 1992."
That optimism appears to be confirmed by the latest results. The company's overall beer volumes were up 2 per cent. Strong cask sales were reported, particularly for the Theakston's range. Theakston sales were then reported to
526
be up 18 per cent. for the year, and 50 per cent. higher than at the time of the acquisition of Matthew Brown. At the annual general meeting on 30 August, the chairman also said:
"our beer sales are ahead of last year, giving cause for continued confidence."
This is the picture of a company successfully taking advantage of the new more competitive trading environment to which the Government measures are contributing—not one that has been knocked sideways by continued intervention to promote competition in the market.
Mr. D. N. Campbell-Savours: What happened to the stock exchange surveillance department's inquiry into insider dealing when Scottish and Newcastle took over Matthew Brown? Is it not true that the department submitted a report identifying those people who had engaged in insider dealing to the Department of Trade and Industry, yet no action was taken? Why were no prosecutions brought when individuals were identified?
Mr. Redwood: In general, the Department brings prosecutions in all those cases where it has collected sufficient evidence to make it worth while, or when other authorities have referred to it suitable cases that could be brought. I cannot answer the hon. Gentleman precisely tonight about the details of that particular case. I shall write to him when I have had a chance to review the file and to see the evidence behind his question. The hon. Gentleman will then be more fully in the picture.
I have identified three possible avenues down which the question of undertakings could be pursued. I have explained that the Government were aware that the regime governing undertakings was not strong under the previous legislation. That has been remedied by the measures we took in the Companies Act 1989, which apply to takeovers and mergers now under way or in prospect. That Act cannot, of course, apply to the takeover of Matthew Brown, which took place under the previous regime.
I promise the hon. Member for Blackburn that I shall study the record of the debate further to see if there is anything that the Department can properly do. I hope, however, that the hon. Gentleman will also pursue the case in the ways that I have identified if he feels that there is sufficient evidence to do so.
Question put and agreed to.
Adjourned accordingly at fifteen minutes to Eleven o'clock.

CIVIL SERVICE

  Equal Opportunities
  Mr. Jack
  To ask the Minister for the Civil Service what progress has been made towards achieving equality of opportunity for women in the civil service.

  Region

  Average new mortgage1

  Weekly payment2

  Increase

  June 1988 9·80 per cent. interest rate

  November 1990 14·65 per cent. interest rate

  £

  £

  £

  £

  Northern

  33,600

  49·19

  73·53

  24·34

  Yorkshire and Humberside

  33,000

  48·06

  71·84

  23·78

  East Midlands

  38,100

  57·67

  86·21

  28·54

  East Anglia

  43,000

  66·90

  100·01

  33·11

  Greater London

  59,800

  98·57

  147·35

  48·78

  South East

  54,000

  87·63

  131·00

  43·37

  South West

  45,000

  70·67

  105·65

  34·98

  West Midlands

  37,400

  56·35

  84·24

  27·89

  North West

  34,800

  51·45

  76·91

  25·46

  Wales

  35,100

  52·02

  77·76

  25·74

  Scotland

  32,500

  47·12

  70·43

  23·32

  Northern Ireland

  23,600

  33·36

  49·87

  16·51

  United Kingdom

  42,200

  65·40

  97·76

  32·36

  1 Building Society mortgages, third quarter 1990.

  2 Assuming endowment mortgage.

  Tanzania and Uganda
  Mrs. Clwyd
  To ask the Chancellor of the Exchequer what would be the estimated cash flow saving per year to Tanzania and Uganda if all official bilateral creditors were to implement Trinidad terms for their debt.

  Mr. Maples
  Tanzania and Uganda owe bilateral official creditors about $2·7 billion and $0·5 billion respectively. Annual interest payments required in order to prevent these debt stocks from continuing to rise would be about $150 million for Tanzania, and $15 million for Uganda. These estimates take account of the different mix of concessional/non-concessional loans outstanding to the two countries. In order to repay the full stock of debt, average future total payments would have to be even higher. The application of Trinidad terms by all bilateral official creditors would mean no payments would be made for five years, with amounts paid rising steadily thereafter, so that the one third of the stock of debt remaining after the write-off would have been repaid after 25 years.

  Premium Bonds
  Ms. Quin
  To ask the Chancellor of the Exchequer if he will supply figures for the numbers of individuals purchasing premium bonds for each year from 1979 to date.
  168
  Mr. Mellor
  A report giving full details of progress made in 1989 has today been published by HMSO. I have arranged for a copy of the report to be placed in the Library.

NATIONAL FINANCE

  Mortgage Repayments
  Mr. Allen
  To ask the Chancellor of the Exchequer what was the average increase in repayments per week on the average mortgage in each region between 1 June 1988 and now.

  Mr. Maples
  Information for an average new mortgage is in the table. Details of average amounts outstanding on all mortgages by region are not available.

  Mr. Maples
  The numbers of individuals purchasing premium bonds is not available. The number of purchases of premium bonds for each calendar year from 1979 to date has been as follows:

  Thousands

  1979

  4,463·1

  1980

  4,103·1

  1981

  3,674·1

  1982

  3,298·3

  1983

  3,499·5

  1984

  3,328·6

  1985

  2,530·0

  1986

  1,949·8

  1987

  1,962·0

  1988

  2,036·7

  1989

  1,418·0

  1990

  1541·8

  1 January to October: provisional.

  Ms. Quin
  To ask the Chancellor of the Exchequer if he has any plans to reduce the level of the minimum premium bond investment from £100.

  Mr. Maples
  No.

  International Monetary Fund
  Mr. John Townend
  To ask the Chancellor of the Exchequer if he will make a statement about the proposed amendment to the international monetary fund's articles of agreement.

  Mr. Maples
  The third amendment to the articles of agreement of the IMF empowers the fund to suspend the voting and related rights of members who do not fulfil their obligations under the fund's articles. This power is intended, in particular, to enable suspension of members in protracted arrears to the fund. The Government support the amendment. A Command Paper on the amendment is now available from the Vote Office.

TRANSPORT

  Coach Speed Limiters
  Mr. Roger King
  To ask the Secretary of State for Transport if he has any plans to change the present annual testing arangements for public service vehicle coach speed limiters; and if he will make a statement.

  Mr. Chope
  We are planning to incorporate a check of speed limiters into the annual PSV roadworthiness test as a statutory test item from 1 April 1991 and we shall be consulting on detailed proposals shortly. Once this change has been made any vehicle which is found to be in breach of the relevant regulations will fail the test. Until that time we shall be continuing to run the special campaign to check speed limiters during the PSV roadworthiness test. If vehicles which fall within the category to be tested are found not to have a speed limiter fitted, enforcement action will be taken.

  Mr. Roger King
  To ask the Secretary of State for Transport what is the policy towards the obligation to fit

  Number of Full-time staff employed on 16 November 1990

  Number of Part-time staff employed on 16 November 1990

  Total cost 1989–90

  Total cost 1990–91

  38

  5

  £793,000

  £775,000

  My right hon. and learned Friend the Home Secretary announced on 16 October that he had initiated a review of the options for the future of civil defence arrangements in the light of east-west relations. Future levels of expenditure on civil defence will depend upon the outcome of that review.

  Wheel Clamping
  Sir Dudley Smith
  To ask the Secretary of State for Transport if he will consider legislation to regulate car-clamping activities, other than those carried out by the police or their express agents.

  Mr. Chope
  I am keeping the matter under review.

  Motor Cyclists (Training)
  Mr. Wallace
  To ask the Secretary of State for Transport what facilities will be available by 1 December within(a) Orkney and (b) Shetland for the basic training necessary for obtaining a provisional motor cycle driving licence after 1 December.
  170
  a speed limiter to a public service vehicle coach being dependent on the owner or operator's declaration that the vehicle is capable of achieving 70 mph.

  Mr. Chope
  It is the legal responsibility of the operators of a coach to determine whether or not any particular vehicle needs to have a speed limiter fitted. It would be impracticable for the Department to road test every vehicle to determine its maximum speed capability, but we are well aware which makes of coach are likely to require speed limiters.

  Mr. Roger King
  To ask the Secretary of State for Transport if he will make a statement on the level of public service vehicle coach speed limiter fitment as it affects vehicles first registered between 1 April 1984 and 31 March 1989.

  Mr. Chope
  All coaches which have a maximum speed capability in excess of 70 mph, and which were first used since 1 April 1984 must now have speed limiters fitted. Operators with coaches which were first used between 1 April 1974 and 31 March 1984 have until 31 March 1991 to comply. Any operators found in breach of the regulations risk tough punitive action as part of our special enforcement campaign.

  Civil Defence
  Mr. Bill Michie
  To ask the Secretary of State for Transport how many civil servants are currently employed(a) full time and (b) part time by his Department on civil defence; what the total costs of employing staff on civil defence duties were in 1989–90; what the total costs of employing staff on civil defence duties are expected to be in 1990–91; and whether he has any plans for these staff to be transferred to work on other duties.

  Mr. Freeman
  The information required is as follows:

  Mr. Chope
  Sites for use for basic training have been approved at Kirkwall in Orkney, and at Lerwick in Shetland. I expect the operators of both these sites to be offering basic training courses from 1 December. Under the regulations, all residents of the islands surrounding the mainlands of Orkney and Shetland are exempt from the requirement to undergo an approved basic training course before riding on the road unaccompanied. They are also exempt from the need to produce a certificate of completion of an approved training course in order to take an "L" test with the Driving Standards Agency. This follows the precedent of the exemptions for the existing part I motor cycle test which basic training will supersede.

  Mr. Maclennan
  To ask the Secretary of State for Transport what steps he is taking to ensure that there is adequate provision for the compulsory basic training of learner motor cyclists living in remote rural areas.

  Mr. Chope
  Since July my officials have been working closely with motor cycle training organisations, retailers, road safety officers and ACPO in a joint action group to ensure that the whole of Great Britain is well covered by
  171
  training sites, and training organisations. I expect almost the whole of Great Britain to be within 30 miles of a site operated by an approved training body. I welcome the fact that in the Highland region, the regional council has let a contract for the supply of training at 11 sites that might not be commercially viable.

  Mr. Maclennan
  To ask the Secretary of State for Transport whether he will consider the introduction of a fixed period exemption for learner motor cyclists through the issue of a provisional licence for the duration of the training period to those living in remote areas not served by public transport.

  Mr. Chope
  Compulsory basic training is designed to improve the safety of all new learner motor cycle and moped riders on our roads. There is no road safety benefit in allowing some riders to avoid the training that others are required to take and after consultation I am satisfied that there will be adequate coverage of facilities except in the smaller islands where a total exemption applies.

  Tactile Surfaces
  Mr. Hinchliffe
  To ask the Secretary of State for Transport (1) what research his Department is carrying out into tactile surfaces to warn the blind, and advise as to safe routes and information points; when the results of the research will be published and advice notes circulated to highway authorities; and if he will make a statement;

  (2) what action he intends to take to ensure standardisation of tactile paving and similar initiatives across the country as a whole.

  Mr. Freeman
  Advice was issued to all local authorities by my Department in 1986 on the use of a specific tactile surface in conjunction with dropped kerbs at controlled crossings. Similar advice will shortly be issued to local authorities on the use of the same tactile surface at uncontrolled crossings and side streets.

  My Department has also commissioned research into the usefulness of a range of other tactile surfaces to provide guidance and warning for blind and partially sighted pedestrians. Trials with those surfaces are currently under way and we will issue advice early in 1991 to local authorities on the appropriate use of each surface in the pedestrian environment.

  Public Transport
  Mr. Hinchliffe
  To ask the Secretary of State for Transport how many licensed public transport vehicles have operated within the United Kingdom on an annual basis from 1979 to 1989.

  Mr. Chope
  The information for the end of December each year is as follows:

  Licensed public transport vehicles with nine or more seats: United Kingdom

  Year

  thousands

  1979

  75

  1980

  73

  1981

  71

  1982

  69

  1983

  69

  1984

  69

  1985

  68

  1986

  70

  1987

  72

  172

  Year

  thousands

  1988

  74

  1989

  75

  Leighton Linslade Bypass
  Mr. Madel
  To ask the Secretary of State for Transport whether, during the construction of the Leighton Linslade southern bypass by Bedfordshire county council, he will agree to an access from the Totternhoe Lime and Stone Company to the bypass; whether such an access is permitted within the existing guidelines; and if he will make a statement.

  Mr. Chope
  The Leighton Linslade southern bypass will ultimately form part of the east-west route referred to in the White Paper "Roads for Prosperity". This will be a major strategic route from the M40 to the east coast ports.

  The Secretary of State would not wish to see a direct access from the Totternhoe Lime and Stone Company on to the bypass for reasons of safety and because it would restrict the free flow of traffic.

  Existing guidelines indicate that such accesses should be restricted in the interests of traffic and safety.

  Departmental Staff
  Mr. Flynn
  To ask the Secretary of State for Transport what is the total number of staff employed by his Department; and under what headings they are employed.

  Mr. Freeman
  A total of 16,675 staff are currently employed by the Department of Transport, including its executive agencies, under the following main headings:

  Percentage of total staff

  Department of Transport Central

  43

  including—

  Public transport

  Highways safety and traffic Aviation, shipping and international work

  Personnel management and finance

  Driver and Vehicle Licensing Agency

  35

  Driving Standards Agency

  13

  Vehicle Inspectorate Executive Agency

  8

  Vehicle Certification Agency

  1

  100

  Cyclists
  Mr. Hinchliffe
  To ask the Secretary of State for Transport what level of consultation his Department has with cycling organisations; and what action is taken to encourage local highway authorities to similarly consult with cyclists over matters concerning access and safety.

  Mr. Chope
  We have regular discussion with cycling organisations on local, regional and national issues affecting cycling. We consult the main organisations representing cycling on our proposed publications and statutory regulations in the traffic and signing field. Individual schemes affecting trunk roads can be discussed at regional office level.

  It is for local highway authorities to decide for themselves how to consult local cycling interests on issues affecting their roads. We are aware that many authorities have established helpful relationships in their areas.

  North Sea Installations (Inspections)
  Mr. Dobson
  To ask the Secretary of State for Transport how many inspectors have been deployed full time on the inspection of North sea oil and gas installations in each year since 1978; and what was the establishment in each year.

  Mr. McLoughlin
  Marine surveyors in my Department undertake the examination of fire-fighting arrangements and life-saving appliances on offshore installations on behalf of my right hon. Friend the Secretary of State for Energy. Work on offshore activities is integrated with other duties of marine surveyors and is estimated to account for about eight man years in 1978 rising to 12 man years in 1987, where it has remained. There is no established complement of surveyors for these duties and surveyors are made available whenever they are required.

  Mr. Dobson
  To ask the Secretary of State for Transport how many prosecutions have been mounted in each year since 1978 following inspections by his staff of North sea oil and gas installations.

  Mr. McLoughlin
  None. The enforcement of safety legislation for offshore installations is the responsibility of my right hon. Friend the Secretary of State for Energy.

  Drink-Driving
  Mr. Hinchliffe
  To ask the Secretary of State for Transport what was the total number of road accidents, injuries and fatalities which took place when the driver was found to be over the legal alcohol limit; and if he will show injuries and fatalities separately for children aged under five years, for the years 1988 and 1989.

  Mr. Chope
  It is estimated that in 1988 there were 14,600 injury accidents in which at least one driver or rider involved was over the legal alcohol limit. It is estimated that 840 people were killed in those accidents, 5,650 were seriously injured and 16,200 were slightly injured. Figures for 1989 are not final, as returns from coroners are not yet complete, but current indications suggest that the final outturn will be very similar to the 1988 levels.

  Children under five years of age make up only a small proportion of casulaties in drink-drive accidents. In 1988 there were four children under five killed, 23 seriously injured and 123 slightly injured in accidents where it was established beyond doubt that at least one driver or rider was over the legal alcohol limit. In 1989 the corresponding figures so far are three killed, 25 seriously injured and 108 slightly injured.

  Community Transport
  Mr. Hinchliffe
  To ask the Secretary of State for Transport which local authorities and passenger transport authorities financially support community transport initiatives in the United Kingdom.

  Mr. Freeman
  The passenger transport executives and many councils support special needs transport for the elderly or mobility handicapped. We do not however have comprehensive information about local authority support for community transport initiatives.

HOME DEPARTMENT

  PC Surinder Singh
  Mr. Bernie Grant
  To ask the Secretary of State for the Home Department how much it cost the Nottinghamshire police authority to defend the case of racial discrimination brought by PC Surinder Singh; and how much it cost the Commission for Racial Equality to prosecute the case.

  Mr. Peter Lloyd
  I understand that the total costs in this case for both Nottinghamshire police authority and the Commission for Racial Equality have yet to be determined. I will write to the hon. Member as soon as this information is available.

  Police Cells
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what guidelines are provided by his Department on the use of wicket gates in police cells.

  Mr. Peter Lloyd
  Home Office guidance on the use of cell door service hatches (known as "wicket gates") specifies that where cell doors are fitted with a drop-down service hatch, the hatch should not be left open when the cell is occupied by a prisoner.

  Mr. Sheerman
  To ask the Secretary of State for the Home Department how many prisoners were being held in police cells at the latest date for which information is available.

  Mrs. Rumbold
  On Wednesday 21 November, 998 prisoners were held in police cells.

  Mr. Sheerman
  To ask the Secretary of State for the Home Department what his Department's guidelines are on the care of suicidal people in police stations; and where that information is contained.

  Mr. Peter Lloyd
  The Home Office has issued no guidelines on the care of persons in police custody with suicidal tendencies. The codes of practice issued in accordance with section 66 of the Police and Criminal Evidence Act 1984 require custody officers to summon a force medical examiner if any detainee appears to require medical attention, which would include a person with known suicidal tendencies. It is for chief police officers to issue any instructions necessary to ensure that the requirements of the codes are met.

  Police Complaints System
  Mr. Sheerman
  To ask the Secretary of State for the Home Department (1) if his Department will begin to collect and monitor data on the ethnic origins of complainants in the statistics they gather from the police forces in the United Kingdom in order to assess the effectiveness of the police complaints system;

  (2) what is his policy in respect of the case for the Police Complaints Authority to gather data on the ethnic origins of complainants in cases that it has dealt with.

  Mr. Peter Lloyd
  No central data are currently collected on complainants since they are not always the aggrieved party and sometimes have no direct involvement in the complaint. Complaints of racially discriminatory behaviour accounted for less than 1 per cent. of all complaints made against the police in 1989, both in the Metropolitan police district and elsewhere in England and Wales.
  175
  The Police Complaints Authority does not seek personal data of any kind from police forces for statistical purposes, nor has it specific powers to do so. I understand, however, that the authority intends to start publishing details of the number of complaints of racially discriminatory behaviour in its annual report for 1990.

  Distress Warrants
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what was the number of distress warrants issued by magistrates courts in 1989.

  Mr. John Patten
  Around 590,000 distress warrants in respect of fine and fee accounts and maintenance accounts were issued by magistrates courts in 1989.

  Gaming
  Mr. Pawsey
  To ask the Secretary of State for the Home Department if he will make a statement on Her Majesty's Government's policy towards the regulation of the promotion of gaming by radio advertising.

  Mr. Peter Lloyd
  One reflection of our well-established policy that demand for gambling should not be

  Number of full-lime staff employed on 16 November 1990

  Number of part-time staff employed on 16 November 1990

  Total cost 1989–90 £

  Estimated total cost 1990–91 £

  166

  13

  3,092,756

  3,302,000

  My right hon. and learned Friend announced in reply to a question from my hon. Friend the Member for Richmond, Yorks (Mr. Hague) on 16 October at column 773 that he had initiated a review of the options for the future of civil defence arrangements in the light of east-west relations. Future levels of expenditure on civil defence will depend on the outcome of that review.

  Malicious Communications
  Mr. Janner
  To ask the Secretary of State for the Home Department when he expects to publish data for 1989 relating to prosecutions under the Malicious Communications Act 1988; and if he will make a statement.

  Mr. John Patten
  The Command Paper "Criminal Statistics, England and Wales 1989" and its five supplementary volumes were published on 16 November 1990. Copies are available in the Library.

  Information on the Malicious Communications Act 1988 is given in the table.

  Persons prosecuted under the Malicious Communications Act 1988

  England and Wales 1989

  Number

  Prosecutions

  49

  Convicted

  40

  Sentenced:

  40

  Absolute discharge

  1

  Conditional discharge

  7

  Probation Order

  1

  Fine

  30

  Other

  1

  176
  encouraged unduly is that neither gaming nor betting may be advertised by broadcast. Subject to that, we are considering advice from the Gaming Board for Great Britain on proposals by the Bingo Association of Great Britain that the current prohibition on the advertising in any medium of specific licensed bingo clubs as places where gaming takes place, under the Gaming Act 1968, should be revised so as to allow the advertising of bingo clubs as such both in print and by radio.

  Civil Defence
  Mr. Bill Michie
  To ask the Secretary of State for the Home Department how many civil servants are currently employed(a) full time and (b) part time by his Department on civil defence; what the total costs of employing staff on civil defence duties were in 1989–90; what the total costs of employing staff on civil defence duties are expected to be in 1990–91; and whether he has any plans for these staff to be transferred to work on other duties.

  Mr. John Patten
  The information requested is as follows:

  Michael Hickey
  Mr. Mullin
  To ask the Secretary of State for the Home Department what response has been given by the governor of Long Lartin to the request that the psychiatrist Dr. McKeith be permitted to examine Michael Hickey.

  Mrs. Rumbold
  A request for a visit by Dr. McKeith was made in a letter from Mr. Hickey's solicitors on 13 November 1990. There are no objections to Dr. McKeith examining Mr. Hickey.

  Birmingham Public Inquiry Office
  Mr. Corbett
  To ask the Secretary of State for the Home Department on what date he plans to open the proposed Birmingham public inquiry office; and whether he has yet identified premises for its location.

  Mr. Peter Lloyd
  We intend to open the office when the necessary funding can be made available. The location will be the immigration office at Birmingham airport.

  Alcohol Consumption (Public Places)
  Mr. Lewis
  To ask the Secretary of State for the Home Department when he expects the advice on new byelaws prohibiting the drinking of alcohol in public places to be issued to local authorities.

  Mr. Peter Lloyd
  Details of the new model byelaw prohibiting the consumption of intoxicating liquor in designated public places were issued to district and borough councils in England and Wales in Home Office circular No 88/1990 on 29 October. A copy of the circular is available in the Library.

ENERGY

  Piper Alpha
  Mr. Dobson
  To ask the Secretary of State for Energy (1) if any of Lord Cullen's report was not included in the two published volumes;

  (2) why his departmental press office advised the press that the Cullen report was over 800 pages.

  Mr. Wakeham
  Lord Cullen's report, as received by me on 22 October, ran to over 900 pages in typescript. My departmental press office, when approached, advised the press prior to publication that the report was a "substantial" document. The report as printed by HMSO was proof-read by a team under the supervision of Lord Cullen himself. The printed version, as the hon. Member will be aware, is about 500 pages long.

  Electricity Privatisation
  Mr. Dobson
  To ask the Secretary of State for Energy whether he will review the proposed timetable for privatisation of PowerGen following the resignation of its chairman.

  Mr. Wakeham
  No. It remains the Government's firm intention, subject to market conditions, to offer shares in National Power and PowerGen for sale to the public in February 1991.

  Mr. Dobson
  To ask the Secretary of State for Energy what percentage fees are to be paid to the companies underwriting the flotation of the electricity distribution companies.

  Mr. Wakeham
  The commission rates to be paid to the underwriters of the sale of the regional electricity companies, subject to the terms of the underwriting agreements, will be

  percentage

  United Kingdom primary underwriting

  0·1700

  United Kingdom sub-underwriting

  1·2500

  Overseas underwriting

  1·2448

  Mr. Dobson
  To ask the Secretary of State for Energy if he will list the firms underwriting the flotation of the electricity distribution companies.

  Mr. Wakeham
  The names of the firms underwriting the offers for sale of the regional electricity companies are set out in the prospectus.

  PowerGen
  Mr. Dobson
  To ask the Secretary of State for Energy (1) when he last met Sir Graham Day or spoke to him on the telephone prior to Friday 16 November;

  (2) when he was informed of the imminent resignation of Robert Malpas as chairman of PowerGen;

  (3) if he will give the dates of his last six meetings with Robert Malpas as chairman of PowerGen.

  Mr. Wakeham
  I have meetings and consultations with the directors of PowerGen, as of other companies in the electricity supply industry, whenever necessary. Such meetings and consultations are confidential.
  178
  Mr. Dobson
  To ask the Secretary of State for Energy (1) whether he has discussed with Robert Malpas as the chairman of PowerGen the use of the least-cost approach to electricity industry investment;

  (2) whether he has had discussions with Robert Malpas as the chairman of PowerGen about the need for energy conservation.

  Mr. Wakeham
  The details of my discussions with Mr. Malpas, in his capacity as the chairman of PowerGen, are confidential.

  Mr. Dobson
  To ask the Secretary of State for Energy whether his predecessor approved the appointment of Robert Malpas as chairman of PowerGen.

  Mr. Wakeham
  I refer the hon. Member to the answer my right hon. Friend the Member for City of Chester (Mr. Morrison) gave to my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) on 9 June 1988 at column 632.

  Offshore Safety
  Mr. Dobson
  To ask the Secretary of State for Energy (1) what consultations he has had with the Health and Safety Commission about the appointment of a successor to Mr. Petrie as head of offshore safety;

  (2) why he has decided to proceed with the selection of the successor to Mr. Petrie as head of offshore safety rather than leaving the appointment to the Health and Safety Commission.

  Mr. Wakeham
  There is no intention to replace Mr. Petrie as director of safety. Offshore safety is, however, to become the responsibility of a new head of division to whom Mr. Petrie will report. Mr. Tony Barrell, from the Health and Safety Executive, has been appointed to the new post. The Health and Safety Commission has warmly welcomed the new appointment.

  Home Energy Efficiency
  Mr. Dobson
  To ask the Secretary of State for Energy (1) what criteria were applied by him and his appointed agency in drawing up the regional allocations under the home energy efficiency scheme;

  (2) if he will give a regional breakdown of the allocations under the home energy efficiency scheme during (a) January to March 1991 and (b) the financial year 1991–92.

  Mr. Wakeham
  The home energy efficiency scheme is a national scheme, and no regional allocations of funding have been made. However, it is important for organisations wishing to apply to become "network installers" in particular localities that they should have some broad indication of the scale of insulation and advice which they might be able to undertake using grants under the home energy efficiency scheme. The energy action grants agency therefore has included with the information it is sending to applicants a preliminary view on this based on numbers in receipt of housing benefit in each locality. The figures provided by the agency are neither an allocation, nor an estimate of the total value of work which might be undertaken by all contractors operating in that locality.

  Clean Coal Technology
  Mr. Andy Stewart
  To ask the Secretary of State for Energy what action is proposed by his Department on clean coal technology.

  Mr. Baldry
  The Government attach great importance to developing clean coal technologies and technologies aimed at maximising the economically recoverable coal from indigenous coal reserves.

  We are, therefore, carrying out a major review of our coal research programme and plan to publish a new strategy as an energy paper early next summer. To help us develop this new strategy my Department has established a new advisory body—the coal task force. The task force held its first meeting this morning. Over the next few months it will examine all aspects of coal research, including extraction, coal preparation, utilisation and conversion.

EDUCATION AND SCIENCE

  Special Educational Needs
  Ms. Armstrong
  To ask the Secretary of State for Education and Science (1) what was the total number of hours of home tuition provided each week to children with a statement of special educational needs by each local education authority for each of the last five years;

  (2) what was the average number of hours of home tuition received per week by each child with a statement of special educational needs in each local education authority for each of the last five years.

  Mr. Alan Howarth
  This information is not collected centrally.

  Ms. Armstrong
  To ask the Secretary of State for Education and Science how many children with a statement of special needs have been(a) excluded from attending school and (b) unable to attend school in each local education authority for each of the last five years.

  Mr. Alan Howarth
  This information is not available centrally.

  Ms. Armstrong
  To ask the Secretary of State for Education and Science if he will list the statutory requirements on local education authorities to provide home tuition for children with a statement of special needs who(a) have been excluded from school and (b) are unable to attend school; and if he will make a statement.

  Mr. Alan Howarth
  Section 7(2) of the Education Act 1981 provides that, in any case where a local education authority maintains a statement of special educational needs for a child, it is the duty of the authority to arrange that the special educational provision specified in the statement is made for him or her unless the parent has made suitable arrangements.

  University Salaries
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science if he will state the average salary of vice-chancellors in United Kingdom universities, together with the average percentage increase in their salaries, for each year since 1980, as recorded for all institutions which supply a return in box 1 of the university statistical record annual return.
  180
  Mr. Alan Howarth
  The information requested is not available to the Department. It is for each university to set the salary of its vice-chancellor.

  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science if he will give the number of professors in United Kingdom universities with salaries in each £1,000 band from £27,000 upwards.

  Mr. Alan Howarth
  Information in the form requested is not readily available. However, the table sets out details of professorial salaries in broad salary bands. The data relate to universities in the United Kingdom at December 1989.

  Professorial Salary Bands

  £

  Number

  26,250–27,819

  537

  27,820–28,704

  479

  28,705–29,609

  452

  29,610–30,549

  554

  30,550–31,549

  430

  31,550–32,589

  311

  32,590–33,654

  220

  33,655–34,669

  123

  In addition, 184 university professors receive salaries over £34,670 pa.

  All figures apply to non-clinical academic professors who are wholly university funded.

  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science if he will list(a) the numbers of men and women who have received awards from the 1 per cent. of academic and related pay set aside for allocation on merit or market criteria since 1 April 1989, (b) the proportions which the above represent of all men and women academic staff and (c) the proportions of the 1 per cent. funds that have been received by men and women since 1 April 1989.

  Mr. Alan Howarth
  The information is not available in the form requested. Information supplied by the UFC in June 1990 indicates that, at that time, it was intended that about 6,000 academics would receive payments from the 1 per cent. of the pay bill set aside to reward individual merit and to help counter staffing difficulties. This figure excludes returns from two universities for which data were not then available. The actual number to benefit from the scheme will be known later; the UFC has been asked to supply us with full details of the implementation of the schemes by 31 December 1990. The figure of 6,000 represents approximately 20 per cent. of all wholly university-funded full-time and part-time academic staff*.
  *Based on USR statistics, 1988–89.

  Research Councils
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science how much money has been paid out by each of the research councils in respect of 1 per cent. awards and what proportion this represents of each research council's total university funding.

  Mr. Alan Howarth
  The SERC has so far paid out £47,473 in respect of 1 per cent. pay additions arising from the 1989 university pay settlement. This represents 0·032 per cent. of the SERC's total research grant funding to higher education institutions in 1989–90. Further claims are expected.
  181
  The AFRC has so far paid out £10,000 in respect of 1 per cent. pay additions. The per annum figure rate of payment is currently £7,000, which represents 0·047 per cent. of the AFRC's total research grant funding to higher education institutions in 1989–90.

  The other three research councils do not keep figures centrally, and the information could be obtained only at disproportionate cost.

  Academic Posts
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science if he will state(a) the total amount of funding made available under the academic "new blood" scheme and the total amount taken up, (b) the total amount of funding made available under the new academic appointments scheme and the total amount taken up, (c) the numbers of men and women academics appointed under each of the two schemes and (d) the numbers of men and women appointed under each of the two schemes who are still in post.

  Mr. Alan Howarth
  (a) The total funding allocated by the University Grants Committee between academic years 1983–84 and 1985–86 under the "new blood" scheme and for new posts in information technology was £40·9 million. All allocated funding was taken up by universities.

  (b) The amount allocated by the Universities Funding Council under the new academic appointments scheme in academic year 1989–90 was £13·4 million. It is estimated that all allocated funding was taken up by universities.

  (c) Information about the total number of men and women academics appointed under the schemes is not readily available.

  (d) Of the total of 792 academics appointed under the "new blood" scheme, 739 were in post in March 1989. A further 46 posts had been replaced through new appointments. Comparable figures are not yet available for the new academic appointments scheme.

  Student Awards
  Mr. Hinchliffe
  To ask the Secretary of State for Education and Science how much financial assistance was offered to students by local authority intermediate awards in the last financial year.

  Mr. Eggar
  The latest data available are for the academic year 1988–89. LEA expenditure on discretionary (section 2) awards granted at less than the mandatory rate was £94·4 million split as follows:

  Percentage of mandatory rate

  Expenditure (£ millions)

  80–99

  27·1

  50–79

  13·9

  below 50

  53·5

  Mr. Hinchliffe
  To ask the Secretary of State for Education and Science what financial assistance is available for further education students, with parents on low incomes or in receipt of benefits; and if he will make a statement.

  Mr. Eggar
  Under section 2 of the Education Act 1962, LEAs have discretionary power to bestow awards on persons who have left school in respect of courses which do 182
  not attract mandatory awards. Since September 1990 the further education access fund has given colleges additional funds to support full-time students aged 19 and over on further education courses.

  Mr. Hinchliffe
  To ask the Secretary of State for Education and Science how much financial assistance was awarded to students by local authority education maintenance allowances in the last financial year.

  Mr. Eggar
  The latest available data are for the academic year 1988–89. The financial assistance awarded to students by local authority education maintenance allowances was £11·2 million in that year.

  School Grants
  Mr. Straw
  To ask the Secretary of State for Education and Science if he will publish a table listing(a) the amounts of capital allocations for county and voluntary controlled schools for 1991–92 for which each local education authority in England has bid, (b) the amount of capital grant for voluntary aided schools in their area which each local education authority has asked of his Department and (c) (a) and (b) for each local education authority and with totals in respect of (a), (b) and (c) for England, and for each region.

  Mr. Fallon
  The information requested is provided in the table. The figures are taken from the capital plans for 1991–92 submitted by each local education authority to the Department. I will provide a regional breakdown of this information shortly.

  LEA plans for Capital Expenditure in 1991–92

  LEA

  LEA plans County and VC schools £'000s

  Voluntary aided schools £'000s

  Avon

  17,000

  1,342

  Barking

  2,659

  1,955

  Barnet

  4,036

  3,605

  Barnsley

  1,246

  25

  Bedfordshire

  8,795

  1,127

  Berkshire

  9,305

  723

  Bexley

  6,170

  2,341

  Birmingham

  20,957

  3,539

  Bolton

  3,256

  984

  Bradford

  23,997

  1,002

  Brent

  8,273

  193

  Bromley

  8,401

  429

  Buckinghamshire

  12,749

  2,401

  Bury

  2,332

  830

  Calderdale

  2,363

  634

  Cambridge

  28,783

  825

  Camden

  3,725

  1,055

  Cheshire

  9,921

  3,324

  City

  0

  97

  Cleveland

  11,935

  884

  Cornwall

  18,382

  444

  Coventry

  7,745

  1,570

  Croydon

  20,970

  3,051

  Cumbria

  16,363

  1,292

  Derbyshire

  27,250

  1,106

  Devon

  23,942

  2,951

  Doncaster

  1,536

  145

  Dorset

  11,525

  6,734

  Dudley

  8,716

  2,385

  Durham

  17,936

  1,103

  E. Sussex

  28,855

  1,319

  Ealing

  11,199

  315

  Enfield

  15,427

  812

  Essex

  66,785

  1,264

  Gateshead

  8,182

  449

  183

  LEA

  LEA plans County and VC schools £'000s

  Voluntary aided schools £'000s

  Gloucester

  10,816

  1,694

  Greenwich

  1,867

  201

  Hackney

  6,848

  162

  Hammersmith

  5,923

  1,357

  Hampshire

  35,504

  2,994

  Haringey

  7,415

  1,412

  Harrow

  3,505

  172

  Havering

  4,334

  159

  Hereford and Worcester

  13,018

  2,580

  Hertford

  11,937

  2,302

  Hillingdon

  9,908

  905

  Hounslow

  5,029

  236

  Humberside

  21,536

  1,400

  Isles of Scilly

  215

  0

  Isle of Wight

  6,806

  260

  Islington

  5,017

  181

  Kensington

  7,794

  3,580

  Kent

  45,605

  7,737

  Kingston

  3,740

  646

  Kirkless

  5,395

  326

  Knowsley

  5,319

  1,329

  Lambeth

  6,532

  937

  Lancashire

  27,625

  6,534

  Leeds

  41,168

  12,626

  Leicester

  13,179

  967

  Lewisham

  9,263

  329

  Lincoln

  22,655

  1,753

  Liverpool

  13,842

  8,180

  Manchester

  20,909

  1,305

  Merton

  7,950

  228

  North Yorkshire

  6,272

  2,005

  North Tyneside

  4,587

  251

  Newcastle

  9,293

  1,050

  Newham

  15,067

  284

  Norfolk

  8,702

  587

  Northampton

  12,945

  400

  Northumberland

  5,411

  1,175

  Nottinghamshire

  10,803

  1,359

  Oldham

  13,674

  609

  Oxfordshire

  23,119

  4,178

  Redbridge

  4,384

  3,399

  Richmond

  4,319

  902

  Rochdale

  12,623

  756

  Rotherham

  3,386

  385

  South Tyneside

  6,651

  59

  Salford

  7,116

  567

  Sandwell

  6,536

  351

  Sefton

  5,488

  2,233

  Sheffield

  4,073

  885

  Shropshire

  16,740

  318

  Solihull

  4,548

  687

  Somerset

  10,357

  2,135

  Southwark

  6,086

  1,616

  St. Helens

  4,852

  2,299

  Staffordshire

  10,723

  2,084

  Stockport

  2,570

  341

  Suffolk

  17,956

  890

  Sunderland

  7,788

  523

  Total allocations and annual capital guidelines for England in cash and constant terms

  £ million

  Local authority schools and colleges

  Voluntary aided and special agreement schools

  Local authority schools and colleges voluntary aided and special agreement

  Cash

  Constant 81–82 prices

  Index 81–82 prices

  Cash

  Constant 81–82 prices

  Index 81–82 prices

  Cash

  Constant 81–82 prices

  Index 81–82 prices

  1981–82

  355

  355

  100

  24

  24

  100

  379

  379

  100

  1982–83

  338

  316

  89

  22

  21

  87

  360

  337

  89

  1983–84

  295

  263

  74

  19

  17

  71

  314

  280

  74

  1984–85

  300

  255

  72

  25

  21

  87

  325

  276

  73

  1985–86

  315

  254

  71

  31

  25

  104

  346

  279

  74

  1986–87

  297

  231

  65

  28

  22

  92

  325

  253

  67

  184

  LEA

  LEA plans County and VC schools £000s

  Voluntary aided schools £000s

  Surrey

  10,255

  2,956

  Sutton

  10,663

  3,374

  Tameside

  2,311

  136

  Tower Hamlets

  29,116

  597

  Trafford

  5,313

  140

  West Sussex

  13,804

  2,129

  Wakefield

  10,475

  346

  Walsall

  3,364

  400

  Waltham

  10,238

  1,800

  Wandsworth

  13,503

  130

  Warwick

  5,704

  3,112

  Westminster

  7,041

  346

  Wigan

  9,725

  2,126

  Wiltshire

  15,552

  1,677

  Wirral

  5,661

  1,017

  Wolverhampton

  5,788

  614

  England

  1,255,953

  167,975

  Mr. Straw
  To ask the Secretary of State for Education and Science if he will publish a table giving the amounts for England of capital allocations for(a) county and voluntary controlled schools, (b) voluntary aided schools and (c) the totals of (a) and (b) for each financial year from and including 1978–79 to 1990–91 expressed in (i) current prices, (ii) constant prices and (iii) an index of (ii) where 1978–79 = 100, together with such estimates for expenditure in 1991–92 on a comparable basis as are already available from the autumn statement.

  Mr. Fallon
  Not all the information is available in the form requested. The table shows figures from 1981–82. Prior to 1981–82, local education authorities did not receive block allocations, but were notified annually, in the context of a rolling programme, of a limit on the value of building starts in the following year.

  From 1981–82 to 1989–90 allocations for spending on capital works were made to local education authorities for schools and colleges of further and higher education, in accordance with the Local Government, Planning and Land Act 1980. It was for each local education authority to decide how to use its allocation, including apportionment between schools and colleges, and the extent to which it wished to supplement it through the use of capital receipts and other sources of revenue.

  Figures for 1990–91 and 1991–92 (in the table) are not comparable with previous years. Following the Local Government and Housing Act 1989, the Department issues an annual capital guideline to each local education authority, which is one element in the calculation of each local authority's basic credit approval announced by the Department of the Environment.
  185

  Local authority schools and colleges

  Voluntary aided and special agreement schools

  Local authority schools and colleges voluntary aided and special agreement

  Cash

  Constant 81–82 prices

  Index 81–82 prices

  Cash

  Constant 81–82 prices

  Index 81–82 prices

  Cash

  Constant 81–82 prices

  Index 81–82 prices

  1987–88

  306

  226

  64

  32

  23

  97

  338

  250

  66

  1988–89

  387

  266

  75

  43

  29

  123

  430

  296

  78

  1989–90

  352

  228

  64

  56

  36

  150

  408

  264

  70

  1990–91

  485

  291

  82

  74

  44

  185

  559

  335

  88

  1991–92

  538

  304

  86

  84

  47

  198

  622

  352

  93

  Notes to the table

  1. All figures are in £ million. All figures are rounded.

  2. Constant prices are calculated at 1981–82 prices using the latest GDP deflators. The index for 1981–82 is set at 100.

  3. The Department provides grant aid at a rate of 85 per cent. on governors' capital expenditure at voluntary aided and special agreement schools.

  4. Capital grant figures for the voluntary aided sector for the year 1981–82 are not separately identifiable from a single building grant figure which includes repairs and maintenance. The capital figures shown for this year are based on an apportionment of the building grant figure using the average ratio between capital and repairs during 1982–83 and 1985–86.

  5. Prior to 1981–82 local authorities did not receive block allocation, but were notified annually in the context of a rolling programme of a limit on the value of the building starts in the following year.

  6. Local authority allocations for 1989–90 and ACGs for 1990–91 and 1991–92 exclude institutions which were transferred to the PCFC sector in 1989–90.

  Students
  Mr. Hinchliffe
  To ask the Secretary of State for Education and Science how many persons between the ages of 18 and 30 years entered full-time further education in the last financial year.

  Mr. Eggar
  In 1989–90, there were 76,000 full-time first-year students aged 18–30 studying on further education courses in England.

  Mature Students (Housing Benefit)
  Mr. Maclennan
  To ask the Secretary of State for Education and Science what study he is making of the impact of the withdrawal of housing benefit on the numbers of mature students following courses in further education.

  Mr. Alan Howarth
  The annual further education statistical records monitor the number of mature students in further education. Mature students with dependants, those who are disabled and part-time students will, of course, retain entitlement to benefits.

ENVIRONMENT

  Metropolitan Water Board "B" Shares
  Mr. French
  To ask the Secretary of State for the Environment what information was available to the Government about the liabilities of the Metropolitan Water Board to the holders of "B" stock at the time of flotation of Thames Water.

  Mr. Heathcoat-Amory
  At the time of the flotation of Thames Water in 1989 the Government were aware of a possibility of outstanding liabilities in respect of such stocks, and this was reflected in a note on contingent liabilities in the privatisation prospectus.

  Archery
  Mr. Pawsey
  To ask the Secretary of State for the Environment what implications COM(90) 453 has for the sport of archery.
  186
  Mr. Atkins
  Although COM(90) 453 concerns the control of the acquisition and possession of weapons, I now understand that it will not have any effect on the sport of archery.

  Mineral Workings
  Ms. Walley
  To ask the Secretary of State for the Environment if he will give full details of the research project he has recently commissioned into the environmental effects of mineral workings; who has been awarded the contract in each case; and when he expects the findings to be published.

  Mr. Atkins
  Roy Waller Associates was commissioned last year to review and examine the environmental impacts of surface mineral extraction and how they can be controlled most effectively. This is a broad-based project looking at the major problems of traffic, blasting, noise, dust, visual and landscape effects. The final report will propose a number of steps to ameliorate the environmental impact of mineral working. Areas for further research will also he identified. Publication of the final report is expected in spring 1991.

  The findings of a more detailed research project carried out by W. S. Atkins Engineering Sciences Ltd. on "The Control of Noise at Surface Mineral Workings" have recently been published by HMSO and copies are already lodged in the House of Commons Library.

  Lead Pipes
  Mr. Pike
  To ask the Secretary of State for the Environment what grants are available to assist domestic consumers to replace old lead feeder pipes from the water mains into their homes.

  Mr. Key
  Both mandatory and discretionary renovation grants under part VIII of the Local Government and Housing Act 1989 are available towards the cost of replacing lead water supply pipes on land owned by the grant applicant, subject to a test of the applicant's financial resources.

  Local Government Finance
  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will publish tables showing for each local authority either the planned use of balances to support revenue expenditure in 1990–91 or the amount to be used to replenish balances as appropriate.

  Mr. Portillo
  I have today arranged for the available information to be placed in the Library.

  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for the Environment if he will obtain a copy of "Local Government Finance, the 1990 reforms", by Michael Ridge and Stephen Smith, published in Fiscal Studies August 1990 (Vol. 11, No. 3), for his Department's library.

  Mr. Key
  The Department's library already has a copy of the journal in which this article appears.

  Mr. Nellist
  To ask the Secretary of State for the Environment if he will make a statement on progress in collection of the community charge in England and 'Wales.

  Mr. Key
  [holding answer 21 November 1990]: Information from regular quarterly returns supplied by local authorities confirms that around nine out of 10 charge payers had begun paying their charges by the end of September. In many areas this figure is already approaching 100 per cent. and I look to all authorities to achieve figures close to this during the balance of this financial year. Collection of the community charge in Wales is a matter for my right hon. Friend the Secretary of State for Wales.

  Keynsham Chew Valley Inquiry
  Mr. Aspinwall
  To ask the Secretary of State for the Environment when he intends to publish the result of the Keynsham Chew valley local plan inquiry, held in December 1989 and January 1990; and if he will make a statement.

  Mr. Atkins
  The inspector has now completed his report to the local planning authority, Wansdyke district council, following this complex inquiry. It will be sent to the council shortly: publication is a matter for it.

  Housing Associations
  Mr. Devlin
  To ask the Secretary of State for the Environment what has been the rate of take-up of funds allocated by the Housing Corporation to housing associations in the different regions of the country; and if he will make a statement on whether the funds taken up by housing associations in the different regions of England have been expended by them in total.

  Mr. Key
  This is a matter for the Housing Corporation. I have therefore asked the corporation to respond to my hon. Friend direct.

  Mr. Devlin
  To ask the Secretary of State for the Environment on what basis he will continue to contribute to neighbourhood care and repair schemes run by housing associations.

  Mr. Key
  As I announced on 19 October, from 1 April 1991, 50 per cent. of the running costs of approved home improvement agencies, including those run by housing 188
  associations, will be met by Government grant. Local housing authorities are responsible for the co-ordination and submission of such bids by the end of the month.

  Disability
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment under the new provisions for house adaptations for people with disabilities, how many people have been denied grants or been given reduced grants to make adaptations to their homes because they do not meet the means test.

  Mr. Key
  The information requested is not yet available. The impact of the new house renovation grant system is, however, being monitored closely.

  Mrs. Dunwoody
  To ask the Secretary of State for the Environment if the Government will introduce legislation to amend the Town and Country Planning Act to make it unlawful to erect or adapt buildings without approved access facilities for disabled people, and to provide for all existing buildings to be adapted in the same way with cash grants available from central Government for the owners of such buildings, with such adaptations subject to checks annually by the disablement advisory service.

  Mr. Key
  There is already a requirement in the Building Regulations 1985 that reasonable provision must be made to enable disabled people to gain access to new offices and shops, and to the principal entrance storey of new factories, educational buildings covered by the regulations, and other premises to which the public are admitted. Consultation proposals have been issued recently which would have the effect of extending this requirement to all floors of all new non-domestic buildings and to certain alterations and extensions to existing buildings. Research is being carried out into the technical problems involved in extending such a requirement to other alterations and extensions of non-domestic buildings.

  Under the adaptations to premises and equipment scheme, administered by the Department of Employment through the disablement advisory service, a grant of up to £6,000 may be awarded to an employer, towards the cost of adapting premises and equipment for an existing disabled employee or a disabled new recruit. Employers are expected to contribute and to undertake to recruit a disabled person with similar needs as a replacement in the event of the original employee leaving. Grants are most commonly provided for adaptations to toilets and improved access to a building. An evaluation of the Department of Employment special schemes was published by my right hon. and learned Friend the Secretary of State for Employment on 2 November 1990 and comments invited by 2 February 1991.

  Peat
  Mr. Ron Davies
  To ask the Secretary of State for the Environment if he will issue guidance to planning authorities which would highlight the importance of refusal of planning permission for the extraction of peat from sites of special scientific interest.

  Mr. Atkins
  Local authorities have to reach decisions on individual planning applications on their merits, having due regard to all relevant material considerations. "Material considerations" include relevant national
  189
  policies, such as the protection of designated sites of special scientific interest. The Department of the Environment's existing guidance in circular 27/87 "Nature Conservation" and minerals planning guidance note 2 requires that proposals for the extraction of peat and other minerals from SSSIs should be subject to the most rigorous examination, in which the need for the mineral has to be balanced against environmental considerations. The Government are giving further consideration to the issues raised by peat extraction and nature conservation, and this includes whether there is a need for further advice.

  I also welcome the agreement reached recently between the Nature Conservancy Council and the Peat Producers Association whereby, pending an agreed peatland strategy, members of the association will not make any planning applications to work existing or proposed peatland SSSIs without the prior agreement of the NCC.

  Sewage Sludge
  Mr. Summerson
  To ask the Secretary of State for the Environment what steps he is taking to ensure other means of disposal of sewage sludge presently dumped in the North sea.

  Mr. Heathcoat-Amory
  My right hon. Friend the Minister of Agriculture, Fisheries and Food has asked the water companies concerned to submit to him by the end of November their detailed plans and programmes of work
  phasing out disposal of sludge to sea. The main disposal options are to agricultural land, landfill and incineration.

  Single People (Accommodation)
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what action he intends to take to ensure the provision of adequate single persons' accommodation in both the public and private rented sectors at prices which young single persons can afford.

  Mr. Michael Spicer
  We have taken a number of measures that will help young single people find accommodation including, in particular, the deregulation of new lettings in the private rented sector. Allocation of subsidised rented housing is mainly a matter for local authorities and housing associations; local authorities' duties under the homelessness legislation cover vulnerable single people; and we have recently announced a special programme, costing £100 million over four years, to help people sleeping rough in London.

  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what studies have been carried out by his Department into single persons' accommodation needs.

  Mr. Michael Spicer
  The Department has published four reports on single persons' accommodation needs.

  These are:

  Housing Single People 1: how they live at present. Design Bulletin 23, HMSO 1790.

  Housing Single People 2: A design guide with a description of a scheme at Leicester. Design Bulletin 29, HMSO 1974.

  Housing Single People 3: an appraisal of a purpose built scheme. Design bulletin 33, HMSO 1979.

  Housing Initiatives for Single People of Working Age. DoE, 1982.

  The Department will shortly let a research contract on single homeless people including their accommodation needs and preferences.

  Mortgage Arrears
  Mr. Cartwright
  To ask the Secretary of State for the Environment if he will take steps to require local authorities, building societies and other mortgage lenders to submit regular returns of the number of borrowers in arrears with their payments and the number of properties repossessed.

  Mr. Key
  Local authorities already make returns to the Department of their mortgage arrears and possessions. Building societies make returns on arrears and possessions to the Building Societies Commission. In addition, the Council of Mortgage Lenders has collected data on arrears and possessions from a number of major mortgage lenders. In view of the information already provided by lenders, I do not consider it appropriate for the Department of the Environment to require returns from private sector lenders.

  Housing and Independent Living
  Mr. Alfred Morris
  To ask the Secretary of State for the Environment if his Department was represented at the housing and independent living conference organised by Shelter, the King's Fund community development living team, the British Council of Organisations of Disabled People and the living options project on 12 and 13 November; and if he will make a statement.

  Mr. Michael Spicer
  [holding answer 16 November 1990]: No.

WALES

  European Court
  Mr. Morgan
  To ask the Secretary of State for Wales what policy considerations led him to send a member of his legal department to observe the preliminary hearing of the Leybucht bay case in the European Court of Justice in Luxembourg on 16 October.

  Sir Wyn Roberts
  I refer the hon. Gentleman to the reply given to him by my hon. Friend the Under-Secretary of State for the Environment on 19 November, at columns 41–42. A member of the Welsh Office's legal division attended because of the relevance of the issues to Welsh Office circular 52/87 "Nature Conservation".

  Mr. Rod Richards
  Mr. Morgan
  To ask the Secretary of State for Wales (1) on what basis the salary to be paid to Mr. Rod Richards, his personal ministerial adviser, has been calculated;

  (2) what salary will be paid to Mr. Rod Richards as his personal ministerial adviser.

  Sir Wyn Roberts
  I refer the hon. Gentleman to the reply given to him on 19 November by my hon. Friend the Paymaster General and to the reply my right hon. Friend gave on 13 November to the hon. Member for Cardiff, South and Penarth (Mr. Michael).

  Mr. Michael
  To ask the Secretary of State for Wales, further to his reply of 13 November,Official Report, column 106, if he will give specific details of the knowledge and experience of Mr. Rod Richards in respect of the private sector which will be relevant to his work as special adviser.
  191
  Sir Wyn Roberts
  My right hon. Friend has nothing to add to the answer he gave the hon. Gentleman on 13 November.

  Civil Defence
  Mr. Bill Michie
  To ask the Secretary of State for Wales how many civil servants are currently employed(a) full time and (b) part time by his Department on civil defence; what the total costs of employing staff on civil defence duties were in 1989–90; what the total costs of employing staff on civil defence duties are expected to be in 1990–91; and whether he has any plans for these staff to be transferred to work on other duties.

  Sir Wyn Roberts
  The Department has no full-time or part-time staff engaged exclusively on civil defence, but such work is estimated to account for the equivalent of six full-time posts across the Department as a whole. The total cost was £156,000 in 1989–90 and is estimated to be £161,000 in 1990–91.

  My right hon. and learned Friend the Home Secretary announced on 16 October 1990 that he had initiated a review of the options for the future of civil defence arrangements in the light of east-west relations. Future levels of expenditure on civil defence will depend on the outcome of that review.

  Music Teachers
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales how many peripatetic music teachers are currently employed by each local education authority in Wales; and what is the average amount of instrument tuition time per week offered by schools in each local education authority.

  Sir Wyn Roberts
  Information on the number of peripatetic music teachers and the amount of tuition time is not collected centrally.

  Imports of Toxic Waste

  Port

  Country of Origin

  Destination

  Type of Waste

  Tonnes

  Holyhead

  Ireland

  Cheshire CC

  Sodium sulphide/sulphate

  36

  Sodium hydroxide

  18

  Greater Manchester

  Cyanoacrylate residue

  47

  Glycerine waste

  21

  Glycolmethacrylate scrap

  24

  Torfaen BC

  Miscellaneous waste

  10

  Total

  156

  Newport

  Austria

  Torfaen BC

  PCB/Transformers Carcass

  53

  Germany

  Torfaen BC

  Miscellaneous chemical waste

  69

  Pesticides

  77

  Ireland

  East Sussex CC

  Nerol (Toluene waste)

  48

  Greater Manchester

  Iron hydroxide/oxides

  177

  Hampshire CC

  Organic waste (mix)

  125

  Torfaen BC

  Chlorinated solvents

  5

  Inorganic waste

  2

  Liners (cont; toxic waste)

  8

  Miscellaneous waste

  8

  Miscellaneous chemical waste

  7

  Organic waste (mix)

  68

  Polychloro Biphenyl (PCB)

  17

  Pharmaceutical waste

  21

  Spain

  Nottinghamshire

  PCB

  22

  Torfaen BC

  PCB contaminated material

  21

  PCB/transformers carcass

  195

  Switzerland

  Greater Manchester

  Aluminium Hydroxide/oxide

  6

  Battery waste

  23

  Junior Doctors
  Mr. Geraint Howells
  To ask the Secretary of State for Wales what progress has been made in negotiations on proposals for a reduction in hours worked by junior doctors in Wales; and if he will make a statement.

  Mr. Grist
  The Department is represented on the working group established by my hon. Friend the Minister for Health which is currently engaged on a detailed examination of the issues involved. A considerable amount of ground has already been covered and all parties are aiming to reach broad agreement in principle on specific changes by the end of the year.

  Self-governing Hospitals
  Mr. Geraint Howells
  To ask the Secretary of State for Wales if he will make a statement on the latest position in respect of hospitals becoming self-governing in Wales.

  Mr. Grist
  Pembrokeshire district health authority has submitted an expression of interest in applying for NHS trust status which is currently under consideration.

  Toxic Waste
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will state for the last available year(a) the amount of toxic waste imported through Welsh ports in total, and by port and (b) the country of origin and destination of toxic waste imports by port, together with the nature of toxic waste in each case.

  Mr. Grist
  The information for the year to 31 March 1990 is shown in the following table.
  193

  Port

  Country of Origin

  Destination

  Type of Waste

  Tonnes

  Calcium hydroxide

  7

  Carbon/charcoal waste

  1

  Distillation residue

  38

  Inorganic waste

  9

  Organic waste (mix)

  5

  Paint waste

  15

  Sodium Chloride

  91

  Torfaen BC

  Organic acids

  44

  Organic waste (mix)

  1

  PCB

  171

  PVC waste

  12

  1,346

  Swansea

  Greece

  Torfaen BC

  PCB

  5

  Grand Total

  1,507

  Soundproofing, Skewen
  Mr. John Morris
  To ask the Secretary of State for Wales what consideration he has given to representations from householders in Skewen about the proposals for window soundproofing from the current motorway development.

  Sir Wyn Roberts
  I have given the representations careful consideration and will be writing shortly to the right hon. and learned Gentleman in response to his recent correspondence.

  Waiting Lists, West Glamorgan
  Mr. John Morris
  To ask the Secretary of State for Wales (1) what are the current waiting lists to see national health service consultants in the West Glamorgan area for first appointments;

  (2) what are the present waiting lists for hospital admissions in the West Glamorgan area.

  Mr. Grist
  The information requested, which relates to 31 March 1990, is as follows:

  Number waiting

  First out-patient appointment

  14,462

  Hospital in-patient admission

  6,949

  Residential and Nursing Homes (Agents)
  Dr. Marek
  To ask the Secretary of State for Wales if he will take measures to stop touting for business on health authority property by agents for residential and nursing homes.

  Mr. Grist
  This is a matter for the district health authority, which deplores the action reported to have taken place in Maelor hospital, Wrexham, by representatives of private nursing homes. I am assured that the district health authority is taking appropriate steps to ensure that incidents of this kind do not occur again.

  Disabled Staff
  Mr. Flynn
  To ask the Secretary of State for Wales what were the percentages of disabled staff employed in his Department in each of the past 10 years.

  Mr. Grist
  The information is as follows:194

  Percentage

  1980

  2·3

  1981

  2·3

  1982

  2·3

  1983

  2·1

  1984

  1·8

  1985

  1·4

  1986

  1·5

  1987

  1·4

  1988

  1·3

  1989

  1·1

  1990

  1·4

  Retail Sales
  Mr. Barry Jones
  To ask the Secretary of State for Wales what information he has on retail sales in Wales; and if he will make a statement.

  Sir Wyn Roberts
  The latest provisional information for 1988, previously unpublished, appears in the following table:

  Wales

  Retail outlets (number)2

  Turnover (£ million)1 2

  Food retailer

  6,711

  2,000

  Drink, confectionery and tobacco retailers

  3,379

  529

  Clothing, footwear and leather goods retailers

  2,891

  411

  Household goods retailers

  3,357

  825

  Other non-food businesses

  1,787

  339

  Mixed retail businesses

  452

  567

  Hire and repair businesses

  240

  65

  Source: CSO.

  1 Inclusive of VAT.

  2 The figures in this table include retail outlets and retail turnover of non-retail businesses.

  Teacher Vacancies
  Mr. Barry Jones
  To ask the Secretary of State for Wales, pursuant to his answer of 16 November to the hon. Member for Alyn and Deeside on teacher vacancies, what was the definition of teacher vacancy used in each survey.

  Sir Wyn Roberts
  The advice given to local education authorities on the definition of a teacher vacancy for the January survey was:"Returns are only required in respect of current vacancies (at 18 January 1990) for full-time permanent appointments or full-time appointments for at least one term's duration which

  195
  have been advertised but not filled. Resignations which have occurred too recently for the vacancy to have been advertised should not be included in the return. A post which has been filled by a temporary appointment pending the finding of a more permanent appointee should be regarded as a vacancy for this purpose but a post which is filled by an appointee whom it is desired to replace by somebody more suitably qualified should not be regarded as a vacancy for that reason alone."

  For the September survey LEAs were asked for information on vacancies for full-time permanent appointments or full-time appointments of at least one term's duration which have been externally advertised. LEAs were told that a post which had been filled by a temporary appointment of a term or more should be regarded as filled for this purpose, even if a permanent appointee is still actively being sought. Posts which there was no intention to fill in September 1990 were to be excluded.

  Bathing Waters
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will announce the results of the 1990 survey of bathing water quality in Wales; and if he will make a statement.

  Mr. Grist
  I refer the hon. Gentleman to the reply given to my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) on 14 November by my right hon. Friend the Secretary of State for the Environment and to the press notice, No. 638, issued on the same day. This included a list of Welsh bathing waters and indicated which had complied in 1990 with the coliform parameters set in the EC directive. A copy of the press notice was placed in the Library.

  Roads
  Mr. Wigley
  To ask the Secretary of State for Wales on what date the Welsh Office publication, "Roads in Wales: Progress and Plans for the 1990s", was first published; and if there were any changes, amendments, additions or deletions to this programme between that date and 31 October.

  Sir Wyn Roberts
  "Roads in Wales: Progress and Plans for the 1990s" was published in April 1989. Since then the following schemes have been added to the programme:

  A5 Holyhead improvement

  A5 Cefni Bridge—Llanfair PG

  A5 Stanley Embankment—Cefni Bridge

  A470 Blaenau Ffestiniog—Betws y Coed improvements

  A487 Penygroes—Llanllyfni bypass

  A550 Woodbank—Deeside Park (joint DTp/WO scheme)

  Information on these schemes and updated information on the schemes listed in "Roads in Wales" will be included in a supplement to be published in the new year.

HOUSE OF COMMONS

  Broadcasting (Direct Feed)
  Mr. Nicholas Bennett
  To ask the Lord President of the Council what representations he has received from commercial companies requesting a direct feed of the House proceedings subscriber service; and if he will make a statement.

  Mr. MacGregor
  I know of no such recent representations either to me or to my predecessor. Under 196
  the present arrangements, organisations wishing to take a clean feed from the Chamber must first approach House of Commons Broadcasting Unit Ltd., the company formed by the main broadcasters which has been licensed by the House to produce and distribute the signal. Those wishing to take coverage of Select or Standing Committees apply to Commons Committee Television, the company contracted for that purpose by the broadcasters. In either case the Select Committee on Broadcasting stands ready to arbitrate in any possible dispute over the terms on which access is granted to the signals. So far the Committee's intervention has not been required. If however, my hon. Friend has a particular case in mind, perhaps he would let me know.

HEALTH

  Young Offenders
  Mr. John Evans
  To ask the Secretary of State for Health (1) if he will make a statement on funding arrangements for secure units for young offenders;

  (2) how many secure units for young offenders are funded directly by his Department; and if he will make a statement.

  Mrs. Virginia Bottomley
  There are currently 33 approved secure units run by local authorities and two secure youth treatment centres run direct by the Department of Health. All these facilities are available for children in care who meet the admissions criteria. (Some will be offenders or alleged offenders). The costs of these placements are met by the placing authority. Certain children who have been convicted of grave crimes under section 53 of the Children and Young Persons Act 1933 may also be placed in these facilities on behalf of the Home Office by the Department of Health. The cost of these placements is borne by central Government. In addition, grants may be made by the Department of Health to local authorities towards the capital costs of providing such accommodation.

  Ring-fenced Funding
  Mr. Bernie Grant
  To ask the Secretary of State for Health (1) if he has any plans to issue guidance to local authorities on the distribution of moneys to local authorities which are ring-fenced specifically for drug, alcohol and mental health projects under the National Health Service and Community Care Act;

  (2) if moneys ring-fenced specifically for funding drug, alcohol and mental health projects under the National Health Service and Community Care Act are awarded to local authorities on the basis of existing services;

  (3) if he will take steps to ensure that local authorities pass on to existing drug, alcohol and mental health projects moneys ring-fenced for those purposes under the provisions of the National Health Service and Community Care Act 1990.

  Mr. Dorrell
  Guidance on the alcohol "and drugs services specific grant was issued last week, and on the mental illness specific grant in September (circulars LAC(90)11 and LAC(90)10 respectively, copies of which are available in the Library).

  Gulf Forces (Injuries)
  Mr. Nellist
  To ask the Secretary of State for Health (1) which hospitals in the West Midlands regional health authority area have been asked to prepare contingency plans for possible receipt of injured service personnel from the Gulf; and if he will make a statement;

  (2) what contingency plans are being studied to utilise the specialist units at the Queen Victoria hospital, East Grinstead, in the event of hostilities in the Gulf; and if he will make a statement.

  Mrs. Virginia Bottomley
  I refer the hon. Member to the reply I gave the hon. Member for Dunfermline, West (Mr. Douglas) on 16 November at column 248. In drawing up their contingency plans, regional health authorities are expected to take account of the services that could be made available by both general and specialist units.

  Salmonellosis and Listeriosis
  Mr. Hinchliffe
  To ask the Secretary of State for Health how many deaths occurred from(a) salmonellosis and (b) listeriosis in the last year for which figures are available.

  Mr. Dorrell
  [holding answer 12 November 1990]: The number of deaths registered in England and Wales in 1989 with salmonella1 as the underlying cause of death was 61.

  In the same period 16 deaths were registered with listeria2 as the underlying cause. In addition, a further 14 deaths of those aged under 28 days—for which no underlying cause is assigned—contained a mention on the certificate of listeria including congenital or maternal listeria.
  1 International Classification of Diseases (ICD) 9th revision code 003.
  2 ICD 027.0, 771.2 (part), 655.4 (part).

OVERSEAS DEVELOPMENT

  Aid Target
  Mrs. Mahon
  To ask the Secretary of State for Foreign and Commonwealth Affairs when overseas aid will reach the United Nations aid target of 0·7 per cent. of gross national product.

  Mrs. Chalker
  The Government have accepted the UN target for official development assistance of 0·7 per cent. of GNP in principle but, like previous Administrations and many other donors, have not set a timetable to achieve it. Progress towards it must depend upon economic circumstances and other calls on Government resources.

  Aid Programme
  Mrs. Mahon
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the level of the aid programme in real terms in 1979 and in the latest available year.

  Mrs. Chalker
  In 1989 gross public expenditure on aid was £1,788 million compared with £1,940 million in 1979 at 1989 prices.

ATTORNEY-GENERAL

  Anti-Jewish Literature
  Mr. Janner
  To ask the Attorney-General if he will list the criteria used to assess whether the public interest is served by the prosecution of those alleged to have published or distributed anti-Jewish literature.

  The Attorney-General
  An assessment concerning the public interest is relevant only whenever it is considered that there is a realistic prospect of securing a conviction for an offence.

  The general considerations applicable to the public interest aspect of the decision whether to prosecute are set out at paragraphs 7 to 9 of the code for Crown prosecutors. This guidance is necessarily in general terms because individual cases have to be considered on their own merits. Factors likely to be of particular relevance to cases of the nature referred to in the hon. and learned Member's question are the prevalence of the conduct and its seriousness. In this context the Director of Public Prosecutions and I have made plain our view that we regard the publication and distribution of material which offends against the provisions of part III of the Public Order Act 1986 as a serious matter.

  The criteria set out in the code are founded on the observations of the right hon. and noble Lord, Lord Shawcross, a former Attorney-General, which are quoted in the code, who said that regard must be had to
  "the effect which the prosecution, successful or unsuccessful as the case may be, would have upon public morale and order, and with any other considerations affecting public policy".

  "Holocaust Myths"
  Mr. Janner
  To ask the Attorney-General what consideration has been given by the Director of Public Prosecutions to initiating proceedings in respect of the publication entitled "Holocaust Myths", distributed by the Association of British Ex-Servicemen.

  The Attorney-General
  A police report has been referred to the Director of Public Prosecutions concerning a leaflet entitled "Question: how long can the Jews perpetrate the holocaust myth" and other publications allegedly distributed by the Association of British Ex-Servicemen.

  The police have been requested to forward further evidence resulting from their inquiries and on receipt of this a decision will be taken concerning the institution of proceedings.

PRIME MINISTER

  Homelessness
  Mr. Corbyn
  To ask the Prime Minister what plans she has to meet representatives of the homeless in London.

  The Prime Minister
  I have no such plans. My right hon. Friend the Secretary of State for the Environment and his ministerial colleagues have regular meetings with voluntary groups working with the homeless, and with local authorities in London and their associations.

  Forestry
  Mr. Ron Davies
  To ask the Prime Minister if she will set out the responsibility for forestry of each of the Minister of Agriculture, Fisheries and Food Secretary of State for Wales, Secretary of State for Scotland and Secretary of State for Northern Ireland; and when the respective responsibilities were last changed.

  The Prime Minister
  The Minister of Agriculture, Fisheries and Food, the Secretary of State for Wales and the Secretary of State for Scotland have individual territorial responsibility for forestry matters in England, Wales and Scotland respectively. They act jointly on forestry policy questions affecting Great Britain as a whole, with the Secretary of State for Scotland taking the lead. The Secretary of State for Northern Ireland has responsibility for all forestry questions in Northern Ireland.

  These arrangements are of long standing and were last changed in 1979 when the Secretary of State for Scotland assumed lead responsibility for policy questions in Great Britain.

  Conservative Leadership Contest
  Mr. Winnick
  To ask the Prime Minister what steps were taken to ensure that no member of her press department was involved in briefing the media on the Conservative leadership contest; and if she will make a statement.

  The Prime Minister
  My press office is aware of its responsibilities.

  Mr. Charles Powell
  Mr. Winnick
  To ask the Prime Minister (1) if she will set out the full duties carried out by Mr. Charles Powell;

  (2) how long Mr. Charles Powell has been employed in her office; and how long she intends him to be employed in his current position.

  The Prime Minister
  Mr. Powell serves as my private secretary for foreign affairs and will serve in my office until it is time for him to leave.

  Correspondence
  Mr. Parry
  To ask the Prime Minister if she will place in the Library a copy of the letter received from the Roman Catholic Archbishop of Baghdad and a copy of her reply; and if she will make a statement.

  The Prime Minister
  [holding answer 20 November 1990]: No. It is not my normal practice to do so.

FOREIGN AND COMMONWEALTH AFFAIRS

  British Hostages (Lebanon)
  Mr. John Evans
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent initiatives have been taken by the Government to ensure the release of the British hostages held in the Lebanon.

  Mr. Douglas Hogg
  I refer the hon. Member to my right hon. Friend the then Minister of State's answer to him of 15 October, Vol. 177, c.752.

  Single European Act
  Mr. Harry Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what date or dates and on what occasions a representative of the Crown signed the Single European Act treaty; and who was the representative.

  Mr. Lennox-Boyd
  The Single European Act treaty was signed at plenipotentiary meetings in Luxembourg on 17 February 1986 and in The Hague on 28 February 1986. On both occasions the Government were represented by my right hon. Friend the Member for Wallasey (Mrs. Chalker), the then Minister of State, Foreign and Commonwealth Office.

  Baltic States
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to support the request by the three Baltic states to be given observer status at the forthcoming CSCE conference in Paris.

  Mr. Douglas Hogg
  We welcomed the decision of the French Government to invite representatives of the Baltic states to attend the CSCE summit as "distinguished guests". We look forward to a time when it will be possible for the Baltic states to participate in the CSCE process as full members. However, membership and observer status are open only to states internationally recognised as such. The Baltic states are not recognised as independent states.

  Soviet Union
  Ms. Quin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if his Department intends to take steps to provide any urgent economic assistance for the Soviet Union to counteract shortages of food and consumer goods; and if he will make a statement.

  Mr. Douglas Hogg
  We are already offering the Soviet Union assistance in introducing economic reform, in particular through our know-how fund. We have not yet received a specific request for humanitarian assistance from the Soviet Union. We shall continue to pay very close attention to the Soviet Union's economic difficulties, and are sure that the EC would consider any justified request for humanitarian aid urgently and sympathetically.

  Romania
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Romania concerning claims that political prisoners, confined to mental institutions by the late President Ceausescu, have not yet been released.

  Mr. Douglas Hogg
  We are aware of a recent television report to this effect, but the British embassy in Bucharest has not been able to provide further information. If the hon. Member will share with us any evidence he may have, we shall consider it with a view to taking up the matter with the Romanian authorities.

  Iraq (Hostages)
  Ms. Quin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his Department's policy towards the sending of gifts by friends and relatives to hostages in Iraq.
  201
  Mr. Douglas Hogg
  We are in touch with the British Red Cross Society, which hopes to arrange for Red Cross parcels to be sent by families in the United Kingdom to the detainees in Iraq. Our embassy in Baghdad has been sending local comfort parcels to detainees in Iraq and these are beginning to get through. The United Kingdom has suspended postal services to Iraq in order to implement sanctions imposed by UN Security Council resolution 661.

SCOTLAND

  Civil Defence
  Mr. Bill Michie
  To ask the Secretary of State for Scotland how many civil servants are currently employed(a) full time and (b) part time by his Department on civil defence; what the total costs of employing staff on civil defence duties were in 1989–90; what the total costs of employing staff on civil defence duties are expected to be in 1990–91; and whether he has any plans for these staff to be transferred to work on other duties.

  Lord James Douglas-Hamilton
  Information on manpower and employment costs is set out in the table:

  Numbers and costs

  Number of full-time staff employed on 16 November 1990

  15

  Number of part-time staff employed on 16 November 1990

  16

  Total cost 1989–90

  £316,974

  Estimated total cost 1990–91

  £302,848

  New dwellings started by local authority 1979 to June 1990

  Area

  Year

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  Jan-June

  Borders

  Berwickshire

  27

  2

  —

  —

  15

  26

  24

  15

  33

  —

  —

  —

  Ettrick and Lauderdale

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Roxburgh

  16

  7

  52

  34

  42

  12

  —

  8

  50

  —

  1

  1

  Tweeddale

  48

  8

  10

  —

  —

  —

  —

  12

  44

  4

  4

  8

  Central

  Clackmannan

  64

  —

  —

  —

  1

  23

  30

  —

  18

  17

  —

  —

  Falkirk

  51

  24

  68

  40

  39

  144

  40

  95

  17

  —

  —

  —

  Stirling

  126

  70

  14

  37

  2

  10

  6

  —

  —

  —

  —

  —

  Dumfries and Galloway

  Annandale and Eskdale

  202

  118

  94

  173

  178

  4

  48

  46

  16

  51

  36

  24

  Nithsdale

  61

  63

  28

  28

  —

  68

  74

  76

  58

  88

  20

  26

  Stewartry

  42

  7

  63

  65

  64

  —

  62

  6

  16

  46

  34

  —

  Wigtown

  93

  22

  68

  64

  78

  28

  —

  46

  14

  26

  —

  5

  Fife

  Dunfermline

  101

  18

  83

  101

  14

  24

  190

  56

  133

  36

  —

  —

  Kirkcaldy

  56

  56

  61

  13

  121

  73

  85

  98

  221

  86

  34

  28

  North East Fife

  71

  142

  35

  118

  74

  43

  22

  67

  18

  19

  20

  137

  Grampian

  Aberdeen

  440

  243

  63

  121

  75

  103

  81

  91

  185

  35

  12

  97

  Banff and Buchan

  156

  300

  110

  155

  127

  129

  52

  45

  91

  65

  —

  19

  Gordon

  —

  22

  99

  146

  129

  72

  61

  171

  47

  145

  80

  72

  Kincardine and Deeside

  —

  10

  70

  54

  56

  38

  153

  43

  140

  19

  42

  52

  Moray

  527

  211

  96

  211

  100

  47

  76

  71

  161

  78

  75

  12

  Highland

  Badenoch and Strathspey

  28

  41

  54

  38

  16

  16

  —

  13

  —

  12

  11

  —

  Caithness

  74

  30

  —

  14

  71

  —

  17

  39

  24

  27

  10

  —

  202
  The staff shown as part time undertake civil defence duties as part of their wider emergency planning responsibilities. In addition some staff in the Scottish Office directorate of telecommunications are similarly involved in emergency planning work.

  My right hon. and learned Friend together with the Home Secretary announced on 16 October a review of the options for the future of civil defence arrangements in the light of east-west relations. Future levels of expenditure on civil defence will depend on the outcome of that review.

  Conservation
  Mr. Macdonald
  To ask the Secretary of State for Scotland whether his proposal to create a Scottish Natural Heritage Agency includes a proposal to house the Scottish Nature Conservancy Council and Countryside Commission for Scotland in a single headquarters building.

  Lord James Douglas-Hamilton
  The Government stated that there should be one headquarters at section III, paragraph 23 of the consultation paper "Scotland's Natural Heritage: The Way Ahead".

  Housing
  Mr. Maxton
  To ask the Secretary of State for Scotland how many new dwellings were started by each district and islands council in each year since 1979 to the latest available date.

  Lord James Douglas-Hamilton
  The information is set out in the table:
  203

  Area

  Year

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  Jan-June

  Inverness

  113

  38

  68

  56

  80

  89

  129

  34

  65

  71

  75

  30

  Lochaber

  90

  —

  18

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Nairn

  —

  —

  —

  —

  —

  23

  21

  6

  16

  28

  —

  20

  Ross and Cromarty

  81

  79

  23

  35

  69

  25

  26

  43

  39

  28

  29

  19

  Skye and Lochalsh

  25

  9

  13

  —

  16

  8

  52

  12

  8

  61

  4

  14

  Sutherland

  26

  9

  12

  34

  11

  29

  8

  35

  34

  48

  28

  1

  Lothian

  East Lothian

  31

  —

  17

  137

  21

  95

  39

  40

  57

  68

  —

  25

  Edinburgh

  35

  110

  —

  —

  —

  —

  —

  115

  107

  154

  —

  —

  Midlothian

  24

  —

  —

  —

  —

  7

  —

  14

  —

  12

  —

  9

  West Lothian

  —

  —

  —

  2

  —

  —

  —

  —

  91

  —

  —

  —

  Strathclyde

  Argyll and Bute

  67

  47

  58

  —

  94

  —

  —

  73

  41

  —

  26

  10

  Bearsden and Milngavie

  76

  —

  56

  12

  —

  16

  —

  35

  6

  —

  6

  —

  Clydebank

  106

  23

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Clydesdale

  22

  34

  33

  20

  14

  4

  29

  1

  24

  11

  38

  1

  Cumbernauld and Kilsyth

  32

  3

  —

  16

  8

  —

  —

  6

  —

  —

  —

  —

  Cumnock and Doon Valley

  77

  4

  8

  —

  12

  2

  —

  6

  4

  —

  —

  —

  Cunninghame

  54

  60

  29

  74

  58

  47

  48

  22

  23

  31

  29

  1

  Dumbarton

  8

  —

  —

  —

  —

  —

  6

  18

  8

  18

  —

  —

  East Kilbride

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Eastwood

  —

  3

  14

  —

  36

  40

  1

  14

  58

  —

  35

  —

  Glasgow

  777

  227

  —

  94

  118

  —

  49

  —

  —

  —

  —

  —

  Hamilton

  131

  22

  100

  116

  52

  83

  —

  —

  43

  18

  —

  —

  Inverclyde

  12

  —

  26

  —

  —

  64

  —

  —

  —

  —

  37

  —

  Kilmarnock and Loudoun

  40

  —

  —

  12

  21

  —

  —

  —

  —

  —

  —

  —

  Kyle and Carrick

  127

  17

  96

  20

  64

  34

  59

  11

  36

  13

  30

  —

  Monklands

  21

  32

  —

  48

  30

  —

  —

  —

  51

  5

  —

  1

  Motherwell

  209

  26

  42

  8

  —

  —

  36

  —

  —

  —

  —

  —

  Renfrew

  89

  212

  71

  148

  —

  22

  10

  64

  27

  —

  —

  —

  Strathkelvin

  —

  40

  —

  —

  19

  —

  24

  13

  —

  —

  —

  —

  Tayside

  Angus

  13

  —

  6

  40

  46

  29

  83

  48

  65

  53

  50

  12

  Dundee

  83

  82

  84

  49

  8

  56

  3

  4

  1

  —

  5

  1

  Perth and Kinross

  65

  114

  37

  118

  75

  174

  —

  —

  —

  —

  —

  —

  Islands Councils

  Orkney Islands

  17

  28

  —

  43

  8

  14

  4

  11

  37

  14

  38

  15

  Shetland Islands

  136

  66

  30

  49

  23

  30

  4

  36

  4

  36

  124

  1

  Western Isles

  88

  91

  28

  42

  56

  4

  41

  12

  14

  10

  2

  —

  1 Returns are incomplete.

  Dyslexia
  Mr. Robert Hughes
  To ask the Secretary of State for Scotland if his Department accepts dyslexia as a condition requiring specialist education; which regional education departments recognise dyslexia as a condition requiring specialist education; which regional education departments provide in-house specialised education for dyslexic children; which regional education departments send children to private schools specialising in education for dyslexic children; and which specialist private schools are registered with his Department as establishments which provide specialist dyslexic education.

  Mr. Michael Forsyth
  The term dyslexia denotes specific learning difficulties which may cause a child to have special educational needs. It is the responsibility of education authorities to provide for such needs, which they may do in mainstream schools, special units or special schools, including independent special schools. The other information requested is not available.

  Property Law
  Mr. Maclennan
  To ask the Secretary of State for Scotland when he anticipates receiving the report of the Scottish Law Commission following its review of property law in Scotland.

  Lord James Douglas-Hamilton
  The preparation of the Scottish Law Commission's report on land tenure reform will be preceded during the course of 1991 by a discussion paper and subsequent public consultation.

  Student Unions
  Mr. Worthington
  To ask the Secretary of State for Scotland (1) on what grounds the press release on student unions issued by his Department on Friday 16 November was withdrawn;

  (2) who instructed the withdrawal of the press release on student unions issued by his Department on Friday 16 November;

  (3) what were the differences between the press releases on student unions issued on Friday 16 November and Sunday 18 November.

  Mr. Rifkind
  A news release about consultation on student unions, the text of which was still under
  205
  consideration, was issued prematurely on Friday 16 November. It was withdrawn under established procedure as soon as the error became apparent, and the final version was issued on Sunday 18 November.

  Mr. Worthington
  To ask the Secretary of State for Scotland whether he intends to introduce legislation following the consultation on student unions.

  Mr. Michael Forsyth
  My right hon. and learned Friend has no plans to do so.

  Mr. Worthington
  To ask the Secretary of State for Scotland whether he will make available the responses to his first series of consultations about student unions in Scotland.

  Mr. Michael Forsyth
  A copy of the publication "Student Union Survey: Analysis" was placed in the House Library last year.

  Mr. Worthington
  To ask the Secretary of State for Scotland whether the consultation proposed on student unions includes discussion on freedom of speech.

  Mr. Michael Forsyth
  The scope of the proposed consultation has yet to be decided.

  Public Sector Tenants (Property Purchases)
  Mr. Canavan
  To ask the Secretary of State for Scotland which housing authorities and housing associations operate a Government-assisted financial incentive scheme to encourage tenants to buy homes in the private sector in order to release rented accommodation for other people; and if he will give details of any such schemes and the legislation under which they operate.

  Lord James Douglas-Hamilton
  Section 66 of the Housing (Scotland) Act 1988 makes provision for local authorities to draw up schemes, for the approval of my right hon. and learned Friend, to offer payments to assist tenants to obtain accommodation in the private sector. This releases council housing for letting to homeless or others in housing need. There is no requirement on local authorities to draw up such schemes.

  Bearsden and Milngavie district council is the first local authority in Scotland to receive approval to operate a cash incentive scheme. The council has allocated £100,000 towards the scheme which commenced on 1 September 1990 and will offer qualifying tenants up to £10,000 towards the purchase of alternative property. A further three authorities have submitted proposals to operate such schemes and these are currently under consideration.

  The tenants' incentive scheme available to housing associations is operated by Scottish Homes under section 2(2) of the Housing (Scotland) Act 1988. I have asked the chairman of Scottish Homes to write direct to the hon. Member giving details of the scheme.

DEFENCE

  NATO
  Mr. Cohen
  To ask the Secretary of State for Defence if he will make a statement on the United Kingdom's involvement in NATO's guerrilla resistance organisation; and whether he has any plans to launch an investigation into its operations along the lines of those set up by the Belgian and Italian Governments.
  206
  Mr. Archie Hamilton
  It is not the Government's practice to comment on such questions.

  The Gulf
  Mr. David Nicholson
  To ask the Secretary of State for Defence what representations he has had, from hon. Members and others, about delays in despatching mail to Her Majesty's forces in the Gulf; and if he will make a statement.

  Mr. Archie Hamilton
  No formal representations have been received from hon. Members or others about delays in despatching mail to Her Majesty's forces in the Gulf. Under the forces postal concessionary scheme letters and packets are automatically sent by air, currently arriving within about five days. Under the same scheme, parcels are transported by air on a fill-up basis, currently arriving within about 10 days.

  Mr. Winnick
  To ask the Secretary of State for Defence what facilities will be provided for allied troops in Saudi Arabia to celebrate Christmas; and if he is satisfied that religious practices can be observed by the troops stationed in that country.

  Mr. Archie Hamilton
  Arrangements are being made to ensure that our forces will be able to celebrate Christmas and the new year properly, subject to the need to maintain military preparedness. Arrangements are always made for the pastoral and spiritual support of United Kingdom forces.

  Mr. Amess
  To ask the Secretary of State for Defence if he will make a statement on the further deployment of British forces to the Gulf.

  Mr. Archie Hamilton
  I refer my hon. Friend to the statement made by my right hon. Friend today.

  Tornado
  Mr. Jack
  To ask the Secretary of State for Defence if he will make a statement on the present situation of and progress towards the weapons enhancement project for the Tornado F3.

  Mr. Alan Clark
  A feasibility study into a possible weapons system upgrade for the Tornado F3 has been undertaken. This study is now under consideration.

  Ulster Defence Regiment
  Mr. Maginnis
  To ask the Secretary of State for Defence what proposals are in hand to close some Ulster Defence Regiment company bases; and what consideration he has given to the social implications of such proposals.

  Mr. Archie Hamilton
  The requirement for all military bases in Northern Ireland is kept under review to ensure that resources are used to the best effect in dealing with the terrorist threat. Before any decision is reached in respect of a particular base all relevant factors are taken into account.

  Territorial Army
  Mr. John Morris
  To ask the Secretary of State for Defence what proposals have been made regarding the amalgamation of the Territorial Army district covering all
  207
  Wales with the north-west of England, and who he will consult before further consideration is given to this proposal.

  Mr. Archie Hamilton
  We have no plans to reorganise the Territorial Army regions. Regarding the review of the United Kingdom land forces district structure, I refer the right hon. and learned Member to the reply I gave to the hon. Member for Brecon and Radnor (Mr. Livsey) on 20 November at column 80.

  Aldershot Military Hospital
  Dr. Thomas
  To ask the Secretary of State for Defence what is the total cost of relocating the staff and facilities from the Aldershot military hospital to the field hospital at Jubayl in Saudi Arabia; and how many(a) surgeons and (b) anaesthetists have been relocated.

  Mr. Archie Hamilton
  Information on the costs of deploying staff and facilities from the Cambridge military hospital Aldershot to the field hospital at Jubayl in Saudi Arabia is not currently available. Five surgeons and five anaesthetists from the Cambridge military hospital Aldershot have been deployed to Jubayl.

  Air-to-Surface Missile
  Mr. Cartwright
  To ask the Secretary of State for Defence when he expects to decide between the various options for the tactical air-to-surface missile.

  Mr. Archie Hamilton
  Our consideration of the various options is continuing. The House will be informed as soon as a decision is taken.

  Service Discipline
  Mr. O'Neill
  To ask the Secretary of State for Defence whether he will place in the Library copies of the most recently published leaflets which each of the three services makes available to those charged under the Service Discipline Acts.

  Mr. Archie Hamilton
  Copies of the most recently published leaflets which each of the three services makes available to those charged under the Service Discipline Acts have been placed in the Library of the House.

  Training
  Mr. O'Neill
  To ask the Secretary of State for Defence what information is made available to service personnel who are due to leave the services regarding training opportunities available from non-Ministry of Defence organisations.

  Mr. Archie Hamilton
  Information about pre-release training in the form of external courses sponsored by the Ministry of Defence and attachments to outside organisations is available for resettlement officers; the service resettlement bulletins published about six times a year; a Defence Council instruction issued each year, giving details of the programme of briefings and courses for the following 12 months; and other internal newsletters and publications. Additionally a range of post-release training options is available to former service personnel, including Government-sponsored courses. Information about these is included in the Training Agency booklet 208
  "Employment Training for Ex-Regulars", copies of which are held by resettlement officers, who are responsible for making personnel aware of its contents. Finally, all personnel attending their final resettlement interview receive copies of the booklet "Employment in Civilian Life" and officers also receive a booklet entitled "Leaving the Services". These booklets, which are both published by the Employment Service, include chapters on occupational training.

  Ethnic Minorities
  Mr. O'Neill
  To ask the Secretary of State for Defence what steps have been taken in the last year to include a more positive image of ethnic minorities in recruitment advertising to the services.

  Mr. Archie Hamilton
  We have included more photographs of ethnic minority personnel in a wider diversity of circumstances in our recruitment advertising and given greater prominence to the fact that the armed forces are equal opportunity employers under the terms of the Race Relations Act.

  Mr. O'Neill
  To ask the Secretary of State for Defence what additional training has been given in the last year to recruitment officers to increase the number of applicants from ethnic minorities into the services.

  Mr. Archie Hamilton
  As part of the wide range of measures now being taken to attract more recruits from the ethnic minorities, the Army and RAF have in the course of this year introduced race relations and cultural awareness into the training syllabus for their recruiting staff. The Navy will introduce similar training in the new year.

NORTHERN IRELAND

  Single European Market
  Mr. Jack
  To ask the Secretary of State for Northern Ireland what initiatives his Department is following to ensure that Northern Ireland industry is able to respond to the completion of the single European market in 1992.

  Mr. Needham
  The Department has a whole series of initiatives to assist Northern Ireland businesses compete in the single market.

  Security
  Mr. A. Cecil Walker
  To ask the Secretary of State for Northern Ireland what further steps he proposes to improve the security situation in north Belfast.

  Mr. Cope
  The Secretary of State and I have regular and frequent meetings with our security advisers to discuss security not only in north Belfast but in Northern Ireland as a whole. New security measures are constantly being explored and where they are considered practical they are implemented.

  Flags
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many persons have received damages arising from the distress caused by(a) the flying

  209
  of the Union flag at their place of work and (b) the flying of the Southern Irish tricolour at their place of work in each of the past three years.

  Mr. Cope
  I am not aware of any individual having received damages or claiming damages from distress as a result of flag flying at his workplace.

  Planning
  Mr. Clifford Forsythe
  To ask the Secretary of State for Northern Ireland what plans he has to restore planning decisions to democratically elected representatives on district councils.

  Dr. Mawhinney
  The Government have no plans at present to restore responsibility for planning decisions to district councils. However, we remain ready to consider any proposals for transferring political power, authority and responsibility to locally elected representatives in Northern Ireland on a basis which would be likely to prove widely acceptable.

  Political Development
  Mr. Maclennan
  To ask the Secretary of State for Northern Ireland if he will make a statement on the progress of his consultations on political development.

  Mr. Brooke
  I refer the hon. Member to the answer I gave earlier today to my hon. Friend the Member for Beverley (Mr. Cran).

  Colin Wallace
  Mr. Campbell-Savours
  To ask the Secretary of State for Northern Ireland whether he will make it his policy to provide all information required by the Select Committee on Defence in the carrying out of its inquiries into the affairs of Colin Wallace.

  Mr. Cope
  We would naturally give all appropriate assistance to the Committee in response to any inquiries which it may make in connection with Colin Wallace.

  Students
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many Northern Ireland students were successful in obtaining places in(a) Queen's university and (b) the university of Ulster for the academic courses commencing 1990; and how many unsuccessful applicants have been accepted into courses in universities, polytechnics and so on, in Great Britain commencing in the current year.

  Dr. Mawhinney
  Provisional figures for the 1990–91 academic year show that the number of Northern Ireland students who obtained places in Northern Ireland universities was as follows:

  number

  Queen's University

  3,600

  University of Ulster

  4,944

  Information is not available on the destinations of applicants who were unsuccessful in gaining a place in Northern Ireland universities.

  Armagh UDR
  Mr. Trimble
  To ask the Secretary of State for Northern Ireland whether he has received any representations in respect of the four Armagh Ulster Defence Regiment men.

  Mr. Cope
  Yes.

EMPLOYMENT

  Youth Training Scheme
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will provide details of the scheme-by-scheme ethnic monitoring statistics for the youth training scheme for each year since 1984 until the most recent date in the following areas: Manchester Central, Manchester East and Manchester North.

  Mr. Jackson
  The information requested could be provided only at disproportionate cost.

  Offshore Oil Installations
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment what discussions he has had with the director-general of the Health and Safety Executive about organisational changes necessary to accommodate the transfer of responsibility for offshore oil installations; what conclusions were reached; and what extra financial resources will now be made available for each financial year for which plans have been made.

  Mr. Forth
  I refer the hon. Member to the statement my right hon. Friend the Secretary of State for Energy made to the House on 12 November, regarding the transfer of responsibilities for offshore oil installations to the Health and Safety Executive (HSE). The commission has already confirmed its acceptance of the transfer, and preparatory work is now proceeding in my Department, the Departments of Energy and Transport and in the HSE to ensure that the transfer is completed as efficiently and speedily as possible. No detailed decisions have yet been made on the question of appropriate resources. But, as my right hon. Friend assured the House in his statement, offshore safety will not be sacrificed through lack of resources.

  Foreign Domestic Servants
  Mr. Nicholas Bennett
  To ask the Secretary of State for Employment what representations he has received about the treatment of foreign domestic servants employed in the United Kingdom; and if he will make a statement.

  Mr. Forth
  Ministers in both this Department and the Home Office have received representations and recognise the concern that reports of abuse cause in this country. The Home Office carried out a review earlier this year of the exceptional arrangements outside the immigration rules and the work permit scheme under which a domestic servant who has worked abroad for an employer who comes to the United Kingdom can be admitted to work for him. The outcome of this review was announced in another place by my noble Friend Lord Ferrers in reply to a question from Lord Hylton on 24 July at columns 1449–50. It is hoped that the new arrangements can be implemented soon.

  Equal Opportunities
  Ms. Richardson
  To ask the Secretary of State for Employment (1) what steps he is taking to clarify employment rights and employment-related benefits to women who work between the ages of 60 and 65 years in view of the recent settlement by Barclays bank; and if he will make a statement;

  (2) what assessment he has made of the implications for women in work between the ages of 60 and 65 years and their employers in view of the recent settlement by Barclays bank: and if he will make a statement.

  Mr. Jackson
  The Barclays bank case related to dismissal.

  The Sex Discrimination Act 1975, as amended by the Sex Discrimination Act 1986, makes it unlawful for employers to set different compulsory retirement ages for men and women in comparable positions. It is for the courts to interpret the law as it applies to the facts of a particular case and we do not consider that any action is called for.

  Subject to the law, terms and conditions of employment, including retirement age, are matters for agreement between employers and employees.

  Disabled People
  Mr. Flynn
  To ask the Secretary of State for Employment what were the percentages of disabled staff employed in(a) his Department and (b) other Government Departments in each of the past 10 years.

  Mr. Jackson
  The percentages of registered disabled staff in the civil service are set out in the table for the years for which records are available. In 1990 the Department of Employment group employed 3·2 per cent. registered disabled. The Office of the Minister for the Civil Service publishes these figures annually in "Independent" magazine, which is in the Library. Registration is voluntary and Departments employ people with disabilities who are not registered.

  Table: Registered Disabled People in the Civil Service1

  Percentage

  1986

  1987

  1988

  1989

  MAFF

  1·2

  1·3

  1·3

  1·4

  Cabinet Office

  1·1

  1·0

  0·8

  1·0

  Customs and Excise

  1·4

  1·3

  1·2

  1·6

  MOD

  1·0

  1·0

  0·9

  1·0

  DES

  2·2

  2·0

  2·1

  2·6

  Employment Group

  2·1

  2·1

  2·2

  2·7

  Energy

  0·6

  1·2

  1·1

  1·2

  Environment2

  —

  —

  —

  1·0

  ECGD

  1·5

  1·4

  1·3

  1·3

  FCO

  0·8

  0·7

  0·4

  0·5

  Health2

  —

  —

  —

  0·7

  Home Office

  0·5

  0·4

  0·4

  0·3

  DTI

  1·5

  1·2

  1·2

  1·2

  Inland Revenue

  1·5

  1·5

  1·5

  1·5

  Land Registry

  2·4

  2·4

  2·8

  2·7

  LCD

  1·4

  1·4

  1·1

  1·3

  DNS

  3·1

  2·9

  2·7

  3·0

  OPCS

  2·1

  2·2

  2·3

  2·3

  Ordnance Survey

  1·1

  1·0

  0·9

  0·9

  ODA

  1·1

  1·2

  1·3

  1·2

  PSA2

  —

  —

  —

  1·2

  Public Record Office

  3·8

  3·3

  2·7

  1·9

  Royal Mint

  3·1

  3·7

  3·5

  2·9

  Scottish Office

  1·7

  1·7

  1·4

  1·4

  Social Security2

  —

  —

  —

  1·5

  Transport2

  —

  —

  —

  1·2

  212

  1986

  1987

  1988

  1989

  HMSO

  1·3

  1·7

  1·8

  1·9

  HM Treasury

  1·3

  1·3

  1·4

  1·1

  Welsh Office

  1·6

  1·4

  1·3

  1·2

  Total3

  1·3

  1·3

  1·3

  1·3

  1 Part-time staff counted as half units.

  2 The Department of Health and Social Security and Environment Group has recently been divided into separate departments. Information for the new departments is only available for 1989.

  3 Total includes a number of smaller departments and agencies not listed in the table.

  Self-employment
  Mr. Flynn
  To ask the Secretary of State for Employment what is his estimate of the total of people self-employed in each of the past 10 years.

  Mr. Forth
  The information is given in the table.

  Self-employed persons in the United Kingdom

  June

  Number

  1980

  2,013,000

  1981

  2,119,000

  1982

  2,170,000

  1983

  2,221,000

  1984

  2,496,000

  1985

  2,610,000

  1986

  2,627,000

  1987

  2,860,000

  1988

  2,986,000

  1989

  3,240,000

  1990

  3,380,000

SOCIAL SECURITY

  Income Support
  Ms. Richardson
  To ask the Secretary of State for Social Security what the cost would be if the proposals on the maintenance of children were implemented but parents solely dependent on benefit were allowed to keep(a) £5, (b) £10 or (c) £15 before income support was deducted.

  Mrs. Gillian Shephard
  The estimated costs of a maintenance disregard in income support are in the table.

  Amount of disregard (£)

  Total cost (£ million)

  5

  70

  10

  130

  15

  180

  Mr. Flynn
  To ask the Secretary of State for Social Security what changes he intends to introduce to improve the levels of income support payable to 16 and 17-year-olds.

  Mrs. Gillian Shephard
  Benefit rates will be uprated from next April in the normal way. We are continuing to monitor the effects of the social security reforms and to make improvements where appropriate; for example, since July 1989 16 and 17-year-olds who have no option but to live independently have been entitled to the higher level of benefit normally paid to 18 to 24-year-olds.

  Research into the operation of the income support rules for 16 and 17-year-olds has been commissioned. The results are expected around Easter 1991.

  Pensions
  Mr. Redmond
  To ask the Secretary of State for Social Security what action he is taking to change the calculation for payment of the basic state pension from relating it to prices to that of earnings; and if he will make a statement.

  Mr. Scott
  We have no plans to do so.

  Redundancies
  Mrs. Dunwoody
  To ask the Secretary of State for Social Security how many redundancies are expected to be created by computerisation and the consolidation of local offices into local management units.

  Mrs. Gillian Shephard
  No compulsory redundancies will be needed as a result of the Department's computerisation programme (the operational strategy) provided staff co-operate in implementing the necessary personnel measures to achieve staff savings. Much of the reduction in staffing will be gained by natural wastage and, where this is not the case, the needs of staff will be taken into account as far as possible.

  The management of the local office network is being restructured because changes in procedures as a result of the operational strategy and the setting up of the Contributions Agency meant that the existing offices no longer formed viable management units. There are no plans to reduce the number of outlets. This restructuring will result in a modest saving at managerial level. A voluntary redundancy scheme is in place for the staff.

  Child Benefit
  Mr. Canavan
  To ask the Secretary of State for Social Security what is the estimated cost of sending out questionnaires to recipients of child benefit as a result of the benefit changes recently announced; and to what categories of recipients the questionnaires were sent.

  Mrs. Gillian Shephard
  To enable the increased amount of child benefit to be taken into account correctly in their assessment from uprating, letters will be sent, between 26 November and 1 March 1991, to all income support recipients, who are paid by the income support computer system, who receive child benefit. The cost of sending these out is about £150,000.

  National Insurance
  Mr. Flynn
  To ask the Secretary of State for Social Security what is the total number of people who have been paying the self-employed national insurance contribution during each of the past 10 years.

  Mr. Scott
  The United Kingdom figures of the number of individuals who paid class 2 (self-employed) national insurance contributions between April 1978 and April 1988 are set out in the table.

  Number1 (thousands)

  Number2 (thousands)

  1978–79

  1,314

  214

  1979–80

  1,376

  232

  1980–81

  1,450

  211

  1981–82

  1,479

  218

  1982–83

  1,526

  240

  1983–84

  1,594

  251

  214

  Number1 (thousands)

  Number2 (thousands)

  1984–85

  1,663

  251

  1985–86

  1,732

  261

  1986–87

  1,850

  295

  1987–88

  1,959

  336

  1 Who paid only Class 2 contributions during this year.

  2 Who paid a mixture of Class 2 and Class 1 contributions during the year.

  Statutory Sick Pay
  Mr. Flynn
  To ask the Secretary of State for Social Security what is his estimate of the effects of the planned changes in the future employment of the disabled that will result from the passage of the Statutory Sick Pay Bill.

  Mr. Scott
  The provisions of the Statutory Sick Pay Bill relating to employers' reimbursement arrangements for SSP will have no direct effect on employees. We do not believe that they will lead to any change in the pattern of employment of people with disabilities. Other factors are of far greater importance in determining job opportunity for disabled people, which a wide variety of policies are designed to promote.

  Disabled Staff
  Mr. Flynn
  To ask the Secretary of State for Social Security what was the percentage of disabled staff employed in his Department in each of the past 10 years.

  Mrs. Gillian Shephard
  The figures for the Department of Social Security at June 1989 and June 1990 are as follows:

  Year

  Percentage of registered disabled staff per cent.

  1989

  1·53

  1990

  1·70

  Separate figures are not held for this Department prior to June 1989. This does not include staff with disabilities who are not registered as disabled.

  Cold Weather Payments
  Mr. Robert G. Hughes
  To ask the Secretary of State for Social Security if he intends making any changes to the social fund cold weather payments scheme for the forthcoming winter.

  Mr. Scott
  I am pleased to tell my hon. Friend that yesterday, Wednesday 21 November, my right hon. Friend the Secretary of State laid before the House the Social Fund Cold Weather Payments (General) Amendment Regulations.

  The effect of these changes will he to better ensure that conditions in different local areas are properly reflected in the scheme. Copies of the regulations are available in the Vote Office.

AGRICULTURE, FISHERIES AND FOOD

  Farmed Salmon
  Mr. Amos
  To ask the Minister of Agriculture, Fisheries and Food what information he has on the presence of dichlorvos in farmed salmon.

  Mr. Maclean
  Following a recent newspaper report that a sample of farmed salmon had been found to contain dichlorvos, the Department's food safety directorate has carried out a further survey of salmon steaks. Forty-three samples were purchased between 12 and 15 November from a variety of retail outlets in East Anglia and London. No dichlorvos was detected in any of the samples.

  An earlier survey of 92 salmon samples for dichlorvos was carried out between 1987 and 1989. Again, no residues were detected.

  Civil Defence
  Mr. Bill Michie
  To ask the Minister of Agriculture, Fisheries and Food how many civil servants are currently employed(a) full time and (b) part time by his Ministry on civil defence; what the total costs of employing staff on civil defence duties were in 1989–90; what the total costs of employing staff on civil defence duties are expected to be in 1990–91; and whether he has any plans for these staff to be transferred to work on other duties.

  Mr. Curry
  The number of man years allocated to civil defence work in the Department, including maintenance of the strategic food stockpile, was 55 in 1989–90 and cost £1–5 million. In 1990–91 the number of man years is expected to be 47 and the cost £1–3 million.

  My right hon. and learned Friend the Secretary of State for the Home Department announced on 16 October that he had initiated a review of the options for the future of civil defence arrangements and future levels of expenditure will depend on the outcome of that review.

  Farm Incomes
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will give such figures as he has available for farm income by(a) farm type and (b) farm size for each of the last five years.

  Mr. Curry
  The most recent information on farm incomes for 1988–89 by type and size of farm is published 216
  in section 8 of "Agriculture in the United Kingdom: 1989" and in more detail in "Farm Incomes in the United Kingdom 1990 Edition". Similar information for previous years is contained in previous editions of these publications and in the annual review of agriculture White Papers. These publications are available in the Library of the House.

  Drift Net Fishing
  Mr. Simon Hughes
  To ask the Minister of Agriculture, Fisheries and Food if he will list those countries which have banned drift net fishing in the Atlantic.

  Mr. Curry
  We are not aware of any country that has banned drift netting outright in the Atlantic. However, from information readily available several countries are known to have taken measures which restrict or prohibit drift netting in this area to some degree. These include Norway, Spain, South Africa, Japan, Taiwan, the USA and the UK. The international community is now addressing the issue of large-scale, oceanic drift netting in the light of a resolution adopted by the United Nations last year.

  Salmon
  Mr. Simon Hughes
  To ask the Minister of Agriculture, Fisheries and Food why the review of the Salmon Act 1986, due in January, has not yet taken place.

  Mr. Curry
  While there is no requirement to review the Salmon Act 1986 as such, section 39 of that Act calls on Ministers to undertake a review of the salmon net fisheries off the north-east coast of England and eastern Scotland and to present a report to Parliament as soon as practicable after 6 November 1989. My right hon. and learned Friend the Secretary of State for Scotland and I hope to be ready to do this soon.

  Salmonella
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what is now his policy on the payment of compensation to owners of laying flocks slaughtered under the salmonella control regulations.

  Mr. Gummer
  This matter is currently under review and an announcement will be made as soon as possible.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Salisbury): The LORD CHANCELLOR on the Woolsack.

City Technology Colleges
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
How many city technology colleges are in operation, and what have been the costs in establishing and maintaining them to the public sector and to the private sector.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords, seven city technology colleges have been opened. Those are located in Birmingham, Teesside. Nottingham, Gateshead, Bradford, Croydon and Dartford. To date, the cost to the Government of establishing those colleges has been £52.8 million, of which £47.1 million is capital. The private sector is committed and will contribute 20 per cent. of those costs.
Lord Dormand of Easington: My Lords, can the Minister say why the original objective to establish 20 CTCs within two years, with the cost being met wholly or largely by the private sector, has not been achieved?
Baroness Blatch: My Lords, seven colleges have already been established and seven more are in the process of being established and will be opened by 1992. A fifteenth college is in the early stages of being considered in Bristol. Therefore the Government have not only secured substantial sums from the private sector but they have also gone a long way towards achieving their target of 20 CTCs.
Lord Dormand of Easington: My Lords, will the noble Baroness kindly answer my question?
Baroness Blatch: M y Lords, I gave all the information which was required for that question.
Lord Beloff: My Lords, does my noble friend the Minister agree that these constant attacks from the Opposition Benches on the city technology colleges show up the hollowness of the Labour Party's claim to care about the relationship between education and our industrial performance?
Baroness Blatch: My Lords, my noble friend is absolutely right; indeed, only yesterday we had such a debate. The policy of noble Lords opposite would mean more spending, more bureaucracy and no choice. They would abolish CTCs. We hope that CTCs are here to stay. Moreover, where they have been established they have an excellent reputation, are popular with both parents and pupils and are oversubscribed.
Baroness Blackstone: My Lords, contrary to what the noble Lord, Lord Beloff, said, can the Minister confirm that nearly 200 major companies were
772
approached and asked to support the city technology colleges and that they all rejected the request for support?
Baroness Blatch: My Lords, the noble Baroness is characteristically negative on the issue. I should prefer, as would the Government, to concentrate upon how positive industry and commerce have been in setting up these centres of excellence.
Baroness Blackstone: My Lords, will the noble Baroness kindly answer my question?
Baroness Blatch: My Lords, I have given the figures representing how much industry and commerce are committed to supply towards the capital cost of setting up these colleges. I believe that this shows a very good record thus far.
Lord Tordoff: My Lords, will the Minister give an answer to the noble Baroness's question?
Baroness Blatch: My Lords, negotiating to make contributions towards the setting up of CTCs is a voluntary activity both on the part of industry and commerce and on the part of government in accepting and establishing the arrangements. I have given all the figures as regards the contribution of the private sector. The private sector is still showing an interest. As I said, seven other CTCs are in the process of being established and a fifteenth looks as though it may get off the starting block but is at present in the early stages of being established.
Lord Dormand of Easington: My Lords, in view of the great cost involved in the setting up of CTCs, will the Government consider giving an amount of money equal to that which has been spent on established CTCs to the local education authorities in those areas so that they can meet the great cost of the necessary repairs to their schools? Perhaps I may give one example. In the North East, where the Gateshead CTC has been established, the amount of money spent is almost £6 million. That is more than the whole of the money available to the Newcastle and Gateshead authorities for the repair and maintenance of their schools.
Baroness Blatch: My Lords, the money which has been spent on establishing CTCs is over and above, and not part of, the moneys which will go into the mainstream education system. Noble Lords opposite disagree with the establishment of CTCs. They have taken many opportunities to criticise them and have done all they can to establish a proposition that they should be abolished. The noble Lord can travel down that road, but we believe that extending choice is a very good thing not just for education but also for the young people who will benefit from a good, sound technical education.
Baroness David: My Lords, does the Minister realise that many children are not in the CTC schools and that a great deal of money needs to be spent on the schools attended by the majority of pupils? Does she also realise that those schools are crumbling? It seems most unfair to many people that an excessive amount of money is being spent on CTCs in proportion to the amount spent on the maintenance of maintained schools.
Baroness Blatch: My Lords, at the risk of repeating some of yesterday's debate, I believe I made it clear that the Government are doing a great deal towards increasing technical and vocational education in our schools. We believe that the excellent example being set by CTCs will do more than anything else to improve technical education in schools. My belief is that we shall see a growth in technical education which will have a great status equal to academic achievement in our schools.

Uniform Business Rate
3.6 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
Whether, in view of the 64 per cent. increase in company liquidations in the third quarter of this year and the sharp decline in business confidence reported by the Confederation of British Industry, they will consider (a) limiting the increase in the uniform business rate next year to 5 per cent. and (b) extending transitional business rate relief to new lettings as well as existing ones.
Baroness Blatch: My Lords, the answer is no. The cost of limiting the increase in the uniform business rate in 1991–92 to 5 per cent. for businesses would create a deficit in local authority funding which would require local authorities to reduce their spending or to levy it on the community charge payer; or the deficit would have to be met by the national taxpayer. As regards the second part of the Question, we have no plans for extending transitional relief to new lettings.
Lord Monson: My Lords, I thank the noble Baroness for her reply, disappointing though it is. I half expected that some fresh thinking might have been applied to the subject. However, does she agree that it would make far more sense to cap business rates, thereby helping businesses specifically, especially small businesses, than, for example, to lower interest rates prematurely, which would only set off the appalling house price spiral once again to the great detriment of first-time buyers and to the economy generally?
Will the noble Baroness also agree that refusal to extend transitional relief to new lettings prevents the effective allocation of resources? Surely that must be a primary aim of government.
Baroness Blatch: My Lords, it is very important to make a distinction between transitional arrangements and the system as it will operate after transitional relief. The effectiveness of the reforms means that business and commerce rates will be capped; they will be capped to the level of inflation. Therefore, no rate increase will ever be greater than the rate of inflation. The only power which exists in legislation is a power to reduce the rate and not to increase it. That compares, under the old system, with rate increases over the past year or so of anything between 33 per cent. and 57 per cent. I believe that when the new reforms are in place they will prove to be much fairer to business and commerce.
Baroness Sharples: My Lords, can my noble friend say whether small businesses have been more successful in these difficult times than large businesses?
Baroness Blatch: My Lords, I am more than pleased to give the figures in that respect. The year 1989 was the most successful one ever. There was a net increase of 87,000 new businesses. That figure takes into account the new businesses which came into the system and the liquidations that went out of it.
Lord McIntosh of Haringey: My Lords, the Minister has told the House that the increase in the uniform business rate will be in line with inflation. Can she now tell us why the figure for inflation for the UBR is so much higher than the figure for inflation allowed in local authority expenditure?
Baroness Blatch: My Lords, the increase in the figure for local authorities is indeed in line with the rate of inflation. The noble Lord has actually taken into account one aspect of provision for local authorities. The increase in their spending is in line with inflation. The increase in respect of local businesses—namely, 10.9 per cent.—is a publicly published figure and that is the figure which has been applied when assessing the rate.
Lord McIntosh of Haringey: My Lords, I am sorry but that answer is still not clear. Is the Minister saying that the standard spending assessments for local authorities are being increased by 10.9 per cent., in line with the inflationary increase in the unified business rate? If not, what is the figure? If the figure is different, why is there a difference?
Baroness Blatch: My Lords, I am saying that the SSAs for local authorities are well beyond 10.9 per cent. I believe that the average for most classes of authority is in excess of 16 per cent.
Lord Monson: My Lords, is the Minister aware that current valuations of business premises are based on the semi-boom conditions that prevailed in the spring of 1988, when interest rates were exceptionally low and business confidence was high? Are not those valuations unrealistically high in view of the slump that prevails today?
Baroness Blatch: My Lords, the noble Lord makes an important point. No one suggests that these times are easy for business, but that only strengthens the Government's objective, which is to get inflation down. If we can do anything for local businesses, especially small businesses, it would be to reduce the level of inflation. If we remit the costs to businesses now, that cost would only have to be levied on other people.

The Gulf
3.11 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Under what circumstances British forces in the Gulf would be placed under the orders of a commanding officer answerable to the United Nations and what is the present position.
Lord Reay: My Lords, the multinational force deployed in the Gulf is not a United Nations force. The question of United Nations command does not arise, therefore. British and other forces have been deployed at the request of Saudi Arabia and other countries in accordance with the inherent right of individual or collective self-defence under Article 51 of the United Nations Charter. The British forces are under ultimate UK command.
Lord Jenkins of Putney: My Lords, I thank the Minister for his explicit Answer, which clarifies the present position that, although the forces are deployed under an article of the United Nations Charter, there is no United Nations command in the Gulf. Having regard to the danger of the present forces being regarded as wholly Western in command, have the Government considered that it might be better to examine the possibility of an ultimate United Nations command?
Lord Reay: My Lords, we believe that effective arrangements have already been put in place. Forces are present in the Gulf in substantial numbers in support of Security Council resolutions and Article 51 of the United Nations Charter. We do not believe that such a proposal would necessarily bring an improvement. The important point is to bring enough pressure on Saddam Hussein to ensure that he complies fully with United Nations resolutions.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the British forces in the Gulf are under the command of a singularly able and distinguished officer, General de la Billière, in whom those concerned have the greatest confidence?
Lord Reay: My Lords, I am grateful to my noble friend for his remarks, which I am sure many noble Lords share.
Lord Williams of Elvel: My Lords, is the Minister aware that we have been reading in the press that there have been substantial moves towards drafting a Security Council resolution which would authorise the use of force in the Gulf? What progress has been made on that resolution? We understand from a French spokesman that they are getting down to drafting the resolution. Is part of that resolution concerned with putting all the forces in the Gulf under United Nations command?
Lord Reay: My Lords, I cannot say whether there will be a further United Nations resolution. Nothing has yet been formally proposed. The wording of any resolution must of course be acceptable to all 15 members of the Security Council, but we would be happy to see a new Security Council resolution which would increase pressure on Iraq to withdraw from Kuwait.
Viscount Montgomery of Alamein: My Lords, does my noble friend agree that, in the unfortunate event of hostilities breaking out, the successful outcome will depend very much on having one commander-in-chief of all forces, whomsoever he shall be?
Lord Reay: My Lords, my noble friend makes a sound point.
Lord Bridges: My Lords, will the Minister reconsider the information that he just gave the House that the resolution would have to meet with the approval of all members of the Security Council? Does he not mean that it would have to be approved by the Security Council?
Lord Reay: My Lords, the noble Lord is highly experienced in these matters, and I accept his correction if that is necessary. We cannot be certain that there will be such a resolution. There is considerably further to go before we shall know whether there is to be one.
Lord Williams of Elvel: My Lords, has not the Soviet Union been pressing for a United Nations single command in this enterprise? Is it a condition of Soviet support for the proposed Security Council resolution that such a command structure should be put in place?
Lord Reay: My Lords, that I cannot say. The Soviet Union has shown itself to be in support of the full implementation of all Security Council resolutions which seek to secure the withdrawal of Iraq from Kuwait. We have no reason to suppose that the Soviet Union would not support a resolution permitting the use of force.
Lord Mayhew: My Lords, what are our commitments in the interim? Will the Minister assure us that the United States will not take military action against the British Government's advice?
Lord Reay: My Lords, the important point is that in our view Article 51 of the United Nations Charter provides legal authority for the use of force in response to the armed attack on Kuwait. However, we shall continue to play our full part in the ongoing Security Council discussions on how to increase pressure on Iraq to withdraw from Kuwait.

Overseas Aid
3.16 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What assistance they are providing to less developed countries, particularly to combat infant mortality, disease and famine.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, much of Britain's aid programme is devoted to poverty alleviation in the least developed countries and is directed specifically to fighting disease and malnutrition.
Lord Molloy: My Lords, I thank the Minister for that Answer. Are the Government aware of the need to develop UK institutions to help in the field of tropical health? Are the Government aware of the magnificent endeavours of Mrs. Lynda Chalker in the United States when, on behalf of the millions who are threatened, she spoke of the need to prevent starvation and death on a horrendous scale? Will the Government be supporting the Minister's desire to see action taken?
The Earl of Caithness: My Lords, I am grateful to the noble Lord for the comments that he made about the Minister for Overseas Development, my right honourable friend Mrs. Chalker, and the work she has done. Of course the Government give her total support. I have seen some of the overseas development work in Africa and the Far East and it is to be recommended. The noble Lord mentioned the important question of tropical diseases. The ODA works closely with several UK institutions, especially the London and Liverpool schools of tropical medicine which are centres of international repute. This year we have committed a total of £16 million over a 5-year period to 14 new research and training programmes at the London and Liverpool schools.
Baroness Ewart-Biggs: My Lords, does the Minister recollect that at the recent world summit on children the Prime Minister and other world leaders signed a plan of action designed to alleviate the suffering of children in the poorest countries? Is he aware of their commitment to make available resources to meet those goals? Has the ODA adjusted its development aid policies so as to honour the pledge and so help children in the poorest countries.
The Earl of Caithness: My Lords, we continue to help all kinds of people in the poorest countries. As the noble Baroness will fully understand, it is not just the children who are important but also the women, for whom she has great concern. There is family planning. All types of aid are important. The current aid programme in total is £1.62 billion. That will rise to £1.72 billion in 1991–92 and to £1.86 billion by 1993–94.
Baroness Ewart-Biggs: My Lords, I am grateful to the Minister for giving those figures. Will he nevertheless confirm that the ODA is now under an obligation to adjust its development aid policies to meet the aims signed by the 71 leaders, including our Prime Minister?
The Earl of Caithness: My Lords, I apologise to the noble Baroness for not covering that supplementary question which she posed to me. We are constantly reviewing the placing of the emphasis. In a reply to an earlier Question some weeks ago, I said that the ODA was considering the matter. I understand that some work has already taken place on it.
Lord Dormand of Easington: My Lords, does the Minister agree that in the important problem raised by my noble friend a contributory factor is the world population explosion, particularly in developing countries? We appreciate what the Government are doing and the noble Earl will recall that we had a debate on this subject before the summer Recess. Will the Minister give an assurance that all the assistance given and work now being done by the Government will continue and increase?
The Earl of Caithness: My Lords, I can confirm that this is a most important matter, as the noble Lord said. The population of the world has doubled since 1950; it is on an upward trend and that poses considerable problems. The majority—95 per cent.
778
—of the increase is in the worst-off areas: therefore the noble Lord's point that it is an important problem is fully underlined.
Lord John-Mackie: My Lords, does the Minister agree that all the surpluses about which everybody complains in food production in the EC should be channelled to the people mentioned by my noble friend?
The Earl of Caithness: My Lords, of course we must send food aid at the appropriate times. However, it is quite wrong for us unnecessarily to dump our excess production on other countries. It is surely much better to help them to produce their own goods.
Lord Rea: My Lords, will the Minister say what proportion of our gross domestic product the aid figures that he gave us represent? Can he say how soon this country will attain anywhere near the level of 0.7 per cent. of GNP which was recommended by the United Nations?
The Earl of Caithness: My Lords, I was fairly certain that the noble Lord would ask me exactly that question. I have already answered it when he asked it in the recent past. I refer him to the Question on the Order Paper. I believe his question is a little wide of it.
Lord Molloy: My Lords, is the noble Earl aware that a number of British periodicals and newspapers which specialise in these matters are submitting horrendous stories of millions of people who will probably starve to death unless help is forthcoming? I give the Minister one example to contemplate: in the Horn of Africa, where the rains failed, millions now face starvation.
Mrs. Lynda Chalker carried out magnificent work in the United States and some of our British institutions are carrying out remarkable work. Nevertheless, there are also reports that, for example, in the Sudan Britons who are doing good work are—one can only assume from what we hear from the Foreign Office—being asked to leave. If the Minister cannot comment on that now, perhaps he would give me further information later.
The Earl of Caithness: My Lords, the noble Lord underlines another area of concern. Perhaps those who suffer most are children and that is the burden of his original Question. There have been disasters throughout the world. The noble Lord mentioned some places and I have seen the effects of hurricanes and cyclones in the South Pacific which cause equal problems. I can reassure the noble Lord that we give serious attention to these matters.

Economic and Monetary Union and Political Union: ECC Report
3.23 p.m.
Lord Aldington Lord Aldington rose to move, That this House takes note of the Report of the European Communities Committee on Economic and Monetary Union and Political Union (27th Report, 1989–90, HL Paper 88).
The noble Lord said: My Lords, this report on Economic and Monetary Union and Political Union is

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full, is calm and has a balance which I shall try to retain in my speech to your Lordships. I should start by reminding your Lordships, in view of the distractions along the corridor and in another place, that the conclusions in this report were reached on 24th October. The report is made to your Lordships in the course of the Select Committee's scrutiny of Community proposals. It is through this scrutiny that the House plays its part in securing the accountability of the institutions of the Community, and particularly the Council, to the Parliament of the United Kingdom.
The Select Committee has produced more than 500 valuable reports over its 16 years, involving hundreds of your Lordships. This report arises from the various proposals put forward by the Community's institutions about economic and monetary union and political union. They were laid out in the introduction to our report. Not for the first time, very important questions of policy and attitudes are raised; not for the first time, the report covers issues to be resolved by governments negotiating with each other and offers advice to our Government on the position they should take in their negotiations.
As is usual, the evidence we took governed our conclusions. The witnesses were as impressive and authoritative on their point of view as can be found. The members of the ad hoc committee who conducted the inquiry have a record in this field as distinguished as one could find anywhere. I have to confess that I was very proud when I was selected as their chairman. Now, standing in front of the House, I feel very humble and rather shy. However, I am told to get over it and I will!
The pattern of our work followed that of the many inquiries conducted by the European Communities Select Committee. We kept to our role all the more successfully because of the presence among us of the Select Committee's chairman, the noble Baroness, Lady Serota. Her reappointment last week most deservedly won the applause of your Lordships.
We could not have accomplished our work for noble Lords without the help of our splendid advisers: Sir Julian Bullard, Mr. Christopher Johnson and Mrs. Eileen Denza. They, with the members of the committee, will tell you that we should have made a poor show indeed without the guidance, the really encyclopaedic knowledge and the superlative pen of our clerk, Mr. William Sleath. How often do we need to pay a warm and well deserved tribute to these wonderful clerks of both sexes who serve us so well in our committees.
Before coming to the individual issues under each of the two heads—EMU and political union—which are to be discussed and decided upon by the inter-governmental conferences starting next month, it may help the debate if I begin briefly with the committee's conclusions about the nature of the Community itself—what is it?—and some of the terms being used and, we have to say, sometimes abused.
The constitution of the Community is unique. Its founders chose a unique name: not a federation, nor
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a confederation, nor the United States of Europe. There is no sign that they intended or that any member state since has intended any of these forms. They most certainly did not intend the form of a "superstate", a term which I heard used the other day when some of my noble friends were talking about the Community.
In our view it is sterile to waste time and valuable rhetoric on arguments as to what the Community might wish to be in its second, third or fourth half-century. It is not only sterile but we think positively damaging to public understanding to parade what my right honourable friend the Foreign Secretary has called ogres and we call spectres of idealistic visions or of federalism. It is as clear that the Community now contains some federal elements, as it is clear that the member states retain their independence and their international sovereignty and have every intention of doing so in the foreseeable future.
The application of Community law direct on our own citizens in the United Kingdom and in other member countries is one federal element. Another is the conduct of external trade relations and the whole apparatus of the single market. These and all other federal type elements in the constitution of the Community were agreed by the member states for the benefit of each of them. It was an exercise of national sovereignty to pool into a united sovereignty some of the political power which had been national. The key question to be asked before those decisions were taken, as it would be before any future decision on the transfer of political powers to the Community, was how the next step towards European unity would further the strength of the Community and the welfare and aspirations of its peoples.
There is nothing new about the commitment of all members of the Community to progress towards ever closer union. All members have accepted that commitment as part of the Treaty of Rome; they have agreed on many occasions that such progress is their aim. Progress has been, and will be, achieved by agreement and will be furthered step by step. The intergovernmental conferences will sort cut what steps should be taken now in the fields of economic and monetary union and of political union and when they should be taken. It is not a question of whether any steps should be taken but what steps and when.
Your Lordships will have noted that we asked ourselves questions about sovereignty. What does that word mean? What help does it give to independent and diverse states which have joined together to increase the prosperity of their peoples and to increase their influence in the world? I commend to your Lordships the sobering paragraphs on sovereignty in Part 2 of the report.
The two sovereignty issues of particular importance in our inquiry related to foreign policy and monetary union. We are quite clear that to include all aspects of foreign policy fully within the Community's competence would remove from member state, the right to take any independent action in foreign policy which had not been approved by the Council and would thus destroy the international sovereignty of each member

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state and its right to a seat in the United Nations. We reject that concept. Foreign policy can be well co-ordinated within the existing system of European political co-operation which we believe can be beefed up.
On the other hand, we see no fundamental objection on sovereignty grounds to full monetary union including a single currency. It would be a reasonable exercise of sovereignty by Parliament to pool with other members such elements of political power as exist in monetary policy if the advantages of so doing were clear. I shall return to that point when I talk about EMU later.
The report welcomes the acceptance of the principle of subsidiarity; namely, that there should be done by the Community only those things which can be better done or, under another definition, must necessarily be done at the centre and not by member states. This principle already appears in the Single European Act in relation to environmental matters. We think it should be included in the revised treaty, perhaps in the preamble, but in such a way that it does not become justiciable but rather a firm political commitment and guideline to govern the Council and the Commission.
As the Community has progressed with wider scope and more powers, its institutions, the Council as well as the Commission, have become too little accountable to national parliaments and to the European Parliament. The proposals to improve democratic accountability, financial control and the effectiveness and implementation of Community laws and court decisions arc all important for the Community at its present size but must be designed for a larger Community in a few years.
Those general themes led us to conclusions on some of the points to be negotiated at the EMU conference and at the PU conference. Your Lordships will note that I use acronyms for economic and monetary union and for political union. I hope I may intersperse a little light relief at this stage. In acronym language the report is about EMU and PU. The emu is the second largest bird and is distinguished from the largest bird, the ostrich, by not putting its head in the sand. Pu, which means simple in Chinese, is a state of Chinese meditation in which, believe it or not, all contradictions vanish.
I deal first with the happy thought of simplicity. Political union proposals are not simple, but they are not difficult to understand. Political union means the process of ever closer union. There is no defined goal. The general ideal of European union cannot be forgotten, but the intergovernmental conferences have to concentrate on the very real needs and concerns of the present. We recommend some principles which should be applied.
We consider that, as its first priority, the Community must take steps to meet the requirements of democracy. Its institutions must be, and must be seen to be, democratically accountable. I shall return
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to that point when I deal with the role of national and European parliaments and their relationships with each other and with the Council and the Commission.
However, there are other shortcomings which have to be remedied. We summarise those in paragraphs 141 to 144. The finger is pointed both at the taking of decisions at Community level when they should be left to national choices and at the unbalanced way in which the Community's development has been dominated by agriculture and the single market without enough concern being shown for social and environmental affairs. The key here, as in so much of the argument about increasing the scope of Community competence, is the principle of subsidiarity. If that principle is held fast, efforts to dispel the perception of an imbalance in Community objectives need not automatically be equated with cumbersome centralised intervention.
Another Community shortcoming lies in the delays in implementation of legislation. We ask that legislation should not be agreed in the first place if it cannot be implemented properly. We further ask that member states should be required to make a written response to Commission reports on implementation and that those responses can be discussed in the parliaments and in the Council. The United Kingdom has consistently been one of the best performers in implementation and has an interest in seeing that disciplines encourage other states to achieve similar standards. The same applies to judgments of the European Court of Justice. They have to be complied with by all and without delay. Effective and efficient implementation of Community policies and laws is vital to its reputation and to the confidence of the public in its control of money and resources generally. The enormous losses suffered by the Community because of fraud is a scandal to which the committee has drawn and will continue to draw the attention of the House. I am very glad that your Lordships will have another opportunity to debate that scandal next week.
There is one further principle that we recommend to the intergovernmental conference. It must look to the future when the Community will have been enlarged—quite soon—by some members of EFTA and later by some of the Central or Eastern European states. Institutional changes must allow for such enlargement. We firmly declare our view that enlargement is desirable and will take place. However, that enlargement is not a question of widening or deepening; the one needs the other. We believe that there is a dominant conviction across Europe that events require the Community to take further steps towards strengthening both the effectiveness and accountability of its actions. We believe that the prime reason why any European state might consider applying for membership is that the Community is seen as strong and growing stronger.
Many proposals have been made to increase the powers of the European Parliament. Our recommendations favour some extension of power over legislation, through the co-operation procedure, and over treaties. We call for the Parliament to have

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greater powers over delegated legislation and enhanced powers to scrutinise Community activity. That will mean more concentrated effort by the Parliament, particularly over the efficiency of spending. We recommend that the Parliament should have a role in the appointment of the commissioners by holding confirmation hearings.
I turn now to the question of the Council. How accountable is the Council? We considered the case for council meetings being held in public but rejected it, even for legislation. We believe that the Community is not yet ready for that. The Foreign Secretary made his view very clear and 'we agreed. However, we ask that the Council and its members should be much more informative both about their intentions and about the progress of legislation. The main answer to the question of accountability lies not so much in Brussels as in the accountability of Ministers to informed national parliaments, just as the European Parliament also has a need to know what the Council is doing and why.
In our view the key to the removal of the so-called democratic deficit in the Community lies with national parliaments as much as with the Community institutions. Members of national parliaments need to involve themselves more closely in Community affairs and to develop appropriate procedures for doing so. They have to be well and properly informed by the Council and by the Commission. They have to have a close partnership with Members of the European Parliament. That is something that your Select Committee, under the leadership of the noble Baroness, Lady Serota, has tried to develop. The role of Members of the European Parliament will be debated at the forthcoming conference of parliaments, or Assizes, in Rome. Perhaps our procedure here is not too bad an example of what can be done.
We considered but rejected the proposal for a second chamber of the European Parliament, to consist of members of national parliaments. That would put serious strain on the members chosen and would not fully involve their own colleagues back home. We believe that it would delay as well as confuse Community proceedings.
We also have important points to make about the Court of Auditors and the European Court of Justice. They must be given the resources and structure necessary to do their job properly. That job is of growing importance. They form an important part of the balancing mechanisms in the unique constitution of the Community.
My final point relating to the terms of political union concerns the means of securing full cooperation on foreign policy. The idea of European political co-operation has worked quite well but the Gulf crisis has shown some of its limitations. We were advised and concluded that it can be made to work better, and with closer links to the Council. The extent to which it should embrace defence matters came under public debate after we had started our inquiry and we did not take any evidence on that specific point. We therefore confined our opinion on defence to the statement that:
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"The Committee believe that it will be in the interests of Member States to find a way of discussing relevant security issues in EPC meetings".
Your Lordships will see that we have tried to apply our general themes to questions relating to political union. I now turn to the subject of economic and monetary union, where we had the same themes in mind. The Community has declared itself in favour of economic and monetary union—not simply economic union—since 1969, before we became members. Many declarations have been made since to which the United Kingdom has been a fully consenting party.
Within that EMU has monetary union been seen simply as a process or as a definable goal? The other 11 member states are quite clear that it was and is a definite goal with irrevocably fixed currency exchange rates leading to a single currency, a single monetary policy and a single monetary authority by whatever name. We have recorded the different interpretation given to us by the Treasury which defines monetary union by the objectives of monetary policy rather than by the means of securing it.
Our opinion is clear. The goal of a single monetary policy, a single currency and a single authority to be responsible for the battle against inflation and for securing the stability of prices is generally accepted in the Community. That is the case not only outside Britain but it is a goal shared by many people within the country in banking, commercial and academic circles. The real and vitally important question for the IGC, and particularly for Britain, relates to how and when the Community proceeds to that goal. We are careful to ask the IGC not to fix dates now for the eventual adoption of a single currency.
It is now generally agreed that insufficient attention has been paid to the transition from the current stage one to the final stage three. Sir Michael Butler's British Invisible Exports Council came forward with a scheme for stage two using a hard ecu but expressly as the next move towards a single currency. That scheme was adapted by my right honourable friend the Chancellor of the Exchequer into his hard ecu scheme but expressly without commitment to the single currency as the end. It is that lack of commitment, albeit with the rider that the hard ecu could lead to a single currency if governments and peoples sc decide, that appears to us both to deny the acceptance of the proposal by other countries and to damage the viability of the scheme in itself. We regret that as we find in the Chancellor's scheme a number of elements of great value to the next stage in monetary union, even though, as we explain in paragraphs 79 and 80 of the report, we cannot regard the scheme as a whole as viable as it now stands.
Specifically, the valuable elements are the establishment and experience of a European monetary fund with supranational powers over the hard ecu and some other matters, and the use of the hard ecu to promote faster convergence of inflation rates and the opportunity for markets to give their verdicts. We very much hope that other members of the IGC will take those proposals seriously. However, I urge that they are more likely to do so if our Government accept the

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same goal as other member states have accepted. There are many details which will have to be considered by the intergovernmental conference, no doubt with the help of the Committee of European Central Banks, which will have in mind subsidiarity. I shall not mention all the points but I shall draw your Lordships' attention to some of them.
We are convinced that a successful monetary union requires a satisfactory measure of convergence of anti-inflationary performance before it starts. Stage two has to ensure such convergence before it ends. A Big Bang entry to stage three as was proposed at one time by some people in the Commission, regardless of inflation rates, would impose unacceptable strains. The institution chosen to issue the currency and to execute a Community monetary policy which will be put in place in stage two, and which we say should be called a European monetary authority, must both be independent of political interference in its operations, and work, as does the Bundesbank, within an agreed economic policy—in the case of the European monetary authority within an agreed Community economic policy.
Also, we say, it must be accountable to parliaments in the sense that it must regularly explain its policies to them. We assume that the Chancellor's European monetary fund would do the same. Experience of that form of accountability should be assured during stage two.
Timing of the next stages is all important. Stage one is by no means complete either in the single market generally or in the financial services area. The timing of the start of stage two clearly must depend on the content of that stage and on the progress in stage one, as assumed. In my opinion and, I believe, the opinion of all the committee it was a mistake for the Rome Summit at the end of October to try to fix the start date of stage two. I say that even though, on the assumptions that we have made, some time in 1994 (which is its date too) would in our opinion be an appropriate date. I repeat that the start date of stage three should not be fixed until stage two has been in operation for several years. Step by step and evolution are the right guidelines for progress in the Community.
The Community should not contemplate a two-tier monetary union. It should be viewed as an essential part of the Community's single market. Two-speed it may have to be if some countries are not able to keep up with the convoy at the chosen time. Firm dates must be established for those countries to join if they are left out in the first place. But we emphasise with all the force at our command that the United Kingdom must be in the front rank. The United Kingdom can only remain outside a monetary union at substantial economic cost.
Avoidance of such a division must be uppermost as government negotiators plan for the intergovernmental conference. Why do we stress that danger? It is quite simply because we believe, as do a great number of people inside as well as outside the country, that the advantages of a single currency to the Community and
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to each of its members are very large. The full benefits of the single market will not be realised while the Community suffers from having several different currencies.
Secondly, individuals as well as businesses would save substantial sums from the removal of transaction costs and the need to pay for hedging against currency fluctuation. For the whole Community the savings in costs under that head are estimated by the CBI and the Commission as around £10 billion a year.
Finally, the single currency would give Europe a major—perhaps the major—world currency and corresponding influence. Taken together, the advantages of a single currency (I quote from the report),
"in creating globally competitive industrial production and financial services would be of the same order as the gains of the Single Market programme itself".
Those gains have been estimated at 5 per cent. to 7 per cent. of gross domestic product.
For the Community to pass up such advantages would seem to be fairly mad, but for Britain to deprive its manufacturers, traders and financiers of them while other members of the Community enjoy them would seem to me at any rate to be disastrous both for the City of London and for our industry.
It was said to the committee that those advantages have been overestimated. We questioned the CBI and bankers and are satisfied that they are real. It was also said that the disadvantages of moving to a single currency are substantial both in cost and in the loss of the weapon of devaluation. Certainly there will be costs in preparation for it and in the process of getting accustomed to it. As for devaluation, we were told that the value of the devaluation weapon in running the economy is doubtful in the long term. Our assumption is that there will have been sufficient convergence of anti-inflationary performance before the final fixing of exchange rates to avoid any basic disequilibrium that could lead to large unemployment.
There is the political objection to passing over to a European authority the power to set monetary policy and issue the currency for Britain as well as for the Community. I have said that there is no fundamental objection on sovereignty grounds to such a pooling of powers. But it is argued that neither the present Government nor the House of Commons will agree to a single currency because they believe that they must retain power over monetary policy. The assumption must be that they believe that they can use that power better than a European authority. Recent evidence going back to the 1970s hardly supports that proposition. However, I believe that in some of the objections there is confusion in some places between monetary policy and the rest of economic policy.
The Community has already progressed a long way toward economic union outside the monetary area through the single market and its associated arrangements on competition policy and other matters as well as through the agreements to seek co-ordination of national economic policies. Earlier ideas of setting binding rules for limiting national budget deficits have been dropped but procedures—binding procedures, as they are called—have still to be

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agreed to secure mutual scrutiny of policy and performance, lest the action of one country should put the Community currency in jeopardy. Baling out and printing money to meet deficits will not be allowed.
However, in the main the responsibility for deciding economic policy within each country is rightly to remain with national governments, which will control their own budgets, tax policies and public expenditure policies, paying full regard to the objectives of Community policy as agreed. That is the proper application of the principle of subsidiarity.
Our proposals for EMU—indeed, all our proposals—follow the step by step approach that the Community has taken over two decades. There is nothing new about progress to closer union or economic and monetary union as a goal. Nor is there anything new about the need for Britain right from the start to take a full part in the formation of new policies and institutions. All that is new is the recognition of the importance of the changes now under consideration and a realisation that a decision has to be made very soon on the next steps forward but not on the steps to be taken after them.
We emphasise that the Community's strength lies in the support of its peoples. Many of the points to which I have referred relate to a closer involvement of national parliaments and through them the people of each nation. There is a clear need for more understanding of what the Community is, what the European Parliament does, what national parliaments do and can do, and what advantages are sought from action through Community institutions rather than nationally. The committee hopes that the report will play a part in removing misunderstanding—and indeed help to slay the Foreign Secretary's ogres—and a part too in building a fuller understanding of the advantages that will come to Britain from a stronger and more democratically accountable Community. I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on Economic and Monetary Union and Political Union (27th Report, 1989–90, HL Paper 88).—(Lord Aldington.)
4 p.m.
Lord Cledwyn of Penrhos: My Lords, before I proceed to the debate, I feel I must refer to the events which are very much in our minds at this time; namely, the impending resignation of the Prime Minister, which is not unrelated to the subject of this debate. The right honourable lady has occupied her high office for 11 years. While we were often dismayed and occasionally distressed by her policies, nevertheless we always recognised her clarity, confidence and courage.
Mrs. Margaret Thatcher has given her name to a decade and left her mark upon it. For that, as well as for the fact that she is our first woman Prime Minister, she will have a place in history.
I must now congratulate the noble Lord, Lord Aldington, and the members of the Select Committee upon their report. It is timely, thorough and of the first importance and we are grateful to our colleagues for
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their hard work over several months. To read this document is to realise how complex are the problems facing us. The changes implicit in economic and political union are immense. There are implications for the way government is conducted, for the legislative process, for economic and financial management, and for the democratic process generally.
This country has committed itself to membership of the Community in a referendum and the policies of all political parties are based upon this commitment. I believe that to be significant because in matters of great national importance it is desirable if not essential that parties should seek agreement. The significance of the report is that it represents the views of Members from all parties in this House and it should therefore be taken seriously by the Government and Opposition parties alike.
We are also conscious at this time of the problems facing the Government and indeed of the debate which is taking place at this time in the House of Commons. The subjects that we are debating are close to the heart of the Government's current problems. I shall not pursue this aspect further at this time save to say that it is very much in the interests the country that these difficulties should be resolved quickly.
It has been said many times over the past 20 years that Britain has been slow to take advantage of the opportunities presented by the Community and that we should have been party to the negotiations of the Treaty of Rome and subsequent developments. That is probably true but there were at that time reasons for Britain's tardiness. We were disengaging from the empire; Commonwealth countries were strongly opposed to it; memories of the war were fresh in the mind; and General de Gaulle was not wildly enthusiastic about British membership. Finally, the English Channel has always been a silent barrier. However, the referendum, when it came, showed that the great majority of the British people had put those obstacles behind them. That is why it is imperative that Britain should play a full, constructive and indeed leading role in the development of the new Europe.
That does not mean that we must accept everything M. Delors proposes without question or that we cannot approach new proposals critically. We in this country have been brought up to scrutinise matters in detail from First Reading to Third Reading and we are not quick to change our habits. However, it is the spirit in which we approach the Rome Conference, and the language we use to express our views, that will make it possible for us to work for a consensus and to reach agreements.
There are other obstacles, many of them in the mind. I am glad that the committee went to the trouble in Part 2 of the report to define some of the areas which have caused confusion. The noble Lord referred to sovereignty. The report states:
"The word 'sovereignty' has a powerful emotional impact, bound up as it is with people's sense of nationhood".
Let me, however, remind the House that we, the Welsh people, surrendered our sovereignty—very reluctantly at the time —several centuries ago. What makes that

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tolerable to me and my fellow countrymen today is that in Britain we live in a parliamentary democracy and that we enjoy freedom under the law. If we lived in a dictatorship, I would want our sovereignty back. It is in that context that I contemplate the great changes that are impending.
But the Community itself came into existence primarily for political reasons: to ensure that war would never again break out in Western Europe. That has so far been the great achievement of the post-war period, and I believe it to be our duty to build upon that. We must of course also concede and recognise that since financial markets and environmental matters cross national boundaries, sovereignty has already been removed to some extent from areas of our economy and national life.
The report deals with these matters—with the effect upon national sovereignty of economic and monetary union. Mrs. Margaret Thatcher and her colleagues have been involved in the argument that monetary union in the form of a single currency would detract substantially from the sovereignty of this country. That has been one of the chief causes of the division within the Government over the past few months. But in fairness it must be said that divisions on this are not necessarily confined to the party opposite.
When the Minister replies, will he agree that it will take a long time before a single currency becomes a reality? The report points out that even if a single currency materialises, this country and others will continue to be separate sovereign states. Will the Minister confirm that that is in fact the Government's view?
The report points out that there are several examples—and this I think is an important point which may have been overlooked—where sovereign states have shared a single currency, including, for example, this country and the Republic of Ireland for a period of years. Paragraphs 74 to 81 of the report are therefore of the first importance because the committee concludes in paragraph 77 that the majority of member states,
"see the IGC's goal as determining not whether, but how, to achieve a full monetary union".
Last month's Rome Summit showed that Britain at that time was totally at odds with its 11 partners. It cannot be true that Britain is right and the Eleven are wrong on all issues and that there is no room for negotiation. The report takes a broader view and calls on the Government to play a constructive part in the coming Rome negotiations. On that we agree with the committee. However, we must now wait for a new Prime Minister to form his administration and to formulate new policies.
I believe that paragraph 93, which discusses the dangers which will result if the United Kingdom finds itself in the second tier of a two-tier Europe, is significant, as the noble Lord, Lord Aldington, has said. The report argues that London has an excellent case for becoming the operational centre of a European central bank if the United Kingdom is part of the monetary union from the start. Other noble
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Lords are better equipped than I am to judge the consequences for the United Kingdom if the central bank were to be established somewhere else. But if London is to keep its position as Europe's foremost business and financial centre, the Government will need to modify their approach.
How is London to organise its efforts to achieve that against the ambitions of Paris and Frankfurt? Here I must say in parenthesis that it was a major mistake to abolish the GLC and leave London without the leadership of a central authority which exists in every other major city. Can the Minister tell us precisely what action the Government are taking to meet this challenge which can have grave implications for our country?
I noted with interest the recent speech of the new Lord Mayor of London in which he emphasised the importance of preparing London for a drive to make a constructive bid as the city most qualified to accommodate the new centre. Can the Minister say what plans the Government have to co-operate in that? Is a body being set up which will take the place of a central authority such as the GLC and which will contain experts in all fields; for instance, economic, financial, commercial, industrial and political? If that is in the Government plans it would show that they are serious about securing the new centre for our capital city.
The House will recall that political union was placed on the agenda for Rome at the Dublin Summit in June, and we are grateful to the committee for dealing with that also.
During the years less attention has been paid to the implications of political union than to monetary union, which, as the report reminds us, has been on the agenda since the 1960s. Aspects of political union have been discussed in many reports but we assume that the IGC will study all the possibilities and implications. A number of national parliaments have already submitted their views and it would be interesting to know whether Her Majesty's Government are proposing to submit a memorandum setting out our views.
The basic question that people are asking is: what effect will political union have on the British Parliament? It is a question of the utmost gravity and it must be answered. People ask whether the European Parliament will carry more authority than national parliaments and whether the Commission and the Council will exercise wider and greater functions. These are matters which the report discusses in detail. Mrs. Margaret Thatcher has suggested that a referendum might be held on monetary union and the single currency on the ground that it is a constitutional issue. Personally, I do not believe that would be practicable. However, if a referendum were held on that subject I dread to think of the referendum which would have to take place on an even more obvious constitutional issue.
But one thing is certain; namely, that political solutions are needed now to resolve problems which have developed in the operation of Community

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affairs. Every member of the Community has a form of democratic government with a freely elected parliament. The report points out that in some respects the Community has the role of a supranational government; furthermore, that there is a danger that the democratic safeguards in the Community structure have not kept place with this development. The House will know that when Community government is criticised, as frequently happens, the response is that the Council of Ministers is there and because Ministers who attend are accountable to parliament the democratic process is thereby satisfied.
I regret to say that I find that totally unsatisfactory. I am glad to note that the committee shares that view. There is a fundamental weakness here which must be recognised and removed. The Council, which has a huge responsibility and which meets in secret, cannot through a Minister of a member state convey its deliberations to national parliaments so that they may be debated there and Ministers can at least be questioned intelligently by the members of those parliaments. More information about the work of the Council and its intentions must be released.
Paragraph 159 of the report states:
"The Council, through the mouthpiece of the Presidency, must be more open".
I should add that I read with great care and interest the very valuable evidence of the noble Lords, Lord Jenkins of Hillhead and Lord Cockfield, upon this subject. After deliberating, the committee came to the conclusion that the key to giving national parliaments greater knowledge of Community affairs and a greater say in decision-making is to strengthen their relationship with the Commission and especially with the Council of Ministers. I see no argument whatever against that. Furthermore, we assume that the IGC will regard this as a first step in the consideration of political unity, accepting that much more work needs to be done before the twelve parties can hope to achieve a consensus. I am bound to say that I do not see that taking place in the immediate future.
We in this House are fortunate to have our European Communities Committee, whose reputation is high both here and in the Community. A warm tribute is due to my noble friend Lady Serota, the chairman, to members of the committee, the staff and their advisers for their outstanding work. It is far and away the most effective method yet devised of scrutinising the work of the Community. It is well in advance of that of the House of Commons, but that is no criticism because I know of the weight of work which these days Members of another place must carry.
Time will not allow me to dwell on other important matters in the report; for example, subsidiarity, the European Court of Justice and the Court of Auditors. Therefore, I conclude by commending and supporting the spirit in which the report has been composed. Its advice that,
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"The Member States must continue to pursue the goal of a closer union of independent sovereign states, acting collectively in the Community when collective action is better than individual action to build on existing achievements"
is, in my view, sensible. Its emphasis on accountability and on the requirements of a democratic society are, however, crucial. I hope and pray that the new Prime Minister and his colleagues will study the report carefully and have it under their arms when they travel to Rome next month.
4.17 p.m.
Lord Ezra: My Lords, I begin my contribution to this important debate by stating that my noble friend Lord Bonham-Carter should have been speaking at this stage. He was a member of the committee chaired by the noble Lord, Lord Aldington, but unfortunately he is indisposed.
I was pleased to hear that the noble Lord, Lord Cledwyn of Penrhos, generally supports the report and its conclusions. We on these benches do likewise. I recently saw the noble Lord, Lord Aldington, in the corridor. I asked him how he could put his name to so many best sellers. I had the honour to serve with him on the committee on our overseas trade which produced his previous report. That was a best seller and, judging from the difficulty in obtaining copies, this report will be likewise. I have no doubt that another best selling report will come along at some future date.
The report could not be more timely. The committee is to be congratulated on the speed with which it has produced it and on the clarity and forcefulness of the argument. It is compelling reading. Before commenting on and supporting its conclusions, particularly in regard to economic and monetary union, I wish to fill in a little of the background. I have been continuously involved in the affairs of the Community since 1949. I then participated in discussions on the response that the Government should give to the Schuman declaration. There was a working party of officials and the steel and coal industries were represented. Our recommendation to the then Attlee Government was that on balance it would be in our interest to join. No doubt for other reasons the Government declined to take that advice.
From 1952 to 1956 I was a member of the United Kingdom delegation in Luxembourg. A big advantage of being there at that time was that it gave us the opportunity of regularly meeting that most remarkable man, Jean Monnet. It was from long discussions with Monnet that I gained a clear appreciation of the vision which had impelled him in the first instance to launch the Schuman plan with the support of his then foreign minister, Mr. Schuman, and of the further steps which he clearly envisaged right from the start.
He considered it imperative that the countries of Europe should band together, and do so in a more coherent way than had ever occurred before in history by voluntary actions. He felt that, in order to bring about that banding together, there should be clearly defined objectives and an institutional framework consisting of a council of ministers to represent the

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member states, a commission or executive, a court of justice and a parliament. Those would be the four main institutions. He believed in a step-by-step approach and that clearly defined dates should be set whereby certain achievements should be attained. Therefore the whole framework within which the Community is now operating was envisaged by that great man at that time.
It is remarkable that, in spite of periods of inactivity within the Community, the move forward within that broad framework which he envisaged has continued. There have been certain major landmarks. For example, after the signing of the Treaty of Paris in 1950 which set up the European Coal and Steel Community, with which I was personally much involved, there was the Messina Conference of 1955. That was the next big step forward which widened the area of operation within the Community to cover all economic affairs. There was then the Treaty of Rome in 1957. The next big landmark was the move towards the EMS—the European monetary system—in which my noble friend Lord Jenkins played such a major role when he was president of the Commission.
Moving on, we come nearer to our own times when, in 1987, we took the big step forward of the Single European Act. The noble Lord, Lord Cockfield, played an enormous role in translating into reality the intentions set out in the Single European Act for the creation of a single market.
That brings us to where we are now. The next big step forward is a move from the creation of a single market to the creation of a European system of economic and monetary union. The mistake which we appear to be making to our friends on the Continent, but perhaps which from now on we shall cease to make, is that we have given the impression that we want the evolution of the Community to stop at the single market. They do not envisage that as even a remote possibility. Nevertheless there is the lurking thought in their minds that we should have always preferred a European free trade area as an alternative. After all, in the early days we were responsible for the creation of the free trade area as an alternative to the European Community. They believe that we wish to return to that and they do not see it that way at all. Nor indeed will it be like that. The momentum in the European Community will continue and the important issue, as this report demonstrates, is that we should play a positive role.
The value of the report is that it brings out those points. I am glad to see that the noble Lord, Lord Roll of Ipsden, will be speaking later. I was with him last Monday at an international meeting in Vienna. The dominant consideration, when we came to speak about European affairs, was the way in which the Community is developing. Countries outside the Community—Austria and others—were represented there. They are keen to gain entry into the Community and their attraction to the Community is its strength. If that strength were weakened, their interest would diminish.
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With the reunification of Germany what is very important is that the Germans give every appearance of being committed to playing their full role in this new evolving Europe. They do not want to give the impression of dominating the affairs of the Continent. At present that is the last thing they wish to do. I believe that that is a historic decision; we must participate to make sure that the present German intentions are turned into a reality. Currently one of the most important ways in which we can do that is by following the very sound advice in this report.
Of course the committee was absolutely right in saying that as we progressively move towards a single currency, we must achieve a greater degree of economic convergence. I should like to submit that we need not wait until there is total convergence because we may wait for that until the end of time. Indeed it could be argued that after a certain point the creation of a single currency could itself lead to greater convergence. Therefore, we must choose the right moment. I believe that the report is correct in stating that we should accept a date for stage two. The date of 1994, which was mentioned at the recent Council in Rome, does not seem to be out of place.
The press statement issued after that Council meeting made it clear that it would be some time before a single currency emerged and that a review of the whole situation would have to be made in 1997 when we would see where we are going. That seems to be a reasonable course to pursue if we wish to play a part in an increasingly integrated Europe.
Consideration is being given to the hard ecu scheme to which the noble Lord, Lord Aldington, referred. It is most unfortunate that that scheme, which contains some admirable features, should have been presented in such a confusing way; namely, whether it would lead to a single currency or a parallel currency; whether or not it would be legal tender; and whether or not anybody would use it. There is not the slightest doubt that our friends on the Continent are very dubious about the proposition. Let us hope that we can clarify their minds on this subject and make it clear to them that that is a practical way in which stage two of the Delors plan can develop. It has many merits and I am sure that our negotiators could show a way of introducing some substance into what is otherwise a somewhat nebulous stage two.
The report provides a framework for Britain to take a leading role in the next big step forward in European integration. I believe that our destiny lies in Europe. I believe that our interests lie there too.
4.30 p.m.
The Earl of Caithness: My Lords, I begin with an apology to the House for breaking the rules of debate, in that I shall not be here for the majority of the debate or indeed for the winding-up speeches. I wrote to the noble Lords, Lord Cledwyn of Penrhos and Lord Ezra, on the matter. The reason is that the Chinese Vice-Foreign Minister, Tian Zengpei, is in London, and I shall meet him tonight at a reception he is kindly giving for me. I hope your Lordships will understand

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that I do not like breaking the rules of the House—in fact I criticise others for so doing—but on this occasion I hope the House will understand.
I am grateful to my noble friend Lord Aldington for tabling today's debate on economic, monetary and political union. His committee, which has been examining these questions since May, has produced a thorough and detailed report for which we are all grateful. Clearly it is the product of a great deal of expertise and thought, and I should like to congratulate all those who took part.
I shall approach the subject in the same order as does the report of my noble friend. I shall deal first with economic and monetary union, and then with political union. When speaking of EMU my noble friend described it as a bird that does not put its head in the sand. It is also a fast runner, but not a flyer. Be that as it may, today's debate provides us with an excellent opportunity to cover three key areas on the subject of EMU: first, the degree of common ground that already exists between the 12 and the commitment that exists to move together as the 12; secondly, the immediate questions that face us as we try to chart out the progress to which we are all committed beyond stage one; thirdly, the longer term.
If all one read were press reports one could be forgiven for believing that the opinions of the British Government diverged absolutely from those of the 11 other member states. In fact we are agreed on a great many matters. The treaty already provides for regular and detailed co-operation on economic and monetary matters. On 11th November Henning Christopherson, Vice-President of the Commission, was quoted in the Independent on Sunday as saying,
"We already have many of the components of the EMU. What we are going to do now is add the last bricks to the building".
As my right honourable friend the Prime Minister said in another place on 30th October, Britain intends to be part of the further economic and monetary development of the Community and believes that next year solutions will be found to enable the Community to go forward as 12. We have all signed up to Stage I, which began in July. We all agree that the overriding objective on monetary policy must be price stability. We all agree that excessive budget deficits and monetary financing must be avoided. And we all agree that there should be arrangements beyond Stage I which would come into existence as soon as possible after ratification of the necessary treaty provision.
That there is common ground cannot be doubted; that we are committed to the process should not be doubted either. We have often repeated our commitment to the progressive realisation of economic and monetary union. I am sure your Lordships will again welcome those assurances.
What, then, are the next steps in the process? The report of my noble friend's committee concludes that it,
"is of paramount importance to the United Kingdom economy to be at the forefront of steps towards monetary union".
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That is a laudable conclusion and one with which we fully concur. That is why the UK has produced the only comprehensive proposal for the next steps in the process. We would vigorously contest the conclusion in the report of my noble friend that the Government's hard ecu scheme is not viable as it stands. Its technical viability has not been seriously disputed by our European colleagues. Politically, we believe that an approach along our lines is the only viable way of moving beyond Stage I while encouraging convergence.
Our approach allows the 12 to move ahead together, working with the grain of the market rather than attempting to distort the market by imposition. We shall pursue our proposals at the intergovernmental conference which opens in Rome next month. Despite some pressures to the contrary the IGC will set its own agenda as promised at the European Council in Strasbourg last December. It is only by keeping our eyes on the road ahead and not by gazing into the distance that we shall achieve the progress we all wish to see. The original Delors Report, published last year, has been compared to a Chinese painting: great detail and clarity in the foreground and lofty peaks in the background, but a vast area of mist in the middle distance. Our immediate task is to clear away that mist.
Lastly I deal with the longer-term position. My noble friend's report argues that a single currency will bring substantial economic gains. There is no doubting the savings that would arise through an end to transaction costs and exchange rate risk within the Community. But a single currency will also have major costs. My noble friend mentioned the cost of losing national control over monetary policy. However, he did not mention the cost of jobs lost and localised depression if the transition to the single currency were anything other than gradual and market-led, nor the cost of paying, in effect, compensation to those peripheral states which demanded it to mitigate the disruptive effects of a single currency regime on their economies.
It is only right to tell the House that the answers I received from a number of members from those countries when I questioned them on a single currency without such compensation were quite revealing. Although it is the opinion of my noble friend's committee, it is not the opinion of this Government that the benefits of the proposals we have before us for a single currency outweigh those costs and disadvantages.
My noble friend's committee wisely concluded last year that the most effective way to decide on the right form of eventual economic and monetary union would be by waiting for proof that Stage I was a success. Stage I has been going for only five months, and we are still in the process of adjusting to a new environment. Stage I, as defined by M. Delors, will not be complete until the single market is achieved and all Community currencies are in the exchange rate mechanism. The Greek and Portuguese governments have given no formal commitment as to when the drachma and the escudo may join.

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Like my noble friend, we believe that we need to wait for proof of success before defining final objectives. Moreover, we agree with the conclusion of my noble friend that monetary union should not be imposed before sufficient economic convergence is assured or before full preparations are complete. But, without defining the final structure, we believe we can still move ahead to the next stage by establishing a European monetary fund to manage the hard ecu. People would begin to use the common currency. The market would then decide whether or not the common currency should become the single currency. It certainly could do so if that is what peoples and governments choose.
The key is not to decide now on what the market will tell us soon enough. The eminent Deputy Director General of the Bank of Italy, Dr. Padoa Schioppa, who was so closely involved in drafting the original Delors Report, wrote recently that,
"In a modern democratic society … existing arrangements … can be changed only when a current of public opinion develops, followed by political and legislative initiatives".
He went on to say that,
"Whether or not the ecu's potential is realised depends primarily on private action".
We must not run ahead of public opinion. Clearly we need to think hard about how to gauge that opinion. Recent debates in another place made it abundantly clear that the democratically elected representatives of the British people would not support the imposition of a single currency. The speed of progress on monetary issues must run with the market, and with market opinion, rather than against it. There is no need now to bind ourselves to a final destination. The Community's best interests will be served by setting up new economic and monetary arrangements for the next steps which will be dynamic and evolutionary.
Let me turn to political union. I am glad to say that the Government fully share the main elements of the committee's analysis and wholeheartedly endorse the majority of its recommendations on political union. As my right honourable friend the Secretary of State recently said, the Community does not stand still. It is debating continually for the mutual benefit of all our citizens whether the Community should develop its role in existing or new areas. The forthcoming intergovernmental conference on political union is part of that process.
We shall be seeking reforms that will make the Community more efficient and more accountable while preserving its liberal, open and market-oriented principles. We agree that the Community must move forward together, by consensus, towards a future which may include new member states but which will always respect the identities and institutions of the nation states within it.
We see considerable scope in the IGC for reforms which will make existing Community policies more effective. People in this country, as anywhere, will only put their trust in institutions and laws in which they
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have confidence. In the preparations for the IGC, the Government have therefore already proposed a number of improvements to the working of the Community's institutions, several of which are also identified in your committee's report.
First, there is a need for balance between the institutions. The founding fathers of the Community established a structure which has stood the test of time and adapted remarkably well to the demands made of it, not least in the face of the dramatic events of the past year. We should be careful not to upset that balance by strengthening any one institution at the expense of another. Like your committee, the Government do not want the position of member states to be weakened by giving the European Parliament substantial new legislative powers, or significantly extending qualified majority voting.
The balance must also be kept in defining the areas in which the Community may act. We must have a clear division of responsibility. The Community should not become involved in areas which are more appropriately dealt with by member states. This is what is meant by subsidiarity. We should welcome a clear reference to that principle in the treaty.
Secondly, where there is a role for the Community, it must work effectively. I am glad the committee share the Government's long-held view that the Community's financial accountability needs to be reinforced. We have also argued, like the committee, that the roles of the Court of Justice and the Court of Auditors should be strengthened. We must ensure that the Community's laws are not only passed at the Community level but put into effect at the national level. At the last count, only 20 of 107 single market measures requiring transposition into national law had been implemented in all member states. The joint leaders, the United Kingdom and Denmark, each have less than 20 to implement. At least one other country has not even implemented half. Once in force we need to be sure these laws will be respected. At the end of last year there were still 82 judgments by the Court of Justice not complied with by member states. There are none against Luxembourg, only one against the United Kingdom and 26 against the current presidency. We have therefore made a number of suggestions on this which have already attracted support and will be taken up in the IGC itself.
Thirdly, we must ensure that the Community is properly accountable for its actions. In this respect, I strongly agree with the committee's recommendation on the need for partnership between national parliaments and the European Parliament.
There are two pillars of accountability: the European Parliament, which monitors Community legislation and the Commission's activities; and Ministers in Council, who are each accountable to their national parliaments. If the countries of the European Community are to work more closely and effectively together, their national parliaments need to be more involved in the Community's life.
The Government welcome the Conference of National and European Parliamentarians (sometimes

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known as "Assises") to be held in Rome at the end of this month, and which will be attended by eight of your Lordships, five of whom are members of the committee that drafted this report. This will be an important meeting. I hope it will be able to suggest ways to take this partnership forward.
Finally, recent events have illustrated the value of the existing political co-operation machinery, which enables member states to co-ordinate their foreign policies. We believe it can be made more effective and have suggested a number of improvements to that end. There is also clearly a case for examining whether it should not cover a wider range of security issues, even though defence itself must continue to be co-ordinated through NATO. But I think all member states are agreed that, as the committee emphasised, they must retain the right of independent action where necessary.
I congratulate the committee on its thorough and lucid report. Although, as I have made clear, the Government do not agree with all its conclusions, it provides us with an excellent opportunity to debate these issues, which are of fundamental importance to the future of this country. Discussions here and in the Community will be long and hard; but that is the right way to do things in a democratic community. Indeed, debate is the lifeblood of democratic institutions. We shall arrive at a better outcome as a result. I am confident that the full and constructive part that the Government intend to play in these negotiations will enable the Community to continue its progress on a sound and successful basis.
The noble Lord, Lord Cledwyn of Penrhos, asked us to play such a constructive role in Europe. I would only say, "as if we have not". I can say from my own experience that every negotiation in which I have taken part, representing whatever Ministry, has been nothing if not constructive. In addition to what I have already said, the House will know that the United Kingdom played a leading and successful role in the last IGC, which agreed the Single European Act and opened the way for completion of the single market. We championed the cause of agricultural reform in the future financing negotiations which was successfully concluded with the introduction of budgetary stabilisers in 1988. We shall lead the way again in putting forward proposals for a more efficient and accountable Community. I firmly believe that once again we shall achieve a successful outcome that will benefit both Britain and the Community.
4.45 p.m.
Lord O'Brien of Lothbury: My Lords, like the noble Earl, Lord Caithness, I hope I may claim to be a loyal observer of the rules of this House, which moves me to say in advance that I apologise if it proves impossible for me to stay to the end of the debate. I do not think an ex post facto apology is easy to contrive in this House.
I was privileged to be a member of the committee which produced the report we are debating today. As a member of the committee I congratulate our splendid chairman on the way he led us through this very difficult subject. I also congratulate him on his
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excellent speech today which said almost everything, leaving very little for the rest of us to say, but we must do our best.
As we found while we were considering this subject, from the written and oral evidence given to us by Ministers and officials the committee's conclusions are—perhaps I should say "were"—at variance with the views of Her Majesty's Government. Indeed, the noble Earl, Lord Caithness, has today confirmed that some of our conclusions still are at variance with the Government's views. However, the pressure in Europe to attain the goals of economic and monetary union and in the end some sort of political union are relentlessly increasing. As so often in the past, I am afraid that it is the United Kingdom which is the laggard. Perhaps in future we shall not be.
We cannot deny that this country was late in joining the Community. There may have been good reasons, but we lost opportunities to take part in decisions which eventually proved to be of great importance to us; for example, the common agricultural policy, which we wish could be very different from its existing form.
Some seven years ago I was chairman of a committee which considered entry into the exchange rate mechanism in furtherance of European monetary union. The report of that committee, which was debated in your Lordships' House, recommended early entry into the ERM. The Government did not reject that conclusion but merely said that they intended to enter the ERM but only when the time was ripe. Repeatedly over those seven years when asked the same question the Government have stated that they intended to enter but that the time was not yet ripe.
Of course in the end the time became overripe and the Government joined the ERM but in circumstances which were most unpropitious, with difficulties in the United Kingdom which probably need not have arisen had we entered at an early date. That is another example of the attitude taken by the Government to European affairs, which I hope in the future will change and they will be taking part rather than dragging others backwards.
Incidentally, I am one of those who believe that this Government have brought immense benefits to the country over the past decade or more. I fear the erosion of those benefits if other hands were to take the tiller. But until today I despaired at this Government's ineptitude in European matters. Not all the arguments are on one side but, as I say, I look for improvement.
Today I want to confine my remarks to the proposed single European currency, monetary union and the proposed European monetary authority or central bank. From the evidence given to our committee—I realise that in the past week things may have changed, and one hopes for the better—it was quite clear that Her Majesty's Government were firmly opposed, as the late Prime Minister herself made all too evident, to a single European currency in the foreseeable future. Vague references were made,

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which have been repeated today, to the possibility of such a development in the far mists of time. But they carried little conviction. The opposition of Mrs. Thatcher did nothing to support the credibility of the Chancellor's proposal for a hard ecu to supplement the 12 separate currencies of the Community member states until such time as it might replace them because of its superior attractions.
Several noble Lords welcomed the hard ecu proposal. I entirely accept that there is much to be said in favour of an evolutionary approach, but I doubt whether evolution into a single currency is likely to come about within a reasonable time after the flotation of a so-called hard ecu. Leaving aside the present ecu, which has achieved a modest, useful existence as a unit of account, I do not see a new hard ecu circulating side by side with existing currencies as a medium of exchange in day-to-day transactions—that is to say, the money in people's pockets.
The growth in its use would depend very much on whether the local currencies were continuously depreciated by inflation. Assuming that the aim of eliminating anything but marginal inflation in Europe is to be achieved, why should people desert the currency they know for some new fangled ecu, especially if in the UK it did not have legal tender status, as the noble Lord, Lord Ezra, said just now? That is a recipe for chaos and very unlikely to lead to the emergence of a single European currency.
We all regret the long decline in the international status of sterling, which was still a proud currency on the gold standard when I first entered the City. Like many others, in more recent years I have done my bit in trying to nurse and support sterling. I do not see it ever again being strong enough on its own to hold a place with the strongest currencies in the world. I believe that before too long, even if perhaps not in my lifetime, sterling should be absorbed into a stronger European currency, standing on equal terms with the US dollar and the Japanese yen. We must not be bewitched by our own great past but intelligently and realistically face the future.
If we are to have a single European currency, I do not see how we can avoid having a European monetary authority. Whether it would be a bank or a reserve board making use of more independent national central banks would be a subject for discussion. All central bankers yearn for more independence; some believe that they have more than they really have. Only two important central banks have real independence—the US Federal Reserve Board in Washington and the German Bundesbank. Both are in this happy position for special reasons. As we all know, federal government in the USA is based on the Founding Fathers' belief in the division of powers. They feared the over-mighty. Hence the independence of the Fed, subject only to regular accountability to Congress.
In Germany where, incidentally the US as occupying power had much influence in the early post-war years, the haunting nightmare of the terrible inflation during the period of the Weimar Republic
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after the First World War has guided them into giving the Bundesbank responsibility for maintaining the value of the currency, with the independent authority enabling it to do so. What a good job the Bundesbank has made of it.
As we know, things are different here. But talk about giving increasing independence to the Bank of England has been growing in political circles. Mrs. Thatcher found some attraction in the idea when she spoke to me on the subject before she came to power many years ago. So also did the noble Lord, Lord Joseph, and, more recently, Mr. Nigel Lawson and Mr. Michael Heseltine. My own cynical view is that such ideas flourish only while the proponents have no power to put them into effect.
But if monetary union in Europe with a single currency is ever achieved, an independent European monetary authority would undoubtedly be required. Monetary policy, which needs day-to-day attention and not infrequent modulation and adjustment, certainly could not be run by a council of finance ministers meeting in Brussels once every three months. The inevitable trading of short-term political objectives would make a coherent and long-term monetary policy impossible.
I see nothing inherently undemocratic in the parliaments of the European countries freely delegating such responsibilities for monetary management to an independent body accountable at regular intervals to those who gave them that authority. No doubt mistakes would be made; even central bankers are not super-human. But the politicians make mistakes all the time partly because short-term political aims so often clash with the needs of long-term economic management. Such management in support of a single European currency, which would be the sole medium of exchange among 12 or more European countries, would be a highly complex task requiring great skill. It would not be quickly organised and put into operation, with due regard to the wide differences in economic prosperity in the many European countries. While momentum must be maintained a blind rush would be disastrous.
Willing, as I believe we must, the eventual achievement of a substantial degree of European unity, perhaps we may take some comfort from the success of our American cousins. They have a country almost as large and as heavily populated as Europe, with just as wide differences of prosperity. Their society is a much more recent creation than the ancient peoples of Europe from whose peoples they sprang. They have the advantage of a single language. Nevertheless, their monetary policy covers all that sub-continent and the responsibility for it rests largely with an independent authority. Need we be all that afraid of following their example?
4.59 p.m.
Baroness Serota: My Lords, although as chairman of the European Communities Select Committee, I always attend debates on our reports, it is only on rare occasions that I feel the need to add to the excellent work of the six specialist sub-committees which

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undertake such thorough inquiries into Community proposals and then report to the House on those which raise important issues of policy and principle.
But this particular inquiry into economic, monetary and political union, prior to the two intergovernmental conferences in December, was, as the noble Lord, Lord Aldington, has explained to the House, undertaken by an enlarged Sub-Committee A of which I became a member in view of the constitutional and scrutiny issues involved.
First and foremost, I must join with all other Members who have spoken so far in this debate in thanking the noble Lord, Lord Aldington, for the way in which he chaired what was undoubtedly a difficult and time-consuming inquiry. The skill and the courtesy with which he presided over our 21 sessions, through a long hot summer, and questioned a large number of distinguished witnesses were quite outstanding. I know that all Members of expanded Sub-Committee A would like to join with me in thanking him for all he contributed to what I believe—as I think this debate has already shown —has been seen on all sides of the House as a most valuable report, whether noble Lords all agree with its findings or not.
My purpose in speaking in the debate is to focus the attention of the House on some specific issues which are dealt with in Parts 6 and 7 of the reports, which deal with the basic principles which should underlie the deliberations at the intergovernmental conference on political union and the practical changes now needed to improve the working of the Community's existing institutions.
When the sub-committee was set up last May and its forward programme was planned, none of us could have envisaged that the report would be published at a time when both the parliamentary and public debate would be so heavily concentrated on the arguments for and against economic and monetary union and the ultimate goal of a single currency. I was very glad to hear my noble friend Lord Cledwyn stress the need for us not to overlook at this moment of time the importance of the issues for the future of the Community, which the noble Lord, Lord Aldington, mentioned to us in the context of political union; namely, the democratic legitimacy of its actions, the accountability of institutions, the role of national parliaments and the European Parliament and the principle, which I personally consider to be of basic importance in determining the balance of powers between the member states and the Community's institutions, subsidiarity, which the noble Lord, Lord Aldington, mentioned early on in his introduction to this debate.
It is not a word that rolls easily off the tongue, however frequently one uses it. But as we pointed out in paragraph 24 in Part 2 of the report on definitions, it has been in use for a considerable time and has a very respectable history. It is not an example of Eurojargon, but is of course much more familiar in those member states which have written constitutions, such as the Federal Republic of Germany.
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At present it only appears in Article 130R of the Single European Act in the following terms:
"The Community shall take action relating to the Environment to the extent to which the objectives referred to … can be obtained better at Community level than at the level of individual Member States".
The emphasis then is on the effectiveness of the resultant action.
Otherwise, says our report, it is a purely political principle which could be used when deciding to propose Community legislation or when formulating such legislation. After considering all the evidence we received on this subject, including that of Sir Leon Brittan, who defined "subsidiarity" as,
"you do at Community level only what needs to be done at Community level",
the committee concluded that the principle of subsidiarity cannot be defined as a precise measure against which to judge legislation, since the test of subsidiarity cannot be wholly objective or indeed consistent over time. We came to the conclusion that, properly used, it should determine not only whether Community legislation is necessary or appropriate at all but also the extent to which it should regulate or harmonise national divergencies and how it should be enforced. For these reasons, the committee recommended that subsidiarity should be added to the objectives set out in the Preamble to the Treaty and perhaps also to the principles in Part 1 but that it should not be justiciable before the European Court of Justice.
This view is widely but not universally shared. For example, the Institutional Affairs Committee of the European Parliament and their rapporteur, Valery Giscard d'Estaing, are recommending that the principle should be enshrined in the opening articles of the Community treaties, with provision for Community legislation to be challenged in the European Court of Justice as being outside the limits of Community powers.
Last Tuesday week, when the noble Earl, Lord Caithness, was opening the debate on the Address, he said on behalf of the Government:
"We believe that subsidiarity must be a major element of IGC reform. This will ensure a clear division of responsibilities, leaving to national governments everything that does not need to be done in common."—[Official Report, 13/11/90; col. 202.]
Once again today he referred to the Government's position on this issue and, as I understood him, he said that there should be a clear reference in the treaty to this principle. But I still feel a need to ask, and perhaps to ask the noble Lord, Lord Hesketh, when he comes to reply at the end of the debate, what specific decisions the Government have come to in view of the importance we all attach to this principle? Are they in fact in favour of the committee's recommendations which I mentioned a moment ago in paragraphs 165 and 216? How do they think the principle should be defined and how indeed should it be applied?
Turning to the question of national parliaments and their role in Community decisions, which have already been mentioned by a number of speakers in the debate today, I should perhaps first draw your

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Lordships' attention to the fact that the report includes at appendix 7 a brief note on the way in which the European Communities Committee goes about its work. The key to our scrutiny system, both in this House and in the other place, is the Government's undertaking that they will not, except in special circumstances, agree to any proposal in the Council of Ministers until scrutiny by the committee has been completed.
As the note points out, there may be a need from time to time to adapt the committee's working methods to take account of changes in the Community, not least the increased pace at which decisions have been taken since the Single European Act has been implemented. This has led us to send letters to Ministers on urgent matters where there is insufficient time for a full inquiry, and these letters are all published in due course.
But it is a tribute to the wisdom and the foresight of those who set up the committee in this House in 1973 and 1974, following the Maybray-King Report, that so few changes have been needed. The terms of reference have stood the test of time: the key to effective scrutiny has been careful selection and flexibility and of course the immensely hard work of the 80 or so Peers who man the sub-committees' inquiries, assisted by the clerks in the Committee Office and their supporting staff.
So far as I know, no other House of any other national parliament is so fortunate in terms of the time which its Members devote to Community matters—some 3,000 Peer hours in a Session on our last count. I was delighted to hear the praise which has been extended to their work today, and I am sure that I can express the gratitude of all noble Lords who take part in our deliberations for the very kind words that their work in the sub-committees has also received.
There are many encouraging signs though that parliamentary scrutiny of Community proposals is being given much greater priority now in all 12 member states. Now, for the first time, there is a scrutiny committee or similar specialist body in every national parliament. A year ago this month representatives of those committees met together for the very first time in Paris as the result of an initiative by M. Laurent Fabius, President of the French National Assembly. Since then, we have met in Cork and in Rome following the pattern of the presidency of the Council of Ministers. These regular meetings have provided a useful forum for contacts and exchanges of experience between those who in committees with very different parliamentary traditions all have a similar job to do; namely, parliamentary scrutiny of EC proposals.
The noble Earl, Lord Caithness, referred in his speech to the forthcoming conference of the parliaments of the 12 member states and the European Parliament which is to be held in Rome next week under the presidency of the Italian Government. The United Kingdom delegation will include some eight members of your Lordships' House. This will be a unique opportunity for members of national
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parliaments and Members of the European Parliament to meet together to discuss economic and monetary union and political union in the run-up to the two intergovernmental conferences. From the outset our Government have supported that initiative for this Parliament has much to contribute both in terms of its democratic traditions and its long experience of systematic and detailed scrutiny of Community proposals.
Those two developments, and the many bilateral contacts we have with our opposite numbers in member states and the European Parliament where our clerks regularly visit the Plenary Sessions that take place every month, convince me of the wisdom of the report's conclusions, which were unanimously agreed and which the noble Earl, Lord Caithness, appeared to endorse in his speech, that:
"there must be a partnership between national parliaments and the European Parliament, based on mutual understanding and respect. But a senate of national parliamentarians is not the answer".
There are those who would argue that the European Parliament, given adequate powers, could alone remedy the Community's democratic deficit. I do not agree. Ministers in the Council of Ministers represent national interests and must remain answerable to their national Parliaments. My noble friend Lord Jay, in his usual forthright manner, argued before the committee that Ministers should be just as accountable for decisions taken in Brussels as they are for those taken in Birmingham. I am convinced that it is no coincidence that the countries with the most developed scrutiny systems, the United Kingdom and Denmark, are consistently at the top of the Commission's league tables for the implementation of Community law.
I would have wished to comment on certain other aspects and recommendations in the report, particularly those relating to the more efficient working of Community institutions and the financial scrutiny of Community expenditure. I should also have liked to go more deeply into the need for the full and speedy implementation of Community legislation by all member states once decisions are reached. However, we have a long list of speakers today and it includes many noble Lords who were the members of this or previous relevant committee inquiries. I have no doubt that they will deal fully with all those issues in their speeches.
I should like to conclude by expressing my personal belief, based on my experience as chairman of the Select Committee, that this country, with its unique and long-standing parliamentary traditions, has a vital role in building a democratically accountable and outward-looking Europe. I hope that this report will assist all concerned in the forthcoming intergovernmental conferences to achieve that objective.
5.12 p.m.
Lord Cockfield: My Lords, the report before us is a remarkable one. I pay tribute to my noble friend Lord Aldington, to the noble Baroness, Lady Serota, and indeed to all members of the committee for the most exhaustive and authoritative analysis of the issues

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involved and, above all, for the clarity of their conclusions. Perhaps I may refer briefly to the speech made by the noble Lord, Lord Cledwyn of Penrhos. I greatly appreciate the tribute he paid to my right honourable friend the Prime Minister.
The Prime Minister and I have not always seen eye to eye on many of the important issues which we are debating today. I should just like to say that I look back with nostalgia to happy days of years gone by. There is one other point in the noble Lord's speech to which I should like to refer. He mentioned the merging of the sovereignty of the Kingdom of Wales with the Kingdom of England. Of course, in those days there was no United Kingdom. But for that merger of the sovereignty of those two countries, we would still have had immigration officers on Offa's Dyke and we would have been deprived of the most distinguished contributions that the noble Lord makes to our debates.
I have addressed your Lordships on many occasions recently on the question of monetary union. Therefore, I do not wish to traverse the same ground again in any detail. I shall only say that monetary policy was brought within the ambit of government control in this country in comparatively recent years; namely, during the time of the Labour Government of 1945–50. Today we have two eminent members of that most distinguished Administration present in the Chamber. I can quite understand them still holding precisely the same views as they did 44 years ago. I am only a little surprised that some of my noble friends and right honourable friends have emerged as born again Keynesians and supporters of vintage Labour Party policy. The report is so categorical on the question of monetary union and argued with such detail and conviction that I hope it will now put the issue beyond doubt.
Interestingly enough, on the very same day that the report was published, Dr. Pöhl was making a speech in London. The important point to remember is not that Dr. Pöhl is President of the Bundesbank but that he is also chairman of the committee of governors of the central banks of the European Community. On that occasion, he said that the single currency was really now a matter of fact and no longer a question of argument. In the light of all that, I hope the hard ecu proposal will now be quietly buried.
It is not a question of arguing as to what are the merits or demerits of the proposal; quite simply, its time has long since passed. Ten years ago it would have been an interesting and even valuable contribution in building a bridge between the old EMS and a single currency. However, 10 years have come and gone and times have changed. Eleven of the 12 member states are now determined to go ahead with a single currency. In my view the time has come for the Government to stop flogging what is in fact a very dead horse.
There is one other comment I should like to make upon the matter. I do so because, unfortunately, the same point re-emerged in the speech made by my noble friend Lord Caithness. I refer to the way that the Government are still talking in terms of a single
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currency being imposed on this country. There is no way in which a single currency could be imposed on this country. It is a simple point of Community law. It does our position in the Community no good that, on such a point, we are still using rhetoric which is quite untrue and inaccurate and which could indeed be said to be misleading.
The other point which causes me some concern is the fact that a decision has now been taken that stage two should start in 1994. The Government have objected to that proposal. However, I still find some difficulty in ascertaining precisely what is their objection. At one time they seemed to be saying, "We do not really know what stage two comprises". All I can say is that everyone else seems to know. All the major problems have been identified and solutions have been proposed. We have even reached the stage where the draft statute of the European central bank has been agreed by the governors of the central banks of the European Community. The Governor of the Bank of England has put in a general reserve as he was instructed to do by the British Government. That alone indicates that our own Government must have known what it was all about.
The alternative possibility is that the Government are trying to argue that you should take all the decisions first and then you should fix a date. However, no one ever proceeds in that way; indeed, the Government themselves do not proceed in that way. In the Queen's Speech we were given a list of Bills that it was proposed to present to your Lordships' House and to another place. We were given a date by which those Bills were to be adopted by Parliament; to wit, the end of the present Session. At the time of the Queen's Speech no one had seen any one of those Bills, still less had any decisions been taken by either House of Parliament. The Community has never proceeded in the way that the Government suggest. If your Lordships turn to the Treaty of Rome you will find that the customs union, which was the Community's foundation stone, was to be completed by a date specified in the treaty itself. There were not tens or hundreds but thousands of decisions to be taken. Nevertheless, the treaty specified the date and that date was adhered to.
When I launched the 1992 single market programme I followed the same procedure. The first thing I did in January 1985 was to say to my colleagues, "We must fix the date of 1992 as the date by which this programme is to be completed". And because we fixed the date, which was agreed by the heads of government at Milan a few months later, we were able to put in a discipline to ensure that the programme was kept on course. That is why the single market will be achieved by the date now specified in the Single European Act. Incidentally, that Act followed the launch of the 1992 programme. It did not precede it. That is why the date of 31st December 1992 will be achieved. The position at the time that we agreed the date was that the preparatory work was far less advanced than the preparatory work on monetary union is advanced today.

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Perhaps I may turn from that subject to the much more general question of economic and monetary union and political union. Perhaps one of the most valuable things the committee does is to debunk—perhaps I should use a more polite phrase—or defuse the arguments which centre upon the use of terms such as "sovereignty", "federation" and so on. Those terms mean such different things to different people that much of the debate is sterile and gets one nowhere. We have now to settle down to the hard task of deciding what should be done.
On subsidiarity, my views do not coincide entirely with those expressed in the report. Subsidiarity has become the popular catchword of the moment; too often it tends merely to be a substitute for thought. It is a philosophical concept, more valuable in intellectual or theological disputations than as a guide to decisions. It cannot be treated as a principle to be applied bluntly and rigidly.
My experience in the Commission indicated clearly not just how difficult it is to draw the line in the first place, but that subsequently the line shifts so easily. That proved to be the case in the instance of the new approach to standards. I shall not go into that matter in detail, but we started on the subsidiarity principle of devolving responsibility to the member states. We then found that trade and industry were demanding that we took it back at Community level and operated upon the basis of European standards rather than upon the principle of mutual recognition.
There is another important point here. While it would often be far better for member states to legislate themselves, and there may well be a consensus that they should legislate, nevertheless, in practice, they will not do so. That may be because they do not trust one another. None of them will legislate unless certain that the others will. That is sometimes because they expect domestic resistance to legislation; sometimes it is due to manifold and ill-defined other reasons. That is a situation that we meet time and time again. I can say only that, for all the reasons that I have given, it would be a serious mistake to incorporate subsidiarity into the treaty. To do so would open up endless opportunities for sterile argument. The committee takes that view to the extent of saying that subsidiarity should not be justiciable, but it then attempts to compromise by proposing that it should be incorporated in the preamble to the treaty. I do not agree with the committee. That device has commonly been used in directives. I can say from practical experience that it provokes endless argument and dissension and provides a basis for opposition and obstruction.
I do not propose to say much about the substance of political union. When I went to the Commission in 1985, I would not join in arguments or debates on political union. I then took the view that we would see economic union in my lifetime and that I should work to achieve it; but political union we would not see in my lifetime, and I was only too happy therefore to leave it to a future generation. Unfortunately, events have moved faster than I had at that time anticipated.
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If we are reluctantly forced to deal with political union, we must deal with it. I do not believe that there is any future in the kind of approach illustrated by the Spinelli treaty of European union, despite the fact that it was favoured by the European Parliament. Your Lordships will remember that it was the subject of a special report by your Lordships' committee in 1985.
I believe it more likely that progress will be made by specific increases in Community competence from time to time. That is the way that the Community has always developed. We started with the Coal and Steel Community; we then had the Economic Community and the Atomic Energy Community. We had the launch of the European monetary system in 1979. In 1986, we had the Single European Act which extended or confirmed Community competence in particular areas and also provided a legal basis for political co-operation on foreign policy, although in a somewhat semi-detached form.
As each successive step forward is taken, it paves the way for the next development. That is the way I believe that political union is likely to be achieved. We may well see at Rome next month an agreement to clarify or extend Community competence in the field of foreign policy. Technically, foreign policy is not a Community competence at all. It is detached from it but we may at Rome see it brought formally into Community competence. We may also see Community competence extended to defence and security matters.
I want to make a brief comment upon institutional issues. In many ways, to whom we delegate power is just as important as what powers are delegated. Community institutions reflect the doctrine of the separation of powers; that is, one has an independent executive, a separate legislature and an independent judiciary. It is a sound principle. Many of our present troubles in this country are due to the erosion of that principle. We should not make the same mistake in relation to the Community. Thus it will be a grave error to subject the Community to control by the European Parliament. The Commission is one of the institutions of the Community which, under the terms of the treaty, enjoys its own functions and its independence. The powers of the parliament are inadequate. But they need to be strengthened in relation to the Council of Ministers, not at the expense of the Commission.
The history of the Community is one of development and progress: sometimes faster, sometimes slower, but never completely coming to a halt and most definitely never going back. That is the Community we joined, and that is the Community whose laws and decided policies we were bound by the treaty of accession to accept. We now see this process of development carried forward. The matters considered in the report of your Lordships' Select Committee are an important illustration. It is not simply our obligation to participate; it is very much in our interest so to do.
5.30 p.m.
Lord Cromer: My Lords, I rise with great diffidence as I am not a familiar figure in this House. With even greater diffidence, I apologise for not being able to remain for the completion of the debate. I wish to take the opportunity of adding my compliments and respect to our chairman for the admirable way in which he organised the report. It was an extremely educational, interesting and enjoyable way of passing the hot summer.
I wish to touch on a couple of points. So much ground has been covered that it is difficult to avoid being repetitious. I shall do my best. The British are traditionally experienced in the practical field of international payment systems where they are deservedly renowned for having created a high standard, although much of it is now bygone history. The gold standard and the sterling area have passed. But the system took much construction and running which we were rather good at.
It was practical British banking leadership which led to the creation of the Bank of International Settlements in 1930 and which fortunately exercised a disproportionately large influence on the creation of the International Monetary Fund at Bretton Woods. That ended with a distinctly American overtone, but the British influence was considerable.
It so happens that because I was available at various times as the UK executive director of the IMF and later as a director of the Bank of International Settlements I was conscious of the advantaged position of the United Kingdom as a respected leader in practical international monetary affairs. We had more experience than most of our colleagues. In 1964 the Community set up what later became known as the central banks' governors committee. It was difficult from my point of view as we had walked out at Messina and were not members of the Community. I was rather averse to this group of bankers meeting without my being present. I had to take the necessary action to make sure that we were not embarrassed by not being included. There was no difficulty about that.
As a result, I naturally received invitations over the years to participate with bankers and academics in seeking, within international, entirely European, groups, a European payments system. Those meetings took place at different venues and under a number of different guises. Our prime quest was to evolve an international unit of account as an enduring store of value or, if that is preferable, numeraire —a benchmark and a currency of exchange. In those days we used to refer to it as a Europa, sometimes a European unit of account and many other similar variations.
We went so far as stimulating what became known as the Werner Report and even created a "snake in the tunnel", alleged by some to be a tribute to Basle as a leading railway junction in Europe. It was not a great success, but it was an attempt to get the European monetary system into a controllable form. Then we
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dabbled extensively in baskets of currencies of various compositions and shapes but never arrived at a pattern that met our criteria.
We were, however, always unshaken in our firm belief that no one national currency would enduringly provide the stability we sought. After all, the dissolution of sterling as the instrument of the gold standard and the disappearance of the dollar as the international standard of measurement increased our belief. That continued right up to the devaluation of sterling in 1967. Roughly 60 per cent. of world trade was reckoned by the Bank of England to be carried out in sterling. However, the dollar was the unit of currency. It confirmed our belief that a national currency was not the ideal basis for an international system.
So we come to the present, and the ecu. I do not find myself wholly in agreement with the noble Lord, Lord Cockfield, in his remarks about the hard ecu. I do not believe that the basket ecu has the qualities that are necessary. There is little disagreement among us that the final goal is the single European currency. But what will that currency be defined as? The question remains. It must be solved practically, not only in terms of what is academically acceptable but also of what is acceptable in the market. This is one of the great challenges and will remain so. I wish I knew the answer; perhaps some noble Lord will provide it. The basket ecu is a fairly wobbly item: it is not the ideal standard to set for the future.
Finally, perhaps I may touch on monetary sovereignty. I should say en passant that monetary sovereignty cannot be claimed on borrowed money. I did as much borrowing in my day as anyone in this House on behalf of the Government. That does not create sovereignty until it is repaid. A certain loss of sovereignty was inherent from time to time in our drawings from the International Monetary Fund. Thus to take a high position on monetary sovereignty—I am not talking about political sovereignty, which is different—is rather artificial.
The suggestion in our report of evolutionary progress towards the single currency is the goal we should keep in front of us. Certainly, for the administration of the currency—whatever it may be—I share the views that have been expressed about the desirability of a politically independent monetary authority or central bank. I do not like the term "Eurofed"; we use the words "monetary authority". My noble friend Lord O'Brien referred to the Federal Reserve System as being a child of the founding fathers in the United States. In that case the gestation period was rather unusual because the Federal Reserve System came into being in 1908 by which time the founding fathers had been underground for some time. However, that has very little to do with the future that we are trying to achieve.
5.40 p.m.
Lord Murray of Epping Forest: My Lords, I must ask for the indulgence of the House as I have a long-standing speaking engagement in Essex this evening and I regret that I shall not be present to hear

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the whole of the debate. However, it is in no conventional spirit that I add my congratulations to those already offered to the noble Lord, Lord Aldington, for the way he steered the committee gently but very firmly to an agreed conclusion. Indeed, I believe the noble Lord is in danger of reintroducing the word "consensus" into the British political vocabulary. I for one would be heartily delighted at that.
Several speakers have made reference to the way in which this report debunks and dispels mythologies such as sovereignty. One piece of mythology which has dogged debates about Europe has taken the form that the Community monetary authority will in some way come to dictate Europe's economic priorities and objectives, whatever the elected representatives may want or think. That concept may be expressed in the phrase, "The European central bank rules okay". However, that is not all right, in my opinion. That position is not desirable and I do not believe that it would happen in practice.
In his evidence Dr. Pöhl rightly and understandably laid great emphasis on price stability. He referred to the contribution that the Bundesbank had made to the achievement of that objective in Germany. He laid great emphasis also on the need for independence of a European central bank. That idea has been echoed in debates, not least in the debate here today. We should remind ourselves of what Dr. Pöhl said at paragraph 65 of the Select Committee's report where he made it clear,
"that the Bundesbank recognised the limits of its responsibilities, namely monetary policy. Political and economic objectives—such as full employment—had to be taken into account, whether by a central bank, ECOFIN, governments, employers or trade unions".
That was underlined by the present Governor of the Bank of England in the evidence he gave. He said on page 21 of volume II of the Select Committee's report, with reference to the Bundesbank:
"I know that it is required to exercise monetary policy with a view to price stability and to exercise it free from intervention by central government, yet nevertheless it is required within that prime responsibility to have due regard to the elected government's economic policy".
The conclusion drawn by the committee is set out in paragraph 83 of the report. We were interested in, if not preoccupied by, the German model as a possible indicator of the way in which we might establish this kind of institution within a European context. It is right that we should reflect on and learn from the German experience and that we should acknowledge the important part played by the Bundesbank in helping to create a climate of price stability in Germany.
We have been reminded this afternoon that the Bundesbank had the enormous advantage of preaching to the converted. Experience of inflation after two world wars meant that German trade unionists were more willing than British trade unionists to make their actions conform to the achievement of price stability. The noble Lord, Lord O'Brien, reminded us of that point. However, we
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should remember that that price stability, and the contribution made by German trade unions to it, did not come mainly from wage restraint but rather from the acceptance of industrial and technological change, training, retraining and modifications in working practices, all in the context of the principle of social partners working closely together in industry.
That principle is too often derided in this country, at least on the Benches opposite, and dismissed as corporatism. In short, the German achievement of price stability has not merely been a matter of monetary policy.
How effective a European central bank would be in promoting price stability would depend in part on the powers written into its constitution and in part on the toughness of its chief officers in practice. However, what the European central bank does will, at the end of the road, depend on its judgment of what it can do without provoking an undue reaction from national governments, national parliaments, the Commission or the Council of Ministers. The impression I received from listening to Dr. Pöhl was that he was as well versed in the art of the possible as any of your Lordships.
I would expect a European central bank to give not only national governments but also banks, employers and trade unionists a hard time. If any of my friends are apprehensive about coming under the hammer in that way, I must say that I would rather be exposed to that kind of continuous and predictable pressure than be subjected to sporadic invasions by the faceless men of the International Monetary Fund. I would also regard steady pressure from an institution of that kind as preferable to sporadic lurches by governments of either party into wage restraint as a means of extricating the nation temporarily from a crisis only to sow the seeds of the next crisis. Indeed, the recurrent resort to pretty crude wage restraint has given incomes policy in Britain an unnecessarily bad name.
Paragraph 86 of the report underlines the need for economic as well as monetary co-ordination. The report does not dot all the "i"s and cross all the "t"s of economic monetary union, but it opens up genuinely clear new options for Britain. The report offers the means by which we can develop a strategy—or even a plan if that is what we would choose—for achieving a better life for the citizens of the European Community. That is the test of this report and of all that will be achieved in the coming intergovernmental conference.
5.48 p.m.
The Earl of Bessborough: My Lords, I am very glad to follow the noble Lord, Lord Murray of Epping Forest. On more than one occasion we have travelled together to Brussels when the noble Lord was a member of the economic and social committee. The noble Lord was the most important leader of trade unions in this country. I was most impressed by the fact that he was very European minded. I thought of him as a good European even though we may not have agreed on everything.

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I wish as briefly as I can to endorse fully the conclusions and recommendations in Parts 8 and 9 of this admirable report on which the noble Lord, Lord Aldington, and the members of his committee, as well as the first-class clerks and specialist advisers, should be warmly congratulated. I was not a member of the noble Lord's committee, but I nonetheless managed to attend some of its meetings. I was particularly struck by the distinguished composition of the committee, which included no fewer than two former Governors of the Bank of England, whom we have just heard.
I listened to many most distinguished witnesses whom I happen to know. They included my right honourable friend the Foreign Secretary, Mr. Douglas Hurd, and the present Governor of the Bank of England, Mr. Robin Leigh-Pemberton, who I thought was sympathetic to most of the recommendations made by the committee. I was particularly impressed by the President of the Bundesbank, Dr. Karl-Otto Pöhl, Sir Leon Brittan, the European Commissioner, and my noble friend Lord Cockfield. I agreed with a great deal of his evidence and also with much of the evidence given by the noble Lord, Lord Jenkins of Hillhead, among others, and M. Trichet the Directeur du Trésor in France.
Ever since the publication in 1970 of the Werner Report, which has already been mentioned, I have been favourably inclined to the concept of a single currency for the EC, and, more recently, eventually for an enlarged European Community. For some 12 years, since I sat in the European Parliament, I have advocated it. Like my right honourable friend Mr. Nigel Lawson, the former Chancellor of the Exchequer, and Sir Geoffrey Howe when he was Foreign Secretary, I have been even more convinced during the past five years of the need for a single currency if we wish a united Europe to be a major power in the world. I say that not merely because I am half French and have many relations and friends in other member states. Surely a Europe completely united economically and monetarily will be stronger than a series of relatively small independent sovereign states. Strength and power must reside in union and must contribute to the effectiveness of the 1992 single market. This must be a case of the whole being greater than the sum of the parts.
On more than one occasion in your Lordshps' House and elsewhere I have stressed the benefits of a fixed exchange rate regime and even a hard ecu. However, I agree with the statement in paragraph 189 of my noble friend's report that those benefits are far less than the substantial gains which would derive from a single currency, which is much favoured by industrialists trading with the Continent and by tourists.
I agree too that the benefits of a single currency should outweigh fears about the loss of national control expressed in paragraph 75. I therefore agree with many in your Lordships' House and in another place that the sooner we agree to a single currency and go along with the other 11 member states of the EC the better, even if we all have separate problems in that connection. I feel that we must now take the plunge.
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I agree too that the hard ecu scheme is not viable as it stands, although it is certainly a useful step in the right direction which should benefit us in the transitional stage. I also agree with what my noble friend Lord Aldington said about convergence and that highly controversial word "subsidiarity".
However, on the question of a European monetary authority and/or a European central bank, it appears that not all experts, even in France, are in agreement. I have just read a book by Mr. Bernard Schmitt L'ECU et Les Souverainetés nationales en Europe—The ECU and National Sovereignties in Europe—which I recommend to your Lordships, even though I do not agree with all that Mr. Schmitt writes. He is one of the best known French authorities on the question of international monetary policy. He considers the setting up of a central bank similar to the Fed in the USA Utopian and that realism must entail a rejection of the idea of supranational money. I do not agree with him on that point. Nevertheless, I believe that it is a book which those of your Lordships who are interested in the subject should read, even though we may not agree with everything that he says, although some people in this country do.
I wonder whether a committee of governors of the central banks would be able to perform the role of a central bank or monetary authority and be concerned in the transitional phase with the proposed European Monetary Fund.
Above all, I consider that we should not remain out on a limb in Europe, with the result that we would not be able to play a full part in developing the overall benefits of monetary union in some form. I agree very much with all that the noble Lord, Lord O'Brien, said on the subject.
I sincerely hope, therefore, that all members of Her Majesty's Government, present or future, and of our party, as well as those in other parties, will agree with the report's recommendations in Part 9. That is not to say that, like others, I do not greatly admire what our Prime Minister has done to make Britain great again in Europe and the world.
I have stated more than once in this House that I do not believe that the loss of sovereignty argument is valid. By joining other international organisations such as NATO and the International Monetary Fund we have already severely curtailed our freedom for independent action. I hope, therefore, that at the next intergovernmental conference Her Majesty's Government will go along in principle with a majority of the other 11 member states.
I agree very much with the report's recommendations on political union. However, in this ease I accept that member states must also retain same right of independent action in foreign affairs. I have already referred on other occasions to the success of European political co-operation in which considerable progress was made when my noble friend Lord Carrington was Foreign Secretary and chairman of the EC Council of Ministers.
Above all I hope that we shall go forward with our 11 partners to full economic and monetary union. I

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agree that that should eventually lead to the establishment of a common monetary authority, as described in paragraph 194. I believe that if we had joined the Exchange Rate Mechanism earlier that would have been beneficial in controlling inflation and reducing interest rates. Between you and me, my Lords, I do not believe that a closer connection with the deutschmark can do anything but strengthen sterling.
Again I should like to pay tribute to my noble friend's report and to all those who helped him draw it up. I fully support the recommendations.
6 p.m.
Lord Cobbold: My Lords, I should like to add my congratulations to those of other noble Lords to the noble Lord, Lord Aldington, and his sub-committtee for the production of a first-class report. Its coverage of economic and monetary union is the clearest and fairest exposition of this complex subject that has emerged since, if I may say so, the Select Committee's earlier report last December. There are many speakers this afternoon and I wish to touch on only three issues related to monetary union: sovereignty, convergence and the form that a single currency might take.
The report's definition and analysis of the sovereignty issue is masterly. The only point that I feel was not perhaps directly addressed is whether Parliament has a sovereign right over the creation of money in the first place. There can be no question but that Parliament has the right to tax and the right to borrow, but it is at least debatable whether Parliament has the right to lend itself money by running the printing presses.
For those who believe that politicians cannot be trusted with the management of the money supply—and history supports that view—it is essential that central banks, like the judiciary, should be independent. However, if I may presume to say so in the presence of two former Governors of the Bank of England, in this country the sovereignty question in the monetary field is about independence of the Bank of England. Once the principle of independence is accepted at the national level, it is less of an intellectual jump to envisage a merging of independent central banks within the Community.
With regard to convergence, it is sensible for an advanced degree of convergence to be achieved before the adoption of a single currency. But there is a danger that the call for convergence is used purely as a delaying tactic. I support the view noted by the committee in paragraph 90 that,
"convergence will be most effectively secured once a single currency is in place, with no more pain than if the struggle is drawn out".
I for one hope that the process will be shorter rather than longer. I believe that there is a risk, particularly after the political changes that are taking place this week, that the momentum for a single currency may now accelerate and that business will demand fairly fast progress in this area.
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In any event, since a single currency at stage three will take a number of years to introduce once the decision is taken, it would be advisable to commence the process while economies are still converging. Convergence without the single currency locking mechanism, were it ever achievable, might well be followed by resumed divergence.
I turn to the question of what form a single currency might take. In the recent evidence that I submitted to the Select Committee, I suggested that the public might not welcome the introduction of an esperanto currency such as the ecu. Since then, we have heard already in this country cries of, "Save our pound". The committee states in paragraph 87 of the report that it sees,
"no objection to the proposal that national currencies should be redenominated into round numbers, which could then be printed on one side of a banknote or a coin, with the single currency denominated on the other".
That is indeed a desirable solution, provided that it involves only a small change in the perceived value of the familiar currency unit. Too large a change in value would destroy the consumer acceptability that is sought.
I would turn the proposition round. Is it not possible to line up the new single currency with existing known values? The three principal currencies of the EMS are the deutschmark, the French franc and the pound. Together they account for 62 per cent. of the weighting of the ecu and, if East Germany is included, 56 per cent. of the population.
The pound has recently entered the exchange rate mechanism at a central rate against the mark of 2.95 and against the franc of 9.89. An adjustment of only 1.7 per cent. in the case of the mark and 1.1 per cent. for the franc—well within the narrow 2.25 per cent. band—would put those central rates at round numbers three and 10. At 10 francs to the pound a franc is the same as a 10 pence piece. If it were not for decimalisation, a mark at three to the pound would be equivalent to six shillings and eightpence. Unfortunately, a decimal pound is not divisible by three. However, most people can handle without difficulty a mental conversion of three to one.
In my written evidence to the committee I put forward a suggestion based on the probability that the deutschmark would need to be revalued within the system before exchange rates were finally fixed. That may still prove necessary and the proposed scheme is still valid. If, on the other hand, further major realignments can be avoided and we manage to get to stage three with existing relationships, a consumer-friendly solution would be to consolidate the £1, three mark, 10 franc whole-number relationship and to fix the value of the new single currency ecu in direct relationship to one or other of the three currencies.
The mark may seem to be the obvious choice. At the moment the ecu is worth close to 2DM. However, a case can also be made for the ecu to be fixed at £1, which happens to be the largest monetary unit in Europe. There would then be three marks to the ecu, and 10 francs. For the British and the French there would be little change. The Germans would receive

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one new ecu for every three deutschmarks. Such an option would obviously have great appeal to the City of London and is one that the British delegation at the IGC could actively pursue in the national interest. There are other variations for such a scheme and several of the other EMS currencies might also be fitted in with only minor adjustments to their existing central parities—for example, the Spanish peseta at 200 to £1.
The important point is that the opportunity to enhance consumer acceptability by making use of such round number relationships between Europe's major currencies should not be missed. Where practical the new should be created to match the old rather than the old redefined to suit the new. In all other respects I fully support the conclusions of the report.
6.7 p.m.
Lord Jay: My Lords, this afternoon I speak with diffidence as a non-member of such an eminent committee. I should like heartily to applaud all that has been said about the clarity and lucidity of this report. I fully agree with one of its conclusions; namely, that these issues are well worth discussing in the House.
Economic union and monetary union are phrases which in themselves could mean almost anything or nothing. However, in practice what appears to be proposed as a settled aim under economic and monetary union is a single currency and a single monetary policy controlled by a single more or less unaccountable central bank.
First, why do we want a single currency? It seems to me that a strange fallacy has grown up recently, to the effect that by adopting a single currency a country can somehow abolish a current account payments deficit. But it does not do that. What a single currency would do to a weak economy would be, first, apparently conceal the deficit and, secondly, convert the debtor country into a more or less depressed area, eventually sucking its population elsewhere if those conditions continue.
Producers in such a country would find that their costs were too high and would contract or close down. People would be put out of work and depressed conditions would arise. That is what happened in Northern Ireland over the past 50 years, and interestingly enough is visibly happening in East Germany at the present time. There, unemployment has already reached something like 20 per cent. Therefore I wholly agree—it is a pleasure sometimes to agree with the Government—with the statement of the present Chancellor of the Exchequer as recently as 11th November on television that a single currency imposed—that is the word he used, but I do not think the word matters much—on our currency would mean massive unemployment in the present condition of the British economy.
Secondly, it is true that to manage the single currency we are faced with a plan for a Euro-fed, independent central bank which Dr. Pöhl believes should be wholly free of political control. Since it is sometimes a good thing to consider the real world, in
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evaluating that issue I should like to remind noble Lords of what happened on 16th March 1939. On that day, Hitler, having seized Prague and the Bank of Czechoslovakia, in the name of the bank put his instruction to the Bank for International Settlements that £12 million of gold deposited there should be returned to him in Prague. At a meeting of the Bank for International Settlements a few days later, Mr. Montagu Norman assented to that arrangement and the BIS duly handed over the gold to Hitler. Some wit made the comment, BIS dat qui cito dat.
However, when the British Foreign Secretary was asked about it in Parliament he said that he knew nothing about what had happened. When Mr. Montagu Norman was asked by the press whether he had consulted the British Government, he said that politicians should not interfere with central banking. I believe that that incident is worth recording. According to the report, the noble Lord, Lord Cockfield, is wholly in agreement with that sentiment.
Lord O'Brien of Lothbury: My Lords, if the noble Lord will allow me to intervene when he is talking about this incident of the Czechoslovak gold, I wish to point out that the gold was deposited formally with the Bank for International Settlements in those far-off days. The Bank of England merely held it on behalf of the Bank for International Settlements as a depositor. It had to obey, and did obey, the instructions of the people who deposited the gold with it. I cannot tell you to what extent the Governor at that time consulted the Government, but as a banker he was absolutely obliged to comply with the instructions of the people on whose behalf he held the gold. It was their responsibility to decide whether that gold should properly be returned to Herr Hitler rather than to the original Czechoslovak owners.
Lord Jay: My Lords, I am very glad to have that confirmation of the account that I gave of the incident. The upshot was that the Government were not consulted and Hitler obtained the gold. That is not in dispute.
However, there is an even more fundamental objection to a supranational central bank. In a modern economy there is almost always a standing dilemma between high employment, on the one hand, and stable prices, on the other. If one has no incomes policy, one is usually forced to choose between either a rising price level or rising unemployment. That is the most fundamental decision that any modern government have to take other than the choice between peace and war.
However, on this issue central bankers—worthy and distinguished characters as they all are, as we can see by looking around the House—a re inevitably biased. Dr. Pöhl has rather condemned himself by saying that there is no need for political control because stable prices will be the sole aim of the central bank. The implication is that employment or unemployment does not matter. Indeed, we have hardly heard the word "unemployment" mentioned in the debate until now. It is no disparagement of central bankers to point that out. Like all of us they have their occupational party line, shall we call it? It is no

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criticism of them, but such bias is highly important when one considers how much authority one should put into their hands.
The truth is that central banking is too important a matter to be left to central banks. If one has a supranational authority, either it is unaccountable or, in so far as one tries to make it accountable by direct elections or other devices, one is inevitably moving towards a loss of status as a sovereign independent nation.
It is not only sovereignty that is now regarded as a legal restriction that is at stake but the fundamental reality of self-government and independence. It is not simply the right of Parliament but the right of the electorate that is at issue. We have hardly heard mention of the electorate and the ordinary people of the country. That issue cannot be fudged. It is a merit of the report that it does not attempt to do so. The status of a sovereign independent nation, as the report points out, is legally defined. It is adjudged by the United Nations when anyone applies to join.
Those who do not wish to retain this country's status as a sovereign independent nation should realise that if that concept were applied to Britain, this country would not merely cease to be a member of the Security Council but would cease to be a member of the UN, while about 120 other nations—one need not enumerate them—would still be members. Those who wish to retain our essential independence and self-government should say so clearly and also accept that in that case a line must be drawn somewhere in handing powers away from the British Government and the British Parliament.
I gathered from his speech last week that the noble Lord, Lord Jenkins of Hillhead, who is not with us now, would be averse to going quite so far as that. He said that he did not wish to see an analogy of the United States in Western Europe. There is also something curiously outdated about the spectacle of the EC at this stage seeking closer and tighter centralisation, when all over the world other societies are seeking independence and a loosening of bonds and Eastern European states are joyfully breaking away from years of centralised authoritarianism. Indeed, even the Soviet Union is being forced to decentralise in order to survive. Surely what we need politically is a wider and looser Europe embracing the EFTA countries to start with—many of them would be willing to join—the liberated ex-communist states at some stage, and perhaps others, in a freely associating society, and not a narrow, exclusive, would-be super power in Europe.
If one insisted on more enforced centralisation, as with a single currency and a supranational central bank, one would surely make it far harder for the EFTA countries and the ex-communist countries to join. Therefore I believe that in the forthcoming intergovernmental conference the UK should stand firm against extreme and authoritarian proposals but—I emphasise this—should not try to veto other countries in the Community from going further in that direction if they wish. I believe that talk of a two-tier
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Europe is extraordinarily misguided and misses the point. It would be much truer to talk of overlapping or concentric circles of countries.
Finally, it is time—since we have gone as far as we have —that the electorate were consulted. Parliament surely has no right to barter away essential constitutional liberties which are the property of the electorate rather than of Parliament. So far the electorate has been misled rather than consulted. We should remember that in Mr. Heath's original White Paper which was presented to Parliament in 1971 he said categorically that in joining the EC:
"There is no question of any erosion of essential national sovereignty".
The pamphlet circulated to all electors in the 1975 referendum under the name of the noble Lord, Lord Jenkins of Hillhead, and others recommending a yes vote stated:
"All decisions of any importance must be agreed by every member".
The other yes pamphlet—there were two yesses and only one no—circulated by the Government under the name of the noble Lord, Lord Wilson, stated:
"The Minister representing Britain can veto any proposal for a new law or new tax if he considers it to be against British interests".
It is interesting to note that the latter pamphlet, which some people may have forgotten, stated:
"There was a threat to employment from the movement in the Common Market towards an economic and monetary union. This could have forced us to accept fixed exchange rates for the pound … This threat has been removed".
In view of what was said by my noble friend Lord Cledwyn about possible referenda, it appears that if those pledges given at the previous referendum are to be honoured the electorate, as well as Parliament, must be consulted again.
6.22 p.m.
Lord Plumb: My Lords, I join with other noble Lords in thanking my noble friend Lord Aldington for the thorough research that he and his committee carried out in producing the report on European economic and monetary union and on political union. The fact that so many of its conclusions have already been fully vindicated by events is a tribute to the quality of his work.
I fully support my noble friend's views on the democratic procedure, the future development of the European institutions and their relationships with national parliaments in particular. We should remind ourselves of the importance of next week when, for the first time formally, there will be the gathering in Rome of the representatives of this House, of national parliaments and of the European Parliament. I hope that we can obtain a better understanding than has obviously been the case hitherto.
I speak with knowledge as a past president of the European Parliament in paying tribute to the courageous lead given by my noble friend Lord Cockfield. Without the pioneering effort that he made in steering his report on economic and monetary

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union through the Commission, the European Parliament and the Council, we should not have made the progress that we have thus far.
The recent European Council in Rome has proved that there is broad support among our Community partners for creating a single European currency by the year 2000. We can now be in absolutely no doubt that Continental member states are serious about this. The prospect of finding ourselves outside a European currency union, therefore, is very real. It is a prospect that I view with the gravest misgivings. The potential damage to the status of the City of London as the principal centre for financial business in this time zone, the risk of our losing foreign investment which has come here because we are part of the European single market, and the probable difficulties for British business in competing in that market through a currency barrier are all extremely grave.
There has been some talk of a single currency being imposed upon us. The fact is that the real argument is whether we choose to exclude ourselves and the costs to us of so doing. But while I regard the process of European monetary union on the Continent as unstoppable I think it wrong not to consider the very positive advantages for this country in accepting this process; indeed, there is still all to play for in determining the precise form which it takes.
I feel that we have been fighting the wrong battle of late. We cannot prevent the Continentals proceeding down this path. Rather than harbour this illusion we should analyse the benefits which monetary union could bring us and determine that we so influence the course of the forthcoming intergovernmental conference that monetary union, when it comes, is of a form that fully suits our national interests.
What are these advantages? As the committee clearly describes, a single European currency is the obvious next step from the completion of the single European market. Savings on transaction costs and the greater commercial certainty brought about by a currency union are acknowledged even by opponents of EMU. The possible savings are assessed, for instance, at some £20 billion annually for the European Community, Businessmen, travellers and tourists will benefit. I submit that that creates employment rather than the reverse. The member states of the European Community already conduct the great majority of their trade with each other, the basic pre-condition for a successful currency union. Intra community trade will increase after 1993, thus increasing the benefits flowing from a single currency.
But the single European currency is not just a question of saved costs and the abolition of exchange rate uncertainty. More important are the European monetary arrangements that will accompany the single European currency. We should certainly welcome these arrangements. By definition, devaluation of the British currency against Continental competitors will be impossible; this must restrain inflation and will rule out the "fool's gold" of competitiveness pursued through devaluation.
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That is not just theory. Those of our Community partners who have been members of the exchange rate mechanism have already experienced some aspects of these benefits, albeit in an imperfect form. In the fields of my own experience, in agriculture for example, I have long witnessed the debilitating market-distorting consequences of the parallel so-called "green currency" system. For farmers, our entry into the exchange rate mechanism and the abolition of the green pound is greatly to be welcomed.
Again, in commercial banking the expansion of ecu-denominated lending is an indicator of how powerful are the pressures for greater currency stability. The committee has rightly concentrated much of its attention on the controversial question of central bank independence. I have long found it incredible that so many people seem to view with scepticism the notion that monetary policy is of such fundamental importance for the health of the economy that it should be removed from the direct political arena. It is difficult to believe that this country has benefited from the subordination of its monetary policy to political control which, after all, dates only from 1946 when Mr. Attlee nationalised the Bank of England. An independent European central bank would allow government to supplement their programme of privatisation by denationalising British monetary policy.
We now realise how absurd it is for British Gas to be ruled from Whitehall and Westminster. It is no less absurd for monetary policy to be decided by Ministers and their officials. We know that the role of central government needs constantly to be scrutinised and frequently to be pruned back. I should personally regard it as a great triumph if the defence of the currency and therefore, incidentally, of personal savings were taken out of the political arena.
A European central bank drawing up its membership from all the countries of the Community, but independent of either national governments or the European Commission, is precisely the kind of Europe that Britain is trying to build. It is a Europe based on sound monetary conditions and minimal intervention from governments or the Commission.
This is the point where the question of monetary union becomes linked with the question of political union. There is no doubt that the form of institutional arrangements which we devise for monetary union will have a tremendous influence upon the manner in which we propose to conduct other areas of common interest whether it be securing the single market, the environment, or formulating common foreign or eventually even security policies.
The benefits of a single European currency for this country are not merely economic. We must not forget the political desirability of binding a united Germany irrevocably into the Western European camp. Herr Kohl will not always be in power, and we have today a perhaps unique chance of ensuring that a maverick Germany will never again pose a threat to the peace of Europe. The European Community is founded upon the pragmatic sharing of sovereignty. Germany's enhanced economic and political weight in the new

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Europe should make more rather than less attractive the prospect of an increased British share in German sovereignty.
Where does all this leave us now in the run-up to the negotiations of the intergovernmental conferences? If I were to identify the one thing which is absolutely crucial and which the report of my noble friend Lord Aldington has made abundantly clear, it is that we will only be able to influence the debate on European monetary union if we say now that we share our Community partners' ultimate objective to create a single currency to go alongside the single market. If we do this, we will be able to bring our full influence to bear on the timing and detailed form of the process to create that single currency. And our full participation in the discussions on European monetary union will allow us also to influence effectively the debate on European political union.
After all the controversies that we have had on these matters, I am convinced that only this can restore our credibility with our partners and secure the true interests of the nation in the crucial negotiations which lie ahead.
Lord O'Brien of Lothbury: My Lords, before the noble Lord sits down and with the consent of my noble friend Lord Harris, perhaps I may remark on the noble Lord's proposition that the Bank of England became a creature of government only in 1946. The shareholding of the Bank of England, which had previously been in private hands, became the shareholding of the government, the Treasury Solicitor. That made very little practical difference to the position of the Bank of England which remained a confidential adviser of government and the implementer of monetary policy. It is true that in earlier years there was an attempt at independence as the noble Lord will see if he reads the correspondence between the late Lord Cunliffe and Lloyd George in which Lord Cunliffe was unsuccessful in his bid for independence.
Lord Plumb: My Lords, I thank the noble Lord, Lord O'Brien. If my proposition provoked that response, then it was well worthwhile.
6.35 p.m.
Lord Harris of High Cross: My Lords, I readily join others in paying tribute to the Select Committee for its clear and instructive report. In measuring its contribution, there may be value in starting from two propositions which may carry wide agreement at the outset. The first is that the basic purposes and principles underlying the Treaty of Rome are so simple and sensible that it is difficult to see how any student of history or politics could seriously dissent. My second proposition is that implementation must give rise to testing judgments on complex, practical details which are bound to divide people of equal good will. The tragedy now unfolding is that a truly historic movement for increasing co-operation should look likely to prove so divisive in our own country and also threaten to aggravate divisions between and within our EC partners.
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I should like to follow the noble Lord, Lord Ezra, in looking back to the visionary purpose of the architects of the EEC. As he said, their aim was so to unite the warring nations of Europe that a repetition of 1914 or 1939 would be impossible to contemplate. Their solution was to supplant the national socialism of Hitler and Mussolini by the international liberalism of my old friend Adam Smith. Neither Germany nor Italy could have armed for war without the central planning, protectionism and subsidised industry necessary for self-sufficiency in all essential supplies. Thus the Treaty of Rome aimed to prevent any repetition of economic autarky, which Adam Smith had denounced two centuries earlier as mercantilism.
If the purpose of the Treaty of Rome was plainly political, its primary method was economic. By entrenching freedom of trade and mobility, the resulting international division of labour would intensify true economic interdependence between nations as the surest guardian of peace. At the same time, it was the best way to spread prosperity among countries with widely differing natural and acquired endowments. As a bonus, free trade would diffuse power and buttress civil liberty. It upset me to read in the report at page 45 that this lofty liberal ideal was rather contemptuously dismissed by the noble Lord, Lord Jenkins of Hillhead, as nothing more than what he called "a Europe of packages".
Many hotly-disputed Euro-issues would be on their way to resolution if the partisans on both sides would pay attention to the following text from Adam Smith's Wealth of Nations. As I have said before, the trouble with this House is that it does not look backward often enough. Smith said in 1776:
"Were all nations to follow the liberal system of free exportation and free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire".
There you have it. It is precisely in this spirit that the promise enshrined in the Treaty of Rome offers the best of both worlds; that is, the economic and the political. The removal of barriers to trade, investment and mobility ensures nothing less than complete economic integration just as though the nations of Europe were indeed part of a single empire. However, at the same time, we preserve the advantages of political decentralisation and democratic accountability among otherwise independent governments.
I found most helpful the Select Committee's three definitions of sovereignty, of which the third best accords with common understanding; namely,
"The extent to which a state had a power of effective or unfettered action".
In that sense, by completing the single market on the timetable settled by the noble Lord, Lord Cockfield, we have in effect agreed voluntarily to sheathe part of our sovereignty in the cause of economic disarmament. But in all other respects separate nations would retain their national sovereignty. However, that national power is denied its destructive outlet in war and is diverted to peaceful competition in the marketplace. That was the dream.

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A long line of classical economists from Smith to Keynes and Milton Friedman have emphasised that competition requires a strong framework of law and institutions to prevent distortions from vested interests ever seeking special privileges. We know that all short-sighted producers naturally prefer a monopoly in what they sell and competition only in what they buy. That is why I underline that we need in Brussels a strong central, if you like, federal authority to police competition, check subsidies and prevent the future re-emergence of restrictive or monopolistic practices.
Strictly speaking, beyond such a commission for competition, full economic union and total economic integration require no further central or federal institutions except a court with power to impose fines for transgression. The danger of multiplying political and social initiatives without end is that they would be the product of the same, often shady, shoddy, opportunistic and nakedly nationalistic power play we recently witnessed over quite trivial cuts in the totally indefensible common agricultural policy. Every vague, starry-eyed, fashionable proposal for further advances in political or monetary union therefore demands the most earnest and searching scrutiny.
It is a neglected liberal principle—alas often neglected on the Liberal Benches—that where trade unites, politics divide. When politicians seek to steamroller national differences by imposing policies, using majority voting—artfully called harmonisation—the method employed includes inevitably more than a dash of double-dealing in the name of compromise and phoney consensus. The long-term result is less likely to be unity and harmony than the division and mistrust of the CAP, multiplied tenfold or even a hundredfold.
Beyond paying tribute to Margaret Thatcher for her magnificent stand on principle in this as well as other matters, I prefer to avoid politics. M. Delors is plainly a lifelong socialist who brings a strong personal commitment to Euro-centralism in his advocacy of the social charter and not least monetary union. I am arguing that neither is necessary for the success of the single market. The contrasting liberal logic, consistent with Adam Smith, points to allowing competitive evolution as the best discovery procedure for determining the pace and direction of progress to fit each nation's changing circumstances.
Turning to EMU, on which I had my say in the debate on the Queen's Speech, I must add that any remaining remnants of seduction were tarnished when I read in paragraph 83 of the Select Committee Report that the Eurobank would have "price stability" only as its main objective but also other guidelines including—I assure the noble Lord, Lord Jay—"a high level of employment".
I was further disturbed by the evidence of the noble Lord, Lord Jenkins, on page 47, throwing some doubt on the famous independence of the Bundesbank. Still more revealing was the memo by Mr. John Stevens, MEP, on page 142, saying that even if our Community partners believed that the move to a single currency would be "disruptive"—his word—they would go
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ahead because of what he called "the German political imperative". I did not like the sound of that. He implies that weaker members like Greece and Portugal have been bought off in their opposition by the promise of still more cash from the enlarged structural funds. Others will be driven on by nothing more substantial than the vision of EMU as a symbol of political integration. There is enough mischief there to keep the snakes in the snake pit.
Mr. Stevens predicts that progress would not be delayed by loose ends and unsettled major issues, even on matters like the extent of a common fiscal policy, because of what he describes as the "steely resolve" to advance to political union.
On page 144 of Mr. Stevens' evidence comes the stripping away of the final veil of principle:
"It is all completely consistent with the way in which Community policies so often advance, namely by leaving unresolved problems in the air which demand resolution by further initiatives".
We must ask where that process will lead us.
I conclude by saying that I predict no happy outcome to this restless pursuit of the European holy grail. In the Select Committee report and elsewhere we are witnessing a descent from the original principles to political opportunism, made worse by the inevitable clash and compromise between 12 versions of short-term national interest.
Mrs. Thatcher has for the moment been punished for struggling to keep alive a noble vision, which the noble Lord, Lord Jay, presented from the Labour Benches—a vision of an open, liberal and expanding association of free self-respecting peoples, with their distinctive national structures and local loyalties. If Mr. Heseltine or some other pretender now leaps aboard the Euro express he will find himself in for a bumpy ride through hostile country on fixed tramlines heading fast towards the buffers. It is a journey on which he will find a surprising number of enthusiasts for the single market, in both the main parties and none, will not wish to travel with him.
6.45 p.m.
Lord Barnett: My Lords, I find myself in total disagreement with the noble Lord, Lord Harris of High Cross. I am not sure whether my noble friend Lord Jay would agree with what was described as the "liberal" element of the debate.
I apologise to the House that due to a long-standing commitment which I cannot cancel I shall sadly miss some of the debate at the end. I simply wish to concentrate briefly on economic and monetary union. I can be brief because I largely agree with the Select Committee. I should like to congratulate the noble Lord, Lord Aldington, along with all the other congratulations that he, my noble friend Lady Serota and the committee received on its excellent report. Even those who disagree with it found it clearly expressed.
This much I concede to my noble friend Lord Jay, who seemed to be agreeing to some extent with the Prime Minister. The Prime Minister was right in not wishing to pre-judge the inter-government conference

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but she was wrong to assume that the inter-government conference would settle all the issues in stone for all time. Even the next one or the one after that will not do anything remotely like that.
What those of us who agree with the report, and I hope members of the committee and the Government, are saying is that we agree with the central objective but that it will be a long path before we arrive at the objective. The committee brings that out clearly, and I shall say a word or two about that later. But I should like, first, to say something about what might be called the non-issues, and sovereignty is the first matter I should like to take up. The noble Earl, Lord Cromer, had a lovely description when he said, understandably as a former Bank of England governor, that it was difficult to have national sovereignty over a huge debt. We need to pay some attention to the people to whom we owe the money.
I would put it another way as well. In paragraph 10 the committee referred to a remark of Judge Edwards, who said that it is a dangerous distraction. That must be true. Indeed, the committee quote John Biffen, who was never known as a great European. He said that the issue of sovereignty raises the temperature unnecessarily. Of course it does, and the Prime Minister did us all a disservice by raising the temperature unnecessarily in Rome.
The only national economic sovereignty available to us as a country, outside economic and monetary union, is the freedom to have a living standard even lower than we already have in comparison to our major competitors in the European Community. I know some believe that we did very well in the old siege economy days living well outside the European Community. But that is not a view that I have ever held and it is not a view that I hold now. I believe the facts clearly dispose of any sense in that argument.
Equally, the next non-issue that I wish to take up is the question of economic and monetary union now. As paragraph 200 of the Select Committee's report brings out, we are not talking about economic and monetary union now. The committee says, and we all agree, that it should not be imposed "before sufficient economic convergence". The committee had difficulty in finding a definition of "sufficient". I have difficulty, as does everybody else, in understanding how we can achieve economic convergence among 12 sovereign states. Indeed, I hope there will be even more member states by the time we reach that stage. Therefore, I can understand why the committee could not give us a clear definition. Nobody can.
Indeed, another paragraph of the report states:
"As yet there are too many imponderables".
The report quotes the President of the Bundesbank, Karl-Otto Pöhl (presumably called the "supreme ogre" in the Community) as saying that he, too, could not see us moving fast along the road until there was greater economic conversion. Therefore, the recent arguments in Rome about stage two are another non-issue. Again, as the report brings out, stage two simply prepares the way for what eventually will be, if
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we agree the objective, economic and monetary union. However, there is a long way to go before we get to that stage.
Perhaps I may also dismiss at this point the concept of consulting the people, as it is called. Here again, the Prime Minister and my noble friend Lord Jay seem to be in agreement on the need to consult the people. My noble friend knows that I have always had the highest regard for him while largely disagreeing with his views, particularly on this subject. Even if we agree the principle of a referendum at this stage, I must ask: what would the question be? Would it be: "Should there be a single currency?" But that is to put the cart before the horse. The fact is that we shall not have a single currency before we have greater economic convergence and economic and monetary union.
Equally, there is the question of the hard ecu. I am inclined to agree with the noble Lord, Lord Cockfield. At one stage it might have been possible to see it as a possible road towards economic and monetary union, but one cannot forget what has happened. John Major, the Chancellor, said he saw it as a road leading to a single currency. His cricket bat was broken, so to speak, shortly afterwards by the Prime Minister; and given all that has happened it would be a waste of time at this stage to pursue that aspect much further in the Community.
The real issue—and here I hope the Government will be able to give us an assurance—is whether we as a nation want to be part of an economic and monetary union and, thereafter, of a single currency. My answer is, yes, but like the Select Committee I recognise the huge problems about the date when we actually get there. Therefore, in a sense I agree with the Prime Minister. In another context, I would join an exchange rate mechanism. I would join an economic and monetary union, but the time is not yet right, and nowhere near right. There are huge problems before we reach that stage.
Let me say at once that I also agree with the Select Committee. When we reach that stage, or before that, I would certainly want to see some democratic accountability. We have had contributions from two former governors of the Bank of England who, not surprisingly, are perfectly happy that governors of banks are accountable to themselves because they know they are always doing the right thing. As a politician I am not so certain. I should like to see some degree of accountability.
The Select Committee said—I am paraphrasing in the cause of brevity—that there should be some power to have national parliaments involved. I very much agree with that. I also happen to agree with the Prime Minister on something else that she said. I would not want to give too much power to a European parliament. The problem with the European Parliament as it now exists, and is likely to exist for some considerable time no matter how directly and democratically elected, is that it largely has the power to spend money while national parliaments have the powers, responsibilities and duties to raise money. In those circumstances, to pretend that you can leave it

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entirely to the European Parliament must be wrong. I should much prefer to bring national parliaments more into the mainstream of accountability.
Lord Jay: I am glad to hear that.
Lord Barnett: My noble friend agrees with something I have said which is good to hear.
Lord Jay: On that point may I ask my noble friend a question? If most of these are non-issues, and if it is all so far away in the distance, why do we have these intergovernmental conferences?
Lord Barnett: My Lords, I thought I had made that clear; certainly the committee has done so. We must have a central objective of where we are going; otherwise what on earth are we doing? I agree with that central objective and that is why I say that these are non-issues.
Indeed, in paragraph 18 the report gets to the heart of the problem on this question of a central monetary authority. It refers to,
"how far the need for a central Community monetary authority can be reconciled with governments' desire"—
the report was not referring only to the British Government but to all governments within the Twelve—
"to retain an influence over economic policy."
I do not want to see national governments give up all influence over economic policy, though I recognise only too well—I only wish that others would, too—that the extent of our sovereignty over our own national economy is, to put it mildly, distinctly limited in the modern world. Therefore, while I want to see some accountability to national governments, I recognise that there will be and must be a central monetary authority.
I conclude by returning to the central question of whether we want to be genuinely involved in the discussions, and part of the discussions, on the objective of economic and monetary union and a single currency. To some extent there is a chicken and egg argument. The noble Lord, Lord Cockfield, referred to what he did by fixing a date, with which I wholly agree, of 1992 for the single market. That concentrated our minds and without that date I doubt whether we would have got there. He was quite right in that respect. However, I do not believe that we can fix a date for economic and monetary union for the reasons I have already given. Nor should we say that we will have what is called the "big bang" theory of a single currency in advance. That is not the right way to do it. The correct way is to achieve economic and monetary union with much greater economic convergence. A single currency will then almost automatically evolve of itself, because it would be absurd if we did not have a single currency in such a Community.
I know that there are some people, like my noble friend Lord Jay, who sincerely in the first place never wanted to join. They now tend, as my noble friend did today, to put up bogies and then knock them down. With the greatest possible respect, to talk in that way primarily ignores Britain's true position in the real world. That is why I strongly support the
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recommendations in the committee's report. I hope that we can put irrelevant arguments behind us and play an active, positive and constructive role in the Community. That is the only effective way in which Britain can play a serious part in world economics.
6.58 p.m.
Lord Carr of Hadley: My Lords, before I comment on the report, I must add to the praise already given to my noble friend Lord Aldington for his role as chairman of the sub-committee conducting this inquiry, and to our clerk and advisers. This year has been my first experience of participating in a scrutiny of European Community affairs by your Lordships' House. It has been an honour to be so involved and it was a pleasurable and stimulating experience, particularly the inquiry leading to this report. I am sure—though it is not necessary to say this—that all Members of your Lordships' House understand that the high degree of regard which I believe our committee's scrutiny has achieved, not only in your Lordships' House but far beyond it and outside the shores of this country, is due more than anything else to the skill and dedication of those who chair the inquiries and those who serve the inquiries as clerks and advisers.
One of the problems in debating European Community affairs is that the discussion is bedevilled by big words such as "federalism" and "sovereignty" which stimulate strong emotions far more than they stimulate reason. Different people give them totally different meanings. Therefore, I believe that one important part of the report is the way it has most carefully defined some of the big words which keep on cropping up.
Perhaps I may strongly add that, keen European that I am and have always been, I most definitely do not support and have never supported the concept of a single unitary state; nor does the report support such a concept, or foresee it. When people fear this they must face up to and come to grips with some of the spectres or ogres that bedevil these discussions. They are nothing more than nightmares. There are some very prominent people in Europe who hold these views. I do not believe that there is a party (nor individual leader in any of our European democracies) which would win power if it were to come out in support of such a concept. Though no one can say what may happen in decades or centuries in the future, the single unitary state is a false bogy at the moment.
My noble friend has set the overall scene dealt with by the report so fully, comprehensively and valuably that I wish to concentrate on one subject only—that is to say, the single currency. I propose to do so not by posing as an economic or financial expert but as a politician. I do not apologise for that. I use the word in the broad sense. I believe that the task ahead of us is above all a political one. It is part of what someone once expressed most graphically as the endless adventure of governing men. I disagree with some of the analysis of my noble friend Lord Cockfield. I do not disagree with him at the intellectual level but

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because I feel that, if we are to bring this ship home to port, the intellectual argument has to be moderated to some extent by deep political considerations.
The whole weight of evidence leads to the conclusion that, if we are to maximise the long-term benefits of the single market, then we need a single currency. You cannot have that without also having a single European monetary authority. I do not doubt that that is what the weight of evidence shows, and I believe that that conclusion is backed up by considerations of common sense. Economic benefits are very important. They are very much wanted and appreciated by the people of our own and other countries. However, they are not the only factors that matter in life. The economy is made for man and not man for the economy.
I do not seek a single currency at any price. It would be in the interests of Britain in particular and of Europe as a whole to seek seriously and with determination to find ways to bring it about which are both economically effective and socially and politically acceptable. What are the essential requirements for doing that? Above all, we must not try to proceed too fast. We must rule out any approach towards the "big bang" way of doing it. There are several reasons for this.
First, the purely technical problems are considerable. For that reason alone there has to be an adequate, and possibly defined, amount of time in stage two to design, set up and test the component parts before we move to stage three. Therefore, no date should be given to the beginning of stage three, let alone the end of it. There may come a time, for the reasons given by my noble friend Lord Cockfield, when it will be necessary to set dates. That is a considerable way off so far as stage three is concerned.
Secondly, for economic, political and social reasons, we must have time to achieve greater convergence between the economies of the different member states before we come to the single currency. Some argue that establishing a single currency is the essential instrument for achieving convergence. I see force in that argument, but it is a dangerous overstatement and misreads the economic and political factors with which we have to deal. There will come a time when convergence is near enough and the introduction of a single currency will be the necessary instrument to bring the matter to a final conclusion. If you apply that force too soon, then I have little doubt, and certainly very much fear, that it will almost certainly lead to sharp increases in the differences in employment opportunities and living standards between different parts and within different countries in the Community. In the end that could make the whole concept politically and socially unacceptable, and could indeed kill it. Therefore, we must make further considerable progress in a long convergence before we leap into stage three.
Thirdly, we need time to narrow what has been described as the democratic deficit in the way in which the Community's affairs are presently conducted. The report before us makes proposals to that end. That is
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essential if the achievement of the economic goals is to win the acceptance and confidence of the peoples of Europe. If the customer is always right it is the peoples of Europe who are the customers for what we are doing. That requires action in relation to the European Parliament, and proposals about that are contained in this report. Even more importantly, it requires action by national parliaments. Although it is perhaps difficult and delicate to say so as a Member of your Lordships' House, this matter requires much more progress in another place.
Perhaps I can say this more easily than some of your Lordships. For a long period I was a Member of the other place, and I have many colleagues who are in the same position. For a short time I was the Leader of the other place. Therefore, I understand only too well the difficulties, but I believe they can be surmounted if the will is there. It is necessary for both Houses of Parliament to realise that the social and economic affairs of Europe are now among the most important issues that need to be dealt with in the interests of the people of this country and the constituents whom Members in another place represent. Therefore, the other place must give these matters priority not only in the amount of time devoted to them but in the prominence dictated by the time of day at which they are discussed and reported. That is of the greatest importance.
Thirdly, it is necessary to pursue the idea of subsidiarity. Although I heard and understood the reasons for the remarks made by my noble friend Lord Cockfield on this subject, I think it is necessary to write this matter into the preamble of a future statute. Finally, it is only if we follow this careful, thorough, step-by-step approach that we shall assuage the fears and win the confidence of many people—and not only in this country—on the surrender of sovereignty which is involved.
I agree strongly with the report's conclusion that the pooling of United Kingdom sovereignty with that of other states on the issues of economic and monetary union need not jeopardise parliamentary sovereignty. It will not do so provided we take the time and care needed to work out and define the terms of reference of the new European monetary authority and its procedures for accountability to the Council of Ministers, to the European Parliament and, particularly importantly, to national parliaments as well. That is of special importance so far as Britain is concerned. At the risk of appearing to repeat myself, this applies above all to the proceedings and concerns of the other place.
In conclusion on this vexed, emotive question of sovereignty, let us remember three things. What really matters is our country's effective influence in the affairs which affect our lives; and increasingly in the modern world that may be achieved by pooling some aspects of sovereignty with that of other states.
Secondly, we ought not to exaggerate, let alone romanticise, the sovereign independent power which we have exercised in these matters over recent decades. If I am honest, I cannot remember in 26 years as a Member of another place, or even as a Cabinet

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Minister, being much consulted, or my advice, let alone my approval, sought very much in advance about decisions on monetary policy. They are by their nature taken more or less in secret. That is unavoidable. So let us not romance about the amount of control we have had, and therefore about the amount we shall be losing. More often than not we are reacting to other people's actions in the present world.
I would rather have these matters settled by a proper monetary authority, with proper terms of reference and proper accountability, on which we have proper representation, than always be reacting to something which is done by the German Bundesbank or in other countries. I believe that Europe as a whole would he on more equal terms in monetary affairs with the United States and Japan, and that we should be on more equal terms as a member of that grouping than we are at the moment.
Finally, as the report makes clear and as my noble friend Lord Aldington stressed, there is a very big difference between the sovereignty involved in the EMU and what would be involved if we had to consider putting foreign affairs within the competence of the European Community. Then we really should lose national sovereignty and that is not something which we ought to do. We must make a success of our affairs in Europe; we must be in the vanguard and not in the rearguard of these events, and I believe and hope that this report will help to that end.
7.12 p.m.
Lord Roll of Ipsden: My Lords, the report we are debating today matches perfectly the importance of the issues with which it deals. From a medium and long-term view there is none as vital for the future of our country. The noble Lord, Lord Aldington, and his committee deserve our congratulations and gratitude for a masterly document. It is particularly noteworthy in that it presents, very objectively and clearly, all the various views that can be held on these complex issues and yet it is not a bland document. It comes to quite clear-cut conclusions. I say at once that I agree wholeheartedly with the committee at least on all crucial points. The report comes at an opportune time, just before the opening of the intergovernmental conferences on monetary and economic union and political union. I propose to confine myself to the former.
Now that the long-playing Whitehall farce "The Ripe Time"—or was it "The Right Time"?—is off the boards, I hope that we shall not again be involved in semantic acrobatics; for example, as to whether monetary union is to be imposed. I hope that the noble Lord, Lord Cockfield, in last week's foreign affairs debate and again today has put this red herring firmly where it belongs. It has often been said—for example, last week in the economic debate by the noble Lord, Lord Jenkins of Hillhead—that we have disadvantaged ourselves enormously in our relations with Europe by always being late.
Before the Macmillan Government took their historic decision in 1962 to seek membership of the Community there were, as your Lordships may well
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imagine, the most intensive and detailed studies in Whitehall on the possible consequences of such a step, including particularly the common agricultural policy, which was at that time just being debated inside the Community and which we regarded, I think rightly, as the main stumbling block.
In sending forward our report to Ministers I said:
"We must not suppose that we can square the circle. A solution which pleases everyone is out of the question. But our best chance of making the best of it lies in influencing the Common Agricultural Policy before it is completely settled".
I ended by quoting the obvious:
"If it were done when 'tis done, 'twere well it were done quickly."
Alas, it was not possible then. I had hoped that the Government's endorsement of the objective of monetary and economic union in the Single European Act, and in so many solemn declarations since, had shown that we had at last learnt our lesson. I am not sure that that is so.
I had also hoped that by this time some of the more extravagant attacks on the Community and its aim of monetary and economic union would have ceased, including the personal attacks on President Delors. I should like here to join in the tribute which the noble Lord, Lord Cockfield, paid to him last week. I first had dealings with M. Delors when he was French Finance Minister and I fully endorse what the noble Lord, Lord Cockfield, said. To hear some people, M. Delors is a rabid, red revolutionary. It should be remembered that the remarkable turn-around in French economic policy, and subsequent economic performance, which started in 1983 was very largely his work.
Although the noble Lord, Lord Cockfield, and my noble friend Lord O'Brien of Lothbury have, I think successfully, dismissed the hard ecu proposal, it deserves a few more words since it still seems to be the centrepiece of the Government's policy. As an analysis of possible monetary arrangements it belongs to a very long series of similar efforts; and those with an antiquarian interest in these matters may like to compare it with, for example, the proposals made by Alfred Marshall over 100 years ago and the many discussions on the gold standard, the gold exchange standard, a standard based on commodity indices and many others, including Bretton Woods; though it should be remembered in regard to Bretton Woods that the dollar, the basis of the Bretton Woods system, is a real currency, legal tender in its own country and, as it is still the major transaction currency, widely accepted everywhere else.
In the form presented by the Government it resembles—though it is, I believe, analytically inferior—a proposal produced by our most eminent living economist, James Meade. To my mind, the essential point is that it is not a proposal for the further development of the European monetary system nor for the creation of a common or eventually a single currency, but rather for the setting up of a separate and separately managed standard which may or may not in time act as another, thirteenth, currency

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according to whether it is used alongside national currencies—a point dealt with by my noble friend Lord O'Brien.
These national currencies have the great advantage over the ecu not only of custom but also of being legal tender and they are used by everybody. We know that in at least one important quarter the view has been expressed that the hard ecu would not be much used. Thus neither its use as a parallel currency nor its use as a standard for exchange stability is really guaranteed. That being so, I find it extremely difficult to see why it should be called evolutionary.
This proposal must above all be judged not in terms appropriate for sophisticated discussions in the classroom but as a diplomatic move; and its purpose was clearly diplomatic both domestically and internationally. As the noble Lord, Lord Cockfield, said, had it been made after the collapse of the first Community attempt at monetary union, the Werner plan, and certainly before the adoption of the European monetary system in 1979, there might have been some inclination to consider the creation of an outside unit of account which would also somehow have been made to act as an increasingly common currency and standard of value. That might have had some virtue to be discussed. Even then, I suspect it would not have lasted long.
But it came after the EMS and its essential mechanism, the exchange rate mechanism, had been going for more than 10 years. These were and are instruments internal to the Community, to its currencies, its monetary policies and its monetary institutions. Moreover, the Community had decided to move towards the achievement of the agreed goal of monetary and economic union by building on the existing system and mechanism. We belonged to the system but not to its operating mechanism. Only very belatedly did we accept that mechanism in principle; and then we delayed putting it into operation. We also subscribed to the objective of monetary and economic union but had shown—to put it mildly—little enthusiasm for it.
Therefore, is it surprising when we belatedly produce this new proposal—which in the words of its authors involves monetary control being exercised simultaneously both at national and community level with no indication of how this duality is ever to work while it lasts or whether it will be made to disappear over time, and with no commitment that we accept the ultimate objective—that it is firmly rejected by the Community and particularly by those who have most experience with successful monetary management.
In my view, Bundesbank President Dr. Pöhl has quite rightly pointed to the confusion and potential conflict of policy to which the proposal would lead. Nevertheless, it is worth remarking parenthetically that this proposal was most courteously received by our partners in the Community, which is very much in contrast to what has been said in some quarters in this country about the Delors plan. Indeed, I remember some people describing it as infamous. I checked the definition of the word in the dictionary in case I had
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missed something and found that it was defined as "vile" or "abominable". Those are certainly not words which any of our partners have used about the hard ecu proposal.
When you add to that central flaw the many other unanswered questions, such as whether or not the ecu would, or indeed could, become legal tender, or how the objective of price stability, which the European Monetary Fund was to secure, was to be measured and achieved, I am not surprised that the committee of the noble Lord, Lord Aldington, in its report unequivocally concludes that the hard ecu is not viable as it stands.
Suggestions have been made for hardening the existing ecu. That is perhaps what the committee had in mind when it stated that the hard ecu could help with preparation for monetary union. That is one aspect of the committee's conclusions about which I am not convinced. I am delighted that my noble friend Lord O'Brien has a similar view. However, be that as it may, it would in any case be absolutely essential, first, that the ultimate objective of monetary union should be clearly reaffirmed; secondly, if there is to be a process of hardening the ecu, that it should not be in the hands of a newly created institution but firmly in the charge of the European Committee of Central Banks—the forerunner of a future European central bank; and, thirdly, that it should be regarded only as an adjunct to the other aspects of the progress towards a single currency.
Whatever details the Commission's plans may need to undergo —and without a doubt they will have to undergo some—its essence of reliance on the narrowing of exchange margins with the ERM, increasing collective management to achieve this objective, and simultaneous progress in convergence of economic policies (which narrower exchange margins will themselves facilitate) must remain the basic next steps.
When we joined the ERM, at a time and in conditions now regarded as far from ideal, it was stated that we hoped to move soon into the narrow band of exchange margins. That may not be so easy; nor indeed may it be easy to keep pace with our partners in the progress towards the start of stage two. From every point of view, not least the position of the City of London as a premier financial centre, it is highly desirable that there should be no delay, or, if there must be some delay, that it should be as short as possible. However, if it proves impossible to avoid some delay we should nevertheless join whatever projects emerge from the intergovernmental conference even if our economic circumstances at the time oblige us to seek for ourselves a device, well accepted and much practised in the Community, for a short delay in working it out. If the Government's optimistic forecasts of economic developments, especially on inflation, prove right, perhaps any such delay can be avoided.
As for the single currency, in some quarters it is regarded as an unacceptable surrender of sovereignty. I shall not go into the more arcane philosophical aspects of sovereignty. But if on any particular issue

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the practical question is whether we need to preserve an absolutely unfettered right of national decision-making, I think that this, for a trading country such as ours, is not one of them. As the noble Lord, Lord Carr of Hadley, pointed out, we do not have it now. I cannot understand why those who argue all the time that you cannot buck the market should think otherwise. Even the Tudor monarchs had experience of the constraints which we now call Gresham's law.
The single currency is certainly some, or perhaps many, years away. However, it is one example of the need—precisely when you look some years ahead—to be prepared to think afresh. Let us take another example. In 20 years' time, which is not so very far away, the four leading countries in terms of gross domestic product will be China, with over 6 trillion dollars and somewhat ahead of the United States; Japan, the Soviet Union (if it survives as a union); and Brazil. No single European country will reach even 1 trillion dollars. The four largest European countries taken together will only just be ahead of Japan; nor are the demographic trends favourable to Europe.
We in this country still possess great social, moral, political, intellectual and indeed material resources. But is it not crystal clear that we cannot hope to use these to the best advantage for ourselves or to deploy them to the advantage of the world, except within the indispensable framework of Europe? And this, for many years to come, must mean the Community.
Our decision in regard to European integration is, I think, the single most important example today of the vital necessity to develop new mental attitudes. The great mathematician, Alfred North Whitehead, who left Cambridge, England, to become a great philosopher in Cambridge, Massachusetts, said what I believe to be the last word on this supremely difficult task. He said:
"The task of free society consists first in the maintenance of the symbolic code; and secondly in fearlessness of revision … Those societies which cannot combine reverence to their symbols with freedom of revision must ultimately decay either from anarchy or from the slow atrophy of a life stifled by useless shadows".
Throughout its history, this country has shown an extraordinary aptitude to achieve just that combination. We must not fail now.
7.27 p.m.
Lord Butterworth: My Lords, as a member of the sub-committee, I wish to join all those who have expressed thanks to my noble friend Lord Aldington. I should also like to congratulate him on so skilfully presiding over the production of a report, the character of which may well permanently have shifted the British argument in this area.
I confess immediately that I may not be prepared to go quite as far as the report goes in certain respects. However, many of the major tenets are undeniable. First, on the evidence we received, it would be difficult logically to deny now that the benefits of a single currency are the natural complement of a single market. Secondly, although some of the comments
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made on this aspect today were somewhat equivocal, Britain is now fully committed to the progressive realisation of economic and monetary union.
I recognise that a single currency may well be the ultimate solution. My problem is that so many decisions still need to be taken before the single currency can be established. I refer to decisions required to complete the single market and to identify all the stages which are necessary to complete monetary and economic union. In my view it would be politically irresponsible to appear to be accepting all those changes even before we know what most of them will mean.
We clearly need experience of the single market before we can, with confidence, commit ourselves to a single currency. Most governments in Europe would seem to assume that the single market has already been organised: the truth is that much still remains to be done.
We need to take all the difficult decisions which will make the single market a success; otherwise it could so easily fail. Our report refers to problems of insurance. Other difficult areas are the movement of animals and plants, political asylum, drugs, firearms and public health regulations. Moreover, many Community regulations need to be pruned. They are inhibiting free flow within the market.
Next, we must identify the decisions that need to be taken to achieve stage two. Convergence has already been mentioned. Our report states that the switch to a single currency should be undertaken only after "satisfactory convergence". But what does "satisfactory convergence" mean? How much convergence is satisfactory? Unless we can recognise what amounts to "satisfactory convergence" we may launch the single currency prematurely and do great damage to the weaker currencies.
Do we agree with countries joining the new single currency seriatim; that is to say, when each country considers that it has achieved "satisfactory convergence"? Again, there is a view prevalent in Europe that sufficient convergence can be achieved only by direct assistance being given to some of the poorer member states. The Delors Committee Report hinted that the increased structural funds could be used for that purpose, but the Commission immediately distanced itself from the opinion. The possibility of financial assistance is a factor in the expectation of a number of member states. Reference in Community documents to "economic and social cohesion"—they are words to look out for—is Euro-jargon envisaging the possibility of setting up funds for that purpose. We then need to know what powers individual countries must be prepared to surrender to the centre. How can anyone talk about the length of stage two before we know what is to go into it?
One of the functions of the IGC will be to recommend what powers should be surrendered to the centre if a single currency is to be launched successfully. Monetary powers to be surrendered to the new central bank may not be difficult to identify and would probably not cause any political problems.

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However, the economic powers that would need to be surrendered to the centre are a different matter. Here the centre does not mean the central bank; it means the Council. As our report points out in paragraph 68, the Delors Committee Report implied that tight controls would be necessary on member states' freedom of action in fiscal and budgetary policy.
The Commissioners' March 1990 paper seemed to reject that approach and suggested instead that "binding procedures"—whatever that may mean—would be sufficient. The problem is of course that irresponsible action by national governments, such as running heavy budget deficits, could undermine the viability of the single currency. Recently, some member states, such as Germany and the Netherlands, have made it clear that they would not consider joining unless the Council had express power to set clear limits in that area. An economic power of that sensitive kind goes to the heart of an individual government's political responsibility to its legislature and ultimately to its electorate. What would happen over the Budget if the Chancellor of the Exchequer confessed to the other place that he could not deal with the problem because the power had already been surrendered to Brussels?
At the moment we are so far away that governments do not need to commit themselves wholly to a single currency, especially when there is no agreement as to what the next stage should comprise or what powers it is necessary to surrender to the centre. The purpose of the IGC is to identify those problems and to make recommendations. They can then be debated in the House and elsewhere. Once agreement has been achieved amendments to the treaties can be drafted for presentation to individual national parliaments.
If one reflects upon the steps that must be taken—the completion of the single market to make it a free competitive market and the identification of the stages within stage two—there is much to be said for some kind of evolutionary approach to enable the European Community to have experience of each stage as it works progressively towards a single currency. The difference between the two courses, as I have tried to describe them, is not great. The advantage of the evolutionary course has the merit of being consistent with the democratic accountability of the governments involved.
7.38 p.m.
Lord Greenhill of Harrow: My Lords, all members of the committee are grateful to the noble Lord, Lord Aldington, for his magisterial chairmanship of it, and to the noble Baroness, Lady Serota, for her calm oversight of all that we were doing. As one of the least qualified members of the committee, I shall speak simply and briefly. Most of the technical aspects of the problems have already been brilliantly discussed.
I wonder how much the importance of the coming IGC is understood by the general public. Over the past two decades and longer, British Governments, political parties and the media have paid inadequate
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attention to the trends in Europe and have nourished our traditional lack of interest in what goes on across the Channel. We must add to that the language problems and the memories of some people of the 1940s years of disaster.
Contrary to the view of some noble Lords, it is by no means all our fault that we have missed part of the journey of the famous European train described by the noble Lord, Lord Cockfield. The ticket office was shut on us by a vindictive General de Gaulle; and that simple act was well understood by the public here.
President Pompidou relented in due course, but not until the requirements of his government on agriculture and other matters had been met. I hope that in the coming months a special effort will be made to explain to the British people what is at stake. I hope that a majority in all parties can come to agree on where our interests lie. This report will, I think, contribute to that understanding.
I was particularly struck by the remarks made by the noble Viscount, Lord Eccles, and the noble Lord, Lord Jenkins of Hillhead, in recent speeches. They are two statesmen who do not usually agree on Europe. On 13th November, the noble Viscount said:
"I wish that the major political parties could agree on the main objectives … Our negotiators, whoever they are, will not obtain the best deal for Britain unless they are supported by a manifest consensus at home. This is a great issue; it is much greater than party politics".—[Official Report, 13/11/90; col. 226.]
The noble Lord, Lord Jenkins of Hillhead, had the same thought in mind. He said on 14th November:
"I become increasingly convinced that the two party politics in this country have served the vital question of our relations with Europe remarkably and almost impartially badly".—[Official Report, 14/11/90; col. 348.]
It is easier to agree with these two noble Lords if one sits on the Cross-Benches, but even the most ardent party man must admit that there is more than a little truth in what they say.
The Aldington Committee was an all-party affair. If its advice is accepted by all parties, our negotiators will be in a much stronger position. I have confidence that the isolation for which we are mocked will diminish when reality rather than the rhetoric of the Community is faced.
Great emphasis has been laid on the supposed unity of the 11. They may share a vision, but, when realities are faced, as we have seen recently on agriculture, automobiles and insurance, there are marked national differences. I recognise just how difficult it is to ask for unity between our political parties at this time, but the cost of disunity will be high.
Perhaps I may make one further point on an entirely different subject—the enlargement of the Community. The report did not elaborate on this; I do not think that it was in the terms of reference. The committee reminded us that the Community remains open to new members. Do all the present members have any wish to enlarge the Community? Personally, I have doubts. I am assured that I am mistaken, but I have met several significant Europeans over recent times who agree with me. What, for example, is to be

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made of M. Delors' recent statement that his objective was a unitary state with the Commission as the executive and the Council as senate? This suggests to me that his unitary state does not include any country other than the existing members. His proposed objective appears to me to make the entry of several desirable partners difficult, if not impossible.
The policy of Her Majesty's Government is, I believe, aimed at an enlarged Community. I hope, like the noble Lord, Lord Jay, that as soon as possible it will include the Scandinavians. From a democratic and historic point of view they are as reliable as, if not more reliable than, some of the existing members. They are the largest trading partners of the Community. I hope therefore that Her Majesty's Government will continue to prepare for enlargement.
I return for a moment to my original point. At this critical time it makes little sense that our national interests in this vital area are the subject of party bickering. Is there not enough common ground on Europe between all the parties to give our negotiators in Brussels significant support and to secure in this country wide public agreement across party lines? Is this too much to hope for? I am afraid that it may be.
7.46 p.m.
Lord Bruce of Donington: My Lords, I have been in political life for a long time. Taking up the point raised by the noble Lord, Lord Greenhill of Harrow, I can hardly remember a week in the past 50 years which was not a critical time of one kind or another.
The report we are discussing this evening seems to me to be based on two assumptions which so far as I am aware were not articulated in the committee itself. Thanks to the courtesy of the noble Baroness, Lady Serota, and the chairman, the noble Lord, Lord Aldington, I was able to attend almost every session of the committee. The two assumptions which were not articulated were, first, that the European Community itself, taken as an entity, has so far been a resounding success. To disagree with that assumption immediately invites one to be a heretic.
As your Lordships know, on certain matters I am a heretic. Nevertheless, from the record, what is the success which is assumed? The gross domestic product in the Community as a whole over the past 10 years has been markedly below that of Japan and the United States. Inflation over the Community as a whole has been higher than in both Japan and the United States. Unemployment has been much higher in the Community than in either Japan or the United States.
The Government, with an adjusted figure of 1.7 million unemployed, boast of their success against wider and greater unemployment in Europe. That unemployment has oscillated between 11 million and 15 million over the past 10 years. That does not take into account quite a large number—almost 1 million—of migrant workers who have since departed from some of the EC states and gone back to their own countries without being included in the unemployment figures.
I do not wish to embarrass noble Lords who may not have thought of these figures previously, but they
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are valid. They show that the dream of the European Community in terms of economic progress lies more in the realms of propaganda, financed considerably from funds provided by the member states as well as by organisations such as the European Movement.
Some noble Lords talk of the single market as being the end of the whole process of the freeing of trade within Europe. However, they forget that ever since 1972 we have progressively moved towards a single market for about 90 per cent. of the goods and services provided by this country. All we have been seduced into believing is that the achievement of the single market represents a goal which in point of fact should already have been achieved in any case. All that this talk amounts to is a shifting of the goal posts. They know quite well that the Common Market as an organisation has not lived up to its original expectations. Therefore they shift the goal posts and declare that in 1992 when the single market arrives everything will be all right.
These are weighty matters. I regret that the noble Lord, Lord Jenkins of Hillhead, is not in his place at the moment. However, in his valedictory speech to the European Parliament he remarked rather regretfully that up until then the European Community had merely comprised of the Common Market plus a few peripherals. Those were the words he used and he was right to say that.
It is not often realised that at present the European Community is largely concerned with the common agricultural policy. According to the Government's own figures, the common agricultural policy has resulted in the average British family of four paying £17.50 a week above normal world prices for its food. The common agricultural policy is the biggest protectionist racket that has ever been devised by any bureaucracy. It goes completely against the much lauded sentiment of free enterprise and right into the realms of protectionism. By its continued existence, despite a 30 per cent. reduction in subsidies dated back to 1986, the common agricultural policy is still a bar to the proper achievement of the General Agreement on Tariffs and Trade. Such an agreement would be a valuable achievement if we could obtain it. It would free world trade to a far greater degree than is the case at present.
I am sorry to have to speak somewhat expansively about this matter. I would be glad to be contradicted. I suppose that some noble Lords who have listened to me before will consider my remarks to be old hat. They will say, "We have heard it all before. This is the referendum argument reproduced all over again". However, it is nothing of the kind; it is a plain objective statement of fact which I challenge anyone to refute in detail.
Many of my best friends are bankers, including happily my bank manager. However, the second basic assumption that lies behind the report is that bankers are somehow the final repositories of all human wisdom and that banks are solid, impartial institutions that can be relied upon to look after one's investments. I have been in politics a long time and I well remember the exploits of Montagu Norman and

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others. I have had the benefit of reading Cabinet minutes under the terms of the 30-years' rule and therefore I know what a mess Montagu Norman and his cohorts and supporters got us into in that era.
I am not saying that the City of London does not perform excellent functions. I am sure that in facilitating and financing commercial transactions and in dealing in currency futures and a whole host of other banking functions the institutions of the City of London perform a perfectly good and respectable task. However, we seem to presume that what is good for the City of London, which includes banks, insurance companies and syndicates, trusts and other such institutions, must be good for the remainder of the country. I do not know where that idea came from, but it seems to be assumed that what is good for the City is good for the rest of Britain. However, one should try to tell the tenth of the population living at or below subsistence level that the banks are good for them and see whether they believe that.
There is an identity of view between the banks, the other financial institutions and the Conservative Party itself. At Lord Mayors' banquets a polite welcome may be given to Labour Chancellors of the Exchequer and a coded language of reproof may be used in so far as it is consistent with politeness, but the parties have nothing in common with each other. The financial institutions and the City have nothing in common with the Labour movement as I knew it and as I know it today. Therefore the idea that bankers are the final repositories of wisdom in this matter is complete nonsense. Some 90 billion dollars a day travel across the exchanges in currency transactions. However, are those transactions beneficial to the country as a whole? They certainly benefit that section of the population that can be identified with the City of London.
Your Lordships will probably have seen an article in The Times the other day that appeared on the day we entered the exchange rate mechanism. The article described a couple of foreign exchange dealers in their early twenties who arrived at their offices in the afternoon just as the announcement about the exchange rate mechanism was made. They took up their positions in front of their screens and watched the screens for a couple of hours without making any changes. They then walked off with £600,000. They gained that money simply by watching their screens. They said they were going to buy yachts and one or two other odd items and that they wanted to have a good time abroad. I do not begrudge them that, but anyone who suggests that that activity has anything to do with the production of valuable goods and services in this country ought to have his brain examined. It does nothing of the kind. Among other things it adds to the money supply and to inflation.
Let us not hear talk of bankers being mystically capable by virtue of their profession—noble Lords should note that it is not by virtue of their honesty or their integrity—of maintaining the financial balance in this country. However, if one reads bank reports published over the past few years one discovers that
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debts have been incurred in developing countries. The banks have had to write off a lot of the money deposited with them after the OPEC explosion which they subsequently lent to other countries. Nevertheless the assumptions that I have mentioned have been made.
Those remarks bring me to the exchange rate mechanism itself, which we have now joined. It is reckoned to be the precursor to economic and monetary union. In 1986 our trade with other countries was roughly in balance. There was a slight deficit but nothing very significant. Since that time the balance of payments deficit has soared. We are told that the responsibility for that lies with ordinary working people who have been demanding too much in wages, and other such nonsense, whereas it has been due to the appreciation and progressive overvaluation of the rate of exchange. Since the second and third quarters of 1986 the pound has become overvalued by some 20 per cent. against the deutschmark, 25 per cent. against the yen and 50 per cent. against the US dollar. That has not been due to any action taken by ordinary working people in this country. It has been due to the activities of the experts on whom we are now supposed to rely.
Much has been said this afternoon about the necessity for convergence. The use of the term varies; some have referred to convergence in inflation rates, others have referred to convergence without any qualification and the rest have talked of economic convergence. To my mind economic convergence means that, broadly speaking, ordinary people, who have not taken part in the discussions and who probably would not understand the somewhat complex and technical language of the report, can have a reasonable standard of life without the risk of permanent unemployment hanging over their heads. There has to be a gradual narrowing of the gap between the rich and the poor. There has to be a growing convergence socially and in ordinary economic terms.
We have had some 10 years of this Government. Far from there being more convergence, we have not even achieved convergence or anything approaching it in this country. So it is in Europe. I was for some time president of the regional affairs committee of the European Parliament as well as being a member of its budget committee and economic and monetary affairs committee. The poorer regions of the Community have become poorer and the richer regions have become richer. That is still happening.
What does a single currency mean? It means that we have a fixed rate of exchange. No matter what happens within the country, no matter what misfortunes, no matter how its occupations vary and its economics change, one is tied to that rate of exchange. So it is with the ERM. All that has really been done is that we have kidded ourselves that in fixing the barometer we have also fixed the weather. That is nonsense.
We ought to look at the whole matter afresh, casting aside our occupations, our connections, our social positions, our personal wealth, our personal

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associations and everything else. We ought to think in terms of the people of this country and what we want for them. There is nothing that I would wish more than that there should be co-operation between all the nations of Europe, as independent states with their own cultures and customs. I am all for anything that can expedite that. I should like to see free trade between them. However, I fear that we may be going astray because we have ignored the end of the Cold War.
The Cold War has changed the whole face of the world. As a country, instead of withdrawing into fortress Europe, with all the agriculture rackets to which I have referred and fraud on a massive scale, we ought to be looking to the wider world. We ought to make it possible to co-operate freely with all the countries that are prepared to accept the social market to which I have referred on previous occasions and, above all, with our own Commonwealth.
I am distressed by the fact that at the time when we joined the EC—and I do not wish to turn that clock back—we seemed to adopt a defensive posture as if there was nowhere else for us to go. There was no positive dynamism about our action. It was as if it was a hopeless step and there was nothing else for us to do. At the same time we ditched the Commonwealth. I bitterly resent that. Many of us know well what happened, for example, to New Zealand. New Zealand lost 10,000 of her men who came over to this country of their own accord to fight against an undesirable form of Mittel Europe. They paid with their lives. Yet when it came to joining the EC we entered into arrangements which have now culminated in New Zealand being denied one of the most important outlets for her survival, the export of her sheep. Those exports have now been reduced to one-tenth of their original level and the country now faces distress.
I do not wish to be jingoistic, but it seems to me that there is something wrong here. We ought to take a wider vision of the world, not for the sake of the world as a whole, although we live within it, but for the sake of our own people, with whom there should be considerable ties. We are a great people. We have contributed much to the culture and law-giving of the world. We should not, by default, cast that away in favour of a regime imposed by a bureaucracy in Brussels.
Lord O'Brien of Lothbury: My Lords, before the noble Lord sits down—what a loss he is to the other place!—it is not my place to take him up on his attack on the banking system, but perhaps I may be allowed to question his remarks about the late Montagu Norman. I worked with Montagu Norman for many years and was his last private secretary at the bank. He was by no means the ogre the noble Lord portrayed. Philip Snowden, the Labour Chancellor of the Exchequer, was one of his dear friends. Philip Snowden left to the bank the casket in which he received the freedom of the City of London. If the noble Lord cares to read the book written by Andrew Boyle, who never knew Montagu Norman, he will get a much better picture of what he was really like.
Lord Bruce of Donington: My Lords, I unhesitatingly agree that the late Montagu Norman was a man of the highest possible integrity. I would not wish to impugn his integrity in any way. All say is that his judgment, like that of Philip Snowden, was not the last word in logic, reason or correctness.
8.8 p.m.
Lord Bridges: My Lords, like other members of the ad hoc committee presided over by the noble Lord, Lord Aldington, I should like to say how much the committee owes to his guidance and leadership. The document we have before us bears the stamp of his leadership. As others have said, it owes much to our excellent clerk.
It is my hope that the document will lead to something that I believe we need at this point, namely a more informed debate in the nation at large about the issues which are presented by the two intergovernmental conferences. I have been greatly dismayed in the past six months to observe the manner in which these important issues, which concern so much of the future of our country, have been the subject of judgments that are sometimes instinctive and sometimes prejudiced. They are very rarely based upon an informed knowledge of these very large issues.
It is not the least virtue of the report that it provides a collection of facts, gives a careful balance of opinion and suggests some judgments. I hope that it will serve not only your Lordships but the nation at large in the days to come.
Perhaps I may be permitted one further observation on this. I do not believe that, confronted with decisions of such gravity, any other nation in Europe would have indulged in the superficial opinions that we have had cast before us in the past few months. They are difficult subjects but I believe that the citizens of this country deserve rather more guidance than they have received from some quarters in both the political world and the world of some newspapers.
Unlike most other speakers in this debate who have concentrated on the issue of economic and monetary union, and unlike the noble Lord, Lord Bruce, who with his characteristic eloquence and vigour took us down byways some distance away from the theme of the debate, I should like to speak of one aspect of political union that is the subject of one of the two intergovernmental conferences; namely, the activity known as European political co-operation. I agree with the committee's opinion on this subject which is stated on pages 56 and 57 of the report. However, there are some matters that merit a little further examination.
My starting point is agreement with the committee's view that in general at these conferences we should look for evolutionary rather than revolutionary change. That applies to the future of European political co-operation. Above all, we should aim to ensure that any changes to the treaty which may emerge in the next year or two should accommodate the future needs of the Community. I am confident that that is the right approach. I suggest that we might

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do well to encourage some expansion of the subjects at present covered in European political co-operation so as to permit discussion by member states of the topic which I would define broadly as political security; that is to say, the boundary between foreign affairs and defence.
I should make it clear that I do not seek to transfer additional formal competence to the European Community. I do not propose that the Community should act together in this field, but I suggest that we need to discuss some of the issues in that way. Perhaps I may give the House some reasons for these opinions. The profound and very welcome changes which have taken place in Europe over the past year or so will make it more necessary than ever that the nations of Europe, both East and West, take collective decisions about the way in which we secure peace throughout the European Continent. Happily we are moving away from the confrontation of two armed alliances to a more relaxed situation. The treaty on conventional arms in Europe and the charter of the CSCE, which was signed in Paris this week, mark a watershed in European political affairs. We can now expect an accelerated decline in the number of armed forces in Europe and their equipment.
However, the situation is still extremely uncertain. New tensions, long buried in some instances during the Stalinist ice age, are beginning to appear. Let me mention a few examples. The state of affairs in Yugoslavia illustrates how a new nationalism, which has been concealed from our view for perhaps a generation, now threatens the stability of the Yugoslav state. We shall have to find the right solutions to problems of that kind. Put another way, the era of ideological confrontation, which it seems has now just ended and which was accompanied by much tyranny and repression, from another point of view was an era of stability in international relations. The aspirations of new nationalism which are now emerging throughout Europe will produce different kinds of tension.
Agreements for the future security of Europe will have to be reached on a pan-European basis. It will be very important for the nations of Western Europe which are members of the European Community to discuss such issues together and to prepare a common approach, using for the purpose the machinery of political co-operation. I believe that that will prove much the most effective way of defending our interests on questions involving the political future of Europe.
I suggest that the intergovernmental conference on political union should be encouraged to consider some marginal expansion of the work done in political co-operation for that purpose. That should include the ability to cover broad issues involving matters of defence and security. It would not make sense to exclude those issues or to allow one or more member states to prevent the proper discussion of such vital questions on the grounds that the treaty does not extend so far.
Another reason for reaching that conclusion is that none of the existing organisations is ideal for the
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purpose which I described. It is true that the CSCE is now to be established on a more permanent basis, with its own offices and secretariat, which it has never had before. But with 34 signatories it is much too large and its membership much too disparate to be appropriate for the purpose. Some people would like to use the Euro-group in NATO. I personally have nothing against that notion but we need to understand the objections of some EC member states, either existing members or those who may join the Community in future years, who would be unwilling to take part in political discussions under the NATO umbrella. NATO will continue to play an essential role in European security issues as the vital hinge between Western Europe and the United States. But I do not think that that is an altogether appropriate place for the formulation of policy by the West European member states themselves.
Recently the Italian Government suggested making greater use of the Western European Union as it has been used during the Gulf crisis to co-ordinate the movement of naval vessels on patrol in the Gulf. But I doubt whether WEU would be an appropriate organisation for the purposes that I described; nor do I believe that the Western European Union could in some way be subsumed within the European Community. We need to remember that the WEU treaty was the precursor of NATO and that the obligation on its members to come immediately to the aid of a member state which is the object of external aggression is in fact more binding than the terms of the NATO treaty itself. Also, in other respects the WEU treaty shows signs of its age. I do not believe that WEU would be useful. The transfer of WEU obligations to the Community would mean endowing the Community with formal and binding commitments in the area of defence, which seems to me and perhaps to most other people to be going further than we need or should go at this stage.
For those reasons I feel that the committee is right to suggest, as it did in paragraph 176, that:
"it will be in the interests of the Member States to find a way of discussing relevant security issues in EPC meetings".
My plea is that we should recognise the profound change that is taking place in the nature of European political affairs. We should equip ourselves with the right piece of machinery for dealing with that situation. The states of Western Europe will need to take counsel together in the broadest possible way. That is how I see European political co-operation developing in the future and I hope that the intergovernmental conference will take the opportunity to acknowledge that need and to point the Community in the right direction.
8.20 p.m.
Lord Selsdon: My Lords, I stand before you in a slightly more pragmatic way as a trader. For almost all my working life I have been involved in trade and the financing of trade—the financing of British trade in yen and of foreign trade in ecus. I have been dragged around the conferences in Europe discussing

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the "Europa" and the ecu, and working out new mechanisms. All in all I have come to the conclusion that the hard ecu is a good thing.
Certain doubts have been expressed about the desirability of the hard ecu, or indeed the wet and whimpering ecu that sits in its basket. The noble Lord, Lord Roll, took us back 100 years and reminded us that other systems did not work in those days. However, out of deference and respect to the noble Lord, Lord Aldington, who has drilled me and so many in your Lordships' House over so long a time, I must return to the days of William of Wykeham. At the time when he founded Winchester he was a great proponent of currencies. At that time the écu de la couronne was launched. It was a very solid, hard ecu. Indeed it was certainly harder than the ecu that was launched in 1339. travelled alongside other currencies and in substitution for them. In the 14th and 15th centuries came the noblest of all, the golden ecu of the sun—l'écu d'or au soleil. That too financed trade and, based upon a gold standard, travelled happily alongside various currencies and in substitution therefor.
Six hundred years or more later we find ourselves in a position where, regrettably, finance and politics are seeking to usurp the first place of trade. It is as though the army and the air force tried to demolish the Royal Navy. Trade comes first and with it the financing of trade. Within the countries that now comprise the EC, or the Europe of the ecu, we have many disparities in trade. The United Kingdom is more dependent upon foreign trade than any of the other members. But if we move, as we would all like, towards a common currency, we are told that at some time in the distant future there will be a stage three. As my noble friend Lord Caithness said, the foreground and the background are painted, but the middle ground has yet to be taken.
Thus those noble Lords who seem to reject or oppose an initiative taken by Government to fill in the middle ground in a perhaps more pragmatic way than Jacques Delors with his excellent report has managed to do need to think a little. The convergence, about which noble Lords have already spoken, is difficult to achieve when one has the existing membership divided logically, and regrettably, between the high inflation and the low inflation countries. To seek to bring those together too quickly will cause serious pain and unemployment among the high inflation countries. We shall see a division with perhaps on the one hand Germany, France, the Netherlands, Belgium, Luxembourg, Denmark and maybe Ireland and on the other ourselves with Italy, Spain, Portugal and possibly other members who join.
We must recognise too that it is not the Community of today which we are considering when thinking of the years ahead but a broader Community which will include many other countries with different currencies, different exchange rates and different trading patterns. To accommodate all those countries in plans today is difficult indeed. Inevitably there will have to be an intermediate stage. Stage two and stage three, may be
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followed by stage four, stage five and stage six. They may continue for ever as we develop and finance follows trade.
Our own trading pattern is not yet determined for the future. One has seen in a few short years that 50 per cent. of British exports have gone to the EC. We are told that by 1992 those exports will be home sales. The pattern becomes stronger as one recognises that the greatest trading bloc in the world at the moment is the current EC. What does it lack? It lacks a hard currency. We have been brought up to recognise the value of the gold standard, of Bretton Woods, and of various other attempts. Perhaps with some regret some of us are nervous about the movement towards a deutschmark standard and have fears about the ability or the desire of the Bundesbank to administer the economy of Europe. Thus, inevitably, we feel there should be some form of currency. The ecu, which is already translated into different languages and has been around for a while, is a logical one. To have a weak ecu is to admit weakness and demonstrates a rather wet attitude when it is perfectly possible to have a strong ecu which we may call the hard ecu.
While the proposal of the Government is that the hard ecu should run alongside existing currencies, it is also in substitution for them, as is appropriate, so that gradually a transitional period can take place without the pain and suffering that would inevitably arise from the differing inflation rates. The danger is that if we move too quickly to stage three the pressure on the ERM within the 2¼ per cent. band will be so great that the system will break up and much that we have achieved today will be thrown away.
I believe strongly in the hard ecu for another reason, one which the noble Lord, Lord Aldington, will appreciate. I went to the same school as the noble Lord, and the noble Lord, Lord Jay, although, unfortunately for me, at a different time. I was in the same house as the noble Lord, Lord Aldington, although also at a different time. A Wykehamical colleague, a banker for whom I have much regard, conceived the hard ecu. It was not just a government idea. It was thought out carefully by the banking system over a considerable period of time. Perhaps the Government used it as a stalking horse to demonstrate some political commitment towards Europe, as the noble Lord, Lord Carr, said. But it is not a bad idea and it has been quite well received in the economic and financial centres of the continent of Europe by our European partners.
It is difficult for me to conceive of a stage where Europe does not have a hard currency. Indeed if we do not have that hard currency, our future difficulties will be very great indeed. In moving towards the third stage, we need a second stage. I believe that the hard ecu in the form proposed has a very real role to play. If the original ecu —the golden ecu of the sun which was based upon the gold standard, and the gold standard itself that served us so well—can be replaced today by a hard ecu, it will be no more than a return to a gold standard. It is hard, and it is the best. The ecu of the basket is wet and weak. I prefer the hard ecu.
8.28 p.m.
Lord Benson: My Lords, I wish to speak to only two points in the report. First, perhaps I may draw the attention of the House to paragraphs 166 and 167. They repeat, as has been done many times in the past two years, the need to overhaul the resources and the objectives of the Court of Auditors in the Community. I do not propose to develop the point any further tonight because we shall debate it next week. However, I urge the Government to take note of the continued requests for action to be taken on those lines. I hope that they will be able to tell us something about it on Wednesday.
My second point relates to wider issues. Every now and then a fever overtakes a country or a continent. There are numerous examples in history. Many influential people in Europe have been infected with the fever of European unity. I agree with the report that nothing will stop it and this country must and can play its full part.
Let us see where the fever has taken us so far and where it is likely to lead us in the future. At present the Community comprises 12 member states representing 320 million people speaking nine languages. A form of government organisation has been set up in Brussels which bears little resemblance to representative democratic government. The operations of the Community and the 12 member states are riddled with fraud. For years past up to 70 per cent. of the Community budget has been spent in distorting the whole agricultural industry of Europe and, to some extent, of the world. Therefore, there are some defects in the foundations on which this great enterprise is built.
Perhaps we may now look a little further into the future. Some influences in Europe believe that the Community should be contained within the 12 member states. However, the report makes it clear, and a great many people believe, that the fever will extend into wider fields. Indeed, negotiations are already taking place in those areas and they will continue and become faster.
If within the next 25 years the Community is joined by the seven EFTA states and the six Eastern European countries we shall have a body comprising 25 member states, representing 450 million people and speaking 16 to 20 different languages. We shall be led into some form of monetary union and a single currency. Neither of those processes has yet been properly thought through. Political union will follow and some federal government will be set up in Brussels. We shall seek to govern by remote control the daily lives of up to 450 million people in an area stretching from Crete to John o' Groats and from Lisbon to Stockholm.
At the same time, up to 25 bankers will be set up in another capital of Europe, probably 200 or 300 miles from Brussels. They will be charged with the task of maintaining single stable prices. The evidence given by the bankers was refreshingly frank. They made it clear that they wished to be autonomous. They desire security of tenure so that they cannot be dismissed
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from office. They expressed great unwillingness ever to be infected or touched by the decisions of the political parliament sitting in Brussels. I hope that the House will forgive me if I stifle a gasp of incredulity at some of those proposals.
But what will happen then? I suggest that the fever will abate and the relentless lessons of history will point the way ahead. I believe that this great edifice will crumble at the edges and eventually disintegrate. The reason for my belief is that whenever a community reaches a certain stage of sophistication it finds government by remote control repugnant. The whole trend of social development is in favour of devolution into smaller units whose communities can be masters of their own destinies.
At the time of the First World War the British empire was a dominant factor in the world; it was then probably the dominant factor. It now lies in tatters. The Spanish, Portuguese, Dutch, French and Belgian empires have suffered the same fate and for the same reason. During the past 12 months we have watched the Soviet Union and its satellite countries disintegrating. In the 1950s, after a series of intergovernmental conferences, we sought to impose a federal government on a huge chunk of central Africa comprising many thousands of square miles and many millions of people. After a further series of intergovernmental conferences the whole structure collapsed within four or five years.
We in this country should be particularly sensitive to this trend of history. During the 1920s the Republic of Ireland seceded from the United Kingdom because it found remote control from London repugnant. We have only to look across the banks of the Tweed to find a clamour from Scotland for devolution. If that takes place, Wales will follow. We see that Quebec is seeking to distance itself from Canada. The Basques are trying to detach themselves from the Government of Spain.
This fever of European unity is a virulent disease. I believe that it will be dispersed by the remedial forces of history. It is difficult to know when this will take place but I believe that it will be during the second half of the next century. I do not know whether the House of Lords will exist at that time. If it exists at all it will probably have a different structure from that now prevailing. But whatever the form of government that exists I suggest that it will have before it a Select Committee report written with the same clarity and conviction as this report explaining beyond peradventure that Europe must be unbundled. There is only one sadness: that no one in this Chamber will be alive to reap the harvest that we are now sowing.
8.36 p.m.
Lord Briginshawe: My Lords, I too associate myself with the congratulations offered to the noble Lord, Lord Aldington. The Government are in disarray over Europe. Each of the two main warring factions in the Conservative Party offer a so-called strategy for our relationship with our Community partners. Both plans, I am afraid, seeks to obscure the fact that this

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Government are irretrievably out of step with developments within the Community and both plans offer no credible path forward.
I draw your Lordships' attention not only to the manifest flaws in the Conservative party's approaches but also to the more significant realities that we should recognise as we plan the basis of our European co-operation. Two smokescreens have been emerging. The first we may call the little England approach. Apparently, there is to be a two-track Europe with Britain left adrift to pursue an independent economic strategy which will guarantee our future prosperity. We are invited to take as read at least three fundamental misconceptions. There is as well a thinly veiled appeal to nationalism which is dangerously unpatriotic and which seeks to confuse important issues by equating superficial symbols of national identity with self-determination.
I watched with some interest a news feature on a little village in central France. Its inhabitants were concerned, we were told, about their future prosperity in a more unified Europe. The name to be given to the currency used as one of the methods of engineering that prosperity did not, however, worry them. I suspect that the villagers of central England have the similar sense to separate things that matter from those that do not. The idea that calling a currency by another name acts to undermine our sovereignty is disingenuous. A pound that will buy only one apple where an ecu can buy two in some ill-thought-out twin-track exercise is no demonstration of national pre-eminence.
Another limb of the little Englanders' approach is their reverential attitude to what they call free trade. There is, of course, no such thing as free trade, nor has there ever been. There are no perfect markets. At the risk of sounding too technical, what are commonly known as "transaction costs" always intervene. Moreover the historians who inform us that our prosperity in Victorian times was based on a laissez-faire trade philosophy are the same historians who neglect to mention that our imperial armies and navies saw to it that those who underpinned our ability to compete were forced to supply on terms favourable to us. Thankfully, we can no longer reduce our transaction costs in such a manner. Such was the cost of free trade then as it is now. Markets are always shaped and engineered. If soft loans have replaced strong navies the effect is still the same. The idea, therefore, that we can somehow compete internationally as an individual nation in a world of trading blocks is one that has truly had its day.
The final misconception in this particular approach is that the Community should swiftly be enlarged to welcome Eastern European nations into membership. I am far from convinced that the idea is even put forward in good faith. Certainly no one with even an ounce of sense could seriously propose that nations like Poland or Hungary could be ready for the disciplines of membership in the next decade. Our own problems, nearly 18 years after joining the EC, are weakening this Government by the hour. Imagine then the instability that would be caused by hasty
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invitations being sent out to Eastern Europe from Brussels. So transparently inept is such a proposal that when I say that the real purpose behind the plan is to apply a brake to developments taking place from within the existing membership, I am neither the first to make such a comment nor am I being controversial.
Let us imagine, for a moment, that the little Englanders won the day. It is 1995 and Britain has opted for a twin-track approach. The relationship with the Community will have remained, constitutionally and economically, as it is now. However, our European partners will have, in the meantime, forged closer links, all converging on Brussels. A big Englander, let us say British Airways, has decided that it wishes to take a stake in a German airline. The success of that acquisition would revolve around the application of competition rules made in Brussels. In such a scenario, it is inevitable that there would at the very least be a comparative decline in our ability to influence any decision made. It is verging on dishonesty to pretend that our national interests could be protected. The weight of a committed, participating administration behind any such strategy on the part of one of our international players is absolutely essential.
I turn to the second smokescreen emerging from the Conservative Party. Partially visible, there is the outline of the so-called hard ecu parallel. The idea has attracted little or no support in Europe and has gained barely minimal credibility. For a party that has championed itself as a scourge of bureaucracy, an idea that relies on a European monetary fund owned and run by all the central banks of the EC states and then gives the fund not one but two roles as a treasury authority and disciplinary authority is choice to say the least. It will not work and should be abandoned before it embarrasses us further.
It is time to expose the fundamental weaknesses in the Conservative Party's attitude towards the EC. These are weaknesses that neither of the arguments I have spent time assessing can conceal.
On the one hand, the Conservatives view the run-in period to monetary union far too narrow as a process of economic management. Monetary union is not only designed as a mechanism for stabilising currency differentials and making banking and trade transactions more efficient. Monetary union has a fully social context. Europe is a social as well as economic community. We harmonise both in order to create conditions for Europe to compete internationally as a trading block and also, just as important, to provide for better standards of living for all the inhabitants of the community. It is because the Conservatives refuse to recognise this that we fall further and further out of step.
Europe has accepted that the socialist principles which are the engine of social democracy are those best suited to the needs of the present and the near future. Intervention by government in industry, whether at a national or supranational level is healthy. That is beyond dispute. Also beyond dispute of course is the notion that government should manage industry. Once a matter of historical necessity, it is an idea that has served its purpose.

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Harmonisation then means two things. First, it demands that national economic apparatus are brought together on a European basis so that we can compete internationally. Secondly, it means that at the same time as we take steps to compete externally, we also take internal measures to ensure that those who help create this economic trading block are justly rewarded. They should expect to receive the same value attached to their work, whether they happen to live in southern Spain or northern Germany. If the price of an apple in Ipswich is to be the same as the price of an apple in Heidelburg, we should not expect the inhabitants of either to possess less purchasing power than the other.
Some might seek to insert some rather complex economic irrelevancies into this equation. They ask what if apples cost more to sell or produce in Ipswich than in Heidelburg? The correct response to the assertion is that in the main these things will iron themselves out. For example, there may be more elderly persons living in Heidelburg. Ipswich would therefore return the subsidy that it effectively received in apples by contributing proportionately more to welfare provision. Of course, in such a context, the precise terms of monetary union are absolutely crucial.
This leads to the other great weakness for which the Government are responsible. It is said that there is no such thing as a free lunch. The only way that we can ensure that monetary union benefits the ordinary British citizen as much as the ordinary German one is to justify our right to equality by competing as an industrial nation. I spoke last week on our pressing need for investment in education to create an infrastructure which will supply us with the raw materials of future competitivity. Indeed, investment is an urgent necessity not just in the medium term for education, but in the shorter term for industry. The failure of the Government to build a competitive economy is the real reason why they are frightened of deepening our relationship within the EC. Monetary union exposes the Conservative Government for what they have failed to do.
I hope that I have added to the debate on this subject. I conclude with three brief points. Monetary union is not to be feared. Monetary union can only happen when there is in place a radical investment strategy that has begun to bear fruit. This is likely to be in five to six years' time rather than in two or three. Social harmonisation should proceed as an integral part of the process of monetary union.
8.50 p.m.
Lord Thurlow: My Lords, as the noble Lord, Lord Aldington, is not present I shall not add to the chorus of congratulations in which I should otherwise have participated. His work was extraordinary. However, I should like to join in the many tributes paid to our remarkable clerk, whose drafting—I know a little about drafting—has been very fine indeed.
I endorse all the recommendations of the report. I hesitate to bring the hard ecu section into the debate
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because it is above my head. I am prepared to accept the view of my colleagues. I should like to refer briefly to the main topic of the hour; that is to say, the single European currency. I agree with the noble Lord, Lord Barnett, that this issue is a dangerous distraction. The noble Lord, Lord Butterworth, referred to the issue as dangerous and as if it were a commitment. However, in our report we referred to it as a goal. A goal is quite different from a commitment.
The notion that monetary sovereignty is bound up with a national currency is, as I am sure most noble Lords will agree, an illusion. The pound sterling has long ceased to be a currency of sufficient international weight on its own. Twenty-five years ago I had the rather tiresome experience of leading a financial delegation to Australia to ask on our bended knees for Australian support for the arrangements to be made under the Basle agreement. In order to demonstrate to us how weak the pound sterling and London had become, we were kept hanging around for weeks as the Australians deliberately refused to make up their minds until the highest monetary authority in this country went out secretly to Australia in dark glasses. I believe that secret mission has never been disclosed.
I should like to refer briefly to the European Parliament. The noble Baroness, Lady Elles, is present so I do so with diffidence. In my view the European Parliament is bound to increase its influence over the years and become a more effective instrument of scrutiny, of supervising administration. It will probably be a very long span of years. I have no doubt that the logic of events will force the European Parliament into that increasing role and will force the other institutions of the Community to accept such an increasing role.
The committee's recommendations in relation to the European Parliament are modest, but they are forceful. It is especially important that the British Parliament should develop a warmer relationship with the European Parliament. At all costs, we must avoid sliding into a second tier as a second-class member effectively shut out from the inner councils of the Community that determine policy. That could be disastrous for our national economic and financial interests.
We need to remain within the inner ring to establish a position of influence. We must show that we share the creative vision of our common goals, and that we wish to contribute constructively to the creation of the best framework for enterprise and innovation. Unless we are seen to be co-operating constructively in further improvement of the framework and institutions we shall effectively be relegated to a second tier and have little influence in matters that will be of great moment in determining our own interests. That could lead to a downward spiral for us. We already have ground to make up. There can be no illusions regarding the serious difficulties that confront this country. We have slipped relatively backwards in our competitive power and must build up.
The conditions for effective progress were recently defined in striking terms in the new book by Michael Porter of the Harvard Business School on the

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competitive advantage of nations, in which he puts all the emphasis in maintaining or regaining effective progress on to innovation and enterprise. We made strides in those directions in the past 10 years, but there is a long way to go. We can best advance our interests and gain the acceptance of the basic principles that we regard as sound by co-operation in the top European league. If we slide into a second tier the framework within which we are locked will increasingly be changed to our disadvantage and developed in directions that could prejudice our future.
We must co-operate. But our co-operation must be aimed at making the European Community and its institutions more efficient and more accountable. We must be vigilant in insisting that nothing should be done centrally that can be done as well or better nationally.
8.59 p.m.
Baroness Elles: My Lords, with others in your Lordships' House I congratulate the chairman of the committee which produced the report before the House. I also congratulate the clerk and the special advisers. The report, however, deserves more than that. We owe a great debt of gratitude to my noble friend Lord Aldington and the clerk, William Sleath, as well as to the special advisers, who produced a report which is a monument to clarity and breadth of vision. That is supported by the fact that so many distinguished witnesses came before the committee, including the Foreign Secretary. It is a sign of the importance of the subject matter both for the United Kingdom and for Europe as a whole.
The report should be studied not only with regard to its recommendations, all of which I warmly support, but also against the background of the current political situation inside and outside the Community. This week we have seen a gathering of 34 nations and from their backgrounds over the past 15 years one realises that radical changes have taken place in many of them since the signing of the original Helsinki Final Act in 1975.
I take this opportunity of paying a deep tribute to my right honourable friend the Prime Minister. These radical changes, both in the Soviet Union and Eastern European states have been largely due to her own perception, persistence and determination to bring about change in oppressed nations. It is also true to say that in Paris on Tuesday a charter was signed, to which the noble Lord, Lord Bridges, referred. It has been hailed as heralding "a new era of peace and unity".
However, we have become sceptical of such treaties and it may well end up as so many treaties in the history of Europe have done unless it is bolstered, strengthened and cemented. A lesson can be learnt from the Treaty of Rome., which has relied for the past 40 years on economic and social progress, practical measures and closer economic and political cooperation based—I insist on this—on perceived national interests. No member state has given way on its own national interests in order to arrive at a
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common position. It is also based, of course, on a strong security policy in an alliance with the United States and Canada within the framework of NATO.
If the Paris charter is to endure, the above conditions must apply gradually to the whole of Europe. Just as it is now unimaginable for the Twelve ever to go to war with each other again—I cannot understand how the noble Lord, Lord Benson, who is not in his place, can refer to that as a virulent disease when for the first time in European history there has been over 40 years of guaranteed peace between our nations—so surely those are the principles that should guide the European Community along its way.
If we are to contribute to political and economic progress throughout the whole of Europe, we must take measures which will consolidate the Community itself. The EFTA countries and the new democracies of Eastern Europe will not want to join just a free trade area. They practically have that already. They will want to be part of a system, as they have already declared, taking part in decision-making as Greece, Spain and Portugal wanted after their experience of totalitarian regimes. They will want a system which will retain their national pride, based on economic advantage and, above all, the guarantee of a democratic political system. Therefore, if the vision of Europe stretches from the Atlantic to the Urals—a vision of the future of Europe which I believe is shared by many people of all persuasions—it is essential for us to build successfully on a stronger, more effective and more efficient Community.
The second point which I should like to stress before referring to one or two aspects of the report itself relates to Britain's role in shaping the Community. It is not soft words which protect Britain's interests. People in this country do not always seem to be aware of the admiration and respect in which our Prime Minister is held throughout not only the member states of the Community but practically everywhere else in the world. She is by far the best known and best respected of all European politicians. That is precisely because she has always stood up for the interests of Britain and has always eventually reached agreement with other member states. It is well known in the corridors of power in Brussels that many people have hidden behind the skirt of Mrs. Thatcher in order to conceal their own disagreement which, eventually of course, emerges. All those who, over the years, have teen involved, whether at high or low level, in the formation and adoption of European Community law will know that those who are the furthest away from the objective at the outset win the most battles. They give attention to detail in the knowledge that the results will be applied in national law. It is well known—one or two noble Lords have already referred to this fact—that those who speak loudest with the rhetoric of Europe are the worst at applying and implementing law in their own national systems. Many others who fail at the last minute, despite clamouring for European sovereignty and the giving up their own national sovereignty, are the most resistant to agreement when it comes to the crunch. I can give several examples and I know that

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my noble friend Lord Plumb is well aware of matters such as insurance, aspects of energy policy, television directives and many other issues where Britain has led the way and reached a satisfactory conclusion. In many cases it has been thanks to Britain that agreement has been reached.
As leaders of the proponents of a single European market, we should surely not think it illogical to foresee that at some stage one will arrive at a single European currency, whether by achieving fixed exchange rates or by the process, or modification of the process, proposed by my right honourable friend the Chancellor of the Exchequer—the hard ecu. Many noble Lords have spoken with great experience and wisdom on that matter.
It may be of interest if I point out the results of a recent public poll taken throughout member states on how many people would want a single currency. Surprisingly enough, in the United Kingdom 37 per cent. are already in favour of a single European currency and 58 per cent. in favour of a central bank. The figures for other countries varied. In Germany and Luxembourg, for example, the figure was over 70 per cent. but in Denmark it was 31 per cent. Considering the lack of interest and discussion in the press on these matters it is surprising to see such a high figure for the United Kingdom. Incidentally, the lowest concern to the British people was loss of sovereignty. However, there must be clear conditions if we go down that road.
In practice, the question of imposing a single currency simply does not arise. There has been no amendment to any of the treaties that have been concluded without it first being debated and voted upon in both Houses of our national Parliament. We need only think back to the long debates, amendments and discussions we had on the provisions of the Single European Act before that was adopted. Firm criteria must be established in regard to the policies and powers of any central control system. As we know, and as we have been informed again this evening, central bankers have already met and are drawing up draft statutes for such a central bank. Therefore, there is nothing secret about that. The details are available and can be studied and discussed.
Criteria must be laid down with particular regard to the state of the economy. Many noble Lords have discussed the convergence of the economy, the difference in interest rates and rates of inflation. I shall not labour those points. It is quite clear that some conditions must be laid down before one can advance to a single currency. I agree with many noble Lords who have said that it is idle to fix a date now. In the history of the Community many dates have been fixed for transitional periods. So far, the one characteristic has been that, as far as I can remember, none of the dates has been honoured. The only date which I hope will be honoured is the end of 1992, fixed by my noble friend Lord Cockfield for the creation of the single European market.
If we contemplate a wider Europe, the thought of having six or seven new currencies from EFTA and at
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least three or four from Eastern Europe is enough to convince one that over 20 currencies operating in a single market would be a nightmare. Perhaps it is too sensible and reasonable to be a reality for the world in which we live, but it would be far simpler to have one single currency; for instance, the ecu.
The economic strength of the existing Community is already diluted in relation to the dollar and the yen. Yet for some time we have been the world's largest trading bloc whether in commodities or services. Therefore, why should world trade, including the price of oil, be dominated by the dollar? It will no longer be dominated by the pound, the French franc, the Italian lira or even perhaps by the deutschmark, although there is every chance of it being dominated by the ecu which would raise the standard of Europe in terms of world trade and the economy. If we are to contemplate a wider Europe the present institutional structures are clearly inadequate. They must be made more efficient and effective and subject to greater scrutiny and public accountability.
I shall confine my closing remarks to one or two points concerning the European Parliament which the noble Lord, Lord Thurlow, mentioned. I also wish to comment on a remark made by the noble Lord, Lord Barnett, who referred to the powers of the parliament concerning the expenditure of the Community budget. The fact is that contributions to the budget are laid down by treaty. The parliament has no power to increase that amount except by a margin agreed with the Council of Ministers. It can only amend about one-third of the whole of that budget which is known as the non-obligatory sector. The total budget amounts to about £36 billion which is approximately the amount that United Kingdom local authorities spend in one year. Therefore, I do not believe that anyone can accuse the European Parliament of having vast powers over the expenditure of the Community.
It must be clear that the competence and the facility to scrutinise the ever-increasing discretionary powers of the Commission are essential. For example, concerning external treaty making, the adoption of secondary legislation or anti-dumping procedures, there is in many instances no public scrutiny. That is clearly unacceptable. As more matters are dealt with at European level, it must be quite clear that in proportion democratic control must be increased.
It is also necessary to scrutinise more effectively Community expenditure which is largely carried out by the Commission. Here the budgetary control committee of the parliament needs strengthening and reinforcing. It requires a larger staff. It must also have a more responsible role in amending draft legislation. After all, it is the only elected body representing the views of the people of Europe. About 50 per cent. of the amendments tabled and voted on by the European Parliament are already adopted by the Council. There are still many aspects where the views of the parliament are not sufficiently taken into account.
The opportunity must also be given for MEPs to work more efficiently and to be sited in Brussels near the Commission and the Council, preserving Strasbourg as a meeting place for political debates and

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ceremonial occasions. It has already been mentioned but I think the point should be reinforced, strengthened and repeated. As decisions are increasingly being made at European level, national parliaments must be involved in the debates before the decisions are taken. It is up to the national parliaments.
I plead with another place that it should look with more favour on MEPs and be prepared to work with them. They are representing the same electors and we have the same interests. Members serving in the European Parliament are representatives of the people of Britain as indeed are the Members of another place. It would be infinitely better for our country if both sets of parliamentarians were to meet, possibly within the ambit of select committees on the relevant subjects for which they are respectively responsible.
I thank again my noble friend Lord Aldington for a report containing a great many recommendations which I fervently hope the Government will take to the IGC meetings and draw upon for inspiration and guidance.
9 14 p.m.
Lord Seebohm: My Lords, if the noble Lord, Lord Aldington, will forgive me, I shall keep my compliments short in view of the lateness of the hour. Nevertheless they are very sincere. It must be over 20 years ago, when I was employed in the international money business, that I and my colleagues came to the conclusion that a common market did not make any sense without a common currency. We were very relieved when, a few years later, Great Britain joined the Common Market and was committed to monetary and economic union. The problem then, as now, was how and when to achieve it.
The economic gains are obvious, although opponents of the idea say that transaction savings will be minimal. Nevertheless, the savings from a common currency, from the point of view of trading within the Community, will be absolutely enormous. There is no doubt whatever that the stimulus to trade when all prices and transactions can be quoted in the same currency will be quite amazing.
There is enthusiasm for this from all those concerned with wealth creation, and I was surprised that the noble Earl, Lord Caithness, said there was no general enthusiasm for a common currency. In the world that I live in, I find that there is enormous enthusiasm for it. I do not know when it will come, but I think we all agree that it must be the ultimate goal.
Those who object seem to do so solely on the grounds of loss of power, which they cloak under the more impressive word, "sovereignty". Nothing that has happened in the last three decades has convinced me that the power-seekers—that is, the politicians—have shown that they are capable of managing a money economy. I go further and say that they are not fit to manage the economy, and want to cling on to it in order to continue to mismanage it, by which I mean having the power to devalue and to inflate as they have regularly done in the past.
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The noble Lord, Lord Jay, was emphatic on this point. I do not think I need to follow his arguments at length, but he seemed to assume that, unless one can devalue and inflate regularly, there will be unemployment and a stagnating economy. That appears to me to be absolutely absurd. The conclusions that I draw from all this are that the sooner we return money management to the central bankers and take it away from politicians the better, and that a European central bank system will be of enormous value to the Community, including this country.
There is an extraordinary feeling entertained by the Prime Minister about the sanctity of sterling. This question has already been dealt with by the noble Lords, Lord Thurlow and Lord Cobbold. The noble Lord, Lord Cobbold, submitted a very interesting memorandum, which appears right at the end of the volume on evidence. It is well worth reading.
So far as coins are concerned we need not bother at all, because they do not enter into the international exchange, except at the level of tourism. So I do not think that coins need to have the EMU value on one side and the pound on the other. We can retain them more or less as they are now. But, having said that, I am in full agreement with the recommendation that one must wait till stage one is successful. Our entry into the ERM is still experimental and no one knows at this stage whether Great Britain has entered at the right rate. France took three or four years to settle down and, certainly, we shall not be secure until inflation is down to, say, 3 or 4 per cent.
So, having stated my case for a single currency and a European central bank system, I agree that the method of getting there and the timing is still an open question. But various choices are appearing. The hard ecu might work as a temporary measure, though there are a lot of objections to it. But I rather favour following Sir Michael Butler's suggestion of pursuing the ERM route gradually, hoping that the margins will be reduced to a point where a move to a single currency will be almost an overnight matter.
While I doubt whether it is wise for a date to be fixed now, I am a great believer in fixing date targets as soon as appears practicable; otherwise, nothing is likely to happen. After all, it was not until after—thanks to the noble Lord, Lord Cockfield—a deadline of 1992 was fixed for economic union that things really began to happen.
I turn now to the question of sovereignty. By joining the ERM, we have already given away about 50 per cent. of our power of manoeuvre. Of course the rate is adjustable in theory, but that would be contrary to the undertakings at entry. If we move to the hard ecu, we shall have surrendered the balance of our so-called sovereignty.
There is one other aspect of the single currency which has received little attention. I refer to the fact that the balance of payments disappears as an exchange rate problem. As Sam Brittan put it, the balance of payments between Sussex and Normandy would be the same as between Sussex and Yorkshire.

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Similarly, the balance of payments with countries outside the Community would then be the responsibility of the Community as a whole.
Finally, I should just like to mention the political union. Here I am 100 per cent. in agreement with the Bruges Group and trust that the principle of subsidiarity will be rigidly observed and that Community regulations are confined solely to those matters which are patently better carried out by the Community than by member states in co-operation.
I was most interested to hear the remarks made by the noble Lord, Lord Benson. However, I sincerely hope that he is wrong. We are living in the twentieth century and not the twenty-first century. We must proceed as best we can with what we are doing. If the Bruges Group policy, as I call it, is followed, perhaps bureaucracy at the centre will not in fact prove to be too much of a menace. These days, contrary to the experience in, say, central Africa, the advances we have made in information technology, in satellite television and in travel make the situation completely different as regards harmonising the Twelve. In conclusion, I should like to say how strongly I support the report. It is a splendid job of work.
9.21 p.m.
Lord Geddes: My Lords, it has been a great honour to be a member of the ad hoc sub-committee under the esteemed chairmanship of my noble friend Lord Aldington. He steered us, and extracted information from witnesses, with the same supreme skills and finesse with which he opened the debate this afternoon. We all owe him a great debt of gratitude, as indeed we owe our clerk, William Sleath, and our advisers.
So much of the discussion about EMU has in the past focused upon the negative aspects: what will happen if Britain does not participate? What about loss of sovereignty? Why should we abandon sterling? Instead, I urge concentration upon the positive benefits of EMU. I suggest that the objections raised are no more than political sensibilities which as we know—it is to be hoped—from our reading of Jane Austen should not be allowed to overrule political good sense.
What can be said of such political sensibilities? There has been, and I am sure there will continue to be, much use of such phrases as, "loss of monetary sovereignty" and, "loss of unilateral control over economic policy". I am convinced—I believe that the report supports this conviction—that the use of such phrases in that context is at best misleading and at worst a distortion of reality.
My right honourable friend Mr. Tebbit put a somewhat rhetorical question in another place on 14th November. In an interjection to Mr. John Smith of the Opposition he asked whether there were circumstances in which he would be willing to give up Britain's unilateral control of its own economic policy. In the context of EMU, sovereignty or unilateral control—call it what you will—was lost long ago if indeed it ever existed.
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The report considers that point at considerable length. The evidence given by the noble Lord, Lord Jenkins of Hillhead, on the subject was particularly significant. He said that the House of Commons was deluding itself if it thought that it had control over monetary policy. It did not in his day —by which he meant when he was Chancellor—and he did not think it had in anyone else's day. He continued by pointing out that monetary policy, interest rate policy and exchange rate policy were the supreme field in which one could cling on to the shadow of sovereignty although the substance had flown out of one's grasp some time previously.
As the report points out and as has been mentioned by several noble Lords today, the word "sovereignty" can be used in several senses. The report offers three definitions. We must not allow the emotional overtones which it necessarily raises to cloud our judgment or to lead us to believe that which is not the case. The sense in which the word is correctly applied to EMU is defined by the report to be political rather than legal; that is, the extent to which a state has the power of effective or unfettered action. In that sense—here I warmly support my noble friend Lord Carr of Hadley—sovereignty can be, and has been, pooled in many areas as diverse as limiting fishing rights and the constraints imposed by the ERM.
To make any sense at all, surely European economic and monetary union must inevitably result in a single currency. The sooner the Government come off the fence and make that statement the better. My noble friends Lord Caithness and Lord Selsdon understandably favoured the case of the hard ecu in itself. My noble friend Lord Butterworth somewhat less understandably took the same view. I say "somewhat less understandably" because he was a member of the committee who was at sharp variance with the committee's findings.
I hope not to delay the House too long, but in that context paragraph 78 of the report states:
"But suspicions will persist for as long as the United Kingdom resists acceptance of a single currency as the goal… Moreover, the Committee consider that the hard ecu would have little chance of wide acceptance unless it were seen as the forerunner to a single Community currency. If the Government accepted this goal, it would then be able to champion the hard ecu as the best way to prepare for the ultimate introduction of a single currency".
The so-called abandonment of sterling is yet another emotional rather than substantive issue. The report makes the proposal, which I wholeheartedly endorse, that in the fullness of time national currencies should be redenominated into round numbers which could then be printed on one side of a banknote or coin, with the single currency denominated on the other. In that way the pound could and would be retained. However, progress towards a single currency must and should be via long and meticulously detailed planning. United Kingdom decimalisation was given such planning and it was brought in with remarkably little fuss, bother or distortion. The same can be achieved for a single currency.
The general objections raised are of form and not of substance. Much of the apparent reluctance felt by the

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people of this country to commit themselves to Europe is, I am convinced, attributable to a woeful lack of knowledge and the bad press consistently given to the EC, not least by the Government themselves.
My noble friend Lady Elles mentioned the results of a survey carried out throughout the 12 EC countries. She mentioned the statistics. Across the board, 61 per cent. of all people questioned were in favour of a single currency, whereas in the United Kingdom the figure was 37 per cent. only and that for Denmark was 31 per cent. My noble friend drew a slightly different conclusion from the one I drew. I suggest that we should ask ourselves why the people of this country have such divergent views from those of all our European neighbours except Denmark. I submit that the reason is largely to be found in our political attempts to camouflage the real arguments with the emotional rhetoric of national pride and sovereignty, to which I have already referred. Much more needs to be done to improve public awareness and understanding and to remove the old prejudices which are proving so harmful and damaging to our industrial progress.
The Government have a responsibility—I was tempted to say a duty—to change both their real and perceived stance on Europe. Again, I quote from paragraph 188 of the report:
"This Committee has consistently argued that the best way to maximise the influence of the United Kingdom is to show by word and deed that Britain in no way dissents from the Community's agreed objectives".
Cricketing analogies are much in vogue at the moment. If I may presume to follow the fashion, I suggest to your Lordships that if we wish to score runs it is quite important to be on the batting side.
The Eurocrats themselves are by no means blameless in the context of public awareness. There needs to be more obvious control and accountability. Here I mention just two institutions, the European Court of Justice and the Court of Auditors, already often mentioned today, and the extreme importance of giving them the ability, both in financial terms and in terms of personnel, to do their job so that justice can not only be done but be seen to be done.
Much has already been said on political union. I shall therefore restrict myself to one specific which has only received an airing today from my noble friend Lady Elks. I endorse the necessity for deciding on one location for the European Parliament. The report found that the parliament is heavily handicapped by the requirement to travel between Brussels and Strasbourg, with many of the staff living in Luxembourg. Inevitably, as my noble friend said, this adversely affects efficiency, quite apart from involving additional and unnecessary expense. It would undoubtedly be sensible if all legislative proceedings were concentrated in Brussels, thus granting MEPs the opportunity of taking a greater part in scrutinising the other Community institutions.
The time has arrived when a positive approach to Europe in general and EMU in particular must be adopted as a matter of urgency. The committee concluded that the United Kingdom could only
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remain outside a monetary union at substantial economic cost. Failure to be at the forefront of the negotiations will almost inevitably mean that London will lose the chance of being the operational centre of a European central bank, with all its attendant benefits.
I sincerely believe that we have exhausted our European partners' patience and indulgence. We must seize the opportunity of the intergovernmental conferences to put that right. The present difficulties being experienced by the Conservative Party, of which I am proud to be a member, came to a head specifically on the subject of the EC. The credibility of this country with our European partners was clearly strained after the Rome meeting in late October.
We have had, and I think have taken, a golden opportunity today to show that this House at least—with one or two noted exceptions—supports both the theory and the practice of the EC as outlined in this report. Our 11 partners in the EC need us and we need them. Within a week, the Conservative Party will have a new leader and the country a new Prime Minister. The intergovernmental conferences are only three weeks away. May that Prime Minister send the right—by which I mean positive—signals to our partners in advance of 14th December and may he not only give the right impression but also take the lead during those conferences and thereafter.
9.35 p.m.
Lord Grantchester: My Lords, I wish to start by expressing my admiration for and appreciation of the noble Lord, Lord Aldington. I also admire the concise and clearly expressed report which he and his committee produced with the aid of their support staff. As I am speaking rather late in the debate, I should be most unpopular if I did more than make a few observations which I hope have not been expressed before.
It is clear from the report that monetary union follows on from economic union as night follows day. The entire policy of economic union in Europe is based on the premise of a level playing field. That is an in-phrase which may or may not be in the report but which is bandied about before sub-committees week after week. However, it is no good considering economic union when the 12 member states can from time to time, by adjusting their interest rates and their monetary policies, alter the terms of trade for their own benefit.
Monetary union is now before us and is presented in the report as a desirable measure in the interests of a combined trading Community. There is no difficulty in approving monetary union but problems arise when we consider how to attain it and, when we have attained it, what controls we shall place over the Community institutions involved. Those are the two crucial questions which are not really dealt with by the report except in relation to the hard ecu. However, that is only relevant to the establishment of the single currency and is not really part of the present debate, which concerns whether or not we want monetary union.

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We are facing the conversion of 12 national currencies into one European currency. I do not believe that that is entirely the simple process that the noble Lord, Lord Cobbold, suggested. We start with 12 currencies, some of which are more exchangeable than others, and each of which is subject to market forces and dealers' appreciation of the rise and fall and the background of the relevant national market economy in the immediate short term.
The United Kingdom has oil and gas reserves and a large international exchange system in London. Other countries have other assets and liabilities such as national debts and international loans and liabilities. We shall need to devote a lot of thought to achieving one currency out of that tangle. As the noble Baroness, Lady Elles, said, at the end of the day we shall need an Act which authorises the exchange of our currency (against the background of the exchange of the other 11 currencies) into the Community currency. It is that factor which we should now concentrate on. It is only right and proper that the Government should emphasise to the business world and to the population generally that this is the stage that is now being embarked upon. The Government should emphasise that people will not simply find ecus in their pockets instead of pounds in, say, a week's time, but that a great deal of background work will now be required over a long period of time.
On that point, mention has been made in the debate of the suggestion of a convergence of values. When mentioned in the report, that does not mean, as some noble Lords have suggested, the equalisation of wealth within the 12 member states, or if it does that should be made abundantly clear at this stage. I suspect that it means nothing of the sort. I believe that the phrase is being misused to frighten people off the idea.
Having achieved the second stage, and in due course having overcome the problems of the establishment of the Community currency, we shall then have a level playing field. We shall have that because the central bank will exercise interest rate and monetary control in the interests of the Community as a whole and not, as now in this country, for the benefit of our community here. That is a significant difference in practice which will emerge. Exactly the same position applies to other powers which are now being transferred to Europe, such as merger control. The Commission should exercise its merger control operations in the interests of the Community as a whole.
Those limitations mean that, if there is to be political control, that political control should be exercised by a democratic Community organisation and not by the national governments and elected authorities of the 12 member states. It has been suggested—by the noble Lord, Lord Barnett—that the governments of the 12 member states will exercise control over the central bank. I do not think that that is right. I believe that the control has to be exercised on an entirely different basis. That should be made clear.
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The one remaining point that I should like to make is that if we accept monetary control on the basis of the doctrine of the level playing field there will also be control over direct and indirect taxation throughout the Community, partly through the necessary market forces but probably by the means of further community directives. I know that that concept is not being bandied about at present, but if one establishes a level playing field and one has a single currency and there is also transferability of money and of labour, then the labour and the money will move to those places where the most profit is to be made. Therefore it is no good one member state thinking that it can exercise its taxation policies, for example, for the equalisation of wealth within its boundaries. That would immediately cause an outflow of capital and an outflow of labour. The Community would then step in and say that it wanted a level playing field and that taxation must be organised and laid down within bands.
I hope that I have issued a note of warning that we are going down a path which is leading into future difficulties and other matters which are far more complex than are mentioned in this report.
9.45 p.m.
Lord Stoddart of Swindon: My Lords, although I commend its diligence and congratulate the Select Committee on a well written report, nevertheless I cannot welcome it. In my view its recommendations compromise the remaining freedom and independence of the United Kingdom. Too much power has already been ceded to institutions outside this country and not under the control of the British people. Too many decisions are being taken which are not in British interests but in favour of countries whose interests are inimical to ours.
The noble Lord, Lord Geddes, might very well consider those words to be emotional rhetoric. He will hear some more in a moment. I was most concerned to hear him say that the patience of our European partners is exhausted. I felt a nasty, cold clamp over my heart when I heard that phrase because the last person whom I heard use it was Adolf Hitler before he launched his Blitzkrieg on Poland. I must tell the noble Lord that I do not care two hoots if the patience of our European partners is exhausted. It is right and proper for the Ministers of this Government—of any British government—and in particular the Prime Minister to stand up for British interests no matter how much that may exhaust the patience of our European partners. I hope that future Prime Ministers will do that in the same manner as the present Prime Minister, who has been so shamefully deposed today by the Tory Party.
Having got that off my chest, I must say that so far membership of the EC has brought only high costs in economic terms and few, if any, benefits. In his speech my noble friend Lord Bruce of Donington described how we have reaped very few benefits from the EC, and so far as one can see there have been no benefits at all. We have been told of the benefits of trade. The only way in which there is any benefit in trade is when one makes a profit. At the moment, and indeed for the

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past 10 years at least, we have been making a loss. Therefore there has been no benefit of trade. Last year our loss was £15 billion; this year the loss will be about £14 billion. That is not a benefit. It is detrimental to this country. Therefore, my noble friend Lord Bruce was right to draw that fact to your Lordships' attention.
In political terms our membership of the EC has done little to enhance Britain's influence abroad and in some ways has diminished it. Furthermore, as we are now experiencing, the EC issue is causing severe political stresses and strains at home, splitting asunder the Tory Party and threatening to cause it permanent damage. I do not care particularly about that but I am sure that noble Lords opposite feel that that is not a good thing. Nevertheless that issue has caused the damage at the present time.
My party, the Labour Party, while enjoying for the moment the spectacle of the Conservative Party at war with itself, is no more united over the European issue than its opponents. When Labour attains office at the next election, the Euro-conspiracy will cause havoc in its ranks too, as the Euro-fanatics try to force a Labour Government along the path of destroying Britain as a nation state and creating instead a monster Western European super-state through federation or a unitary state, complete with an overbearing centralised government. That is some emotional rhetoric, is it not, my Lords? I hope that the House enjoyed it. There is more to come!
If the movement towards ending our nationhood emanated from the grassroots, from a demand by the people of this country for complete integration into a Euro-state, it might have some respectability. But it does not come from the grassroots. It does not come from the people in this country. The demand is from a select group of people in high places whose self-interest takes first place over the real interests of Britain and her people.
It is not surprising that there is no groundswell of opinion in favour of the moves recommended by the Select Committee. Ordinary folk are confused about the issue. As we have seen in the debate today, many people are themselves confused. God help the British people; they cannot help but be confused under the circumstances. They hear conflicting evidence.
Let us take the ERM. Before we entered the exchange rate mechanism, the British people were told that we must do so if interest rates were to fall and inflation to be reduced. Nobody told them before entry that the long-term consequences would be lower living standards and higher unemployment. Certainly the fact that the economic crisis was caused by our de facto membership of the ERM since 1985 through the shadowing of the deutschmark by the pound was hidden from them.
Now that Britain is locked into ERM, it is being made clear every day to ordinary people that it is they—not the bankers and others in the City who forced ERM upon us—who must bear the adverse consequences and cost of ERM membership. The Chancellor in his broadcast a week ago last Sunday
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made it absolutely clear that the British people will bear not only the cost of ERM but the cost of a single currency and EMU. Working people in Britain will be made to pay the price in both economic and political terms.
We are now being told that if we do not proceed along the lines proposed by the Select Committee and others we shall be isolated in Europe. That really is rubbish. Other European countries cannot afford to isolate Britain. With a trade deficit of £15 billion they need us more than we need them. Let us make no mistake about that. However, perhaps a little more isolation from the EC might help us re-integrate with the remainder of the world. After all, 53 per cent. of our trade is still with the remainder of the world outside Europe. There is a big world outside the EC and we ought to remember that. This concentration on the EC is helping to lose us markets elsewhere.
Lord Aldington: My Lords, that really is rubbish, if I may say so.
Lord Stoddart of Swindon: My Lords, it is not rubbish. It is far too easy to say, "There is Europe, there is your little market. Concentrate on that. Don't worry about anyone else". The wide world consists of 5,000 million people, not 330 million people.
We have heard of convergence. The report refers to convergence. Convergence is a wonderful thing. The word rolls off the tongue more easily than ERM or a single currency. But what is convergence? We have not attained it in this country yet. There is no proper convergence between Northern Ireland and the United Kingdom or between Scotland and England. There is depopulation in those two countries because convergence has not been attained. How are we to attain this convergence? How much is there to be? What will it cost? At the present time we contribute about £2.2 billion to the EC. Are we to contribute a lot more? Some estimates have put our future contributions at much more than that. We need to know the answers to those questions.
In the last analysis—this must be fully understood and it matters not whether we are in the EC or out of it—if this country is to be successful there are no panaceas. There is no panacea in the ERM and no panacea through the EMU or a single currency. If we are not to be depopulated and impoverished there is only one cure for our ills; it is to pull ourselves up by our own bootlaces. That means taking the actions necessary to do so and for a British Government to put our economy right. It can be done no other way and it is about time that we started to do it.
What of the view of the people? As things stand they will not be asked for their opinions. They will not be allowed to decide the issue any more than they were allowed to before Britain was dragged into the EC in 1973 by Edward Heath. Instead, the vital decisions will be taken by a Parliament which so far has shown itself all too ready to cede its decision-making powers to institutions alien to our traditions and by methods which bypass any democratic process. But Parliament has forgotten that in the last analysis it is a mere trustee of the people's sovereignty and not the owner.

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It is not Parliament's to give away. In this context it must be seen as an amazing paradox that, at the same time as the countries of Eastern Europe have demanded and obtained a return of their nationhood after 40 years and in the Soviet Union after an even longer period the constituent republics are demanding independence, our Parliament should be contemplating measures to undermine our nationhood and compromise our independence.
One of the problems for the people of this country at present is that there is no political party articulating firmly and clearly its fears about and basic opposition to EMU and political union—although the Labour Party has serious and important reservations. A cross-party consensus is developing among those opposed to the present direction and speed of European integration. It will increase as time goes on, but that may not prove to be enough. There is a danger—people may laugh at the suggestion—that a new political party might emerge, perhaps of the extreme Right or even of the extreme Left. It may be a British independence party or, as the Scots do not like the idea of a British independence party, perhaps for the first time ever an English National Party.
I believe that such a development would be unfortunate and undesirable. But if those who, on the one hand, swear allegiance to Her Majesty, her heirs and successors, continue, on the other hand, to undermine the integrity and independence of Her Majesty's realm to the extent that there may be nothing left for her or her heirs and successors to rule, it might be the only course left to save the country that we serve and love. The noble Lord, Lord Aldington, said "Good Lord!", but I believe in what I have said and I hope that he listened carefully.
10 p.m.
Lord Monson: My Lords, I am delighted to follow the noble Lord, Lord Stoddart of Swindon. No doubt I shall pick up one or two of his themes. I join other noble Lords in congratulating the members of the Select Committee on the hours of hard work which they obviously must have put in. The report is well written and well produced. Its conclusions are perhaps another matter.
I do not wish to say too much about the EMU, given the time of evening and the technicalities of the subject. However, a second potential big lie must be smartly knocked on the head before it has chance to take root. The first big lie was that before the advent of the modern nation state the whole of Europe was a haven of peace, tranquillity, harmony and brotherly love and that only the formation of the EC after the war, to supersede the supposedly wicked nation state, has prevented a third world war. That is absolute nonsense. If I had an hour to spare, I should develop the theme in great depth.
The second big lie is that it was Mrs. Thatcher's robust defence of British self-determination in the face of creeping federalism which led to her becoming electorally unpopular. That is the precise opposite of
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the truth, nowhere more forcibly demonstrated than in a MORI poll published in the Sunday Times on 18th November.
The poll set out the political consequences of each of three options. If Mrs. Thatcher remained Prime Minister with, by implication, no change in policies, the Labour lead would be 9 per cent. If Mr. Heseltine replaced Mrs. Thatcher and initiated the major modifications of the poll tax which he had publicly promised, the Conservative lead would be 1 per cent. However, if the poll tax were to be abolished with, by implication, no change in the leadership, the Conservative lead would leap to 10 per cent.
In other words, it is not suspicion of federalism and other forms of Eurofanaticism which made Mrs. Thatcher unpopular among the public at large; quite the reverse. It was the wretched poll tax. In other words, the continuation of Mrs. Thatcher in office, shorn of the poll tax incubus, would have given the Tories a lead in the polls 10 times greater than that resulting from Mr. Heseltine stepping into her shoes.
Of course outright abolition of the poll tax is now difficult and perhaps impossible. If it could have been made swiftly less of a burden upon those earning less than the average wage, perhaps with the shortfall made up from higher taxation of those who have done so well out of the abolition of the domestic rate—by limiting tax relief on mortgage interest to the standard rate of tax or something along those lines—Mrs. Thatcher would almost certainly still have been in office in 1991.
It is too late for all that now. However, the point I wish to make is that it is not Europe—as it is usually misdescribed—which has dished Mrs. Thatcher. Indeed, the opposite appears to have been the case: her attitude as regards that seems to have been popular. It is the poll tax or, at any rate, the unfair manner in which it impinged on the lower paid.
As to the EMU, there are many conflicting views among the experts as to its precise economic benefits. The noble Lord, Lord Aldington, cited the Cecchini Report. That report envisaged a growth in GDP of between 5 and 7 per cent. as a result of EMU. If that forecast is correct, it may well be worth throwing caution and tradition to the winds. On the other hand, the Treasury is much less optimistic about the advantages of joining the EMU. If the growth in GDP were to be only of the order of 1 per cent., the consequential disadvantages of joining might well outweigh the advantages.
There are respected economists and others who believe that the EMU would be positively disadvantageous, as currently envisaged. They include Sir James Goldsmith. The fact that Sir James got out of equities totally in August and September 1987 proves him to be a man of acute intelligence and uncanny foresight. I suggest that that demonstrates that EMU should be approached with extreme caution.
I turn to political union. Perhaps I may first ask why unity is automatically assumed to be a self-evidently desirable objective. Unity has nothing to do with friendship or co-operation. I have a great

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many friends and I co-operate with a great many people. But I do not want them living in my house; still less do I want them to tell me what to do in my life.
A dozen years or so ago a well-known journalist wrote in the Daily Telegraph that post-war West Germany had about as much personality as an airport lounge. We face the danger that Western Europe as a whole may end up with about as much personality as an airport lounge. Diversity is surely more interesting than unity.
Why is there the determination for unity at all costs? The answer clearly lies in history. In an excellent speech on this subject last week, the noble Viscount, Lord Eccles, pointed out that we were the only country in the EC to have something like the Battle of Britain Sunday about which to feel proud. Continental countries have either been occupied by foreign powers or have been dictatorships. As Sir Fred Catherwood pointed out in his evidence to the committee at page 187 of Volume II:
"For almost all [member states] the war was a failure and the Community has been a success. For Britain the war was a success and … the Community has seemed a failure".
Moreover, fully half of the EC countries are 19th or 20th century creations—Belgium, Luxembourg, Germany, Italy, Greece and the Republic of Ireland. Many of the other countries have centuries of creative achievement to look back upon in the fields of science, engineering medicine and architecture as well as in painting, literature and music. However, they have a good deal less to be proud of in the realm of government; in other words, in the political sphere. For example, France must face the excesses of the French Revolution and the fact of widespread collaboration during World War II. The Danes, who were formerly sceptics like ourselves, are now scared stiff by the idea of a united Germany.
I must therefore suggest that the noble Lord, Lord Cledwyn of Penrhos, missed the point when he remarked that it cannot be true that Britain is right and the other 11 wrong on all issues—I hope I copied correctly what he said. Of course that cannot be true. In the main we are right from our perspective and the other 11 are right from their perspective, and rarely the twain shall meet. Their perspective is formed by geography as well as history. Their very location turns them inward and gives them perhaps a subconscious hankering for the recreation of the Holy Roman Empire. By reason of history as well as geography we are essentially Atlanticists, as are the Portuguese, and we will always remain Atlanticists to a considerable degree. It is difficult to exaggerate the hostility and suspicion of the Continent towards Japan, despite its relatively small population of 122 million people. There is a similar hostility towards the United States, with a population of 227 million, as well as to Canada, Australia, New Zealand, and so on.
I love France. I go there frequently and have a good many friends there. It is the place I should most like to live if for any reason I could not live in Britain. But it must be said that while they generally much regret the killing of the Portuguese photographer, the majority of the French fully support the action of their
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government in sending their secret service to sink the "Rainbow Warrior". They greatly resent the fact that on that issue, as on many others, the British support the New Zealanders rather than the French. The French consider our attitude to be not communautaire, and that it brands us as bad Europeans.
It must be faced that for most Continentals the EC is almost a religion. Any fundamental criticism of it is heresy and about as welcome as a bevy of carol singers in Saudi Arabia. That is why all talk of Britain being able to influence events by jumping on the train is fanciful in the extreme. We would not be able to apply the brakes singlehandedly or to jump off at a moment when the train is trundling along in order to alter the points and switch us on to a different track. I am not talking about the gravy train—we are discussing one aspect of that next Wednesday and the other aspect is properly condemned in paragraph 146 of the report—but about the semi-sacred mystery train setting off to an unknown destination in pursuit of what my noble friend Lord Harris of High Cross termed the Holy Grail.
Nothing better illustrates this than the naive assumption that had we joined the Common Market at the outset it would have prevented the excesses of the common agricultural policy. The CAP had virtually nothing to do with economics and everything to do with politics. It was a piece of social engineering designed to keep inefficient peasant farmers on the land for fear that they would otherwise drift to the cities and form a potentially revolutionary proletariat who would vote for communists or other extreme Left-wing parties. Faced with that situation, Britain's advice would have counted for almost nothing. That is not my analysis, it is a matter of historical record.
We should look with extreme suspicion at any suggestion of giving more powers to the European Parliament. One reason is that given by the noble Lord, Lord Barnett. I am glad to be able to agree with him on at least one issue: that the European Parliament can vote for spending but has no responsibility for raising the money on which that spending is based. Another reason, as I pointed out on an earlier occasion—
Baroness Elles: My Lords, did I hear the noble Lord say that the European Parliament was responsible for raising money in the European Community, or did I misunderstand what he was saying?
Lord Monson: My Lords, indeed it is not responsible and that is the whole problem. The European Parliament can vote for spending but does not have the responsibility for raising the money. It has the power to vote for spending in an irresponsible fashion.
Baroness Elles: My Lords, with respect to the noble Lord, the European Parliament has no power over spending. It has the power to amend one-third of the budget which is proposed by the Commission and agreed by the Council of Ministers. The power of the European Parliament is extremely limited in regard to expenditure.
Lord Monson: My Lords, perhaps I should have referred to indirect spending; in other words, the European Parliament can vote for policies which will cause member states of the EC to incur expenditure which, in the absence of resolutions or directives emanating directly or indirectly from the European Parliament, they would not have otherwise incurred. The taxpayers of the country concerned would not have had to fork out for those expenditures.
Another reason, as I have pointed out on earlier occasions and as the noble Lord, Lord Cockfield, will remember, is that because of the allocation of seats in the European Parliament Britain could be outvoted on a matter affecting our vital interests by a coalition of smaller countries whose total populations are less than 53 per cent. of our own. I know that the noble Lord, Lord Cockfield, said that that came about because of a deal done many years ago, and I accept that, but it does not make it any more palatable.
I was delighted to see that Mr. Andrew Duff—who nobody can accuse of not being a Euro-enthusiast—in his evidence to the committee said he believed that,
"Seats won must match broadly votes cast".
That is on page 263 of Volume II. Then again, the Financial Times—nobody could possibly accuse that paper of being inimical to the EC in any way—in its issue dated 27th October painted a vivid picture of the European Parliament. It described a visit to the European Parliament of Virgilio Barco, the drug fighting president of Colombia. The article states:
"Barco was perplexed to find half his audience wearing black arm bands and waving home made cardboard tombstones for people allegedly murdered by the Colombian Government".
The article later described the chamber:
"The left side is dotted with youth and colour. A German Green with spiky hennaed hair in a multicoloured kaftan kisses a like-minded Dane".
The Financial Times did not say whether the Dane was of the same sex as the German or the opposite sex. It continued:
"Near her a British leftie in a rugby shirt yawns over the sports page of the Guardian".
I know that there are also many splendid and hard-working members of the European Parliament, but to what extent should our future be in the hands of German punks in multicoloured kaftans?
Paragraph 143 of the report speaks of,
"the spectre of arbitrary and unnecessary intervention from the centre",
implying that there is a great deal of fuss about nothing and that the "spectre" is not to be taken seriously. That is not so. Why should the people of one country have the right to interfere in the shooting seasons, the speed limits or the degree of water purity of any other country? Why should any outside or foreign body prevent the British Government from building a road across Twyford Down or building another road through a wood in order to complete the East London crossing? It is every concern of the British. We have every right to object and I do not like
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some of these proposals myself. However, these matters are not the business of anybody else in any other country.
I deplore the extension of the TGV line through virgin country from Montélimar to Avignon, and Aix-en-Provence to Nice. I greatly sympathise with the people of Provence in their opposition to the construction of this line. But in the final analysis it is their business and absolutely none of mine. Therefore, I totally oppose the proposal for the extension of majority voting to environmental matters except in those rare instances such as acid rain, pollution of the oceans and smoke pollution, where the consequences transcend national frontiers.
10.16 p.m.
Baroness Seear: My Lords, until one hour ago I intended to begin by saying that there had been remarkable uniformity in the support and praise for this report. However, recent speeches have led me to believe that there is more diversity of views in your Lordships' House than the earlier speeches had suggested. It will not surprise your Lordships that we on these Benches who claim to be the Stone Age Europeans and totally undivided supporters of the EC from its inception welcome this report wholeheartedly. I shall not take up too much time congratulating the noble Lord, Lord Aldington, and his team because everybody else has done so. I am sure he will accept that our enthusiasm and gratitude are great. They have been much enhanced by the speeches made in the last hour, which have shown how great is the need for clarification of the kind that this report has given us.
There are a number of points raised in the report. Among those who support it in general terms there is a great deal of agreement about those points. The rejection of the hard ecu, with the exception of the support for it from the noble Lord, Lord Selsdon, has been widespread. The reasons given for the rejection have been extremely helpful to those of us who find the intricacies of the currency arguments not too easy to unravel.
There is widespread agreement that there is a need for more democratic control over the developing institutions of the Community. Those views have been very well and valuably expressed and discussed in the report. I believe that all of us will agree that this is a very important feature to which great attention needs to be given.
There are those of us who believe that the institutions of the Community must be developed and that enlargement will come. At the same time there must be a deepening of those institutions. There must also be concern about the democratic element. As the report has stressed, these measures have to be achieved in two directions; namely, in greater links between the national parliaments and the institutions of the Community and in more detailed suggestions about the way in which the Houses of Parliament and the MEPs can have closer contact. Those proposals are valuable and need to be followed up and put into practice as soon as possible.

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There should be more power for the European Parliament, though there is considerable diversity of opinion about how much power it should be given. Those of us who are in favour of the report in general terms believe that the parliament needs to be strengthened and made more democratic.
In making the parliament more democratic, one step that could be taken very quickly, and taken unilaterally by the Government in this country, is to change the voting system to the European Parliament so that at least it would be more democratic in its representation of the voters of this country. If that was done, it would be more in line with the requirements of the treaty, which have always laid down that elections for the parliament should be on a common basis. But that is, as it were, in parenthesis. There are developments for the increased democratisation of the Community which we would all very much support.
The points raised by Members of your Lordships' House who have, to some degree at any rate, if not totally, supported the report, have centred around the question of sovereignty, and also around the way in which power is to be distributed throughout the Community and throughout the nation states within the Community. This is another aspect, I suppose, of the issue of sovereignty.
I must say that as I listened to the noble Lord, Lord Benson, I could not believe my ears. When he described to us the edifice from which we would be retreating, or rather the edifice from which our great-grandchildren would be retreating, in 50 years' time, I could not begin to comprehend that that was the kind of organisation we were building. There is no suggestion, as I understand it, of a great super state with strong central powers which will dictate not only to the Twelve, but to all the other countries which are likely to join together. It would be a ludicrous conception, and I am quite certain that it is not the conception that was held by the members of the committee of the noble Lord, Lord Aldington, or by any of the rest of us who are greatly in support of further developments inside the Community.
But we have to think in more detail about how power is to be distributed. There are clues given in the report in terms of interpretations of the idea of subsidiarity. The noble Lord, Lord Cockfield, said that too much can be made of the idea of subsidiarity, and it has been said—I forget whether the noble Lord himself said it, but it has certainly been said on a number of occasions—that people who do not wish to see the Community develop hide behind the idea of subsidiarity to halt the kind of development which is necessary.
However, there is more to it than that. We need to know what decisions are to be made and at what level. It is not only a question of what decisions are to be made by the parliament, by Brussels and by the Council of Ministers; of how power is to be distributed at that level; and what decisions are to be made by national governments. Also, surely, in the Community of the future, especially if it is enlarged,
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there are likely to develop regional areas, perhaps regional groupings, which will themselves want to take decisions in respect of their own affairs.
We see this happening inside the United Kingdom. In Scotland, there is an urgent demand for more control over their own affairs. The noble Lord, Lord Cledwyn, never loses an opportunity to tell us how important it is that the Welsh should be able to control what goes on in Wales, where something is relevant only to Wales. You have only to look across into continental Europe. There are problems to be settled with the Basques, the Catalonians and a whole variety of other groups who will demand that they have control over their own affairs. If the freed countries of Eastern Europe join, either directly or in some associated status, they, too, will make demands of the same kind. I was recently talking to an enthusiastic politician from Slovenia. He could not wait to get away from Belgrade. In the future, those regional groupings will be part of the Community, whatever kind of shape it takes. We too must think in such terms. We must consider the huge question of how power is to be distributed.
I absolutely agree that we cannot here and now say how that power will be distributed. In contradiction of the nightmare put forward by the noble Lord, Lord Benson, that what will emerge is a highly centralised state trying to control by diktat throughout the whole European Continent, we can emphatically say that that would be madness and that it would receive no support. Moreover, it is not what any of us who have supported the European idea for decades have been working for. We cannot make that point too clear.
The most disappointing speech, although perhaps not unexpectedly so, came from the noble Earl, Lord Caithness. The impression of the Government's attitude which we were given was that in reality what they want, and what they should always have settled for, is a free trade area. They see the Community as an economic community giving opportunities which arise through a large unified market; and that is the beginning and end of the matter. That is why the Government have been so unwilling to take the lead in going along with the development of the European Community along the lines which have been suggested and which are supported by the noble Lord, Lord Aldington, and his report.
The idea of the single currency, having received widespread support in other areas, was turned down out of hand by the noble Earl. His attitude towards those who criticise the Government and towards those who support the development suggested by the noble Lord, Lord Aldington, was condescending and patronising.
I have no doubt that the noble Earl's speech was written before today. Perhaps this is indeed an historic day on which to be discussing the Future of the European Community and our place in it. Whatever one may feel about the changes which have taken place today, it must be true that this gives us an opportunity for a new start in our relations with the European Community. Whoever it is who goes to Rome he will perhaps not be hamstrung by the

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decisions and statements which have come from the Government in the past. It is to be hoped that what we heard today was in every sense yesterday's speech.
One of the problems which we face is that the European Community is a totally new conception. There is no precedent in human history for the Community. We are always trying to find parallels where there are no parallels. We set out to create something which is new in terms of the way in which human beings organise themselves as nations and as communities. However, as we set out, we do not know where we shall arrive. We should do much better if we accepted that uncertainty as part of the conditions under which we are working. It is a little like Christopher Columbus setting out to find the East Indies and in fact discovering America. It was a much greater achievement than he anticipated and one which was totally unexpected.
Because this is a new concept, the language we use to describe it is never quite right. I much regret—and I speak now more for myself than for my party—that the word "federal" is so much used. It conjures up in people's minds a picture which is false to the Community. On hearing the word "federal", the vast majority of people in this country think about the United States of America. The United States was made up of people who had voluntarily abandoned the old world and deliberately, and of their own volition, set out to reate a new country and a new nation. Nothing could be less like that than the European Community, which is the coming together of old cultures. They come together because they see a common interest and a common benefit in so doing. That has never happened before in human history.
It is not surprising that we are confused. Let us not confuse ourselves further by using misleading language. As it is so difficult for us to know precisely where we are going, it is equally difficult for us to know the route by which we shall get there. As we struggle with the objectives and with the route, and as we work at the constructive conflicts that that journey involves, we shall learn what it is we are trying to create and the best way to create it.
10.30 p.m.
Lord Williams of Elvel: My Lords, we have come to the end of a long day's debate. I, as others have, congratulate the noble Lord, Lord Aldington, and the committee on their report. He must be feeling somewhat less shy at the end of today than he proclaimed himself to be earlier this afternoon.
I want to stress, as did the noble Lord, Lord Carr of Hadley, that this is possibly the most important issue in politics that we shall continue debating during the 1990s. The noble Lord was right to say that Members of another place should recognise, if they do not already recognise, that these are matters which affect and will affect their constituents directly, and that it is therefore of supreme importance that both Houses of Parliament take an intense interest in what is going on and what will develop over the next few years.
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I have only two small criticisms of the committee's report, and I offer them in the friendliest possible spirit. The first is that in view of the paragraph on convergence—I shall come to convergence later—I was disappointed that the committee did not take evidence—I understand that it was under considerable time pressure—from the Portuguese, the Greeks, the Spaniards and the Danes—a Dane did give evidence but I understand that he was speaking for the Commission. Their countries are those on the periphery of the Community which may have a word to say about convergence if we go right through to the EMU single currency.
My other slight criticism is that I believe that the operation of the monetary compensation allowances—the green currencies—in the Community might have given us some insight into how a common currency might work, because the monetary compensation allowances have had to be devised as a form of regional policy, and a form of regional policy will have to be devised with a single currency. I shall return to that point later. They are slender and small criticisms only, which I offer in the friendliest possible spirit to the noble Lord and his committee.
I say to the noble Lord, Lord Hesketh, who is to follow me, that I appreciate the difficulty in which the noble Earl, Lord Caithness, and the noble Lord find themselves. I say that sincerely because they must respond for the Government, and yet within one or two weeks we shall have a new Prime Minister, a new Cabinet and a new Government. It is extremely difficult to make any commitments on behalf of any new Government which may be in office only two weeks from now. Whatever the noble Lord says, we shall have to take it with the due qualification that I am sure he would impose.
I intend to deal more with economic than with political matters, although the two cannot, as the report rightly points out, properly be separated. The noble Lord, Lord Harris of High Cross, was too emphatic when he said that he knew nothing about politics and was dealing with economics only. These are matters of politics and economics and it is a great mistake to try to separate the one from the other.
It was a year ago only—on 18th December, 1989—that your Lordships debated the Select Committee's report on the Delors Report. On that occasion, we from these Benches said that, first, we were in favour of British entry into the exchange rate mechanism, but on the basis that there would be tough negotiation about the rate. We would not jump in blind. Our support was on the basis that the swap arrangements inside the mechanism would be increased to accommodate sterling, which is the second most highly traded currency in the Community. It was also on the basis that there would be emphasis on a growth pattern, a co-ordinated economic system within the Community.
The first two conditions—tough negotiations and swap arrangements increased—were not envisaged by the Government. They jumped in blind at the wrong moment and there was no attempt to increase the swap arrangements. However, the third condition,

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which is tantamount to mutual surveillance of economic policies, is starting to appear, if it is agreed. We are pleased about that. The second point we made in that debate from these Benches was that we did not regard the Delors model stages two and three as necessarily the right model for the future. We thought that both stages had serious disadvantages.
The problem that most exercised us in that debate and still exercises us today is the so-called independence of the central monetary authority. The noble Lord, Lord Cockfield, rightly pointed out that one of the services the report had done us was to demonstrate that a number of the buzz words used were simply a substitute for thought. I tend to think that the word "independent", when we talk about a European central hank, is one of those words.
If we consider the status of the Bundesbank, it does not take long to see, if I can rely on Mr. Schlesinger, who is the vice-president of the Bundesbank and to whom I talked the other day, that on only two occasions in the past 30 years has the Bundesbank gone against the advice of the finance ministry in Bonn in any of its actions in raising or lowering interest rates. It was quite clearly shown by the chancellor of the Federal Republic that when push came to shove on re-unification, the Bundestag could remove the independence of the Bundesbank by a simple vote. That was pointed out. The result was that the Bundesbank went along with something it had not advised. Furthermore, Dr Pöhl is quite right when he says that the Bundesbank pays attention to the generality of economic and financial policy of the Federal Republic. It is quite proper that it should do so.
My noble friend Lord Murray of Epping Forest made an important point. It was that we cannot simply separate monetary policy from fiscal policy and from social policy. They all go together. There must be some method of accountability imposed upon whatever monetary authority runs the monetary unit, the single currency or whatever we get to: it must have some democratic legitimacy. I put it like that because it is an important concept. It is not simply accountability to the Council of Ministers; somebody must control it democratically.
We do not think that government control of monetary policy started in 1946. I have a difference of opinion with the noble Lords, Lord Cockfield and Lord Plumb, on that matter. Governments have always been interested in monetary policy. After all, Mr Churchill put us on the gold standard in 1925. If that is not government interest in monetary policy, I do not know what is. As regards a European central bank, if I may use that catchphrase, one of the points on which we insist is that there must be some strong political control, not just accountability.
I join with the noble Lords, Lord Cockfield and Lord Roll of Ipsden, and the noble Baroness, Lady Elles, in complaining about the phrase "imposition of a currency", which I believe the noble Earl, Lord Caithness, used three times in his speech. There is no means of imposing a currency on the United Kingdom. Such a proposition would have to pass
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through your Lordships' House among other institutions and be subject to a vote taken in Parliament. However, I recognise that the debate on the single currency has moved on since we debated the measures of the Delors Committee almost a year ago. The debate has moved on in two respects: first, it has moved on because the political momentum has moved forward and gained pace and, secondly, because the Government have produced a hard ecu plan.
I do not intend to spend a great deal of time discussing the hard ecu plan because the noble Lord, Lord Cockfield, effectively put that to bed. Further, the noble Lords, Lord Roll of Ipsden and Lord Selsdon, pointed out that it would perhaps have been acceptable as a separate standard. I believe those were the words that were used. That might have been the case 10 or 15 years ago, but unless it can be demonstrated that it is not just an illusion or a trick produced by the Government and that it would lead quite quickly to a single currency, it does not seem to me to have any political merit as regards the discussions that are taking place. Until now no one has managed to demonstrate the contrary.
However, the single currency argument which has moved forward has brought us up against the problem of convergence. Here the report is eloquent. As I have said, it is sad that evidence was not given by some of the countries in the Community whose people I would have thought would be most disadvantaged by a move towards either irrevocably fixed exchange rates or a single currency, for example, the Greeks, the Portuguese and perhaps the Spanish. Perhaps Dr. Pöhl thinks we are on the fringe of those in the Community who might be disadvantaged by moving in that direction.
My noble friend Lord Briginshaw pointed out that the Eastern European countries would fall into the category of those who are not even near the edge of being convergent with us. When we talk about convergence I assume we mean upward convergence rather than downward convergence; in other words we are saying that we would all like to reach up to the highest level rather than drag the German economy, for example, down to the average level. I imagine that is right, but the point has not been hitherto stressed in the debate. As the report quite rightly points out, convergence is not just a question of convergence on inflation. It is convergence on all kinds of economic parameters. There may be a trade off between a slightly higher inflation rate and a slightly lower unemployment rate. We may have to consider all these matters.
I am glad that at paragraph 92 the report sets out the possibility of what I call staggered entry. The report suggests that it might be possible to create something which was relevant to a number of countries at one particular time. However, until convergence was further advanced other countries might not wish to join immediately but would perhaps like to join within a set timetable. We would resist the idea, as other noble Lords have done, that one should impose absolute dates when this should happen. The date at which states wish to join in monetary union

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will depend on how well they do. The noble Lord, Lord Carr of Hadley, made that point and I support him.
I now return to the monetary compensation amounts. If EMU is to hold together, it will certainly require substantial transfer of resources from one country to another, either in the form of the structural funds or in the form of a rather more developed regional policy. There are obviously serious imbalances in the European economy and if we enter monetary union too fast the whole thing will fall apart because of those imbalances. It is better to make haste slowly, to try to get the thing right and to try to make sure that there is a system to stop the Scots, the Welsh, the Galicians or the Catalonians suffering just because of a haste to enter monetary union.
It is the Federal Republic of Germany that will be in the firing line. Will the German economy, which will be the dominant economy in Europe in national terms over the next few years, be able to sustain not only the reunification of Germany but also the substantial transfer of resources to the poorer members of the Community which will have to take place? I have very serious doubts on that point. The Germans quite rightly believe that German reunification is the most important item on their financial agenda. Not just billions but trillions of deutschmarks are being poured into East Germany. There is not much point in asking Germany to take part in an EMU which includes the development of the structural funds and a regional policy involving inter-country transfers if it is so concerned about the reunification of Germany and the financial investment which that involves.
We have to ask ourselves how that will operate. There are many questions to be answered. Noble Lords have put some of those questions, and there will be others which have to be answered before we can form a final view. No doubt the shape of those questions will come out in the two IGC conferences which are about to take place. However, it is perfectly clear to me and to us on these Benches that the other members of the Community will go ahead on the basis of their own timetable. We cannot be left behind. The problem we would then have to face would be not whether EMU is or is not desirable for us but to what extent an EMU which left us out would leave our economy in an impossible position. It is the recognition of that inevitability which should spur us to participate actively in shaping the course of events.
It is just as important to ensure that our own economy moves out of its present weak position. That will require long-term policies to be put in place which are quite different from those of the past few years.
In principle, to adopt the words of the noble Baroness, Lady Elles, we believe that it is in our national interest to join actively in the process towards EMU. In principle we have no objection to a single currency on the assumption, as my noble friend Lord Barnett said, that it is a long way off. It will not happen tomorrow. We must obviously wait to see what form of single currency emerges from the
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discussions. But if we want to be part of it - whatever it may turn out to be - we must put our own house in order first, and that we can only do ourselves.
10.47 p.m.
The Minister of State, Department of Trade and Industry (Lord Hesketh): My Lords, we have had an interesting and thoughtful debate this afternoon. However, if I were a betting man and had been asked before the start of the debate in your Lordships' House today whether or not we should be discussing the "Rainbow Warrior" or carol singers in Saudi Arabia I should have lost my money.
I, too, should like to pay tribute to the work of the committee chaired by my noble friend Lord Aldington. The committee's report reflects months of hard and productive labour. The committee has taken evidence from nearly all the key players in the EMU and political union debate. It has travelled to Europe. Through the course of the summer and early autumn it has had to contend almost daily with new developments in a continually shifting debate. Whatever happens in the course of the intergovernmental conferences which begin on 14th December, I am convinced that the report will be an important reference work for many years to come.
There is much in the report with which the Government can agree. We agree that member states should retain control over budgetary policy and that there is a need for greater economic convergence. We agree that the next stage of the EMU process is of key importance; and that the single financial area should be completed. On the political side, we agree that there is a need for a pragmatic and consensual approach which will improve the efficiency of the Community. We also recognise that Community institutions should be democratically accountable, and that the principle of subsidiarity should be clarified at the IGC.
But we cannot agree with the main recommendation of the report—that the Government should accept the goal of a single currency. The imposition of a single currency would involve a considerable transfer of sovereignty over national monetary policy to a European central bank. I do not believe that this would be acceptable to this Parliament. Indeed, it was decisively rejected in another place.
Moreover, we do not believe that the Community is ready for a single currency, for economic convergence among the 12 member states remains a long way off and we must consider their relative economic performance, as my noble friend Lord Selsdon pointed out in his notable speech.
Inflation ranges from 3 per cent. to 22 per cent; short-term interest rates range from 8.5 per cent. to 19 per cent; long-term interest rates range from 9 per cent. to 24 per cent; budget balances range from a surplus of 1 per cent. of GDP to a deficit of 17 per cent; and unemployment, which is a good measure of labour market inflexibility, ranges from 1 per cent. to 16 per cent.
For as long as such substantial divergences in the economies of member states exist, a move to a single

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currency and a single monetary authority for the Community would represent a massive leap in the dark, with potentially disastrous consequences.
It is true that the imposition of a single currency might suppress some of the differences between these widely differing economies—for a short time. But this would only be at the cost of rising unemployment in countries, especially in southern Europe, whose economies were not sufficiently flexible to adjust. That is not just the view of the British Government. Listen to Karl Otto Pöhl, President of the Bundesbank, speaking in Munich in September:
"As long as divergences between EC countries exist—as today—it is hard to conceive how the exchange rate can be given up as a policy mechanism".
Dr. Pöhl, of course, has first-hand experience of monetary union. Following the union of the German economies, Dr. Pöhl is having to cope with running an integrated German monetary policy, at a time when the Eastern German economy is completely out of kilter with the Western half. And Dr. Pöhl has pointed out quite bluntly that the price of German economic and monetary union will be paid for—and these are his words—
"either in terms of unemployment or in expenditure of public funds to prevent the worst".
So what could be the consequences of a premature move by the European Community to a single currency? There are four main possibilities, the first of which the noble Lord, Lord Williams of Elvel, pointed out to your Lordships. There would be demands for increasing transfers from the well-off northern member states to their poorer southern partners to compensate them. Taxpayers may well not welcome that, least of all in Germany where the full cost of its monetary union is only now becoming apparent. Even on present policies, the Community by 1993 will be spending £14 billion on structural policy. And all the evidence suggests that budgetary transfers are not an effective way of avoiding unemployment in the longer term.
Secondly, the "independent" central bank could succumb to the inevitable political pressure and relax monetary policy. This would cause a significant increase in inflation and deteriorating economic performance right across the Community. Thirdly, there could be an ever-increasing flow of migration from the member states with less flexible economies as people go in search of jobs and prosperity. Fourthly, as the real costs of monetary union become apparent to governments and electorates, the monetary union could break up under the weight of increasing social and economic tension. That would set back the cause of closer economic integration by decades and would be enormously damaging to the Community both internally and in the eyes of the world.
We believe that the facts are plain. Many member states will continue to need to use monetary and exchange rate policies to adjust to differences in economic circumstances. Moreover, so long as those circumstances remain as different as they are now, different counrtries' economies will react differently to
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unexpected shocks. They need flexibility to deal with such shocks. And the costs of losing that flexibility could be devastating.
However, if the costs of a premature move to a single currency are considerable, what are the benefits of a single currency? The publication of the Commission report One Market, One Money a month ago continues the important debate on the benefits and costs of EMU.
That report, however, clearly exaggerates the reduction in transaction costs that would flow from a single currency. It does so by referring principally to the more costly methods of transferring money around the Community. There are cheaper mechanisms already available. Significant cost savings can certainly be made in the relatively short term without taking the drastic step of moving to a single currency.
Nor does the Commission report take sufficient account of financial liberalisation and technological change. Those are both likely to reduce transaction costs significantly in the years ahead, whether or not a currency union takes place.
We must not forget that transaction costs will by no means disappear with a single currency. Banks would still incur costs in transferring money from one country to another. One has only to look at the experience of the United States. Clearing cheques between different states is still an expensive business, despite America's long and distinguished history of a single currency.
The costs of a premature move to monetary union could clearly outweigh the limited benefits. I again quote Karl Otto Pöhl:
"The alleged savings in transactions costs are not in the least convincing"
As Dr. Pöhl also said:
"John Major … is quite right to point out that a joint monetary policy can be very much more expensive than the conceivable saving in transactions costs".
It is against that background that the Government have put forward an alternative, evolutionary approach—the hard ecu and the European Monetary Fund. We have proposed a new common currency, to be introduced alongside national currencies. The hard ecu would by definition be a highly stable, anti-inflationary currency. That is because it would never devalue against the strongest currency on realignments of the exchange rate mechanism.
We have proposed a new institution—the European Monetary Fund—to manage the hard ecu. The EMF would issue hard ecu only in exchange for community national currencies. Its own operations therefore would never result in an increase in the Community's monetary base.
We believe the hard ecu would become widely used. It will provide a secure store of value for savers and the low rate of interest—associated with a strong currency—should prove attractive to borrowers. It will provide a good medium of exchange for intra-Community trade and could become widely used by businesses and tourists. In time, if peoples and

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governments so choose, it could develop into a single currency. But we believe that that is not a decision that we should take now.
Perhaps I may turn to some of the points raised by noble Lords in the debate. From the remarks made by my noble friend Lord Caithness, the noble Baroness, Lady Seear, deduced that the Government were interested only in a free trade area. With the commitment that this country already has to 1992, and from my experiences at Brussels, I am clear that we are a member of a body that is a great deal more complex than simply a free trade area; and it will continue to become more integrated.
The noble Lord, Lord Thurlow, referred to the fact that the currency of sterling had become very weak. However, the noble Lord, Lord Bruce of Donington, claimed at the same time that the currency was far too strong. Not for the first time and not for the last, I suspect that if I am in between the two the Government may have got it right.
The noble Lord, Lord Briginshaw, said that there was no such thing as free trade. He may be right. One thing is certain, however: the road to protectionism is also the road to ruin.
The noble Lord, Lord Bruce of Donington, felt that he might be committing an act of heresy when he rose to speak in your Lordships' House this afternoon. I listened with great interest to his speech. I fear that if he were in a position of suitable strength I should be the first that he would take to the stake to burn. However, what happened to this country in the decade of the 1980s must be remembered. His figures for Europe may well be correct but it must be remembered that the United Kingdom enjoyed a period of unprecedented economic growth within the Community.
My noble friend Lord Carr of Hadley rightly drew your Lordships' attention to his time as a Cabinet Minister when he was not made privy to every piece of financial information that came from the Treasury. I can assure him that little has changed.
The noble Lord, Lord Butterworth, was right to point out that a single currency could damage other and weaker currencies. I agree entirely that it would create demands for massive transfers from structural funds, to which I referred earlier.
The noble Lord, Lord Greenhill of Harrow, raised the question of European expansion; the acquisition of more states coming into the Community. He inquired about the Government's commitment to expansion. If there are others who desire to come into the Community—I believe that he was referring to the East—the Government support that proposition.
The noble Lord, Lord Cromer, was intriguing about the question of what currency would come into being. It is important to note that the advantage of the hard ecu is that it is a currency which can be brought into being quickly as compared with EMU, for which as yet no one has given a date.
The noble Lord, Lord Harris of High Cross, pointed out that by 1776 Adam Smith had clearly set
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out the definition of a supreme and successful common market. I was grateful to the noble Lord for drawing that to the attention of the government spokesman.
The noble Lord, Lord Jay, referred to the 1939 Bank for International Settlements and to the £l2 million in Czechoslovakian gold. There was then some disagreement between the noble Lords, Lord Jay and Lord O'Brien. However, the noble Earl, Lord Bessborough, moved on to the subject of the sovereignty of our nation. He pointed out that this country had historically signed many treaties. It is true that more than 500 years ago we signed a treaty with Portugal. I suspect that his belief that all treaties meant an end to sovereignty would be disagreed with by the Government today.
The noble Lords, Lord Harris of High Cross and Lord Jay, described each other as economic liberals. I shall read Hansard to see whether I can find more elucidation. I heartily agree with the warnings given by the noble Lord, Lord Jay, about the potential dangers of a premature move into a single currency. I am grateful for his support.
The noble Lord, Lord Cobbold, agreed that convergence was needed for monetary union but argued that it must not be an excuse for delay. I point out that the UK's proposals, which could be put into practice shortly, would promote convergence today.
Much was made of the Bundesbank. As was pointed out by the noble Lord, Lord Williams of Elvel, for my education, only twice in its history has it acted against the advice of the Bundestag. It is important to remember that what is often offered to your Lordships as an example of financial freedom and independence is today paying a substantial price for German unity.
The noble Lord, Lord Barnett, argued that economic monetary union should not happen now but that we should commit ourselves to the final objective. If a single currency is a long way off—perhaps decades away—why should we commit ourselves to a blueprint of a central bank whose shape we do not know?
I was interested to hear the remarks made by the noble Lord, Lord Seebohm, suggesting an independent central bank which would have a monopoly of monetary rectitude. During the past decade Japan has had one of the lowest inflation rates in the industrial world and its central bank is probably the least independent in the world.
The noble Lord, Lord Cledwyn, asked about a reintroduction of the GLC. I draw your Lordships' attention to the development in the eastern part of our great capital city in Docklands, the commitment to the new Underground railway and the link to the Channel Tunnel as examples of the infrastructure which is taking place and which will be required for this country and this capital to be the financial capital.
The noble Lord, Lord Cledwyn, also referred to a merger between England and Wales. I draw his

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attention to a takeover when Henry Tudor returned from Wales. If there had been a Monopolies and Mergers Commission then, would it have succeeded?
The noble Lord, Lord Benson, referred to a fever taking control in Europe and government by remote control. I listened to his argument with interest. I hope that what he believes may happen will not happen. My noble friend Lord Selsdon made an excellent speech. He not only acknowledged the hard ecu but pointed out that versions of it in various shapes and forms had existed for some 600 years.
The most interesting remark in the debate was made by the noble Lord, Lord Williams of Elvel. It is always an advantage for me to gain clarification. The noble Lord, Lord Williams, gave me clarification this evening, so when next I travel to Europe I can tell those who are interested that the Labour Party is committed to political control of any European bank.
This Government's objective is evolution and not revolution. Also, we do not wish to interfere.
11.5 p.m.
Lord Aldington: My Lords, I shall be brief in closing the debate because I took up rather too much of your Lordships' time earlier. I thank all noble Lords who took part in the debate. I am grateful for all the kind observations made about the report and the committee and also for the flattering but quite unjustified remarks made about me personally.
As I stressed at the beginning, these reports are part of the scrutiny process of Parliament. They are part of the system of accountability of the Community and particularly of the Council of Ministers to national parliaments. Therefore, to have a speech such as the one given by my noble friend Lord Hesketh is of enormous value. It completes the process. I should like to thank him for that, even though I sharply disagree with him on what he says is one nub, but not the only nub, of our report; that is, the acceptance by Her Majesty's Government of the goal of the single currency which every other nation believes it is committed to as a goal.
My noble friend gave selective favourable quotations of President Pöhl. However, I remind him
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that if he looks at the evidence he will find that President Pöhl told us that he believes that every member state is and has been committed to the single currency as a goal. I must say, as I said in my introductory statement when I tried to lay the carpet, that it appears to me that we have all been committed to it since we entered the Community in 1972. That is what economic and monetary union means. If it meant economic union only, it would say that. However, I shall not go over that again.
I wish to declare my position and that of the committee less one, because I observed one defector in the course of the debate. We still strongly recommend to the Government that they should continue to look at this matter if they are to continue to play, as the whole House wants them to play, a leading part in working out the next stages towards full monetary union.
I say that because some noble Lords here this evening do not believe at all in the Community. They have no interest in a report like this, the purpose of which is to strengthen the Community, its efficiency, its effectiveness and democratic accountability. I understand that the noble Lord, Lord Monson, the noble Lord, Lord Stoddart, who wagged his finger and face at me, and the noble Lord, Lord Bruce, do not like the Community at all. We have got that message but I do not believe that that helps the discussion on this subject, the purpose of which is to strengthen the Community for the future. It is also to remind your Lordships and the country of the step-by-step approach on which the Community has thrived ever since it started and of the great benefits that can come to Britain, and the people of Britain, if we steadily continue with the process of strengthening the Community and its union.
I once again thank your Lordships. I hope the House will accept the Motion which I moved earlier today.
On Question, Motion agreed to.
House adjourned at eleven minutes past eleven o'clock.

  EASTERN EUROPE AND THE BALKANS: CONSULATES
  EASTERN EUROPE AND THE BALKANS: CONSULATES
  TURKEY: DEATH SENTENCES
  TURKEY: DEATH SENTENCES
  CHILDREN ACT 1989: DESIGNATED FAMILY JUDGES
  CHILDREN ACT 1989: DESIGNATED FAMILY JUDGES
  OIL EXPORTS TO EASTERN EUROPE
  OIL EXPORTS TO EASTERN EUROPE
  DICHLORVOS IN FARMED SALMON
  DICHLORVOS IN FARMED SALMON
  NHS DENTISTRY: FUNDING
  NHS DENTISTRY: FUNDING
  SMOKING: NHS COSTS
  SMOKING: NHS COSTS
  BELFAST: SPECIAL HOUSING PROVISION
  BELFAST: SPECIAL HOUSING PROVISION